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The Financial Toxic Wasteland

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  • The Financial Toxic Wasteland

    Quality of Life in California vs Financial Independence in lower COL state?

     

  • #2


    the burdensome taxes now worsened with the new tax reform
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    How do you mean?  What in particular has done this to you?  I'd assume the loss of deduction for state and local taxes.  Run your numbers; if you pay more, it's doubtful to be much more.

    The only time you look at your neighbor's plate is to make sure they have enough, not to see if they have more than you.

    Seems like everything else you've stated is awesome.  Mid-30s, no debt (other than mortgage? or did you buy outright in CA?!?) is terrific.  Putting over $45,000 into tax-advantage accounts each year is likewise terrific.  Loving your job and where you live is even more terrific.  I guess I'm waiting to see what the problem is...?

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    • #3
      You can definitely appreciate the double benefit of both 403b+457b. If you're on track to cut back at 50 and retire by 60 and that's what you want to do, then it sounds as if you're set - for now. But you're only 2 years in. A lot can change and you've got a lot of life to live. Enjoy your youth, relish in the opportunities you have to be in CA at this particular time in your lives, but don't get locked into the mindset of staying in place no matter the cost. You and your fiance can be especially flexible before you have children so it's important to ask yourself these questions, as long as they don't constantly revolve around the almighty dollar.
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #4
        I guess the question is- what do you need to be happy? I don't know what you need and neither does anyone else. It sounds like you have a very nice life. Will you be able to do everything you want if things continue as they are ( not sure if y'all plan on having kiddos or not) ? If so, I'm not sure why you'd change things right now. I think it's good to be flexible, maybe in 5 years it will make sense to leave but the decision you make now isn't forever and can be changed down the road. I personally have chosen to work less, make less so I will not FIRE at 45 and we live in a much smaller house than my friends and family in Texas but these are all choices that make me happy. So you just have to figure out your priorities and values and plan accordingly.

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        • #5
          Sounds like you're going in with your eyes wide open and have a great thing going. If more money but living somewhere else isn't going to make you happier, then stay right where you are.
          Helping those who wear the white coat get a fair shake on Wall Street since 2011

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          • #6
            if having the biggest wallet is the goal, you are in the wrong place.

            congratulations on being off to a great start.

            i haven't heard you talk about disability, which is probably the only real area that sounds like it could compromise your happiness.  changes in spending habits are also potentially something that could derail your goals.

            personally i think you are too young in your career to project that far ahead.  lots of things can happen.  your boss leaves.  they hire someone who is the nephew of some big shot and you get to do all the crap stuff.  big changes in retirement law.  illness.  kids.  etc.

            i'm glad you are happy.  you should try to stay happy as long as possible.  if you are on the road to retirement at 50, despite being in bottom 5% of payscale, while living in HCOL area, you are doing something right!  don't over think it.

             

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            • #7
              There are many great places to live and most of them are cheaper, safer, and less crowded than high COLA of California. But they won't be warmer. And you love everything about your job. So to me this is a no brainer to stay.

              We left California before getting a real job so I wouldn't have the chance to fall in love with the perfect job in the wrong place. We found an area we loved and I fell in love with the job here instead. Now I would never leave and we have the added benefit of living in a reasonable cost of living area.

              Word to the wise: leave California and other high COLA before letting yourself fall in love with your first job. Fall in love somewhere else.

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              • #8
                Kind of a head scratcher of a post.  A financial toxic wasteland where you can max out three tax-advantaged accounts, go part time by 50, and fully retire by 60 sounds pretty nice indeed.  Yes, you can make more money doing some other things or living some other places.  If you don't like CA, don't live there.  If you like it, live there.  Not everyone wants to live in the sticks like WCI  :P

                 

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                • #9
                  I always say, "you get what you pay for." There's a reason why many Orange County houses are astronomical in cost. Everything is an opportunity cost. For me, it's worth the higher taxes for me to live in California. You have to make that decision yourself. Sure, I could move to some very low-cost of living state in the Midwest, but my seasonal affective disorder would kick in, and I'd be miserable.

                  Sounds like you're doing everything right.

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                  • #10




                    the burdensome taxes now worsened with the new tax reform, I can’t help but recall WCI’s quote about California being a “financial toxic wasteland” for physicians.

                     
                    Click to expand...


                    As someone who also lives in a HCOLA area (Chicago) I think it's going to be more or less a push for me.

                    Quick and dirty I'm going to lose about $25k in deductions for SALT, but a huge part of our income in in the top bracket and I'll be paying 3% less on that to say nothing of the overall lower brackets.

                    You might want to do some back-of-the-envelope calculations on your personal situation.

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                    • #11
                      As has been written here before, if you have a job you truly love, you've already won the game.  If you were in private practice and/or in TX or FL, what would you do with the extra $?  Would you work any less or retire earlier?  Would you really buy an extra house, and do you think it would make you happier?  If the answers are no across the board, you have your answer.

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                      • #12




                        Quality of Life vs Financial Independence?

                        I am 2 years into my stint as an academic attending at a terrific hospital in California. I love everything about my job. The people, the patients, the medicine. California is easy to fall in love with as well. But between my lowly W-2 earnings (bottom 5th percentile for my specialty), the high cost of living (top 10th percentile in the country), the burdensome taxes now worsened with the new tax reform, I can’t help but recall WCI’s quote about California being a “financial toxic wasteland” for physicians.

                        Currently I’m on track for financial independence. I’m in my mid-30s, have paid off all my debt, am annually maxing out all of my retirement accounts (403b, 457b, Roth IRA), and just purchased a home in a great public school district. My fiance and I live comfortably, and we love our jobs, but one can’t help but wonder just how much more we could be making if either a) I wen’t into private practice and/or b) we moved to a low-tax/no-tax state. But would all this extra money increase our happiness? While my academic job doesn’t pay the big bucks it feels very sustainable with increased long-term incentives as I “climb the ranks”. I believe that at this current rate I’ll be able to go part time by 50 and retire before 60, but I’ll never be able to have the luxury homes, cars, or vacations that my private practice colleagues in TX and FL have. It seems like “the grass is always greener on the other side of the fence”. Especially in California with all of our draught conditions!

                        Just curious to hear what others have to say ?
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                        I totally agree with Lithium that if you have a job you truly love, you've already won the game.  I gotta say that I greatly envy your situation.  You're debt free, you live somewhere awesome, and most of all you like everything about what you do.  I would like to think if I had these things lined up like you do I'd be a much happier person and not care as much about trying to reach financial independence.  The only reason I desire financial independence is so I can be free from my job.  I don't like what I do.  And I don't feel like my job is sustainable or secure.

                        If I had to pick between financial independence or finding a career I loved and enjoyed, I'd pick the career.  I think having a sense of purpose in one's life is much more enjoyable than any amount of money in the bank.

                        If I were you, I'd ignore your rich friends in TX and FL and enjoy the awesome life you already have  If you're really concerned about making more cash, look into picking up a side hustle.  Save up the money from that extra work and buy yourself something nice. See if the extra cash gave you any extra joy.  If not, then it's not worth it.

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                        • #13







                          Quality of Life vs Financial Independence?

                          I am 2 years into my stint as an academic attending at a terrific hospital in California. I love everything about my job. The people, the patients, the medicine. California is easy to fall in love with as well. But between my lowly W-2 earnings (bottom 5th percentile for my specialty), the high cost of living (top 10th percentile in the country), the burdensome taxes now worsened with the new tax reform, I can’t help but recall WCI’s quote about California being a “financial toxic wasteland” for physicians.

                          Currently I’m on track for financial independence. I’m in my mid-30s, have paid off all my debt, am annually maxing out all of my retirement accounts (403b, 457b, Roth IRA), and just purchased a home in a great public school district. My fiance and I live comfortably, and we love our jobs, but one can’t help but wonder just how much more we could be making if either a) I wen’t into private practice and/or b) we moved to a low-tax/no-tax state. But would all this extra money increase our happiness? While my academic job doesn’t pay the big bucks it feels very sustainable with increased long-term incentives as I “climb the ranks”. I believe that at this current rate I’ll be able to go part time by 50 and retire before 60, but I’ll never be able to have the luxury homes, cars, or vacations that my private practice colleagues in TX and FL have. It seems like “the grass is always greener on the other side of the fence”. Especially in California with all of our draught conditions!

                          Just curious to hear what others have to say ?
                          Click to expand…


                          I totally agree with Lithium that if you have a job you truly love, you’ve already won the game.  I gotta say that I greatly envy your situation.  You’re debt free, you live somewhere awesome, and most of all you like everything about what you do.  I would like to think if I had these things lined up like you do I’d be a much happier person and not care as much about trying to reach financial independence.  The only reason I desire financial independence is so I can be free from my job.  I don’t like what I do.  And I don’t feel like my job is sustainable or secure.

                          If I had to pick between financial independence or finding a career I loved and enjoyed, I’d pick the career.  I think having a sense of purpose in one’s life is much more enjoyable than any amount of money in the bank.

                          If I were you, I’d ignore your rich friends in TX and FL and enjoy the awesome life you already have  If you’re really concerned about making more cash, look into picking up a side hustle.  Save up the money from that extra work and buy yourself something nice. See if the extra cash gave you any extra joy.  If not, then it’s not worth it.
                          Click to expand...


                          but but but he's already on track for part time by 50.

                          from a financial perspective, s/he's already got it all.  the only challenge is some vague sense of not being paid market rate.  but maybe 5th percent is local market rate for academic specialty in desirable area of California.  there can't be too many numbers to compare with.

                           

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                          • #14
                            It sounds like you are doing great.  I agree 5th percentile sounds bad.  But if you love your job..  hopefully it's 5th percentile for neurosurgery or something well-paid.

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                            • #15
                              Not much to add to that commented above:  you're debt free, it sounds like you love everything about where you're at...what more is there?

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