Answer to Most Physician/High Income Job Questions:
Answer to Most Physician/High Income Job Questions:
YES I DID Tx
This is what most physician/High Yearly Income NEED TO SEE: (Please feel free to critique)
All you need to know about Physician/High net worth Investing:
Physician Financial Priority:
1A. Get Emergency Fund
1B. Get Own Occupation Disability/Term Life if have child for 2 million for 20-25 Yr; once self Insured by investment stop paying...
1C. Umbrella Policy of 2-3 million as NET worth increases
2. Pay off debt over 5-7%
3. After Emer Fund can save for House Down-payment in high interest savings acct aim for 25-30% down-payment and get a 15 Yr fixed loan (look at PennFed, Navy Federal, Wells Fargo etc)
4. Max 403/457 (Target Fund with low Exp Ratio) or Simple 3-4 Fund with Bonds and Real Estate
5. Backdoor Roth 5500
6. Taxable Acct (4 Fund Combo with Total Mkt, Small/Mid Cap Fund, Intl/Emer Mkt Ex US, Tax Free Muni Bond)
7. 529 - Can change to $500/month per kid
8. Donor Advised Fund for Charitable
9. Personal Play/Business Savings if overage left
10. Buy cars cash 2-3 years old
Retirement Goal: (Correct me if my calculation are a little off)
If you plan on contributing ~100K per year total (35-50k pre-tax 401/403/457) and 50-70k in taxable acct for retirement
For 20-25 Years 35 y/o to 55-60 y/o
100k/Yr Invested x 25Yr assume 6-8% return = $5 million portfolio by Age 55-60
Then retire on 250K/Yr from investments at 4% plus SS Income at age 55-60
Thoughts?
This is what most physician/High Yearly Income NEED TO SEE: (Please feel free to critique)
All you need to know about Physician/High net worth Investing:
Physician Financial Priority:
1A. Get Emergency Fund
1B. Get Own Occupation Disability/Term Life if have child for 2 million for 20-25 Yr; once self Insured by investment stop paying...
1C. Umbrella Policy of 2-3 million as NET worth increases
2. Pay off debt over 5-7%
3. After Emer Fund can save for House Down-payment in high interest savings acct aim for 25-30% down-payment and get a 15 Yr fixed loan (look at PennFed, Navy Federal, Wells Fargo etc)
4. Max 403/457 (Target Fund with low Exp Ratio) or Simple 3-4 Fund with Bonds and Real Estate
5. Backdoor Roth 5500
6. Taxable Acct (4 Fund Combo with Total Mkt, Small/Mid Cap Fund, Intl/Emer Mkt Ex US, Tax Free Muni Bond)
7. 529 - Can change to $500/month per kid
8. Donor Advised Fund for Charitable
9. Personal Play/Business Savings if overage left
10. Buy cars cash 2-3 years old
Retirement Goal: (Correct me if my calculation are a little off)
If you plan on contributing ~100K per year total (35-50k pre-tax 401/403/457) and 50-70k in taxable acct for retirement
For 20-25 Years 35 y/o to 55-60 y/o
100k/Yr Invested x 25Yr assume 6-8% return = $5 million portfolio by Age 55-60
Then retire on 250K/Yr from investments at 4% plus SS Income at age 55-60
Thoughts?
Last edited by duke33 on Sat Sep 27, 2014 10:34 am, edited 3 times in total.
Re: Answer to Most Physician/High Net Worth Questions:
seems accurate, one of my new friends who is a doc - she has 400,000 of school debt. so that plays a role
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Re: Answer to Most Physician/High Net Worth Questions:
OP: did you forget Disability Insurance?
Also, I see nothing wrong with buying a New Car (a Lexus, preferably) with cash a few years after starting work, with the plan of keeping it for seven years or more...
Also, I see nothing wrong with buying a New Car (a Lexus, preferably) with cash a few years after starting work, with the plan of keeping it for seven years or more...
Attempted new signature...
Re: Answer to Most Physician/High Net Worth Questions:
I would also add tax free HSA account or so called stealth IRA (roughly up $6500 line item tax deduction with tax free withdrawal for healthcare expenses) if you have a qualified healthcare insurance plan. I would not recommend a HSA qualified for most people with limited means or chronic illnesses but for an informed physician with a healthy family, it's a no brainer.
For asset protection (my wife and I are both physicians), we keep essentially all accounts outside retirement accounts separate in our respective revocable living trusts.
Check out White Coat Investor website, it will you a lot of time in terms of financial education.
For asset protection (my wife and I are both physicians), we keep essentially all accounts outside retirement accounts separate in our respective revocable living trusts.
Check out White Coat Investor website, it will you a lot of time in terms of financial education.
Re: Answer to Most Physician/High Net Worth Questions:
I agree if selp employed HSA is a good option. Tougher to do for employed docs..
What is the deal with keeping things outside of retiremnt accounts seprate? Is this for risk mitigation reasons?
What is the deal with keeping things outside of retiremnt accounts seprate? Is this for risk mitigation reasons?
Re: Answer to Most Physician/High Net Worth Questions:
This thread is now in the Personal Finance (Not Investing) forum (financial planning).
Re: Answer to Most Physician/High Net Worth Questions:
15 year mortgages are a personal choice. So is buying used cars (cost difference between a new civic and a used one is minimal over the lifespan. Of the cars. Driving to 150k+ miles is far more importanr). The rest is solid advice but you can debate the priorities. Favoring retirement over a house might make sense for the single doc for example. And of course putting any money in a taxable account before maxing out ROTH makes no sense
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Re: Answer to Most Physician/High Net Worth Questions:
Beyond my thoughts in red above, I encourage a simpler, stricter approach to post-residency lifestyle than just "buy 2-3 year old cash cars": live like a resident for at least 5 years (we did 8). In 5 years of resident-like living, most physicians will pay off huge amounts of debt, some will become completely debt free, some will become rich in that short period of time doing just that. But it all becomes much more difficult if the first thing one does after training is buy a big new house, buy an expensive new car, start taking expensive vacations, pop the kids into expensive private school, join the private golf club, etc.duke33 wrote:
All you need to know about Physician/High net worth Investing:
Physician Financial Priority:
Step 0 - pick your spouse well and get a prenup if appropriate
1a. Get great disability insurance
1b. Get Emergency Fund - agree
1c. Get personal umbrella insurance
1d. Get excellent malpractice insurance
2. Pay off debt over 5-7% - yes, but when? Not necessarily before buying a house.
3. After Emer Fund can save for House Down-payment in high interest savings acct aim for 25-30% down-payment and get a 15 Yr fixed loan (look at PennFed, Navy Federal, Wells Fargo etc) - don't see why a 30 year loan wouldn't be preferable for many investors, given historically low interest rates
4a. Max 403/457 (Target Fund with low Exp Ratio) or Simple 3-4 Fund with Bonds and Real Estate - agree
4b. Max HSA if applicable
5. Backdoor Roth 5500 - plus $5500 for spouse, if married
6. Taxable Acct (4 Fund Combo with Total Mkt, Small/Mid Cap Fund, Intl/Emer Mkt Ex US, Tax Free Muni Bond) - including I or EE bonds if appropriate, to increase tax-deferred space
7. 529 - Can change to $500/month per kid - should strongly consider using at higher rates if there is a state tax benefit, once all debt is paid off, or if just looking to increase tax-deferred space
8. Donor Advised Fund for Charitable - using donation of appreciated taxable shares
9. Personal Play/Business Savings if overage left - not sure what this means
10. Buy cars cash 2-3 years old - would expand this to 'keep living well below your means because things can turn on a dime, even for you'
Retirement Goal: (Correct me if my calculation are a little off)
If you plan on contributing ~100K per year total (35-50k pre-tax 401/403/457) and 50-70k in taxable acct for retirement
For 20-25 Years 35 y/o to 55-60 y/o
100k/Yr Invested x 25Yr assume 6-8% return = $5 million portfolio by Age 55-60
Then retire on 250K/Yr from investments at 4% plus SS Income at age 55-60
Thoughts?
- neurosphere
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Re: Answer to Most Physician/High Net Worth Questions:
That's not a bad list, and anyone who can follow it will do quite well. But the obvious bullet point may have to be #0: "Plan to live on half your salary, and save/invest the rest". And as others on this board, including myself has advised, "live like a resident" [Edit: letsgobobby beat me to it!] for as long as you can after getting that first job. It will go a LONG way towards achieving retirement goals.
Last edited by neurosphere on Sat Sep 27, 2014 9:29 am, edited 1 time in total.
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes" (even in taxable accounts).
Re: Answer to Most Physician/High Net Worth Questions:
Become a regular reader of the White Coat Investor blog.
Re: Answer to Most Physician/High Net Worth Questions:
Excellent bullet points and comments! Thanks. This should be required reading for everyone leaving graduating from med school.
Re: Answer to Most Physician/High Net Worth Questions:
Sometimes i think we push the live like a resident idea too much. Definitely dont stretch yourself with expensive purchases but if you live too frugal, i personally believe you miss out on life. I also feel this leads to poor performance in the work environment eventually. Now if you stretch yourself financially, it also leads to excessive stress at work and poor performance.
Last edited by dhodson on Sat Sep 27, 2014 10:05 am, edited 1 time in total.
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Re: Answer to Most Physician/High Net Worth Questions:
it's only a few years. Even if it's only 3 years, that's an extra $150k-$300k for debt repayment and investing. That's a huge difference compounded over 20-50 years... easily another $1,000,000 in purchasing power when all is said and done.dhodson wrote:Sometimes i think we push the live like a resident idea too much. Definitely do stretch yourself with expensive purchases but if you live too frugal, i personally believe you miss out on life. I also feel this leads to poor performance in the work environment eventually. Now if you stretch yourself financially, it also leads to excessive stress at work and poor performance.
I've sadly known (and treated) too many docs who 10 years or even 20 years after graduating are still so dependent on their jobs to make ends meet that they make countless bad professional decisions - leaving a good job for a little more money but a much more toxic work environment; taking on inordinate more debt for a risky business venture which might earn them more money because they are financially squeezed; becoming a bad spouse or bad parent because they're always worried about money.
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Re: Answer to Most Physician/High Net Worth Questions:
I agree that 8 years is a long time to live like a resident. Personally, I lived a lifestyle about 1.5-2X what I had as a resident for 4 years, then moved into the lifestyle I intend to continue indefinitely. That was plenty for me. Someone with a lower income to debt ratio may need to be more aggressive or do it longer, but living like a resident for a couple of years (as an attending) is probably enough to launch most physicians financially just fine.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy |
4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
Re: Answer to Most Physician/High Net Worth Questions:
Great advice. Thanks for taking the time to put this together. As a newly minted doc it's good to have some concrete goals and plans to implement. I followed most points on this thread (did buy a moderately priced house for our area with 15 year mortgage as I didn't want to have to uproot the wife and kids from neighborhood, friends, schools, etc again as I've done twice already in the last two years; and bought a new car since my previous 15 year old car with almost 170k miles was starting to break down frequently), and despite that will still be saving at least 15% of my gross income.
One question I have (and hopefully doesn't derail the thread), is how much is enough in an HSA? I had accumulated over $7K in mine as a resident (after contributing enough to 403b to get full match and Roth IRAs for wife and I for all 5 years of residency and one year of fellowship) and am now contributing the max. Obviously I won't have "enough" in the near future, but is $50K enough? 100k?
One question I have (and hopefully doesn't derail the thread), is how much is enough in an HSA? I had accumulated over $7K in mine as a resident (after contributing enough to 403b to get full match and Roth IRAs for wife and I for all 5 years of residency and one year of fellowship) and am now contributing the max. Obviously I won't have "enough" in the near future, but is $50K enough? 100k?
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Re: Answer to Most Physician/High Net Worth Questions:
Rephrase as what is the max one should have in an HSA. Don't know. I'll throw out $100k just because... it's a round number.
Re: Answer to Most Physician/High Net Worth Questions:
I don't see much difference between the suggestions here and what non-physicians should want to do.
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Re: Answer to Most Physician/High Net Worth Questions:
True, which may be why the OP mentioned HNW, though it should more accurately be High Net Income.livesoft wrote:I don't see much difference between the suggestions here and what non-physicians should want to do.
Seems like disability and malpractice insurances would not be applicable to most other occupations...
Last edited by The Wizard on Sat Sep 27, 2014 10:44 am, edited 1 time in total.
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Re: Answer to Most Physician/High Income Job Questions:
agree 100%!livesoft wrote:I don't see much difference between the suggestions here and what non-physicians should want to do.
Re: Answer to Most Physician/High Net Worth Questions:
There is no limit how much to accumulate in HSA technically, but it is likely to limited by HSA contribution limits and your investments. I keep mine at HSA Bank linked to TD Ameritrade brokerage account. However a good rule of thumb is to expect healthcare expenses in retirement to approach $250,000. If my HSA account gets to $250,000, I would be pleasantly surprised. Barring a sudden quick demise, we all will require healthcare expenditures.
As to separate not joint marital taxable accounts, a large malpractice lawsuit can claim your taxable assets but not your spouse's (unless it is a joint asset), your home in some states or for that matter retirement accounts.
As a side issue, if you were to accumulate significant assets in taxable accounts, umbrella insurance is a must and is relatively inexpensive.
As to separate not joint marital taxable accounts, a large malpractice lawsuit can claim your taxable assets but not your spouse's (unless it is a joint asset), your home in some states or for that matter retirement accounts.
As a side issue, if you were to accumulate significant assets in taxable accounts, umbrella insurance is a must and is relatively inexpensive.
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Re: Answer to Most Physician/High Income Job Questions:
I certainly agree about umbrella insurance.
Does anybody know if umbrella insurance will pick up if malpractice insurance is limit is exceeded?
Ralph
Does anybody know if umbrella insurance will pick up if malpractice insurance is limit is exceeded?
Ralph
Re: Answer to Most Physician/High Income Job Questions:
I do know.ralph124cf wrote:I certainly agree about umbrella insurance.
Does anybody know if umbrella insurance will pick up if malpractice insurance is limit is exceeded?
Ralph
The answer is absolutely not. The policy (at least my policy) specifically excludes business/professional activities.
Mitch
Re: Answer to Most Physician/High Income Job Questions:
If you can afford it, why would you limit your HSA contributions? If I ever need it for health purposes, it's good to know it's there. But once you hit 65, it can also function as a second IRA account. Myself, I'm paying for eligible expenses and saving my receipts. If it ever gets to a balance where I feel it's sufficient to cover future health care expenses, I'll pull dollars out of the HSA to pay back past expenses and use those dollars to fund future Roth IRA contributions so that money is tax-free going in and coming out.
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Re: Answer to Most Physician/High Income Job Questions:
We have a personal umbrella policy, and added a separate business/commercial umbrella policy for a small business endeavor where others are physically on the property (slip and fall, etc.).MitchL wrote:I do know.ralph124cf wrote:I certainly agree about umbrella insurance.
Does anybody know if umbrella insurance will pick up if malpractice insurance is limit is exceeded?
Ralph
The answer is absolutely not. The policy (at least my policy) specifically excludes business/professional activities.
Mitch
But I have no idea if that - or a different - type of umbrella policy would cover anything the surpassed malpractice coverage.
Ours required that we have specific (non-minimal) regular insurance for the business property, same as the personal umbrella coverage required wrt our homeowner's policy.
RM
This signature is a placebo. You are in the control group.
Re: Answer to Most Physician/High Income Job Questions:
Normally umbrella does not
Which is also why it's so cheap
Which is also why it's so cheap
Re: Answer to Most Physician/High Net Worth Questions:
This what I recommend to all the residents we train here. This gives the new staff physician and their family a reward for all those years of hard work, while still allowing much to be done in regards to debt and savings.EmergDoc wrote:I agree that 8 years is a long time to live like a resident. Personally, I lived a lifestyle about 1.5-2X what I had as a resident for 4 years, then moved into the lifestyle I intend to continue indefinitely. That was plenty for me. Someone with a lower income to debt ratio may need to be more aggressive or do it longer, but living like a resident for a couple of years (as an attending) is probably enough to launch most physicians financially just fine.
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Re: Answer to Most Physician/High Net Worth Questions:
I think you mean "Plan to live on half your salary, because the IRS gets the other half."neurosphere wrote:That's not a bad list, and anyone who can follow it will do quite well. But the obvious bullet point may have to be #0: "Plan to live on half your salary, and save/invest the rest". And as others on this board, including myself has advised, "live like a resident" [Edit: letsgobobby beat me to it!] for as long as you can after getting that first job. It will go a LONG way towards achieving retirement goals.
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Re: Answer to Most Physician/High Net Worth Questions:
Revocable?? For asset protection?Kidneydoc wrote:I would also add tax free HSA account or so called stealth IRA (roughly up $6500 line item tax deduction with tax free withdrawal for healthcare expenses) if you have a qualified healthcare insurance plan. I would not recommend a HSA qualified for most people with limited means or chronic illnesses but for an informed physician with a healthy family, it's a no brainer.
For asset protection (my wife and I are both physicians), we keep essentially all accounts outside retirement accounts separate in our respective revocable living trusts.
Check out White Coat Investor website, it will you a lot of time in terms of financial education.
Re: Answer to Most Physician/High Net Worth Questions:
No he means half of your net salary.toofache32 wrote:I think you mean "Plan to live on half your salary, because the IRS gets the other half."neurosphere wrote:That's not a bad list, and anyone who can follow it will do quite well. But the obvious bullet point may have to be #0: "Plan to live on half your salary, and save/invest the rest". And as others on this board, including myself has advised, "live like a resident" [Edit: letsgobobby beat me to it!] for as long as you can after getting that first job. It will go a LONG way towards achieving retirement goals.
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Re: Answer to Most Physician/High Net Worth Questions:
Sorry, I thought the 50% "after tax" was implied.toofache32 wrote:I think you mean "Plan to live on half your salary, because the IRS gets the other half."neurosphere wrote:That's not a bad list, and anyone who can follow it will do quite well. But the obvious bullet point may have to be #0: "Plan to live on half your salary, and save/invest the rest". And as others on this board, including myself has advised, "live like a resident" [Edit: letsgobobby beat me to it!] for as long as you can after getting that first job. It will go a LONG way towards achieving retirement goals.
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes" (even in taxable accounts).
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Re: Answer to Most Physician/High Income Job Questions:
"100k/Yr Invested x 25Yr assume 6-8% return = $5 million portfolio by Age 55-60
Then retire on 250K/Yr from investments at 4% plus SS Income at age 55-60"
I'm not sure these numbers add up. $5M by age 55-60 is OK but then . . .
$250,000 per year on a $5M portfolio? If you're going to retire in this low interest rate environment, early (age 55), I don't think you're going to take 5% from your portfolio. Or at least, I wouldn't. If you're truly going to stop having earned income at 55, a $5M portfolio might generate $150,000+ annually safely (unless you anticipate dying relatively early).
And I didn't understand your social security calculation. Starting at 67? 70?
But overall, I think the plan up to that point is reasonable. If you're living in an expensive part of the country, saving for a house to put 25% down and finance a 15-year mortgage is not reasonable unless you want to be buying a house relatively late in life.
Then retire on 250K/Yr from investments at 4% plus SS Income at age 55-60"
I'm not sure these numbers add up. $5M by age 55-60 is OK but then . . .
$250,000 per year on a $5M portfolio? If you're going to retire in this low interest rate environment, early (age 55), I don't think you're going to take 5% from your portfolio. Or at least, I wouldn't. If you're truly going to stop having earned income at 55, a $5M portfolio might generate $150,000+ annually safely (unless you anticipate dying relatively early).
And I didn't understand your social security calculation. Starting at 67? 70?
But overall, I think the plan up to that point is reasonable. If you're living in an expensive part of the country, saving for a house to put 25% down and finance a 15-year mortgage is not reasonable unless you want to be buying a house relatively late in life.
Re: Answer to Most Physician/High Income Job Questions:
Was looking back at this post, from last year. Certainly good to refresh on these points. Crazy to think that I just realized between our term life policies and disability for both wife and I that we pay close to $850 per month (~600 Disability, stuff adds up but certainly worth it).
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Re: Answer to Most Physician/High Income Job Questions:
I'm not the physician, my wife is. But I hear all the stories and see what her co-workers have done or not done. Looks like a good list of what to do, but with the physicians I know, the more important list is the one of what NOT to do. Off the top of my head.
1. Don't buy excessively expensive real estate. Many physicians live in relatively low cost areas and have either been convinced or have convinced themselves that there is some kind of financial asset management benefit to buying a really expensive house. Around this part of Texas it is usually a custom home. Maybe the real estate agents are whispering it in their ears, or their wife's ears. But I have heard several physicians justify buying big McMansions on big estates by pointing to asset protection. Meanwhile they own a highly taxed expensive to maintain and operate house that 0.1% of the surrounding population can afford which means they can't hardly ever sell for what they paid. Plus the 0.1% that can afford such houses around here generally want to build their own anyway and don't want someone else's "used house" Once the kids have gone, what do you do with a 5,000 sf white elephant?
2. Don't go into any kind of investment partnerships with other doctors. In the past 10 years I have seen local doctors partner to invest in strip malls, wineries, distilleries, coffee roasters, quarter horses, restaurants, and a variety of local designer clothing and home decor shops. Unless I'm WAY wrong, I doubt any of them made any money and certainly not what index funds would have returned. Maybe they give their wives a place to keep busy but that's about it. A cousin on mine who is a physician in Oregon invested with his buddies in a gold mine in British Columbia that hasn't yet mined an ounce of gold 15 years later but they still fly up there every so often to "inspect" the operation.
3. Stay out of the country club, especially if you are in a smaller city. Once you start hanging with that set you will get invited to 50 functions a year that require you bring your checkbook along. I expect it is different in big cities, but in our metro area of about 250,000 the country club set really tries to suck you in and get you donating to their endless list of charities and projects, most of which involve dress up dinners and a checkbook.
4. Don't let your kids think they are rich. Pampered 16 year old daughter of a local surgeon down the street totaled her new Range Rover last year after fleeing from a party that was being broken up by the cops. You have to fight hard to make sure your kids don't grow up feeling too entitled.
5. Don't expect your spouse to stay at home. Encourage your spouse to work if possible. Gives them something to do and a life outside yours. Doesn't matter if the spouse is a wife or husband. Makes the partnership more equal, even if the income isn't. I get that with kids it doesn't always make sense but that is a relatively short period of time when they are really young. Several of my wife's female co-workers have non-working stay at home Dad husbands and it seems to be a growing source of frustration for them as kids get older and the husband doesn't have much to do except for expensive hobby projects.
1. Don't buy excessively expensive real estate. Many physicians live in relatively low cost areas and have either been convinced or have convinced themselves that there is some kind of financial asset management benefit to buying a really expensive house. Around this part of Texas it is usually a custom home. Maybe the real estate agents are whispering it in their ears, or their wife's ears. But I have heard several physicians justify buying big McMansions on big estates by pointing to asset protection. Meanwhile they own a highly taxed expensive to maintain and operate house that 0.1% of the surrounding population can afford which means they can't hardly ever sell for what they paid. Plus the 0.1% that can afford such houses around here generally want to build their own anyway and don't want someone else's "used house" Once the kids have gone, what do you do with a 5,000 sf white elephant?
2. Don't go into any kind of investment partnerships with other doctors. In the past 10 years I have seen local doctors partner to invest in strip malls, wineries, distilleries, coffee roasters, quarter horses, restaurants, and a variety of local designer clothing and home decor shops. Unless I'm WAY wrong, I doubt any of them made any money and certainly not what index funds would have returned. Maybe they give their wives a place to keep busy but that's about it. A cousin on mine who is a physician in Oregon invested with his buddies in a gold mine in British Columbia that hasn't yet mined an ounce of gold 15 years later but they still fly up there every so often to "inspect" the operation.
3. Stay out of the country club, especially if you are in a smaller city. Once you start hanging with that set you will get invited to 50 functions a year that require you bring your checkbook along. I expect it is different in big cities, but in our metro area of about 250,000 the country club set really tries to suck you in and get you donating to their endless list of charities and projects, most of which involve dress up dinners and a checkbook.
4. Don't let your kids think they are rich. Pampered 16 year old daughter of a local surgeon down the street totaled her new Range Rover last year after fleeing from a party that was being broken up by the cops. You have to fight hard to make sure your kids don't grow up feeling too entitled.
5. Don't expect your spouse to stay at home. Encourage your spouse to work if possible. Gives them something to do and a life outside yours. Doesn't matter if the spouse is a wife or husband. Makes the partnership more equal, even if the income isn't. I get that with kids it doesn't always make sense but that is a relatively short period of time when they are really young. Several of my wife's female co-workers have non-working stay at home Dad husbands and it seems to be a growing source of frustration for them as kids get older and the husband doesn't have much to do except for expensive hobby projects.
Re: Answer to Most Physician/High Income Job Questions:
Good things to keep in mind and another angle to look at. is there any alternative investments for high net worth individuals that ARE RECCOMENDED? It seems like most would rather default that investment into index funds in a taxable brokerage account.
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Re: Answer to Most Physician/High Income Job Questions:
I would hope this would not just be a financial decision, but also a personal decision among the couple. My wife and I both prefer for her to "stay home" where she does a job much more difficult and much more important than my surgery job. We never liked the idea of hiring a mom.texasdiver wrote:
5. Don't expect your spouse to stay at home. Encourage your spouse to work if possible. Gives them something to do and a life outside yours. Doesn't matter if the spouse is a wife or husband. Makes the partnership more equal, even if the income isn't. I get that with kids it doesn't always make sense but that is a relatively short period of time when they are really young. Several of my wife's female co-workers have non-working stay at home Dad husbands and it seems to be a growing source of frustration for them as kids get older and the husband doesn't have much to do except for expensive hobby projects.
Re: Answer to Most Physician/High Income Job Questions:
Here is a great article about SAH spouses: http://www.nytimes.com/2015/05/17/opini ... women.html
Apparently, spouses collect annual bonuses, too.
Apparently, spouses collect annual bonuses, too.
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Re: Answer to Most Physician/High Income Job Questions:
Interesting rip off of the opening scene of "The Nanny Diaries." Certainly the culture of NYC should be considered "normal" and is the same as everywhere else. My sister lives in NYC on the Noooorth Shoooore and is one of those women.livesoft wrote:Here is a great article about SAH spouses: http://www.nytimes.com/2015/05/17/opini ... women.html
Apparently, spouses collect annual bonuses, too.
Re: Answer to Most Physician/High Income Job Questions:
Please stay on-topic, which are the financial aspects of high income physicians.
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Re: Answer to Most Physician/High Income Job Questions:
Every couple has their own dynamic. I'm only saying that the high-earner spouse shouldn't EXPECT their spouse to stay home, just because they can. Time goes by quickly and kids are soon off to school. Then what's left? Cleaning and cooking? Within my own small world it just seems like the couples in which both spouses have active employment seem to do better in the long run. Seems to make the relationship more equal, even if the salaries aren't. Respect your spouse's profession even if they only make 20% of what you do. That's all I'm saying.toofache32 wrote:I would hope this would not just be a financial decision, but also a personal decision among the couple. My wife and I both prefer for her to "stay home" where she does a job much more difficult and much more important than my surgery job. We never liked the idea of hiring a mom.texasdiver wrote:
5. Don't expect your spouse to stay at home. Encourage your spouse to work if possible. Gives them something to do and a life outside yours. Doesn't matter if the spouse is a wife or husband. Makes the partnership more equal, even if the income isn't. I get that with kids it doesn't always make sense but that is a relatively short period of time when they are really young. Several of my wife's female co-workers have non-working stay at home Dad husbands and it seems to be a growing source of frustration for them as kids get older and the husband doesn't have much to do except for expensive hobby projects.
Re: Answer to Most Physician/High Income Job Questions:
When looking at donor advised fund as part of overall physician financial plan blueprint what is the best way to fund this?
My inclination is to contribute directly monthly from cash, but some would say to contribute from winners in a brokerage account. My hesitation with this is that it can take away from overall brokerage account gains, and takes extra maintenance to reinvest similar to tax loss harvesting. Also in up market years, if only contribute loser from cash out loss would not have charitable contribution that year, thus may be better to just direct cash monthly.
My inclination is to contribute directly monthly from cash, but some would say to contribute from winners in a brokerage account. My hesitation with this is that it can take away from overall brokerage account gains, and takes extra maintenance to reinvest similar to tax loss harvesting. Also in up market years, if only contribute loser from cash out loss would not have charitable contribution that year, thus may be better to just direct cash monthly.
Re: Answer to Most Physician/High Income Job Questions:
I don't see it the way you see it. If I have $5,000 in cash and $5,000 in appreciated shares of TSM, then I buy $5,000 of TSM with the cash (very easy last time I checked) and donate $5,000 of previously owned TSM to a DAF. The "extra maintenance" takes about as much time as it took to read this sentence once everything is set up.duke33 wrote:When looking at donor advised fund as part of overall physician financial plan blueprint what is the best way to fund this?
My inclination is to contribute directly monthly from cash, but some would say to contribute from winners in a brokerage account. My hesitation with this is that it can take away from overall brokerage account gains, and takes extra maintenance to reinvest similar to tax loss harvesting. Also in up market years, if only contribute loser from cash out loss would not have charitable contribution that year, thus may be better to just direct cash monthly.
One would not contribute loser from cash out loss.
If $5,000 doesn't float your boat, then use a different number.
- Yesterdaysnews
- Posts: 964
- Joined: Sun Sep 14, 2014 1:25 pm
- Location: Sugar Land, TX
Re: Answer to Most Physician/High Income Job Questions:
If you are in a reasonably good field within medicine I don't see the rush to stop working completely. I would go part-time well before quitting totally, as it is a good, relatively stable and largely satisfying career.
I feel part-time medical career is a sweet spot, particularly in my specialty.
I feel part-time medical career is a sweet spot, particularly in my specialty.
Re: Answer to Most Physician/High Income Job Questions:
Gotcha, so you basically sell X amount of the appreciated share, and buy the EXACT same share at X amount nearly at same time, since don't have to worry about wash sale rule. Thus from a net standpoint not effecting overall balance of brokerage account.
I'm just trying to wrap my head around how this approach is an overall tax advantage vs just putting that X number directly in DAF? Also when you sell X you create a taxable event that has to be shown at tax time I believe even it is transferred to a DAF, right?
I'm just trying to wrap my head around how this approach is an overall tax advantage vs just putting that X number directly in DAF? Also when you sell X you create a taxable event that has to be shown at tax time I believe even it is transferred to a DAF, right?
Re: Answer to Most Physician/High Income Job Questions:
You DO NOT SELL X. That would create a taxable event. You click on "Transfer shares (without selling)" or the equivalent. Also timing is of no issue, you can buy new, then donate old. Or you can donate old, then buy new. Or whatever.duke33 wrote:Gotcha, so you basically sell donate X amount of the appreciated share, and buy the EXACT same share at X amount nearly at same time, since don't have to worry about wash sale rule. Thus from a net standpoint not effecting overall balance of brokerage account.
I'm just trying to wrap my head around how this approach is an overall tax advantage vs just putting that X number directly in DAF? Also when you sell X you create a taxable event that has to be shown at tax time I believe even it is transferred to a DAF, right?
- bertie wooster
- Posts: 764
- Joined: Mon Jun 25, 2007 5:14 pm
Re: Answer to Most Physician/High Net Worth Questions:
This is one of those moments where I agree with livesoft!livesoft wrote:I don't see much difference between the suggestions here and what non-physicians should want to do.
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Re: Answer to Most Physician/High Income Job Questions:
Good list, but in the end there are NUMEROUS good 10 point lists for any HNW individuals (including doctors). The key is not coming up with the list, but getting the person to go through it and EXECUTE it. Too many HNW professions are so ingrained on focusing on their profession they don't feel they have to spend the extra time worrying about what to do with the money. How do we change that. Until that changes any list is a waste of time.
I also would include picking one's spouse CAREFULLY. One can make a lot of money, but doesn't matter if the other spouse spends it.
Good luck.
I also would include picking one's spouse CAREFULLY. One can make a lot of money, but doesn't matter if the other spouse spends it.
Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” |
-Jack Bogle
Re: Answer to Most Physician/High Income Job Questions:
Thanks livesoft for clarification, so it is basically a just a transfer from brokerage to DAF so no tax headaches. I deduce then it would make it a little easier to then have your DAF with the same firm as your taxable. Helpful advice, I appreciate it...
Re: Answer to Most Physician/High Income Job Questions:
That is true. For instance, I have Fidelity DAF. I donated shares from a Fidelity brokerage account (with same account holder credentials) to the DAF with a few button clicks.duke33 wrote: I deduce then it would make it a little easier to then have your DAF with the same firm as your taxable.
However, I do not really use Fidelity as a broker, but only as a conduit. Instead, I buy ETFs elsewhere. After a while, I transfer to Fidelity to get a bonus and let them sit. Then I donate to the DAF. In most respects, if you have old shares sitting around, then it doesn't matter where they are held as you are not going to sell them anyways, so you might as well move them around to collect bonuses and participate in tax avoidance moves.
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- Posts: 3937
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- Location: Vancouver WA
Re: Answer to Most Physician/High Net Worth Questions:
The difference I think is that most physicians start earning real money much later in life, tend to have a lot more accumulated debt, have much bigger liability concerns, and tend to burn out quicker.bertie wooster wrote:This is one of those moments where I agree with livesoft!livesoft wrote:I don't see much difference between the suggestions here and what non-physicians should want to do.
Otherwise, its pretty standard stuff for higher income individuals.