Time travel for high salary earners

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Sellery1031
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Time travel for high salary earners

Post by Sellery1031 »

I am an early career physician transitioning from fellowship to attending level salary.

I have a question for high salary earners - most informative would be those peri-retirement.

Let's use an arbitrary cut-off of $500K+ annual household income (W2 salary alone).

Is there anything you wish you would have done sooner with respect to personal finances or investments?
Is there anything unique that high salary earners should consider in the personal finance space?

In particular, anything more than:
-Maxing out employer-sponsored tax-advantaged retirement account(s)
-Maxing out HSA
-Maxing out individual retirement account(s)
-Life insurance
-Disability insurance

Thanks for the input in advance,
bwalling
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Re: Time travel for high salary earners

Post by bwalling »

Saved more early on rather than enjoying finally having a high income. Both for the compounding, and for forcing the "base spend" up higher.
ridebikeseveryday
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Re: Time travel for high salary earners

Post by ridebikeseveryday »

Sellery1031 wrote: Fri Oct 16, 2020 2:20 pm I am an early career physician transitioning from fellowship to attending level salary.

I have a question for high salary earners - most informative would be those peri-retirement.

Let's use an arbitrary cut-off of $500K+ annual household income (W2 salary alone).

Is there anything you wish you would have done sooner with respect to personal finances or investments?
Is there anything unique that high salary earners should consider in the personal finance space?

In particular, anything more than:
-Maxing out employer-sponsored tax-advantaged retirement account(s)
-Maxing out HSA
-Maxing out individual retirement account(s)
-Life insurance
-Disability insurance

Thanks for the input in advance,
Employer plans + IRAs is only ~26k/year, which is not very much money to save if you're earning $500k/year.
stan1
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Re: Time travel for high salary earners

Post by stan1 »

I think one important point would be to continue living below your means in choices of housing, automobiles, travel, and other lifestyle factors even while your peer group might be spending more. Even delaying "lifestyle creep" by a few years will make a big difference since what you save in your 30s will have decades of appreciation and make you financially secure in assets as well as income for the rest of your lives.

You didn't mention medical school debt so not sure if that means you are debt free or if it means you are accounting for it separately.
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Re: Time travel for high salary earners

Post by jebmke »

Estate strategy including philanthropic plans.
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TomatoTomahto
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Re: Time travel for high salary earners

Post by TomatoTomahto »

Wish we had used Roth plans more and earlier. It’s decidedly a first world problem, but between SS, RMDs, pensions, deferred compensation, taxable account dividends, etc., we (or probably more accurately, my widow) will be paying a lot in taxes.

ETA: probably should have set up trusts and gifted to the annual gift tax exclusion earlier.
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fortunefavored
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Re: Time travel for high salary earners

Post by fortunefavored »

The obvious ones already mentioned: save more early, hold down lifestyle inflation
Marry someone with similar earning potential and money philosophies
Tax planning: more Roth, more careful fund selection in taxable accounts since you're likely going to be piling away a lot of money in taxable
kerfuffle
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Re: Time travel for high salary earners

Post by kerfuffle »

Sellery1031 wrote: Fri Oct 16, 2020 2:20 pm I am an early career physician transitioning from fellowship to attending level salary.

I have a question for high salary earners - most informative would be those peri-retirement.

Let's use an arbitrary cut-off of $500K+ annual household income (W2 salary alone).

Is there anything you wish you would have done sooner with respect to personal finances or investments?
Is there anything unique that high salary earners should consider in the personal finance space?

In particular, anything more than:
-Maxing out employer-sponsored tax-advantaged retirement account(s)
-Maxing out HSA
-Maxing out individual retirement account(s)
-Life insurance
-Disability insurance

Thanks for the input in advance,
Nowhere near pre-retirement, and this may all be obvious but I would say:

Aim for a % of your income to save, rather than just thinking about maxing out accounts - and when you run out of space in tax-advantaged accounts, put the remained in taxable accounts.
Continue to budget - it's tempting to stop when income is easier to come by, but it's easy for it to get out of hand. This doesn't mean not spend, but to spend with intention and within plan
Be cautious of taxes, and the fact that many many tax benefits phase out once you are over certain income limits
See if mega-back-door roth is possible through your employer sponsored plan
If you've got money to spare, go for a shorter-term, higher monthly payment mortgage so that equity builds faster and you waste less on interest, especially with the mortgage interest cap for itemized tax deductions.
Keep cheap debt but pay off expensive debt ASAP
KlangFool
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Re: Time travel for high salary earners

Post by KlangFool »

OP,

This is as per my first-hand observation of my family member. At this and higher income level, the only mistake that could destroy your retirement is

Marrying an expensive spouse.


My family member divorced his spouse and the spouse took 50% of his wealth. Then, he early retired at 49 years old soon after that.

KlangFool
anoop
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Re: Time travel for high salary earners

Post by anoop »

Based on thread title, and thinking my salary was high, I came in to offer my wisdom, only to find out that my salary is not high enough.
Tingting1013
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Re: Time travel for high salary earners

Post by Tingting1013 »

anoop wrote: Fri Oct 16, 2020 4:25 pm Based on thread title, and thinking my salary was high, I came in to offer my wisdom, only to find out that my salary is not high enough.
The rich are different from you and me; they have more money.
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vitaflo
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Re: Time travel for high salary earners

Post by vitaflo »

Sellery1031 wrote: Fri Oct 16, 2020 2:20 pm Let's use an arbitrary cut-off of $500K+ annual household income (W2 salary alone).
Not a lot of people in this position. W2 salaries don't tend to get that high outside of a select few.

That said, you'd have a lot more options available to you if you weren't a W2 employee. Something to keep in mind should you be able to make that transition in the future.
KlangFool
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Re: Time travel for high salary earners

Post by KlangFool »

Tingting1013 wrote: Fri Oct 16, 2020 4:32 pm
anoop wrote: Fri Oct 16, 2020 4:25 pm Based on thread title, and thinking my salary was high, I came in to offer my wisdom, only to find out that my salary is not high enough.
The rich are different from you and me; they have more money.

Please do not confuse income with wealth. Doctors and lawyers are among the worst professions in accumulating wealth.


KlangFool
HIMcDunnough
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Re: Time travel for high salary earners

Post by HIMcDunnough »

stan1 wrote: Fri Oct 16, 2020 2:35 pm I think one important point would be to continue living below your means in choices of housing, automobiles, travel, and other lifestyle factors even while your peer group might be spending more. Even delaying "lifestyle creep" by a few years will make a big difference since what you save in your 30s will have decades of appreciation and make you financially secure in assets as well as income for the rest of your lives.

You didn't mention medical school debt so not sure if that means you are debt free or if it means you are accounting for it separately.
Echo this, and I'd simplify it even more. At this level of income, if you keep your housing and auto spend down (i.e., buy and drive something someone making a third of what you make could comfortably afford), you can spend like an animal on just about everything else and still have an insane savings rate. And while I have nothing other than a gut feeling to back this up, I suspect living in a comparatively modest house is the best thing you can do to prevent lifestyle creep in other areas. Less keeping up with the Joneses, I suspect.
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FIREchief
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Re: Time travel for high salary earners

Post by FIREchief »

Sellery1031 wrote: Fri Oct 16, 2020 2:20 pm I have a question for high salary earners - most informative would be those peri-retirement.

Let's use an arbitrary cut-off of $500K+ annual household income (W2 salary alone).
Well, I never made close to that (and I didn't even sleep in a Holiday Inn Express last night), but I'll respond anyway.
In particular, anything more than:
-Maxing out employer-sponsored tax-advantaged retirement account(s)
-Maxing out HSA
-Maxing out individual retirement account(s)
-Life insurance
-Disability insurance
Those first three should be a given. In addition to the potential tax benefits, they also have the potential to provide strong asset protection (IRA depends on the state you live in). Asset protection trusts might also be a good option for "extra" money.

If I had made $500K per year in my thirties, I would live like I made $100K per year and stockpile the rest in the stock market. I guess that means I would maintain Life Insurance and Disability Insurance sufficient to maintain that same $100K per year lifestyle. LBYM should get a whole lot easier as "M" increases. Strangely, it doesn't seem to work that way in the real, non-Boglehead world. :?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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FIREchief
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Re: Time travel for high salary earners

Post by FIREchief »

Tingting1013 wrote: Fri Oct 16, 2020 4:32 pm
anoop wrote: Fri Oct 16, 2020 4:25 pm Based on thread title, and thinking my salary was high, I came in to offer my wisdom, only to find out that my salary is not high enough.
The rich are different from you and me; they have more money.
:P

That said, some mistakenly think that the rich are those who make more money....
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
MarkerFM
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Re: Time travel for high salary earners

Post by MarkerFM »

I'm going to respond with something a bit counter to the others.

Yes, max out tax-deferred, and you will still need to set targets for saving because you will earn far more than you can put in tax-deferred.

Avoid lifestyle creep as others have said; it is worse than a recession and market correction because it tends to be semi-permanent unlike periodic economic hiccups.

BUT. All work and no play makes Sellery1031 a dull person. Once you have met your milestone goals, allow yourself a splurge that won't cost a fortune but will be a reward for your good behavior. And, later in your career, transition your thinking to how you will spend all the loot you have socked away over the years. Don't start to loosen the purse strings too soon, but also don't do it to late.

Enjoy the journey.
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The Man with the Axe
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Re: Time travel for high salary earners

Post by The Man with the Axe »

Resist the urge to buy the big house.
arsenalfan
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Re: Time travel for high salary earners

Post by arsenalfan »

stan1 wrote: Fri Oct 16, 2020 2:35 pm I think one important point would be to continue living below your means in choices of housing, automobiles, travel, and other lifestyle factors even while your peer group might be spending more. Even delaying "lifestyle creep" by a few years will make a big difference since what you save in your 30s will have decades of appreciation and make you financially secure in assets as well as income for the rest of your lives.

You didn't mention medical school debt so not sure if that means you are debt free or if it means you are accounting for it separately.

+1.
I bought 2 "forever homes"
I wish I'd rented, or house hacked and bought a few rentable town homes first while our babies were young, and locked them in with 30yr mortgages.
And also done way more research on public schools and local/state taxes.
Would have ended up in an entirely different area
oldfort
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Re: Time travel for high salary earners

Post by oldfort »

FIREchief wrote: Fri Oct 16, 2020 4:45 pm Those first three should be a given. In addition to the potential tax benefits, they also have the potential to provide strong asset protection (IRA depends on the state you live in). Asset protection trusts might also be a good option for "extra" money.
People worry too much about asset protection, or at least they worry about the wrong risks. The biggest cause of losing half your assets is divorce. The most common reason for having your paycheck garnished is child support, alimony, or having too much credit card debt despite your high income. What almost never happens is a liability lawsuit, which doesn't ultimately resolve within reasonable insurance limits.
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FIREchief
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Re: Time travel for high salary earners

Post by FIREchief »

The Man with the Axe wrote: Fri Oct 16, 2020 5:07 pm Resist the urge to buy the big house.
+1 8-)
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fredflinstone
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Re: Time travel for high salary earners

Post by fredflinstone »

look into 529s for asset protection. The rules depend on the state.
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Watty
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Re: Time travel for high salary earners

Post by Watty »

Sellery1031 wrote: Fri Oct 16, 2020 2:20 pm Is there anything unique that high salary earners should consider in the personal finance space?
My background and income is totally different but one thing that would be good to keep in mind is that the healthcare landscape in the US is likely to change a lot over your career.

Doctors will always be well paid but you might want to be a bit cautious about developing a lifestyle that depends on the high income continuing for the rest of your career.

Even if the high income continues the tax rates could go up a lot and tax breaks might be more limited. If you look at the past top marginal tax brackets they were scarcely high at times.

https://www.taxpolicycenter.org/statist ... -tax-rates

Those are a bit misleading though since few people actually paid rates that high and there were a lot more tax deductions available back then.
stereotaxis
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Re: Time travel for high salary earners

Post by stereotaxis »

Big house is okay if you don't live in a high-cost-of-living area. Just don't go bonkers.
Afty
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Re: Time travel for high salary earners

Post by Afty »

Some ideas for things to do before transitioning to the high salary:

* Use Roth accounts for retirement savings in preference to pre-tax
* Roth conversions of any existing pre-tax accounts
* If you have taxable investments, consider whether you want to sell/rebalance before high tax rates make it more painful. Also consider tax gain harvesting if you're in the 0% capital gains bracket.
lainvestor
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Re: Time travel for high salary earners

Post by lainvestor »

Sellery1031 wrote: Fri Oct 16, 2020 2:20 pm In particular, anything more than:
-Maxing out employer-sponsored tax-advantaged retirement account(s)
-Maxing out HSA
-Maxing out individual retirement account(s)
-Life insurance
-Disability insurance

Thanks for the input in advance,
I am new to this forum and going to watch this thread very closely. I am in 37% + 11.3% tax bracket but I haven't done
#1 Didn't invest in post tax 401k until last week. I didn't know much about Roth conversion either.
#2.I have PPO plan. HSA is a no brainer in my case (1.5k contribution from the company and 4k is maximum out of pocket expense).
#3. This I have done
#4. Yes, from the employer
#5. Yes

I will fix #2 next year. But I probably should all the above 5~6 years back!
BestCoast123
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Re: Time travel for high salary earners

Post by BestCoast123 »

Sellery1031 wrote: Fri Oct 16, 2020 2:20 pm I am an early career physician transitioning from fellowship to attending level salary.

I have a question for high salary earners - most informative would be those peri-retirement.

Let's use an arbitrary cut-off of $500K+ annual household income (W2 salary alone).

Is there anything you wish you would have done sooner with respect to personal finances or investments?
Is there anything unique that high salary earners should consider in the personal finance space?

In particular, anything more than:
-Maxing out employer-sponsored tax-advantaged retirement account(s)
-Maxing out HSA
-Maxing out individual retirement account(s)
-Life insurance
-Disability insurance

Thanks for the input in advance,
Need to be wary of the "country club" variety investment opportunities that are available for accredited investors. Real estate deals, angel investment opportunities, etc. I'm not saying alternative investments are all bad, just that there are a lot of bad opportunities out there.
hoofaman
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Re: Time travel for high salary earners

Post by hoofaman »

The best financial advice would be to never get legally married. You could still have a wedding cermony, and perhaps create some custom legal agreement between you and spouse
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ram
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Re: Time travel for high salary earners

Post by ram »

Spend at least 10 K /mo ( 25% income) excluding taxes.
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ResearchMed
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Re: Time travel for high salary earners

Post by ResearchMed »

Sellery1031 wrote: Fri Oct 16, 2020 2:20 pm
<snip>

Is there anything you wish you would have done sooner with respect to personal finances or investments?
Is there anything unique that high salary earners should consider in the personal finance space?

<snip>

Thanks for the input in advance,
We aren't near the >$500k/yr income, although we are doing far better (to the extent this is measured by income/wealth, which isn't necessarily what "counts") than we ever expected.

This isn't quite what you were asking, but don't forget to enjoy life along the way.
Don't keep "waiting until <future time or success level>" to do some of the things you dream about doing, be it travel, learning a hobby, volunteer work... whatever.

That "Time Travel" only goes one direction, of course, at least until there are some more interesting developments someday.

Try to include some general enjoyment along the way, including things that might cost a bit extra if that's what you want to do/experience... and while you - and loved ones - are still around and healthy enough.

The one with the biggest bank account doesn't necessarily "win".

We are among those who "almost waited too long" to enjoy some of those special plans and dreams.
Fortunately, after the medical emergency (less than 2 weeks before the planned departure date of that first "big trip") that almost derailed too many things... there was a quite good recovery.
We now have many amazing memories and lots of wonderful photos, to last us through times when we might not be able to travel (be it due to declining health/age, or... plagues :annoyed ).

RM
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Minty
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Re: Time travel for high salary earners

Post by Minty »

KlangFool wrote: Fri Oct 16, 2020 4:38 pm
Please do not confuse income with wealth. Doctors and lawyers are among the worst professions in accumulating wealth.
Except those of us lucky enough to have found BH :happy
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investorpeter
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Re: Time travel for high salary earners

Post by investorpeter »

I wish I had enrolled in a HDHP and started a HSA as soon as it became available instead of signing up for the Gold plan every year. Max contributions each year in a HSA would now be a tidy sum heading into early retirement.
bogledogle
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Re: Time travel for high salary earners

Post by bogledogle »

ridebikeseveryday wrote: Fri Oct 16, 2020 2:32 pm
Sellery1031 wrote: Fri Oct 16, 2020 2:20 pm I am an early career physician transitioning from fellowship to attending level salary.

I have a question for high salary earners - most informative would be those peri-retirement.

Let's use an arbitrary cut-off of $500K+ annual household income (W2 salary alone).

Is there anything you wish you would have done sooner with respect to personal finances or investments?
Is there anything unique that high salary earners should consider in the personal finance space?

In particular, anything more than:
-Maxing out employer-sponsored tax-advantaged retirement account(s)
-Maxing out HSA
-Maxing out individual retirement account(s)
-Life insurance
-Disability insurance

Thanks for the input in advance,
Employer plans + IRAs is only ~26k/year, which is not very much money to save if you're earning $500k/year.
Physicians have access to retirement/deferred compensation accounts to stash more than 26k ( example: 403b + 457b + 401a + HSA + backdoor roth). Although, it depends on the employer if they are for profit/non-profit.
MedSaver
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Re: Time travel for high salary earners

Post by MedSaver »

Although I don't know your specific situation, I was in your shoes 5 years ago. You say $500k+ salary, but my advice is to not count your chickens until they're hatched. In other words, if you're on a partner track or self employed, your trajectory may change suddenly. Maybe partnership isn't what you thought it would be or maybe you want to spend more time outside of the hospital/clinic/etc. Don't spend what you think you'll make, spend below what you actually do make. I guarantee there will be lifestyle inflation, but coming from fellowship salary (slave wage), some inflation is fine; you just can't inflate ALL of your spending. Pick one or two things to splurge on and save the difference. It's always easier to live a little bigger than to reverse course and try to live smaller. The peer pressure to live up to your means will be enormous, but ignore what your peers are doing. Try to stuff as much into pretax retirement as you can and then start packing it into taxable. Once you have a 7-figure net worth you can loosen the purse strings even more. I mean at that point, relatively speaking, anything less than a 5-figure spend is a rounding error.

I would not recommend buying a house within the first year of a new job; too much can go wrong. If you have student debt, pay that off fast without sacrificing your retirement funds - at least for me, it was a psychological burden. People say a mortgage can be a psychological burden too, but at least you can sell a house for some money back; good luck trying to sell your MD. One thing I should have done is consolidate all my bank accounts early on. For us, every institution we trained at had a different retirement account at a different company. We have been slowly working to reduce the number of financial institutions we use, but we still have sizable accounts at BofA, Fidelity, Vanguard, and Schwab. You can get more perks with a bank the higher your balance is.
oldfort
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Re: Time travel for high salary earners

Post by oldfort »

KlangFool wrote: Fri Oct 16, 2020 4:38 pm Doctors and lawyers are among the worst professions in accumulating wealth.


KlangFool
This can't possibly be true. What's the median net worth of a doctor or lawyer vs the general population?
azianbob
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Re: Time travel for high salary earners

Post by azianbob »

As others mentioned, just continue to live like a resident even though you have the attending salary.

Max out all the retirement accounts that you mention.

Invest after tax money in after tax brokerage account.

If you get married, have an ironclad prenup. However, living like a resident will probably help you on this front as it will most likely repell the "high maintenance" expensive gold digger hotties and only attract similarly frugal minded girls.

Use condoms.
KlangFool
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Re: Time travel for high salary earners

Post by KlangFool »

oldfort wrote: Fri Oct 16, 2020 7:58 pm
KlangFool wrote: Fri Oct 16, 2020 4:38 pm Doctors and lawyers are among the worst professions in accumulating wealth.


KlangFool
This can't possibly be true. What's the median net worth of a doctor or lawyer vs the general population?
oldfort,


Please note that I said in accumulating wealth.


Have you read the book, "The Millionaire Next Door"?


KlangFool
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Brianmcg321
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Re: Time travel for high salary earners

Post by Brianmcg321 »

oldfort wrote: Fri Oct 16, 2020 7:58 pm
KlangFool wrote: Fri Oct 16, 2020 4:38 pm Doctors and lawyers are among the worst professions in accumulating wealth.


KlangFool
This can't possibly be true. What's the median net worth of a doctor or lawyer vs the general population?
Nope, it's true. Lots of doctors and lawyers feel the pressure to appear more wealthy than they actually are. Add to that they have some of the highest student loan debt. They spend the early years paying off their student loan debt and driving BMWs instead of fully funding their retirement accounts.
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.
oldfort
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Re: Time travel for high salary earners

Post by oldfort »

Brianmcg321 wrote: Fri Oct 16, 2020 8:33 pm
oldfort wrote: Fri Oct 16, 2020 7:58 pm
KlangFool wrote: Fri Oct 16, 2020 4:38 pm Doctors and lawyers are among the worst professions in accumulating wealth.


KlangFool
This can't possibly be true. What's the median net worth of a doctor or lawyer vs the general population?
Nope, it's true. Lots of doctors and lawyers feel the pressure to appear more wealthy than they actually are. Add to that they have some of the highest student loan debt. They spend the early years paying off their student loan debt and driving BMWs instead of fully funding their retirement accounts.
Prove it. Provide a link which shows doctors and lawyers have below the US average net worth.
Kennedy
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Re: Time travel for high salary earners

Post by Kennedy »

1) Select your future spouse carefully.
2) Avoid divorce.
3) Take advantage of HSA accounts early on.
4) Live way below your means until you are able to sock away an amount of money so you could live reasonably comfortable for the rest of your life if SHTF and you can't maintain your high income.
5) Things happen in life (illness, disability, life), so don't take your high income for granted.
6) Buy disability and life insurance early on before anything bad happens.
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Brianmcg321
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Re: Time travel for high salary earners

Post by Brianmcg321 »

oldfort wrote: Fri Oct 16, 2020 8:43 pm
Brianmcg321 wrote: Fri Oct 16, 2020 8:33 pm
oldfort wrote: Fri Oct 16, 2020 7:58 pm
KlangFool wrote: Fri Oct 16, 2020 4:38 pm Doctors and lawyers are among the worst professions in accumulating wealth.


KlangFool
This can't possibly be true. What's the median net worth of a doctor or lawyer vs the general population?
Nope, it's true. Lots of doctors and lawyers feel the pressure to appear more wealthy than they actually are. Add to that they have some of the highest student loan debt. They spend the early years paying off their student loan debt and driving BMWs instead of fully funding their retirement accounts.
Prove it. Provide a link which shows doctors and lawyers have below the US average net worth.
Nobody said they had below average net worth. They are bad at accumulating wealth. Compared to their income they are not prodigious savers. Here’s a book.

https://smile.amazon.com/Millionaire-Ne ... lio&sr=8-3
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.
gonefishing01
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Re: Time travel for high salary earners

Post by gonefishing01 »

Wish I’d had a three fund BH portfolio from the start. It would be furiously compounding away at this point.

Glad i fired my financial advisor before i was in too deep. He was selling a Whole Life policy and after doing some research i discovered that not only was it a terrible idea for me but also found BH and index investing.

Wish I’d kept up doing backdoor Roth’s. Financial advisor did them for us when they first became available, but after going on my own i should have paid more attention and done them every year myself.

2008 was a great year when my income spiked into the big leagues for the first time, but I was young and dumb and despite all the investment opportunities after the meltdown I bought cars and stuff instead of index funds. Learned a lot about what matters to me and what does not over the next 5-7 years.

Wish Morgan Housels book The Psychology of Money was around back then. Read it asap if you have not.
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Brianmcg321
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Re: Time travel for high salary earners

Post by Brianmcg321 »

oldfort wrote: Fri Oct 16, 2020 8:43 pm
Brianmcg321 wrote: Fri Oct 16, 2020 8:33 pm
oldfort wrote: Fri Oct 16, 2020 7:58 pm
KlangFool wrote: Fri Oct 16, 2020 4:38 pm Doctors and lawyers are among the worst professions in accumulating wealth.


KlangFool
This can't possibly be true. What's the median net worth of a doctor or lawyer vs the general population?
Nope, it's true. Lots of doctors and lawyers feel the pressure to appear more wealthy than they actually are. Add to that they have some of the highest student loan debt. They spend the early years paying off their student loan debt and driving BMWs instead of fully funding their retirement accounts.
Prove it. Provide a link which shows doctors and lawyers have below the US average net worth.
Here’s a good article if you don’t have time to read a whole book. https://thefinitygroup.com/blog/are-doctors-rich
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.
oldfort
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Re: Time travel for high salary earners

Post by oldfort »

Brianmcg321 wrote: Fri Oct 16, 2020 9:01 pm
oldfort wrote: Fri Oct 16, 2020 8:43 pm
Brianmcg321 wrote: Fri Oct 16, 2020 8:33 pm
oldfort wrote: Fri Oct 16, 2020 7:58 pm
KlangFool wrote: Fri Oct 16, 2020 4:38 pm Doctors and lawyers are among the worst professions in accumulating wealth.


KlangFool
This can't possibly be true. What's the median net worth of a doctor or lawyer vs the general population?
Nope, it's true. Lots of doctors and lawyers feel the pressure to appear more wealthy than they actually are. Add to that they have some of the highest student loan debt. They spend the early years paying off their student loan debt and driving BMWs instead of fully funding their retirement accounts.
Prove it. Provide a link which shows doctors and lawyers have below the US average net worth.
Here’s a good article if you don’t have time to read a whole book. https://thefinitygroup.com/blog/are-doctors-rich
The link shows doctors to be a fantastic profession for accumulating wealth. According to your link, the median net worth of a physician is $1 million. The median net worth of a household in the US is $100k. I don't know if they adjust for age, but doctors appear to be worth 10x as much as the typical American household.
novemberrain
Posts: 489
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Re: Time travel for high salary earners

Post by novemberrain »

Sellery1031 wrote: Fri Oct 16, 2020 2:20 pm I am an early career physician transitioning from fellowship to attending level salary.

I have a question for high salary earners - most informative would be those peri-retirement.

Let's use an arbitrary cut-off of $500K+ annual household income (W2 salary alone).

Is there anything you wish you would have done sooner with respect to personal finances or investments?
Is there anything unique that high salary earners should consider in the personal finance space?

In particular, anything more than:
-Maxing out employer-sponsored tax-advantaged retirement account(s)
-Maxing out HSA
-Maxing out individual retirement account(s)
-Life insurance
-Disability insurance

Thanks for the input in advance,
I fit your income criteria. Main thing at high income levels is that tax deferred contributions only form a small part of savings. The vast majority go to taxable brokerage accounts.

Secondly, budgeting becomes very important. At high income levels, lifestyle creep is very real. When you have several tens of thousands of after tax income every month, and spending is maybe 10k per month, it is very important to budget. Otherwise if you start comparing every cost against your high income, you will feel it is small amounts and overspend.
Xrayman69
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Re: Time travel for high salary earners

Post by Xrayman69 »

oldfort wrote: Fri Oct 16, 2020 8:43 pm
Brianmcg321 wrote: Fri Oct 16, 2020 8:33 pm
oldfort wrote: Fri Oct 16, 2020 7:58 pm
KlangFool wrote: Fri Oct 16, 2020 4:38 pm Doctors and lawyers are among the worst professions in accumulating wealth.


KlangFool
This can't possibly be true. What's the median net worth of a doctor or lawyer vs the general population?
Nope, it's true. Lots of doctors and lawyers feel the pressure to appear more wealthy than they actually are. Add to that they have some of the highest student loan debt. They spend the early years paying off their student loan debt and driving BMWs instead of fully funding their retirement accounts.
Prove it. Provide a link which shows doctors and lawyers have below the US average net worth.
Agree probably hyperbole. Generalizations and stereotypes for high earning W2 individuals. Millionaire next door is also likely a end of the curve hyperbole. The vast majority of next door neighbors are not “millionaires”. The principles of the book are sound, but execution of sound principles are challenging

OP, use common sense. Max all tax advantage accounts. Keep spending “reasonable”. Enjoy the journey. Living to just accumulate and squirreling nuts is not necessarily enjoyable. Living to excess and leveraged to the hilt and being owned by the bank is also not ultimately enjoyable as well.
oldfort
Posts: 1735
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Re: Time travel for high salary earners

Post by oldfort »

Brianmcg321 wrote: Fri Oct 16, 2020 8:57 pm
oldfort wrote: Fri Oct 16, 2020 8:43 pm
Brianmcg321 wrote: Fri Oct 16, 2020 8:33 pm
oldfort wrote: Fri Oct 16, 2020 7:58 pm
KlangFool wrote: Fri Oct 16, 2020 4:38 pm Doctors and lawyers are among the worst professions in accumulating wealth.


KlangFool
This can't possibly be true. What's the median net worth of a doctor or lawyer vs the general population?
Nope, it's true. Lots of doctors and lawyers feel the pressure to appear more wealthy than they actually are. Add to that they have some of the highest student loan debt. They spend the early years paying off their student loan debt and driving BMWs instead of fully funding their retirement accounts.
Prove it. Provide a link which shows doctors and lawyers have below the US average net worth.
Nobody said they had below average net worth. They are bad at accumulating wealth. Compared to their income they are not prodigious savers. Here’s a book.

https://smile.amazon.com/Millionaire-Ne ... lio&sr=8-3
Isn't net worth and the accumulation of wealth the same thing. In mathematical terms, your net worth would be the integral of the rate at which you accumulate wealth.
novemberrain
Posts: 489
Joined: Wed May 09, 2018 12:26 pm

Re: Time travel for high salary earners

Post by novemberrain »

oldfort wrote: Fri Oct 16, 2020 9:50 pm
Brianmcg321 wrote: Fri Oct 16, 2020 8:57 pm
oldfort wrote: Fri Oct 16, 2020 8:43 pm
Brianmcg321 wrote: Fri Oct 16, 2020 8:33 pm
oldfort wrote: Fri Oct 16, 2020 7:58 pm

This can't possibly be true. What's the median net worth of a doctor or lawyer vs the general population?
Nope, it's true. Lots of doctors and lawyers feel the pressure to appear more wealthy than they actually are. Add to that they have some of the highest student loan debt. They spend the early years paying off their student loan debt and driving BMWs instead of fully funding their retirement accounts.
Prove it. Provide a link which shows doctors and lawyers have below the US average net worth.
Nobody said they had below average net worth. They are bad at accumulating wealth. Compared to their income they are not prodigious savers. Here’s a book.

https://smile.amazon.com/Millionaire-Ne ... lio&sr=8-3
Isn't net worth and the accumulation of wealth the same thing. In mathematical terms, your net worth would be the integral of the rate at which you accumulate wealth.
That is not the point. Saving 50k on a 200k income is completely different from saving 50k on a 500k income. Sure, both of them might end up with 1M NW at some point. But the person who did it with 500k income is bad at accumulation
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Brianmcg321
Posts: 977
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Re: Time travel for high salary earners

Post by Brianmcg321 »

novemberrain wrote: Fri Oct 16, 2020 9:54 pm
oldfort wrote: Fri Oct 16, 2020 9:50 pm
Brianmcg321 wrote: Fri Oct 16, 2020 8:57 pm
oldfort wrote: Fri Oct 16, 2020 8:43 pm
Brianmcg321 wrote: Fri Oct 16, 2020 8:33 pm

Nope, it's true. Lots of doctors and lawyers feel the pressure to appear more wealthy than they actually are. Add to that they have some of the highest student loan debt. They spend the early years paying off their student loan debt and driving BMWs instead of fully funding their retirement accounts.
Prove it. Provide a link which shows doctors and lawyers have below the US average net worth.
Nobody said they had below average net worth. They are bad at accumulating wealth. Compared to their income they are not prodigious savers. Here’s a book.

https://smile.amazon.com/Millionaire-Ne ... lio&sr=8-3
Isn't net worth and the accumulation of wealth the same thing. In mathematical terms, your net worth would be the integral of the rate at which you accumulate wealth.
That is not the point. Saving 50k on a 200k income is completely different from saving 50k on a 500k income. Sure, both of them might end up with 1M NW at some point. But the person who did it with 500k income is bad at accumulation
Not only that, they won’t be able to retire. Spending $40k a month to maintain the same lifestyle will burn through that nest egg pretty quick.
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.
Tingting1013
Posts: 405
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Re: Time travel for high salary earners

Post by Tingting1013 »

novemberrain wrote: Fri Oct 16, 2020 9:54 pm
oldfort wrote: Fri Oct 16, 2020 9:50 pm
Brianmcg321 wrote: Fri Oct 16, 2020 8:57 pm
oldfort wrote: Fri Oct 16, 2020 8:43 pm
Brianmcg321 wrote: Fri Oct 16, 2020 8:33 pm

Nope, it's true. Lots of doctors and lawyers feel the pressure to appear more wealthy than they actually are. Add to that they have some of the highest student loan debt. They spend the early years paying off their student loan debt and driving BMWs instead of fully funding their retirement accounts.
Prove it. Provide a link which shows doctors and lawyers have below the US average net worth.
Nobody said they had below average net worth. They are bad at accumulating wealth. Compared to their income they are not prodigious savers. Here’s a book.

https://smile.amazon.com/Millionaire-Ne ... lio&sr=8-3
Isn't net worth and the accumulation of wealth the same thing. In mathematical terms, your net worth would be the integral of the rate at which you accumulate wealth.
That is not the point. Saving 50k on a 200k income is completely different from saving 50k on a 500k income. Sure, both of them might end up with 1M NW at some point. But the person who did it with 500k income is bad at accumulation
...but good at living?
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