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  • Finishing residency

    I am a PGY3 medicine resident who is moving to the (very) rural upper midwest to do semi-traditional outpatient and inpatient medicine. Before I signed the contract, it was reviewed and optimized by an attorney who advertises on this website as well as a financial planner who works with several of the residents in our academic medical center for free. Said financial planner has also helped educate me about some insurance, tax, and student loan issues. Now that I am at the end of my training, he has offered to become my a fulltime FP for $200/mo (which is apparently what he offers new attendings). He is a CPA, CFP, CFA and his firm apparently specializes in doctors and dentists but they are not listed under the vetted groups on the “best financial advisors” page. I did email him and ask him why his firm was not listed on this website and also sent the questions contained here: https://www.whitecoatinvestor.com/qu...ncial-adviser/
    His response email was something along the lines of “we’ve already worked together and I would have thought I earned your trust already, and if not, a questionnaire isn’t likely to change that.”

    at any rate, my main concern is whether or not to consider hiring a FP. My financial literacy is very low, but I’m not sure whether even that price tag would be worth it in my situation because I have minimal assets, about $15k in the bank. I also have $360k in student loans but due to the extreme need for an internist with my skillset in this rural farm community, the hospital system has agreed to pay off my student loans (~360k) in full over a seven year period and will be treated as a forgiveable loan for tax purposes. I guess I may need help with the tax consequences of that and other similar benefits I received in my contract, but beyond that I’m not really sure what else I need. I’ve recently got the insurance i need mostly purchased through the agents on this website.

  • #2
    Those questions for a financial advisor should probably be asked in person, but if he isn't willing to answer them, I would cut and run. It doesn't pass the smell test that he would charge $200 a month and not expect to get paid some other way.

    According to what I'm reading, employer loan repayment is taxable. Due to the CARES Act, this isn't taxable through the end of 2020.

    You have the usual options of learning on your own through books and the forum, taking the WCI online course, or hiring another advisor. If you post in this format (https://www.bogleheads.org/forum/vie...php?f=1&t=6212) and ask more specific questions, you can get a lot of the advice you need for free.
    “Work” is a four letter word for good reason.

    Comment


    • #3
      Sounds like the services you really need might be more tax preparation than any elaborate financial planning. And you can probably do it yourself although you may want hire it the first time.
      Seems like $2400 you might save. Some blog articles below. If you do the reading and build your plan, you can get a lot of free advice here.
      Not Just portfolio:
      Gross-taxes-retirement (20%)=spending
      Specific questions get useable answers. Avoid mistakes and get a good start. Some blog entries cover a ton of ground below.

      https://cse.google.com/cse?cx=partne...ing+waterfall+

      Comment


      • #4
        read WCI book and "A Simple Path to Wealth" by JL Collins. You have time, you do not need a financial advisor right this second. What did this financial advisor guy say about your student loans? Did he push for term life insurance or whole life? If he suggested whole life while you still have 360k in student loans, hes a shark looking for a whale to latch on to. Dont be his whale. Cut ties immediately. Easier to never start paying 200/month and have him chase you than you trying to end the relationship after it started. Not really but for some reason people keep paying useless FAs longer than they need to. If he wont answer your questions but wants you to pay 200/month, what is he really doing to help you? trust? Think of him like a cheating spouse saying "dont you trust me, im not answering that" when confronted. Use someone on WCI list if you still think you need one after reading WCI and JL Collins' books. There are people advertised here that will help you get term life insurance.
        IN GENERAL, to start new attendings need to:
        get own occupation disability insurance
        pay off any credit card/car loans
        save up for emergency fund
        refinance student loans vs go for PLSF/forgiveness etc
        get term life insurance
        save 20% gross into: 401k if offered (or solo 401k if doing 1099 work) up to match, backdoor roth, finish 401k limits,(most should be able to do those three) then any other tax advantages space, then taxable account if needed to finish off the 20%.
        rent and live like you did as a resident until you are sure you will stay at the job, then decide rent vs buy. FYI some job's warts dont show up until about a year later bc most jobs are better than residency

        If you can do that, you'll be ahead of where most of us were at the start of our careers. Read WCI blogs, and the two books. Then ask questions here. Good luck

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        • #5
          Originally posted by billy View Post
          read WCI book and "A Simple Path to Wealth" by JL Collins. You have time, you do not need a financial advisor right this second. What did this financial advisor guy say about your student loans? Did he push for term life insurance or whole life? If he suggested whole life while you still have 360k in student loans, hes a shark looking for a whale to latch on to. Dont be his whale. Cut ties immediately. Easier to never start paying 200/month and have him chase you than you trying to end the relationship after it started. Not really but for some reason people keep paying useless FAs longer than they need to. If he wont answer your questions but wants you to pay 200/month, what is he really doing to help you? trust? Think of him like a cheating spouse saying "dont you trust me, im not answering that" when confronted. Use someone on WCI list if you still think you need one after reading WCI and JL Collins' books. There are people advertised here that will help you get term life insurance.
          IN GENERAL, to start new attendings need to:
          get own occupation disability insurance
          pay off any credit card/car loans
          save up for emergency fund
          refinance student loans vs go for PLSF/forgiveness etc
          get term life insurance
          save 20% gross into: 401k if offered (or solo 401k if doing 1099 work) up to match, backdoor roth, finish 401k limits,(most should be able to do those three) then any other tax advantages space, then taxable account if needed to finish off the 20%.
          rent and live like you did as a resident until you are sure you will stay at the job, then decide rent vs buy. FYI some job's warts dont show up until about a year later bc most jobs are better than residency

          If you can do that, you'll be ahead of where most of us were at the start of our careers. Read WCI blogs, and the two books. Then ask questions here. Good luck
          no he didnt recommend any whole life or anything like that. He did recommend disability insurance which I have yet to obtain. I have had term life for a while since I have children. My employer is actually paying off my student loans in their entirety which actually has some tax consequences I need help figuring out (they are forgiveable loans forgiven for every 1 month of work).

          Comment


          • #6
            You can hire a CPA to do your taxes. It’s a lot cheaper than paying a FA. Get a disability insurance before you graduate. You can use one of the recommended insurance brokers on the website. I wouldn’t hire a FA until you’ve read more about basic investing. I didn’t get serious about investing/financial literacy until we were pregnant with our first child. WCI and Bogleheads have helped me tremendously. You can do the same. Investing and saving for retirement is a lot easier than medicine.

            Comment


            • #7
              “ I need help figuring out (they are forgiveable loans forgiven for every 1 month of work).”

              Any chance your employer already has it figured out? Ask.
              https://www.google.com/search?q=empl...&client=safari

              Maybe you can do your taxes too.


              Comment


              • #8
                Just because someone doesn't advertise on this site, does not mean they aren't a good FA.

                You just need to decide if you want one at all.

                Comment


                • #9
                  Originally posted by Bstop View Post
                  My employer is actually paying off my student loans in their entirety which actually has some tax consequences I need help figuring out (they are forgiveable loans forgiven for every 1 month of work).
                  I just reread your original statement and saw that I missed that. Is there a way to work the "student loan" part as a year to year thing, instead of paying all up front and being forgiven month to month which will then cause a headache if you leave before then? The only worry I'd have about it is those are pretty big 7 yr handcuffs. Or is the hospital paying every month so if you leave after 12 months you are only responsible to pay back that last month's loan payment? Figuring out what will happen in the event you leave before the 7 yrs is important

                  Comment


                  • #10
                    Originally posted by pierre View Post
                    Just because someone doesn't advertise on this site, does not mean they aren't a good FA.
                    You just need to decide if you want one at all.
                    IF you need one is important. More to it. FA needs a definition, what services do you really need and what is a fair price for the anticipated value.
                    https://www.whitecoatinvestor.com/ho...ncial-advisor/
                    Certainly paying for advertising is one way to attract clients. In return, some bad actors are screened out. There are a ton of bad actors in the FA space, captive and independent. It’s not a catch all as well. Financial planning, estate planning, tax planning are often pitched under a generic FA label.
                    Choose wisely if you choose one at all. The technique of building relationships at med schools and residencies is target marketing, same as advertising but likely without screening, it’s free.

                    Comment


                    • #11
                      Originally posted by billy View Post
                      I just reread your original statement and saw that I missed that. Is there a way to work the "student loan" part as a year to year thing, instead of paying all up front and being forgiven month to month which will then cause a headache if you leave before then? The only worry I'd have about it is those are pretty big 7 yr handcuffs. Or is the hospital paying every month so if you leave after 12 months you are only responsible to pay back that last month's loan payment? Figuring out what will happen in the event you leave before the 7 yrs is important
                      I would be responsible for paying back any month not yet forgiven. So they started paying in Feb 2019, and make payments every month. That means after my first thirty days of work in August of this year, that feb 2019 payment is “forgiven” (it is an extra about 5.2k of income for the month of August for the purposes of taxes).

                      Comment


                      • #12
                        Originally posted by Bstop View Post
                        I would be responsible for paying back any month not yet forgiven. So they started paying in Feb 2019, and make payments every month. That means after my first thirty days of work in August of this year, that feb 2019 payment is “forgiven” (it is an extra about 5.2k of income for the month of August for the purposes of taxes).
                        This is still pretty confusing
                        By paying back you mean pay the hospital back? They are "forgiving" you for loan payments they made only after 6 months? Seems a strange arrangement

                        Comment


                        • #13
                          Originally posted by childay View Post
                          This is still pretty confusing
                          By paying back you mean pay the hospital back? They are "forgiving" you for loan payments they made only after 6 months? Seems a strange arrangement
                          Sorry, I explained it better in another thread-->

                          Originally posted by Bstop View Post
                          I am a resident who starts my real-world attending job this summer. As part of my contract, which I signed as a PGY-2 in February of 2019, my employer has been making payments on my student loans. They have made payments every single month since then. My contract term is 5 years, and the loan repayment is on a 7-year schedule, meaning if I stay all 5 years and then sign on for an additional 2 years, my employer will have paid off my student loans in full.

                          Now, I am scheduled to start work in August of this year. The way my contract works, the loan payments count as forgivable loans. In other words, they are income for tax purposes. For each month I am employed, one month of loan payments is forgiven. For example, if I work all of August of this year, then the loan payment made by the hospital in February 2019 is “forgiven.” Each payment is around 5k, so that one month of forgiveness would mean I would have to report 5k additional income for tax year 2020.

                          Comment


                          • #14
                            Originally posted by pierre View Post
                            Just because someone doesn't advertise on this site, does not mean they aren't a good FA.

                            You just need to decide if you want one at all.
                            I definitely don't want one, but I am a novice and don't want to make any crucial mistakes up front. I'll put in the work and try doing this my own. The phrase "no one cares about your money as much as you" really got through to me.

                            Comment

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