Anesthesiologist Advise [how to save money]

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Gundamn959
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Anesthesiologist Advise [how to save money]

Post by Gundamn959 » Mon Oct 09, 2017 11:01 pm

Hey guys!
New to the forum. Here is my problem:
32yr old New anesthesiologist with zero debt who just moved from the Mid-West to So-cal. My current situation is 1099 with absolutely no perks. This is my 3rd month working and it seems like i am living paycheck to paycheck (and credit cards). I understand that eventually the "billing will catch up" and I should be making close to 25K a month but this is all before taxes. I have about $3300 in guaranteed expenses a month ( rent, disability, malpractice, health insurance, extremely low car payment and phone to name a few). My rent alone is $2200 ( I am going to try to break the lease and move). I have about 14K in my 401K from residency and about 10K in a Roth (the disability insurance person helped me with that) . My issue is how am I supposed to save besides moving into a cheaper place. On top of all this I have been giving money to my parents and plan to every check since they have supported me my whole life... I know I need to "invest" but literally don't know where to start. I have looked into opening a Schwab investing account but I am pretty sure there is a $1000 minimum. Then I hear things about incorporating myself into an S-corp but I feel like this year its pointless until I get a handle on what I am going to be keeping after tax.
I know you usually have to pay for this kind of advise but any suggestions on what I can read or should be doing would be greatly appreciated!!

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djpeteski
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Re: Anesthesiologist Advise [how to save money]

Post by djpeteski » Tue Oct 10, 2017 6:12 am

I think you are putting the "cart before the horse" with being concerned about investing. You will get there, but now is not the time.

If I was in your situation here is what I would do:

I am going to assume that your 3300 in expenses is in addition to your rent, so about 5500 in all.

1) Understand how long it will take for me to get up to "full salary", is 25K per month 3 months away or a year? If it is 3 months away, then the current rental is fine. If it is much longer you will either need to find room mate(s) or find someplace less expensive to rent.

2) I am going to stop helping my parents for now, that can continue once you get back on your feet.

3) I would drive a very modest car.

4) I would make saving for taxes the first priority. If you have trouble with organization open a separate account to save your taxes. I would seek tax help from a competent adviser.

5) I would then save up a small emergency fund, at least 5K, and maybe 10K. This is not an investment, it goes into a savings account that earns almost nothing.

6) I would then retire the credit cards, and kill any balance on those cards. If I had a car loan that would also be paid off.

7) I would then look at my student loans. I would make payments such that they would be gone in 5 years or less.

8) I would then start to look at starting a retirement plan. Some amount to help get it started.

9) Then I would look to help my parents.

10) I would then increase my emergency fund to 6 months of expenses.

It will take time to work through these steps, but you can get there. Now the goal is to spend as little as possible. While you have achieved something great, it is time to live and spend like someone hardly making anything. The country club memberships will come later.

Grt2bOutdoors
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Re: Anesthesiologist Advise [how to save money]

Post by Grt2bOutdoors » Tue Oct 10, 2017 6:20 am

Assume you come home with 50 cents on the dollar, that's 12,500 per month. You sound like prime candidate for You Need A Budget. Doesn't sound like you know where your money is going. Aim to save 40-50 percent of take home pay, need to be frugal for a while longer or you will continue cycle of living paycheck to paycheck.
Last edited by Grt2bOutdoors on Tue Oct 10, 2017 12:10 pm, edited 2 times in total.
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Finance-MD
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Re: Anesthesiologist Advise [how to save money]

Post by Finance-MD » Tue Oct 10, 2017 6:34 am

Congrats on having no debt.
$3300/mo includes rent? That sounds pretty good.
How much are you getting now before taxes?
Do you have a PLLC set up?
S Corp is helpful for minimizing Medicare tax since you only pay Medicare tax on the portion that comes to you as a w-2 salary.
It won’t be helpful now in a low income year.

How much are you getting monthly now?

As for immediate goals I’d first open an individual 401k with vanguard and try to get it fully funded with the employer contribution of $18000 for this year by the end of the year, preferably Roth 401k because I’m assuming your tax bracket this year will be 28% or less...

It may be hard to swing that though.
Can you pick up more shifts? Moonlight somewhere else?

You should be saving a minimum of 20% of your salary as a general rule.

HSA if you have a HDHP, then Solo 401k , then Backdoor Roth, then taxable account... can consider a cash value pension plan too once making a lot.

Read white coat investor blog
Read physician on fire blog (my preferred)

Listen to podcasts: white cost investor, Doctor money matters

Join Facebook group: married to medicine personal finance

jayk238
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Re: Anesthesiologist Advise [how to save money]

Post by jayk238 » Tue Oct 10, 2017 7:28 am

I think its really unfortunate that you are in this situation after working so hard for so many years!

While your potential salary sounds great I would add that there are some modifiable factors involved that may benefit you if changed-

Before stating you cannot- consider this- is living in Ca more important than having enough money asap for FI? What if you have a traumatic injury and cannot work in 10 years? What if you become depressed or anxious and need a career change? What if you become disabled in another way? Or die? Would you want enough money saved for a loved one then? What if you just want enough money to retire on in the near future so that it gives you freedom to do other things- working for charity care etc that may be more meaningful ?

Making more money is not exactly about buying expensive cars- though thats nice. Its also about protecting yourself from the future because as Donald Rumsfeld says- there are unknown unknowns we have no idea about.

Can you potentially move away from cali? If living in Cali is very important does it outweigh saving for retirement and helping family out? Perhaps you can move to midwest where COL is lower and incomes are higher so that you can both save and help them.

What I notice is a high rent and a lower pay. I am going to be an internist and my income nearly matches you. This shouldnt be the case. My rent is going to be around 2300 a month and this is by choice (to live in a luxury high rise in downtown) as opposed to a much more affordable 1k a month for a cheap apt in the suburbs. You can find very affordable housing in the midwest. You will also get paid much higher. Some things to think about!

I once read - in the WCI- but have heard elsewhere before that-paraphrased- as a doctor you are compensated well- but not so well that you can have everything you want. You can have a few nice things or a lot of not so nice things but you will struggle to have everything.

As an anesthesiologist making below market incomes (IMO)- you are stretching yourself thin with- higher housing budget, giving money to fam, saving for retirement.
Remeber:
1. Your taxes in Ca are eating your income a lot - ALOT
2. You COL is eating your income ALOT
3. Your below market income is eating your income ALOT
4. You are giving money to fam
5. You are trying to save for retirement but unable to

Which of the above is the easiest to fix?

mrsytf
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Re: Anesthesiologist Advise [how to save money]

Post by mrsytf » Tue Oct 10, 2017 7:42 am

How much are you making right now? Is it variable? If so then you need to learn to live on last months income. Here is a link from the blog the simple dollar on what that means and how to do it. https://www.thesimpledollar.com/how-to- ... hs-income/

What are your monthly expenses? Not just the fixed but everything else: food, entertainment, parent's stipend etc. if you don't know how much you are spending a month, start tracking expenses. Some use personal capital or mint. Physican on fire, another anesthesiologist, has a link on his blog.

Saying, "billing will catch up" is a huuuuuge red flag. History has shown people can outspend any income. Any income. You need to learn how to live on what you have right now. Were you running a deficit when you were a resident making $50k per year? If no, then you should not be now. Fit your rent, parental contributions and anything else you are spending your money now into your current income right now. Waiting for your income to match your expenses is a bad way to start your career. You need to fix it now.

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in_reality
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Re: Anesthesiologist Advise [how to save money]

Post by in_reality » Tue Oct 10, 2017 7:47 am

Gundamn959 wrote:
Mon Oct 09, 2017 11:01 pm
I have looked into opening a Schwab investing account but I am pretty sure there is a $1000 minimum
Minimum account opening requirement: $1,000 (waived with automatic $100 monthly deposits or by opening a Schwab Bank High Yield Investor Checking® account linked to your Schwab One® brokerage account)
[60% US _ 26% DEV _ 14% EM] | (-16% LC _ +8% MC _ +8% SC) | [47% FND/VAL _ 40% MKT _ 7% MOM _ 6% REIT] | (+/- 5% or *25% rebalancing bands)

mrsytf
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Re: Anesthesiologist Advise [how to save money]

Post by mrsytf » Tue Oct 10, 2017 7:56 am

Okay, so this is my second reply on your post but you have me seriously concerned. This is a link to white coat investors "start here" page. If you scroll down to the links there are ten or so intro pages that might be helpful to you. https://www.whitecoatinvestor.com/new-t ... tart-here/

Also for taxes I would get an account at turbotax.com. You don't need to pay anything. Input how much you have made so far and turbo tax will spit out how much you will have to pay in taxes so you have an idea. You may not have the money right now but you can start getting prepared. Include information from your last pay check as a resident or fellow.

I would also research sep IRA vs solo 401k. People here seem to advocate solo401ks so you can do a backdoor ROTh IRA. You may not be able to max either out this year but if you can contribute a little bit that would be a great start.

fipt2030
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Re: Anesthesiologist Advise [how to save money]

Post by fipt2030 » Tue Oct 10, 2017 8:26 am

To OP,
Great suggestions so far,if it was me I would do the following, irrespective of where you work and live
- for 2017 Roth IRA
- Talk to your employer if they can pay your LLC instead of you ( 1099 goes to LLC)
- Till your income crosses 150k in year don't worry about S Corp with IRS
- Open solo 401k, that's a must, to save on taxes and jumpstart your retirement portfolio ( 50K plus every year)
- Get on a budget, either you paid your student loans or you don't have any, congrats. I was 32 when I was done with my quarter million SL

Educate yourself on personal finance and investment stuff, I am playing catch up now and I wish I knew Bogleheads in 2010

Good luck

wahnfried
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Re: Anesthesiologist Advise [how to save money]

Post by wahnfried » Tue Oct 10, 2017 8:39 am

Hi gunda
Congrats on joining us as an attending !

I strongly agree with jay238, you are at a time in your career when you should maximize income and minimize expenses, living in socal will not help on either end.
While places like polar, ND or hogwash MI have nothing on Orange County , living and working there just for five short years will do wonders to to your retirement account and your peace of mind....
Get it over with , live there for a bit , work hard and make some real coin, THEN move to a nicer place, you will be able by then to be a bit more picky what you do ( cardiac? Trauma? OB ? What's that?) and where you work.
Best of luck , wahnfried

bigred77
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Re: Anesthesiologist Advise [how to save money]

Post by bigred77 » Tue Oct 10, 2017 8:50 am

A debt free doctor in their early 30s who grosses 300k a year and has expenses between $40k and $66k a year is being told they shouldn't live in their current location for financial reasons... Wow :shock: :shock:


OP,

Just do some reading, Find out how your income works. Find out how taxes work. Find out how to best save in tax advantaged accounts. You don't need to cut any expenses, you don't need to worry about hitting a $1k minimum investment. Just take a deep breath, read, and collect information for a few weeks/months.

staythecourse
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Re: Anesthesiologist Advise [how to save money]

Post by staythecourse » Tue Oct 10, 2017 9:03 am

First thing to do is some reading and meeting with an accountant. Reading about the basics of investing. Even if it is boglehead wiki page. Start with the foundation, i.e. lowering/ eliminating debt (not an issue with you), LBYM, figuring out your budget (to the closest $100), saving for EF (6 months at least, but if you are supporting others, i..e parents make it 12 months), etc... After that then start reading about investing. Meet with a CPA and start learning about how to keep track of your income and business expenses and how to pay quarterly taxes as you are 1099. For example. some of the expenses are not a full value. You can write off malpractice, health, and ?disability as business expenses. Are you a sole prop. or single member LLC? Either way the tax reporting is the same. Set up a solo401k so you can start saving in that (18k employee+ up to 35k employee).

If you don't figure out the basics of the foundation then you are setting yourself for under performance down the road.

Being single would you consider locums? That will generate SIGNIFICANTLY more then 25k/ month and they even cover lodging and malpractice. double positive.

Good luck.

p.s. Investing is like teaching the an ER resident about airway. They all want to intubate which is sexy, but as you know the basics of airway management with bag and mask is more important. So take your time and really focus on the basics first.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

adamthesmythe
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Re: Anesthesiologist Advise [how to save money]

Post by adamthesmythe » Tue Oct 10, 2017 10:31 am

> 32yr old New anesthesiologist with zero debt

So your earnings will be very high, certainly high enough to live well in CA

> I understand that eventually the "billing will catch up" and I should be making close to 25K a month

> I have about $3300 in guaranteed expenses a month

You have a temporary problem and modest (for CA) essential expenses.

> how am I supposed to save besides moving into a cheaper place

What is cheaper in CA- living in your car?

> I have been giving money to my parents and plan to every check since they have supported me my whole life... I know I need to "invest" but literally don't know where to start

I do not see why you are even trying until your biiling and compensation catches up. As you describe it you are in a transient situation. At you age you have many decades of income to save out of for retirement.

Sometimes people around here are obsessive about saving for retirement, even in circumstances where the sensible thing is to defer saving until it becomes more practical.

mac808
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Re: Anesthesiologist Advise [how to save money]

Post by mac808 » Tue Oct 10, 2017 11:30 am

bigred77 wrote:
Tue Oct 10, 2017 8:50 am
A debt free doctor in their early 30s who grosses 300k a year and has expenses between $40k and $66k a year is being told they shouldn't live in their current location for financial reasons... Wow :shock: :shock:


OP,

Just do some reading, Find out how your income works. Find out how taxes work. Find out how to best save in tax advantaged accounts. You don't need to cut any expenses, you don't need to worry about hitting a $1k minimum investment. Just take a deep breath, read, and collect information for a few weeks/months.
In defense of that line of advice: it's all about choices, and sometimes people come to Bogleheads to have others walk them through what those (seemingly obvious, to us) choices are. There are significant geographic disparities in medical reimbursement. He can live in CA if he wants and he's going to be fine. He can live in a rural area and more than double his after-tax income, working the same hours. He can live in CA and work locums elsewhere to supplement his income. Lots of options. If retiring or moving to part-time work early in life is high up on one's priority list, as it is for many who find their way here (even if they don't admit it in their first post), then extra savings could make a difference; if not, then not so much.

I sense a lot of income insecurity out there recently, even though the housing, stock, and jobs markets are booming. In many of these posts from mid-career professionals making great incomes might be the unspoken fear of "I don't know how long this will continue". Probably not as applicable to the medical field which enjoys great job security, but certainly in others.

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Watty
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Re: Anesthesiologist Advise [how to save money]

Post by Watty » Tue Oct 10, 2017 11:48 am

djpeteski wrote:
Tue Oct 10, 2017 6:12 am
1) Understand how long it will take for me to get up to "full salary", is 25K per month 3 months away or a year?
+1

If it will just be a few months then I would just put all the big decisions on the back burner for awhile and concentrate on just muddling through until things settle down. Once things settle down then you will still need at least a few months to build up a good emergency fund and come up with a long term plan.

It sounds like you are about three months into a year lease so I would not bother to move since there would be moving costs and likely some cost to break the lease too.

A few things to do for 2017 though;

1) Make sure that you are paying enough taxes now to avoid any underwithholding penalty when you file your taxes.

2) Plan to be able to max out 2017 retirement accounts.

WanderingDoc
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Re: Anesthesiologist Advise [how to save money]

Post by WanderingDoc » Tue Oct 10, 2017 11:56 am

Folks telling someone earning $25K/mo. to live frugally, drive a beater car, and move to a cheaper place in SF? I thought I've seen it all.

This gentleman/lady has obviously demonstrated their ability to earn a high income, and worked hard for it. Now they are expected to scrounge and save? Do you think someone went to medical school and residency during the more vibrant decade of their life so they could live like money mustache for the following decade?

He/she has enough to live well, spend money on trips and nice things, invest in mutual funds + real estate. I was able those things and then some on less then half of the $25K/mo. salary.
One day it suddenly dawned on me that I had won the real estate lottery.

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Re: Anesthesiologist Advise [how to save money]

Post by Grt2bOutdoors » Tue Oct 10, 2017 12:09 pm

WanderingDoc wrote:
Tue Oct 10, 2017 11:56 am
Folks telling someone earning $25K/mo. to live frugally, drive a beater car, and move to a cheaper place in SF? I thought I've seen it all.

This gentleman/lady has obviously demonstrated their ability to earn a high income, and worked hard for it. Now they are expected to scrounge and save? Do you think someone went to medical school and residency during the more vibrant decade of their life so they could live like money mustache for the following decade?

He/she has enough to live well, spend money on trips and nice things, invest in mutual funds + real estate. I was able those things and then some on less then half of the $25K/mo. salary.
You're right, the OP needs to follow your methodology on investing in real estate. Then, all those real estate lottery winnings will bail him out of his budgeting issues! :oops: The OP needs to live frugally until he can figure out his inflows and outflows. Right now, it appears he has more outflows than inflows, no way to sink a leaking ship faster than to spend more than you take home with nothing in reserve to back you up. Being concerned about a $1,000 minimum at that income level? I'd say perhaps he needs a Dave Ramsey style intervention.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

ThriftyPhD
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Re: Anesthesiologist Advise [how to save money]

Post by ThriftyPhD » Tue Oct 10, 2017 12:12 pm

WanderingDoc wrote:
Tue Oct 10, 2017 11:56 am
Folks telling someone earning $25K/mo. to live frugally, drive a beater car, and move to a cheaper place in SF? I thought I've seen it all.

This gentleman/lady has obviously demonstrated their ability to earn a high income, and worked hard for it. Now they are expected to scrounge and save? Do you think someone went to medical school and residency during the more vibrant decade of their life so they could live like money mustache for the following decade?

He/she has enough to live well, spend money on trips and nice things, invest in mutual funds + real estate. I was able those things and then some on less then half of the $25K/mo. salary.
To be fair, OP hasn't yet earned $25k/month. That is the hoped for salary when "billing will catch up". At the moment there are cash flow issues, with living paycheck to paycheck and using credit cards to meet costs. Depending on how long it will take for "billing to catch up", OP will need to watch spending and budget until they're no longer living on credit cards. Probably not worth breaking a lease and moving, since in SoCal that rent doesn't seem high, but also probably not in the situation to currently buy a new BMW and winter in The Maldives.

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DarkNyte
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Re: Anesthesiologist Advise [how to save money]

Post by DarkNyte » Tue Oct 10, 2017 12:33 pm

Hi Gundamn959,

First off welcome to the forum. Money matters can be intimidating but I congratulate you on taking your first steps.

I don't usually give advice on this forum but your situation is very close to mine so I will chime in. I am also a 1099 anesthesiologist living in SoCal. I have been in practice for a little over 3 years, so also recently finished fellowship. For me, it took around 5 months for billing to catch up to a point where it is pretty consistent monthly. So you are almost there, probably just need to wait it out for 2 or 3 more months.

If you don't already, I would recommend using some form of a budget. Excel spread sheet, mint.com, ynab.com. Budgeting empowers you to be able to save confidently, never fearing that you will run out of liquid money due to over aggressive spending, or over aggressive retirement saving. Learning to budget and stick to your budget will be the most important financial discipline you learn for the rest of your life. Learn to do this before even thinking about stock investing, etc.

If you don't have this already, I would build up a fully liquid bank account with around 3 to 6 months of living expenses in it. In your case this would be around 10k to 20k since you spend around 3.3k on guaranteed monthly expenses.

After you have an emergency fund in place I would open up a Solo 401k. I did a fair amount of research and chose TD Ameritrade due to the lowest possible fees for investing in a 3 fund portfolio. Ironically their fees are even lower than going with Vanguard for a Solo 401k.

Make sure you have own occupation disability insurance, term life insurance if you have dependents that you support (?parents), and an umbrella insurance policy. These are necessary to protect you early in your career.

I wouldn't bother with an S corp as this point. I did some rough calculations, when I was deciding to incorporate or not, and the break even point is around 400k yearly income due to all the expenses associated with forming and keeping an active incorporation. It costs $800 dollars a year just to have an incorporation in California. I personally do my own taxes since I never incorporated. Taxes get much more complicated after incorporation, so most anesthesiologists that incorporate also have an accountant that they pay anywhere from 1k to a couple grand a year to complete their taxes. Keep going as a sole proprietor as this time, but definitely apply for a EIN if you haven't already. You can be a sole proprietor but still use a EIN to keep your SSN safer. https://www.irs.gov/businesses/small-bu ... ein-online

Hope this helps. Feel free you private message me if you have anymore specific questions about anesthesia practice in SoCal.

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goodenyou
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Re: Anesthesiologist Advise [how to save money]

Post by goodenyou » Tue Oct 10, 2017 12:36 pm

I moved to an ultra LCOL and did the geographic arbitrage (in the old days of medicine-20+ years ago). Spent less and made more with additional investment opportunity. I spent the first 5 years living in a small home and paid off all debt. The next 5 years I lived way below my means, but I was still living very well (I was making very good money). 10 years later, I am immune to the deterioration of medicine. I will be moving to a HigherCOL and spending a lot more on luxury. My kids 529 are funded and I have hit "critical mass". My advice is to LBYM, don't make "stupid doctor mistakes" by investing in dumb ideas, and save, save, save. You don't want to be a slave to this profession, especially nowadays.
"Ignorance more frequently begets confidence than does knowledge" | "The best years you have left are the ones you have right now"

staythecourse
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Re: Anesthesiologist Advise [how to save money]

Post by staythecourse » Tue Oct 10, 2017 12:57 pm

WanderingDoc wrote:
Tue Oct 10, 2017 11:56 am
Folks telling someone earning $25K/mo. to live frugally, drive a beater car, and move to a cheaper place in SF? I thought I've seen it all.

This gentleman/lady has obviously demonstrated their ability to earn a high income, and worked hard for it. Now they are expected to scrounge and save? Do you think someone went to medical school and residency during the more vibrant decade of their life so they could live like money mustache for the following decade?

He/she has enough to live well, spend money on trips and nice things, invest in mutual funds + real estate. I was able those things and then some on less then half of the $25K/mo. salary.
He isn't going to be making 25k/ month. He will be making GROSS 25k. Minus both halves of SS and medicare. Progressive tax structure. Picking up own medical, dental, and malpractice (albeit at reduced price as he can write off some of those expenses as business). Also said he will be paying for parents. All while living in 2k apartment for rent. A salary of anesthesia at 300k per year is not all that much EVEN when it is as a W2 employee status let alone when you are 1099.

I am not saying like others are don't live in expensive part of Cali, but do agree with others going through ALL that hard work to get to this point and feel like you are always playing catch up for the rest of your career is not a great feeling. Heck my wife and I live in a Large Metro area (both physicians) and have done great financially, so it doesn't mean you have to move to a town of <10k to do well as a physician vs. the "big city".

Either way the OP is not asking if he/ she should move so it is irresponsible to give such advice.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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DarkNyte
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Re: Anesthesiologist Advise [how to save money]

Post by DarkNyte » Tue Oct 10, 2017 12:58 pm

Also forgot to mention, it's possible to LBYM even in SoCal and build net worth. Sometimes I feel like this forum is so biased towards living in Podunk USA for everyone starting out. It's not possible for everyone, nor desirable to do that, nor is in necessary.

I'll use myself as an example just to prove a point. My monthly rent is $2100 a month for a single family house in SoCal, not far off from OP. In 3 years I have seen my net worth go from negative 26k after finishing fellowship, to 591k. I also expect to hit "critical mass" by the 10 year mark, but didn't need to be in a LCOL area to do it. Of course this all depends on where the market takes us, in that sense we are all in the same boat, no matter where we live.

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Re: Anesthesiologist Advise [how to save money]

Post by Spirit Rider » Tue Oct 10, 2017 2:58 pm

fipt2030 wrote:
Tue Oct 10, 2017 8:26 am
Talk to your employer if they can pay your LLC instead of you ( 1099 goes to LLC)
What is the LLC supposed to accomplish. It will provide little to no liability protection for the OP. An LLC's liability protection is for the company, it does not extend to the professional acts of the owner. That is what malpractice and business liability insurance are for. A default single member LLC is considered a disregarded entity by the IRS taxed as a sole proprietor and provides no tax benefits. Not to mention California expressly prohibits physicians from operating as an LLC.
Till your income crosses 150k in year don't worry about S Corp with IRS
This isn't exactly true. An S-Corp generally provides a significant benefit for net business profits $50K - $250K and again at $350K+. The optimal net business profit for creating an S-Corp in 2017 is $127,200 / 0.9235 ~= $137,735. This is because with increases above this amount, the self-employed are only paying a 2.9% SE tax, while the S-Corp shareholder-employee will continue to pay 15.3% FICA. The S-Corp advantage will continue to decline until the S-Corp' shareholder-employee's W-2 Social Security wages >= $127,200. Then factor in the fact than in California there is a 1.5% (min $800) franchise tax on an S-Corp's net income. This further offsets the minimal difference in employment taxes. Finally factor in the fact that 1/2 SE taxes are deduction against income tax.

So lets add all the factors for someone in CA with $300K in net business profit and compare the employment taxes between self-employment and an S-Corp with shareholder-employee W-2 wages = $150K:
  1. self-employment
    1. SE tax $300,000 * 0.9235 = $277,050; $127,200 * 0.124 = $15,772.80 + ($277,050 * 2.9% = $8,034.45) ~= $23,807
    2. ACA 0.9% Medicare surtax (assuming single) $277,050 - $200,000 = $77,050 * 0.9% ~= $693
    3. 1/2 SE tax deduction != $11,904 @ 33% marginal rate ~= $3,928 effective 1/2 SE tax offset
    4. SE tax $23,807 + ACA Medicare surtax $693 - 1/2 SE tax offset $3,928 = $20,572 effective SE tax
  2. S-Corp
    1. FICA $150K W-2 SS wages; $127,200 * 0.124 = $15,772.80 + ($150,000 * 2.9% = $4,350) ~= $20,123
    2. Federal unemployment tax (FUTA) $7,000 * 6.0% = $420.
    3. CA Unemployment Insurance (UI) $7,000 * 3.4% = $238. If you pay this timely, you receive a FUTA credit. So no net cost.
    4. CA Employment Training Tax (ETT) $7,000* 0.1% = $7
    5. CA State Disability Insurance (SDI) $110,902 * 0.9% ~= $998, you can opt out with an exclusion statement.
    6. CA minimum franchise tax = $800, no S-Corp profits.
    7. FICA $20,123 + FUTA $420 + ETT $7 + CA Franchise tax $800 = $21,350
So for someone in CA with $300K in net business profit, it will cost them more in payroll taxes that it would effectively cost them in SE taxes. For someone not in CA, it saves them < $500. This is even before you factor in the additional tax preparation fees, payroll costs, your time and the hassle factor. Depending on those costs and your particular state (CA is not the only one with additional taxes/fees), once you get above $250K, you really need $350K - $400K to justify an S-Corp on purely payroll tax issues.

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Re: Anesthesiologist Advise [how to save money]

Post by Katietsu » Tue Oct 10, 2017 3:46 pm

OP, you are still in transition. IMO, most people see their net worth go down when they make a geographic move and start their first post training job, especially on a 1099. I would not move. Your rent is reasonable for your location and expected salary. And, since so many new physicians change jobs, you may want to move for that reason at the end of your lease.

Do you parents need your support now? If they are using it for optional expenses, I would consider halting your assistance for a few months until you get your own financial life straightened out.

I agree with those who talk about the need for a budget and an emergency fund. I think that the lack of a plan and disorganization is at the root of your financial concerns. You also need to make sure you have a good handle on your taxes. I would meet with a tax preparer now to make sure you are handling your expenses, documentation, estimated taxes, etc in the best way possible.

jayk238
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Re: Anesthesiologist Advise [how to save money]

Post by jayk238 » Tue Oct 10, 2017 4:59 pm

I strongly disagree with anyone who states that current income is ok at any level.

As long as your income for the time you put in is lower than it would be some where else then your current income is not ok.

This is objective from a purely mathematical standpoint. The next question is whether the tradoff of a worse salary is better if what you get in return is ok. If living in a certain location trumps salary at any point or a certain threshold then obviously do that. Otherwise, posters stating that having this current salary in SoCal is ok are being unhelpful to the OP. He has not objectively stated yet that living in SoCal is essential to him. Perhaps he picked that place because he didnt know where else he would like to live (IMO this is just due to not investigating enough) or maybe he jumped at the first offer or maybe he is worried about missing loved ones. Any of these things can be addressed in a myriad of ways if one were to live in anothe rlocation.
Here is my reasoning:

1. I believe that happiness primarily comes from the people we interact with, our social connections, and experiences we have. Research generally backs this up-
There seems to be an assumption here that in order to make bank compared to OP you need to live in bumblebum town < 10k pop. This is objectively false. If that were the case I would agree that money is not everything. Many people who are single or have small families or something else need larger cities or towns to have things to do and make social connections.

One can find such opportunities at many other locations- cities in the Midwest that offer numerous lifestyle opportunities that while not as varied as in SoCal or NYC are nevertheless plentiful. Cincinnatti, lexington, nashville, indianapolis, columbus, to name a few from looking at the midwest map. This is objectively possible and opportunities are abound. You wont be able to surf or maybe have the same outdoor lifestyle as in Denver but you will be able to make friends, meet interesting people, do fun things. I would find it hard to believe that living in SoCal offers such amazing lifestyle choices as to trump income

2. How much income are we talking about? The average anesthesiology salary in Cali is 300k. In the midwest its 500k+. Is 200k difference OK? At what income level are these tradeoffs worth it? 100k difference? 200k? 50k? We are not talking about small numbers here. The financial difference doesn't end there. Cali state income tax is progressive and punishing. In Cali its effective state income tax is around 8% for someone making 300k. Thats about 24000 in the other cities I mentioned effective tax is around 2% or about 6000. Is the additional 18000 dollars worth it?

One can again find enormous savings opportunities with this money alone. Taking the 18k savings over a 10 year period amounts to 180k plus invested - which is about an additional 5-10 k invested. This is not a negligible amount.

Finally the COL is astoundingly different - we are talking about 3k for a livable area vs 1.5k for a very well appointed living space in any of these cities. Again the living and lifestyle is enormously different.

3. It is not about living an expensive lifestyle. It is about protecting one's self from the future.
Doctors may have a stable profession but that doesnt mean we are not encroached upon by other services. Look at all the reasons why:
1. From CRNAs, to NPs and PAs who believe the y can perform beyond their scope (another topic antoher time)
2. increasing pressures politically to 'reign in' physician pay with single payers and other schemes (note physician pay is 80 billion vs a 2.5 trillion economy- just how will cutitng doctor pay by half going to help us?!!!) - rhetorical q btw.
3. To falling reimbursements because a practice failed to properly manage itself be it hospital or large system
Im just listing these concerns that to us physicians are readily apparent but not to others and dont want to debate them really

4. And finally doctors have NOT earned for a long time in life. On average they barely have any savings when they reach 30 years. Whereas an engineer making 90k starting at 23 years of age has the opportunity to save and move up the ranks over time. This means savings today is even more important than ever including compound interest at this age vs waiting over a period of years. I suspect comparing a doctors savings rate as a first year attending is much much lower than such an engineer. So saving as much as one can in his early working years by minimizing income loss is magnified that much more -both because of the power of compound interest and also because of his late earning start.

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Re: Anesthesiologist Advise [how to save money]

Post by Toons » Tue Oct 10, 2017 5:01 pm

You have a computer
Consider Quicken.
To aid in managing your financial life, :happy
https://www.quicken.com/compare
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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Re: Anesthesiologist Advise [how to save money]

Post by fipt2030 » Tue Oct 10, 2017 5:11 pm

Spirit Rider wrote:
Tue Oct 10, 2017 2:58 pm
fipt2030 wrote:
Tue Oct 10, 2017 8:26 am
Talk to your employer if they can pay your LLC instead of you ( 1099 goes to LLC)
What is the LLC supposed to accomplish. It will provide little to no liability protection for the OP. An LLC's liability protection is for the company, it does not extend to the professional acts of the owner. That is what malpractice and business liability insurance are for. A default single member LLC is considered a disregarded entity by the IRS taxed as a sole proprietor and provides no tax benefits. Not to mention California expressly prohibits physicians from operating as an LLC.
Till your income crosses 150k in year don't worry about S Corp with IRS
This isn't exactly true. An S-Corp generally provides a significant benefit for net business profits $50K - $250K and again at $350K+. The optimal net business profit for creating an S-Corp in 2017 is $127,200 / 0.9235 ~= $137,735.







Obviously I am not aware of CA laws as far as PLLC's go

Regarding S Corp, it's a no-brainer, once yearly income crosses 150k, we both are saying the same thing

OP should plan on forming one next year

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Re: Anesthesiologist Advise [how to save money]

Post by Spirit Rider » Tue Oct 10, 2017 6:54 pm

fipt2030 wrote:
Tue Oct 10, 2017 5:11 pm
Obviously I am not aware of CA laws as far as PLLC's go
Even if the OP was not a physician it would not necessarily make sense to have an LLC, because LLCs provide little to no liability protection to the owner. This is a persistent myth that causes many people to create LLCs when they provide little benefit for them. Also, in CA and many other states LLCs pay franchise and other taxes and/or fees that a sole proprietor does not.
Regarding S Corp, it's a no-brainer, once yearly income crosses 150k, we both are saying the same thing
We are not saying the same thing. It is NOT a no-brainer, because it is not always true. There is this persistent myth that an S-Corp is always better for higher income owner-employees. Like many myths is is only sometimes true.

You obviously did not read my comparison of someone with $300K in net business profit. The OP will pay almost $800 more as a $300K CA S-Corp than they would as a $300K CA sole proprietor. Even if the OP was not in CA, they would save < $500. In both cases that does not include CPA and payroll costs.
OP should plan on forming one next year
No, the OP should not plan on forming an S-Corp based on employment taxes alone. The OP should sit down with a CA lawyer familiar with the his exact circumstance and determine the best business entity.

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badbreath
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Re: Anesthesiologist Advise [how to save money]

Post by badbreath » Tue Oct 10, 2017 7:34 pm

Besides White Coat investor you should talk to www.physicianonfire.com he is also a anesthesiologist that has just started working only part time.
“While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho Marx

fipt2030
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Re: Anesthesiologist Advise [how to save money]

Post by fipt2030 » Tue Oct 10, 2017 8:08 pm

Spirit rider, You are right
I guess I shouldn't have paid my attorney and CPA , shouldn't have filed an S Corp

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Re: Anesthesiologist Advise [how to save money]

Post by Spirit Rider » Tue Oct 10, 2017 9:14 pm

fipt2030 wrote:
Tue Oct 10, 2017 8:08 pm
Spirit rider, You are right
I guess I shouldn't have paid my attorney and CPA , shouldn't have filed an S Corp
I don't know if this is a genuine statement or sarcasm.

There are many cases where an S-Corp is the right choice. My main point is that there are still a lot of cases where the conventional wisdom is wrong. You have to evaluate the specific circumstances of each situation to determine the best choice.

If it is sarcasm. Just be aware that we have seen many cases here on Bogleheads where CPAs and/or lawyers did not give the best advice. Your CPA should have software or a spreadsheet tweaked for your specific state circumstances.

The math does not lie, it is only wrong if the model is wrong. Classic examples are not factoring in the 1/2 SE income tax deduction when comparing SE taxes to S-Corp FICA, additional S-Corp taxes/fees, payroll costs and professional service fees required by the S-Corp tax filings.

fipt2030
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Re: Anesthesiologist Advise [how to save money]

Post by fipt2030 » Tue Oct 10, 2017 9:43 pm

No Sarcasm, I hear you about CPA/Attorney, I did get duped by them
My basic knowledge of things saved me, it worked out at the end

I honestly don't think anyone here will take advice seriously without verifying themselves

You seem to be an intense and thorough at what you do,👍

Can you comment on my investment question on another thread, your comments will be appreciated

viewtopic.php?f=1&t=228997

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Re: Anesthesiologist Advise [how to save money]

Post by PhysicianOnFIRE » Tue Oct 10, 2017 10:03 pm

jayk238 wrote:
Tue Oct 10, 2017 4:59 pm
I strongly disagree with anyone who states that current income is ok at any level.

As long as your income for the time you put in is lower than it would be some where else then your current income is not ok.

This is objective from a purely mathematical standpoint. The next question is whether the tradoff of a worse salary is better if what you get in return is ok. If living in a certain location trumps salary at any point or a certain threshold then obviously do that. Otherwise, posters stating that having this current salary in SoCal is ok are being unhelpful to the OP. He has not objectively stated yet that living in SoCal is essential to him. Perhaps he picked that place because he didnt know where else he would like to live (IMO this is just due to not investigating enough) or maybe he jumped at the first offer or maybe he is worried about missing loved ones. Any of these things can be addressed in a myriad of ways if one were to live in anothe rlocation.
Here is my reasoning:

1. I believe that happiness primarily comes from the people we interact with, our social connections, and experiences we have. Research generally backs this up-
There seems to be an assumption here that in order to make bank compared to OP you need to live in bumblebum town < 10k pop. This is objectively false. If that were the case I would agree that money is not everything. Many people who are single or have small families or something else need larger cities or towns to have things to do and make social connections.

One can find such opportunities at many other locations- cities in the Midwest that offer numerous lifestyle opportunities that while not as varied as in SoCal or NYC are nevertheless plentiful. Cincinnatti, lexington, nashville, indianapolis, columbus, to name a few from looking at the midwest map. This is objectively possible and opportunities are abound. You wont be able to surf or maybe have the same outdoor lifestyle as in Denver but you will be able to make friends, meet interesting people, do fun things. I would find it hard to believe that living in SoCal offers such amazing lifestyle choices as to trump income

2. How much income are we talking about? The average anesthesiology salary in Cali is 300k. In the midwest its 500k+. Is 200k difference OK? At what income level are these tradeoffs worth it? 100k difference? 200k? 50k? We are not talking about small numbers here. The financial difference doesn't end there. Cali state income tax is progressive and punishing. In Cali its effective state income tax is around 8% for someone making 300k. Thats about 24000 in the other cities I mentioned effective tax is around 2% or about 6000. Is the additional 18000 dollars worth it?

One can again find enormous savings opportunities with this money alone. Taking the 18k savings over a 10 year period amounts to 180k plus invested - which is about an additional 5-10 k invested. This is not a negligible amount.

Finally the COL is astoundingly different - we are talking about 3k for a livable area vs 1.5k for a very well appointed living space in any of these cities. Again the living and lifestyle is enormously different.

3. It is not about living an expensive lifestyle. It is about protecting one's self from the future.
Doctors may have a stable profession but that doesnt mean we are not encroached upon by other services. Look at all the reasons why:
1. From CRNAs, to NPs and PAs who believe the y can perform beyond their scope (another topic antoher time)
2. increasing pressures politically to 'reign in' physician pay with single payers and other schemes (note physician pay is 80 billion vs a 2.5 trillion economy- just how will cutitng doctor pay by half going to help us?!!!) - rhetorical q btw.
3. To falling reimbursements because a practice failed to properly manage itself be it hospital or large system
Im just listing these concerns that to us physicians are readily apparent but not to others and dont want to debate them really

4. And finally doctors have NOT earned for a long time in life. On average they barely have any savings when they reach 30 years. Whereas an engineer making 90k starting at 23 years of age has the opportunity to save and move up the ranks over time. This means savings today is even more important than ever including compound interest at this age vs waiting over a period of years. I suspect comparing a doctors savings rate as a first year attending is much much lower than such an engineer. So saving as much as one can in his early working years by minimizing income loss is magnified that much more -both because of the power of compound interest and also because of his late earning start.
Amen.

Sincerely,
anesthesiologist in the midwest

---------------------------------------------

@Gundamn959 may have very good reasons to be in Southern California that negate all of the above, but if not, there are substantial benefits to geographic arbitrage and in medicine, we have a fairly unique setup in which the salaries tend to be highest in places with the lowest cost of living.

Working a relatively work / life balance-friendly anesthesia job, I've been earning about 50% more than what the OP is told he'll make, but as an employee with a solid benefits package including 401(k) match and profit sharing. I have friends in the metro area earning 50% more than me, also with a good schedule.

As far as where to start, it can be overwhelming. The wiki here is excellent, but a book is nice to sit down with and read cover to cover. I appreciate the recommendations for my site and The White Coat Investor. His book would be a good starting point. You can even skip the first couple chapters devoted to med school and residency and read the whole thing in one quiet call shift.

:beer
-PoF

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Re: Anesthesiologist Advise [how to save money]

Post by Spirit Rider » Tue Oct 10, 2017 10:12 pm

I tend to focus on tax advantaged accounts including owner-employee business retirement plans and associated business issues. I am not really that good on investment advice beyond a 3-fund portfolio and maybe some I Bonds. You already have a few very knowledgeable Bogleheads in that thread.

somekevinguy
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Re: Anesthesiologist Advise [how to save money]

Post by somekevinguy » Tue Oct 10, 2017 11:02 pm

1) Congrats! You made it to the other side and on top of that, with zero student debt.
2) Even though your income is transiently variable, it should be both stable and substantial in the near future.
3) Reading BH, you'll get a fair amount of live frugally, move to somewhere cheaper, etc type of advice. That is all fair to consider and certainly living below your means is always good but don't get too stressed about it- you're going to be fine.
4) I'd work on getting educated to start- as many have mentioned, WhiteCoatInvestor is a great place to start. PhysicianOnFire is also helpful (and as some have mentioned, written by an anesthesiologist).The BH start here page is also good.
5) This year: 3-6 mo emergency fund, Roth IRA (backdoor if exceeding income limits), solo 401k. Do the turbotax thing and figure out what your taxes are going to look like. Don't know much about S corp's but sounds like that can wait until at least next year
6) Relax a little- if you continue to live like a resident(-ish) for just a few years, you'll save a ton and be in great shape.

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Re: Anesthesiologist Advise [how to save money]

Post by 8foot7 » Wed Oct 11, 2017 9:04 am

Are all of the posts about being super concerned about the OP sarcasm? He or she is 32, no debt, and about to earn 300k/year gross, if not more, for the foreseeable future.

OP, save half your income from the start. Live on the other half. You will be fine.

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Re: Anesthesiologist Advise [how to save money]

Post by goodenyou » Wed Oct 11, 2017 11:34 am

You will get "there". How fast and by how much is the question. Living in California on $300k is much better than many. You will pay a lot more taxes than other places, and the cost of living will be more. How one defines cost of quality of life is subjective. The size of home, use of services that improve quality of life and increase time, and other discretionary costs can be modulated to increase the percentage of savings. There will be few that will sympathize with your situation since they don't have the discretionary spending (or savings) that you have. Are you married? Kids? That also complicates things. HCOL areas often have horrible public schools yet expensive public school taxes. Private education is often necessary and costly.
"Ignorance more frequently begets confidence than does knowledge" | "The best years you have left are the ones you have right now"

ImaBeginner
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Re: Anesthesiologist Advise [how to save money]

Post by ImaBeginner » Wed Oct 11, 2017 9:49 pm

You are fine. We get about 75% of our collections within 3 months, by Christmas you should be pretty stable for income. Then make your budget, just don't get too crazy with spending.
Make a different account and put 1/2 your pay there till you figure out how taxes work into your budget.
THEN pay yourself up to a reasonable EF, get good insurances, full retirement contributions, living expenses
THEN give some to parents/charity/fancy stuff.

The first months after residency are tough, just stick with it and you focus on building your rep at the hospital. That will earn you more long term than investing during your first 6 months. Check back in February, and get investment and the rest sorted.

You know the moving and salary bit, but just to beat the horse a little harder, we have employed guys working 26 weeks a year doing a lot better than you.

Momus
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Re: Anesthesiologist Advise [how to save money]

Post by Momus » Wed Oct 11, 2017 10:39 pm

This dude makes 300k/yr, take home is 180k/yr NET income.

Expenses is 3300/mo (all inclusive) or 40k/yr.

Simple math, he has 140k/yr NET money lying around every yr. He has plenty of money. In fact, you can spend a little some of that and still feeling flushed... Go read Boglehead guide to investing and come back again later.

You have 0 liquidity problem, you have investing knowledge problem. Read a book or two. You gonna be a millionaire in less than 10 yrs.

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Re: Anesthesiologist Advise [how to save money]

Post by spammagnet » Wed Oct 11, 2017 10:49 pm

Gundamn959 wrote:
Mon Oct 09, 2017 11:01 pm
... This is my 3rd month working and it seems like i am living paycheck to paycheck (and credit cards).
Start a budget immediately, not so much to impose Draconian frugality but more to get a clear picture of what you're spending, and where. You may find surprises that are easy to fix. It will also help you plan your goals once your cash flow issues settle out.

As others have mentioned, try Mint, YNAB or other tools. Assuming you don't object to giving your bank login information to an aggregator web site (that's a philosophical discussion to be held elsewhere) it's easy for you to see all of your cash flow in a single place. It doesn't take much effort and provides a lot of benefit.

book lover
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Re: Anesthesiologist Advise [how to save money]

Post by book lover » Thu Oct 12, 2017 1:33 pm

My wife and I have been using a ledger for the past twenty seven years to track our expenses, or if you prefer use a software program to to keep track of your expenses.The old saying is don't expect what you don't inspect. Being able to compare our expenses from month to month and year to year was a great help. Two excellent books come to mind that you may want to read: The Boglehead's Guide to Investing and The Bogleheads' Guide to Retirement Planning both by Taylor Larimore and Mel Lindauer. In addition, anything by John Bogle would be very informative.

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Re: Anesthesiologist Advise [how to save money]

Post by forkhorn » Thu Oct 12, 2017 9:48 pm

And here I expected a thread on how to save money on anesthesia services! :oops:

grp2c
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Re: Anesthesiologist Advise [how to save money]

Post by grp2c » Thu Oct 12, 2017 11:48 pm

37 yo socal 1099 anesthesiologist here. OP, I was in your same shoes 5 years ago except with 140k student debt. Excellent advice in some of the posts above. Here's some more advice that I have used:

-Ask for an interest free loan from your billing company that is secured against your accounts receivable to make ends meet until your billing kicks in
-If possible, do a roth conversion of the 14k in your 401k for 2017, income will not be lower than it is this year esp. with the delay in billing
-I am a sole proprietor, some of my partners are s corps. I have not felt the need to incorporate. S corp might allow you to be more aggressive with business deductions and I was told the audit risk is lower. As spirit rider showed above it's probably wash on tax savings vs extra fees at your income.
-Live below your means

Further down the road:
-Max out retirement accounts. I started with a SEP ira then changed to a solo 401k, so I can do the backdoor roth. I'd just start with the solo 401k.
-Use an HSA as a stealth ira
-When you want buy a home look into the doctor loan that allow 10% down and no PMI. I saved for a down payment with ibonds and california muni bonds
-Once your maxing out the solo 401k, backdoor roth, and HSA, consider a taxable account and learn to tax loss harvest. I use wealthfront for my taxable account because I find the automated tax loss harvesting convenient and worth the 25 basis points.

Further, further down the road once you have at least 3 years of consistent 300k+ income:
-Hire a TPA and open a define benefit plan + solo 401k that allows aftertax nonroth contributions (mega backdoor roth ira). I am setting up one currently (wish I did a few years ago). At 37, 300k income will roughly allow: 95k pretax DB contribution, 18k pretax 401k employee salary deferral, 10k pretax employer profit sharing portion, 26k aftertax nonroth contributions that can be converted to roth.


I could move and make more money elsewhere but there are very few places where I can be in the water surfing a premier break all while getting paid to be on call. If someone knows another location like this that will reimburse me better, please PM me. :D

WanderingDoc
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Re: Anesthesiologist Advise [how to save money]

Post by WanderingDoc » Thu Oct 12, 2017 11:58 pm

grp2c wrote:
Thu Oct 12, 2017 11:48 pm
37 yo socal 1099 anesthesiologist here. OP, I was in your same shoes 5 years ago except with 140k student debt. Excellent advice in some of the posts above. Here's some more advice that I have used:

-Ask for an interest free loan from your billing company that is secured against your accounts receivable to make ends meet until your billing kicks in
-If possible, do a roth conversion of the 14k in your 401k for 2017, income will not be lower than it is this year esp. with the delay in billing
-I am a sole proprietor, some of my partners are s corps. I have not felt the need to incorporate. S corp might allow you to be more aggressive with business deductions and I was told the audit risk is lower. As spirit rider showed above it's probably wash on tax savings vs extra fees at your income.
-Live below your means

Further down the road:
-Max out retirement accounts. I started with a SEP ira then changed to a solo 401k, so I can do the backdoor roth. I'd just start with the solo 401k.
-Use an HSA as a stealth ira
-When you want buy a home look into the doctor loan that allow 10% down and no PMI. I saved for a down payment with ibonds and california muni bonds
-Once your maxing out the solo 401k, backdoor roth, and HSA, consider a taxable account and learn to tax loss harvest. I use wealthfront for my taxable account because I find the automated tax loss harvesting convenient and worth the 25 basis points.

Further, further down the road once you have at least 3 years of consistent 300k+ income:
-Hire a TPA and open a define benefit plan + solo 401k that allows aftertax nonroth contributions (mega backdoor roth ira). I am setting up one currently (wish I did a few years ago). At 37, 300k income will roughly allow: 95k pretax DB contribution, 18k pretax 401k employee salary deferral, 10k pretax employer profit sharing portion, 26k aftertax nonroth contributions that can be converted to roth.


I could move and make more money elsewhere but there are very few places where I can be in the water surfing a premier break all while getting paid to be on call. If someone knows another location like this that will reimburse me better, please PM me. :D
Not sure about anesthesia pay, but on Oahu you'll see better, more consistent, world-class surfing. Not to mention better weather and lower taxes ;)
One day it suddenly dawned on me that I had won the real estate lottery.

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Re: Anesthesiologist Advise [how to save money]

Post by dekecarver » Fri Oct 13, 2017 5:27 am

Just a simpleton's opinion.
Once you have your expenses understood and in check, your savings will follow.

Afterwards, from the knowledge I have received from this board, keep your investments simple (if you can) from the start and branch out as you gain an understanding of how asset buckets work with each other while again, keeping it a as simple as you can.

runner540
Posts: 349
Joined: Sun Feb 26, 2017 5:43 pm

Re: Anesthesiologist Advise [how to save money]

Post by runner540 » Fri Oct 13, 2017 7:34 am

Momus wrote:
Wed Oct 11, 2017 10:39 pm
This dude makes 300k/yr, take home is 180k/yr NET income.

Expenses is 3300/mo (all inclusive) or 40k/yr.

Simple math, he has 140k/yr NET money lying around every yr. He has plenty of money. In fact, you can spend a little some of that and still feeling flushed... Go read Boglehead guide to investing and come back again later.

You have 0 liquidity problem, you have investing knowledge problem. Read a book or two. You gonna be a millionaire in less than 10 yrs.
The key fact is that she/he doesn't yet have any of money, and doesn't seem to have a firm idea of their budget. I can hear the worry/stress in the original post. If anyone posts, whether with $30k income/year, $300k or $3MM, and has credit card debt, no emergency fund and no savings, then they do have a liquidity problem.

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