I appreciate the feedback. Sounds like we should scale back our plans.
Nonetheless, it still feels “weird” to me that (assuming nothing goes massively wrong), SO will have a ~$300k/yr job in 5 years – a salary that easily (and reasonably) buys a $1M house – yet despite being able to make a ~50% downpayment, we would be ill-advised to buy a “stepping stone” house along the way to that “mansion”.
I know the more prudent folks here advocate for retirement savings and equity investments, but, well, we didn’t train for this long just to retire as soon as possible. And what else is there to do with that kind of money? Some people like boats, we like houses.
I'm sorry, but there are so many things wrong with this mentality. I'm going to break down each thing because I just can't help myself:
"SO will have ~$300k/yr job in 5 yrs - a salary that easily (and reasonably) buys a $1M house""
- I can tell from this statement that your wife has not been in medical practice long (though I'm cheating because you said she's an MS4). The further long in training she gets, the more people she will meet that didn't travel along the professional plan they had initially devised. There are all sorts of things that could derail your 5-year financial plan: pregnancy, illness, family emergencies, failing boards, burnout, change of specialty, change of program, etc. You cannot rely on a hypothetical income 5 years from now. Also, because a banker (who's livelihood is based on closing as many mortgages as possible) says you can afford a house doesn't mean you should buy that much house.
"despite being able to make a ~50% downpayment, we would be ill-advised to buy a “stepping stone” house along the way to that mansion."
- It's not about the down payment, it's about your lack of household income when you move. Why do you feel the need to trade up to that "stepping stone" house? Even assuming everything works out perfectly for your wife professionally over the next five years (ie doesn't change specialties, no academic hiccups), do you really think you will be that much happier in the $750k house than you would in a $400k house? You have to keep in mind the strain on your everyday finances (mortgage payment trumps going out to eat) not to mention the over-leveraged place you put yourself into.
"I know the more prudent folks here advocate for retirement savings and equity investments, but, well, we didn’t train for this long just to retire as soon as possible."
- Your wife may (will?) feel differently in 15-20 years when the overnight calls start to take a toll and your kids take up more of her sparse free time.
"And what else is there to do with that kind of money?"
- You said it already: go out to nice restaurants! How does an impromptu trip to the The French Laundry sound the next time you are in the Bay Area for a medical conference? Or how about a 2-week trip to Australia and New Zealand for you and the kids? The financial freedom required to do things like this are a lot easier when you aren't house-poor.
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