Announcement

Collapse
No announcement yet.

New attending, IM RICH!

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • #31
    I remember making a similar post to OP shortly after I had graduated fellowship and started my real job. We bought a house that needed to be furnished (our stuff from residency and fellowship was trashed after moving across country for medical school, then to residency, then to fellowship and wouldn’t have survived another move), my 14 year old car would have cost more to ship across the country than it was worth so I needed a new vehicle, and now we had student loan payments, disability and life insurance, a mortgage payment, etc. And all that after 40-45% of my gross income was already spent towards taxes and tithing. Then I had to save for retirement in earnest, since I’d only done Roths for wife and I, plus a minuscule amount in 403b in residency to get the full match.

    It didn’t feel like I was making any progress, as the remaining money was being diverted to so many places. Now looking back 7+ years later the car payment is gone, the student loans are paid off, the mortgage balance is half of the original amount, and I have seven figures (for another few days anyway, depending on how this market correction goes 😬) in retirement accounts, plus mid to high 5 figures in each kids’ 529 accounts. The key is persistence and having a plan for each dollar, particularly for the important things like investing and loans. I feel less guilty now spending money on things that bring me happiness because my aggressive goals are being met first.

    I think the mistake I made at first was not realizing how much of my paychecks were going to disappear to taxes before I even got to use any of the money. Then when you have a $3000 mortgage payment and a $1000 car payment and there’s not much left. Hence the importance of living like a resident for the first 4-5 years, at least, to get everything in order.

    Comment


    • #32
      Originally posted by MaxPower View Post
      I remember making a similar post to OP shortly after I had graduated fellowship and started my real job. We bought a house that needed to be furnished (our stuff from residency and fellowship was trashed after moving across country for medical school, then to residency, then to fellowship and wouldn’t have survived another move), my 14 year old car would have cost more to ship across the country than it was worth so I needed a new vehicle, and now we had student loan payments, disability and life insurance, a mortgage payment, etc. And all that after 40-45% of my gross income was already spent towards taxes and tithing. Then I had to save for retirement in earnest, since I’d only done Roths for wife and I, plus a minuscule amount in 403b in residency to get the full match.

      It didn’t feel like I was making any progress, as the remaining money was being diverted to so many places. Now looking back 7+ years later the car payment is gone, the student loans are paid off, the mortgage balance is half of the original amount, and I have seven figures (for another few days anyway, depending on how this market correction goes 😬) in retirement accounts, plus mid to high 5 figures in each kids’ 529 accounts. The key is persistence and having a plan for each dollar, particularly for the important things like investing and loans. I feel less guilty now spending money on things that bring me happiness because my aggressive goals are being met first.

      I think the mistake I made at first was not realizing how much of my paychecks were going to disappear to taxes before I even got to use any of the money. Then when you have a $3000 mortgage payment and a $1000 car payment and there’s not much left. Hence the importance of living like a resident for the first 4-5 years, at least, to get everything in order.
      Being a Bone Doc helped! But I agree it would have been easy to have just spent all of it along the way. A few years of "hardship" makes a huge difference!

      Comment


      • #33
        You are rich. Three things to remind yourself of:

        Your savings of $100k equals 1.5x of Median household income of $67,521 in 2020

        At every income point people say they would feel rich if they made 50% more

        You are comparing what you have left after buying the things money provides like a decent living situation and financial security instead of the opportunity to buy that stuff in the first place.

        Your problem is a mindset problem, not a lack of wealth problem

        Comment


        • #34
          Originally posted by Lordosis View Post

          Being a Bone Doc helped! But I agree it would have been easy to have just spent all of it along the way. A few years of "hardship" makes a huge difference!
          Yeah, a bigger than typical shovel helped, although I made the least my first couple of years out than I do now. I had also just discovered WCI around the time I’d already made a couple of dumb decisions—at the time, anyway; my house is now worth 3 times what it cost in 2014–and buying a brand new top of the line SUV.

          The biggest key is prioritizing the big stuff first—retirement, fixed expenses like house and food, and loans, and then making do with less than what is left. And now old habits die hard.

          Comment


          • #35
            Originally posted by TheDangerZone View Post

            400k in Coastal California isn’t going to get you much. Are you saying the hypothetical physician making 200k should find something that costs a lot less or a lot more?
            Well, I guess just that when things on their face seem off i think its important to reconsider the rule of thumb. Now if we're talking to physicians in lower cost of living areas, where 2x a physician income gets you a perfectly great large enough house its a good rule. But i think telling people in some of the highest cost of living areas that they should stick to the same rule as someone in a lower cost living area, it makes less sense. obviously math is math and there are other sacrifices, but i do feel its reasonable to spend more than what others do in different parts of the country.

            Also how coastal are we talking? Honestly imo the majority of physicians on average do not earn high enough incomes to justify actually living in a beach city. I realize that a lot of the LCOL members scoff here at california in general, but as even being 20+ minutes from the beach things get so much cheaper and theyre still very nice. Still expensive of course, but significantly more doable. Mainly if you are looking for a doctor house and not a beach bungalow.

            Comment


            • #36
              Originally posted by Turf Doc View Post

              Well, I guess just that when things on their face seem off i think its important to reconsider the rule of thumb. Now if we're talking to physicians in lower cost of living areas, where 2x a physician income gets you a perfectly great large enough house its a good rule. But i think telling people in some of the highest cost of living areas that they should stick to the same rule as someone in a lower cost living area, it makes less sense. obviously math is math and there are other sacrifices, but i do feel its reasonable to spend more than what others do in different parts of the country.

              Also how coastal are we talking? Honestly imo the majority of physicians on average do not earn high enough incomes to justify actually living in a beach city. I realize that a lot of the LCOL members scoff here at california in general, but as even being 20+ minutes from the beach things get so much cheaper and theyre still very nice. Still expensive of course, but significantly more doable. Mainly if you are looking for a doctor house and not a beach bungalow.
              I agree with you 100% that math is math. However, it actually takes some work. Multiple offers in multiple states in multiple cites is tons of work.
              Compensation : How much are you going to make?
              Gross
              Pretax tax retirement
              Other pretax deductions
              Taxes FIT
              Taxes State and local
              Net Pay
              Roth
              Post tax Retirement
              Housing (rent of own)
              Transportation
              Food
              Loans
              Insurance
              Phone/Internet
              Living expenses
              Travel/Vacation
              What is left?

              There are plenty of tools on the internet for taxes, housing, cost of living. Use them. The problem is taxes are basically state and housing, transportation and food are local . Run the top level comparisons. But when you get to a specific job, there is only so much to cut. Once you take housing much more than 20%-30%, it is gonna hurt. Housing can blow you up. Don't guess, run the numbers for the specific city. VHCOL is primarily housing, but everything costs more.That is not a reason to ignore the numbers. The comp can actually be equal to or less. Double hit, income and expenses. Typically to move the housing down requires a big commute time as well. This is possible any location, not just California. I really don't care what choices are made. Depends on the location specifically. It is just math as you say. It actually disappoints me to say that $400k is middle class to lower class in some locations. A tough pill to swallow. $400k in San Francisco is about $183k in Indianapolis for the same standard of living. Who knows? Price them yourself when you get to the job search. Probably bigger than you think.

              https://smartasset.com/mortgage/cost...tor#HLwT5e8RK4
              https://swz.salary.com/CostOfLivingW...oll_start.aspx
              https://www.nerdwallet.com/cost-of-l...-washington-dc



              Comment

              Working...
              X