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  • conniebird
    replied
    Get the DIsability insurance and term life insurance asap. You're the sole breadwinner with kids. You cannot afford to NOT have it. Talk to Lawrence Keller. Read WCI post on it. Expect to pay 1-3% if your gross salary. You need 6 months of emergency funds. DI kicks off after a 3 month waiting period typically.

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  • drcolleen
    replied




    That seems like a very small emergency fund for someone who’s the sole breadwinner in a family of four.  I’m single and keep at least 20k in the bank.  Do you have a second tier of emergency funds?  Some people withdraw their Roth IRA contributions, but not sure you can do that (without a penalty) when it comes to a SEP-IRA.
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    I understand not wanting to keep a bunch of cash around when you have debts, but I agree with Lithium that your emergency fund/cash reserve sounds small for a guy without disability insurance.  If something were to happen and you couldn't work do you have a few months of your minimum expenses (cutting out soccer, eating out, etc)? You should have at least enough until your wife could get work, but better yet to have disability insurance.

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  • AlexxT
    replied
    Kaiser has it's pros and cons. You would  have to do the math with your specific numbers, but the benefits are worth a total of about 10-15% of your gross income, or perhaps around 3-4 k per month.  In other words, if you save that much in your own defined benefit retirement plan for the same 20-25 years,  you will have the same pension.  Kaiser also gives you 100% asset protection, and dental and health insurance for life, and for your children until age 26. Your only out of pocket medical expenses will be $5 rx copays.   There's also some free life insurance and other benefits as well.  The downside for an ER doc is no control over your schedule, and no opportunity to leave if you're not happy, once you have some time in, due to the pension, aka "golden handcuffs".   Now, each facility will have it's own culture,to some extent, and I don't know how much control you have over your schedule now.  Some people in some specialties in some departments love it, and do better financially than they would elsewhere.   Other people hate it.   Some docs in a particular specialty might have a much different experience in one hospital than do docs in the same specialty just a few miles away, due to culture ( ie psychopathy of administration and dept. chiefs ) , presence of residents, and division of labor among the specialties.  If you're considering a Kaiser job, ask both young and old docs at that hospital, and ask at other hospitals as well.  Frequently all is fine the first 10 years, but later you find you can't give up night shifts or get any priority on shifts.  What seemed fine when you're starting out will be torture as you look towards cutting back.

    As for your general financial progress, it sound like you're doing great.  In a few years you'll be debt free and your net worth will start to grow.

    I agree with not being so eager to buy a house.  First pay off your loans.

    I have a house in an expensive Bay Area neighborhood.  I did very well financially with that house, but that just means that over the past 15 years my housing costs ( down payment, mortgage interest payments, renovations, upkeep etc ) in excess of renting have kept up with the S&P 500. ( I did pretty detailed calculations to determine that )  Also given that you're in ER you have a lot of flexibility in terms of moving without having to close and open a practice, so renting allows you to take advantage of that flexibility in the future.

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  • PhysicianOnFIRE
    replied




    congrats on impressive debt repayment.

    “I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much”

    The above is your biggest RISK to your lifestyle, health, abilities, and longevity. 18-20 shifts/monthly takes a toll.

    I agree with others who stated that retirement savings trumps college savings.

     
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    All work and no play makes Jack a dull boy.

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  • childay
    replied
    You are getting good advice.

    Get the disability insurance today.  It isn't that difficult.  If you want I can tell you who I used.  I know a young doctor recently diagnosed with metastatic cancer, who has no disability policy.  Shit happens, don't procrastinate (from a chronic procrastinator).

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  • jz
    replied
    congrats on impressive debt repayment.

    "I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much I’m already working too much"

    The above is your biggest RISK to your lifestyle, health, abilities, and longevity. 18-20 shifts/monthly takes a toll.

    I agree with others who stated that retirement savings trumps college savings.

     

    Leave a comment:


  • RocDoc
    replied
    I wouldn't recommend enslaving yourself for 20-25 years to Kaiser for a $160,000 pension. ER Medicine gets much tougher to do as you age. However ER is one of the best specialties to custom design your work life. If you chain yourself to Kaiser's pension carrot then you've just blown up your flexibility to make your work life fit you.

    You're doing just fine the way you're going. You'll have the debt knocked out in 2 years. After the debt's gone, on your good ER independent contractor income, you can pay $100 K tax per year, spend $100 K per year, save $200 K per year for retirement. Switch to an independent 401k, do backdoor Roth IRAs, and get a taxable brokerage account. By the time you're fifty you should have at least 1 million saved. That's a good start. You need more to retire but you can let the million grow and keep adding to it at a work rate that's good for you. At that point your 50 year old self can decide if you don't want to do nights anymore or if you only want to work 12 shifts a month or only work lower volume or lower acuity ER's. And then can also walk away from a bad hospital where the CEO is torturing your medical director about Press Gainey or Utilization or Time in Department or Door to Doctor Time or whatever else is currently rolling doing hill. The best advice I can give you as an old 53 doc, is that NO ER Doctor should turn age 50 without lots of money already stashed so that they can walk away from crap ER jobs. There are plenty of crap ER jobs out there. You don't want to be the 60 year old ER Doctor (or heaven forbid-70 year old ER Doctor) who HAS to take them! And there are so many great ER jobs out there that you can take advantage of, IF you can afford to walk away from the bad ones.

    Bay Area houses are too expensive. Don't do that to yourself. RENT. Tell the wife (in a nice way of course) that if she wants a Bay Area house she can go to work and save for one while you save for retirement.

     

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  • Lithium
    replied
    That seems like a very small emergency fund for someone who's the sole breadwinner in a family of four.  I'm single and keep at least 20k in the bank.  Do you have a second tier of emergency funds?  Some people withdraw their Roth IRA contributions, but not sure you can do that (without a penalty) when it comes to a SEP-IRA.

    Leave a comment:


  • Hatton
    replied
    If you really want to buy a house at some point have you thought about moving to a lower cost area.  In my view being an ER doc really gives you the flexibility to move.  All your costs would decrease and maybe the income would increase per shift so you would not work as much.  You would be shocked at how cheap houses are even waterfront ones if you leave the coasts.

    Leave a comment:


  • smg
    replied
    Thank you all for your responses.

    Overall, I am not trusting of financial advisers.  I hired a company last year to do my taxes to see if I could save money.  I also did my own taxes that year too as a comparison.  The company over calculated my tax by $4,000!  I did my taxes on TurboTax an it got it right.  I am not going to use that company again.

    Another question:  I do have about $10K in the bank account for emergencies, I think this is a sensible to thing to do.  I currently do NOT carry disability insurance and I know I need to do it.  It is just so bloody expensive.  Plus that is another thing I need to do a lot of research on.

    Someone discussed above about making snowball payments for debt.  That is a great idea, and I was unwittingly already doing that.  I found a great calculator online at http://www.whatsthecost.com/snowball.aspx?country=us that allows you to put all your debts in and tells you about the snowball method of paying them off.  I have 33 more months to go!  *ugh*

    There was something else I was going to ask, but I can't remember now.

    Leave a comment:


  • PhysicianOnFIRE
    replied
    You're doing amazingly well. Living and working like a resident. Your expenses are remarkably low for where you live. Subtract the rent, and you're spending less than my frugal physician family.

    To answer your questions as best I can:

    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?

    In that market, you might be better off renting indefinitely. The transaction costs for a million dollar property, along with the taxes, maintenance, etc... are extraordinarily expensive. It's OK to be a renter for life. At any rate, I would continue to work on debt and reevaluate the situation when you're debt free. You should be able to build up funds pretty quickly for a downpayment if you decide to go that route.

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

    I am a fan of 529 funds, but you've got to have money left over to contribute to them. You won't have that for awhile. Encourage state schools; you've got some good ones out there, and pay as you go.

    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?

    I wouldn't necessarily count on a pension being the same twenty to twenty-five years from now. With the salary you're making currently, you can create your own pension. I would guess you'd take a pretty big pay cut to work for Kaiser. Additionally, I wouldn't count on you wanting to work until you are in your early to mid-sixties. Those are golden handcuffs I'd rather not be wearing.

    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?

    Go for it. You can knock those off in a few months.

    Great job and good luck!

    -PoF

     

    Leave a comment:


  • jfoxcpacfp
    replied
    If you want to continue to DIY financial planning, read The One Page Financial Plan and begin implementing immediately. By your own admission, you're already working too much, so perhaps your wife could handle the planning for your family. However, I strongly recommend you at least schedule a couple of free initial consults with fee-only CFPs to see what they can offer. You only have an hour or so of time to lose and could gain more than you realize by hiring a professional. You may be just as well off by DIY, but how will you know without finding out more?

    There are no scholarships for retirement. Retirement (and a financial plan) before college savings. If you have no employees (doubtful at that income level) move to a SOLO-401k so you can also add a backdoor Roth. Hire your wife part-time so that she can begin saving and reduce your taxable income. You have other options besides Kaiser - don't let the tail wag the dog.

    I wish you well - you're doing a great job on the debt, btw. And I think loving a 4-y.o. Mazda is pretty harmless in the grand scheme of things.

    Leave a comment:


  • huruta
    replied
    Have you read the White Coat Investor's book? It really helped us prioritize within our own value setting how we wanted to proceed with our debt. We started out with 250k in student loans, a few credit cards and a car loan (-300k net worth). Since end of residency (2009) we've paid off credit cards/car loan, reduced student debt by 100k, bought a house in Seattle and got lucky (it's appreciated 50%), and now have a very healthy retirement (putting in 120k / year). We also have saved a lot beyond retirement. We could pay off the remaining student loans (@3.75% interest) but would rather do other things with our money at the moment. His book was an incredible help, and so is his blog so you are definitely in the right place to be moving forward financially! You can be your own master. No one cares as much about your finances as you. We never met with a financial advisor and have been pleased with our own work with WCI's guidance. But there are many ways to skin a cat...

    Leave a comment:


  • conniebird
    replied
    I trained in CA so I am familiar with Kaiser - ppl stay there for the pension. I personally couldn't work there but for EM it probably doesn't matter as much. For my field, I would be extremely limited in what I would be able to do and my scope of practice.

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  • conniebird
    replied
    Admire your student loan payments - I def have not been as productive.

    I hope you have occupation specific disability insurance, life insurance, etc since you're the single earner.

    Living in CA is tough..bay area....toughest. I live in NYC and I can't afford to buy a "home" (apt) here and I'm derm and my spouse makes a great salary too...best of luck.

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