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  • Am I morally obligated to help my family financially?

    Below the dotted line I have attached a very lengthy background story that may not be necessary for the direct questions listed immediately below. Writing out the long story and sharing it is therapeutic for me, which is why I included it.

     

    The brief synopsis is that I come from a working class family and I have been very fortunate to become a physician. My wife and I are low maintenance and will live below our means even when I finish fellowship training in 6/2018. I feel a moral obligation to help my family financially because we will have a solid household income (~$400k) after I finish training. I anticipate being debt free before I finish fellowship. I fear that the guilt and my giving nature may negatively impact my financial well being longterm though.

     


    Financial questions:

    1. I do not have any children myself yet. My wife and I plan to have 1 or 2 (in the next 5 years). I would like to save for my niece (age 5) who is otherwise not going to have any realistic financial support from her parents for her college. For the 529 that I can step up for her, what happens if she does not go to college? Can I transfer her account to my children? Is it irresponsible to start saving for my niece before my own children?

    2. Given my parents do not have a substantial retirement account and they are just turning 60, I anticipate they will work until they die or become ill. In the event that they become ill and need long term care, how does one pay for the cost above and beyond what insurance pays for? Are there any accounts I start to protect for that possibility?

    3. Any advice on starting a non-profit would be nice. I would eventually (likely years from now) like to start a non-profit and dedicate it to my mother?

    4. Any advice on how to beat some sense into my brother and sister-in-law in terms them being financially irresponsible ?

    5. How do the more experienced/wise physicians "pay it forward"?


     

    =================================================================================================

     

    Family Background: I am from a working class family in a working class suburb of Baltimore. I am the first person in my family to go to college and obviously the first doctor in the family. My parents are two of the most hard working individuals one could meet. My dad worked two jobs to provide for the family and my mom cleaned houses despite requring multiple back surgeries in her childhood leaving her partially physically disabled. Despite their hard work, they made poor financial decisions (no savings, tens of thousands of dollars in credit card loans, no retirement, etc.). I have one brother who made multiple poor life decisions in his youth and early adulthood (dealing drugs, problems with the law, had his first child when he was 17 and the mom was 14). He has straightened out quite a bit and he has 2 kids with one on the way (son-17 and daughter-5). 

     

    My Background: The family background obviously left an indelible mark on me and affected my life choices. I always wanted to be successful and I recognized at a very young age that the people around me were not showing me the pathway toward true success. I saved all my birthday money, starved myself and saved my lunch money and I would sell sodas/candies in school for about 100% profit margin. I "invested" my money in CD accounts at that time when the interest rates were 7%. I share this anectdote to show that I am naturally very frugal and remain that way to this day. 

     

    I was fortunate enough to get a 3/4 scholarship to my undergrad (small liberal arts school no one has ever heard of) and I somehow got into my state medical school, University of Maryland, on the first try. I had two mentors who are the reason why I am where I am today. One, was my undergrad advisor who helped me realize my potential and not let my perceived "poor background" dissaude me from pursuing medicine as a career. The second was an oncologist who I seredipitously met who became my mentor allowing me to volunteer and even do paid work for him and he paid for my MCAT course! Without their guidance I may have turned to a more unscrupulous lifestyle that was surrounding me at that point in my life. 

     

    I struggled throughout the first two years of medical school and thankfully passed(barely) and did slightly above average on my USMLE step 1. I did great in the clinical years and matched into my first choice in residency in Neurology. After my graduation is where my financial journey begins.

     

    My finanicial situation: I am blessed to have met the most amazing woman who became my wife over 2 years ago. Not only is she beautiful and intelligent, but she is pretty financially saavy and we have the same goals in life finanically and otherwise. My wife was a year behind me, but she was in pharmacy school. She has no debt from her schooling because of scholarships, working during college/pharmacy school and her parents helping. She immigrated here from China when she was 8 and her parents sacrificed so much to pay for her education. 

     

    In 2013, I graduated from medical school and immediately made 2 very big financial decisions quite hastily. I financed a used car (1 year old Chevy Cruze- $16k over 7 years with $0 down $250 monthly payment) with low interest rate 1.9% and a "family discount" because my dad works for a car dealership and does financing. The other purchase was buying a condo. My total student loan burden was about $180k.

     

    My living situation in college and medical school was interesting. I had a 75+ year old roommate! The roommate was my grandfather and he took me in rent free after I was kicked out of my house because of a serious altercation I had with my brother. My cost of living was very low because it was a small house and my grandfather didn't make me pay for anything except my food/gas/car/insurance. I did not have the internet where I lived throughout college and medical school, so I had to either go to the local/school library, my gym (free wifi) or family/friends houses when I needed the internet. This situation was obviously not ideal for residency where I would need the internet to do work from home. My grandfather was not willing to let me install internet in his home. Therefore, I had to decide: rent or buy.

     

    Now, the decision that I made was not one I would advise anyone else to ever do in a million years. All parties involved took a huge gamble that thankfully has worked out. My wife and I, before we were even engaged, bought a condo together using her family funds to put 15% down and utilize the physician loan program. We got a 3 bed, 2 bath condo for $150k paying ~$800/month for mortgage and $200 HOA. 

     

    The first year: I started as an intern and adjusted to hours as a resident. My wife was still a student in her clinical year of pharmacy school so she had less time to do her PRN pharmacy tech job. Our household income at that time was ~$60k. We rented out a room to my friend for $400-500 to help with the finances. Unfortunately, in Feb 2014 our condo complex burned down. We were able to salvage most of our stuff because the damage to our place was more water and smoke damage because the fire started on the floor above us. We were displaced for about 14 months. We did not have a large coverage for living expenses from our insurance policy, so we had to live with our parents (she lived with her parents and I lived with mine) and we paid them rent. Paying our parents rent quickly burbed up (pun intended) our insurance funds (that was utilized quickly because we only got $11k). We lived with our parents rent free after that, but still had to pay our mortgage/HOA.

     

    The second year, PGY-2: I started my neurology training and was logging tons of hours. It was actually a blessing in disguise because my mom was taking care of me like I was a kid again. She would cook dinner, iron my dress clothes and help me out because I was working and on call so much. It was really great and allowed my wife and I to save as much as possible despite a tough set of circumstances. At the end of my PGY-2 year, my wife and I got married (we paid for it ourselves)  and  finally got back into our condo (without a roommate). During this year, my wife was in her 1 year residency program making about $44k bringing our household income up to about $90k.

     

    PGY-3 to now (PGY-5): My wife was now making "attending" pharmacist money as a clinical pharmacist making about $115k. She was also so wonderful that they actually started paying her at that salary after 7 months of her residency in order to retain her so we earned some more money unexpectedly. All the insurance claims had settled and my wife was making great money bringing our household income up to $170k. Since then, we have made a fair amount of big financial moves. My wife has maxed out her 403b with a 6% employer match (good ROI 17% annually at about $60k currently). We refinancied my loans after paying off some of the low hanging fruit. We refinanced half ($75k) into a variable loan through Sofi and the other half ($75k) into a fixed arm 5.5%  through DRB that allowed me to pay just $100 during my training. We paid off the variable loan first in about 1.5 years. We are now chunking away at the fixed loan (down to $55k) and we should have it paid off before I finish my fellowship 6/2018 (currently applying to refinance into a 5 year variable loan with the intention to pay it off in 1 year). The only retirement that I contribute to is a Roth IRA that I just started this year and will have to backdoor it next year. When I become an attending, I will be able to max out a 403b (4% employer match) and a 457 (no match) which will allow my wife and I to put away $55k in retirement a year.

     

    My moral conundrum: My wife and I have fortunately made smart decisions (and lucky ones) and are set up to do well. I have signed a contract for 8/2018 that conservatively will bring our household income to $420k. At the time I start my attending job we will not have any debt besides our mortgage. I am so proud of my wife and I and I am extremely thankful for all the blessings in our lives.

     

    However, I feel very guilty about my almost financial freedom at the age of 30. My parents are doing better financially, but they do not have saving for retirement and will likely be working until they die. My brother is doing well, but he and his wife are not well off financially (debt, kids and low income). I do notice some subtle differences in how my family treats my wife and me. I am extremely close with my family, but I feel like they are defensive about money issues now. The same is true for my friends I grew up with who are either uneducated making a great living doing trade jobs or are educated doing lower income but very noble professions (i.e. teacher). That stuff does not really make any difference to me. I love all my friends and I do not care how much money they make or their "status in society." I am a low maintence and down to earth guy. At some point I changed from being "Chris" to "the doctor." I do not ever bring up that I am a physician, but people who are close to me bring it up quite often to the point that it makes me a bit uncomfortable. 

     

    I am never going to forget where I came from and the people who provided the foundation upon which I became the man I am today. I want my friends and family to always be a part of my life irrespective of financial situations. I have a ton of anxiety about the next 5 years. My wife and I want to move away from the immediate area that I grew up in so that we can go to a neighborhood to raise our future children in a great public school district and immerse them in  a more diverse culture (my wife is Chinese and I am white so we want them to be exposed to their Chinese heritage and community). We want to move into a nice house ($600-800k). We want to continue our passion of traveling the world (I had never been on an airplane before meeting my wife and now I have been to 6 countries on 3 different continents!). We are going to accomplish our goals, but hopefully it doesn't alienate my loved ones.

     

    If you read this novel- thank you for your time!

  • #2

    I read the novel -- thanks for sharing so many details.  It's hard to do that.


    I think you know that you're posing some questions that no one else can answer for you.


    1) As long as you own the 529 account you can transfer it to anyone you want.  If you want to save for your niece go ahead.  If you want to save for your future kid,open an account for yourself and transfer it to your first kid when they are born.  You can transfer money from your nieces account to your kids whenever you want -- they belong to you, not her.


    2) There is long term care insurance, but I personally know nothing about it.  When individuals are financially destitute they are Medicaid eligible in some states (also Medicare if old enough) so they will get support from there.  However that may not be the place you want them to be.


    3) Will defer to others

     

    4) Beating them over the head won't help, it'll just make them resent you since you are already financially successful (unless you have a different relationship with them than most people have w/their siblings).  Perhaps talking to them about what you've read and learned from a specific sense (i.e. a couple articles or a really short book or a video or a blog or something), but if they aren't inclined to listen or learn, you can't force it on them.

     

    5) I am neither experienced nor wise, but I am planning on helping my own kids w/college (I had support from my family) and while my parents don't need me to pay for their retirement, they may need other types of support when they are older and in more ill health, and I hope to help them when that happens.  However paying it forward is done in a million ways.  It's not really paying back those who helped you, it's also helping those who could never repay you or hoping that when they can repay you, they actually choose to help the next person who can't pay.  That's mentorship, that's charity, that's religion, that's your profession, that's international health, that's so many things I can't even imagine them all.  

     

    Best of luck with the decisions.  I am looking forward to reading other responses.
    An alt-brown look at medicine, money, faith, & family
    www.RogueDadMD.com

    Comment


    • #3

      1) you can fund a 529 for your niece. If she never uses it, you can change the beneficiary to any relative of the initial beneficiary, including your own children. 


      2) Long term care insurance is expensive. To my observation, it will be cheaper to pay in-home care.   Your regard of your own parents will model for your own children how they will one day treat you. 


      3)  If you are supporting your parents, and niece, etc.   you will not have enough money to fund any impactful non-profit fund.


      Lastly, as you move into a higher SES, some of your relatives will develop walls of envy that they can not overcome. Others will not.  It's not you, it's them. 

      Comment


      • #4

        Congrats on your long and extended journey.  You have two mentors out there -- perhaps they would have some words of wisdom further to guide you.


        It's saying something that you have a desire to help your immediate family and progeny -- even ahead of your own future children.


        That said, you have to make you own bed first in order to help others.  ie: emergency fund, retirement funding.  Then plan out potential expense where both you and your wife agree.  Remember, there' s her side of the family too that may have potential needs.   


         


        Financial questions:

        0.   Save for EF and Tax advantaged accounts.

        1.  529 - Open for Unnamed Child 1 Jane Doe -  and start saving -- you can always use this fund for anyone in the next generation immediate family without penalties.  Given your niece is only age 5; you have 13 years to decide whether to help her out truly and in what amount without telling or your sibling anything.  

        2.  The most cost effective -- do what generations of folk have done -- bring them under your roof.  Modern variations -- Granny flats or duplex;  and nearby condo.  Hire immigrant help .  My parents have already stated this is their preferred modality - live-in Chinese immigrant able to cook their preferred meals and do housekeeping.  (they live in nearby condo to us).

        3.  Not seeing the benefit of this.  

        4.  No, not yet.  they haven't seen you be financially successful -- only responsible and achieving academic excellence.  A step would be sending a financial adviser and an accountant as a holiday gift.  

        5.  Honor your parents is my 'why' here

         

        Comment


        • #5
          1. I do not have any children myself yet. My wife and I plan to have 1 or 2 (in the next 5 years). I would like to save for my niece (age 5) who is otherwise not going to have any realistic financial support from her parents for her college. For the 529 that I can step up for her, what happens if she does not go to college? Can I transfer her account to my children? Is it irresponsible to start saving for my niece before my own children?

          2. Given my parents do not have a substantial retirement account and they are just turning 60, I anticipate they will work until they die or become ill. In the event that they become ill and need long term care, how does one pay for the cost above and beyond what insurance pays for? Are there any accounts I start to protect for that possibility?

          3. Any advice on starting a non-profit would be nice. I would eventually (likely years from now) like to start a non-profit and dedicate it to my mother?

          4. Any advice on how to beat some sense into my brother and sister-in-law in terms them being financially irresponsible ?

          5. How do the more experienced/wise physicians “pay it forward”?

          --------

          no people are not morally obligated to help others, even family.  however you feel morally obligated, so in your case the answer is yes.

           

          1.  you can transfer within generation with no penalty.  however, transferring from your niece to your own kid does not help you niece, which i think is the goal.  i would say you should just consider the money gifted to your niece or else acknowledge to yourself at least, that you are just using her as a tax shield to jumpstart spending on your future kids.  your savings and income seem like they would be adequate to help your niece substantially without affecting your ability to fund your own kids.  however, most fund their own kids first just in case.

           

          2.long term care is a delicate subject.  given that they are poor (as my parents are), they may be better off just getting help from the government if it comes to that.  are you asking for them, or are you asking because you are afraid of the potential impact on your financial plans (no judgment here)?

           

          3.  not time yet.  come back in ten years.

           

          4.  leave them alone.  it sounds like you already had a big fight with them.   they are living their own lives, not yours.

           

          5.  not time yet.  come back in ten years.

           

          Comment


          • #6

            Be prepared for your family members to envy you.  Even though both of my brothers are educated (engineer, lawyer) I have heard lots of envious snide comments over the years because I have made so much more money.  I helped one of my nieces by employing her in my office and paying her health insurance.   Another One of my nieces is currently in the hospital after a suicide attempt on Saturday that put her in the ICU.  She is 32 now so I really do not know what to do about that.  Family dynamics are tough.  I think you help them when you can but it is tough to fix problems other people create for themselves.

            Comment


            • #7

              I think I have recounted here many times of my philosophy of paying it forward by a generation.


              If your parents have substantially helped you either by providing aid for schooling or college or worked hard to provide you with food and shelter so that you can progress in life, helping them is what I would do. Same goes to helping your wife's parents who have sacrificed everything for her.


              I am not so sure about your brother and sister in law. I would let your niece finish her schooling and help her later on. Your future children come first. Also it might cause a little tension with your wife if you help your niece and not her niece or family members. Discuss all financial help with your wife openly before you do it.

              Comment


              • #8

                In regards to your niece, you may find the situation changes down the road.  I agree with all the comments above that a 529 is a great option, as you can change the beneficiary.  Meaning, you can open one now, and decide later if you will use it for your niece or for your child.  I would not tell your brother, sister-in-law, or niece about the 529 at this point.  I think helping with her college could be a good use of your money.  But there is a risk that your brother could start seeing you as a source of funds for his current needs if he knows you are willing to do this.  I would just quietly put money in a 529, then decide later how to use it. 

                Comment


                • #9

                  In short, yeah, you should be there for your family if they're truly in need, but no, you shouldn't fuel their bad habits and absolutely no, you shouldn't sacrifice your success and independence to do it.


                  You shouldn't be talking about your money situation with them.  You shouldn't try to go out of your way to hide things, but I wouldn't bust out the slideshow of fancy vacations whenever they come over.  Sure, they can use the google and figure out approximately what a pharmacist and a neurologist make, but they don't have to know the details of your employment, and they don't need to know what stage of the game you're at on your student loans, etc.


                  You're not going to fix any of your family's spending habits.  I wouldn't even bring it up unless they ask for help.  Buying them a copy of Rich Dad Poor Dad is only going to make you look like a snob.  To them, you have all the money in the world pouring in and can't relate to them at all.


                  Cross each bridge as you come to it.  The worst thing IMO is turn yourself into your family's checking account.  There should be no recurring obligations on your part, at least not until there is an end in sight.  If you want to put a little more money on top of medicare to help your mom be in a nicer home, sure.  But don't start paying her bills now.


                  You're still a fellow, hardly in the situation to be funding a 529 for your niece.  In 13 years when she goes to college and after scholarships and aid she gets, she still needs a little help to realize her dreams, she can ask Uncle Chris for a little help, and if you can swing it, help her out.  But committing to some huge financial outlay right now is a horrible move. #1) you have your own family and future children to worry about, #2) you have no idea what your future holds, you might be broke in 5 or 10 years, and #3) you're likely screwing her out of any need-based aid she might otherwise qualify for, and removing any incentive to work hard to qualify for merit based aid.  


                  You have to take care of yourself first.  Go watch one of those 30 for 30s on NFL players going broke.  Sure you probably have a longer career ahead of you, but you're not even making league minimum.  You start taking care of your mother, father, brother, niece right now, you'll never get anywhere yourself, and eventually it could even be ruinous if anything were to befall you.  Once you've added 2, 3, 4 adult dependents to your tally, you can kiss your financial freedom goodbye.   


                  Crixus probably said it best, in just a few words.  The clip was pretty good too.  They will eat you alive if you let them.  And they might even try to if you don't.

                  Comment


                  • #10

                    You cannot save them.   You can help them, but you can't save them from themselves.  Please don't forget.   


                    The best thing you can do is keep yourself financially strong so that when they need your help, you will be able to help.  Live lean.  Save a lot.  Invest.   


                    You received a combination of good genes in the form of intelligence and personality traits from what was available.   You had a background that allows you to tolerate adversity, and succeeded under difficult conditions.  You have confronted tragedy, and know what to do when it strikes.  "If you are going through ************************, keep going."  


                    You made good choices, worked hard, and took advantage of what you found along your path in life.  People saw the potential in you and pitched in to help.  You married a strong women with good values.  Good work, sir.   


                    For your efforts, you will be rewarded with a mixture of respect and unavoidable resentment from the people in your past.  Forgive what you can.  Because they are only human, after all.  


                    The advice above is good.  As for Crixis, a man must ask forgiveness also, but buried in his lack of tact is still an important consideration.  


                    If you give someone a pile of money, without the lifetime experience of accumulating, growing, and respecting it, and with a background of deprivation and poor financial education, they will likely squander it.  Also, savings may end up simply transferred to the government, or the healthcare financial machine if they become disabled or ill.  


                    You can help in other ways.  Housing or caretaker for ailing parents, a reliable car, paying some expenses, investing a little in a young person's future....  You will have the ability to provide this in the future as the need arises.    


                    A person's problems are their own to solve, it is unreasonable to make them your own, and unhelpful to attempt to take them upon yourself.  You have some degree of survivor guilt. 


                    Keep at it though, your journey is only beginning.    


                     


                     


                     


                     


                     


                     

                    Comment


                    • #11

                      You don't owe anyone anything ,IMO.


                      But obviously it will be difficult to see loved ones suffer too. As others have echoed - your nuclear family comes first - you made a vow to your wife, not your parents. 


                      Set boundaries NOW and tow the line, or else they will drag you down. You and your wife need to discuss how/if/when you wil help your family (what about hers?).


                      This post may help - https://missbonniemd.com/financially-ill-prepared-parents/

                      Comment


                      • #12

                        Others have already given good responses to your questions in the OP.  To respond to the thread title - Yes, you are morally obligated to help your family financially in my opinion.  Does that mean providing them with a lavish lifestyle?  Of course not.  However, if members of your family are struggling to meet basic needs, you should help them. 


                        There will always be a gray area about where to draw the line, but if there is not a moral obligation to help even your family when they are in need, then there isn't any morality at all.

                        Comment


                        • #13

                          I agree with the excellent comments above so I won't repeat them.  But, I'll say...be careful not to be taken advantage of.  Especially with your brother. You have a very kind, generous heart clearly, but even family members can take advantage of you.  You have to protect what you've worked so hard for first and foremost so that you actually are financially secure the rest of your life.  You and your wife and any children you have should come first.  Don't feel guilty that the rest of your family aren't living as well as you.  I'm sure they're very proud of you and very happy to see you be successful.  You can help them as you see fit, but again, be careful.


                          But CONGRATS!  You have done a great job and deserve it!    

                          Comment


                          • #14

                            Thank you all for the very helpful advice.


                            I needed this advice to realize that I need to take care of my immediate family (wife and future children) before I even consider providing help for my other family members. I think I needed absolution for wanting to be "selfish" and take care of myself first. I always tell the family members who stay at the bedside 72 hours non-stop that they must "take care of themselves before [they] can help [their] loved one." I guess I should heed my own advice. 


                            I also must thank you all for pointing out that my wife may not be cool with this. I think she would be on board with the 529 especially since we could change it over to our kids. It is worth noting that my wife is a product of the one child policy so we do not have to worry about any nieces/brothers/sisters. Her parents are the ones I take financial advice from because they are financially secure. They pay cash for everything (primary residence, investment rental property, cars, etc.) and have set themselves up to flourish in retirement because they lived well below their means for many years as immigrants. I'd be pissed if the roles were reversed and I married into a family that's troubles are all self created!


                            Summary of what I learned and my financial plan going forward (in order of importance):


                            1. Pay off remaining balance of student loans by the end of fellowship (6/2018)


                            2. Wife continue to max out 403b every year


                            3. Max out ROTH IRA for wife and me since this is the last year (2017) we will be eligible


                            4. Continue to keep $10k as an emergency fund


                            5. Max out 403b and 457 each year when starting my attending job


                            6. Backdoor Roth IRA for wife and me when I become an attending


                            7. Figure out what to do with our mortgage (we plan to keep the condo as a rental property but I am not sure whether it is smarter pay it off quickly or not)


                            8. Consider starting 529 for miscellaneous family member(s)


                            9. Only help out family financially if it is truly life/death or catastrophic. Do not reinforce their bad behavior and allow them to learn the hard way from their mistakes.


                             


                            Thank you all again. My favorite lines was "Go watch one of those 30 for 30s on NFL players going broke.  Sure you probably have a longer career ahead of you, but you’re not even making league minimum."

                            Comment


                            • #15


                              If you read this novel- thank you for your time!
                              Click to expand...



                              You typed a good deal, and all of your comments were how to spend money you don't yet have, and worrying about how to give it to everyone else but yourself. I'd typed an initial response, but it wasn't very kind, so I'll just agree with this:




                              You don’t owe anyone anything ,IMO.
                              Click to expand...



                              From your latest list, my thoughts:


                              #4 - potentially increase it. 


                              #7 carefully consider this one.


                              #8,9. This is a slippery slope. You might consider adopting the mantra "We have "student loans" - no one has to know when/if you've paid them back. 

                              Comment

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