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Hello to all, I've been reading the blog since its inception (right before I started medical school). I am now in my intern year and hoping to gain some wisdom from the community (especially Dr. Dahle). I will give my financial history first to frame the context of my question. My finances are fairly different from the average intern and I do not present any of the following to boast...I am trying to make the most informed decision I can. As far as liabilities go, I have about 160k in med school debt at an average of 6.6% (which I am currently in the process of trying to switch to REPAYE). We have no other debt other than medical school. For assets, I have real estate investments that return anywhere from 10-18% per year, giving me a nice 20-35k cushion to my resident salary. I have about 95k of cash that is invested fairly conservatively and has returned anywhere from 3-12%. I've got about 13k in checking (have to pay hospital bills for birth of first child). Everyone is probably asking why I have cash that invested in vehicles that have such a fluctuating rate of return: this is because I intermittently have real estate opportunities that have been historically great investments. This is also why I have chosen to not pay off my student loans (basically, I know that I can achieve a significantly better return than the 6% I owe on the loans, which will hopefully be even lower after REPAYE). Other that this, I also have some intellectual property that may or may not take off during residency. Finally, there is interest from a buyer in my largest real estate holding that, if successful, would more than triple the investment that I have in the property (I would obviously lose the 20-35k/year until I could re-invest...which I would pursue aggressively).
I am in a very well-paying transitional year with excellent benefits. I matched into dermatology but my residency pay and benefits will be taking a significant hit to the tune of about 20k/year (when everything is totaled up; I am not referring to just raw salary). My health insurance costs alone go from $187/month with a $2,000 deductible with amazing coverage to $650/month with a $10,000 deductible. I have fairly good job prospects post residency. Assuming that dermatology does not get completely obliterated in terms of compensation before I finish, I anticipate being debt free and fairly close to financial independence within 10 years of finishing residency.
Now, for the wrinkle. I am heavily considering joining the Reserves while I am in residency. I was almost certain that I was going to do the military HPSP scholarship when I decided to go to medical school because it was inconceivable to me to go into the amount of debt that many medical schools require. Fortunately, I got into what was once one of the cheapest state medical schools in the country and have a fairly low debt level and had an unrestricted specialty choice (they did raise tuition fairly significantly every year I was there). I have no issues with military service and several other physicians in my extended family are or have served in the military. Many people tell me that it is financial craziness to join the reserves, but I am not so sure. Here is my reasoning: time value of money. I have had success early in life by not delaying making money. By joining the Reserves, I would completely nullify the pay cut I take when I start derm. That would free up almost all of my residual income from my real estate investments, allowing me to grow these profitable endeavors. Furthermore, it would also likely give me the flexibility to pursue some of the stock market activities I had engaged in during undergrad which is how I generated my initial reserve of cash. I think that there is actually a decent chance that I could grow my investments by at least the size of my outstanding medical school debt. Furthermore, the benefits offered by the military would allow me to lock down my health, disability, and life insurance situations in the most favorable way possible and would decrease that background worry that all new fathers feel. I have no issues with drilling one weekend a month when I finish or serving two weeks per year. A three month deployment would obviously not be the most favorable thing for a family man such as myself, but I think that the benefits that would be realized during residency would outweigh both the lost income and the lost time away from family. Another benefit to the additional income from the Reserves during derm residency is that it would allow us to live within walking distance to where I will spend almost all of my time in clinic. This is huge for me because if I had to drive, I would spend a lot of time in traffic and get home after my child went to bed. So, bottom line, is this a crazy thought to join the Reserves? My only worry is that I am underestimating what life in the Reserves would entail. I would love feedback from the community, particularly those who have served in the military. Many thanks in advance!
I am in a very well-paying transitional year with excellent benefits. I matched into dermatology but my residency pay and benefits will be taking a significant hit to the tune of about 20k/year (when everything is totaled up; I am not referring to just raw salary). My health insurance costs alone go from $187/month with a $2,000 deductible with amazing coverage to $650/month with a $10,000 deductible. I have fairly good job prospects post residency. Assuming that dermatology does not get completely obliterated in terms of compensation before I finish, I anticipate being debt free and fairly close to financial independence within 10 years of finishing residency.
Now, for the wrinkle. I am heavily considering joining the Reserves while I am in residency. I was almost certain that I was going to do the military HPSP scholarship when I decided to go to medical school because it was inconceivable to me to go into the amount of debt that many medical schools require. Fortunately, I got into what was once one of the cheapest state medical schools in the country and have a fairly low debt level and had an unrestricted specialty choice (they did raise tuition fairly significantly every year I was there). I have no issues with military service and several other physicians in my extended family are or have served in the military. Many people tell me that it is financial craziness to join the reserves, but I am not so sure. Here is my reasoning: time value of money. I have had success early in life by not delaying making money. By joining the Reserves, I would completely nullify the pay cut I take when I start derm. That would free up almost all of my residual income from my real estate investments, allowing me to grow these profitable endeavors. Furthermore, it would also likely give me the flexibility to pursue some of the stock market activities I had engaged in during undergrad which is how I generated my initial reserve of cash. I think that there is actually a decent chance that I could grow my investments by at least the size of my outstanding medical school debt. Furthermore, the benefits offered by the military would allow me to lock down my health, disability, and life insurance situations in the most favorable way possible and would decrease that background worry that all new fathers feel. I have no issues with drilling one weekend a month when I finish or serving two weeks per year. A three month deployment would obviously not be the most favorable thing for a family man such as myself, but I think that the benefits that would be realized during residency would outweigh both the lost income and the lost time away from family. Another benefit to the additional income from the Reserves during derm residency is that it would allow us to live within walking distance to where I will spend almost all of my time in clinic. This is huge for me because if I had to drive, I would spend a lot of time in traffic and get home after my child went to bed. So, bottom line, is this a crazy thought to join the Reserves? My only worry is that I am underestimating what life in the Reserves would entail. I would love feedback from the community, particularly those who have served in the military. Many thanks in advance!
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