Besides Neurosurgery, which specialties have both lay and professional prestige?

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pseudosquam said:
Think about it - lets say you're a physician making 200k/yr. Would you really be comfortable trying to pay off a home that was more than 100% of your salary?
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If you're not, then there's something seriously wrong with your financial management skills.
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200k houses are pretty much garbage nowadays. Housing has grown exponentially more expensive when compared to inflation, even with the bust of 2008.
 
notbobtrustme said:
200k houses are pretty much garbage nowadays. Housing has grown exponentially more expensive when compared to inflation, even with the bust of 2008.
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Another ridiculous comment :mad:. This is highly dependent upon location. Beautiful homes can be purchased in certain areas for 200k.
 
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Now you're starting to get it. Just keep learning and you'll get there.


Smokemont said:
Another ridiculous comment :mad:. This is highly dependent upon location. Beautiful homes can be purchased in certain areas for 200k.
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pseudosquam said:
Now you're starting to get it. Just keep learning and you'll get there.
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Lol? You're still trying to cover up your early blunder...

"Would you really be comfortable trying to pay off a home that was more than 100% of your salary?" - you


"If you're not, then there's something seriously wrong with your financial management skills."
^exactly
 
notbobtrustme said:
200k houses are pretty much garbage nowadays. Housing has grown exponentially more expensive when compared to inflation, even with the bust of 2008.
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Where I'm from in the south you can purchase a rather nice home for 200k. The only stipulation is that you have to live in a town of 600 people 1.5 hours from a mall or decent movie theater.
 
pseudosquam said:
Now you're starting to get it. Just keep learning and you'll get there.
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Seriously? You tried to talk about things you knew very little about and got called out. You can make all the BS comments on here that you want but you need to admit it to yourself and mature a little bit. If you want to get into med school then I wish you the best of luck, but like I said, if you keep this attitude up you will get crushed, if not by your classmates then surely from your senior physicians. There is always going to be someone that knows more than you. You need to learn that often times the best answer is "I don't know".
 
At any point since page 2 has this thread been on topic?
 
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pseudosquam said:
No way. Me + Duplex's can out perform REIT every day of the week. Johnny, here is a tip for free, it's all about holding real capital. REIT will leave you wanting in the long term.

For further reading:

http://en.wikipedia.org/wiki/Duplex_(building)



FYI RIET @ -4.5% today.
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401184_112646365530875_112644595531052_43681_112712375_n.jpg
 
pseudosquam said:
My goal is to live within my means. If I can get a 200k duplex I would love that. Someone else can help subsidize my living by renting out the other side. Think about it - lets say you're a physician making 200k/yr. Would you really be comfortable trying to pay off a home that was more than 100% of your salary?
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haha wow.


strong unaware of how a mortgage works....
 
Yes. I understand how a mortgage works. If you did you would not find my comment so ridiculous. SouthSideSteve is well on his way to being another home broke american. You know... the ones that only look at the monthly costs vs nominal value of an item.

I'll be waiting for you in financial paradise, Steve. You might get there when you're 90. Don't worry. Judging by other posters on this thread you wont be alone.



SouthSideSteve said:
haha wow.


strong unaware of how a mortgage works....
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CassieBagley said:
Sober up, bro. The home-broken american applied to those without stable jobs, making below 100K that took out heftier loans than they could handle. Since most docs make above 200K, you'll be able to pay off a 2-million dollar home mortgage over 25 years. Yes, you will pay more over time for it, but the laws of supply and demand state that your poor ass demanded a house straight out of residency and so the lords supplied it. Unless you're reeling in >1 mill per year, you're more than likely going to take a loan (mortgage) and pay that off over time.
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A $2 million mortgage at 7% interest over 25 years is a $14135 per month payment. This is $169620 per year on the mortgage alone. When you start to factor in all other other costs that come with owning that home it will jump to well over 200k. No bank will give you that kind of loan with an annual income of $200k. Then you gotta have a car or two and all the costs that come with that, pay taxes, children's education, PAY BACK MED SCHOOL LOANS (which for lots of people is likely over 215k), save for retirement, etc etc etc. It's even worse if you marry a physician with tons of loans or someone whose income isn't very significant. Point being on a $200k income I think you'd be a fool to buy a house more than $600-700k (which is a super nice house depending on the area).

But you can do what you want.
 
Pretty fair assessment. My biggest advice to people is that you can always titrate your standard of living up but it's difficult to to go the opposite direction. With expensive housing comes the opportunity cost of gaining your financial footing that will set you up nicely later in life. Why not start out with that 200k home as a young attending and pay down your debt, take some cool vacation, and save heavily for retirement [note: time value of money] then upgrade housing years down the road when you've put more roots down in a hospital/group and have those other obligations more or less taken care of.

Jumping into big homes, cars, etc. is why physicians tend to have high incomes but low net worth. But in the end - as duckie said - do what you want... just realize what you're giving up by financing a 1-2 million dollar home.

EDIT: Just wanted to put this in here for those that are not familiar with the term opportunity cost

Opportunity cost is the cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.


duckie99 said:
Point being on a $200k income I think you'd be a fool to buy a house more than $600-700k (which is a super nice house depending on the area).

But you can do what you want.
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duckie99 said:
A $2 million mortgage at 7% interest over 25 years is a $14135 per month payment. This is $169620 per year on the mortgage alone. When you start to factor in all other other costs that come with owning that home it will jump to well over 200k. No bank will give you that kind of loan with an annual income of $200k. Then you gotta have a car or two and all the costs that come with that, pay taxes, children's education, PAY BACK MED SCHOOL LOANS (which for lots of people is likely over 215k), save for retirement, etc etc etc. It's even worse if you marry a physician with tons of loans or someone whose income isn't very significant. Point being on a $200k income I think you'd be a fool to buy a house more than $600-700k (which is a super nice house depending on the area).

But you can do what you want.
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Just wanted to point out for [present day] accuracy...

Mortgage Rates
30 yr fixed = 3.75%
15 yr fixed = 3.0%

Other than that, agreed...a 2MM home is pretty heavy for average joe physician.
 
Blais said:
Just wanted to point out for [present day] accuracy...

Mortgage Rates
30 yr fixed = 3.75%
15 yr fixed = 3.0%

Other than that, agreed...a 2MM home is pretty heavy for average joe physician.
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oh ok. In that case the monthly payment decreases to around $10k per month for 25 yrs ($14k/month for 15 yrs). But that's still beyond hefty for a $200k income with everything else I talked about included. Also gotta take into account that lots of people bought homes as an investment with the expectation of making money. Now their homes are worth a lot less. So if you're going to buy a home plan to stay for a very long time.


pseudosquam said:
Pretty fair assessment. My biggest advice to people is that you can always titrate your standard of living up but it's difficult to to go the opposite direction. With expensive housing comes the opportunity cost of gaining your financial footing that will set you up nicely later in life. Why not start out with that 200k home as a young attending and pay down your debt, take some cool vacation, and save heavily for retirement [note: time value of money] then upgrade housing years down the road when you've put more roots down in a hospital/group and have those other obligations more or less taken care of.

Jumping into big homes, cars, etc. is why physicians tend to have high incomes but low net worth. But in the end - as duckie said - do what you want... just realize what you're giving up by financing a 1-2 million dollar home.

EDIT: Just wanted to put this in here for those that are not familiar with the term opportunity cost

Opportunity cost is the cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.
Click to expand...

I agree with pseudosquam. I personally would like to not purchase a home until after all my fellowships and would love to spend a few years just paying back med school loans with a full salary before I buy a house just so I can start off with a nice car and house (which I can keep for a long time) with as little debt from education as possible. But I doubt that will end up happening because life takes over... i.e. try pulling that with a wife who wants a few kids and a move to a nice neighborhood while she works part time.
 
As a home owner I feel I can weigh in a bit about mortgages.
Someone with 200K in total income will NEVER get a loan for a million dollars let alone 2 million. Even without student loans.
Let's say you got a 2 million dollar home loan. Plus your student loan (call it 200k). Let's say you're the type guy who can sell the Brooklyn Bridge and talked the guy at the bank down to a 2.0 apr. Let's also say you are crazy savvy and only pay 30% in taxes. You have about 30k left over. 12k a year just to keep the lights on and the pipes from freezing. Now you're at about 18k from broke. No furniture. No gas. No food. And if you have a family you're encroaching on the poverty line. Only the mob would give you a loan like this.
 
Why are people fixating on $2 million for someone earning $200k a year?

Pseudo was saying that anything over one year's salary was too much, and that's silly.

$2 million house with $200k annual salary? Yes, probably too much.

$500k house with $200k annual salary? Not too much.
 
Lol, this argument is ridiculous. You can afford a million dollar home with our current mortgage rates. With an income of 200k, one could COMFORTABLY afford a mortgage (including property taxes/homeowners insurance) of 57k per year. Put 20 percent down (you would be stupid to buy a house with such a huge mortage if you don't this..) and get an 800k loan at 3.5 percent 30 year fixed. With property taxes, interest, principal payments, etc. you'll probably end up paying about $4700 a month on your new home or 57k per year. The general rule of thumb (assuming you down pay 20 percent) is you can afford a home 5x your income in this economy. If i'm not mistaken, it was more along the lines of 4x your income pre-recession.
 
5x is wrong. As a homeowner I am telling you how it really works out. Those places wind up owning you. Trust me. No bank will give you a loan for 5x your pretax salary. None. Pre or post recession makes no difference on how much is smart to borrow.
I'm assuming you don't have to pay a mortgage?
 
johnnydrama said:
Why are people fixating on $2 million for someone earning $200k a year?

Pseudo was saying that anything over one year's salary was too much, and that's silly.

$2 million house with $200k annual salary? Yes, probably too much.

$500k house with $200k annual salary? Not too much.
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This.
 
johnnydrama said:
Why are people fixating on $2 million for someone earning $200k a year?

Pseudo was saying that anything over one year's salary was too much, and that's silly.

$2 million house with $200k annual salary? Yes, probably too much.

$500k house with $200k annual salary? Not too much.
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Lol exactly :thumbup:. $2 million is ridiculous with $200k salary. $600k tops is more accurate and comfortable. But regardless, I also don't know why everyone is fixating on that figure. Pseudoquam is trying to draw attention away from the embarrassing fact that he didn't know how a mortgage worked.

3176401 said:
Lol, this argument is ridiculous. You can afford a million dollar home with our current mortgage rates. With an income of 200k, one could COMFORTABLY afford a mortgage (including property taxes/homeowners insurance) of 57k per year. Put 20 percent down (you would be stupid to buy a house with such a huge mortage if you don't this..) and get an 800k loan at 3.5 percent 30 year fixed. With property taxes, interest, principal payments, etc. you'll probably end up paying about $4700 a month on your new home or 57k per year. The general rule of thumb (assuming you down pay 20 percent) is you can afford a home 5x your income in this economy. If i'm not mistaken, it was more along the lines of 4x your income pre-recession.
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No, the general rule is 3x your annual income. Even 3x often ends up not being too comfortable based on monthly income. $57k annual home payments are ridiculously expensive for someone earning $200k. You forget to include taxes, car payments, utilities, cable, internet, etc.
 
pseudosquam said:
Pretty fair assessment. My biggest advice to people is that you can always titrate your standard of living up but it's difficult to to go the opposite direction. With expensive housing comes the opportunity cost of gaining your financial footing that will set you up nicely later in life. Why not start out with that 200k home as a young attending and pay down your debt, take some cool vacation, and save heavily for retirement [note: time value of money] then upgrade housing years down the road when you've put more roots down in a hospital/group and have those other obligations more or less taken care of.

Jumping into big homes, cars, etc. is why physicians tend to have high incomes but low net worth. But in the end - as duckie said - do what you want... just realize what you're giving up by financing a 1-2 million dollar home.

EDIT: Just wanted to put this in here for those that are not familiar with the term opportunity cost

Opportunity cost is the cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.
Click to expand...

Wow, you knew what opportunity cost was, but not what a mortgage was :rolleyes: ?
It is perfectly fine and doable to finance a home twice your annual income, save enough for retirement, invest, and take nice vacations. My home is twice my annual income and I still manage to save 40-50% of my income. Remember, there is no point being the richest man in the cemetery. It's fine saving 80-90% of your income, but just what sort of retirement are you planning to have? You can match current income saving less than 20%... I suggest you read a personal finance book if you don't understand such basic concepts. And yes, $2mil was waaaayyy over what anyone should pay, but $600k on $200k income is comfortable.
 
johnnydrama said:
Why are people fixating on $2 million for someone earning $200k a year?
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The $2 million figure is based on the statement below. The guy clearly states that a person on $200k income can afford a $2-million mortgage. Obviously we all know that is ridiculous (and I'm not even close to buying a home...).

CassieBagley said:
Sober up, bro. The home-broken american applied to those without stable jobs, making below 100K that took out heftier loans than they could handle. Since most docs make above 200K, you'll be able to pay off a 2-million dollar home mortgage over 25 years. Yes, you will pay more over time for it, but the laws of supply and demand state that your poor ass demanded a house straight out of residency and so the lords supplied it. Unless you're reeling in >1 mill per year, you're more than likely going to take a loan (mortgage) and pay that off over time.
Click to expand...
 
Let's clear one thing up: I have always known what a mortgage is and the structure of such a financial service. In fact some may describe me as a financial savant. I'm not a "business" major; however, I have taken many accounting, economic, and financial courses. From those courses and extensive readings from rigorous financial journals I have come to the conclusion that I do not want a large mortgage weighing me down right after I graduate.

Though, your guys' mis-understanding is proving serendipitous in that this discussion is likely informing many of the less financially developed readers. With that consideration I'll be forgiving and leave it at that because of the global benefit my "defense" posts were to these forums.

Read them. Understand them. Learn.
 
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pseudosquam said:
Let's clear one thing up: I have always known what a mortgage is and the structure of such a financial service. In fact some may describe me as a financial savant.
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Oh Mighty Financial Savant :bow: :rofl:


For everyone else, 2-3x annual income is very safe, especially for medicine. 1x is unnecessary, but it depends on the area. Sometimes it's all you need. More often than not though, it's not.
 
pseudosquam said:
Let's clear one thing up: I have always known what a mortgage is and the structure of such a financial service. In fact some may describe me as a financial savant. I'm not a "business" major; however, I have taken many accounting, economic, and financial courses. From those courses and extensive readings from rigorous financial journals I have come to the conclusion that I do not want a large mortgage weighing me down right after I graduate.

Though, your guys' mis-understanding is proving serendipitous in that this discussion is likely informing many of the less financially developed readers. With that consideration I'll be forgiving and leave it at that because of the global benefit my "defense" posts were to these forums.

Read them. Understand them. Learn.
Click to expand...

Dude didn't you major in like EMT studies or something and you worked as a Corpsman and a lab tech? I'm not sure how you make the leap from there to financial savant...
 
Yeah. EMT to Navy. Which transitioned to EMS while I've been completing a BS degree. Been volunteering doing some lab tech stuff for an EC. Finance was a later interest but I feel like I've learned a lot the past few years. Maybe "savant" was a little self congratulatory.

Out of the navy I almost buried myself in a mortgage. It would have prevented me from perusing my dream of becoming a medical doctor. Especially because of the subsequent mortgage crisis. That's why I tend to think that keeping living costs down post-grad is a great idea to maintain some flexibility. It would have completely changed my path through life in that attending school would have been financially difficult and I would have been geographically inflexible.

calvnandhobbs68 said:
Dude didn't you major in like EMT studies or something and you worked as a Corpsman and a lab tech? I'm not sure how you make the leap from there to financial savant...
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xf3rn4nd3sx said:
Lol exactly :thumbup:. $2 million is ridiculous with $200k salary. $600k tops is more accurate and comfortable. But regardless, I also don't know why everyone is fixating on that figure. Pseudoquam is trying to draw attention away from the embarrassing fact that he didn't know how a mortgage worked.



No, the general rule is 3x your annual income. Even 3x often ends up not being too comfortable based on monthly income. $57k annual home payments are ridiculously expensive for someone earning $200k. You forget to include taxes, car payments, utilities, cable, internet, etc.
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3x your income? Maybe that was the general rule in the 90s when interest rates were 8 percent. Let's look at it like this. In the example I gave above I mentioned an 4700 monthly payment on a 800k mortgage at 3.5% for 30 years. If anyone recognized, the mortgage itself (interest + loan) should be 3700, but florida has HUGE property taxes so it'll come out to roughly 4700 per month. Because this house is in Florida, we don't pay income or state taxes; we'll only end up paying the federal tax of approx. 26 percent (if your married filing jointly). This leaves us with 147000 left over, of which 57k goes towards your house. 90k is left over, thats still plenty of money to pay for an IRA, lease decent luxury cars, pay for utilities (which really isn't that much, don't know why you mentioned it lol), etc. Let's not forgot that your 200k income won't be the same 30 years from now. It'll probably 400k because of inflation AND (here's the best part) you're still paying the same amount of money for your house as you did 30 years ago! All I'm trying to say here is that if you budget well (apparently, physicians suck at doing this..) you can live comfortably even with an income of 200k.
 
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Your numbers are off.
Trust me. I have purchased a home post-recession. In that process, I contacted several mortgage companies and banks. I am telling you the numbers they gave me. 2-3 times your income is where it is at, not 5 times your income.
Expecting to buy a 2 million dollar house with a 200k income is like expecting HMS to give you a full ride with a 1.53 cGPA and a 16 MCAT.
 
pseudosquam said:
Out of the navy I almost buried myself in a mortgage. It would have prevented me from perusing my dream of becoming a medical doctor. Especially because of the subsequent mortgage crisis. That's why I tend to think that keeping living costs down post-grad is a great idea to maintain some flexibility. It would have completely changed my path through life in that attending school would have been financially difficult and I would have been geographically inflexible.
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Definitely not an English savant. You peruse a bookshelf, you pursue a dream. :p
 
Mjolner said:
Your numbers are off.
Trust me. I have purchased a home post-recession. In that process, I contacted several mortgage companies and banks. I am telling you the numbers they gave me. 2-3 times your income is where it is at, not 5 times your income.
Expecting to buy a 2 million dollar house with a 200k income is like expecting HMS to give you a full ride with a 1.53 cGPA and a 16 MCAT.
Click to expand...

What mortgages are affordable and what are available are two very different things.

Rates are very low right now, but banks are also very stingy. A big mortgage could therefore be affordable, you just won't find anyone willing to give it to you.
 
Hey JohnnyDrama, Why do you not take me seriously?
 
3176401 said:
3x your income? Maybe that was the general rule in the 90s when interest rates were 8 percent. Let's look at it like this. In the example I gave above I mentioned an 4700 monthly payment on a 800k mortgage at 3.5% for 30 years. If anyone recognized, the mortgage itself (interest + loan) should be 3700, but florida has HUGE property taxes so it'll come out to roughly 4700 per month. Because this house is in Florida, we don't pay income or state taxes; we'll only end up paying the federal tax of approx. 26 percent (if your married filing jointly). This leaves us with 147000 left over, of which 57k goes towards your house. 90k is left over, thats still plenty of money to pay for an IRA, lease decent luxury cars, pay for utilities (which really isn't that much, don't know why you mentioned it lol), etc. Let's not forgot that your 200k income won't be the same 30 years from now. It'll probably 400k because of inflation AND (here's the best part) you're still paying the same amount of money for your house as you did 30 years ago! All I'm trying to say here is that if you budget well (apparently, physicians suck at doing this..) you can live comfortably even with an income of 200k.
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Have you purchased a home before? First of all, 26% is the marginal tax rate... So many people don't understand that only part of your income falls in that range. Secondly, $200k will never be $400k for a physician. You clearly have not been following the trends if you don't realize that physician income isn't keeping up with inflation. It's going down, but I digress. Let's assume a state that has income tax, since Florida is an awful state to practice medicine. Assuming $140k annual income after taxes, that's $11,667. Less the mortgage = $6,967. Here's the big one. You forget med school loans. Assuming $100-200k (average is around $150k) in debt the loan payment will be between $1-2k per month leaving you with $5,467. Less the lease payment for 2 mid-level luxury cars (e class or 5 series leases run at least $500 each) = $4,467. Less food and clothing for a family of 4 = $3,467. Less gas for vehicles, internet, cable, cell phone, utilities, etc = $2,467. Suddenly that huge physician income isn't so large is it? This is excluding miscellaneous expenses for a family, such as piano lessons, tennis lessons, vacation, gym memberships, country club memberships, entertainment, electronics, etc.

Budgeting is key, but you have to budget literally everything. You can't just say "We have $147,000 left over. $57k for mortgage leaves $90k a year. That's plenty!" That's how many physicians think and that's why they are known for being bad with money. My personal strategy is to set aside a third of my pretax income as my limit for spending (including mortgage).

P.S. Many lenders won't even approve you for 5x your annual income (after the recent housing mess) and especially not if you are hundreds of thousands of dollars in debt from med school. The above example was for 4x your annual income and you can see how little flexibility you actually have.
 
johnnydrama said:
What mortgages are affordable and what are available are two very different things.

Rates are very low right now, but banks are also very stingy. A big mortgage could therefore be affordable, you just won't find anyone willing to give it to you.
Click to expand...

Yes, exactly. :thumbup: No bank is going to give you a loan for 5x your annual income, especially if you have med school debt. The mess originated from people thinking they could stretch their budgets and afford homes well beyond their limits.

Maybe it's just this thread, but I find myself agreeing with you on many issues, Johnny.......................................... other than politics :smuggrin:


Mjolner said:
Your numbers are off.
Trust me. I have purchased a home post-recession. In that process, I contacted several mortgage companies and banks. I am telling you the numbers they gave me. 2-3 times your income is where it is at, not 5 times your income.
Expecting to buy a 2 million dollar house with a 200k income is like expecting HMS to give you a full ride with a 1.53 cGPA and a 16 MCAT.
Click to expand...

Yup, 2-3x has been my experience as well. I went for 2x, but 15 year mortgage.
 
VisionaryTics said:
It's a prestige thread. There was no way this was ever going to end well.
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I like it how you have a confused sign for psych, did that include Cool Ass Neuro?
Seriously, Psych needs a better publicist. The general consensus is that they are often ill-qualified to be "REAL" physicians (looking at you vistiral.)

Yes I know that they have the lowest step 1, some don't know how to do the basic IM, Most want them out of their life, Daniel Carlat is popular, the history of psychiatry is plagued. Psychiatry is a legitimate medical field and is quite essential to the ever centralized bureaucracy known as medicine. Why the all the disrespect?
 
xf3rn4nd3sx said:
Yes, exactly. :thumbup: No bank is going to give you a loan for 5x your annual income, especially if you have med school debt. The mess originated from people thinking they could stretch their budgets and afford homes well beyond their limits.
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I don't know about mortgages but I have over a $100,000 credit line with all of my credit cards combined. I am a med student with no income. Getting that kind of mortgage is not out of the realm of possibility.
 
TAWS said:
I don't know about mortgages but I have over a $100,000 credit line with all of my credit cards combined. I am a med student with no income. Getting that kind of mortgage is not out of the realm of possibility.
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Wow. That's how we got into our current financial mess.
 
xf3rn4nd3sx said:
Yes, exactly. :thumbup: No bank is going to give you a loan for 5x your annual income, especially if you have med school debt. The mess originated from people thinking they could stretch their budgets and afford homes well beyond their limits.

Yup, 2-3x has been my experience as well. I went for 2x, but 15 year mortgage.
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I'm with you 100%. I think people don't truly get how it works until they have go through the process themselves. I went for 2.5% my income myself and I'm glad I didn't go for more since there are so many expenses involved with home ownership (and life) that you don't anticipate.
 
Mjolner said:
I'm with you 100%. I think people don't truly get how it works until they have go through the process themselves. I went for 2.5% my income myself and I'm glad I didn't go for more since there are so many expenses involved with home ownership (and life) that you don't anticipate.
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2.5%? I'm guessing you meant 2.5x unless you're living in Cleveland. :p
 
xf3rn4nd3sx said:
Have you purchased a home before? First of all, 26% is the marginal tax rate... So many people don't understand that only part of your income falls in that range. Secondly, $200k will never be $400k for a physician. You clearly have not been following the trends if you don't realize that physician income isn't keeping up with inflation. It's going down, but I digress. Let's assume a state that has income tax, since Florida is an awful state to practice medicine. Assuming $140k annual income after taxes, that's $11,667. Less the mortgage = $6,967. Here's the big one. You forget med school loans. Assuming $100-200k (average is around $150k) in debt the loan payment will be between $1-2k per month leaving you with $5,467. Less the lease payment for 2 mid-level luxury cars (e class or 5 series leases run at least $500 each) = $4,467. Less food and clothing for a family of 4 = $3,467. Less gas for vehicles, internet, cable, cell phone, utilities, etc = $2,467. Suddenly that huge physician income isn't so large is it? This is excluding miscellaneous expenses for a family, such as piano lessons, tennis lessons, vacation, gym memberships, country club memberships, entertainment, electronics, etc.

Budgeting is key, but you have to budget literally everything. You can't just say "We have $147,000 left over. $57k for mortgage leaves $90k a year. That's plenty!" That's how many physicians think and that's why they are known for being bad with money. My personal strategy is to set aside a third of my pretax income as my limit for spending (including mortgage).

P.S. Many lenders won't even approve you for 5x your annual income (after the recent housing mess) and especially not if you are hundreds of thousands of dollars in debt from med school. The above example was for 4x your annual income and you can see how little flexibility you actually have.
Click to expand...

Lol, you physician making 200k today will make the same 200k 30 years later? Get real, its only been in the last few years that physician income has not been keeping up with inflation. An income of 200k in 1982 is about 480k today; I purposely said 400k to seem conservative. Anyways, I didn't mention student loans because it seems pretty obvious that in order to have 200k for a downpayment, you would need to have your student loans paid off already. Yes, in order to pay off student loans and collect enough money for a 200k downpayment the physician would have to live frugally for another 4-5 years after residency, but this is one of the sacrifices a physician would have to make it to buy a million dollar home.. Okay, let's assume we live in a state with income and state taxes and we take 140k as our take home salary. You do realize that the 4700 figure I mentioned would be considerably lower because it includes florida property taxes (which run around 1.1k-1.2k for per year on a million dollar home)? I'm done arguing here, but banks still need to lend out money despite the economy. A physician (physicians have best job security, which gives them another reason to hand out a loan) with no student loans, good credit score, and a downpayment of 20 percent wouldn't have much of a problem receiving a 800k loan for a million dollar home.
 
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