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My Financial Situation

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  • DMFA

    1. Stop wanting things.  With spouses and children, though, that's really hard.  The first step to achieving Nirvana is the elimination of desire...and the Bleach album.

    2. Max your savings - $53k to 401k (solo?), $5500 to Roth IRA (backdoor), $6650 HSA.  There's still probably 20 years or so of compound interest to be earned there, depending on how long you feel like working and your retirement goals.

    3. Annihilate your loans.  The math supports killing off the highest interest rate first, but the Ramsey "snowball" plan is pretty good psychologically, and at that income and small debt levels shouldn't end up costing you too much in the long run.  You'll find that the correct mathematical answer and the correct overall answer for you and your family might not be the same.

    4. Re: 529s college funds, 7 years of compound interest isn't nothing, but not nearly as good as 18 years' worth (hindsight 20/20) and your money is probably better served eliminating your debt with its probably awful interest rate and with your retirement for more years of compound interest.

    5. Buying a house in CA...shoot me in the face.  God bless Texas.

    6. Lots of moving parts.  Professional financial planning would be a good move.  Find a flat-fee advisor who works specifically with physicians.  This can be done in person or via VTC.  Several advertise on this site.  Through my relatively limited interactions with them, they all seem like a pretty solid bunch.  I will not state a favorite :-)

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  • huruta
    "Since Aug 2014 I have reduced my debt from $373 K to $211 K" That's amazing. Kudos to you and your family for making this happen.

    It's true. Keep doing what you are doing and in two years you will be debt free. WCI has a good post about what to pay down and in what order. If it were me, I'd pay off those car loans which would be easy enough to do and then start a split approach to paying down student loans and saving for a house. The balance on the student loans is really high and it'd be nice if you could get into a home you could pay off before retirement.

    Perhaps I'm not the best person to give advice about college since we don't have kids, but many a financial book I've read suggests that your children have a lifetime to payoff their student loans but you do not and it's better to prioritize your retirement over their college tuition. Most friends I know are not following this course so probably harder said than done.

    Can wife work outside the home? I'm a spouse and make nothing near my physician husband but over 50% of my earnings go to retirement and help to max out those accounts. Every little bit helps when digging out of a financial hole.

    Good luck!



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  • smg
    started a topic My Financial Situation

    My Financial Situation

    Would appreciate your comments / suggestions on my financial situation.  I will try to make this as brief as possible.


    42 yrs old, married, 2 kids (11, 10)

    ER physician in CA, graduated from residency 2014.

    My wife doesn’t work at this time.

    Kids go to public school.

    We rent a home.


    As of Day 1 of being an ER attending in Aug 2014, my debt totaled $373K:

    • Credit Card $25,000 (at ~13%)

    • Student Loans $300,000 (Public: 240K @ 6.8%; Private 58K @ 5%)

    • Car Loan #1 $14,000 (Mazda 2012 @3.2%)

    • Car Loan #2 $23,000 (Subaru 2013 @ 5%)

    • Parents Loan $15,000 (at 0%)

    I/we had no assets besides my wife’s 401K worth about 80K.

    Now you may have noticed above some crappy car loan rates.  That is due to us having bad credit.  We used to own a rental property in Arizona.  We lost money every year.  Moreover our losses occurred during the market housing bust.  So we decided in 2011 to foreclose on our property (we lost 50% of house value and were losing money every month).  At the time we were willing to take the hit to our credit.  Perhaps that wasn’t the right thing to do.  But the past is done and right now we have a delinquency on our credit.  This makes it difficult to be approved for any loans, and if we are approved the rate is not competitive.  The key thing is that I expect our delinquency to be removed in 7 years, so sometime in 2018.  The good news is our credit scores are ~ 750, hopefully higher.

    I’m an independent contractor doctor. I have steadily increased my workload to 18-20 shifts/month.  Last year I worked 2000 hours, made $440K.  Fed taxes = 23.2%, CA taxes = 5.6%.  This year I will probably make about the same.


    I am *pleased* (not ecstatic) about how much I’ve paid down. Since Aug 2014 I have reduced my debt from $373 K to $211 K.  My debts are

    • Student Loans $188 K

    • Car #1: $7 K

    • Car #2: $16 K

    • No CC debt!

    • No parental debt!

    Monthly expenses:

    • Rent, phone, Health Insurance, TV, etc = $6.5 K

    • SEP-IRA = $4K

    • HSA = $550

    • All Loans = $4,000 (I am basically doubling my student loan payment, sometimes more).

    Some Comments:

    • I’ve tried refinancing my student loan debt through a variety of companies and I can’t due to my credit delinquency.  I even refinanced one of my cars to only 3.2%!

    • I don’t think I’m eligible for PSLF.  I didn’t even realize it existed until I became an attending.  I was in forbearance during residency.

    • I’m maxing SEP-IRA and HSA accounts.

    • I would love to live like a resident.  I hate debt and would spend little money.  But I have a family.  My wife is not a big spender but I think there could be some improvements.  It’s hard.  We put our kids in soccer, music class, summer school, and that stuff all adds up.

    • We have no plans on moving out-of-state.  I could probably live in a bunch of areas around the country, but my wife wants to live out here in the Bay Area.  In fact she would like to live in SF itself!  Her family is here and her Mom is kind of stable-ill if that makes sense so she wants to be close by.  Moreover, our kids are in the school system here and they have friends, and moving makes that issue more difficult.

    • I am not a car guy, but I absolutely love my Mazda and it is one of the few things that make me happy every day.  Bought it used with 21K miles.


    Some Questions:

    1. My wife wants us to have money set aside as a down payment ready when we are ready to buy a house in a few years.  I have not been saving money for that because I want to pay off the debt.  I think I know what you are going to say…debt first then start saving for a down payment.  Don’t do it at the same time?

    2. Should we put aside money for our kid’s college education starting today?  They will be going to college in 7 years.

    3. I might be able to get a job at Kaiser.  I would make much less each month, but they have a great pension plan.  In general, if I work there for 20-25 years and if their pension plan remains solvent, I would make $160K/yr as a pension.  Is it just a no brainer that it would be easier for us to retire if I could get a job with Kaiser?

    4. I would love to just pay off the car loans.  And then use that monthly payment money towards my debt.  But that is technically not the right thing to do, right?


    That is all I have right now.  I think the biggest way I could pay down more debt is by refinancing it.  It’s going to be too hard to significant reduce our rent.  I’m already working too much.  And if my wife works we have to get a nanny which is a big pain-in-the-butt!  (tax wise that is).