half high income physician, half financial illiterate

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A-Commoner
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Re: half high income physician, half financial illiterate

Post by A-Commoner »

muffins14 wrote: Wed Feb 07, 2024 7:22 pm
A-Commoner wrote: Wed Feb 07, 2024 3:25 pm If you’re going to live in a VHCOL you might as well buy a house instead of rent, given your income is high enough to cash flow the mortgage. The reason is that houses in VHCOL seem to appreciate faster gaining you more equity. Thats been my experience anyway, living in Los Angeles. Our house here has doubled in value over the last 7 years.

Not sure why your house in Seattle didn’t appreciate that much over the last few years.



Buying a house too soon is what got them into this mess

The problem is not that he bought a house. The problem is he bought a $2.3 million house on a $550k income. He could have gotten a $1m to $1.5 million house.

There’s a huge viable middle ground between a $2.3 million house and a 1 bedroom apartment. It’s amusing to see the OP’s thought process swing between these 2 extremes.
happy_statistician
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Re: half high income physician, half financial illiterate

Post by happy_statistician »

I remember your post from when you were trying to sell your house. It seems you are impulsive and drawn to extremes (eg, 2.3M house with financed furniture vs 1 BR apt). The good news is you make a lot of money.

My advice is to slow down your decision making, and make a budget that is *reasonable* for you and your wife. Not beans and rice every day, but not Michelin stars every week either. It will not be the life of a high-flying specialist.

Stop buying new cars. Pay down the debt aggressively using your payment plan or some other automatic option. Those are guaranteed wins that you won't have to think about regularly. Put a fixed amount in your taxable brokerage each month and *don't think about it anymore*. The goal is to automate as much as possible so you don't end up making some extreme decisions (buy the big house, short sale, etc etc).
fakin' the funk
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Re: half high income physician, half financial illiterate

Post by fakin' the funk »

I hate to say it y'all but is OP trolling?
OP: "Here are my problems, do y'all have any solutions?"
BH: "Here are some solutions"
OP: "Nah I don't want to do those"
Figaro
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Re: half high income physician, half financial illiterate

Post by Figaro »

If wife wanted a Tesla X, she was not aware of the financial situation. Have that conversation or you'll die because of the STRESS of keeping up the financial house for all the people that depend on you.

Put your own financial situation in order before funding your kid's (529) or your parents expenses.

Pay off their mortgage debt which is probably lower interest than your student loans at 7%.

If you have any taxable brokerage, sell now and dump it into the high interest debt. Your interest paid expense will drop as a result of that.

You're already considering your parent's home to be yours by paying it off in three years? How about slowing down on that and pay off your student loans first. You could always come back to it. Not sure why you feel guilty in that they dumped down payment into your house. Did they give you $200-250k or something? I doubt your parents know the financial situation you're in and if they did know, they'd want you to secure your ship from the leaky debt you've got.

You have the opportunity now to focus on the debt with your now higher income than previously job loss. It's not time to start chasing after something else ($3-4k Google ads). Think of debt like a leaky ship...it might sail initially, but eventually it'll sink if you don't plug the holes up.
pomomojo
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Re: half high income physician, half financial illiterate

Post by pomomojo »

fakin' the funk wrote: Thu Feb 08, 2024 12:29 am I hate to say it y'all but is OP trolling?
OP: "Here are my problems, do y'all have any solutions?"
BH: "Here are some solutions"
OP: "Nah I don't want to do those"
If this guy is a troll, he has been a consistent troll for at least seven years. That is a lot of invested time.
I do not have an HSA, nor do I have personal health insurance
This strikes me as absolutely insane. You need to have at least catastrophic medical insurance for a hospitalization or even an ER visit. You are way underinsured, especially as the single high income earner of your household. You should have 1+ million umbrella insurance and LT disability at minimum.
COMBINED SPENDINGS - approx $13000
Mortgage - $3500 monthly
2 new cars - $1000 month brand new hyundai santa fe & sonata. 60 month
furniture financing - $600 monthly 60 month
cable & internet, phones, utility bills - $600 could be more. house is kinda big...
credit cards(5 cards 3 department store cards) - $700 should be able to pay off all in 2 years
insurances - $300 ish
food - $900? i have no idea how much this will be to be honest... previously $500 was enough for us. but we will probably eat out once or twice a month at a nice restaurant. we drink starbucks daily. and we only buy organic...
shopping - $500 this scares me the most. it could be alot more than $500 monthly. previously we did all the shopping with credit cards. i'm determined not to use credit cards for shopping, but life just don't work that way.
gym membership - $200
leisure - $200 golf, movies, etc
combined student loan payments - $4500 monthly :|
What happened to the 2 Hyundai? This was approximately seven years ago. The cars should still be in respectable condition, and, in theory, fully paid off.

If this post is genuine, you have not changed any habits since your first post in 2016. You really need to make a concerted effort to tackle your debt issues and then begin to build a foundation for future success.
James.534
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Re: half high income physician, half financial illiterate

Post by James.534 »

I see these posts and being a physician myself, and realize that the OPs problem , is not an occupation problem. It has nothing to do with his financial issues. His financial issues are due to poor money management and living a life style that he can not afford. Your degree and your occupation is your personal capital , which affords you the ability to create wealth. Your spending and other choices are what is destroying your ability to create wealth.
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LiveSimple
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Re: half high income physician, half financial illiterate

Post by LiveSimple »

OP, Wish you the best and back on track asap... taking the right steps...
Invest when you have the money, sell when you need the money, for real life expenses...
ScubaHogg
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Re: half high income physician, half financial illiterate

Post by ScubaHogg »

James.534 wrote: Thu Feb 08, 2024 9:19 am I see these posts and being a physician myself, and realize that the OPs problem , is not an occupation problem. It has nothing to do with his financial issues. His financial issues are due to poor money management and living a life style that he can not afford. Your degree and your occupation is your personal capital , which affords you the ability to create wealth. Your spending and other choices are what is destroying your ability to create wealth.
The oddest thing is that the spending on his own household is not that high excluding rent ($3000 in a hcol area). It's just a ton of money going to the parents, rent, student debt, and an apparently a money losing business.
There are more things in Heaven and Earth, Horatio, than are dreamt of in your Expected Returns
Borqa45
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Re: half high income physician, half financial illiterate

Post by Borqa45 »

pomomojo wrote: Thu Feb 08, 2024 6:42 am
fakin' the funk wrote: Thu Feb 08, 2024 12:29 am I hate to say it y'all but is OP trolling?
OP: "Here are my problems, do y'all have any solutions?"
BH: "Here are some solutions"
OP: "Nah I don't want to do those"
If this guy is a troll, he has been a consistent troll for at least seven years. That is a lot of invested time.
I thought they just started reading personal finance. You are saying OP has been on this forum for 7 years, yet is having financial problems at their salary level of 550k+ ???? OP is irredeemable. Moving on ....
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HMSVictory
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Re: half high income physician, half financial illiterate

Post by HMSVictory »

Bones_Jones wrote: Wed Feb 07, 2024 10:58 am I'm not sure about downgrading to a 1996 Camry, but I might be able to persuade my wife to go back to a one-bedroom apartment. Honestly, we don't need two bedrooms since the baby sleeps with us anyway.

i know you guys are against on investing, but Maxing out the SEP IRA is a priority for me as it helps reduce my tax burden.

I've been following Ramsey but implementing it is quite challenging.

One lesson I've learned from my mistakes is that I definitely don't need a $2.3 million house. i'll inherit the house from my parents anyway, so i won't be buying a house anytime soon. paying 12k mortgage was pain even if i felt i had means to do it. i was naive to think that house will appreciate so much that i would be able to payoff student loans with equity. that was actually the reason i bought the house in the first place.

I've managed to save $15-20k per month over the past few months and replenish my depleted emergency fund. I plan to continue saving at this rate and increase my monthly contributions towards paying off the debt. Instead of the projected 4 years, I aim to clear it in 2 1/2 years or so.

Additionally, my income is not fixed. If I put in more hours, I can earn more. Since I work from home and have the flexibility to work from anywhere, I don't feel like a workaholic. Despite working seven days a week, I spend a lot of quality time with my wife and son, which brings me happiness. There was a time when I thought I'd never have the opportunity to spend time with my family and would be stuck working non-stop at the hospital. However, I've changed, and I can't go back to that lifestyle.


Thank you once again for all your input. I truly value your comments. Although I was initially hesitant, I'm grateful that I opened up. It's helped me realize that I need to make some difficult decisions moving forward.
Like any medical intervention the sooner you take action (or find the issue) the better the outcome for the patient.

You can do it. Once you get this big mess cleaned up with your income unencumbered by all debt you can build substantial wealth.
Stay the course!
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HMSVictory
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Re: half high income physician, half financial illiterate

Post by HMSVictory »

James.534 wrote: Thu Feb 08, 2024 9:19 am I see these posts and being a physician myself, and realize that the OPs problem , is not an occupation problem. It has nothing to do with his financial issues. His financial issues are due to poor money management and living a life style that he can not afford. Your degree and your occupation is your personal capital , which affords you the ability to create wealth. Your spending and other choices are what is destroying your ability to create wealth.
There is a huge difference in skill set between earning a big income and converting that income to wealth.

People can be exceptional at one and terrible at another (Mike Tyson comes to mind). :shock:

To be great at both is where the magic happens.
Stay the course!
folkher0
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Re: half high income physician, half financial illiterate

Post by folkher0 »

Bones_Jones wrote: Wed Feb 07, 2024 6:00 am I do not have an HSA, nor do I have personal health insurance; only my wife and son are covered. However, I receive routine check-ups at no cost. I will open up HSA and will get an insurance starting next year. I missed the enrollment period.
This is insane. What kind of 45 year old doctor doesn’t have health insurance?

Get insurance. Then get therapy.
nonnie
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Re: half high income physician, half financial illiterate

Post by nonnie »

folkher0 wrote: Sat Feb 10, 2024 4:11 pm
Bones_Jones wrote: Wed Feb 07, 2024 6:00 am I do not have an HSA, nor do I have personal health insurance; only my wife and son are covered. However, I receive routine check-ups at no cost. I will open up HSA and will get an insurance starting next year. I missed the enrollment period.
This is insane. What kind of 45 year old doctor doesn’t have health insurance?

Get insurance. Then get therapy.
And disability insurance and umbrella insurance!
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familythriftmd
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Re: half high income physician, half financial illiterate

Post by familythriftmd »

Great courage to put yourself out there for feedback!!

OP in 2016 you said you live in Tacoma? I would think that 4k for an apartment is a bit much in Tacoma. Even in Seattle you could get it for less (e.g. Wallingford, Fremont, Roosevelt, etc). Is your apartment pretty flashy?

For the rest, I agree with the above posters, ESPECIALLY INSURANCE.
rockstar
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Re: half high income physician, half financial illiterate

Post by rockstar »

Your lifestyle is out of sync with your income despite it being high. Nothing I say is going to impact that reality.

The higher income allows you to build wealth. But in order to do this, you need to spend less than you make.

By going overboard on your home, you gave up the high appreciation that homes had since 2020. You squandered a wealth building opportunity.

Your net worth is ridiculously low compared to your earnings and age. You should have at least $2m by now.

I recommend seeing a shrink to get your house in order based on what I’ve read in this thread already.
nptit
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Re: half high income physician, half financial illiterate

Post by nptit »

Bones_Jones wrote: Wed Feb 07, 2024 7:52 am Thank you for all the insights.

I'm seriously considering prioritizing debt elimination over investing in M1 and college plans. so adding 2k to debt settlement payment will speed things up.

However, concerning Google Ads...

Having worked in telehealth for five years, I understand its lucrative yet highly competitive nature. It's tough out there with thousands of applicants vying for positions, and many companies resort to hiring RAs or offering lower pay.

To ensure my survival in this industry, I've ventured into establishing my own telehealth company, investing $30k to develop the platform and obtaining the LegitScript certificate. However, for this venture to thrive, advertising is essential. After all, having a fantastic website means little if no one knows about it.

I'm willing to give it a shot for a year or two. If it doesn't pan out, so be it. At least i didn't borrow money. But if it does, I can see myself fully dedicated to growing this business, especially once I've achieved debt freedom.

I realize that the time to act is now, especially considering the current landscape heavily favoring telehealth.
Why you need such a high ad fee? Did you run the ad yourself or through an agent. I run ad biz as a side biz, it is really easy to optimize your dollar cost.
Mayacallie
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Re: half high income physician, half financial illiterate

Post by Mayacallie »

Retired physician here.
So many red flags have been addressed by posters that took a significant amount of their own time and should be appreciated.
The biggest bogie is your estimated $800 K new venture in telemedicine. I don’t trust it.
I watched two of my immediate partners go through bankruptcy, and knew of at least a dozen more over my 30 year career.
Physicians as a group are terrible money managers, perhaps someone will eventually discover why.
I usually urge self reliance, but a good CPA or financial planner could save you the fate of my partners.
MH2
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Re: half high income physician, half financial illiterate

Post by MH2 »

Mayacallie wrote: Sat Feb 10, 2024 7:22 pm Retired physician here.
So many red flags have been addressed by posters that took a significant amount of their own time and should be appreciated.
The biggest bogie is your estimated $800 K new venture in telemedicine. I don’t trust it.
I watched two of my immediate partners go through bankruptcy, and knew of at least a dozen more over my 30 year career.
Physicians as a group are terrible money managers, perhaps someone will eventually discover why.
I usually urge self reliance, but a good CPA or financial planner could save you the fate of my partners.
Simple question.

Why?

I’m generally curious. I imagine that you need intelligence and a heavy dose of rational thinking skills to make it though medical school. Those are the sorts of things that incline someone towards good financial decisions (or, at least, a couple of Google searches that get you to WCI, Dave Ramsey, and Bogleheads).
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leeks
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Re: half high income physician, half financial illiterate

Post by leeks »

How are you paying taxes on your current income? You said in an earlier post "I've managed to save $15-20k per month over the past few months and replenish my depleted emergency fund." But, based on the expenses you outlined, I don't see how you could have saved that much after tax. I think perhaps you are talking about "saving" money that actually should be going to taxes. How much of that $67K per month is going to taxes now?

Is that $3K/month really all you are spending? If that is all of your living expenses - including groceries, dog food, baby supplies, restaurants/delivery, utilities, phones, toiletries, clothing, gas, etc - then your wife is not at all high maintenance. Have you considered asking your wife to take charge of all family finances for a few years?
snowday2022
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Re: half high income physician, half financial illiterate

Post by snowday2022 »

MH2 wrote: Sat Feb 10, 2024 7:30 pm
Mayacallie wrote: Sat Feb 10, 2024 7:22 pm Retired physician here.
So many red flags have been addressed by posters that took a significant amount of their own time and should be appreciated.
The biggest bogie is your estimated $800 K new venture in telemedicine. I don’t trust it.
I watched two of my immediate partners go through bankruptcy, and knew of at least a dozen more over my 30 year career.
Physicians as a group are terrible money managers, perhaps someone will eventually discover why.
I usually urge self reliance, but a good CPA or financial planner could save you the fate of my partners.
Simple question.

Why?

I’m generally curious. I imagine that you need intelligence and a heavy dose of rational thinking skills to make it though medical school. Those are the sorts of things that incline someone towards good financial decisions (or, at least, a couple of Google searches that get you to WCI, Dave Ramsey, and Bogleheads).
Debt, living beyond means, thinking income and hence wealth is guaranteed, little time to spend on managing one’s own finances, exploitation by financial planners or business partners, etc.
MH2
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Re: half high income physician, half financial illiterate

Post by MH2 »

snowday2022 wrote: Sat Feb 10, 2024 7:41 pm
MH2 wrote: Sat Feb 10, 2024 7:30 pm
Mayacallie wrote: Sat Feb 10, 2024 7:22 pm Retired physician here.
So many red flags have been addressed by posters that took a significant amount of their own time and should be appreciated.
The biggest bogie is your estimated $800 K new venture in telemedicine. I don’t trust it.
I watched two of my immediate partners go through bankruptcy, and knew of at least a dozen more over my 30 year career.
Physicians as a group are terrible money managers, perhaps someone will eventually discover why.
I usually urge self reliance, but a good CPA or financial planner could save you the fate of my partners.
Simple question.

Why?

I’m generally curious. I imagine that you need intelligence and a heavy dose of rational thinking skills to make it though medical school. Those are the sorts of things that incline someone towards good financial decisions (or, at least, a couple of Google searches that get you to WCI, Dave Ramsey, and Bogleheads).
Debt, living beyond means, thinking income and hence wealth is guaranteed, little time to spend on managing one’s own finances, exploitation by financial planners or business partners, etc.
I guess I can see the last one, but all of the other reasons are shared with pretty much everyone else out there.

What’s the difference between a high income engineer and a high income doctor that predisposes the latter towards bad financial decisions?

I guess it just doesn’t make much sense to me. Plenty of occupations can lead to high incomes. You don't seem to hear the same stories though.
Big Shon
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Re: half high income physician, half financial illiterate

Post by Big Shon »

A lot of "tough love" in the replies so far, and I suspect the OP has left the room. :shock:
snowday2022
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Re: half high income physician, half financial illiterate

Post by snowday2022 »

MH2 wrote: Sat Feb 10, 2024 7:54 pm
snowday2022 wrote: Sat Feb 10, 2024 7:41 pm
MH2 wrote: Sat Feb 10, 2024 7:30 pm
Mayacallie wrote: Sat Feb 10, 2024 7:22 pm Retired physician here.
So many red flags have been addressed by posters that took a significant amount of their own time and should be appreciated.
The biggest bogie is your estimated $800 K new venture in telemedicine. I don’t trust it.
I watched two of my immediate partners go through bankruptcy, and knew of at least a dozen more over my 30 year career.
Physicians as a group are terrible money managers, perhaps someone will eventually discover why.
I usually urge self reliance, but a good CPA or financial planner could save you the fate of my partners.
Simple question.

Why?

I’m generally curious. I imagine that you need intelligence and a heavy dose of rational thinking skills to make it though medical school. Those are the sorts of things that incline someone towards good financial decisions (or, at least, a couple of Google searches that get you to WCI, Dave Ramsey, and Bogleheads).
Debt, living beyond means, thinking income and hence wealth is guaranteed, little time to spend on managing one’s own finances, exploitation by financial planners or business partners, etc.
I guess I can see the last one, but all of the other reasons are shared with pretty much everyone else out there.

What’s the difference between a high income engineer and a high income doctor that predisposes the latter towards bad financial decisions?

I guess it just doesn’t make much sense to me. Plenty of occupations can lead to high incomes. You don't seem to hear the same stories though.
I was 35 before I made more than 60K in a year. Within two years I was making 3/4 of a million dollars. I have friends who had half a million in debt coming out of training. Working insane hours for a couple decades to get to that point. It can be hard to climb out of the hole, and hard to keep deferring gratification forever. All of a sudden you come into a high income…You start buying things like a huge house, nice cars, private school, you pay 250K in taxes, don’t pay much attention to savings, and wake up at 44yo nearly broke like OP. Not rare.

It is not at all similar to being a high income engineer or vast majority of other high income professionals who make money much earlier in life and can start compounding early.
FeralCat
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Re: half high income physician, half financial illiterate

Post by FeralCat »

snowday2022 wrote: Sat Feb 10, 2024 9:43 pm
MH2 wrote: Sat Feb 10, 2024 7:54 pm
snowday2022 wrote: Sat Feb 10, 2024 7:41 pm
MH2 wrote: Sat Feb 10, 2024 7:30 pm
Mayacallie wrote: Sat Feb 10, 2024 7:22 pm Retired physician here.
So many red flags have been addressed by posters that took a significant amount of their own time and should be appreciated.
The biggest bogie is your estimated $800 K new venture in telemedicine. I don’t trust it.
I watched two of my immediate partners go through bankruptcy, and knew of at least a dozen more over my 30 year career.
Physicians as a group are terrible money managers, perhaps someone will eventually discover why.
I usually urge self reliance, but a good CPA or financial planner could save you the fate of my partners.
Simple question.

Why?

I’m generally curious. I imagine that you need intelligence and a heavy dose of rational thinking skills to make it though medical school. Those are the sorts of things that incline someone towards good financial decisions (or, at least, a couple of Google searches that get you to WCI, Dave Ramsey, and Bogleheads).
Debt, living beyond means, thinking income and hence wealth is guaranteed, little time to spend on managing one’s own finances, exploitation by financial planners or business partners, etc.
I guess I can see the last one, but all of the other reasons are shared with pretty much everyone else out there.

What’s the difference between a high income engineer and a high income doctor that predisposes the latter towards bad financial decisions?

I guess it just doesn’t make much sense to me. Plenty of occupations can lead to high incomes. You don't seem to hear the same stories though.
I was 35 before I made more than 60K in a year. Within two years I was making 3/4 of a million dollars. I have friends who had half a million in debt coming out of training. Working insane hours for a couple decades to get to that point. It can be hard to climb out of the hole, and hard to keep deferring gratification forever. All of a sudden you come into a high income…You start buying things like a huge house, nice cars, private school, you pay 250K in taxes, don’t pay much attention to savings, and wake up at 44yo nearly broke like OP. Not rare.

It is not at all similar to being a high income engineer or vast majority of other high income professionals who make money much earlier in life and can start compounding early.
I think it is more than that. The OP sounds like a gambler to me. They bought a $2.3M house with hopes that the equity gains would allow them to pay off a large amount of debt. In order to do this, the house needs to be eventually sold, so where then does the family live next? It sounds unfair to the spouse/kid. Why take risks like that with a family?
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cchrissyy
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Re: half high income physician, half financial illiterate

Post by cchrissyy »

OP, at your income there is absolutely no reaosn you need to have a side gig starting your own business.
you don't have an income problem.
it is 100% on the spending side.
if your new business makes as much as you hope, it won't matter. your pattern is you will surely spend it.
you can turn this around but it's a big change.
60-20-20 us-intl-bond
MH2
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Re: half high income physician, half financial illiterate

Post by MH2 »

snowday2022 wrote: Sat Feb 10, 2024 9:43 pm
MH2 wrote: Sat Feb 10, 2024 7:54 pm
snowday2022 wrote: Sat Feb 10, 2024 7:41 pm
MH2 wrote: Sat Feb 10, 2024 7:30 pm
Mayacallie wrote: Sat Feb 10, 2024 7:22 pm Retired physician here.
So many red flags have been addressed by posters that took a significant amount of their own time and should be appreciated.
The biggest bogie is your estimated $800 K new venture in telemedicine. I don’t trust it.
I watched two of my immediate partners go through bankruptcy, and knew of at least a dozen more over my 30 year career.
Physicians as a group are terrible money managers, perhaps someone will eventually discover why.
I usually urge self reliance, but a good CPA or financial planner could save you the fate of my partners.
Simple question.

Why?

I’m generally curious. I imagine that you need intelligence and a heavy dose of rational thinking skills to make it though medical school. Those are the sorts of things that incline someone towards good financial decisions (or, at least, a couple of Google searches that get you to WCI, Dave Ramsey, and Bogleheads).
Debt, living beyond means, thinking income and hence wealth is guaranteed, little time to spend on managing one’s own finances, exploitation by financial planners or business partners, etc.
I guess I can see the last one, but all of the other reasons are shared with pretty much everyone else out there.

What’s the difference between a high income engineer and a high income doctor that predisposes the latter towards bad financial decisions?

I guess it just doesn’t make much sense to me. Plenty of occupations can lead to high incomes. You don't seem to hear the same stories though.
I was 35 before I made more than 60K in a year. Within two years I was making 3/4 of a million dollars. I have friends who had half a million in debt coming out of training. Working insane hours for a couple decades to get to that point. It can be hard to climb out of the hole, and hard to keep deferring gratification forever. All of a sudden you come into a high income…You start buying things like a huge house, nice cars, private school, you pay 250K in taxes, don’t pay much attention to savings, and wake up at 44yo nearly broke like OP. Not rare.

It is not at all similar to being a high income engineer or vast majority of other high income professionals who make money much earlier in life and can start compounding early.
So it’s basically coming into a lot of resources at once, not knowing what to do with them, and being overconfident because of prior success in a very competitive field.
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HanSolo
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Re: half high income physician, half financial illiterate

Post by HanSolo »

Bones_Jones wrote: Wed Feb 07, 2024 6:00 am 8. Funding a telehealth business I've started: $3,000-$4,000 for Google ads
I'm wondering who makes more from your business, you or Google.

If it's Google, and if they're doing the same to many businesses, then that explains their stock price.

I've never clicked on a Google ad (as far as I recall). And I use ad blockers. And life is good.
Strategic Macro Senior (top 1%, 2019 Bogleheads Contest)
protagonist
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Re: half high income physician, half financial illiterate

Post by protagonist »

Bones_Jones wrote: Wed Feb 07, 2024 7:52 am

I realize that the time to act is now, especially considering the current landscape heavily favoring telehealth.
The issue is that, as an independent contractor in a niche that is very much a trend today, you don't have job security. You are relying on predicting the future, and I would guess that after doing telehealth for many years, if your predictions prove wrong, you may have a hard time, especially as an older physician, getting hired in a conventional medical practice if things dry up.

Which is not to say you should not continue to do what you are doing....you are enjoying it, which is reason enough to continue, and you are also making a LOT of money.

But if I were in your shoes, I would be relatively risk-adverse, at least for the time being....you need to concentrate on saving a lot while the going is good. With an $800K/yr income that should, theoretically, be very easy if you don't overspend....pay off your debt as soon as you can (it shouldn't take long at all if you make it a priority), and cut your expenses until you have enough money safely invested.

Contrary to what others have suggested, $4k/mo for a 2 br Seattle apt. does not seem outrageous to me. If you like living there, you can afford that. But you need to learn how to save a LOT while you are making so much money, and invest it wisely. Not only wisely, but simply....there are better ways to spend your limited spare time than pouring over price/earnings ratios and the like. For one thing, your family needs your time. Investing wisely is easy, and the simpler you make it, the less likely you are to get into trouble.


The Bogleheads Wiki is a good start. From there, don't hesitate to ask questions. There are a lot of knowledgeable people on this site that are eager to help.

Coming here, you are on the right track.

Good luck.
Last edited by protagonist on Sun Feb 11, 2024 12:36 am, edited 1 time in total.
Hebell
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Re: half high income physician, half financial illiterate

Post by Hebell »

MH2 wrote: Sat Feb 10, 2024 7:30 pm
Mayacallie wrote: Sat Feb 10, 2024 7:22 pm Retired physician here.
So many red flags have been addressed by posters that took a significant amount of their own time and should be appreciated.
The biggest bogie is your estimated $800 K new venture in telemedicine. I don’t trust it.
I watched two of my immediate partners go through bankruptcy, and knew of at least a dozen more over my 30 year career.
Physicians as a group are terrible money managers, perhaps someone will eventually discover why.
I usually urge self reliance, but a good CPA or financial planner could save you the fate of my partners.
Simple question.

Why?

I’m generally curious. I imagine that you need intelligence and a heavy dose of rational thinking skills to make it though medical school. Those are the sorts of things that incline someone towards good financial decisions (or, at least, a couple of Google searches that get you to WCI, Dave Ramsey, and Bogleheads).
I agree, and I am equally perplexed. I would like to think that someone who guides my health decisions (which includes balancing of risks against various courses of action) would not think like this.
protagonist
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Re: half high income physician, half financial illiterate

Post by protagonist »

Hebell wrote: Sun Feb 11, 2024 12:35 am
MH2 wrote: Sat Feb 10, 2024 7:30 pm
Mayacallie wrote: Sat Feb 10, 2024 7:22 pm Retired physician here.
So many red flags have been addressed by posters that took a significant amount of their own time and should be appreciated.
The biggest bogie is your estimated $800 K new venture in telemedicine. I don’t trust it.
I watched two of my immediate partners go through bankruptcy, and knew of at least a dozen more over my 30 year career.
Physicians as a group are terrible money managers, perhaps someone will eventually discover why.
I usually urge self reliance, but a good CPA or financial planner could save you the fate of my partners.
Simple question.

Why?

I’m generally curious. I imagine that you need intelligence and a heavy dose of rational thinking skills to make it though medical school. Those are the sorts of things that incline someone towards good financial decisions (or, at least, a couple of Google searches that get you to WCI, Dave Ramsey, and Bogleheads).
I agree, and I am equally perplexed. I would like to think that someone who guides my health decisions (which includes balancing of risks against various courses of action) would not think like this.
That is a bit unfair and very judgmental.
It is not at all unusual for a person to be wise in certain facets of life and not in others.
Lots of people, for example, are really brilliant at their jobs but can't figure out how to maintain a decent relationship. Or they make stupid investments.
Notsobad
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Re: half high income physician, half financial illiterate

Post by Notsobad »

protagonist wrote: Sun Feb 11, 2024 12:43 am
Hebell wrote: Sun Feb 11, 2024 12:35 am
MH2 wrote: Sat Feb 10, 2024 7:30 pm
Mayacallie wrote: Sat Feb 10, 2024 7:22 pm Retired physician here.
So many red flags have been addressed by posters that took a significant amount of their own time and should be appreciated.
The biggest bogie is your estimated $800 K new venture in telemedicine. I don’t trust it.
I watched two of my immediate partners go through bankruptcy, and knew of at least a dozen more over my 30 year career.
Physicians as a group are terrible money managers, perhaps someone will eventually discover why.
I usually urge self reliance, but a good CPA or financial planner could save you the fate of my partners.
Simple question.

Why?

I’m generally curious. I imagine that you need intelligence and a heavy dose of rational thinking skills to make it though medical school. Those are the sorts of things that incline someone towards good financial decisions (or, at least, a couple of Google searches that get you to WCI, Dave Ramsey, and Bogleheads).
I agree, and I am equally perplexed. I would like to think that someone who guides my health decisions (which includes balancing of risks against various courses of action) would not think like this.
That is a bit unfair and very judgmental.
It is not at all unusual for a person to be wise in certain facets of life and not in others.
Lots of people, for example, are really brilliant at their jobs but can't figure out how to maintain a decent relationship. Or they make stupid investments.

1) Hubris. Lots of docs are very smart and forget that we are not smart about everything.

2) The ramp up in salary from residency to practice in one’s 30’s can be dramatic, and all that pent up delayed gratification can impair judgment.

3) keeping up with the Joneses. The Dr Joneses, as well as friends in IT and business etc who made real money for years before the doc. Sad, but true.

4) zero education about personal finance in premed or med school or residency. One must be self taught or have good role models. Or have a savvy spouse. Preferably both.
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Harry Livermore
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Re: half high income physician, half financial illiterate

Post by Harry Livermore »

Gradient Descent wrote: Wed Feb 07, 2024 7:53 pm
That is absolutely the last thing OP should do.

OP needs to:
1) Get health insurance
2) Get life insurance
3) direct all savings toward debt repayment

Nothing else matters until those are resolved.
I would modify that:
1) Get health insurance
2) Get life insurance
3) Get OWN OCCUPATION disability insurance
4) direct all savings toward debt repayment

When I was fresh out of college, self-employed (as I still am) and only making like $30K that first year or two, my first order of business was #1- health insurance. I'm an asthmatic and this was 20 years prior to the ACA, so my pre-existing condition made it very expensive. It left so little money, I think it was like year 2 or 3 before I started an IRA (I was also trying to save for a house)
I also got disability insurance, although not own-occupation (to save some money on the premium) I had read it is many times more likely that someone will become disabled during their working years than die during that time. Plus, I had no spouse or dependents, so didn't need life insurance, BUT I figured I'd have some financial means of not being a burden on my parents. Later, when I had kids, I got a term life policy.
Today is Sunday. Spend the day learning about life, health, and disability insurance. Ask more questions about those products here. Line up all three this week. You could probably get a small life insurance policy online right now, with no interview or physical. I don't know.
OP- you should listen seriously to the folks here. Fix these glaring risks first, then focus on both debt and trimming expenses (you can walk and chew gum at the same time) I would stop all taxable investing, and trim everything else to the bone. The excellent folks here have given you actionable advice.
Cheers
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leeks
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Re: half high income physician, half financial illiterate

Post by leeks »

Harry Livermore wrote: Sun Feb 11, 2024 7:36 am
Gradient Descent wrote: Wed Feb 07, 2024 7:53 pm
That is absolutely the last thing OP should do.

OP needs to:
1) Get health insurance
2) Get life insurance
3) direct all savings toward debt repayment

Nothing else matters until those are resolved.
I would modify that:
1) Get health insurance
2) Get life insurance
3) Get OWN OCCUPATION disability insurance
4) direct all savings toward debt repayment
It is also a priority to ensure taxes are being paid on this independent contractor income and I have a suspicion the OP is not making estimated tax payments or otherwise sequestering the money needed for his tax bill (wild guess $250K/year). It sounded to me like the OP refilled his emergency fund with money that should have gone to taxes. I hope I am wrong about that.
delamer
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Re: half high income physician, half financial illiterate

Post by delamer »

protagonist wrote: Sun Feb 11, 2024 12:21 am
Bones_Jones wrote: Wed Feb 07, 2024 7:52 am

I realize that the time to act is now, especially considering the current landscape heavily favoring telehealth.
The issue is that, as an independent contractor in a niche that is very much a trend today, you don't have job security. You are relying on predicting the future, and I would guess that after doing telehealth for many years, if your predictions prove wrong, you may have a hard time, especially as an older physician, getting hired in a conventional medical practice if things dry up.

Which is not to say you should not continue to do what you are doing....you are enjoying it, which is reason enough to continue, and you are also making a LOT of money.

But if I were in your shoes, I would be relatively risk-adverse, at least for the time being....you need to concentrate on saving a lot while the going is good. With an $800K/yr income that should, theoretically, be very easy if you don't overspend....pay off your debt as soon as you can (it shouldn't take long at all if you make it a priority), and cut your expenses until you have enough money safely invested.

Contrary to what others have suggested, $4k/mo for a 2 br Seattle apt. does not seem outrageous to me. If you like living there, you can afford that. But you need to learn how to save a LOT while you are making so much money, and invest it wisely. Not only wisely, but simply....there are better ways to spend your limited spare time than pouring over price/earnings ratios and the like. For one thing, your family needs your time. Investing wisely is easy, and the simpler you make it, the less likely you are to get into trouble.


The Bogleheads Wiki is a good start. From there, don't hesitate to ask questions. There are a lot of knowledgeable people on this site that are eager to help.

Coming here, you are on the right track.

Good luck.
The problem that I see is that the OP’s actions aren’t in sync with his expressed wishes.

He says that he feels insecure and
all I desire is a simple life with enough wealth and contentment to retire comfortably.
Being a self-employed contractor (plus starting a side business) is not the route to security. Yes, if the breaks cut his way, he could become quite wealthy. But his own experience should tell him that the risk is very high of failure.

Finding a salaried job with with a lower salary that provides security and some measure of predictability is more in tune with his indicated goals.

(I do realize that what people claim that they want publicly and what they really desire in their heart aren’t necessarily the same. So there’s that.)
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
BradleyB
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Re: half high income physician, half financial illiterate

Post by BradleyB »

I don't think that you need any more advice, what you need to do at this point is make the commitment to actually do something.

Retired DDS here...we don't make anywhere near what you do, but the pressure for the "doctor lifestyle" is definitely there. The best thing I ever did for my financial and mental health was to retire. Yes, now I don't hang around with other docs driving new Jags and bragging about their vacation homes. I hang out with "regular guys", drive a 11 year old Honda and walk my dog. You think that you can ignore them, but it is tough.

They're still working well into their 70's; I'm riding my bike.

Is your definition of success having more stuff or sleeping well at night and taking your kids to the zoo?

All bashing aside, it is time for some long-term planning. No more home runs with the Google ads and giant house.

And have a serious sit down, private, kids in bed conversation with your wife. You are (hopefully) in this together it needs to be a team approach.

I wish you the best.
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White Coat Investor
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Re: half high income physician, half financial illiterate

Post by White Coat Investor »

Bones_Jones wrote: Wed Feb 07, 2024 6:00 am My circumstances:

I'm a 44 year old physician. Last year was a challenging period for me. As a self-employed physician working for various telehealth companies, I faced significant setbacks:

1. I lost a highly lucrative telehealth job. It was paying me 550k a year.
2. Financial strain led me to attempt to sell my home, but when that failed, I resorted to a short sale.
3. My wife and I had approximately $410,000 in student loans, prompting us to opt for a debt settlement plan, which we aim to pay off within four years, settling about $240,000 of the debt. Credit already ruined because of short sale, so we've decided to do this. Interest on our student loans were in 7% range.

However, my situation has since improved. I secured a new job that offers substantially higher pay than the one I lost, projecting an annual income of about $800,000. Nonetheless, I lack job security due to being a self-employed contractor. The reason for my previous job loss was the company's struggles during the COVID-19 pandemic, leading to staff cuts, particularly among high-earning physicians like myself.

My current monthly income is approximately $67,000, and my expenses include:

1. Student loan Debt settlement fee: $5,200
2. Rent for a two-bedroom apartment: $4,000
3. Maxing out SEP IRA contributions: $5,500
4. Investing in an M1 stock account: $1,000
5. Contributing to a 529 college plan: $1,000
6. Supporting my parents financially: $6,000
7. Car payment for a 2012 BMW X5: $382 (down from $750 for a Lexus)
8. Funding a telehealth business I've started: $3,000-$4,000 for Google ads
9. Health insurance: $1,000
10. Malpractice insurance: $1,500
11. Living expenses $3000 ish (I have a 1 year old baby, 3 dogs, and my wife is sorta high maintenance)

Financially, I currently have:

- SEP IRA account: $500,000, primarily invested in META, APPL, MMM, TSLA, PYPL, JNJ, BABA, AMZN, MCD, and GOOG. It was much higher when TSLA was doing great.
- M1 account: $10,000, invested in VOO and the "Magnificent 7."
- Just started a college plan for my 1 year old son.
- Emergency funds: $45,000, with a monthly savings goal of $15,000-$20,000.

I do not have an HSA, nor do I have personal health insurance; only my wife and son are covered. However, I receive routine check-ups at no cost. I will open up HSA and will get an insurance starting next year. I missed the enrollment period.

Regarding housing, I've decided against purchasing a home for at least next 6-7 years, feeling secure in my apartment in Seattle, despite the city's safety concerns. We had a nightmare buying a home we didn't love. It was a disaster.

I am confident in my ability to retain my current job for a few years, but if I were to lose it, I could potentially return to a $250,000 income telehealth work as a backup. It would suck, but at least I'll always have a job. I hope for my business to eventually take off. If it doesn't work out then at least I didn't borrow any money to fund it.

In light of this overview, I welcome any advice or suggestions, including whether to continue with the debt settlement plan, which I feel somewhat conflicted about. Any input would be appreciated. I have this lingering feeling that I should have amassed a substantial fortune by now, yet I haven't. I started late. finished residency in 2016. This uncertainty leaves me feeling quite insecure, and all I desire is a simple life with enough wealth and contentment to retire comfortably. My primary wish is for nothing but the best for my child.
Sorry it took me so long to get to this. I was very busy at a physician financially literacy conference last week.

Were they private student loans? Otherwise, they're typically not forgiven in bankruptcy nor does the federal government really do "debt settlement plans" as far as I know. Very curious what's going on there as it is pretty unusual for docs.

Super sorry to hear about the loss of the house and your credit. I guess you'll be renting for a while, at least 2-3 years while your credit recovers. Certainly not the end of the world.

Also sorry to hear about the loss of what sounds like a great job. Sounds like that was a blessing in disguise though, now with a massive raise.

In your budget posted above, you're blending personal and business expenses. Those need to be separated out and the finances of your business and the finances of your personal life need to be kept completely separate. Separate bank accounts etc.

I see your assets, which seem pretty good, over half a million there. I don't see your debts. Sounds like there is at least a car payment and I suspect some federal student loans. I don't know what to make of the debt settlement fee. Is that payments on loans? What's the total amount owed?

Stop using a SEP-IRA and roll it into a solo 401(k) so you can start doing Backdoor Roth IRAs. This is nowhere near your biggest issue of course.

Stop picking individual stocks and start using broadly diversified low cost index funds like VTI and VXUS. This again, is nowhere near your biggest issue.

Don't call your wife high maintenance in front of other people. # 1 it's mean and will affect your most important relationship. # 2 it's not true if your monthly living expenses are only $3K.

You've got enough income to solve all of your financial problems, and relatively quickly. Try to knock out as many of them as you can quickly in case something happens to it.

The place to begin is at the beginning. Make a balance sheet (all assets on the left, all liabilities on the right) and calculate your net worth. Make an income statement with all income on the left and all expenses on the right and calculate your savings rate. You'll need one of these for the business and for your personal life. Then you'll know where you stand. Continue to update these every month or so as you make little tweaks to your plan. Develop a written investing plan as you become more financially literate and follow it, increasing your financial discipline. Many docs before you have dealt with these same issues and come out smelling like a rose as multimillionaires. I'm confident you can do the same.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
Houseofbricks
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Re: half high income physician, half financial illiterate

Post by Houseofbricks »

You need life insurance way more than paying down your parents’ mortgage. Everyone should understand that.
snowday2022
Posts: 638
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Re: half high income physician, half financial illiterate

Post by snowday2022 »

FeralCat wrote: Sat Feb 10, 2024 10:10 pm
snowday2022 wrote: Sat Feb 10, 2024 9:43 pm
MH2 wrote: Sat Feb 10, 2024 7:54 pm
snowday2022 wrote: Sat Feb 10, 2024 7:41 pm
MH2 wrote: Sat Feb 10, 2024 7:30 pm

Simple question.

Why?

I’m generally curious. I imagine that you need intelligence and a heavy dose of rational thinking skills to make it though medical school. Those are the sorts of things that incline someone towards good financial decisions (or, at least, a couple of Google searches that get you to WCI, Dave Ramsey, and Bogleheads).
Debt, living beyond means, thinking income and hence wealth is guaranteed, little time to spend on managing one’s own finances, exploitation by financial planners or business partners, etc.
I guess I can see the last one, but all of the other reasons are shared with pretty much everyone else out there.

What’s the difference between a high income engineer and a high income doctor that predisposes the latter towards bad financial decisions?

I guess it just doesn’t make much sense to me. Plenty of occupations can lead to high incomes. You don't seem to hear the same stories though.
I was 35 before I made more than 60K in a year. Within two years I was making 3/4 of a million dollars. I have friends who had half a million in debt coming out of training. Working insane hours for a couple decades to get to that point. It can be hard to climb out of the hole, and hard to keep deferring gratification forever. All of a sudden you come into a high income…You start buying things like a huge house, nice cars, private school, you pay 250K in taxes, don’t pay much attention to savings, and wake up at 44yo nearly broke like OP. Not rare.

It is not at all similar to being a high income engineer or vast majority of other high income professionals who make money much earlier in life and can start compounding early.
I think it is more than that. The OP sounds like a gambler to me. They bought a $2.3M house with hopes that the equity gains would allow them to pay off a large amount of debt. In order to do this, the house needs to be eventually sold, so where then does the family live next? It sounds unfair to the spouse/kid. Why take risks like that with a family?
I have many friends with 3-500K in debt who came right out of fellowship and bought similar houses low 2M range. In VHCOL that’s the expectation for a “doctor house”. As other posters said, it’s hard to defer gratification forever and the comparisons with one’s colleagues homes etc can be a big influence.

At his income, the house is easily affordable, it’s the other expenses and choices that are more of an issue in my mind. That said I am glad he is renting a reasonably priced Apt now instead.
protagonist
Posts: 9173
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Re: half high income physician, half financial illiterate

Post by protagonist »

delamer wrote: Sun Feb 11, 2024 8:48 am
protagonist wrote: Sun Feb 11, 2024 12:21 am
Bones_Jones wrote: Wed Feb 07, 2024 7:52 am

I realize that the time to act is now, especially considering the current landscape heavily favoring telehealth.
The issue is that, as an independent contractor in a niche that is very much a trend today, you don't have job security. You are relying on predicting the future, and I would guess that after doing telehealth for many years, if your predictions prove wrong, you may have a hard time, especially as an older physician, getting hired in a conventional medical practice if things dry up.

Which is not to say you should not continue to do what you are doing....you are enjoying it, which is reason enough to continue, and you are also making a LOT of money.

But if I were in your shoes, I would be relatively risk-adverse, at least for the time being....you need to concentrate on saving a lot while the going is good. With an $800K/yr income that should, theoretically, be very easy if you don't overspend....pay off your debt as soon as you can (it shouldn't take long at all if you make it a priority), and cut your expenses until you have enough money safely invested.

Contrary to what others have suggested, $4k/mo for a 2 br Seattle apt. does not seem outrageous to me. If you like living there, you can afford that. But you need to learn how to save a LOT while you are making so much money, and invest it wisely. Not only wisely, but simply....there are better ways to spend your limited spare time than pouring over price/earnings ratios and the like. For one thing, your family needs your time. Investing wisely is easy, and the simpler you make it, the less likely you are to get into trouble.


The Bogleheads Wiki is a good start. From there, don't hesitate to ask questions. There are a lot of knowledgeable people on this site that are eager to help.

Coming here, you are on the right track.

Good luck.
The problem that I see is that the OP’s actions aren’t in sync with his expressed wishes.

He says that he feels insecure and
all I desire is a simple life with enough wealth and contentment to retire comfortably.
Being a self-employed contractor (plus starting a side business) is not the route to security. Yes, if the breaks cut his way, he could become quite wealthy. But his own experience should tell him that the risk is very high of failure.

Finding a salaried job with with a lower salary that provides security and some measure of predictability is more in tune with his indicated goals.

(I do realize that what people claim that they want publicly and what they really desire in their heart aren’t necessarily the same. So there’s that.)
Yes, but that route is not for everybody.

I was a self contractor physician who, like the OP, found (or, rather, created) a niche when I finished my fellowship in 1987. I figured I could run with it for a few years and then I would have to go back to a conventional practice, but I rode it out until 2002, at which time I was (remarkably) still able to find a steady position in a university hospital still confined to my "niche", doing what I loved doing and nothing else. I rode that out until 2008 when I retired. There was a lot of insecurity involved , and both rich and lean years, but I was willing to pay that price for being able to write my own ticket and live the life I wanted.

Meanwhile, in that period (I think in the 90s?) when many hospitals were consolidating and/or going broke, many of my colleagues who assumed they had great, secure partnership positions found themselves suddenly out of work and having to take jobs as employees that they found really miserable.

I suppose I was lucky. But I have always been more of a "make the best of today because who knows what tomorrow might bring anyway" sort of guy.
afan
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Re: half high income physician, half financial illiterate

Post by afan »

Someone whose independent contractor work was practicing medicine would not have that held against them if they wanted a W2 job. If they were spending all their time running a business, then people might wonder how well they had maintained clinical skills
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
garfield_dilbert
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Re: half high income physician, half financial illiterate

Post by garfield_dilbert »

For the $6000/month paying down mortgage of your parents, have you considered gift tax implications? Thats 72K/year, gifts from both you and your wife exceed the 34K/year limit. If they helped with your downpayment, etc, perhaps characterize part of this payment as loan repayment with interest. You have a high tax burden, you don't want to add gift taxes to it.

Your car payment is fine, so is your apartment. Because you work from home, you can use one bedroom exclusively for work and claim that as office expenses. You could downsize to 1 BR, but it could be a wash. Your living expenses are fine too. $3000 with a baby is very reasonable.

I think your SEP IRA contributions are fine too (else you'll end up paying a lot more in taxes), but I wonder if that can be rolled over to a 401K, then is it possible to take a 401K loan, pay off the student debt entirely? You can pay off the 401K loan instead of the student loan, but you'll be paying yourself interest, guaranteeing a rate of return on your retirement.

I would definitely cut the 1000 for M1 and 1000 for 529, and seriously consider the 6K/month mortgage payment. With these three, you have easily 8K/month to pay off student loans. After student loans are paid off, you can think of your parents home, which is most likely at a low interest rate.
snowday2022
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Re: half high income physician, half financial illiterate

Post by snowday2022 »

garfield_dilbert wrote: Mon Feb 12, 2024 9:49 am For the $6000/month paying down mortgage of your parents, have you considered gift tax implications? Thats 72K/year, gifts from both you and your wife exceed the 34K/year limit. If they helped with your downpayment, etc, perhaps characterize part of this payment as loan repayment with interest. You have a high tax burden, you don't want to add gift taxes to it.

Your car payment is fine, so is your apartment. Because you work from home, you can use one bedroom exclusively for work and claim that as office expenses. You could downsize to 1 BR, but it could be a wash. Your living expenses are fine too. $3000 with a baby is very reasonable.

I think your SEP IRA contributions are fine too (else you'll end up paying a lot more in taxes), but I wonder if that can be rolled over to a 401K, then is it possible to take a 401K loan, pay off the student debt entirely? You can pay off the 401K loan instead of the student loan, but you'll be paying yourself interest, guaranteeing a rate of return on your retirement.

I would definitely cut the 1000 for M1 and 1000 for 529, and seriously consider the 6K/month mortgage payment. With these three, you have easily 8K/month to pay off student loans. After student loans are paid off, you can think of your parents home, which is most likely at a low interest rate.
wouldn't the gift taxes only be applicable once he exhausts his lifetime estate tax exemption? Which is about 23M away for him. Or is it different for gifts to one's parents?
dorster
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Re: half high income physician, half financial illiterate

Post by dorster »

clip651 wrote: Wed Feb 07, 2024 6:26 pm
Big Shon wrote: Wed Feb 07, 2024 5:54 pm At age 44, you have 3 dogs and 1 child. I just don't get scenarios like this.
Dogs are likely older than the 1 year old kid. And we don’t know how long OP has been married, how many kids they want, the age of the wife, etc. No idea why out of all the issues in the OP this is what stands out to you as odd?
3 dogs and 1 child is the most financially sensible part of the whole post.
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familythriftmd
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Re: half high income physician, half financial illiterate

Post by familythriftmd »

afan wrote: Sun Feb 11, 2024 1:33 pm Someone whose independent contractor work was practicing medicine would not have that held against them if they wanted a W2 job. If they were spending all their time running a business, then people might wonder how well they had maintained clinical skills
I think that if you love your job, it's probably easier to stay up to speed on the content (as in, the continuing medical education and stuff). But I'm no coach, so that's just my thought.
bltn
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Re: half high income physician, half financial illiterate

Post by bltn »

I can understand some of the OP s problems.

In my early thirties I got a big bump in income when I became a partner/owner in a small company I had joined a couple of years earlier. I was working 60-70 hours a week, but still had the energy to buy some rental real estate and look into side businesses. Because I wanted a low risk side business, I concentrated on franchises. I could not connect with one for various reasons. I did start a side business with a friend which required some sizable startup loans. My friend ran the business with advice from me. I almost lost my shirt. And this was after making a lot of money for the previous 7-8 years and living relatively frugally.

Finally, at about age 40, I heard about John Bogle and passive stock market investing. And dollar cost averaging. I gave up on private investment partnerships. I gave up on the idea of getting a franchise second business. I decided 65 hours of work a week was enough, since by then we had two kids and my wife needed a break from time to time, which I enjoyed providing. And I maintained a relatively modest lifestyle with a savings rate of about 40-50% of our take-home pay. Ten years later I was able to drop all disability insurance, and all life insurance except for a small whole policy that was carrying itself. A dozen years after that, I made plans for retirement, despite liking my job.

My success depended on spending much less than I made. And investing the majority of our savings in the Vanguard Index 500 Fund. Period.

OP
Buy a small house for about the same house payment as the rent you currently pay. Fit into the modest middle class neighborhood and enjoy your neighbors and the neighborhood activities. Don t let people think about your income. You ll be saving a large part of it anyway. Pay off the loans.

If job security is an issue for the telemedicine job, get a very secure job at the hospital for less pay. Saving for a long period of time with indexing, will almost guarantee financial prosperity. When you buy a car in the future, write a check. When you buy the next house in the future, write a check.
Remember that a house, with its maintenance costs, is more of a liability than an investment opportunity. It simply provides a certain quality of life.

Many people who make a lot of money have little accumulated. I m trying to make sure that my two children, who are both medical school graduates, keep that in mind. Save. And best of luck.
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familythriftmd
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Re: half high income physician, half financial illiterate

Post by familythriftmd »

bltn wrote: Mon Feb 12, 2024 2:23 pm I can understand some of the OP s problems.

In my early thirties I got a big bump in income when I became a partner/owner in a small company I had joined a couple of years earlier. I was working 60-70 hours a week, but still had the energy to buy some rental real estate and look into side businesses. Because I wanted a low risk side business, I concentrated on franchises. I could not connect with one for various reasons. I did start a side business with a friend which required some sizable startup loans. My friend ran the business with advice from me. I almost lost my shirt. And this was after making a lot of money for the previous 7-8 years and living relatively frugally.

Finally, at about age 40, I heard about John Bogle and passive stock market investing. And dollar cost averaging. I gave up on private investment partnerships. I gave up on the idea of getting a franchise second business. I decided 65 hours of work a week was enough, since by then we had two kids and my wife needed a break from time to time, which I enjoyed providing. And I maintained a relatively modest lifestyle with a savings rate of about 40-50% of our take-home pay. Ten years later I was able to drop all disability insurance, and all life insurance except for a small whole policy that was carrying itself. A dozen years after that, I made plans for retirement, despite liking my job.

My success depended on spending much less than I made. And investing the majority of our savings in the Vanguard Index 500 Fund. Period.

OP
Buy a small house for about the same house payment as the rent you currently pay. Fit into the modest middle class neighborhood and enjoy your neighbors and the neighborhood activities. Don t let people think about your income. You ll be saving a large part of it anyway. Pay off the loans.

If job security is an issue for the telemedicine job, get a very secure job at the hospital for less pay. Saving for a long period of time with indexing, will almost guarantee financial prosperity. When you buy a car in the future, write a check. When you buy the next house in the future, write a check.
Remember that a house, with its maintenance costs, is more of a liability than an investment opportunity. It simply provides a certain quality of life.

Many people who make a lot of money have little accumulated. I m trying to make sure that my two children, who are both medical school graduates, keep that in mind. Save. And best of luck.
Great stuff! The idea of the modest middle class neighborhood in particular should help with the Diderot phenomenon of vicious cycles of overconsumption.
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