Time travel for high salary earners

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6miths
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Re: Time travel for high salary earners

Post by 6miths »

Kennedy wrote: Fri Oct 16, 2020 8:55 pm 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.
I would go with these ones too.

And in point 1 it would be someone who has good money sense, is not a spendthrift, does not drink Grey Goose vodka, doesn't need to wear high end brand name labels bought retail and changed every season etc. Someone who in 'The Millionaire Next Door' would be a PAW - Prodigious Accumulator of Wealth (as compared to many MDs who wind up being UAWs - Under Accumulators of Wealth).

For 6 I would suggest that when buying life insurance it should be term life rather than permanent.

For further in depth discussions and suggestions from MDs go to https://www.whitecoatinvestor.com/. I would definitely look at old threads on life insurance and 'Biggest Financial Mistakes - Stupid Doctor Tricks' and various other related blog posts.

Recognize that you are a 'Whale' and many people will see you as an opportunity to make money. You can lessen the risk of being taken advantage of by not looking like a whale - blue jeans, beater car, no McMansion, no Rolex, etc.
Last edited by 6miths on Fri Oct 16, 2020 10:17 pm, edited 1 time in total.
'It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so!' Mark Twain
oldfort
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Re: Time travel for high salary earners

Post by oldfort »

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
To me, they are both equally good or bad at accumulating wealth, although at this point we're arguing over semantics.
penumbra
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Re: Time travel for high salary earners

Post by penumbra »

I think you've gotten some good advice so far. Sounds like you're an employee? Tax deferred space is likely limited. With private practice groups, there are opportunities to structure more robust and complex defined benefit plans, etc. We were able to put away several hundred thousand/yr that way, enabling us to accumulate high 7 figure tax free accounts over the years. Roth IRA's are a good way to go. I'm guessing tax rates will go up in future years.

Be really thoughtful about your taxable accounts: they will likely be to bulk of your assets over time, and you don't want to be in the wrong vehicles, have to reposition and pay taxes, and start over. Broad index funds seem like the best choice, as has been recommended over and over on this board. Lots of good advice here.

Certainly choice of spouse is absolutely critical. Hardly anyone thinks they're making a bad choice on the way in, but check back years later: the story often takes a sad turn. I've been lucky, I'm still with wife number one, and very happy at that. But truly, I don't really know how I made such a good choice. I had no idea what made a good marriage while I was in my 20's. Look around at the good marriages among your parents friends, and try to model on those.

Choice of house is really important. We've been in our home for over 40 years, and still love it. It's a single story, one of the best choices we could have made. Stairs are a nuisance, at best, but over time, as you get older, they are just miserable. Beyond that, not too big, not too small, not too much maintenance, practical location. A view is lovely. It's hard to think of what might serve your needs decades hence, but worth considering.

Best of luck with your choices!!
novemberrain
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Re: Time travel for high salary earners

Post by novemberrain »

Tingting1013 wrote: Fri Oct 16, 2020 10:02 pm
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

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?
Everything in moderation. Is earning 100m per year and saving 50k per year also “good at living”?
Tingting1013
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Re: Time travel for high salary earners

Post by Tingting1013 »

novemberrain wrote: Fri Oct 16, 2020 10:26 pm
Tingting1013 wrote: Fri Oct 16, 2020 10:02 pm
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

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?
Everything in moderation. Is earning 100m per year and saving 50k per year also “good at living”?
Why does someone earning 100m per year need to save at all?

And why should living be in “moderation”. I only get one life, I intend to live the $!@& out of it.
Carousel
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Re: Time travel for high salary earners

Post by Carousel »

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?
It's not true, and it's all in the book. In the book's portrait of the typical millionaire, it says 8% have law degrees, 6% have medical degrees. Clearly, millionaires are overrepresented in these professions. My first google search tells me that .36% of the US population are lawyers and .29% are doctors. So, we have 20x as many lawyer and doctor millionaires as expected. (I didn't bother to find % population numbers from 1996, so those figures are more recent.)
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WWJBDo
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Re: Time travel for high salary earners

Post by WWJBDo »

I am just the demographic you are looking for. Nearing retirement, $500k + W2 between spouse and myself.
Don't ramp up cost of living to match your change in salary.
Pay off debt.
Maximize retirement (Cash balance plan can be useful to increase retirement savings, but pay off debt first).
One low maintenance wife who shares your sense and rate of spending.
Term life. 2-3 M total only-get some 10 and 20 year level term. Renew or reapply as necessary, but you won't need it after you turn 60.
By the time you retire, you should l have a lot of both tax deferred and cash positions, making term life no longer necessary.
Fly coach for now. Read "How to think about money" . It may be the best $ you spend.

In California? Buy a house in the area you want your kids to grow up and select the best lot and worst house you can find. A mortgage is ok, but renovate with cash only.
"It is difficult to get a man to understand something when his salary depends upon his not understanding it." Upton Sinclair
EnjoyIt
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Re: Time travel for high salary earners

Post by EnjoyIt »

Lots of great advice and I will agree that the right spouse plus prenup as well as not buying too much house are very very important. I will add a few more items here.

1) don’t expect to make $500k forever. The world of medicine is constantly changing. Over my practicing career I see a constant downward pressure on cutting reimbursement. It will happen to you as well. I also see a consistent increase in the logistics and documentation in doing your job. This generally means it will take you more time to accomplish the same task. In effect that is a pay cut unless you are willing to work longer and longer hours to keep up. Lastly, your skill set can become in lower demand due to progress in medicine. As an example are the cardiothorasic surgeons who made a ton of money until cardiologists started doing caths and took away a substantial portion of their business. This can happen to you as well.

2) Manage your lifestyle creep in a way that will provide the most enjoyment. Sure if you go from spending $50k a year to spending $200k a year you will have a lot of fun. But after a few years this will become your norm and that joy will dwindle. Instead increase your lifestyle slowly getting pleasure out of each and every incremental step. When out of residency increase your spending by maybe $1k a month for the first 1-3 years. Then add another $1k a month and so forth. Doing this will allow you to quickly build wealth early on while still getting to enjoy a consistent increase in spending for most of your career. Those first few years out are buy far the most important.

3) Most medical professions that make the big bucks make you work hard for it. Make sure you take the time to eat healthy, exercise and enjoy life outside of work. Burnout is real and will devastate your career. Your much better of making less money for a longer period of time as opposed to burning yourself out in the first 5 years and then not being able to practice. I have seen far too many doctors burn themselves out and make bad decisions that end them making mistakes, getting sued, and even losing hospital privileges. Don’t forget that those mistakes cost lives. Take care of yourself and take care of the patients. The money will come.

Congrats and good luck in your career.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
ad2007
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Re: Time travel for high salary earners

Post by ad2007 »

Depending on your specialty and I could be wrong, but you'll get paid more in a lower-COL than HCOL area. But more importantly, it's much easier to save when everyone around you are driving pick up trucks.

Housing: Pay cash for your first fancy house if possible. Otherwise rent until you can.
Cars: Don't develop too fancy of a taste for automobiles.
Vacation: You should be able to do whatever you like, except if all your friends are buying beach houses, mountain cabins and ski lodges or whatever. Again rent first before buying. And buy with cash if you must have it.
Taxes: Fill up all your tax deferred space and build up a healthy after-tax account. There aren't any "loop holes" for w2 earners. Don't waste your time with sales people on this subject.

Otherwise, it's actually more important to hone your skills and earn as much as possible without burning out. And you may enjoy medicine enough and do not want to retire early. I know a few people who practiced into their 70s because they still love it. You can have your cake and eat it too.

Good luck.
pasadena
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Re: Time travel for high salary earners

Post by pasadena »

I once read something that stuck with me, even though I'm no physician, from WhitecoatInvestor: live like a resident. e.g. stay put in terms of lifestyle for as long as it makes sense, and save as much as you can during that time. Then I suppose increase your lifestyle gradually.
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Watty
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Re: Time travel for high salary earners

Post by Watty »

pasadena wrote: Sat Oct 17, 2020 3:32 am I once read something that stuck with me, even though I'm no physician, from WhitecoatInvestor: live like a resident. e.g. stay put in terms of lifestyle for as long as it makes sense, and save as much as you can during that time. Then I suppose increase your lifestyle gradually.
Again I have a different background but for a long time I saved half of any pay increase and that worked well for me. Saving is sort of like dieting and exercise in that if you do not set reasonable goals you will likely fail.
TheNightsToCome
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Re: Time travel for high salary earners

Post by TheNightsToCome »

MedSaver wrote: Fri Oct 16, 2020 7:56 pm The peer pressure to live up to your means will be enormous, ...
I read this frequently, but who are these peers? Where are they? How do they exert such pressure?

I'm a high-income physician and I've never felt any pressure to live up to my means, much less "enormous" pressure.
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midareff
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Re: Time travel for high salary earners

Post by midareff »

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.
and they sure aren't the typical working or office fellow who worked 40+ years and saved diligently throughout life's ups and downs to get their second comma by 60.
Kelrex
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Re: Time travel for high salary earners

Post by Kelrex »

TheNightsToCome wrote: Sat Oct 17, 2020 7:14 am
MedSaver wrote: Fri Oct 16, 2020 7:56 pm The peer pressure to live up to your means will be enormous, ...
I read this frequently, but who are these peers? Where are they? How do they exert such pressure?

I'm a high-income physician and I've never felt any pressure to live up to my means, much less "enormous" pressure.
Same, it's just not a thing among the many medical professionals I know. Some spend a lot, some don't, but there's absolutely no pressure, and no one really cares what anyone else spends. They can be intensely status-y about roles and titles, but they DGAF about spending.

I think this depends more on your general community attitudes towards spending and keeping up with the Joneses.

OP-as for my specific experience and advice:
I really only have two key pieces of wisdom
1: Cash flow isn't wealth and doesn't make you rich until you've saved it. I had this attitude and it saved my ass when s#+t hit the fan.
2: Make sure you have good disability insurance.
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zzcooper123
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Re: Time travel for high salary earners

Post by zzcooper123 »

You are expendable. Don't get cocky. At that salary level you must perform. Is it worth it?
Learn to negotiate with Hospital administrators. They live by a different code than you.
Find some sort of self-employment. Don't sign restrictive covenants that limit your ability to make outside income. Hire your spouse and kids. A Solo 401k is your best friend.
Learn the tax laws. You about to pay a whole lot of taxes.
Don't buy the monster Doctor house. Your income stream isn't that dependable.
Learn how to handle stress. The Politics of Big Medicine can be brutal.
TheNightsToCome
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Re: Time travel for high salary earners

Post by TheNightsToCome »

midareff wrote: Sat Oct 17, 2020 7:36 am
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.
and they sure aren't the typical working or office fellow who worked 40+ years and saved diligently throughout life's ups and downs to get their second comma by 60.
Probably not. Many of them were star students who gained entry to top colleges and excelled there, and then:

Excelled again in a competitive interview process to earn an investment banking job where they then worked soul-crushing hours for years, or

Gained entry to a T-14 law school where they excelled in order to earn a BigLaw job where they then worked soul-crushing hours for years, or

Landed a Big3 consulting job where they then worked soul-crushing hours for years while climbing the up-or-out pyramid structure of their company, or

Gained entry to med school, followed by 3 years of residency, then 3 years of fellowship, and then took every other night call and every other weekend call for years. Sixty hour weeks are the easy weeks.
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midareff
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Re: Time travel for high salary earners

Post by midareff »

TheNightsToCome wrote: Sat Oct 17, 2020 8:33 am
midareff wrote: Sat Oct 17, 2020 7:36 am
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.
and they sure aren't the typical working or office fellow who worked 40+ years and saved diligently throughout life's ups and downs to get their second comma by 60.
Probably not. Many of them were star students who gained entry to top colleges and excelled there, and then:

Excelled again in a competitive interview process to earn an investment banking job where they then worked soul-crushing hours for years, or

Gained entry to a T-14 law school where they excelled in order to earn a BigLaw job where they then worked soul-crushing hours for years, or

Landed a Big3 consulting job where they then worked soul-crushing hours for years while climbing the up-or-out pyramid structure of their company, or

Gained entry to med school, followed by 3 years of residency, then 3 years of fellowship, and then took every other night call and every other weekend call for years. Sixty hour weeks are the easy weeks.
Big bucks and big hours may not be as closely related as you think. The working man I was referring to can work 60 and 70 hour weeks most of his career too. You don't have to be an investment banker, lawyer or doctor to work long hours.
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TomatoTomahto
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Re: Time travel for high salary earners

Post by TomatoTomahto »

TheNightsToCome wrote: Sat Oct 17, 2020 8:33 am
midareff wrote: Sat Oct 17, 2020 7:36 am
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.
and they sure aren't the typical working or office fellow who worked 40+ years and saved diligently throughout life's ups and downs to get their second comma by 60.
Probably not. Many of them were star students who gained entry to top colleges and excelled there, and then:

Excelled again in a competitive interview process to earn an investment banking job where they then worked soul-crushing hours for years, or

Gained entry to a T-14 law school where they excelled in order to earn a BigLaw job where they then worked soul-crushing hours for years, or

Landed a Big3 consulting job where they then worked soul-crushing hours for years while climbing the up-or-out pyramid structure of their company, or

Gained entry to med school, followed by 3 years of residency, then 3 years of fellowship, and then took every other night call and every other weekend call for years. Sixty hour weeks are the easy weeks.
Or, Excelled again in a competitive interview process to earn a high end job at a high frequency trading company and had a pretty good work/life balance

Or, Excelled again in a competitive interview process to earn a high end job at a FAANG and had a possibly good work/life balance
Okay, I get it; I won't be political or controversial. The Earth is flat.
TheNightsToCome
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Re: Time travel for high salary earners

Post by TheNightsToCome »

midareff wrote: Sat Oct 17, 2020 8:36 am
TheNightsToCome wrote: Sat Oct 17, 2020 8:33 am
midareff wrote: Sat Oct 17, 2020 7:36 am
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.
and they sure aren't the typical working or office fellow who worked 40+ years and saved diligently throughout life's ups and downs to get their second comma by 60.
Probably not. Many of them were star students who gained entry to top colleges and excelled there, and then:

Excelled again in a competitive interview process to earn an investment banking job where they then worked soul-crushing hours for years, or

Gained entry to a T-14 law school where they excelled in order to earn a BigLaw job where they then worked soul-crushing hours for years, or

Landed a Big3 consulting job where they then worked soul-crushing hours for years while climbing the up-or-out pyramid structure of their company, or

Gained entry to med school, followed by 3 years of residency, then 3 years of fellowship, and then took every other night call and every other weekend call for years. Sixty hour weeks are the easy weeks.
Big bucks and big hours may not be as closely related as you think. The working man I was referring to can work 60 and 70 hour weeks most of his career too. You don't have to be an investment banker, lawyer or doctor to work long hours.
Yes, my brother-in-law is the most brilliant man I know, but he decided to become a neuroscience PhD (now published as lead author in Cell). He works extremely long hours as a post-doc in his late 30s now, but for peanuts.

However, the typical working or office fellow works about 40 hours, but may have the impression that highly-compensated professionals have similar working lives. Instead, those professionals often have exceptional talents and/or work ethics and are killing themselves at work while the typical Joe is having a weekend barbecue.
Olemiss540
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Re: Time travel for high salary earners

Post by Olemiss540 »

Tingting1013 wrote: Fri Oct 16, 2020 10:02 pm
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

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?
I think you confused "living" with "spending".
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.
Soon2BXProgrammer
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Re: Time travel for high salary earners

Post by Soon2BXProgrammer »

Get highly rated "own occupation disability insurance" -- Make sure its OWN occupation!!!!! - Pay for it. Do It. Now!

Get highly rated term life insurance. Get multiple policies if needed. Don't short yourself.

DO NOT let anyone convince you you need complex investment or insurance. No whole life, no infinite banking, no, no no no. If your grandparents wouldn't understand it, then you don't need it.

Don't be suckered into complex life insurance trusts where you gift the yearly gift limit to it to buy whole life, Just give the money to your children don't force them to wait to kill you off, for them to get it. Again if it doesn't make sense to grandma, its not a good idea.

Burn out is a real thing. limit the size of a house you buy, and i would say with that salary, there should not be anything you buy on credit EVER.(besides a house, and then your goal should be to pay it off in a reasonable time) I don't care if it is good financing, NO. let me repeat NO. Grandma wouldn't agree with the idea of i'm borrowing money on a car, to put it in the stock market lotto machine.. No No No. Your goal should be to make your finances as boring as possible. Boring Boring Boring. If your financial life is boring, and you start to experience burn out, you will have the space in your life to do locums for a year. Or find a part time limited schedule job with a pay cut, to allow yourself to figure out what is next.

Don't enslave yourself to your high income.

One of your best assets is your earning potential, so simplicity in life is key. So that you can earn. Try and capture a large percentage of your earning power in savings.
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,
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midareff
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Re: Time travel for high salary earners

Post by midareff »

TheNightsToCome wrote: Sat Oct 17, 2020 8:50 am
midareff wrote: Sat Oct 17, 2020 8:36 am
TheNightsToCome wrote: Sat Oct 17, 2020 8:33 am
midareff wrote: Sat Oct 17, 2020 7:36 am
Tingting1013 wrote: Fri Oct 16, 2020 4:32 pm

The rich are different from you and me; they have more money.
and they sure aren't the typical working or office fellow who worked 40+ years and saved diligently throughout life's ups and downs to get their second comma by 60.
Probably not. Many of them were star students who gained entry to top colleges and excelled there, and then:

Excelled again in a competitive interview process to earn an investment banking job where they then worked soul-crushing hours for years, or

Gained entry to a T-14 law school where they excelled in order to earn a BigLaw job where they then worked soul-crushing hours for years, or

Landed a Big3 consulting job where they then worked soul-crushing hours for years while climbing the up-or-out pyramid structure of their company, or

Gained entry to med school, followed by 3 years of residency, then 3 years of fellowship, and then took every other night call and every other weekend call for years. Sixty hour weeks are the easy weeks.
Big bucks and big hours may not be as closely related as you think. The working man I was referring to can work 60 and 70 hour weeks most of his career too. You don't have to be an investment banker, lawyer or doctor to work long hours.
Yes, my brother-in-law is the most brilliant man I know, but he decided to become a neuroscience PhD (now published as lead author in Cell). He works extremely long hours as a post-doc in his late 30s now, but for peanuts.

However, the typical working or office fellow works about 40 hours, but may have the impression that highly-compensated professionals have similar working lives. Instead, those professionals often have exceptional talents and/or work ethics and are killing themselves at work while the typical Joe is having a weekend barbecue.
Very true... most work 40 hours. There are more than some section and division heads who have professional level skill sets and see 40 hours in before lunch Thursday and continue forward including a few weekend hours logged in as well. There is always something that needs to be done if you are detailed and dedicated enough regardless of profession. ... not to even include continuing education hours in your field or fields.
TheNightsToCome
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Re: Time travel for high salary earners

Post by TheNightsToCome »

TomatoTomahto wrote: Sat Oct 17, 2020 8:41 am
TheNightsToCome wrote: Sat Oct 17, 2020 8:33 am
midareff wrote: Sat Oct 17, 2020 7:36 am
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.
and they sure aren't the typical working or office fellow who worked 40+ years and saved diligently throughout life's ups and downs to get their second comma by 60.
Probably not. Many of them were star students who gained entry to top colleges and excelled there, and then:

Excelled again in a competitive interview process to earn an investment banking job where they then worked soul-crushing hours for years, or

Gained entry to a T-14 law school where they excelled in order to earn a BigLaw job where they then worked soul-crushing hours for years, or

Landed a Big3 consulting job where they then worked soul-crushing hours for years while climbing the up-or-out pyramid structure of their company, or

Gained entry to med school, followed by 3 years of residency, then 3 years of fellowship, and then took every other night call and every other weekend call for years. Sixty hour weeks are the easy weeks.
Or, Excelled again in a competitive interview process to earn a high end job at a high frequency trading company and had a pretty good work/life balance

Or, Excelled again in a competitive interview process to earn a high end job at a FAANG and had a possibly good work/life balance
I'm sure there are highly-compensated professional positions with decent work-life balance, e.g., dermatology, but you won't be able to become a dermatologist today unless you are at the top of your med school class. That is, you get there by being exceptional.

Ditto for FAANG jobs. I'm not in tech, but from what I understand, only the cream of the crop can land a FAANG job.

Sinecures exist, but everyone I know who earns a high income has exceptional talent/intellectual horsepower and/or works (or has worked) very long hours and/or took a big career risk (successful entrepreneurs).
Tingting1013
Posts: 412
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Re: Time travel for high salary earners

Post by Tingting1013 »

Olemiss540 wrote: Sat Oct 17, 2020 8:54 am
Tingting1013 wrote: Fri Oct 16, 2020 10:02 pm
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

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?
I think you confused "living" with "spending".
I think that’s up to the person. People are different. Some prefer to buy happiness.
is50xenough
Posts: 122
Joined: Sat Jul 28, 2018 1:37 pm

Re: Time travel for high salary earners

Post by is50xenough »

KlangFool wrote: Fri Oct 16, 2020 4:38 pm
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
Klangfool, I don’t think this is what it says in The millionaire next door”. Do you have data for this commonly quoted “fact”?
novemberrain
Posts: 491
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Re: Time travel for high salary earners

Post by novemberrain »

is50xenough wrote: Sat Oct 17, 2020 10:04 am
KlangFool wrote: Fri Oct 16, 2020 4:38 pm
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
Klangfool, I don’t think this is what it says in The millionaire next door”. Do you have data for this commonly quoted “fact”?
+1.
I agree that physicians may be bad at accumulating wealth, given their income. But so are the vast majority of people, relative to what they make
KlangFool
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Re: Time travel for high salary earners

Post by KlangFool »

is50xenough wrote: Sat Oct 17, 2020 10:04 am
KlangFool wrote: Fri Oct 16, 2020 4:38 pm
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
Klangfool, I don’t think this is what it says in The millionaire next door”. Do you have data for this commonly quoted “fact”?

is50xenough,


Accumulating wealth = saving your income and invest. Doctors and lawyers are high social status occupations. They are among the worst in saving their incomes.


KlangFool
User avatar
Watty
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Re: Time travel for high salary earners

Post by Watty »

TomatoTomahto wrote: Sat Oct 17, 2020 8:41 am
TheNightsToCome wrote: Sat Oct 17, 2020 8:33 am
midareff wrote: Sat Oct 17, 2020 7:36 am
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.
and they sure aren't the typical working or office fellow who worked 40+ years and saved diligently throughout life's ups and downs to get their second comma by 60.
Probably not. Many of them were star students who gained entry to top colleges and excelled there, and then:

Excelled again in a competitive interview process to earn an investment banking job where they then worked soul-crushing hours for years, or

Gained entry to a T-14 law school where they excelled in order to earn a BigLaw job where they then worked soul-crushing hours for years, or

Landed a Big3 consulting job where they then worked soul-crushing hours for years while climbing the up-or-out pyramid structure of their company, or

Gained entry to med school, followed by 3 years of residency, then 3 years of fellowship, and then took every other night call and every other weekend call for years. Sixty hour weeks are the easy weeks.
Or, Excelled again in a competitive interview process to earn a high end job at a high frequency trading company and had a pretty good work/life balance

Or, Excelled again in a competitive interview process to earn a high end job at a FAANG and had a possibly good work/life balance
Or, Became rich the old fashioned way by inheriting the money, or marrying someone with money. For example the richest family in the US is the Walton family. When Jeff Bezos of Amazon got divorced his ex-wife got about $38 Billion.

https://www.investopedia.com/articles/i ... milies.asp

Realistically though even though many doctors may have a high income and net worth of several million dollars that might not be enough to qualify as really being rich now. In fact many of them may not even qualify for the often touted 1% since you need an income of $422K to reach that threshold.

https://www.cbsnews.com/news/how-much-i ... -in-the-1/
KlangFool
Posts: 17712
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Re: Time travel for high salary earners

Post by KlangFool »

novemberrain wrote: Sat Oct 17, 2020 10:30 am
is50xenough wrote: Sat Oct 17, 2020 10:04 am
KlangFool wrote: Fri Oct 16, 2020 4:38 pm
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
Klangfool, I don’t think this is what it says in The millionaire next door”. Do you have data for this commonly quoted “fact”?
+1.
I agree that physicians may be bad at accumulating wealth, given their income. But so are the vast majority of people, relative to what they make
novemberrain,


Conversely, among the professions, teachers and engineers are among the best. This thread is about OP aka the doctor. It is a warning about his/her occupation hazard in savings.

KlangFool
Tingting1013
Posts: 412
Joined: Mon Aug 24, 2020 5:44 pm

Re: Time travel for high salary earners

Post by Tingting1013 »

KlangFool wrote: Sat Oct 17, 2020 10:37 am
novemberrain wrote: Sat Oct 17, 2020 10:30 am
is50xenough wrote: Sat Oct 17, 2020 10:04 am
KlangFool wrote: Fri Oct 16, 2020 4:38 pm
Tingting1013 wrote: Fri Oct 16, 2020 4:32 pm

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
Klangfool, I don’t think this is what it says in The millionaire next door”. Do you have data for this commonly quoted “fact”?
+1.
I agree that physicians may be bad at accumulating wealth, given their income. But so are the vast majority of people, relative to what they make
novemberrain,


Conversely, among the professions, teachers and engineers are among the best. This thread is about OP aka the doctor. It is a warning about his/her occupation hazard in savings.

KlangFool
“Engineers” are the best at saving?
A bit self-serving Klang?
TheNightsToCome
Posts: 611
Joined: Fri Jun 30, 2017 11:48 pm

Re: Time travel for high salary earners

Post by TheNightsToCome »

Watty wrote: Sat Oct 17, 2020 10:36 am
TomatoTomahto wrote: Sat Oct 17, 2020 8:41 am
TheNightsToCome wrote: Sat Oct 17, 2020 8:33 am
midareff wrote: Sat Oct 17, 2020 7:36 am
Tingting1013 wrote: Fri Oct 16, 2020 4:32 pm

The rich are different from you and me; they have more money.
and they sure aren't the typical working or office fellow who worked 40+ years and saved diligently throughout life's ups and downs to get their second comma by 60.
Probably not. Many of them were star students who gained entry to top colleges and excelled there, and then:

Excelled again in a competitive interview process to earn an investment banking job where they then worked soul-crushing hours for years, or

Gained entry to a T-14 law school where they excelled in order to earn a BigLaw job where they then worked soul-crushing hours for years, or

Landed a Big3 consulting job where they then worked soul-crushing hours for years while climbing the up-or-out pyramid structure of their company, or

Gained entry to med school, followed by 3 years of residency, then 3 years of fellowship, and then took every other night call and every other weekend call for years. Sixty hour weeks are the easy weeks.
Or, Excelled again in a competitive interview process to earn a high end job at a high frequency trading company and had a pretty good work/life balance

Or, Excelled again in a competitive interview process to earn a high end job at a FAANG and had a possibly good work/life balance
Or, Became rich the old fashioned way by inheriting the money, or marrying someone with money. For example the richest family in the US is the Walton family. When Jeff Bezos of Amazon got divorced his ex-wife got about $38 Billion.

https://www.investopedia.com/articles/i ... milies.asp

Realistically though even though many doctors may have a high income and net worth of several million dollars that might not be enough to qualify as really being rich now. In fact many of them may not even qualify for the often touted 1% since you need an income of $422K to reach that threshold.

https://www.cbsnews.com/news/how-much-i ... -in-the-1/
Right, doctors are not the actual rich; the top 1% net worth requires $11,099,166 now (https://dqydj.com/average-median-top-ne ... rcentiles/). Not many doctors in that group.

But in this thread, "rich" means earning several hundred thousand dollars per year, which usually means long hours of hard work.
hmw
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Re: Time travel for high salary earners

Post by hmw »

TheNightsToCome wrote: Sat Oct 17, 2020 7:14 am
MedSaver wrote: Fri Oct 16, 2020 7:56 pm The peer pressure to live up to your means will be enormous, ...
I read this frequently, but who are these peers? Where are they? How do they exert such pressure?

I'm a high-income physician and I've never felt any pressure to live up to my means, much less "enormous" pressure.
I totally agree. I am in a relatively high paying speciality. I have never felt any pressure or inquiries from other physicians regarding how I spent my money. There are lots of expensive cars/SUVs on my hospital doc parking lot. I've never felt the need to buy one as well. I know that some of them probably make less than 1/2 of what I make.
oldfort
Posts: 1735
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Re: Time travel for high salary earners

Post by oldfort »

TheNightsToCome wrote: Sat Oct 17, 2020 8:50 am
midareff wrote: Sat Oct 17, 2020 8:36 am
TheNightsToCome wrote: Sat Oct 17, 2020 8:33 am
midareff wrote: Sat Oct 17, 2020 7:36 am
Tingting1013 wrote: Fri Oct 16, 2020 4:32 pm

The rich are different from you and me; they have more money.
and they sure aren't the typical working or office fellow who worked 40+ years and saved diligently throughout life's ups and downs to get their second comma by 60.
Probably not. Many of them were star students who gained entry to top colleges and excelled there, and then:

Excelled again in a competitive interview process to earn an investment banking job where they then worked soul-crushing hours for years, or

Gained entry to a T-14 law school where they excelled in order to earn a BigLaw job where they then worked soul-crushing hours for years, or

Landed a Big3 consulting job where they then worked soul-crushing hours for years while climbing the up-or-out pyramid structure of their company, or

Gained entry to med school, followed by 3 years of residency, then 3 years of fellowship, and then took every other night call and every other weekend call for years. Sixty hour weeks are the easy weeks.
Big bucks and big hours may not be as closely related as you think. The working man I was referring to can work 60 and 70 hour weeks most of his career too. You don't have to be an investment banker, lawyer or doctor to work long hours.
Yes, my brother-in-law is the most brilliant man I know, but he decided to become a neuroscience PhD (now published as lead author in Cell). He works extremely long hours as a post-doc in his late 30s now, but for peanuts.

However, the typical working or office fellow works about 40 hours, but may have the impression that highly-compensated professionals have similar working lives. Instead, those professionals often have exceptional talents and/or work ethics and are killing themselves at work while the typical Joe is having a weekend barbecue.
Lots of physicians work normal hours. Try getting an appointment on a Saturday or Sunday lol.
Kelrex
Posts: 239
Joined: Wed Aug 26, 2020 1:32 pm

Re: Time travel for high salary earners

Post by Kelrex »

Soon2BXProgrammer wrote: Sat Oct 17, 2020 9:01 am Get highly rated "own occupation disability insurance" -- Make sure its OWN occupation!!!!! - Pay for it. Do It. Now!
Yes, yes, yes.

I mentioned disability insurance but I forgot to emphasize OWN occupation, because in my mind, it's a given.

Also, if you ever, ever, ever get even a little bit chronically ill, or even suspect that you *might* get a little chronically ill, and may possibly someday become seriously chronically ill, contact a disability lawyer before you even talk to your MD.

Don't ever, ever, ever fill in anything for an insurance claim without consulting a lawyer first.

You can't even imagine how important handling your disability insurance properly is until you need it.

I cannot emphasize this enough.
MedSaver
Posts: 123
Joined: Sun Jul 02, 2017 5:33 pm

Re: Time travel for high salary earners

Post by MedSaver »

hmw wrote: Sat Oct 17, 2020 10:56 am
TheNightsToCome wrote: Sat Oct 17, 2020 7:14 am
MedSaver wrote: Fri Oct 16, 2020 7:56 pm The peer pressure to live up to your means will be enormous, ...
I read this frequently, but who are these peers? Where are they? How do they exert such pressure?

I'm a high-income physician and I've never felt any pressure to live up to my means, much less "enormous" pressure.
I totally agree. I am in a relatively high paying speciality. I have never felt any pressure or inquiries from other physicians regarding how I spent my money. There are lots of expensive cars/SUVs on my hospital doc parking lot. I've never felt the need to buy one as well. I know that some of them probably make less than 1/2 of what I make.
It’s more subtle. It’s not people knocking on your door and demanding you spend money. You’ll be in the lounge and your colleagues might be talking about how one of them bought a boat and went fishing or got a new Tesla or went heli skiing, etc. and sometimes you think to yourself “gee, that might be nice.” If it doesn’t affect you, that’s great, but it happens all the time and it usually starts even before graduating fellowship.
Soon2BXProgrammer
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Re: Time travel for high salary earners

Post by Soon2BXProgrammer »

Kelrex wrote: Sat Oct 17, 2020 12:08 pm
Soon2BXProgrammer wrote: Sat Oct 17, 2020 9:01 am Get highly rated "own occupation disability insurance" -- Make sure its OWN occupation!!!!! - Pay for it. Do It. Now!
Yes, yes, yes.

I mentioned disability insurance but I forgot to emphasize OWN occupation, because in my mind, it's a given.

Also, if you ever, ever, ever get even a little bit chronically ill, or even suspect that you *might* get a little chronically ill, and may possibly someday become seriously chronically ill, contact a disability lawyer before you even talk to your MD.

Don't ever, ever, ever fill in anything for an insurance claim without consulting a lawyer first.

You can't even imagine how important handling your disability insurance properly is until you need it.

I cannot emphasize this enough.
Agreed, and the devil is in the details, some policies are OWN occupation for say 2-5 years then ANY occupation after. Others are own occupation forever, and others are any occupation.

It is essential for high earners to understand what type of policy they are buying. What are the disability criteria, and how long will it pay.

and yes, for a really good policy it is expensive, but it is worth it.
Tingting1013
Posts: 412
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Re: Time travel for high salary earners

Post by Tingting1013 »

What is the point of being a high earner if you’re not going to spend the money? Might as well have spent less time studying in school and found a normal job with normal hours and normal pay.

My household income is approaching $800k at age 34 & 35.

I am looking for a $100k SUV to celebrate.
Olemiss540
Posts: 1497
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Re: Time travel for high salary earners

Post by Olemiss540 »

Tingting1013 wrote: Sat Oct 17, 2020 9:20 am
Olemiss540 wrote: Sat Oct 17, 2020 8:54 am
Tingting1013 wrote: Fri Oct 16, 2020 10:02 pm
novemberrain wrote: Fri Oct 16, 2020 9:54 pm
oldfort wrote: Fri Oct 16, 2020 9:50 pm

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?
I think you confused "living" with "spending".
I think that’s up to the person. People are different. Some prefer to buy happiness.
Sure but did you read your own quotes response? Does that make the folks buying happiness "good at living"? It factually makes them good at spending.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.
Kelrex
Posts: 239
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Re: Time travel for high salary earners

Post by Kelrex »

Tingting1013 wrote: Sat Oct 17, 2020 12:25 pm What is the point of being a high earner if you’re not going to spend the money? Might as well have spent less time studying in school and found a normal job with normal hours and normal pay.

My household income is approaching $800k at age 34 & 35.

I am looking for a $100k SUV to celebrate.
Yeah, but I'm guessing you have a fair amount of invested assets as well.

A lot of physicians are your age and just barely at a zero NW due to length of time in school and debt load.

Hundreds of thousands in income is all nice, but when you're years behind in terms of earning years, it's not that high until you play a bit of catch up.

I'm all for spending if you've got it, but a new grad physician doesn't have wealth, they have potential for future wealth. A wealth that can be totally taken out by one nasty middle aged illness.
EnjoyIt
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Re: Time travel for high salary earners

Post by EnjoyIt »

Tingting1013 wrote: Sat Oct 17, 2020 12:25 pm What is the point of being a high earner if you’re not going to spend the money? Might as well have spent less time studying in school and found a normal job with normal hours and normal pay.

My household income is approaching $800k at age 34 & 35.

I am looking for a $100k SUV to celebrate.
Agreed in essence but the details are important. No problem buying a $100k car on your income especially if you have been and will continue to be a good saver. If OP has saved very little jumping straight I tot he $100k SUV may be a bit to soon.

Also, once you get that $100k SUV what will the next car be? $120k? What about the car after that. The problem with hedonistic spending is that your brain wants you to keep increasing it and it takes will to keep that at bay.

So in OP situation buying a $100k is a horrible idea being the first car out of fellowship. Make the first car may a 3 years used $40k car. Then the next car can be $60k and the next $80k. Each upgrade provides increasing joy as OP builds to the $100k if that is even their goal/intention. One of the worst things a doctor could do is to jump in right out of residency into the doctor lifestyle. After a few years you get used to it being the norm and then there is no room for lifestyle creep or splurges.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
Ron Ronnerson
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Location: Bay Area

Re: Time travel for high salary earners

Post by Ron Ronnerson »

Tingting1013 wrote: Fri Oct 16, 2020 10:31 pm
novemberrain wrote: Fri Oct 16, 2020 10:26 pm
Tingting1013 wrote: Fri Oct 16, 2020 10:02 pm
novemberrain wrote: Fri Oct 16, 2020 9:54 pm
oldfort wrote: Fri Oct 16, 2020 9:50 pm

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?
Everything in moderation. Is earning 100m per year and saving 50k per year also “good at living”?
Why does someone earning 100m per year need to save at all?

And why should living be in “moderation”. I only get one life, I intend to live the $!@& out of it.
While I agree that everyone enjoys different things and purchases can make people happy, I think it's important to be strategic about it if the goal is actually to maximize happiness. One thing to keep in mind is that after a certain amount of income to live on, additional dollars begin to have diminishing returns in terms of the joy they tend to bring. Money has a place in life and is important for security and reasonable comfort. However, time is of great value too because life is literally made up of moments of time. It's easy to become hypnotized (not saying that you are doing this but just making a general comment) by a large paycheck but it's important to weigh the cost it comes with.

For example, if someone works very few hours at a job that they love and makes a big salary and uses that money to buy fun things while saving very little and then proceeds to acquire a mysterious illness and suddenly dies, things have worked out fine (except for the dying part, of course). On the other hand, if they get that large paycheck by working long hours at a job they can barely stand, sacrifice their health and relationships due to all the hours needed to work at that stressful job to be able to buy things, and then have to greatly downgrade their lifestyle when they are older due to spending so much earlier on, I'd say they likely would wish for a do-over. However, as you said so perfectly, you only get one life. By all means, live it to the fullest. I'd just recommend pausing for at least a brief moment first to think about how to proceed in accomplishing that goal.
randomguy
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Re: Time travel for high salary earners

Post by randomguy »

bwalling wrote: Fri Oct 16, 2020 2:30 pm Saved more early on rather than enjoying finally having a high income. Both for the compounding, and for forcing the "base spend" up higher.
I would have spend much more money early on. The things I passed up on to save those extra 5k-10k/year just weren't worth now that I am saving 20x of that per year.
am
Posts: 3525
Joined: Sun Sep 30, 2007 9:55 am

Re: Time travel for high salary earners

Post by am »

oldfort wrote: Sat Oct 17, 2020 11:01 am
TheNightsToCome wrote: Sat Oct 17, 2020 8:50 am
midareff wrote: Sat Oct 17, 2020 8:36 am
TheNightsToCome wrote: Sat Oct 17, 2020 8:33 am
midareff wrote: Sat Oct 17, 2020 7:36 am

and they sure aren't the typical working or office fellow who worked 40+ years and saved diligently throughout life's ups and downs to get their second comma by 60.
Probably not. Many of them were star students who gained entry to top colleges and excelled there, and then:

Excelled again in a competitive interview process to earn an investment banking job where they then worked soul-crushing hours for years, or

Gained entry to a T-14 law school where they excelled in order to earn a BigLaw job where they then worked soul-crushing hours for years, or

Landed a Big3 consulting job where they then worked soul-crushing hours for years while climbing the up-or-out pyramid structure of their company, or

Gained entry to med school, followed by 3 years of residency, then 3 years of fellowship, and then took every other night call and every other weekend call for years. Sixty hour weeks are the easy weeks.
Big bucks and big hours may not be as closely related as you think. The working man I was referring to can work 60 and 70 hour weeks most of his career too. You don't have to be an investment banker, lawyer or doctor to work long hours.
Yes, my brother-in-law is the most brilliant man I know, but he decided to become a neuroscience PhD (now published as lead author in Cell). He works extremely long hours as a post-doc in his late 30s now, but for peanuts.

However, the typical working or office fellow works about 40 hours, but may have the impression that highly-compensated professionals have similar working lives. Instead, those professionals often have exceptional talents and/or work ethics and are killing themselves at work while the typical Joe is having a weekend barbecue.
Lots of physicians work normal hours. Try getting an appointment on a Saturday or Sunday lol.
They’re taking call or rounding on patients.
toocold
Posts: 156
Joined: Sun Jul 23, 2017 9:17 am

Re: Time travel for high salary earners

Post by toocold »

Keep your spouse happy.
Enjoy life.
You may eventually get bored or frustrated with your job.
Some sacrifices are necessary to be successful
This may not be relevant for doc's - Always look for new opportunities.
You will hit a wall eventually. Make sure your career trajectory rises quickly.
Enjoy your job.
Keep spending flat.
Generate passive income and/or wealth outside your W-2.
oldfort
Posts: 1735
Joined: Mon Mar 02, 2020 8:45 pm

Re: Time travel for high salary earners

Post by oldfort »

am wrote: Sat Oct 17, 2020 2:00 pm
oldfort wrote: Sat Oct 17, 2020 11:01 am
TheNightsToCome wrote: Sat Oct 17, 2020 8:50 am
midareff wrote: Sat Oct 17, 2020 8:36 am
TheNightsToCome wrote: Sat Oct 17, 2020 8:33 am

Probably not. Many of them were star students who gained entry to top colleges and excelled there, and then:

Excelled again in a competitive interview process to earn an investment banking job where they then worked soul-crushing hours for years, or

Gained entry to a T-14 law school where they excelled in order to earn a BigLaw job where they then worked soul-crushing hours for years, or

Landed a Big3 consulting job where they then worked soul-crushing hours for years while climbing the up-or-out pyramid structure of their company, or

Gained entry to med school, followed by 3 years of residency, then 3 years of fellowship, and then took every other night call and every other weekend call for years. Sixty hour weeks are the easy weeks.
Big bucks and big hours may not be as closely related as you think. The working man I was referring to can work 60 and 70 hour weeks most of his career too. You don't have to be an investment banker, lawyer or doctor to work long hours.
Yes, my brother-in-law is the most brilliant man I know, but he decided to become a neuroscience PhD (now published as lead author in Cell). He works extremely long hours as a post-doc in his late 30s now, but for peanuts.

However, the typical working or office fellow works about 40 hours, but may have the impression that highly-compensated professionals have similar working lives. Instead, those professionals often have exceptional talents and/or work ethics and are killing themselves at work while the typical Joe is having a weekend barbecue.
Lots of physicians work normal hours. Try getting an appointment on a Saturday or Sunday lol.
They’re taking call or rounding on patients.
Being on call for an emergency doesn't mean you're likely to come in. I remember my LASIK doc saying he had like one emergency in three years where he had to come in on a weekend.
am
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Re: Time travel for high salary earners

Post by am »

oldfort wrote: Sat Oct 17, 2020 2:23 pm
am wrote: Sat Oct 17, 2020 2:00 pm
oldfort wrote: Sat Oct 17, 2020 11:01 am
TheNightsToCome wrote: Sat Oct 17, 2020 8:50 am
midareff wrote: Sat Oct 17, 2020 8:36 am

Big bucks and big hours may not be as closely related as you think. The working man I was referring to can work 60 and 70 hour weeks most of his career too. You don't have to be an investment banker, lawyer or doctor to work long hours.
Yes, my brother-in-law is the most brilliant man I know, but he decided to become a neuroscience PhD (now published as lead author in Cell). He works extremely long hours as a post-doc in his late 30s now, but for peanuts.

However, the typical working or office fellow works about 40 hours, but may have the impression that highly-compensated professionals have similar working lives. Instead, those professionals often have exceptional talents and/or work ethics and are killing themselves at work while the typical Joe is having a weekend barbecue.
Lots of physicians work normal hours. Try getting an appointment on a Saturday or Sunday lol.
They’re taking call or rounding on patients.
Being on call for an emergency doesn't mean you're likely to come in. I remember my LASIK doc saying he had like one emergency in three years where he had to come in on a weekend.
That’s a lifestyle specialty. Many other docs are not so lucky. Even if you don’t come in, the calls and anticipation of something happening will do a good job ruining it.
KyleAAA
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Re: Time travel for high salary earners

Post by KyleAAA »

Not really, no. The basics work just fine even when you're earning $500k. It doesn't pay to be overly frugal when you are a high earner. You won't wish you hadn't spent that $2k on vacation in 10 years.
stoptothink
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Re: Time travel for high salary earners

Post by stoptothink »

randomguy wrote: Sat Oct 17, 2020 1:56 pm
bwalling wrote: Fri Oct 16, 2020 2:30 pm Saved more early on rather than enjoying finally having a high income. Both for the compounding, and for forcing the "base spend" up higher.
I would have spend much more money early on. The things I passed up on to save those extra 5k-10k/year just weren't worth now that I am saving 20x of that per year.
Never really understood this perspective. I suppose memories are very unique things, but (as someone who has been frugal since birth, out of necessity until the last 5 years or so) now that I can pretty much buy anything I want (within reason), it's never crossed my mind that I wished I had a memory of spending on something when I was younger. Yeah, spending that money then wouldn't have really hurt long-term, but would it have made me happier either? More than anything, it set me up to be happy with a simple life, which has brought my family and I security.
uroflow
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Re: Time travel for high salary earners

Post by uroflow »

I would max out 403b/457a/HSA/backdoor Roth. Most people start work the summer or fall after finishing their training. Make sure you max out these accounts right off the bat for the remainder of the year. It's hard seeing all of that go, but jumpstarting your retirement accounts with $58k (if my numbers are right for married couple) can really help. Then you can slowly contribute starting the following January.

Try to get a more reasonable house that you will be able to live in for a few years. I don't think buying is a big deal if you're going to be there for awhile. I bought a home which required a good amount of updating, repairs, etc as it was the only reasonable home in the particular neighborhood we wanted. 2 years later we moved into a house we custom built. It probably wasn't the best financial decision to move out so quickly. If there was a house that would have worked a bit better for us while our family grew, I might have been able to stay in it for 5 years before going on to building a custom home. I don't regret having built the custom home at all. As a physician you can have anything you like, just not everything. We chose a new, custom home with a pool.

Don't look in the parking lot at the other doctor cars. For one thing, most of them have been at it much longer and have higher net worths. Also, rolling in to the parking lot in a brand new Porsche kind of irritates the primary care doctors driving Hondas. You need the PCPs to like you and keep sending you business.

Don't have any complications in your first year. Pass on a harder case if you must. Build up the professional equity with your colleagues. If you have a bad outcome in your first month, it's hard to dig out of that. We all have bad outcomes, but you want to avoid them as much as possible in your first year. It's much easier to have a bad outcome a year into practice after you've shown that your patients usually do well.

Maintain good relations with your spouse and any children. As has been said, divorce will be the number one way to lose money. You only get one shot at being a parent. There will always be another patient.

Be patient, but assertive. Understand that it might take time for your practice to grow, but don't let yourself get dumped on by your senior colleagues.
decapod10
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Re: Time travel for high salary earners

Post by decapod10 »

To attempt to answer OP's question, I don't think there's anything major to consider that's significantly different than the things that other people consider. Physicians are a little bit different in that their earning tends to start later than other professions, so you're a little bit "behind" so to speak when you're first starting. All the things you mentioned otherwise are the typical recommendations.

If you are a high earner, you can max out your tax advantaged space more easily so you have to consider taxes a bit more.

Other than that, how much to save and spend is a very personal matter, so it's hard to give advice on that subject. Your personal preferences and family situation matter a lot.

The amount that our family saves is relatively low compared to most others here. We're around 40 now, haven't had too many regrets yet, but I guess we will see.
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