Nontrad starting med school in the fall. Is this a reasonable outlook

[carw1801]

I'm in my late 30's and I hope to be done with an FM residency by 46. Considering what is knows about FM salaries today and what we can reasonably predict about the specialty in the future, I still have a goal to retire with 7-8 million by the time I am 75. Yes, I plan on working till 75.

Can it be done?

Not married but maybe it will happen

No kids

I expect student loan debt to be forgiven with PSLF

I'm not materialistic. I see money as freedom.

I will rollover my current 401K which is currently about 300K and then if I save 6k per month, can I get to 7 or 8 million by 75?




Or better stated, how do I get to 7 or 8 million by 75?

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[wamcp]

I'm in my late 30's and I hope to be done with an FM residency by 46. Considering what is knows about FM salaries today and what we can reasonably predict about the specialty in the future, I still have a goal to retire with 7-8 million by the time I am 75. Yes, I plan on working till 75.

Can it be done?

Not married but maybe it will happen

No kids

I expect student loan debt to be forgiven with PSLF

I'm not materialistic. I see money as freedom.

I will rollover my current 401K which is currently about 300K and then if I save 6k per month, can I get to 7 or 8 million by 75?




Or better stated, how do I get to 7 or 8 million by 75?

Certainly very possible if you do simple math of:

Start 300K at age 46. Assume your 401k gain nothing until done with residency (to be uber conservative).

Add 6000 a month.

Assume 6% nominal gain annually from 70% stocks and 30% bonds.

By age 75 you would have $7,071,000.

What would most likely derail your assumptions:

Kids. With single income. Means it can become difficult to save aftertax 6k a month until kids become adults. Especially if you need to pay for preschool and college.

 

[carw1801]

Certainly very possible if you do simple math of:

Start 300K at age 46. Assume your 401k gain nothing until done with residency (to be uber conservative).

Add 6000 a month.

Assume 6% nominal gain annually from 70% stocks and 30% bonds.

By age 75 you would have $7,071,000.

What would most likely derail your assumptions:

Kids. With single income. Means it can become difficult to save aftertax 6k a month until kids become adults. Especially if you need to pay for preschool and college.

That's the exact scenario that I was coming up with. This is a good plans until you factor in kids.

What's crazy is that I'm even questioning if I can afford kids AS A DOCTOR! Afford in the sense that you at least want to be able to educated them through college while still being able to live that upper middle class lifestyle with a house and a vacation each year.

What are your thoughts on getting 7% or more from the stock market. I'm very conservative with my estimates and I read a little about Dave Ramsey's advice and I don't think you're going to get 12%.

 

[wamcp]

That's the exact scenario that I was coming up with. This is a good plans until you factor in kids.

What's crazy is that I'm even questioning if I can afford kids AS A DOCTOR! Afford in the sense that you at least want to be able to educated them through college while still being able to live that upper middle class lifestyle with a house and a vacation each year.

What are your thoughts on getting 7% or more from the stock market. I'm very conservative with my estimates and I read a little about Dave Ramsey's advice and I don't think you're going to get 12%.

Nominal 10% average return is historical and expected for SP500 , so that’s possible if you stick to 100% stocks. 12% is optimistic

 

[carw1801]

Nominal 10% average return is historical and expected for SP500 , so that’s possible if you stick to 100% stocks. 12% is optimistic

I'm not a finance expert yet so this might be a novice question...

With 7 or 8 million when I am 75 or in 2060, how much is that future 7 or 8 million actually "worth" at that time? I guess due to inflation, I'm looking at a purchasing power of 1/2 of that when comparing prices today? How do I calculate that exact figure? In other words, 8 million is a lot of money today but I know it's not the same in the future.

Also is there any negative to trying to save $6000 or even more each month? Everybody I tell this plan to laughs at me and says it is unreasonable. Only a few people are truly impressed with what I want to accomplish.

 

[worthless]

I'm not a finance expert yet so this might be a novice question...

With 7 or 8 million when I am 75 or in 2060, how much is that future 7 or 8 million actually "worth" at that time? I guess due to inflation, I'm looking at a purchasing power of 1/2 of that when comparing prices today? How do I calculate that exact figure? In other words, 8 million is a lot of money today but I know it's not the same in the future.

Also is there any negative to trying to save $6000 or even more each month? Everybody I tell this plan to laughs at me and says it is unreasonable. Only a few people are truly impressed with what I want to accomplish.

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Yes it is predicted to be worth about half over 30 years. So think 3.5M today.

 

[wamcp]

I'm not a finance expert yet so this might be a novice question...

With 7 or 8 million when I am 75 or in 2060, how much is that future 7 or 8 million actually "worth" at that time? I guess due to inflation, I'm looking at a purchasing power of 1/2 of that when comparing prices today? How do I calculate that exact figure? In other words, 8 million is a lot of money today but I know it's not the same in the future.

Also is there any negative to trying to save $6000 or even more each month? Everybody I tell this plan to laughs at me and says it is unreasonable. Only a few people are truly impressed with what I want to accomplish.

6000 is not a lot per month if you want to live an upper middle class lifestyle, retire earlier than 75, also have kids and spouse to support, and be able to combat inflation. Will need save and invest much more to adjust any of your initial plan, because life is never a straight path on what you project today

 

[carw1801]

6000 is not a lot per month if you want to live an upper middle class lifestyle, retire earlier than 75, also have kids and spouse to support, and be able to combat inflation. Will need save and invest much more to adjust any of your initial plan, because life is never a straight path on what you project today

You're suggesting I save more?

How much do you feel the average doctor should retire with at minimum? I was reading an article that said MOST physicians don't even retire with $2 million because they never planned.

Do you think I could even get up to $10 million with a better strategy? Just on my hypothetical income for now...

 

[wamcp]

You're suggesting I save more?

How much do you feel the average doctor should retire with at minimum? I was reading an article that said MOST physicians don't even retire with $2 million because they never planned.

Do you think I could even get up to $10 million with a better strategy? Just on my hypothetical income for now...

Yes, save more because something will very likely come up in life that prevents you from saving as much as you want. For example suppose you sock away 10k a month first few years as an attending. Then life happens, you need to spend more for your kids or your aging parents or whatever, and you can only save 5k a month moving forward. Well, you would be glad you were aggressive with saving and investing early on, before that happens. You might have built an excess 600K that will compound nicely on its own for another 20 years, than if you didn’t

 

[carw1801]

Yes, save more because something will very likely come up in life that prevents you from saving as much as you want. For example suppose you sock away 10k a month first few years as an attending. Then life happens, you need to spend more for your kids or your aging parents or whatever, and you can only save 5k a month moving forward. Well, you would be glad you were aggressive with saving and investing early on, before that happens. You might have built an excess 600K that will compound nicely on its own for another 20 years, than if you didn’t

That is fair advice. Had I paid attention to compounding in high school, I would have made very different life decisions early on in life.

Where do I begin to learn about how investing and taxes work? On that hypothetical 7-8 million which is really 3-4 million in today's dollars, how is the tax calculated on that with withdrawals each year?

 

[Curlywhirly1]

I will rollover my current 401K which is currently about 300K

Following as I'm in a similar situation. Can you clarify what you meant by the above - do you plan to rollover your 401k to a Roth IRA prior to matriculation (and pay the conversion taxes)? Any reason you're not keeping your 401k as is?

 

[carw1801]

Following as I'm in a similar situation. Can you clarify what you meant by the above - do you plan to rollover your 401k to a Roth IRA prior to matriculation (and pay the conversion taxes)? Any reason you're not keeping your 401k as is?

Thanks for bringing that up. I should have been more clear. I am going to be keeping the 401K as it is and then roll it over to the new employer plan once residency begins. So my calculations are from residency onwards.

 

[PB2464]

I'm in my late 30's and I hope to be done with an FM residency by 46. Considering what is knows about FM salaries today and what we can reasonably predict about the specialty in the future, I still have a goal to retire with 7-8 million by the time I am 75. Yes, I plan on working till 75.

Can it be done?

Not married but maybe it will happen

No kids

I expect student loan debt to be forgiven with PSLF

I'm not materialistic. I see money as freedom.

I will rollover my current 401K which is currently about 300K and then if I save 6k per month, can I get to 7 or 8 million by 75?




Or better stated, how do I get to 7 or 8 million by 75?

What will you do with 7-8 million at 75, especially with no wife or kids. Plus you are not materialistic. Why do you need this much?

 

[carw1801]

What will you do with 7-8 million at 75, especially with no wife or kids. Plus you are not materialistic. Why do you need this much?

It's not a question of why you need "so much." It's always better to have a savings and wealth mindset and not a spending mindset. Who knows, maybe I'll get a kid one day and I can pass it on to them. If not, you can live well off of that and then have the ability to donate it to worth while causes.

 

[PB2464]

It's not a question of why you need "so much." It's always better to have a savings and wealth mindset and not a spending mindset. Who knows, maybe I'll get a kid one day and I can pass it on to them. If not, you can live well off of that and then have the ability to donate it to worth while causes.

So if it becomes mainly a question of can I make this much in this amount of time so I can donate it, then it just makes the question silly imho. Plus I doubt you're going to suddenly live "well off" after being so frugal.
Will any of this change your plan for a FM residency?

 

[carw1801]

So if it becomes mainly a question of can I make this much in this amount of time so I can donate it, then it just makes the question silly imho. Plus I doubt you're going to suddenly live "well off" after being so frugal.
Will any of this change your plan for a FM residency?

Yes, the question was about how to make that amount of money in that amount of time with an FM salary and my current savings.

If I can make 300K in FM over 25-30 years adjusted for inflation then I'm happy with that.

Like I said, anything can happen in the next decade in my personal life. If I get married and have a kid then this money can be passed on to the next generation, if not, that doesn't mean I would go spend it all. Holding onto wealth is always a good move.

 

[Splenda88]

I started med school in my mid 30s after being a RN for ~8 years. One of the best decisions I made.

I have been a hospitalist for over 2 years now and financially things have been better than I expected. Made 405k in 2022 and 401k last year w/o killing myself.

Lifestyle is better than I expected as well. I work an average of 17 days/month and 8 out of these 17 days, I am home between 1:30--3pm and the other 9, I am home by 6:20 pm.

Never thought I can go on vacation and stay in $500-700+/night hotel with the family without even giving it a second thought.

The key is to keep the big ticket items (cars, home) low. I don't have a car payment and my mortgage is < $1600 since I live in LCOL area in term of housing.

 

[Splenda88]

The fact of the matter is if your home is paid off and you have 2 mil in the market and another 140k in emergency, so you won't have to draw from your investment when the market is tanking, you will be ok.

SDN thinks people need > 5 mil to retire. < 5% of the US household will retire with a nest egg of 3+ mil.

 

[carw1801]

The fact of the matter is if your home is paid off and you have 2 mil in the market and another 140k in emergency, so you won't have to draw from your investment when the market is tanking, you will be ok.

SDN thinks people need > 5 mil to retire. < 5% of the US population will retire with a nest egg of 3+ mil.

This is a point of debate that I have always had. Just grouping doctors together as one group, you think less than 5 million is satisfactory to retire with?

My argument is there is no reason that all doctors should not be retiring with way more than that to pass on to future generations. But again, I'm not a materialistic person so I can't understand why someone would buy a Mercedes or a mansion. Different tastes I guess. My thinking is you are getting money, now make it grow and don't be a schmuck.

 

[Splenda88]

This is a point of debate that I have always had. Just grouping doctors together as one group, you think less than 5 million is satisfactory to retire with?

My argument is there is no reason that all doctors should not be retiring with way more than that to pass on to future generations. But again, I'm not a materialistic person so I can't understand why someone would buy a Mercedes or a mansion. Different tastes I guess. My thinking is you are getting money, now make it grow and don't be a schmuck.

Doctors are rich and that's why people in SDN thinks one needs > 5 mil to retire.

Where I live (small city in the SE), once can enjoy a nice retirement with 2 mil if home is paid off.

 

[carw1801]

Doctors are rich and that's why people in SDN thinks one needs > 5 mil to retire.

Where I live, once can enjoy a nice retirement with 2 mil if home is paid off.

What is your definition of rich though?

1 million does not impress me. 2 million is nice. But when I see 5 million, I see money that can change trajectories. If I had 5 million and kids, I would feel very comfortable telling my kids that thy are free to pursue whatever they want to pursue. At 2 million, I'd still say stick to my path.

 

[Splenda88]

What is your definition of rich though?

1 million does not impress me. 2 million is nice. But when I see 5 million, I see money that can change trajectories. If I had 5 million and kids, I would feel very comfortable telling my kids that thy are free to pursue whatever they want to pursue. At 2 million, I'd still say stick to my path.

If you (as an individual) are 2 std deviation above average in the income bracket, you are rich IMO. 350k+ place you there and most docs have the ability to make that much if they work FT

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I know things might be a little different for people who live in HCOL area but most of the country don't live in NY, LA, DC, Boston, San Diego, the Bay area etc...

I agree 1 mil does not seem to be that much but you have to put that in context given that only 11-12% household in the US worth more than that.

If a physician finishes residency/fellowship ~35 y/o, you should be able to retire with > 4 mil net worth at the age of 60 unless you have divorces, or you are reckless with money etc...

There is a nocturnist (@Nocturnist) in the IM forum that already has a net worth ~4 mil and he/she is < 40.

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[carw1801]

If you (as an individual) are 2 std deviation above average in the income bracket, you are rich IMO. 350k+ place you there and most docs have the ability to make that much if they work FT

Income Percentile Calculator for the United States

The income percentile calculator for individual US income in 2022. See average, median, and top 1%. What percentage of earners were you?

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I know things might be a little different for people who live in HCOL area but most of the country don't live in NY, LA, DC, Boston, San Diego, the Bay area etc...

I agree 1 mil does not seem to be that much but you have to put that in context given that only 11-12% household in the US worth more than that.

If a physician finishes residency/fellowship ~35 y/o, you should be able to retire with > 4 mil net worth at the age of 60 unless you have divorces, or you are reckless with money etc...

There is a nocturnist (@Nocturnist) in the IM forum that already has a net worth ~4 mil and he/she is < 40.

The Top 1 Percent: What Jobs Do They Have?

Explore the occupations and industries of the nation's wealthiest households.

archive.nytimes.com

In your opinion, do you feel that most doctors who "look" like celebrities on the outside are actually broke?

 

[Splenda88]

In your opinion, do you feel that most doctors who "look" like celebrities on the outside are actually broke?

Most are not broke but they don't have the type of net worth they should have IMO.

Physicians that are > 55 y/o can live like mini celebrities if they were smart with their money.

If you are part of the physician FB group, you will notice a lot physicians in their 40s asking if it's safe to retire with their net worth of 5+ mil.

 

[voxveritatisetlucis]

No it’s not possible. There are many factors working against physician salaries and it is likely that by the time you graduate, FM docs will be making 175-200k

 

[carw1801]

No it’s not possible. There are many factors working against physician salaries and it is likely that by the time you graduate, FM docs will be making 175-200k

They have been saying that for decades now though. I've only seen salaries increase in FM over the years.

 

[voxveritatisetlucis]

They have been saying that for decades now though. I've only seen salaries increase in FM over the years.

Hasn’t reimbursement been declining since like the early 2000s so in inflation adjusted terms FM docs (and all others) make like 30% less

 

[carw1801]

Hasn’t reimbursement been declining since like the early 2000s so in inflation adjusted terms FM docs (and all others) make like 30% less

About 20 years ago, I met an FM doc who told me he made 150k in a good year. Today, you can make 300k out of residency in certain geographical locations.

Nobody can predict for sure what the next 20 years will look like but those who I have spoken with don't feel that FM is going anywhere anytime soon.

 

[Splenda88]

No it’s not possible. There are many factors working against physician salaries and it is likely that by the time you graduate, FM docs will be making 175-200k

It won't happen unless medical school is free.

 

[Splenda88]

In your opinion, do you feel that most doctors who "look" like celebrities on the outside are actually broke?

You can be the chairman/CEO (sole owner) of my hospitalist group who has his own private jet (Bombardier Global Express). The company has 3 private jets but he uses the Bombardier Global Express. He is (or was) a general surgeon.

I was reading the local newspaper where I have a home in FL and I was shocked that he has an 18 mil dollars home in that county. I have no idea why do they publish these things in local newspaper? The guy lives in AZ; not sure why he needs an 18 mil $ home in Palm Beach County.

The company covers ~60 hospital in the US.

 

[carw1801]

You can be the chairman/CEO (sole owner) of my hospitalist group who has his own private jet (Bombardier Global Express). The company has 3 private jets but he uses the Bombardier Global Express. He is a general surgeon.

I was reading the local newspaper where I have a home in FL and I was shocked he bought an 18 mil dollars home in that county. I have no idea why do they publish these things in local newspaper?

The home that I have there only worth 500k. Lol

I appreciate your insights man but I feel that your view on money or how money translates into success is skewed towards celebrity-grade behaviors.

I separate the population into two groups: Normal people and celebrities/outliers. Physicians fall into the group of normal people as the path to becoming a physician is more or less the same for anybody who chooses it. Having said that, private jets, "18 million" dollar homes, and some other scenarios that you have previously described are not the norm. They certainly are the norm for celebs but I'd say don't look at medicine as a way to live that type of life; you will only be disappointed when you can't compete and when you find yourself broke from the materialism.

$300k/year in FM is an excellent lifestyle when you are comparing yourself to the average "normal" person in society.

 

[Splenda88]

I appreciate your insights man but I feel that your view on money or how money translates into success is skewed towards celebrity-grade behaviors.

I separate the population into two groups: Normal people and celebrities/outliers. Physicians fall into the group of normal people as the path to becoming a physician is more or less the same for anybody who chooses it. Having said that, private jets, "18 million" dollar homes, and some other scenarios that you have previously described are not the norm. They certainly are the norm for celebs but I'd say don't look at medicine as a way to live that type of life; you will only be disappointed when you can't compete and when you find yourself broke from the materialism.

$300k/year in FM is an excellent lifestyle when you are comparing yourself to the average "normal" person in society.

Agree. I am perfectly content with what I am making now. It's a lot more than I need to be honest.

I thought my household income was great when we were making 110-120k as nurses.

You are wrong separating the population into 2 groups. Physicians are not celebrities but they are "normal" people either. Normal people are not living in 700k to 1 mil dollars homes.

Remember that 60% of Americans can not save themselves from 1k unexpected bil.

 

[carw1801]

Agree. I am perfectly content with what I am making now. It's a lot more than I need to be honest.

I thought my household income was great when we were making 110-120k as nurses.

You are wrong separating the population into 2 groups. Physicians are not normal people. Normal people are not living in 700k to 1 mil dollars homes.

Remember that 60% of Americans can not save themselves from 1k unexpected bil.

I actually stand by my assessment for the following reason:

Even though I believe that the process to apply to and succeed at gaining an acceptance to medical school, in the US at least, favors those who already come from families with greater household incomes; I would say gaining a medical school seat is very easy compared to landing a sports contract, becoming an A-list Hollywood celeb, or becoming a celebrity politician these days.

So what I'm saying is that physicians are drawn from that group of "normal" people. The celebrities/outliers rely on the unpredictability of genetics and also a lot of luck and this is not considered normal.

Physicians are absolutely "normal" people when you consider that the path to becoming a physician is straightforward for anyone. Not everybody is up to the task however.

 

[thesauce]

I would say gaining a medical school seat is very easy compared to landing a sports contract, becoming an A-list Hollywood celeb, or becoming a celebrity politician these days.

It isn’t easier. It’s just statistically more likely. As you said, there’s a lot more luck, skill, and natural ability involved.

 

[carw1801]

It isn’t easier. It’s just statistically more likely. As you said, there’s a lot more luck, skill, and natural ability involved.

You're right and I take the easy part back. It's not 'easy" to become a doctor, but statistically the odds are waaaaaaayyy better that you will become a doctor with hard work than you will one of the outliers I mentioned previously.

And I think this all comes back to medicine being a clear path to a stable and perhaps even lucrative career that is accessible to the masses.