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  • #16
    Originally posted by ddd View Post
    Thanks for all of the responses. Seems general consensus is to give it a bit more time before making the plunge. I had previously intended to wait one to 2 years, maybe I'm just getting antsy when there seems to be such a limited supply of the houses we like in the location we like. Also the real world is nothing like the people on this forum so when every single one of your friends owns a house and has done well with it you start to question yourself a little bit.


    The "real world" you quoted is likely just a perception, not a reality. A deeper dive into your friends financials would probably reveal a different story (not that you should pry, but appearances often are deceiving in HCOL careers- drs, lawyers, finance). The race to FI or retirement or whatever is solely yours- do it at your own pace.

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    • #17
      'welcome' to the Forum - at least active participation. Since you're not a DIY or contractor minded person AND want a limited product -- there's going to be a price premium to that and consider that portion as a consumptive/luxury cost in addition to your home purchase. It sounds like that market will continue to support regardless because of limited stock. Double check on what happened in the area in 2007 and how quickly it recovered. That'll give you an idea of the risk of the property.

      A question on the math: 600k income for past 6 months. All those savings cited all within past 6 months? Didn't see 529 mentioned and savings goals and plans for kids as they grow and impact on income decisions there. --- those make more impact than anything.

      I've always worried on top of the neighborhood purchases. But in limited stock areas, it doesn't matter as much unless it's grossly out there -- the only 3000 ft home in place of 1000-1500 homes would give me a bit of pause, but if the there's other comparable properties - then you're fine -- just don't go buy topped out luxury flats and that becomes a resale issue -- hence the consumptive/luxury costs one may have to deal with since you're looking to buy that part.

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      • #18
        Originally posted by ddd View Post
        I’ve been a follower/lurker of WCI since before the forum was even a thing so we had 5 years of residency to slowly save/compound plus signing bonuses for jobs. I'm embarassed to say it but it would actually be higher if I hadn't tried to time the market during the inital covid drop. I couldn't see how the market wouldn't continue to drop so I transferred almost 1/2 of our retirement accounts to money market on March 19th with the intention of putting it back in the market one week later after it had dropped further. I finally got it all back in around 2 months later but definitely still kicking myself for going against everything I've learned. I guess rather be burned now and learn a valuable lesson than in 10 years when it could have turned into a 6-7 figure mistake.
        This is a good time to make that mistake. In 5 years, you’ll have forgotten all about it (save for the evidence of this post). This is also a perfect example of the strength of your emotions v education when it comes to investing and money and a cautionary tale for others reading this thread. (Fwiw, I made that mistake once upon a time before getting into this profession - everybody here probably has a tale to tell. Thanks to the benefit of experience and maybe a tiny bit of wisdom, we were doing Roth conversions in March and no clients got out.)

        Agree that you really really need to consider the nearby schools - if you have to pay for private school in addition to the great neighborhood, you may really be kicking yourself in a few years.
        Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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        • #19
          Originally posted by billy View Post

          The "real world" you quoted is likely just a perception, not a reality. A deeper dive into your friends financials would probably reveal a different story (not that you should pry, but appearances often are deceiving in HCOL careers- drs, lawyers, finance).
          You are SO RIGHT. Just went through this with a CPA client whose partners were bragging about their remarkable tax advice from their CPAs and how buying 6000 lb vehicles had been wise and miraculous. Frustrating sometimes.
          Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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          • #20
            To complete the financial picture, we both have term life insurance and individual own-occ disability plus group disability (though did initially get sold a fake own occ by NWM agent 4th year of med school which is actually how I got started reading WCI) we have not started specifically saving for college but plan to open 529 for both kids this year. Public schools are great in the area we want to live even though a lot of the parents send their kids to the nearby private school. We both went to public schools and plan on doing the same for our kids unless crazy circumstances arise. Plan on saving enough for them to go to whatever undergrad school they want debt free (so probly somewhere around 200k per kid) and hopefully they pick a state school or get scholarships and the money can be used for grad school.


            I guess the other question is that the majority are saying to save up more cash for downpayment while Peds is saying don't put down 20%. I'm assuming this is because of the low interest rates and making more in the market. It makes sense but to be honest I like the idea of 20% downpayment with 15 year mortgage to try and get it paid off as soon as possible. May not make the most sense financially but I'm in the camp that would prefer the pyschological aspect of being debt free. I'd like to think I have the dedication to save/invest the excess monthly payment but it would be really easy to see that extra amount in the checking account and decide to fly business class whenever we are able to go on vacation again.

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            • #21
              Originally posted by ddd View Post
              To complete the financial picture, we both have term life insurance and individual own-occ disability plus group disability (though did initially get sold a fake own occ by NWM agent 4th year of med school which is actually how I got started reading WCI) we have not started specifically saving for college but plan to open 529 for both kids this year. Public schools are great in the area we want to live even though a lot of the parents send their kids to the nearby private school. We both went to public schools and plan on doing the same for our kids unless crazy circumstances arise. Plan on saving enough for them to go to whatever undergrad school they want debt free (so probly somewhere around 200k per kid) and hopefully they pick a state school or get scholarships and the money can be used for grad school.


              I guess the other question is that the majority are saying to save up more cash for downpayment while Peds is saying don't put down 20%. I'm assuming this is because of the low interest rates and making more in the market. It makes sense but to be honest I like the idea of 20% downpayment with 15 year mortgage to try and get it paid off as soon as possible. May not make the most sense financially but I'm in the camp that would prefer the pyschological aspect of being debt free. I'd like to think I have the dedication to save/invest the excess monthly payment but it would be really easy to see that extra amount in the checking account and decide to fly business class whenever we are able to go on vacation again.
              I'm pretty sure you can put 20% down on a 15 yr mortgage AND fly business class, tbh. You're doing great! Personally I like the 15 yr mortgage because you see real progress in the mortgage each year and for me it's a good compromise between a 30 yr and paying it off ASAP.

              As far as FOMO, I have a bit of a real estate addiction and let me tell you, I can always find another house I'd like to buy. When the time is right you will find the perfect house.

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              • #22
                Not going to address anything else but this. I personally own the most expensive house in our neighborhood and I don't care. I used to want the least expensive home in the neighborhood which we did for years but at this point in life, it's highly unlikely that we will ever move and it checks virtually every box we could ask for. Very thankful to be here. Life is about living, not always saving.

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                • #23
                  In 2000 we bought a house 1.8x our income 1 yr into my job and 1 month into my wife's job. It was purchase with no benefit of the WCI like wisdom. Looking back on it, we probably should have bought bigger. It still turned out well. Sometimes it does, sometimes it doesn't. Lots of room for learning with dual physician income. Go with your gut. It got you this far I suppose.

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                  • #24
                    Well I figured it out also. My concern for the OP is the newness of the job and the fact your wife is 2 weeks postpartum. 6 months is not enough time to know about jobs. Will your wife want to work FT with 2 young kids? This could really factor in to your numbers. If you wait 6 months from now or 2 years from residency I think you will be in a better position.

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                    • #25
                      If you are employed , I would wait until you renegotiate your contract. I think at that time , you will have a good idea if you are going to stay. It is alot easier to move when you dont have a house to sell. In the mean time , enjoy a care free apt with your wife and kids. Much more enjoyable than trying to fix brokien items and mow the lawn in your free time.

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                      • #26
                        OP , thanks for the asset clarification. I think you have done a wonderful job of getting ahead.
                        •Progress of peer group- this feeling is virtually universal. Fact: physicians have a longer runway to takeoff. Deal with it. Delayed gratification rather than keeping up with the Jones.
                        • gross - taxes - 20% retirement = spending
                        Follow that rule every year and it is difficult to make mistakes.
                        • The second contract is a better representation of your long term job satisfaction. The odds of staying are drastically better. That’s the reason for two years employment.
                        •You will be able to have anything you want, just not everything.
                        You will always be able to afford the most expensive house, it’s only a question of timing and how much you want to spend.
                        • Peds 20% down comment is the current interest rate is lower than the typical mortgage insurance premium and anticipated long term market investment returns assuming you invest it. Revisit that when you are ready to buy a house.

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                        • #27
                          There's nothing wrong with purchasing the biggest most expensive house in the neighborhood. I assume that there will always be a demand for it if it were in an optimal commuting location as there will always be at least one person like you who makes a good income and is looking for a short commute. My main concern would be the school district. The school district by definition will be poorer then if you had a comparably priced house but it was the smallest house in the neighborhood. I don't know how much difference it makes, but your kids will end up with different friends in your school district if all the kids are going to Ivy leagues vs not graduating from college. That's not some elitist attitude, there always are exceptions, but when you look at colleges kids end up going to after high school, there is usually an obvious difference between the richer districts vs the poorer ones.

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                          • #28
                            Originally posted by Hawkeye225 View Post
                            Not going to address anything else but this. I personally own the most expensive house in our neighborhood and I don't care. I used to want the least expensive home in the neighborhood which we did for years but at this point in life, it's highly unlikely that we will ever move and it checks virtually every box we could ask for. Very thankful to be here. Life is about living, not always saving.

                            I pretty much could have written that word for word. I too lived in a small house for 17 years that when people came and saw me and my house they asked - are you sure you are a doctor.

                            Now that I am FI and work to keep my mind from going crazy, I built the most expensive house in my neighborhood. Double of what some of the other houses are valued. I don't care. Even if it is a loss when I am gone , I would have enjoyed my wealth. The good thing is that in MCOL the most expensive house gives you a ton of space and upgrades that a tiny house in Bay Area will not, for the same price.

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                            • #29
                              Another consideration in favor of continuing to rent which may or may not be applicable but in my area it is a seller's market right now which I prefer to avoid.

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                              • #30
                                My family and I thoroughly enjoy our pricy old house, low to medium cost of living, medium sized city. Walkable to restaurants, outdoor festivals, concerts and events (when it’s not covid) and downtown. When we purchased the home, in our mid 40s, we had already lived 14 years in a new (our first post fellowship), somewhat cookie cutter house.

                                You make your house your home, so either way, you will grow to appreciate your decision. We have a bit of a remodeling bug, so we spent money redoing a 6 year old kitchen in the ‘new house’ anyway. You may also continue to stalk the houses that got away in a neighborhood that you admire. I’m biased, I’d go for the older house, plan on some extra money going toward the most important people in your neighborhood; the plumbers, electricians and painters.

                                Take some time to talk to people who have kids in the public school system, I would bet there is a game that they play. We have always chosen religious private, but the public kids in our neighborhood go to a magnet school with college prep classes in high school. Middle school appears to be a little dicey in my opinion, but the affluent in our neighborhood send their kids there, so I’m sure they figure it out.

                                Another benefit of an older area is the diversity of people. Older, younger, professional, quirky folks who could talk hours about old fireplaces, picture rails, and original light fixtures. Being physicians will no longer be the most interesting thing to talk about.

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