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Hello WC Investors!
I’ve been a lurker on this site, as well as a few others about money management and retirement. I’ve read the WCI book and now, I finally decided to post and participate in the conversation. I’d like to tell you our situation and the plan we’ve created.
We are very much the low income doctor in a high cost of living area. My partner will be completing her residency in Peds and has accepted a contract starting in July! (Yay!) We currently have no children, rent in California, debt of $450k, base of $150k + side income (moonlighting; my income of $20k) and emergency savings of $40k. We are attempting to continue to live like a resident.
Our $450k debt is a mixture of credit cards, personal ($25k) and student debt ($425k). For the student loans that qualify, we will be doing public service loan forgiveness. For the rest of the student loans that don’t qualify, we will refinance in July. After we do that, we still start to do the following
I two questions.
Since we do not have a company retirement plan/ match through our employer, we are not putting away 18k per person each year. Typically, putting money into this account would occur before maxing out an HAS/Backdoor Roth. Should we still put away this $18k per person per year, even though we wouldn’t get a tax break, before we pay off medium interest debts/save up for a down payment for a house, or should we wait until step 6? If we wait to pay off our debt, it may be 8 years before we start to invest in bigger sums (10k+ per person) of money into retirement accounts.
Rent cost ~$2500 per month. We are thinking of purchasing a duplex with a doctor’s loan if the price/agreement is right. We will live in one place, rent out the other place. As long as our rent does not increase significantly and we have an emergency fund to cover if the other place does not get rented, this seems like a great idea considering how much rent. Roughly speaking, rent over 3 years would be 90k, plus we would still have to save money for a down payment. Trying to save money while paying that rent does not make sense to me. What do you think of this idea?
I’d love your feedback. Thanks in advance!
I’ve been a lurker on this site, as well as a few others about money management and retirement. I’ve read the WCI book and now, I finally decided to post and participate in the conversation. I’d like to tell you our situation and the plan we’ve created.
We are very much the low income doctor in a high cost of living area. My partner will be completing her residency in Peds and has accepted a contract starting in July! (Yay!) We currently have no children, rent in California, debt of $450k, base of $150k + side income (moonlighting; my income of $20k) and emergency savings of $40k. We are attempting to continue to live like a resident.
Our $450k debt is a mixture of credit cards, personal ($25k) and student debt ($425k). For the student loans that qualify, we will be doing public service loan forgiveness. For the rest of the student loans that don’t qualify, we will refinance in July. After we do that, we still start to do the following
- We our employers do not offer a company match/ retirement account/401k/403b/etc so we will start off by paying off high interest debts.
- Max contribution HSA if we get a high-deductible health plan.
- Max contribution to Roth/Backdoor Roth
- Pay medium interest debts unless in loan forgiveness
- Save up for a house down payment
- Invest in taxable account in risky investments
- Pay of low interest debts unless in loan forgiveness
- Invest in taxable accounts in low risk investments
- Ball out
I two questions.
Since we do not have a company retirement plan/ match through our employer, we are not putting away 18k per person each year. Typically, putting money into this account would occur before maxing out an HAS/Backdoor Roth. Should we still put away this $18k per person per year, even though we wouldn’t get a tax break, before we pay off medium interest debts/save up for a down payment for a house, or should we wait until step 6? If we wait to pay off our debt, it may be 8 years before we start to invest in bigger sums (10k+ per person) of money into retirement accounts.
Rent cost ~$2500 per month. We are thinking of purchasing a duplex with a doctor’s loan if the price/agreement is right. We will live in one place, rent out the other place. As long as our rent does not increase significantly and we have an emergency fund to cover if the other place does not get rented, this seems like a great idea considering how much rent. Roughly speaking, rent over 3 years would be 90k, plus we would still have to save money for a down payment. Trying to save money while paying that rent does not make sense to me. What do you think of this idea?
I’d love your feedback. Thanks in advance!
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