New high income earner

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
idoc-2
Posts: 1
Joined: Mon Feb 17, 2020 9:36 pm

New high income earner

Post by idoc-2 » Mon Feb 17, 2020 9:52 pm

After many years making a 50-60k salary and two years making a high salary (400k), I am now in a position to be making 800k plus for the foreseeable future with continued growth potential. I am 35, married with 3 kids, and have a whole boat-load of debt (400k mortgage, 100k cars, 100k student, 1,000,000 business debt). All my debt, other than the mortgage, is scheduled to be paid off in 5 years or less. I have about 200k in savings but pretty much all in taxable accounts. With my new income I expect to have around 15-20 k to invest per month after paying my expenses and debt obligations. I currently don’t have a financial manager of any sort. My question is with this level of income am I better off leaving it to a “expert” to manage for me or should I still continue to go at it myself. I am moderately financially savvy but don’t want to be spending a ton of time anymore researching things myself. Any advice for a new high income earner whose still trying to figure things out and doesn’t want to ruin it would be greatly appreciated.

KyleAAA
Posts: 8356
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: New high income earner

Post by KyleAAA » Mon Feb 17, 2020 10:27 pm

No need for an expert. In the grand scheme of things, that’s not a particularly high income. The mundane advice applies: arrange your debt by interest rate. Figure out what your cutoff rate would be to pay off versus invest ( I.e. any debt above 4.5% you would pay off, any below you’d let it ride). Proceed according to plan.

mega317
Posts: 4335
Joined: Tue Apr 19, 2016 10:55 am

Re: New high income earner

Post by mega317 » Mon Feb 17, 2020 11:07 pm

I disagree with the above. Pay off all your debts asap. Maintain your lifestyle and aim the extra 400k a year at debt. I would seriously consider downgrading cars too, that's a lot of car.
https://www.bogleheads.org/forum/viewtopic.php?t=6212

jayk238
Posts: 661
Joined: Tue Jan 31, 2017 1:02 pm

Re: New high income earner

Post by jayk238 » Mon Feb 17, 2020 11:08 pm

idoc-2 wrote:
Mon Feb 17, 2020 9:52 pm
After many years making a 50-60k salary and two years making a high salary (400k), I am now in a position to be making 800k plus for the foreseeable future with continued growth potential. I am 35, married with 3 kids, and have a whole boat-load of debt (400k mortgage, 100k cars, 100k student, 1,000,000 business debt). All my debt, other than the mortgage, is scheduled to be paid off in 5 years or less. I have about 200k in savings but pretty much all in taxable accounts. With my new income I expect to have around 15-20 k to invest per month after paying my expenses and debt obligations. I currently don’t have a financial manager of any sort. My question is with this level of income am I better off leaving it to a “expert” to manage for me or should I still continue to go at it myself. I am moderately financially savvy but don’t want to be spending a ton of time anymore researching things myself. Any advice for a new high income earner whose still trying to figure things out and doesn’t want to ruin it would be greatly appreciated.
What do you do?

User avatar
anon_investor
Posts: 2338
Joined: Mon Jun 03, 2019 1:43 pm

Re: New high income earner

Post by anon_investor » Mon Feb 17, 2020 11:19 pm

You do NOT need to pay someone to manage your money. Since you have high cash flow, a lot of debt and only a relatively small amount of savings, you can just start off easy and establish an emergency fund of 3-6 months of living expenses (just stick with an FDIC insured online high yield savings account) then put the rest into a simple 2 or 3 fund portfolio (I personally do not invest in international, so I use a 2 fund portfolio). Since your investments will be in a taxable account and you are in the highest tax bracket, use an intermediate muni bond fund for your bond allocation.

If you want easy just get mutual funds at Vanguard and you can even set up automatic investments every month.

User avatar
Stinky
Posts: 4490
Joined: Mon Jun 12, 2017 11:38 am
Location: Sweet Home Alabama

Re: New high income earner

Post by Stinky » Mon Feb 17, 2020 11:51 pm

anon_investor wrote:
Mon Feb 17, 2020 11:19 pm
You do NOT need to pay someone to manage your money. Since you have high cash flow, a lot of debt and only a relatively small amount of savings, you can just start off easy and establish an emergency fund of 3-6 months of living expenses (just stick with an FDIC insured online high yield savings account) then put the rest into a simple 2 or 3 fund portfolio (I personally do not invest in international, so I use a 2 fund portfolio). Since your investments will be in a taxable account and you are in the highest tax bracket, use an intermediate muni bond fund for your bond allocation.

If you want easy just get mutual funds at Vanguard and you can even set up automatic investments every month.
This ^

And use as many tax advantaged accounts as you can. Backdoor Roth, 401(k), etc. Whatever is available to you.
It's a GREAT day to be alive - Travis Tritt

User avatar
KingRiggs
Posts: 513
Joined: Wed Dec 12, 2018 12:19 pm
Location: Indiana

Re: New high income earner

Post by KingRiggs » Tue Feb 18, 2020 11:10 am

jayk238 wrote:
Mon Feb 17, 2020 11:08 pm
idoc-2 wrote:
Mon Feb 17, 2020 9:52 pm
After many years making a 50-60k salary and two years making a high salary (400k), I am now in a position to be making 800k plus for the foreseeable future with continued growth potential. I am 35, married with 3 kids, and have a whole boat-load of debt (400k mortgage, 100k cars, 100k student, 1,000,000 business debt). All my debt, other than the mortgage, is scheduled to be paid off in 5 years or less. I have about 200k in savings but pretty much all in taxable accounts. With my new income I expect to have around 15-20 k to invest per month after paying my expenses and debt obligations. I currently don’t have a financial manager of any sort. My question is with this level of income am I better off leaving it to a “expert” to manage for me or should I still continue to go at it myself. I am moderately financially savvy but don’t want to be spending a ton of time anymore researching things myself. Any advice for a new high income earner whose still trying to figure things out and doesn’t want to ruin it would be greatly appreciated.
What do you do?
Based on income curve, age, and screen name, I'd say OP is an ophthalmologist...
Advice = noun | Advise = verb | | Roth, not ROTH

mortfree
Posts: 2334
Joined: Mon Sep 12, 2016 7:06 pm

Re: New high income earner

Post by mortfree » Tue Feb 18, 2020 11:13 am

Just a reminder that the financial expert is usually only an expert at one thing.

Taking your money and managing it to the benefit of themselves and the company they work for.

YMMV

User avatar
anon_investor
Posts: 2338
Joined: Mon Jun 03, 2019 1:43 pm

Re: New high income earner

Post by anon_investor » Tue Feb 18, 2020 11:14 am

KingRiggs wrote:
Tue Feb 18, 2020 11:10 am
jayk238 wrote:
Mon Feb 17, 2020 11:08 pm
idoc-2 wrote:
Mon Feb 17, 2020 9:52 pm
After many years making a 50-60k salary and two years making a high salary (400k), I am now in a position to be making 800k plus for the foreseeable future with continued growth potential. I am 35, married with 3 kids, and have a whole boat-load of debt (400k mortgage, 100k cars, 100k student, 1,000,000 business debt). All my debt, other than the mortgage, is scheduled to be paid off in 5 years or less. I have about 200k in savings but pretty much all in taxable accounts. With my new income I expect to have around 15-20 k to invest per month after paying my expenses and debt obligations. I currently don’t have a financial manager of any sort. My question is with this level of income am I better off leaving it to a “expert” to manage for me or should I still continue to go at it myself. I am moderately financially savvy but don’t want to be spending a ton of time anymore researching things myself. Any advice for a new high income earner whose still trying to figure things out and doesn’t want to ruin it would be greatly appreciated.
What do you do?
Based on income curve, age, and screen name, I'd say OP is an ophthalmologist...
Now I am curious. Now, totally expecting the OP to say something completely different, like he is a used car dealer :twisted:

Blue456
Posts: 737
Joined: Tue Jun 04, 2019 5:46 am

Re: New high income earner

Post by Blue456 » Tue Feb 18, 2020 12:06 pm

idoc-2 wrote:
Mon Feb 17, 2020 9:52 pm
After many years making a 50-60k salary and two years making a high salary (400k), I am now in a position to be making 800k plus for the foreseeable future with continued growth potential. I am 35, married with 3 kids, and have a whole boat-load of debt (400k mortgage, 100k cars, 100k student, 1,000,000 business debt). All my debt, other than the mortgage, is scheduled to be paid off in 5 years or less. I have about 200k in savings but pretty much all in taxable accounts. With my new income I expect to have around 15-20 k to invest per month after paying my expenses and debt obligations. I currently don’t have a financial manager of any sort. My question is with this level of income am I better off leaving it to a “expert” to manage for me or should I still continue to go at it myself. I am moderately financially savvy but don’t want to be spending a ton of time anymore researching things myself. Any advice for a new high income earner whose still trying to figure things out and doesn’t want to ruin it would be greatly appreciated.
We are in similar situation but less salary and less debt. We are making 500k per year with roughly $1,000,000 debt. What we doing is cutting expenses as much as possible, living on $50,000 a year, paying off all debt in 4 years. We are not buying any new cars, any house or anything else that would come with people who live in our tax bracket. Then literally plow 100% into retirement and taxable investments which gives us option to FIRE or at least FI in 15 years.
Really the biggest investment you can make is cut down on the expenses and not go into any more debt. We went from renting an apartment for $3000 a month to renting for $900 a month. We paid off all of our cars, phones, etc. And currently our total monthly expenses are $2700 a month. And before we used to live paycheck to paycheck on 6 figures....

niceguy7376
Posts: 2710
Joined: Wed Jul 10, 2013 2:59 pm
Location: Metro ATL

Re: New high income earner

Post by niceguy7376 » Tue Feb 18, 2020 12:12 pm

idoc-2 wrote:
Mon Feb 17, 2020 9:52 pm
My question is with this level of income am I better off leaving it to a “expert” to manage for me or should I still continue to go at it myself.
Welcome to the forum OP.
As the old saying goes :"it is not what you earn, it is what you keep".
Do you have any retirement plans at work? Are you self employed (based on business debt)?
If you could provide a full picture, then you can get customized plan for you in terms of where to invest, which ones to prioritize etc.
With that income, all other debts outside of Business debt can easily be paid off in less than 5 years. What you need to maximize is the start and maintenance of retirement accounts so that you can reduce the taxes you pay at the highest tax bracket.

inbox788
Posts: 7132
Joined: Thu Mar 15, 2012 5:24 pm

Re: New high income earner

Post by inbox788 » Tue Feb 18, 2020 1:55 pm

idoc-2 wrote:
Mon Feb 17, 2020 9:52 pm
I currently don’t have a financial manager of any sort. My question is with this level of income am I better off leaving it to a “expert” to manage for me or should I still continue to go at it myself. I am moderately financially savvy but don’t want to be spending a ton of time anymore researching things myself. Any advice for a new high income earner whose still trying to figure things out and doesn’t want to ruin it would be greatly appreciated.
You seem to be managing just fine. I'm not sure what you'd gain from having someone else do it for you. If you found the right expert, they may be able to more optimally navigate you to your destination without worries, but I'd worry about whether the "expert" you did find was actually doing you any good and worth the fees and costs involved, not just the visible ones, but lost opportunity from the wrong ones.

You will likely need a host of expertise from various individuals such as CPA/tax accountants, tax planning, legal/estate, insurance, etc. that the typical "financial or investing advisor" isn't going to be much help, let alone of questionable help when it comes to investing advice. It does take some time to educate yourself, but like reading and understanding contracts before signing, it's wise to do so.

lessismore22
Posts: 148
Joined: Sun Jul 01, 2018 8:02 pm
Location: USA

Re: New high income earner

Post by lessismore22 » Tue Feb 18, 2020 2:10 pm

If you need some help getting started you could always go to a fee-only fiduciary. Preferably one that is also a CPA. Their recommendations will be in your best interest with tax efficiency in mind. For less than $1,000/year you can have someone looking over your financial shoulder until you're comfortable doing it yourself.

sean.mcgrath
Posts: 358
Joined: Thu Dec 29, 2016 6:15 am
Location: US in NL

Re: New high income earner

Post by sean.mcgrath » Tue Feb 18, 2020 3:01 pm

Blue456 wrote:
Tue Feb 18, 2020 12:06 pm

We are in similar situation but less salary and less debt. We are making 500k per year with roughly $1,000,000 debt. What we doing is cutting expenses as much as possible, living on $50,000 a year, paying off all debt in 4 years. ... Then literally plow 100% into retirement and taxable investments which gives us option to FIRE or at least FI in 15 years.

Really the biggest investment you can make is cut down on the expenses and not go into any more debt.
+ This.

Ok, maybe not that extreme, but more or less. If you lived for years on 50-60k, you can live extremely comfortably on 200k. Save the rest: put as much as allowed in tax advantaged, and the rest to pay down the debt in three years or so. Continue with moderate increases in spending for ten years, saving the rest. You don't need an investment advisor.

Obviously, this is a completely personal, individual/couple decision. I can only say that I did something similar, and there is a tremendous amount to be said for living wildly within your means, and having significant financial independence.

Good luck,
Sean

mega317
Posts: 4335
Joined: Tue Apr 19, 2016 10:55 am

Re: New high income earner

Post by mega317 » Tue Feb 18, 2020 4:15 pm

KingRiggs wrote:
Tue Feb 18, 2020 11:10 am
Based on income curve, age, and screen name, I'd say OP is an ophthalmologist...
The i is for infectious diseases, the income curve is when they went from having 2 to 4 full time jobs.
https://www.bogleheads.org/forum/viewtopic.php?t=6212

User avatar
KingRiggs
Posts: 513
Joined: Wed Dec 12, 2018 12:19 pm
Location: Indiana

Re: New high income earner

Post by KingRiggs » Tue Feb 18, 2020 9:34 pm

mega317 wrote:
Tue Feb 18, 2020 4:15 pm
KingRiggs wrote:
Tue Feb 18, 2020 11:10 am
Based on income curve, age, and screen name, I'd say OP is an ophthalmologist...
The i is for infectious diseases, the income curve is when they went from having 2 to 4 full time jobs.
Nah. No infectious disease doc has a million-dollar practice. Most are employed physicians. And none make $800k. Still say young ophthalmologist buying in to group practice or striking out on his own.
Advice = noun | Advise = verb | | Roth, not ROTH

averagedude
Posts: 1148
Joined: Sun May 13, 2018 3:41 pm

Re: New high income earner

Post by averagedude » Tue Feb 18, 2020 9:42 pm

Educate yourself on finances by following this forum. Investing with a high income is no different than investing with a middle income. Living below your means apply to everyone. Only difference, you may need some professional tax advice.

mega317
Posts: 4335
Joined: Tue Apr 19, 2016 10:55 am

Re: New high income earner

Post by mega317 » Tue Feb 18, 2020 10:09 pm

Ha did you even read my post?
https://www.bogleheads.org/forum/viewtopic.php?t=6212

rockstar
Posts: 385
Joined: Mon Feb 03, 2020 6:51 pm

Re: New high income earner

Post by rockstar » Tue Feb 18, 2020 10:14 pm

The upcoming podcast looks like it might be of interest to the OP. I’d check out that post.

Jimsad
Posts: 245
Joined: Mon Mar 20, 2017 5:54 pm

Re: New high income earner

Post by Jimsad » Wed Feb 19, 2020 5:59 am

sean.mcgrath wrote:
Tue Feb 18, 2020 3:01 pm
Blue456 wrote:
Tue Feb 18, 2020 12:06 pm

We are in similar situation but less salary and less debt. We are making 500k per year with roughly $1,000,000 debt. What we doing is cutting expenses as much as possible, living on $50,000 a year, paying off all debt in 4 years. ... Then literally plow 100% into retirement and taxable investments which gives us option to FIRE or at least FI in 15 years.

Really the biggest investment you can make is cut down on the expenses and not go into any more debt.
+ This

Ok, maybe not that extreme, but more or less. If you lived for years on 50-60k, you can live extremely comfortably on 200k. Save the rest: put as much as allowed in tax advantaged, and the rest to pay down the debt in three years or so. Continue with moderate increases in spending for ten years, saving the rest. You don't need an investment advisor.

Obviously, this is a completely personal, individual/couple decision. I can only say that I did something similar, and there is a tremendous amount to be said for living wildly within your means, and having significant financial independence.

Good luck,
Sean
Cutting expenses to 50k on a 500k income seems a bit extreme

User avatar
goodenyou
Posts: 2261
Joined: Sun Jan 31, 2010 11:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: New high income earner

Post by goodenyou » Wed Feb 19, 2020 8:48 am

No need to overthink your financial plan. Fill up every tax advantaged space, buy all your insurances (life, disability, etc), protect assets from liability (LLCs), save like crazy for kids’ education and live below your means. You will have a huge salary increase when your debt is paid off. That is if the music doesn’t stop playing. Be very careful of contingent liability with partners, if you have any. I was in a similar situation many years ago as a young doctor just out of residency. After I paid off all the investments in the practice, real estate, surgery centers and hospitals, I finally felt like I was making good money. Be cautious and eliminate the debt. The industry is changing quickly.
Last edited by goodenyou on Wed Feb 19, 2020 8:50 am, edited 2 times in total.
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.

jharkin
Posts: 2572
Joined: Mon Mar 28, 2016 7:14 am
Location: Boston suburbs

Re: New high income earner

Post by jharkin » Wed Feb 19, 2020 8:49 am

KyleAAA wrote:
Mon Feb 17, 2020 10:27 pm
No need for an expert. In the grand scheme of things, that’s not a particularly high income.
Agreed he can DIY... but on what planet is 800k (over 10x the USA median), not a high income?

Independent George
Posts: 758
Joined: Wed Feb 17, 2016 12:13 pm
Location: Chicago, IL, USA

Re: New high income earner

Post by Independent George » Wed Feb 19, 2020 9:37 am

This is very much a DIY forum, but given the sudden change in income (and the high spending on home and cars), I think a one-time consultation with a financial adviser would be a great benefit. The important thing is to find an advisor who (1) is a fiduciary, and (2) charges either a flat or hourly fee instead of taking a percentage of assets under management. You don't need someone managing your money, but you do need someone to teach you how to manage it yourself. This forum and the wiki are outstanding resources, but sometimes it takes a little face-to-face guidance to get you started on the right path. The high income is a great asset, but there is an entire category of mistakes that people in the financial field call "dumb doctor moves". White Coat Investor (who will be appearing on the next Bogleheads on Investing podcast) and Physician on FIRE are two excellent resources geared specifically towards the unique financial position that MDs often find themselves in.

CoAndy
Posts: 606
Joined: Thu Jun 06, 2013 4:45 pm

Re: New high income earner

Post by CoAndy » Wed Feb 19, 2020 9:56 am

jharkin wrote:
Wed Feb 19, 2020 8:49 am
KyleAAA wrote:
Mon Feb 17, 2020 10:27 pm
No need for an expert. In the grand scheme of things, that’s not a particularly high income.
Agreed he can DIY... but on what planet is 800k (over 10x the USA median), not a high income?
I thought the same thing. :shock:

sean.mcgrath
Posts: 358
Joined: Thu Dec 29, 2016 6:15 am
Location: US in NL

Re: New high income earner

Post by sean.mcgrath » Wed Feb 19, 2020 1:04 pm

Jimsad wrote:
Wed Feb 19, 2020 5:59 am
sean.mcgrath wrote:
Tue Feb 18, 2020 3:01 pm
Blue456 wrote:
Tue Feb 18, 2020 12:06 pm

We are in similar situation but less salary and less debt. We are making 500k per year with roughly $1,000,000 debt. What we doing is cutting expenses as much as possible, living on $50,000 a year, paying off all debt in 4 years. ... Then literally plow 100% into retirement and taxable investments which gives us option to FIRE or at least FI in 15 years.

Really the biggest investment you can make is cut down on the expenses and not go into any more debt.
+ This

Ok, maybe not that extreme, but more or less. If you lived for years on 50-60k, you can live extremely comfortably on 200k. Save the rest: put as much as allowed in tax advantaged, and the rest to pay down the debt in three years or so. Continue with moderate increases in spending for ten years, saving the rest. You don't need an investment advisor.

Obviously, this is a completely personal, individual/couple decision. I can only say that I did something similar, and there is a tremendous amount to be said for living wildly within your means, and having significant financial independence.

Good luck,
Sean
Cutting expenses to 50k on a 500k income seems a bit extreme
You misread. I suggested 200k per year of expenses. I referenced that he had been living on 50-60k until two years ago.

KyleAAA
Posts: 8356
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: New high income earner

Post by KyleAAA » Wed Feb 19, 2020 1:41 pm

jharkin wrote:
Wed Feb 19, 2020 8:49 am
KyleAAA wrote:
Mon Feb 17, 2020 10:27 pm
No need for an expert. In the grand scheme of things, that’s not a particularly high income.
Agreed he can DIY... but on what planet is 800k (over 10x the USA median), not a high income?
It is a high income. It is not a PARTICULARLY high income in the context of the question.

pennylane
Posts: 256
Joined: Thu Apr 12, 2018 10:22 am

Re: New high income earner

Post by pennylane » Wed Feb 19, 2020 3:16 pm

How’d you manage to make such a large income leap in a short amount of time?

pennylane
Posts: 256
Joined: Thu Apr 12, 2018 10:22 am

Re: New high income earner

Post by pennylane » Wed Feb 19, 2020 3:16 pm

How’d you manage to make such a large income leap in a short amount of time?

User avatar
KingRiggs
Posts: 513
Joined: Wed Dec 12, 2018 12:19 pm
Location: Indiana

Re: New high income earner

Post by KingRiggs » Wed Feb 19, 2020 3:23 pm

pennylane wrote:
Wed Feb 19, 2020 3:16 pm
How’d you manage to make such a large income leap in a short amount of time?
I would assume: residency > fellowship > private practice
Advice = noun | Advise = verb | | Roth, not ROTH

inbox788
Posts: 7132
Joined: Thu Mar 15, 2012 5:24 pm

Re: New high income earner

Post by inbox788 » Wed Feb 19, 2020 5:09 pm

KingRiggs wrote:
Wed Feb 19, 2020 3:23 pm
pennylane wrote:
Wed Feb 19, 2020 3:16 pm
How’d you manage to make such a large income leap in a short amount of time?
I would assume: residency > fellowship > private practice
Pretty sure fellowship doesn't pay that much. I would guess:

residency/fellowship > private practice > partnership w/ buy-in [or striking out on own, but risky; or merger/marriage]

Jimsad
Posts: 245
Joined: Mon Mar 20, 2017 5:54 pm

Re: New high income earner

Post by Jimsad » Wed Feb 19, 2020 6:14 pm

sean.mcgrath wrote:
Wed Feb 19, 2020 1:04 pm
Jimsad wrote:
Wed Feb 19, 2020 5:59 am
sean.mcgrath wrote:
Tue Feb 18, 2020 3:01 pm
Blue456 wrote:
Tue Feb 18, 2020 12:06 pm

We are in similar situation but less salary and less debt. We are making 500k per year with roughly $1,000,000 debt. What we doing is cutting expenses as much as possible, living on $50,000 a year, paying off all debt in 4 years. ... Then literally plow 100% into retirement and taxable investments which gives us option to FIRE or at least FI in 15 years.

Really the biggest investment you can make is cut down on the expenses and not go into any more debt.
+ This

Ok, maybe not that extreme, but more or less. If you lived for years on 50-60k, you can live extremely comfortably on 200k. Save the rest: put as much as allowed in tax advantaged, and the rest to pay down the debt in three years or so. Continue with moderate increases in spending for ten years, saving the rest. You don't need an investment advisor.

Obviously, this is a completely personal, individual/couple decision. I can only say that I did something similar, and there is a tremendous amount to be said for living wildly within your means, and having significant financial independence.

Good luck,
Sean
Cutting expenses to 50k on a 500k income seems a bit extreme
You misread. I suggested 200k per year of expenses. I referenced that he had been living on 50-60k until two years ago.
I was referring to blue 456 . It seemed to be that he is doing this now and plans to do it going forward too

User avatar
ram
Posts: 1596
Joined: Tue Jan 01, 2008 10:47 pm
Location: Midwest

Re: New high income earner

Post by ram » Wed Feb 19, 2020 7:21 pm

KingRiggs wrote:
Tue Feb 18, 2020 11:10 am
jayk238 wrote:
Mon Feb 17, 2020 11:08 pm
idoc-2 wrote:
Mon Feb 17, 2020 9:52 pm
After many years making a 50-60k salary and two years making a high salary (400k), I am now in a position to be making 800k plus for the foreseeable future with continued growth potential. I am 35, married with 3 kids, and have a whole boat-load of debt (400k mortgage, 100k cars, 100k student, 1,000,000 business debt). All my debt, other than the mortgage, is scheduled to be paid off in 5 years or less. I have about 200k in savings but pretty much all in taxable accounts. With my new income I expect to have around 15-20 k to invest per month after paying my expenses and debt obligations. I currently don’t have a financial manager of any sort. My question is with this level of income am I better off leaving it to a “expert” to manage for me or should I still continue to go at it myself. I am moderately financially savvy but don’t want to be spending a ton of time anymore researching things myself. Any advice for a new high income earner whose still trying to figure things out and doesn’t want to ruin it would be greatly appreciated.
What do you do?
Based on income curve, age, and screen name, I'd say OP is an ophthalmologist...
Agree. Likely with sub specialty qualification. (? Retina specialist)
Resident/ Fellow @ 60K.
Employee for 2 years on partner track @ 400K.
Partner : 800K

Most people on this board with a income of 800K self manage their investment. You may take tax advice from a CPA. Ask about saving taxes, not just filing of taxes.

If you are indeed a physician then 5% of the brain and 0.5% of the time is adequate to make you a "good enough" investor.
Ram

User avatar
ram
Posts: 1596
Joined: Tue Jan 01, 2008 10:47 pm
Location: Midwest

Re: New high income earner

Post by ram » Wed Feb 19, 2020 7:48 pm

jayk238 wrote:
Mon Feb 17, 2020 11:08 pm
idoc-2 wrote:
Mon Feb 17, 2020 9:52 pm
After many years making a 50-60k salary and two years making a high salary (400k), I am now in a position to be making 800k plus for the foreseeable future with continued growth potential. I am 35, married with 3 kids, and have a whole boat-load of debt (400k mortgage, 100k cars, 100k student, 1,000,000 business debt). All my debt, other than the mortgage, is scheduled to be paid off in 5 years or less. I have about 200k in savings but pretty much all in taxable accounts. With my new income I expect to have around 15-20 k to invest per month after paying my expenses and debt obligations. I currently don’t have a financial manager of any sort. My question is with this level of income am I better off leaving it to a “expert” to manage for me or should I still continue to go at it myself. I am moderately financially savvy but don’t want to be spending a ton of time anymore researching things myself. Any advice for a new high income earner whose still trying to figure things out and doesn’t want to ruin it would be greatly appreciated.
What do you do?
delete
Last edited by ram on Wed Feb 19, 2020 7:54 pm, edited 1 time in total.
Ram

an_asker
Posts: 2678
Joined: Thu Jun 27, 2013 2:15 pm

Re: New high income earner

Post by an_asker » Wed Feb 19, 2020 7:52 pm

ram wrote:
Wed Feb 19, 2020 7:48 pm
jayk238 wrote:
Mon Feb 17, 2020 11:08 pm
idoc-2 wrote:
Mon Feb 17, 2020 9:52 pm
After many years making a 50-60k salary and two years making a high salary (400k), I am now in a position to be making 800k plus for the foreseeable future with continued growth potential. I am 35, married with 3 kids, and have a whole boat-load of debt (400k mortgage, 100k cars, 100k student, 1,000,000 business debt). All my debt, other than the mortgage, is scheduled to be paid off in 5 years or less. I have about 200k in savings but pretty much all in taxable accounts. With my new income I expect to have around 15-20 k to invest per month after paying my expenses and debt obligations. I currently don’t have a financial manager of any sort. My question is with this level of income am I better off leaving it to a “expert” to manage for me or should I still continue to go at it myself. I am moderately financially savvy but don’t want to be spending a ton of time anymore researching things myself. Any advice for a new high income earner whose still trying to figure things out and doesn’t want to ruin it would be greatly appreciated.
What do you do?
He makes 2nd copy of other people's identity documents and has recently gotten very good at it. :happy
(Sorry. Apologies to the original poster)
In that case, idoc-1 will have the first mover's advantage ;-)

User avatar
drgenefish
Posts: 72
Joined: Sun Feb 12, 2017 2:52 pm
Location: Horsham, PA
Contact:

Re: New high income earner

Post by drgenefish » Sun Feb 23, 2020 12:11 pm

I’d suggest a few things

1) nothing is on fire given your income...but I would make learning how to handle your money top priority outside of your biz and family for 2020 and start planning for 2021. There is no rush. I’d just say don’t make any large moves until you have your game plan set and you’re comfortable with it. I just went through the same thing last year where I dove into this forum weekly with coffee. I’m no expert but I have a game plan I understand and I’m on board with.

2) you either need to learn how to handle your money or learn how to pick a true expert. I’d prefer learning myself personally. It’s not THAT hard. WORST case you learn a lot and are better at picking and monitoring an expert. So I’d vote for learning yourself.

3) I would look at the people who hard core want to remove debt and the people who prefer a balance of debt vs long term investing. And see which one fits best for you. Personally I’m in the remove all debt camp and keep your lifestyle to a minimum. That’s my comfort level.

4) You are probably rightly confident that your income will be that high (and more) given your skills. But stuff happens. Do you have a plan for that?

zlandar
Posts: 277
Joined: Wed Apr 10, 2019 8:51 am

Re: New high income earner

Post by zlandar » Sun Feb 23, 2020 12:34 pm

Think you are doing a good job if you managed to save $200k two years out of fellowship. I’m in the same income range and have not felt any need to hire a financial planner. Most planners want to charge you an assets under management fee (AUM). A 1% fee is typical. I’m not paying $10k a year for every $1 million in assets.

Continue living below your income level, maximize your tax-deferred accounts (401k profit sharing, backdown Roth). Start 529 plans for your 3 kids.

Only insurance I would consider is a term life policy. Also consider a disability policy if your company doesn’t have a group policy. Avoid the whole life and variable life trash.

User avatar
TomatoTomahto
Posts: 10646
Joined: Mon Apr 11, 2011 1:48 pm

Re: New high income earner

Post by TomatoTomahto » Sun Feb 23, 2020 12:43 pm

drgenefish wrote:
Sun Feb 23, 2020 12:11 pm
3) I would look at the people who hard core want to remove debt and the people who prefer a balance of debt vs long term investing. And see which one fits best for you. Personally I’m in the remove all debt camp and keep your lifestyle to a minimum. That’s my comfort level.
OP, before we started buying 6 digit cars, we had no mortgage and no other debt. I don’t know much about business debt; perhaps that’s acceptable. We live very comfortably now, but I think you’re jumping the gun.

Is the pressure to live large coming from you or external?

ETA: substantial DIY portfolio. We do have a CPA.
Okay, I get it; I won't be political or controversial. The Earth is flat.

Post Reply