I dropped 25-30k on vacation this year. I dont think it makes any sense but I made 405k last year and projecting to make about the same this year. Also, my mortgage is < $1600 and I have no car payments. I just like traveling.
Buying a house as a new grad
- Thread starter Dofreshman
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You went on 8-10 vacations!!! 😝
Lol. Family of 4. We stayed 5 days in Manhattan, 5 days in the Bahamas, 5 days in Colombia, 3 days in Phenix and 4 days in Los Angeles in that particular order. We stayed in hotels that were $400-750/night.
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Would be cheaper to go to sea or iberia and live like a king
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I bought a 850k home as a new resident and traded up for a 2.1M home a few months back. I'm about 1.1M in debt. Still in fellowship.
But in Aus you can pay off your student debt and other debts rapidly, before taking on huge mortgages. I'll have it paid off in less than 10 years despite kids and travel.
If you know where you want to live, and can afford it with minimal risk... Worked fine for me so far
But in Aus you can pay off your student debt and other debts rapidly, before taking on huge mortgages. I'll have it paid off in less than 10 years despite kids and travel.
If you know where you want to live, and can afford it with minimal risk... Worked fine for me so far
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(For those wondering his 2.1m dollarydoo home would equate to around 1.4m freedom notes)
One big vacation. For family of 4 is 15-20k especially peak spring break season
Royal Caribbean 7 day suite is 18k for family of 4 peak spring break. That was spring break 2022 for us.
Excludes air travel and excursions.
Can’t remember how much park city cost me. But it wasn’t cheap this past spring break 2023
Vail will be super expensive spring break 2024 as well.
That’s ONE VACATION. 15-20k.
So we spend 40k easily for 3 vacations and mini get a ways.
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Figure out if your going to be in the current job and thus the area first and that might take you 1-2 years so simply rent in that timeline and pay off your other debts. The bigger risk is buying a house and having to move for work which is a net loss and a big stressor in such a short time given fees and if prices decline. Maybe I got lucky as I ended up renting a house in my area since i kept losing to all cash buyers but my 1 yr lease becomes month to month which is great for flexibility when something right pops up.
Once your established in your location use the 1-2x rule of gross income for your mortgage. So if your going to keep making 400k then your new house mortgage will be somewhere in the 400-800k. Remember this means that the actual house might be 1m but with a down payment your higher end mortgage is 800k.
If you have paid off loans in this 1-2 year timeline and maybe have no car payment you can more likely go on the higher end but again that will also be decided if your in a LCOL vs HCOL area.
This is very safe play if you do the above and will avoid a lot of headaches. My sibling is a ca3 and her fresh attending friends are buying teslas and rolexes so to each their own.
Also, the money you generate in the first 10 YEARS of attending life is the most significant money you will ever make. Why? Due to compounding effects but also there is never a guarantee that salaries and demand will always be what they are now. Not telling you to live like a resident but if you sock away more than avg you could be set for life no matter what happens to the job market or want to go part time etc. Work extra hard in your 30s to chill thereafter is the best advice I ever got.
Once your established in your location use the 1-2x rule of gross income for your mortgage. So if your going to keep making 400k then your new house mortgage will be somewhere in the 400-800k. Remember this means that the actual house might be 1m but with a down payment your higher end mortgage is 800k.
If you have paid off loans in this 1-2 year timeline and maybe have no car payment you can more likely go on the higher end but again that will also be decided if your in a LCOL vs HCOL area.
This is very safe play if you do the above and will avoid a lot of headaches. My sibling is a ca3 and her fresh attending friends are buying teslas and rolexes so to each their own.
Also, the money you generate in the first 10 YEARS of attending life is the most significant money you will ever make. Why? Due to compounding effects but also there is never a guarantee that salaries and demand will always be what they are now. Not telling you to live like a resident but if you sock away more than avg you could be set for life no matter what happens to the job market or want to go part time etc. Work extra hard in your 30s to chill thereafter is the best advice I ever got.
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Interest rates affect the 1-2x rule. Monthly P&I on an 800k loan is 3160 at 2.5% but 5870 at 8%.
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Can't imagine having a mortgage payment > 3k/month
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Definitely not but it's a beautiful state.
My mortgage is $4500/mo
Rent for the house would be 8-10k month. But my home is 2-2.2 mil so I have a lot of equity after full renovations as well
Nowhere to run these days with housing
If you can rent $3k a month for 2500-3000 sq foot home in a safe neighborhood. That’s wise choice.
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Doing that as an attending is all good.
But spending 1/5 of your income on vacations when you make $50k and barely can get by as a resident doesn’t make a lot of sense unless someone else is paying for it.
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I was just joking but I would really go on 4 vacations for that. I have private school to pay for!!! A big blowout sounds fun though.
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Rents have really gone insane. Some 2BR 1100 SF apartments in what used to be working class suburbs are now going for $5-7k. Newer complex though.
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Especially when you take into account the massive expenses that can come into play with maintenance.
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My rent is 3800 ish for a 3300 house in a safe neighborhood and good schools in the midwest. However if i had bought now at these rates my P and I would be 4500 as a mortgage for the house i am renting. If you included taxes and home insurance that's 5900/mo averaged out over the year.
My landlord who bought the house 2 years ago probably got an interest rate at 3 percent i am guessing and there P and I is 2000/mo and with tax and home insurance 2900/mo averaged for the year. This drives me nuts since that was 2 years ago but I actually still think i am a bit lucky to have the price i do now.
The real issue is maintaining a home (in Florida that means HOA/pool/lawn (Hoa is $200-300/mo pool $100-140 plus lawn $100-150/month ) plus property taxes ($500-1000/mo for 500k-1 mil property )
So when i owned my own home with $0 mortgage.
I’d still be “paying” $1500/mo property taxes (cannot deduct after 10k due to salt trump tax laws of 2018). So the home still cost me $2000/mo just to maintain at min. Plus repairs etc since it’s 20 year old home. It costs around 10-15k a year to “maintain”.
There are many things that goes into home ownership where renting at $5000 a month may make sense. Especially these days if u can stash the money again in higher interest treasury that’s exempt from state income taxes
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My mortgage is close to 5k, but I refi’d to a 15–yr a couple years ago.
Bought around 875 10 yrs ago, 2 years out as an attending after renting for two years. probably up 80% now.
Bought around 875 10 yrs ago, 2 years out as an attending after renting for two years. probably up 80% now.
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How much have you spent apart from your mortgage? Repairs? Updates? Roof? HVAC? Painters? Lawn? Plants? Etc.?
How much less would rent have been? How much would that be worth if invested in an S&P fund for 10 years returning over 12% on average?
How much will the cartel of realtors extract to allow you to sell your house?
It’s possible you got a good return, but all things considered I bet you barely beat the S&P if at all. Maybe you get a better place to live, but also more stress.
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Dude's house is worth almost 1.6 and he's paying 3 percent or less on a 875 mortgage. I don't know if everyone goes into buying a house thinking it is the best investment at the moment but you still need a castle and he did well to get that appreciation. He's living in a place that had he waited 10 years he may not want to drop 1.6 at 7 percent interest.
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I’m not saying move. I’m saying he isn’t up 80% overall (which I know he didn’t exactly claim).
The 20% down payment alone would have grown more than the value of his house, even if it’s up 80%, and that dramatically underestimates the opportunity cost because rent would have been cheaper and countless expenses would have been avoided, so he could have invested way more than just the down payment for the last 10 years.
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The tax cut and jobs act will expire at the end of 2025.
Buying a house is a reasonably good investment/choice as a physician if done within reason.
If you are set on a general location and have the ability to change jobs if things go south, then it is typically the right move to make
I know people will talk about additional fees and worry about maintenance but it's typically very manageable. If you are able to buy a new construction then the builder often has a warranty for awhile as well.
The main issue with renting is your costs will go up. Due to inflation, your landlord will usually steadily increase rents to cover their costs as they need to pay maintenance etc. Landlords are not trying to operate at a loss. They need to cover property taxes, maintenance etc. Just because you aren't personally writing that check doesn't change that.
Not to mention that your lease can potentially be non renewed and you could have to move with relatively short notice.
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I bought in a suburb of Southern California. Down payment was with help of parents.
Initially mortgage rate was 4% and monthly payment was $3551.
During pandemic I was able to refinance twice, 3.25% and then to 2.75%. Monthly payment is now $2889.
Meanwhile, rents are steadily climbing and my housing costs are locked in. Due to inflation, I have no need to try to pay this mortgage off early. Extra money gets invested into VTI and I will eventually help my kids with housing when they are old enough.
During this time, I've changed jobs 3 times, all within 15 minutes of each other so no disruption in the kids lives.
Buying a house is a reasonably good investment/choice as a physician if done within reason.
If you are set on a general location and have the ability to change jobs if things go south, then it is typically the right move to make
I know people will talk about additional fees and worry about maintenance but it's typically very manageable. If you are able to buy a new construction then the builder often has a warranty for awhile as well.
The main issue with renting is your costs will go up. Due to inflation, your landlord will usually steadily increase rents to cover their costs as they need to pay maintenance etc. Landlords are not trying to operate at a loss. They need to cover property taxes, maintenance etc. Just because you aren't personally writing that check doesn't change that.
Not to mention that your lease can potentially be non renewed and you could have to move with relatively short notice.
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I bought in a suburb of Southern California. Down payment was with help of parents.
Initially mortgage rate was 4% and monthly payment was $3551.
During pandemic I was able to refinance twice, 3.25% and then to 2.75%. Monthly payment is now $2889.
Meanwhile, rents are steadily climbing and my housing costs are locked in. Due to inflation, I have no need to try to pay this mortgage off early. Extra money gets invested into VTI and I will eventually help my kids with housing when they are old enough.
During this time, I've changed jobs 3 times, all within 15 minutes of each other so no disruption in the kids lives.
also in many areas where physicians settle with a family, with big houses, good schools, and in suburbs of major cities, renting is not easy. very few places if any (other than a neighbors barn/garage) are available for rent. its not like there are tons of apartment buildings/condos. and the uncertainty of how long landlord will allow you to live there make it undesirable compared to buying
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I didn't buy my house to "beat the S&P". This is not an investment for me cash in at the end of my life. It is my home. This is a very emotional place for my wife and our family. We moved here straight out of fellowship with a 4 year old and a 2 year old. Rented for 2 years to make sure we liked the schools and area. Found a neighborhood we liked. Renting a home in the neighborhood is not an option. My oldest child will graduate high school in a couple years. It was important for us to stay in the same district throughout their education.
This is my third home. Bought the first in med school. walked away with 20k in hand. Bought the next in residency. Walked away owing 40k after 2008. I've got an informed opinion on the real estate market. Just because my house is sitting pretty now doesn't mean it will be once it's time for me to sell. Even if it is, that means that any house I'm buying is equally inflated in value. I haven't really gained anything.
We truly love our home. I have personally painted nearly every wall in there. Halfway through prepping the dining room now, will have it painted and updated by Thanksgiving. With the colors I want. If I want to change the landscape, we do it. Don't need to ask a landlord if it's OK. I'm too old to be asking permission if I can paint my room. In previous homes I have updated electrical, plumbing, even tiled floors. It's a hobby I enjoy, and gives me pleasure knowing I did the work.
I invest money in retirement accounts. I have an employee pension. That's how I save for the future. I choose to live in a home that I love, and that I control. It's not an investment vehicle, though I certainly hope it maintains value so I can uphold the same standard of living throughout my relevant life.
