New Attending, minimalist lifestyle, how to plan financially?

[White.Beard.Doc]

Statistically speaking, the best thing to do for the best outcome is to simply dump everything you have into the market immediately. This is the highest reward approach. But it is also the highest risk approach, the most volatile. The scariest approach.

So, what do you do with the risk, and the psychological fear that it brings? Dealing with that fear is the emotional part of investing, the part that each of us has to figure out how to manage.

So instead of sitting on the sidelines, do something. Take one small step. Dip your toe in the water.

The dollar cost averaging technique (I.e. buying the same amount each and every month) leads to a statistically worse outcome than dumping it all in, now, immediately. But the dollar cost averaging technique is great in that it overcomes the inertia of doing nothing. It leads to a much better outcome than leaving all that money in your savings account, losing value to taxes and inflation every month.

Start small to overcome the inertia of doing nothing. Open a vanguard account. Set up the autopilot. Maybe $2000 a month to VTSAX? I have faith in you. You can do it! Don’t just sit there, do something. Small is better than nothing.

[STATscans]

Update:

loans are now completely paid off as of February of this year. 529 started for the children. 401k sitting at 100k+. No debt currently. Look to be on pace to make around $800k+ this year. Currently have $150k+ sitting in the bank account. Haven’t started back door Roth yet. I feel like market is in a bubble right now so haven’t stated a taxed account yet. Any suggestions?

wow congratulations.

THIS is why the general public thinks physicians make too much. Very few profession allows you to pay off 450k student loans in a few years. I came out with about 360 in loans but decided to pay slowly at first and invested. Once I hit the 1mil mark, paid it off. Glad I wen that path.

I would suggest throwing your money into the stock market. It is passive as any passive income without having to do anything - the companies do the work for you. As long as the US exist as an economy it will keep making money. Real estate and other ventures require you to have to do something about it (e.g. tenants, managers, contracts etc) or at least pay someone to do it. To me that's not passive, sounds active.

[STATscans]

Everyone is going to take their own path but I did things similar to you so I'll give you an idea how I got to an 8 figure NW by about 40, now mid-40's. We have two teenagers. I'm a PCP so I probably started a little younger than you, but our initial household income was not as large a cannon as yours.

We always retired any debt within 3-5 years as a rule. Seems you like that too. That included homes, commercial properties. student loans and automobiles, all pleural. Two were 7 figure loans, at higher loan rates than today so it's certainly doable. All credit cards were/are/will be paid off monthly, unless they have 0% intro periods.

While aggressively paying off any recurring debt, we simultaneously maxed out tax advantaged retirement accounts. I went a bit more aggressive than indexing. 20 years later, this year is the first time we hit a 7 figure 12-month return in our tax advantaged retirement accounts. Building blocks for a secure retirement in 20 years. These accounts currently represent about 15% of NW. Hopefully more milestones to come, compounding on this one.

Now midway into our career, our current household income has quadrupled from our starting, post-training. Hopefully another quadrupling by retirement. This is hard to do salary wise. In our case we did it thru business ownership, taxable investment accounts, real estate ownership, etc. Another reason we did all this is that it is more (semi-)passive with recurring dividends versus our active jobs that only pay once for a service. As such, I only now see patients 3.5 days/week with no weekends, mornings, nights, holidays, etc. Hospitalists take hospital call for me, employed providers taking office call. May cut hours further when adding more providers, don't want to fully give up direct patient care right now.

All but 1 of our 4 current cars are over 10 years old but low mileage reliability. 3 paid in cash, the fourth (>$150K purchase) paid off within 1 year.

We've stayed in our current home for 15 years now. I would say for a family of five, you may want to spend a little more in a MCOLA+ for a well functional home in a good school district, unless you are not planning to stay in it into the kids teenage years (recommend each have their own bedroom and separate bathrooms as teens).

Buying more time/shared family experiences and less stuff is more important to us at this stage. Looks like you also ponder what you want in life carefully. That usually changes a bit over time. Looks like you married someone who is financially astute as well. Stay married, stay happy, stay healthy, be generous.

Good habits make for a good recipe of accomplishments in life's journey, even beyond finances.

Wish you well.

phenomenal story. maybe you should write a book.

when you say, 'buy less stuff', you mean clothes? cause when I think of 'experience' I can name many things that require stuff. Boating for example.

[jfoxcpacfp]

phenomenal story. maybe you should write a book.

when you say, 'buy less stuff', you mean clothes? cause when I think of 'experience' I can name many things that require stuff. Boating for example.

I think you might be waiting awhile for a response😂.

[Medstud21]

Update:

2.5 years in. Worked very hard last year and made around $950k. Loans completely paid off. $450k plus in savings and 401K. 529 started. Probably will slow down a bit next year and take more vacation, anticipate $700k-800k. Still keeping minimalist though but living fairly comfortable. I get anxiety if I make any big purchases. Still renting. Probably should invest in a house at some point.

I do have a few friends that aggressively gambled in crypto and already have 7 figure portfolios, but I’m keeping it low risk ETFs so far. Any other suggestions at this time? I do have access to 403b and a deferred income saving plans that I have not utilized so far.

[HandFellow]

as a high earner and low spender, i would work on that anxiety with large purchases thing. You are going to end up with a ton of money and you won't know how to spend it. There has to be a reason for wealth accumulation. Is it to enjoy life more? Give to charity? Leave to the family?
Try choosing something nice to buy and set money aside in an account just to buy it. then go and do it.

[Medstud21]

as a high earner and low spender, i would work on that anxiety with large purchases thing. You are going to end up with a ton of money and you won't know how to spend it. There has to be a reason for wealth accumulation. Is it to enjoy life more? Give to charity? Leave to the family?
Try choosing something nice to buy and set money aside in an account just to buy it. then go and do it.

Thanks, I’m still getting accustomed to higher earnings. For some reason, it doesn’t feel right to be spending a lot. Likely due to my humble upbringing.

[TheDangerZone]

Congrats on paying off your loans. Contributing to your 403b is a no brainer. Come up with an investing policy statement and determine your goals. Should give you more clarity as you have a large shovel and many ways to optimize (depends on your goals).

[CordMcNally]

Continue on your investing path. You don’t need to hit home runs to win. There’s probably going to be some pain upcoming in the crypto world.

[wa2106]

This is all very odd.
What does your wife think? Do that.

[Eyemd356]

From little acorns, mighty oaks grow

[Tim]

“I do have access to 403b and a deferred income saving plans that I have not utilized ”
Any reason you are paying more taxes than you need?

[TXDoc21]

With that big of a shovel, aversion to debt and low spending (high savings rate), just pick a reasonable plan and you will amass an impressive net worth. But you need a plan. Pick one. When the money comes in you will know exactly what to do with it. Use those tax deferred accounts.

[Medstud21]

This is all very odd.
What does your wife think? Do that.

Wife is very indifferent and low maintenance. Got lucky there. She does think I work too hard so I’ll be slowing down a bit to spend more time at home.

[artemis]

Wife is very indifferent and low maintenance. Got lucky there. She does think I work too hard so I’ll be slowing down a bit to spend more time at home.

Good decision. You've laid the foundation for future wealth; relaxing a bit will help you enjoy life more and also do wonders to preserve your marriage. The last thing you want is for the two of you to drift apart because you've become strangers to one another.