help with saving for retirement; feel like i'm very behind!

[Hatton]

I read this thread and recognized some people that I know. Spending on high end purses is like throwing money into a tornado.

[IlliniGopher]

You have a very large shovel but that kind of spending is going to really hinder you. Also, I agree you're going to need low-mid 8 figures to sustain this lifestyle over time at retirement.

That said, the Hermes birkins do have a strong secondary market (like watches) but I have a feeling that the spending is comprehensive lifestyle and not exclusive to purses. It really needs to be cut back dramatically. Lifestyle creep is hard to fight, particularly if you're in a certain social circle and keeping up with the Joneses. But your future self will either thank or hate you based on the choices you make now.

As a comparison --- I am 37 and have a much smaller shovel. ~$650K student loans with wife (also physician) --- paid off 2019. Gross about $600-650K a year together. Save $184-200K a year in both pretax and posttax buckets. $1.5 mm saved, $1.2 house with $640K left. At this rate, I am trending $26 mm at 7% return. Life is super unpredictable so that can change (health issues, parents health, kids health, anything). As an aside, I don't live miserly -- cars $60K each and spend about $30K a year on travel. Like eating out. You should totally blow my numbers out of the water if you just buckle down.

[Hank]

I read this thread and recognized some people that I know. Spending on high end purses is like throwing money into a tornado.

An Hermès purse and some Hermès scarves is reasonable. Several Hermès purses is an expensive habit. Likewise, it’s OK to have some different shoes for different occasions. 50+ designer shoes you rarely wear is unreasonable. Replacing running shoes every 500 road miles or so is reasonable.

[omaralt]

Is the financed car yours of your wife's and what is it?

If yours I would consider selling it and buying a 30K Honda/Toyota/Subaru as part of the families journey to work together to save for the future and not overspend.

the financed car is mine; was my dream car (2022 bmw m4 manual). my wife drives a paid off mercedes SUV. like i said; i'm generally debt averse, but when the car arrived and i was about to pay for it, they mentioned the 0.9% financing so to me, it was a no brainer.

I just set up a $5k/weekly transfer to my fidelity account where i will start buying into ETFs. That brings my monthly investments to about $25k/month. I will try to increase as i can but i think that amount will suffice until we can get my wifes spending under control

for the record I think my wife deserves all this and more. She worked a miserable job while i was in dental school and residency to help pay for our living expenses. She then had 4 children for me and works hard in the home; so i have no problem spoiling her. My issue is that she doesn't know what she spends. When i tell her that she spent $15k last month she was blown away. A few years back we decided for her to have a budget of $4k/month. I made her her own bank account and simply transfer $4k/month there. However she still has our shared CC which she spends on like crazy. I'm not sure what the solution to that is, but i think shes starting to realize this is not sustainable. I will probably ask her to cancel her CC and have her use her debit card only for now and keep a CC on her for emergencies only.

Thanks again, i knew what needed to be done but needed a push. thanks

[JBME]

Do not pay off the car. Financially speaking, stupid move.

financially it doesn't make sense, especially with inflation. But why not go buy a $10m place with a 4% mortgage rate then? The math works doesn't it. There's a mental issue not addressed with getting rid of debt. Clearly the OP does know how to handle debt, I think, given what's been paid off over 10 years. But once it's paid off that doesn't mean you should start over again....borrow a bunch of money even if low interest and pay it off over 10 years. Especially on a depreciating asset. There needs to be a mentality shift here. Obviously we can debate this all day but I stick by pay off the car and you say don't. I think we understand each other's reason...your reason is financial and mine is mental. Up to OP to decide.

But I'm also concerned about the statement that the wife "invests" in purses and they have gone up in value while the market has been down a lot this year, and so they clearly should keep doing that....if they are going with that general belief in investing, they need to deleverage as much as possible in case catastrophe hits and there's job loss and/or the purses go down in value, etc. That means getting rid of all debt. I'm hoping though that the OP and wife realize short-term results don't mean the long-term results will be the same

[JBME]

the financed car is mine; was my dream car (2022 bmw m4 manual). my wife drives a paid off mercedes SUV. like i said; i'm generally debt averse, but when the car arrived and i was about to pay for it, they mentioned the 0.9% financing so to me, it was a no brainer.

I just set up a $5k/weekly transfer to my fidelity account where i will start buying into ETFs. That brings my monthly investments to about $25k/month. I will try to increase as i can but i think that amount will suffice until we can get my wifes spending under control

for the record I think my wife deserves all this and more. She worked a miserable job while i was in dental school and residency to help pay for our living expenses. She then had 4 children for me and works hard in the home; so i have no problem spoiling her. My issue is that she doesn't know what she spends. When i tell her that she spent $15k last month she was blown away. A few years back we decided for her to have a budget of $4k/month. I made her her own bank account and simply transfer $4k/month there. However she still has our shared CC which she spends on like crazy. I'm not sure what the solution to that is, but i think shes starting to realize this is not sustainable. I will probably ask her to cancel her CC and have her use her debit card only for now and keep a CC on her for emergencies only.

Thanks again, i knew what needed to be done but needed a push. thanks

just be careful. For many people, when you increase your spending because you (or the spouse) deserves it that becomes your new baseline. If one spends $15k/month, after a few months that is the new baseline and what they are used to. Eventually the rush wears off but you have to spend $15k just to feel like you're getting level. So when you next think you deserve something, you spend $17,500. Now that's your new baseline.

This is why I said you should give her a long runway....aim to get the spending to $10k/month for a few months, then $5k. Might even need to do it in smaller increments. Come up with a long term goal of what is acceptable each month. For you guys I'm sure anything between $1k-$5k/month is reasonable though I'm sure most here would say $5k/month is way too much. It sounds like the wife is open to really understanding the spending and sitting with numbers and that is great. Make a plan together, hold each other accountable without arguing by knowing what your ultimate goal is, and execute the plan

[IlliniGopher]

the financed car is mine; was my dream car (2022 bmw m4 manual). my wife drives a paid off mercedes SUV. like i said; i'm generally debt averse, but when the car arrived and i was about to pay for it, they mentioned the 0.9% financing so to me, it was a no brainer.

I just set up a $5k/weekly transfer to my fidelity account where i will start buying into ETFs. That brings my monthly investments to about $25k/month. I will try to increase as i can but i think that amount will suffice until we can get my wifes spending under control

for the record I think my wife deserves all this and more. She worked a miserable job while i was in dental school and residency to help pay for our living expenses. She then had 4 children for me and works hard in the home; so i have no problem spoiling her. My issue is that she doesn't know what she spends. When i tell her that she spent $15k last month she was blown away. A few years back we decided for her to have a budget of $4k/month. I made her her own bank account and simply transfer $4k/month there. However she still has our shared CC which she spends on like crazy. I'm not sure what the solution to that is, but i think shes starting to realize this is not sustainable. I will probably ask her to cancel her CC and have her use her debit card only for now and keep a CC on her for emergencies only.

Thanks again, i knew what needed to be done but needed a push. thanks

Not trying to be a jerk but it will sound that way. If she has been spending this way for "a few years" then it's way beyond deserving a reward (which she totally deserves because she has put a lot of hard work into the family too) and has now evolved into pathologic spending. There has to be some level of self-awareness and responsibility. She's (presumably) in her late 30s too and not just a college student learning what credit cards and beginning finances are.

Saving $25K a month is great and super impressive and happy to see you're paying yourselves first. Your future selves will thank you. However, I am sure the issue of spending will come up again because it will be hard to cut back that dramatically, but if your argument is that it's hurting your futures selves/family maybe that will be a salient enough point. Also, I agree with JBME's point of having a longer runway because she really has to be bought in (or else it seeds resentment).

[omaralt]

financially it doesn't make sense, especially with inflation. But why not go buy a $10m place with a 4% mortgage rate then? The math works doesn't it. There's a mental issue not addressed with getting rid of debt. Clearly the OP does know how to handle debt, I think, given what's been paid off over 10 years. But once it's paid off that doesn't mean you should start over again....borrow a bunch of money even if low interest and pay it off over 10 years. Especially on a depreciating asset. There needs to be a mentality shift here. Obviously we can debate this all day but I stick by pay off the car and you say don't. I think we understand each other's reason...your reason is financial and mine is mental. Up to OP to decide.

But I'm also concerned about the statement that the wife "invests" in purses and they have gone up in value while the market has been down a lot this year, and so they clearly should keep doing that....if they are going with that general belief in investing, they need to deleverage as much as possible in case catastrophe hits and there's job loss and/or the purses go down in value, etc. That means getting rid of all debt. I'm hoping though that the OP and wife realize short-term results don't mean the long-term results will be the same

the investing in purses was a joke. I tell her that i'm getting destroyed in the stock market and she tells me the $15k purse she bought is selling for $25k on the secondary market. I never knew how difficult it is to buy those things new. But it was said in jest and we're not investing in purses.

[fatlittlepig]

the financed car is mine; was my dream car (2022 bmw m4 manual). my wife drives a paid off mercedes SUV. like i said; i'm generally debt averse, but when the car arrived and i was about to pay for it, they mentioned the 0.9% financing so to me, it was a no brainer.

I just set up a $5k/weekly transfer to my fidelity account where i will start buying into ETFs. That brings my monthly investments to about $25k/month. I will try to increase as i can but i think that amount will suffice until we can get my wifes spending under control

for the record I think my wife deserves all this and more. She worked a miserable job while i was in dental school and residency to help pay for our living expenses. She then had 4 children for me and works hard in the home; so i have no problem spoiling her. My issue is that she doesn't know what she spends. When i tell her that she spent $15k last month she was blown away. A few years back we decided for her to have a budget of $4k/month. I made her her own bank account and simply transfer $4k/month there. However she still has our shared CC which she spends on like crazy. I'm not sure what the solution to that is, but i think shes starting to realize this is not sustainable. I will probably ask her to cancel her CC and have her use her debit card only for now and keep a CC on her for emergencies only.

Thanks again, i knew what needed to be done but needed a push. thanks

she can buy me a new watch

[omaralt]

Not trying to be a jerk but it will sound that way. If she has been spending this way for "a few years" then it's way beyond deserving a reward (which she totally deserves because she has put a lot of hard work into the family too) and has now evolved into pathologic spending. There has to be some level of self-awareness and responsibility. She's (presumably) in her late 30s too and not just a college student learning what credit cards and beginning finances are.

Saving $25K a month is great and super impressive and happy to see you're paying yourselves first. Your future selves will thank you. However, I am sure the issue of spending will come up again because it will be hard to cut back that dramatically, but if your argument is that it's hurting your futures selves/family maybe that will be a salient enough point.

i like the long runway. We had a long talk last night before i posted this. She is firmly on board this time; i think the reason is because i'm showing her all the numbers and having her directly involved.

I also am worried that my $1million income is not something i can do long term. I work like a dog and my body can only hold out for so long. I'm the only dentist with 3 hygienists and 3 assistants. I've gotten offers from dental DSOs to buy my office for close to $2million and i found myself strongly considering it. But i would rather simply start to slow down in another ten years and work 2-3 half days while bringing in $300-400k/year. So I really want to get our spending down and savings up in preparation for a lower income. I will probably look into getting an associate dentist to come and help me as well which would lower my income as i slow down.

[JBME]

honestly from how you are responding and what you're writing I certainly feel you guys can do it and you won't have to work like a dog for 10-15 years.

This is my key bit for your success: Make a plan together, hold each other accountable without arguing by knowing what your ultimate goal is, and execute the plan. I really think you and the family can do it

omaralt I just read this today and this is really relevant to you and your spouse: https://financialsuccessmd.com/finan...gratification/

[bovie]

financially it doesn't make sense, especially with inflation. But why not go buy a $10m place with a 4% mortgage rate then? The math works doesn't it. There's a mental issue not addressed with getting rid of debt. Clearly the OP does know how to handle debt, I think, given what's been paid off over 10 years. But once it's paid off that doesn't mean you should start over again....borrow a bunch of money even if low interest and pay it off over 10 years. Especially on a depreciating asset. There needs to be a mentality shift here. Obviously we can debate this all day but I stick by pay off the car and you say don't. I think we understand each other's reason...your reason is financial and mine is mental. Up to OP to decide.

But I'm also concerned about the statement that the wife "invests" in purses and they have gone up in value while the market has been down a lot this year, and so they clearly should keep doing that....if they are going with that general belief in investing, they need to deleverage as much as possible in case catastrophe hits and there's job loss and/or the purses go down in value, etc. That means getting rid of all debt. I'm hoping though that the OP and wife realize short-term results don't mean the long-term results will be the same

Well 4% is very different than 0.9%, for one, and it costs a little more to service $10M than $74k. Those would be my main reasons.

But bring down that interest rate and principal on a generally appreciating asset like a home, and it would actually start to make sense at some point assuming you can service it without impinging on other responsibilities.

Hypotheticals aside, I completely agree that there is a mental/emotional aspect to this, which I am intentionally ignoring in favor of the mathematical. Because to me, it is mathematical and nothing more.

And the only reason I pointed out the car issue was because it was the very first thing that you strongly suggested to rectify, and to me it actually seemed like one of the few positives to the situation besides the income and lack of student loans.

Certainly better than the spending by the Mrs.

But I think that the car note is probably at the bottom of the issue list, and I’m sure you’d be inclined to agree. Small taters here.

[Sampter]

She should sell one of her purses for 25K and you should sell your BMW.

Half joking, half not.

[IlliniGopher]

i like the long runway. We had a long talk last night before i posted this. She is firmly on board this time; i think the reason is because i'm showing her all the numbers and having her directly involved.

I also am worried that my $1million income is not something i can do long term. I work like a dog and my body can only hold out for so long. I'm the only dentist with 3 hygienists and 3 assistants. I've gotten offers from dental DSOs to buy my office for close to $2million and i found myself strongly considering it. But i would rather simply start to slow down in another ten years and work 2-3 half days while bringing in $300-400k/year. So I really want to get our spending down and savings up in preparation for a lower income. I will probably look into getting an associate dentist to come and help me as well which would lower my income as i slow down.

Yea I love that response. I also think you'll be able to do it. The nice thing is that you have a lot of money from the office that you can cash out on in the future. For me, I am a salaried cog in the wheel. So you're in SUCH great shape. But I agree you're going to want to slow down because the kids are only young once.

For me, my struggle is I grew up poor so I am constantly on this hedonic treadmill. Pay off my loans, pay off wife's loans, hit my first million, buy my dream home. Always looking for that next dopamine hit. So I tell my wife (who is now 0.5 FTE and loving it the last two years) that I will keep working hard until X or Y is achieved but I can't bring myself to just chill. My next target is paying off my house but it's 2.625% for 20 years and it makes ZERO mathematical sense to do it but it's almost like my last milestone (although I am sure I will create more).

[8arclay]

Similar situation here with 7 figure income, and a wife who supported us while I went through training. Quite different on the spending though, as we give each $500/mo in no-questions-asked allowance lol (I acknowledge not for everyone)