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Discuss Latest POF Blog Post: FIRE Crossroads 016: 42 with a $4.2 Million Net Worth & FatFIRE Plans

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  • Discuss Latest POF Blog Post: FIRE Crossroads 016: 42 with a $4.2 Million Net Worth & FatFIRE Plans

    This dual-income, one-physician household could retire right now if they really wanted to, but that would require a significant downgrade ... Read more

    Click here to view the article!
    Helping those who wear the white coat get a fair shake on Wall Street since 2011

  • #2
    A much debated issue, but I include mortgage debt when calculating NW. With that, OPs NW would seem to drop by 20%.

    Regardless, given the military income and the burn rate, nice job on the nest egg!

    I am not one a person that will easily move out of my big doctor house to unlock the equity; I rather like living here. The pandemic solidified that in my mind.

    Comment


    • #3
      Originally posted by G View Post
      A much debated issue, but I include mortgage debt when calculating NW. With that, OPs NW would seem to drop by 20%.
      .
      I don't think so. Homes are worth $2.1m and $500k and total debt is $900k. That is $1.7m of equity. Add $2.5m investments and they have $4.2m NW.

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      • #4
        That $1.2m in Roth accounts is an impressive number. Guessing he used his lower income when he was a military doc to put money into a Roth TSP.

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        • #5
          Originally posted by FIREshrink View Post

          I don't think so. Homes are worth $2.1m and $500k and total debt is $900k. That is $1.7m of equity. Add $2.5m investments and they have $4.2m NW.
          As I said, a debated issue. But thanks for doing that arithmetic for me. 😉

          Comment


          • #6
            Originally posted by G View Post

            As I said, a debated issue. But thanks for doing that arithmetic for me. 😉
            I mean, there no debate at all. What are you talking about?

            Comment


            • #7
              I posted about this in another thread recently.

              Net worth. Total assets minus total debt. Measuring stick of ALL things ...including primary home, artwork, NFTs, shiny things things
              Retirement assets. Things that will generate income for retirement.

              Two very different things to allow retirement. MOST will not relocate to cheaper COL areas. We live in SD. We may downsize the house, but probably not the cost. (Smaller but better location). This is the challenge of HCOL living.

              The couple has been exceedingly well. They are what I call beach bum FI...is cut out all costs, live in current house and just chill at home for retirement. Clearly not their goals of travel spend and $190k annual. That will be that $7m retirement assets FatFI. There probably is lean and regular FI in there just not discussed that are good guideposts as work career enters a 'is this worth it' times for both earners
              Last edited by StarTrekDoc; 01-12-2022, 07:16 AM.

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              • #8
                Definitely in 4 years got comfortable with lifestyle inflation. The Roth is impressive.
                The real estate not so much. The reason is although it is in net worth, it is not really an investment. Half if the NW comes with significant carrying costs. Rather than producing income, it is a negative impact.
                This is a negative on the retirement and they dumped the taxable into it.
                The missing piece is what they are actually saving for retirement.
                The parent thing and the big house can stretch out for decades. The parent expenses can go up (living assistance).
                With a big shovel they can easily save. So far they have spent it on lifestyle. That is fine. Just didn’t see much identified as savings (nor much of an interest). Just don’t think the residential real estate is as liquid or as productive and lines up with the financial goals. Doable, I just didn’t see the painting.

                Comment


                • #9
                  Yeah I think they're too RE heavy. Especially with the big dumb doctor house and buying the parents house cash.

                  They'll do fine of course, but just troublesome for any type of RE plans.

                  Comment


                  • #10
                    The most financially secure thing about this story is that the physician loves his current job. ‘If you aren’t happy with your physician job, go find (or make) the perfect one for you! Those jobs are out there. Trust me, I am in one now.’

                    The Roth is also impressive.

                    Once we hit overweightFI, our older kids were entering college age and my physician spouse said that he wanted to work 10 more years even though there was no real need given our net worth and lifestyle (which isn’t lean).

                    Throwing this opinion out there for those who are still raising young kids. If you can find a balance and that job that makes you happy, the upper teens/young adults are driven by seeing you work hard. Going to Greece for a couple of months is probably a lot of fun, but if you really love your job, lean into that part of you. Your kids will benefit from that as much as seeing you 24/7. Believe me, they don’t want to see you that much.

                    Comment


                    • #11
                      Yeah; we've entered the next chapter with kids launched to college. Gonna enjoy FT work until they are fully launched; then glide path to retirement that's dictated by Grandkid status


                      Advice to younger generation with kids -- be there for the kids early :
                      Age 2-8 - imprints a lot -- be present
                      Ages 8-13 - spot support to activities;
                      Ages 13-18 - weekly dinner
                      Ages 18+ family get aways for a week at a time during the long breaks.

                      OP is fine in prioritizing home and parents home and tip of the hat to that.

                      Comment


                      • #12
                        Originally posted by FIREshrink View Post

                        I mean, there no debate at all. What are you talking about?
                        I assume G is referring to the idea of including the value of your home in your retirement portfolio vs the need for its value/debt being used for NW calculation

                        Comment


                        • #13
                          Originally posted by FIREshrink View Post

                          I mean, there no debate at all. What are you talking about?
                          Yes, misread, notice time of first post--pre-coffee.
                          My point should have been liquid NW...I mean, they are years from capitalizing on profit (assuming any) of both houses.

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                          • #14
                            Doesn’t sound like he has any desire to RE. He will be fine. The main crossroads question presented was whether to go into more of a leadership/admin role. It seemed his main motivator for doing so was the increased pay. That is a terrible reason to do it IMO. One should do it if they have a desire to serve in such a role, and if they have good leadership qualities. The aim of such a role should be to make healthcare better for both the patients and the doctors and other clinical staff. I actually believe that anyone in such a role should be FI so that if push comes to shove, they can do what’s right rather than be admin’s puppet in a white coat. So if someone is drawn to leadership, that is a good reason to pursue FI even if no intention to RE. But extra $ is not a good reason to pursue a leadership position.

                            Comment


                            • #15
                              Totally agree with Anne - too often leadership roles aren't physician driven for optimal patient care and staff/faculty environment. It's driven by bottom lines/political goals -- irrespective of profit/non-profit status.

                              Unless you're doing CEO level stuff; $$$ return really is suboptimal and shovel is best then investing that in business ventures.

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