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Pediatric Grad- FA recommendations for DIY with guidance

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  • Pediatric Grad- FA recommendations for DIY with guidance

    I'm a 28 yo who just finished my pediatric residency and will be going to a private practice clinic in general pediatrics starting in Sept 2020. Live in a dual income household (wife is an educator) with combined gross income will be be $190,000-$210,000 but will increase to $240,000-$300,000+ depending on production as a partner in ~ 3 years. Combined student debt is ~$390,000- mostly made up of federal loans but mixed in with some lower interest private undergraduate loans. Wife's $90,000 in loans will be eligible for teacher related PSLF and both are in the REPAYE program currently (yes I know- I did not sign with a 501C3 but for good reason after an extensive job search). Wife has a low interest car loan, otherwise no other debt. $15,000 emergency fund established through residency and put ~25% net income over those 3 years into wealth building (including ~$15,000 in Betterment Roth IRA, modest 403b match for wife, student loan payments, emergency savings). Wanting to buy a house in the next year (rented for 7+ years, staying in the area long term and wanting to buy in an area where non-compete would not be a huge deal if I left the practice). Also wanting to have 2 kids in the next few years. Already have $3 million in tiered term life insurance (15, 20, 30 year $1 million policies) and own occupation disability with future purchase rider in place. No liability insurance at this point.

    All this being said, I'm a pretty avid reader of WCI and other physician finance content but feeling a little uneasy with so many big financial changes/decisions coming up. My ultimate goal is to go most of my financial management myself but am thinking about hiring a fee-only FA to look over my current financials/insurance and come up with more specific plans for some of the bigger ticket items (i.e. house buying budget/process, student loan planning, investment allocation/prioritization) to give me some piece of mind with a second opinion before I carry a plan out.

    Does this seem reasonable? Anybody do something similar and have success with a particular FA?

    Contacting some of the WCI recommended folks but many don't seem to have options aside from long-term planning with annual fee. Aptus seemed to be the best fit but even they have a minimum number of months you need to pay for ongoing support that I may not necessarily need. I also get nervous with the student loan piece of things with certain FA experience in managing large sum/complex student loan situations- thought about getting a second opinion from Travis Hornsby from Student Loan Planner who I've seen featured on WCI and other physician sites (or just paying an FA to do everything aside from student loan planning and then have Travis look at that part).

    Appreciate the help.

  • #2
    Originally posted by DocMc View Post
    I'm a 28 yo who just finished my pediatric residency and will be going to a private practice clinic in general pediatrics starting in Sept 2020.
    congrats!
    Live in a dual income household (wife is an educator) with combined gross income will be be $190,000-$210,000 but will increase to $240,000-$300,000+ depending on production as a partner in ~ 3 years.
    Combined student debt is ~$390,000- mostly made up of federal loans but mixed in with some lower interest private undergraduate loans.
    Wife's $90,000 in loans will be eligible for teacher related PSLF and both are in the REPAYE program currently (yes I know- I did not sign with a 501C3 but for good reason after an extensive job search).
    - so you are not pursuing PSLF on 390K, but her 90K is on track?
    - what rate will you get to refinance the 390K?

    Wife has a low interest car loan, otherwise no other debt.
    - low like what? how much?

    $15,000 emergency fund established through residency and put ~25% net income over those 3 years into wealth building (including ~$15,000 in Betterment Roth IRA, modest 403b match for wife, student loan payments, emergency savings).
    - now its 20% of gross to retirement. so on 200K thats 40K. 401k + 2x rIRA + 9K second 401k (but goal is to max both)
    - then the rest of your money goes to loan plan, efund plan, car/vacation/home plan.
    - are you paying a management fee at betterment? stop that.
    - are you converting your old retirement plans or moving to new employer?

    Wanting to buy a house in the next year (rented for 7+ years, staying in the area long term and wanting to buy in an area where non-compete would not be a huge deal if I left the practice). Also wanting to have 2 kids in the next few years. Already have $3 million in tiered term life insurance (15, 20, 30 year $1 million policies) and own occupation disability with future purchase rider in place. No liability insurance at this point.
    - after a year maybe, but sorry did i miss the part about new job, new practice, not a partner, have 500K in debt already, and you have a non-compete?

    All this being said, I'm a pretty avid reader of WCI and other physician finance content but feeling a little uneasy with so many big financial changes/decisions coming up. My ultimate goal is to go most of my financial management myself but am thinking about hiring a fee-only FA to look over my current financials/insurance and come up with more specific plans for some of the bigger ticket items (i.e. house buying budget/process, student loan planning, investment allocation/prioritization) to give me some piece of mind with a second opinion before I carry a plan out.
    - i think the SL professional advice is good.
    - if you are an avid reader here, then start on bogleheads and get a framework for how to evaluate what an advisor tells you about investing, allocation, and budgeting.

    happy to have more pediatricians.
    head down, do your thing, but realize you cant swim with the specialists.....yet.

    Comment


    • #3
      “happy to have more pediatricians.
      head down, do your thing, but realize you cant swim with the specialists.....yet.”
      Oh you can swim, just follow Peds advice and train for the right distance.
      Freestyle races cover 50m, 100m, 200m, 400m, 800m, 1,500m, 10,000m.
      I think Peds is suggesting the last two events.
      By that I mean avoid making financial and family decisions that have potential downsides as long as possible. Keep options open. House, kids etc. until you make partner and are settled on the compensation/job/location. Long range plan with as much flexibility as possible.

      Comment


      • #4
        - low like what? how much?
        - Currently wife's car is ~$16,000 at 2.99%. Ok with this in the grand scheme of our debt picture.

        - so you are not pursuing PSLF on 390K, but her 90K is on track?
        - what rate will you get to refinance the 390K?
        - Considered pursuing but decided not to as the clinic I signed with seemed to be much more in line with my style of practice and values. This was something I was not willing to compromise for the sake of slugging out 7 years in a job I'd potentially hate. Wife is in a tenured job at a non-profit so will likely just stay the course.
        - Credit score is ~760-800 so I'm assuming fairly good refinancing options. Hadn't looked into it much yet as I wont have to refinance for a few months and wanted more specific advice.

        - now its 20% of gross to retirement. so on 200K thats 40K. 401k + 2x rIRA + 9K second 401k (but goal is to max both)
        - then the rest of your money goes to loan plan, efund plan, car/vacation/home plan.
        - are you paying a management fee at betterment? stop that.
        - are you converting your old retirement plans or moving to new employer?
        - Just using their free service for Roth IRA. The Betterment Roth is the only retirement account I have as of now but will have access to 401K + $6,900/yr match at new employer. Wife has 403b & pension through employer.

        - after a year maybe, but sorry did i miss the part about new job, new practice, not a partner, have 500K in debt already, and you have a non-compete?
        - Believe me, I haven't thought about it lightly. Non compete would not affect my opportunities at other employers in future areas of interest (I negotiated it this way). We would likely be buying in a central location that wouldn't be a commuting issue at any future employer I would go to in the area. We've lived here for almost 10 years, know the areas well and have decided to stay long term regardless. At the end of the day, some of it is also a compromise with my partner who feels stuck in the rental we've had for the last 7 years. Compromising on home buying is better than divorce any day!

        Comment


        • #5
          DocMc so it sounds like you are just looking to put the blueprint in place to give you some guidance/stress test the math and range of outcomes so you can have confidence in setting up some auto-pilot options (e.g. retirement account contributions, allocation, direct deposits for your future home down payment/subsequent mortgage, evaluation of your risk management via insurance with the considerations of your perspective house, children, and spouse's needs, balancing debt strategies for student loans along side shorter term goals and where you should pivot in your approach as you start to achieve these goals/pay off current debts? It goes without saying to do all of this while being respectful of fees & tax impacts on your ability to achieve these goals while efficiently building long-term wealth.)

          The work here is upfront in putting the initial plan together, after that its relatively easy to maintain & update barring any major life or legislative changes.
          Founder, Coastal Wealth Planners- Fiduciary Tax-Sensitive Retirement Planning & Wealth Management www.coastal-wp.com email: [email protected]

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