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  • Tim
    replied
    Originally posted by Moon View Post
    OP sorry your big issue is really spending.
    Sorry for my poor English and good luck
    Your English is fine and your common sense is superior.

    Leave a comment:


  • Fugue
    replied
    you’re fine in the sense that all you need is a course correction, and you posting here probably indicates you’re ready to make some changes. Your problems have been well encapsulated by others in this thread, I won’t rehash those.

    But you really need to get your wife on the same page. Maybe show her some of the responses here. I think getting a financial advisor in this case may actually benefit you, for her to hear it from someone else other than you if it’s constantly leading to fights. It’s not good enough to not want to rein in spending when you have ridiculously high auto costs and a boat. Or ask her to go back to work to help supplement the income so you have more income to save from.

    Leave a comment:


  • Moon
    replied
    OP sorry your big issue is really spending.
    Our HHI is 3 x yours ( dual physician family. attending for 7 years but making this much for the last 3 years because we were on visa and you know, they like to low ball us visa wavier) but we never have 70k cars or a boat.

    What we did right out was to make sure to prioritize saving and know exactly where every dollars goes.

    1. Make a budget out of every month for at least 3 months. Look into every credit card transaction. I like YNAB because putting in every transaction yourselves help you to take a hard look at them. I find this very helpful and eye opening. Do this for 3 months . Now you know where all you money goes. I believe this is a good tools to talk to your wife and help her see exactly the situation well. It helped with my husband. He is in high paying specialty ( He makes about 850k but some of his peer makes up to 2 mil. But he comes home and pick up our son from aftercare every day, took him swimming every evening, doesn’t have to take brutal calls and be in hospital all the time ). When he got out of training , he wanted to buy porch 911 with $2000 car loan. This budgeting help stopped him doing that.

    2 Then , look into what you can cut down as you prioritize saving. So each month you need to have exact number how much you should save for retirement or whatever. We make sure to half of our take home pay goes straight to taxable brokerage account and 529 or down payment for next rental property. (25% take home). Our tax deferred accounts are already fully funded and we do not use 457. We are very aggressive in taxable investment because I want to retire early. ( My husband wants to work until 65 but he may want to cut down after 50. I don’t want him to work too much )

    3 The rest, we allocate to fix cost and variable cost . Such as, are w2 income so our tax is huge. We have to save about $ 3000 a month for tax yearly. Then budget for new cars ( projecting every ten years for each car) and vacations as well as our wants ( like luxury watches for my husband and bags for me etc. until we have enough we fund, we don’t buy them )

    Sorry for my poor English and good luck


    Leave a comment:


  • uksho
    replied
    Originally posted by PedsCCM View Post
    OP I had to chuckle at some of the comments. I completely understand where the constructive criticism is coming from, but this feels a little like a casual 5k runner who lifts weights 2x per week going to a professional marathoner's forum and asking about his level of fitness. You recognize you have room for improvement but you're not starting off terribly and it looks like you're open to some advice. I want to point out that you're still only 20 years away from a $5MM nest egg by saving 20% of your gross ($80k) yearly toward retirement and getting 6% real. I had a similar moment of realization a couple years out of training and had to sit down with my wife to map out a plan. Things that helped:
    • It really helped to skip expert rules or concepts and to start with the end goal (nest egg required to retire) and work backward. How much do you want to spend yearly when you retire? When would you like to retire? I used $4MM and 6% real as we guessed $160k yearly would be enough and I went with the 4% SWR estimate.
    • Using 62 as retirement age, we used the FV function of Excel to calculate where we would end up at current savings rates and then at various higher levels of savings.
    • The above gave us a yearly savings amount that we both agreed that we needed to reach our goal. (I had done all this when I first started learning about finance through this site but working through each step with my wife really helped us both come to value saving at a goal rate).
    • We suck at budgeting. We tried. It really did not go well. I use Mint to help us keep track of categories and make sure that savings + spending < earnings but as long as we're hitting our goals we only glance at where we spend our money 2x per year.
    Hope some of that might help y'all.
    Good comments,
    I assume 4% real for my calculations.
    Both are unpredictable , inflation and returns. so being conservative would hopefully help, if we get lucky, might end with more than we need.
    we also can't budget day to day or on categories, but have a set amount left in checking on 1st of every month, that helps.

    Leave a comment:


  • PedsCCM
    replied
    OP I had to chuckle at some of the comments. I completely understand where the constructive criticism is coming from, but this feels a little like a casual 5k runner who lifts weights 2x per week going to a professional marathoner's forum and asking about his level of fitness. You recognize you have room for improvement but you're not starting off terribly and it looks like you're open to some advice. I want to point out that you're still only 20 years away from a $5MM nest egg by saving 20% of your gross ($80k) yearly toward retirement and getting 6% real. I had a similar moment of realization a couple years out of training and had to sit down with my wife to map out a plan. Things that helped:
    • It really helped to skip expert rules or concepts and to start with the end goal (nest egg required to retire) and work backward. How much do you want to spend yearly when you retire? When would you like to retire? I used $4MM and 6% real as we guessed $160k yearly would be enough and I went with the 4% SWR estimate.
    • Using 62 as retirement age, we used the FV function of Excel to calculate where we would end up at current savings rates and then at various higher levels of savings.
    • The above gave us a yearly savings amount that we both agreed that we needed to reach our goal. (I had done all this when I first started learning about finance through this site but working through each step with my wife really helped us both come to value saving at a goal rate).
    • We suck at budgeting. We tried. It really did not go well. I use Mint to help us keep track of categories and make sure that savings + spending < earnings but as long as we're hitting our goals we only glance at where we spend our money 2x per year.
    Hope some of that might help y'all.

    Leave a comment:


  • Kennyt7
    replied
    70k FOR A CAR???? that's for the wealthy

    Leave a comment:


  • Hank
    replied
    Originally posted by PreCancerDoctor View Post
    @Objn:
    My concern: college appears to be 3-4 years away. You're on the highway, and that exit is coming up pretty quickly.

    1. What is your expectation about what type of college (public, private, Ivy) your kids will attend? Graduate school?
    2. What is your expectation about who will pay for that? Will they be taking out loans for all/some/none of it? Are they full-scholarship superstars?
    3. I will say that if you expect to cover the cost, I would be the dream-crusher and point out that you do not and will not have the savings to pay for it, and that you cannot cash-flow it. The new financial aid rules mean zero need-based aid for you despite having 3 children.

    It's easy for us to post that you should stop contributions to the 529s. But you might have kids wearing Rice sweatshirts who have different ideas.

    To the original poster: if your kids are bright enough to get into Rice, they're bright enough to get into UT Austin. You'd have far smaller class sizes for freshman English and other undergraduate gen ed courses at Rice than at Texas. However, Texas has the number one accounting program in the country, a respectable computer science program, solid engineering programs, and one of the relatively few undergraduate business programs worth pursuing (along with Virginia, Berkeley, Michigan, and not many more public schools). If your kid is dead set on being a lawyer, there likely is more of an anti-Texas bias at Yale, Harvard, Columbia, and a few other of the top 14 law schools compared to going to Rice. That's perhaps the only reason I would shy away from your flagship state university. Otherwise, save money, get a great education, and a solid alumni network if your kid plans to live and work in Texas.

    Leave a comment:


  • Hatton
    replied
    Originally posted by PreCancerDoctor View Post
    @Objn: follow-up questions about your priorities:
    I give you real credit for being open and honest. You're helping a lot of other readers.
    But financial reality is coming. The sooner you read the writing on the wall, the easier it will be to climb over it. Trying to not come off as too harsh.

    My concern: college appears to be 3-4 years away. You're on the highway, and that exit is coming up pretty quickly.

    1. What is your expectation about what type of college (public, private, Ivy) your kids will attend? Graduate school?
    2. What is your expectation about who will pay for that? Will they be taking out loans for all/some/none of it? Are they full-scholarship superstars?
    3. I will say that if you expect to cover the cost, I would be the dream-crusher and point out that you do not and will not have the savings to pay for it, and that you cannot cash-flow it. The new financial aid rules mean zero need-based aid for you despite having 3 children.

    It's easy for us to post that you should stop contributions to the 529s. But you might have kids wearing Rice sweatshirts who have different ideas.

    Better to rip the bandaid off and have a kitchen table conversation as soon as possible. Hiring a financial planner to tell you that paying for 3 kids' cars and 3 sets of college tuition is impossible might take some of the heat off you, but you might get both barrels on the way home.

    I would submit that getting all 3 kids on the same page ASAP would work out way better than signing a blank check for the oldest's education, and then having to tell the younger 2 that they are 100% on their own.

    Retirement comes (much, much) later. I don't see you being able to drop OB when you get older and achy because I don't see you being able to tolerate the income loss.

    Your current investments would provide an annual income of $25K before taxes (4%). That's not going to feed you and your spouse. Even if it quadruples, you will not retire at 62.

    Live as long and as strong as you can. Take care of your health. I would bump that life insurance up to 5M+.

    Can I just add that $250/mo for disability insurance for a practicing obstetrician seems RIDICULOUSLY low. Is this a minimal benefit like 3K/month? I pay over 3x that for own-occupation DI, and I'm not a proceduralist. Maybe I should have shopped around more or used your agent.
    I think PreCancerDoctor makes good points about college. Being honest with the kids and spouse is important. Remember that your kids can get student loans but there are no retirement loans.

    Leave a comment:


  • PreCancerDoctor
    replied
    @Objn: follow-up questions about your priorities:
    I give you real credit for being open and honest. You're helping a lot of other readers.
    But financial reality is coming. The sooner you read the writing on the wall, the easier it will be to climb over it. Trying to not come off as too harsh.

    My concern: college appears to be 3-4 years away. You're on the highway, and that exit is coming up pretty quickly.

    1. What is your expectation about what type of college (public, private, Ivy) your kids will attend? Graduate school?
    2. What is your expectation about who will pay for that? Will they be taking out loans for all/some/none of it? Are they full-scholarship superstars?
    3. I will say that if you expect to cover the cost, I would be the dream-crusher and point out that you do not and will not have the savings to pay for it, and that you cannot cash-flow it. The new financial aid rules mean zero need-based aid for you despite having 3 children.

    It's easy for us to post that you should stop contributions to the 529s. But you might have kids wearing Rice sweatshirts who have different ideas.

    Better to rip the bandaid off and have a kitchen table conversation as soon as possible. Hiring a financial planner to tell you that paying for 3 kids' cars and 3 sets of college tuition is impossible might take some of the heat off you, but you might get both barrels on the way home.

    I would submit that getting all 3 kids on the same page ASAP would work out way better than signing a blank check for the oldest's education, and then having to tell the younger 2 that they are 100% on their own.

    Retirement comes (much, much) later. I don't see you being able to drop OB when you get older and achy because I don't see you being able to tolerate the income loss.

    Your current investments would provide an annual income of $25K before taxes (4%). That's not going to feed you and your spouse. Even if it quadruples, you will not retire at 62.

    Live as long and as strong as you can. Take care of your health. I would bump that life insurance up to 5M+.

    Can I just add that $250/mo for disability insurance for a practicing obstetrician seems RIDICULOUSLY low. Is this a minimal benefit like 3K/month? I pay over 3x that for own-occupation DI, and I'm not a proceduralist. Maybe I should have shopped around more or used your agent.

    Leave a comment:


  • F0017S0
    replied
    Definitely fixable, but better start now becasue the numbers get less "friendly" the longer you delay (in terms of savings requirements to make up lost ground).

    Nuke the cars and pool, since the federal government is being generous on the student loan front (not for long, but it's more than nothing).

    Geography is being very friendly to you, tax-wise being in Texas with no state income tax; just be sure to pay the feds everything they are owed so they don't come over early one morning to "wake you up".

    Maybe yesterday was a better time to think about all of this stuff, but right now is the second best time. You'll get it buttoned up and the ship sailing in the right direction...

    Leave a comment:


  • TheDangerZone
    replied
    Originally posted by Objn View Post
    Thx for your advice. Agree decreasing spending is Home priority followed by paying off loans. We’ll sit down this weekend and work out a plan together. I appreciate everyone’s input, especially flp. Wow, who would have guessed that I would pull the original bad boy of the WCIF out of hibernation my first Beginners helping beginners post.
    Good luck! Keep us posted.

    Leave a comment:


  • Kamban
    replied
    Originally posted by Hank View Post
    Texas is both hot and sunny.
    If you can't pay your taxes and set aside enough for retirement while meeting your other wants and needs, you'll need to modify your budget to reduce some wants and perhaps re-evaluate your "needs". .
    And luckily for hm Texas has no state income taxes too.

    I have geothermal heating and cooling. Best investment I made for long term lower AC bills.

    Leave a comment:


  • Hank
    replied
    Originally posted by Objn View Post
    Monthly estimates
    Utilities/internet/cell ~1000-1500 (it's hot in Texas)
    Texas is both hot and sunny. Any reason not to buy solar panels outright and knock down your AC / electric bill while collecting a federal tax credit at the same time? I don't recommend financing this, but buying your panels outright.

    Doctors straight out of residency / fellowship need to set aside 20% of gross income in order to retire by 60 or 65. You've been practicing for 14 years, so you probably will need to set aside 25% or more of gross income. Painful, but not so painful as a middle of middle class retirement after decades of living high on the hog.

    If your wife has $12K in her (back door) Roth IRA, that suggests you've made contributions for 2021 and 2022 and haven't seen any gains in the market. Maybe you contributed for 2020 & 2021 and still can make a 2022 contribution. Until the year you hit 50, you're limited to $6K per year into the IRA.

    403(b) is $20,500 employee contribution plus typically a 4% match (perhaps more) on the first $305,000 in annual wages. That's $12,200, but it adds to both the numerator of retirement investments and the denominator of gross income.

    So $412,200 in gross compensation means $103,050 per year in retirement savings to hit 25% of gross income towards retirement. You'd need at least this amount to make up for skimping on retirement contributions for your first 14 years as an attending. 30% of gross income would let you retire before 60, but it might be a stretch with your current debt service, ongoing childcare expenses, and upcoming college costs.

    Let's take 25% of gross income as a starting point. Once you pay off the pool, you can pay off the car loan and buy the solar panels outright. Each of these actions will reduce the pressure of recurring monthly debt or utility payments and free up space to increase retirement savings and/or restart 529 contributions for the kids. (You're in a lucrative specialty. Stop buying cars and pools on time / interest!)

    OK, so our annual goal is $103,050 in annual retirement savings. His and hers back door Roth contributions at $6K gets you $12K. In 2022 you can put $20,500 into your 403(b), plus an estimated employer match of at least $12,200. That's $44,700 into qualified funds, so you need an additional $58,350 into a taxable brokerage account earmarked for retirement. (No, your HSA contribution doesn't count at a retirement contribution. Yes, you still should maximize your $7,300 annual family contribution into an HSA, over and above your retirement contributions.)

    So, $58,350 per annum into a taxable brokerage account is $4,862.50 per month. You still need to pay your taxes, or else men with guns will come and take your stuff and potentially take you to prison. Your kids and your stay at home spouse won't have much to live off of if you're in prison, so you need to pay your taxes.

    If you can't pay your taxes and set aside enough for retirement while meeting your other wants and needs, you'll need to modify your budget to reduce some wants and perhaps re-evaluate your "needs". The math is simple. Most anyone bright enough to get into med school could do the necessary arithmetic in fourth or fifth grade. But if you've allowed wants and spending to grow to the point where they consume an outsized share of your gross income, then somehow very bright people reach a point where they psychologically are unable to do very simple math. Don't be one of them. Grab the comfortable retirement that 60 year old you so richly deserves, even if it means a little belt tightening in the short term.

    Leave a comment:


  • Objn
    replied
    Thx for your advice. Agree decreasing spending is Home priority followed by paying off loans. We’ll sit down this weekend and work out a plan together. I appreciate everyone’s input, especially flp. Wow, who would have guessed that I would pull the original bad boy of the WCIF out of hibernation my first Beginners helping beginners post.

    Leave a comment:


  • Hatton
    replied
    Welcome back FLP.
    OP I am OB/GYN. I understand how hard you work. It is hard to focus on anything but your call schedule. The only OBs I know who are working above 62 are those who had a messy divorce or simply did not save. You have time to correct the ship now. I would start tracking your expenses. Develop a spreadsheet and track every thing you and your wife spend. It is not that hard. I use quicken. You will then understand where the money is going. Until you do this it is hard to control.. Make a pledge to never finance anything like a car or a pool again!!!!

    Leave a comment:

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