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  • Struggling to find peace with my finances...

    I am a struggling physician, but not in the usual sense of the word struggling.  I am struggling to have comfort with my financial success.

    For much of my career I was a typical physician, annual income in the 200's for the first decade and in the 300's for the second decade.  Then I got involved with creating a startup and my income increased, actually increased quite a lot, like moving over with an extra comma in there.

    We have expanded our spending to a degree to go along with this new level of income, but that hasn't been an easy adjustment for me.  In the past we lived a nice life but we always balanced relatively careful spending with saving and investing.  These days we are living the extreme high life, spending roughly 300k per year, but that ends up being only about 15% of current gross income.  We live in a high tax state and pay a bit over 40% of income in taxes, and we invest a similar amount.  Right now we have a fairly impressive, steadily growing net worth for a physician family of around 18 million.

    The extreme success somehow makes me uncomfortable.  We have increased our charitable giving, and we have increased our spending on travel, gifts, housing, entertainment, household help and more.  I should feel financially quite secure, but the high annual spend nevertheless still makes me very uncomfortable.  My spouse enjoys the lifestyle, but I have not found peace with spending so much each year.  I carry a somewhat irrational fear that the financial success could evaporate at any moment and we would be stuck in an expensive house with all the surrounding accoutrements that would take time to unwind.

    So much of finance is psychological and I am struggling with my irrational fears.  Has anyone out there dealt with these types of feelings?  Does anyone have any pearls of wisdom to offer?  Are there any psychiatrists or psychologists hanging out on this forum?  It feels unsettling to have achieved this level of success and yet not feel at peace.

  • #2




    I am a struggling physician, but not in the usual sense of the word struggling.  I am struggling to have comfort with my financial success.

    For much of my career I was a typical physician, annual income in the 200’s for the first decade and in the 300’s for the second decade.  Then I got involved with creating a startup and my income increased, actually increased quite a lot, like moving over with an extra comma in there.

    We have expanded our spending to a degree to go along with this new level of income, but that hasn’t been an easy adjustment for me.  In the past we lived a nice life but we always balanced relatively careful spending with saving and investing.  These days we are living the extreme high life, spending roughly 300k per year, but that ends up being only about 15% of current gross income.  We live in a high tax state and pay a bit over 40% of income in taxes, and we invest a similar amount.  Right now we have a fairly impressive, steadily growing net worth for a physician family of around 18 million.

    The extreme success somehow makes me uncomfortable.  We have increased our charitable giving, and we have increased our spending on travel, gifts, housing, entertainment, household help and more.  I should feel financially quite secure, but the high annual spend nevertheless still makes me very uncomfortable.  My spouse enjoys the lifestyle, but I have not found peace with spending so much each year.  I carry a somewhat irrational fear that the financial success could evaporate at any moment and we would be stuck in an expensive house with all the surrounding accoutrements that would take time to unwind.

    So much of finance is psychological and I am struggling with my irrational fears.  Has anyone out there dealt with these types of feelings?  Does anyone have any pearls of wisdom to offer?  Are there any psychiatrists or psychologists hanging out on this forum?  It feels unsettling to have achieved this level of success and yet not feel at peace.
    Click to expand...


    Congrats! Maybe you are just getting used to it? I think any decent therapist should be able to help you though.

    Comment


    • #3
      First of all congratulations, thats awesome. However, it sucks to not feel at peace.

       

      Its a great start to address why you may be feeling this way, though from your description it doesnt seem you're over leveraged in any particular way unless Im reading it wrong or its all tied up in stock/options from the start up.

      So, I think I would start with addressing your fears head on. If you're afraid of losing everything, I'd just run a stress test. Lets say all income stopped yesterday, what are the immediate problems? Is the house paid off, are you sufficiently diversified that primary house and company or other illiquid assets dont make up the vast majority of your net worth?

      To support your spending for 30 years with no more contributions (and likely ending with a balance more than 2x what you started with), a 5% return, 4% withdrawal rate you'd need 7.5M in the portfolio. Thats not too much of your net worth though you may not have it in liquid diversified assets. If I were you with these concerns, I'd probably try to get around 10M in traditional equities/bonds portfolio so that you feel much more secure.

      Comment


      • #4
        This is where a high wealth financial advisor probably can come in handy and bet there's an industry out there that caters to your situation.

        On the philanthropy side of things -- think back and over the years in situations where you wished a helping hand would have been nice -- perhaps setting up a foundation that targets to remedy some of those situations.   Doesn't have to be dramatic either -- could be as mundane as setting up doggie bag stations in the neighborhood.

        Comment


        • #5
          You've certainly worked hard and you've been rewarded. The $18M will give you quite the cushion if your current income dries up. I think you really need to sit down and find out what makes you happy. When you find what it is, concentrate on doing more of that thing. Hopefully that will bring you more peace.

          Comment


          • #6
            You’ve certainly created a high spending lifestyle but you’re living on the 2% rule, which by any estimate is extremely safe - provided all that 18M isn’t in bitcoin or tulip bulbs. You could have all your income evaporate permanently and still be stuck with your 300k/yr lifestyle and you’d be more than ok. Do you not trust the math? Maybe try taking time off to see that your nest egg doesn’t evaporate despite your living demands. Find comfort in these cold calculations, and congrats on your success.

            Comment


            • #7




              I carry a somewhat irrational fear that the financial success could evaporate at any moment and we would be stuck in an expensive house with all the surrounding accoutrements that would take time to unwind.
              Click to expand...


              1) Your financial success WILL evaporate at any moment! Maybe next month or maybe in 20 years. No one can tell you when you will pass away either.




              So much of finance is psychological and I am struggling with my irrational fears.
              Click to expand...


              2) You have self diagnosed, it must be mental! Caused by financial success! Due to worry! Easy as 1-2-3. Wrong.

              3) What do you and your wife want to accomplish in the next 20 years and how do you want to live? Life coach, psychologist, psychiatrist or whatever may help. Only you and your wife can make the choice.

              4) You have personal capital and financial capital. You mentioned start-up, a high income, and $18 million assets. Not one mention of risk/return, liquidity, or diversification. My guess is you are sensing the risk in valuations and liquidity. Add zero's or cut zeros, it will come down % and ratio's for getting your assets diversified with an acceptable risk, then using your income and budget achieving your financial targets. Yes, you need a financial plan, investment plan and a budget. If your money is all in publicly traded stock, or real estate or still in a non-public start-up with restrictions you would need different skill sets in advisors. It sounds like you alot of the success was hardwork paying off with hope and good fortune. Now you want a plan.

              Free of charge, ponder some quotes below and they might inspire you to make changes to reduce your anxiety.

              A man always has two reasons for doing anything: a good reason and the real reason.

              Go as far as you can see; when you get there, you’ll be able to see farther.

              When you expect things to happen – strangely enough – they do happen.

              No problem can be solved until it is reduced to some simple form. The changing of a vague difficulty into a specific, concrete form is a very essential element in thinking.

              The first step towards getting somewhere is to decide that you are not going to stay where you are.

              The wise man bridges the gap by laying out the path by means of which he can get from where he is to where he wants to go

              Comment


              • #8




                I am a struggling physician, but not in the usual sense of the word struggling.  I am struggling to have comfort with my financial success.

                For much of my career I was a typical physician, annual income in the 200’s for the first decade and in the 300’s for the second decade.  Then I got involved with creating a startup and my income increased, actually increased quite a lot, like moving over with an extra comma in there.

                We have expanded our spending to a degree to go along with this new level of income, but that hasn’t been an easy adjustment for me.  In the past we lived a nice life but we always balanced relatively careful spending with saving and investing.  These days we are living the extreme high life, spending roughly 300k per year, but that ends up being only about 15% of current gross income.  We live in a high tax state and pay a bit over 40% of income in taxes, and we invest a similar amount.  Right now we have a fairly impressive, steadily growing net worth for a physician family of around 18 million.

                The extreme success somehow makes me uncomfortable.  We have increased our charitable giving, and we have increased our spending on travel, gifts, housing, entertainment, household help and more.  I should feel financially quite secure, but the high annual spend nevertheless still makes me very uncomfortable.  My spouse enjoys the lifestyle, but I have not found peace with spending so much each year.  I carry a somewhat irrational fear that the financial success could evaporate at any moment and we would be stuck in an expensive house with all the surrounding accoutrements that would take time to unwind.

                So much of finance is psychological and I am struggling with my irrational fears.  Has anyone out there dealt with these types of feelings?  Does anyone have any pearls of wisdom to offer?  Are there any psychiatrists or psychologists hanging out on this forum?  It feels unsettling to have achieved this level of success and yet not feel at peace.
                Click to expand...


                LOL, this is simple, you are not enjoying a fancy lifestyle. Fatlittlepig probably would not either.

                Comment


                • #9
                  The more wealth I accumulated the more fear I had. I am probably more scared than I have ever been. My net wealth is somewhere between 10-15M. But my income is a lot less than yours. Not including investment returns, it peaked out at around 1M/year and since I realized I was FI, it's gone down with my motivation to 700k/year and probably less and less in the future. I'm 45 this year.

                  I guess you have to find out the root cause of your fears. Often, they are not irrational.

                  In my case, my investments are undiversified and non-income generating. I am allocating 1.5M to index funds in the next 2 years, but the dividends will not cover anywhere near my spend (200k/year). The rest I have in non-income generating real estate, which I could liquidate and convert to more safe, diverse assets but won't.

                  But then my investments are unlikely to go down to less than 5M in total so maybe I am being irrational.

                  @ 2% SWR, you would need 15M in diversified investments to cover 300k spend per year. And then a nice house might be 3M. But then if there is a bear market, then you would be underfunded so maybe you have a reason to be fearful due to your spending. But maybe this is irrational because if your assets declined, presumably you would be able to cut your spend.

                  Actually, my spending bugs me and I've spoken to my wife about it and we've taken time out to trim it back from 250k/year to 200k/year and hopefully I can get it back to 180k/year again.

                  I am a Psychiatrist and I found it helpful to get counseling to work through my own relationship, family of origin issues and to connect with hidden feelings. You might find the same. There are some great counselors, psychologists and psychotherapists out there.

                  I read an interesting book on high wealth accumulators in the 100M+ area. A common thread, which seemed too occur more frequently than what one would expect by chance, was that they had absent fathers to varying degrees and they were driven by fear.

                  In my case, my father was an serial entrepreneur who's ventures would blow up quite frequently. Our family was badly affected financially by some of his ventures turning sour. Part of my fear is that I will do the same. And I think this is part of where my chronic fear of not having enough money comes from. I would probably have this fear even if my net worth was 100M. This fear is probably not irrational though. I think I inherited some of his risk taking tendencies and do have a risk of that.

                  I like diverse FI's blog:

                  http://diversefi.com/

                  I have to remind myself, I'm not my father, although I owe a lot to him.

                  Sometimes I have this image of it being dark, way past the time the sun has set and everyone has gone home to dinner and I'm still out there playing. I have this vague feeling that I should have stopped at dusk, but I keep going...

                  Something I've found comforting lately is the idea that there might be a computer singularity in the next 20 years (when your laptop thinks as well as you do) and all this might not matter too much.

                  I hope we all find the peace we are looking for. And that we all get there safely despite our fears.

                  Comment


                  • #10




                    You’ve certainly created a high spending lifestyle but you’re living on the 2% rule, which by any estimate is extremely safe – provided all that 18M isn’t in bitcoin or tulip bulbs. You could have all your income evaporate permanently and still be stuck with your 300k/yr lifestyle and you’d be more than ok. Do you not trust the math? Maybe try taking time off to see that your nest egg doesn’t evaporate despite your living demands. Find comfort in these cold calculations, and congrats on your success.
                    Click to expand...


                    Maybe that is part of my anxiety.  The asset mix.  If I had 18 million in non-retirement liquid assets, that would be an order of magnitude more comfortable.  But our assets are a mixed bag of liquid and non-liquid, and access to much of it would come with hefty federal and state taxes.

                    Current asset mix:

                    Retirement accounts: 5.5 million

                    Taxable accounts: 2.5 million

                    Real estate: 4.5 million (a mix of personal use and income producing)

                    Start-up value: 6 million??? Who even knows what this would be worth if sold?

                    The only assets we have that are accessible without a big tax bill attached are the 2.5 million in taxable.  So maybe my fears are not that irrational.  At the same time, our fixed costs are more like 100k and the rest is optional.  However, that doesn’t give me much comfort.

                    My thought at this moment is to pay off the last of our remaining real estate related debt of around 600k over the next few months, and to then add 1 million per year to taxable accounts over the next several years to assuage my fears about sustainability.  If the economy implodes, I go to plan B, a tete a tete with my spouse and we simplify back to the basics.

                     

                    Comment


                    • #11
                      Congrats on your success, I've had similar feelings to what you have but on a lower scale. Consider this book, it may be helpful in understanding why you are feeling the way you do. It's about a 4-5 hour audiobook. I read it recently and felt it was well done.

                       

                      https://www.amazon.com/Big-Leap-Conquer-Hidden-Level/dp/0061735361

                       

                      Best of luck to you.

                      Comment


                      • #12
                        No counseling or psychiatrist needed just Fatlittlepig, if your spending 300K a year there is a lot of waste and unnecessary frivolous spending that probably bugs you. Whether you can afford is irrelevant

                        Comment


                        • #13


                          If I had 18 million in non-retirement liquid assets, that would be an order of magnitude more comfortable. But our assets are a mixed bag of liquid and non-liquid, and access to much of it would come with hefty federal and state taxes.
                          Click to expand...


                          There you go, but I think you are over doing it. Double your retirement and double your taxable! That's a strawman goal.

                          Retirement accounts: 11 million

                          Taxable accounts: 5 million

                          The problem is the start-up is the source of your income and potentially valuable.The time to grow your garden is when the firehose is spewing out so much cash that can be diverted some and greatly increase your future. If your wife actually understands the percentages, there will be no a tete a tete and back to basics. If the start-up pans out that's a big chunk of your goal. Deal with percentages, not dollars.

                          You didn't mention how your accounts are allocated nor whether the debt is being paid out of your real estate stream or your investment property.

                          Comment


                          • #14
                            congrats!

                            i can't even imagine so i won't try to offer any suggestions other than i hope you find peace.   if it helps, i think even without the startup value, you are doing fine from a spending perspective.

                            good luck

                             

                             

                            Comment


                            • #15




                               

                              Actually, my spending bugs me and I’ve spoken to my wife about it and we’ve taken time out to trim it back from 250k/year to 200k/year and hopefully I can get it back to 180k/year again.

                               
                              Click to expand...


                              I think this is part of how I feel.  After many years of caution with finances, it feels very uncomfortable to spend this much in a year.

                              On the one hand, spending 25% of net income seems totally reasonable.  On the other hand, when it is 3 times what we used to spend, it feels very uncomfortable.  And then I get to thinking if the income tanks, there is a certain amount of adjustment needed to shed the spending bloat.

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