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That isn't as good of a plan as a nice income generating business, I just wanted to point out that any side business is better than no side business at all
-pod
-pod
Be careful! The IRS could come back and re-characterize it as a hobby.Mostly, I run the business at a loss every year.
I'm curious about the warning against daytrading.
I've met more than one attending who keeps a browser window Alt-Tabbed to Fidelity or Charles Schwab's online trading sites.
Daytrading seems to be a natural fit for many of the abilities which are found in good anesthesiologists (i.e. ability to predict short-term trends, ability to make decisions quickly, ability to produce a substantial amount of solvent capital)
DamnProblem with trading is that the market today simply moves too fast. Before med school (late 90s) I did well trading. I got back into it recently, and the change in how fast the market moves was eye opening.
I have some play money in the market and trade when I am not at work. It's a lot of fun, and I admit I am just gambling with it. The other day, I set my sell point 0.01 too high on a volatile stock. I took my eye off of it for about the amount of time it would take to induce a patient (kids or something), ultimately that distraction cost me $25k in (unrealized) losses. I made it back pretty quickly, but that kind of thing will happen if you are trading in the background. Imagine anesthetizing a patient with a $200k trade teetering on the edge. Are you really going to focus on the patient properly? The market moves too fast to trade safely while in the OR
- bsd
Problem with trading is that the market today simply moves too fast. Before med school (late 90s) I did well trading. I got back into it recently, and the change in how fast the market moves was eye opening.
I have some play money in the market and trade when I am not at work. It's a lot of fun, and I admit I am just gambling with it. The other day, I set my sell point 0.01 too high on a volatile stock. I took my eye off of it for about the amount of time it would take to induce a patient (kids or something), ultimately that distraction cost me $25k in (unrealized) losses. I made it back pretty quickly, but that kind of thing will happen if you are trading in the background. Imagine anesthetizing a patient with a $200k trade teetering on the edge. Are you really going to focus on the patient properly? The market moves too fast to trade safely while in the OR
- bsd
Problem with trading is that the market today simply moves too fast. Before med school (late 90s) I did well trading. I got back into it recently, and the change in how fast the market moves was eye opening.
I have some play money in the market and trade when I am not at work. It's a lot of fun, and I admit I am just gambling with it. The other day, I set my sell point 0.01 too high on a volatile stock. I took my eye off of it for about the amount of time it would take to induce a patient (kids or something), ultimately that distraction cost me $25k in (unrealized) losses. I made it back pretty quickly, but that kind of thing will happen if you are trading in the background. Imagine anesthetizing a patient with a $200k trade teetering on the edge. Are you really going to focus on the patient properly? The market moves too fast to trade safely while in the OR
- bsd
Blue screen of death?- bsd
Berkeley Software Design?Blue screen of death?
I think that that is the first time I've ever NOT seen "pod"
Or if you're into Unix, then Berkeley Software Distro?Berkeley Software Design?
For the overwhelming majority of us, nothing is going to pay more per hour than our clinical work. You can "earn" a fortune over a thirty year career by learning about personal finance and and financial markets and take the lessons of saving well and investing wisely to heart. I recommend bogleheads website and whitecoat investor website as excellent starting points.
Recognizing this is an old thread, but I totally agree with Doze. I've reflected on this topic quite a bit, and we are currently about to vote on wether to pursue a chronic pain component to our practice.
But, I think Doze hit's it right on. I also agree with bogleheads and white coat investor.
I've leaned on white coat investor many a time, reading and rereading the classic blog about working extra shifts/hours post-residency and "living like a resident" for a few years. Or at least limiting the lifestyle creep.......
Doze, any other pearls of wisdom. I enjoy your perspective on $.
For the overwhelming majority of us, nothing is going to pay more per hour than our clinical work. You can "earn" a fortune over a thirty year career by learning about personal finance and and financial markets and take the lessons of saving well and investing wisely to heart. I recommend bogleheads website and whitecoat investor website as excellent starting points.
To summarize even more concisely:
Do not do anything stupid with your money. You will end up very rich.
Unfortunately many many doctors are arrogant and foolish, and do not end up rich...
For those interested in learning how to daytrade, look into PATStrading on YouTube. Its all about finding those key entry points where you can ride the waves in the futures market. Relatively low risk too considering the system is set up with a max loss of 100 per trade trading 1 contract. I learned this system inside and out and have been profitable ever since. I'm hoping to find the time to trade more during third year considering I am step studying right now. Also there are options for those who want to daytrade but don't want to risk their own capital. Look into TopStep if you are interested. You have to jump through some hoops as far as performance is concerned for them to give you an account to trade with but if you are profitable with your system and can follow their rules as far as risk management is concerned, they will give you a 30k-150k account to trade with.
For those interested in learning how to daytrade, look into PATStrading on YouTube. Its all about finding those key entry points where you can ride the waves in the futures market. Relatively low risk too considering the system is set up with a max loss of 100 per trade trading 1 contract. I learned this system inside and out and have been profitable ever since. I'm hoping to find the time to trade more during third year considering I am step studying right now. Also there are options for those who want to daytrade but don't want to risk their own capital. Look into TopStep if you are interested. You have to jump through some hoops as far as performance is concerned for them to give you an account to trade with but if you are profitable with your system and can follow their rules as far as risk management is concerned, they will give you a 30k-150k account to trade with.
Risk management is what you make of it. Nothing much else I can say. Yea I can blow up an account if I am not careful and not setting stops but it is possible to have a successful system. I don't know whats hard to believe about that. If you are winning 60-70% of your trades risking only 100 dollars a contract max, wouldn't you say that's low risk? Considering what else is out there I would say it is. Unless you are into penny stocks. Its all about the system you use. My rule is 8 tick MAX stop loss. 100 dollars a trade. If I'm wrong I'm wrong. If I'm right I'm right. Its about being right more often than being wrong which is definitely possible. I don't move the market but finding the spots where the big money is taking the market and riding the wave is what I am talking about.if you suggest that day trading "is relatively low risk", I'm not sure what to tell you other than that you probably don't understand risk very well.
Screw stock tips. Learn price action and you don't have to spend your time picking anything. Also no system is perfect. But you can be profitable.Med students day trading with a can't lose system? There must be a shoeshine boy handing out stock tips somewhere nearby.
Risk management is what you make of it. Nothing much else I can say. Yea I can blow up an account if I am not careful and not setting stops but it is possible to have a successful system. I don't know whats hard to believe about that. If you are winning 60-70% of your trades risking only 100 dollars a contract max, wouldn't you say that's low risk? Considering what else is out there I would say it is. Unless you are into penny stocks. Its all about the system you use. My rule is 8 tick MAX stop loss. 100 dollars a trade. If I'm wrong I'm wrong. If I'm right I'm right. Its about being right more often than being wrong which is definitely possible. I don't move the market but finding the spots where the big money is taking the market and riding the wave is what I am talking about.
I'm not trying to sell anything or influence anyone to getting into daytrading. I just know that a while back I wanted to break into it and wanted more information. Thats all I was trying to provide.
Doze,
Do you allocate a certain % to REIT's?
Hobby loss. You are just playing the audit lottery. Its good now because congress won't fund the IRS. Its the story of our society, from Obama to Trump to everyone else "if you don't like the law just don't obey it."I think most folks don't consider the tax advantages of having a side business. One of the biggest problems with physician income is that it is income, and it is taxed as such, and there really aren't many expenses/ deductions we can take to offset our ridiculously high marginal tax rate.
I rent out 70% of my property for grazing, and I have a 9 tree orchard. All of that land is therefore taxed at agricultural rates. Most land improvements, maintenance, etc becomes a business expense which reduces my taxable income.
Mostly, I run the business at a loss every year. Which is fine by me. Every dollar I lose is a dollar less that I have to pay taxes on. You can get pretty creative with expenses when doing this. It isn't a big income generating business like the thread is asking about, but the ultimate result is keeping more of what you make.
Saving on taxes is awesome.
-pod
Mostly, I run the business at a loss every year. Which is fine by me. Every dollar I lose is a dollar less that I have to pay taxes on. You can get pretty creative with expenses when doing this. It isn't a big income generating business like the thread is asking about, but the ultimate result is keeping more of what you make.
Saving on taxes is awesome.
-pod
I rent out 70% of my property for grazing, and I have a 9 tree orchard. All of that land is therefore taxed at agricultural rates. Most land improvements, maintenance, etc becomes a business expense which reduces my taxable income.
Mostly, I run the business at a loss every year. Which is fine by me. Every dollar I lose is a dollar less that I have to pay taxes on.
Spending a dollar to save 40 cents is awesome indeed.
You are going down on an audit.
Hobby loss. You are just playing the audit lottery. Its good now because congress won't fund the IRS. Its the story of our society, from Obama to Trump to everyone else "if you don't like the law just don't obey it."
Funny thing about land rental is that any gains are considered nonpassive gains but any losses are considered passive losses. Thus you would need non land rental passive income to deduct your passive losses from the land rental. I'm not sure you are getting a penny back from the losses you are declaring. Maybe you are not even aware yourself. The tax code is too complex.No, I'm not going down on audit. I have both passive and active farm income and expenses depending on which part of the farm we are talking about, and I assign expenses accordingly.
Form 4835 doesn't apply to me as I am not paid in crop or livestock shares. I could place the pasture rental income on my Form F, but I want to minimize my responsibility for the animals that I board. I only board them and I don't care for them, so that income goes as rental income on Schedule E.
I'm typing this between matches at my son's jiu jitsu tournament, so hopefully I got the form numbers etc correct.
I think it is important to have accurate statements on the board. Misinformation is not something we should be striving for.Fine I don't understand my own tax situation and strategy. In fact, the tax code is so complex and convoluted that no one should bother looking for tax reducing strategies. Just take the standard deduction.
Not even sure why we are discussing the very smallest part of my strategy anyway.
The biggest gain came from reclassifying the acerage as agricultural thus reducing my property taxes. The second from the part of my farm that I materially participate in and make sure meets the criteria for classification as a hobby farm. Way down the list is the passive income offset.
He took second.
Hard to answer. You need to run the numbers.So, I have a retail real estate opportunity to become involved in over the next 2 years. It's a family asset (a 22,000 sq ft building) which is currently a single business, retail. And the zoning is retail, not to mention that it is "frontage" so facing a main road (which is good).
We would need to buy out another family member via a land contract. THEN, we would need to "white box" the property so that the 22,000 sq ft building could be rented to anyone. There are many variables to these types of retail rental space situations. We may need to upgrade the facade to attract a better tenant. My equity would essentially be given to me by my father. So, no out of pocket initial buy in.
The building is in a growing area with upper-middle class residential homes going up en mass, so growth in that way is good.
However, there will be capital outlays. We may need to put in a fire sprinkler system. "White boxing" will take some demo and construction. Upgrading the facade will take some $$ as well. This is all before any tenant would move in.
Ideally, this could produce very good, but somewhat modest at conservative estimates, passive income, but it will not be without headaches. We would almost surely use a leasing agent to market the space but at a cost, of course.
The project is doable, and I would have a long term outlook with intent to keep an asset in the family but also to develop a passive income stream. My brother will be the 3rd shareholder and he is a commercial construction executive with very good contacts and experience. So, we have some expertise on the construction/build side.
***My hang up is that this will take energy and focus to develop. Retail BIG BOX sites are really struggling. But, this is not that. Even so, retail can be a bit wishy-washy. We would likely not be 100% non-vacant for a long time, but you really never know. It's doable, but there are risks. Paying expenses while waiting for pain in the ass tenants to make a reasonable offer (or accept ours) etc. Tenants coming and going... etc. Not a walk in the park.
As I make financial strides in the conventional way via aggressive student loan pay off (down to 50k three years out) and seeing benefits as a partner, fully funding a defined benefits plan (cash balance plan), fully self-funding 401k with massive profit sharing going to same, and building up personal Vanguard brokerage and 529 plans at the same time, all the while living comfortably but not lavishly by any means (no out of state vacations in 3 years, and working about 3-6 extra shifts per month) I am really enjoying making headway.
I'm just not sure I want to expose myself to risk, and even though it would be corporate debt (land contract and then construction loan), I've become very very debt averse. I'm having second thoughts about the project at this point.
Alternative is to attempt to lease to a SINGLE tenant, or just sell the building.
Thoughts? I know it's hard to analyze without financials, but I've laid it out pretty well I think. Interested in feedback on this.......
I think it is important to have accurate statements on the board. Misinformation is not something we should be striving for.
Funny thing about land rental is that any gains are considered nonpassive gains but any losses are considered passive losses. Thus you would need non land rental passive income to deduct your passive losses from the land rental. I'm not sure you are getting a penny back from the losses you are declaring.
Maybe you are not even aware yourself. The tax code is too complex.
And yet, the only misinformation is when you suggested I need to file a 4835 for my land rental (unless you were just testing to see if I understand my own tax situation, in which case, hat tip to you)
- pod