EM and FIRE

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miacomet

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There is a ton of doom and gloom (and rightfully so) on the EM board.

I wanted to start a thread on financial independence, escape strategies, fellowships- what are our plans?

I'll start. I have a decent gig that I hope will be doable for the next two years. My goal will be to retire with 3-3.2 mm in the bank and a paid off house (done, although I hate my house). If gig continues, so will I, but I think I can walk away at that point fairly safely.

Looking to the future, I'd like to get involved in real estate investing, and would love to hear from others who are pursuing this.
 
miacomet said:
There is a ton of doom and gloom (and rightfully so) on the EM board.

I wanted to start a thread on financial independence, escape strategies, fellowships- what are our plans?

I'll start. I have a decent gig that I hope will be doable for the next two years. My goal will be to retire with 3-3.2 mm in the bank and a paid off house (done, although I hate my house). If gig continues, so will I, but I think I can walk away at that point fairly safely.

Looking to the future, I'd like to get involved in real estate investing, and would love to hear from others who are pursuing this.
Click to expand...
I love personal finance and financial planning.

In my opinion who you marry (assuming one decides to marry) is probably the single most impactful decision on reaching financial goals. If you land a spouse who earns well and also prioritizes saving and spending wisely it takes so much pressure off.

Other than that I have just been focused on dumping as much as possible into the stock market. I can see the draw of real estate to get some leverage but I don't want to be a landlord and the stock market has been kind over the past decade.
 
I'm early-career, about to have a net worth in the black in the next two months (finally). Still have >$200k of loans to pay off.
I like my job and I'm paid well compared to many of my colleagues. Volumes are lower and patients are nice. I'm in a geographically isolated area though, which affords some protection against hordes of unemployed docs.

I was planning to dump as much money into my loans as possible but now I think I need to have a six month emergency fund on-hand in case the sky falls.

I plan to pay most of my loan balance down over the next year then I'll likely be looking for an international position in one of the Commonwealth countries, where they still seem to respect physicians. I don't think I can go back to a typical US ED.

Have also considered a fellowship in pain, aerospace, or CCM.

I have to admit, I wish I was doing this job 5-10 years ago, the days of $300+hr locums and FSEDs abound. We really missed out.
 
I've been following the FIRE community stuff for a while now. My plan is to stay married, try our best to live off of one salary while investing the rest, and hopefully stay employed while the doom and gloom in EM passes through (hoping it does)

Partly to help stay focused and partly to encourage others to pursue FIRE as well, I started blogging. Actually taking the time to research, plan out, and write a good blog post has given me some good perspective on how we can approach FI and manage our finances. It turns out even with the average loans (~200k) a doc can achieve FI in 10-20 years. If you count Coast FI the timeline is even shorter.

In the next year, we're hoping to have our loans completely paid off and stay employed. SO and I both like our jobs and if we follow this, could be FI in 5 years, fatFI in 10 years?
 
Backpack234 said:
I've been following the FIRE community stuff for a while now. My plan is to stay married, try our best to live off of one salary while investing the rest, and hopefully stay employed while the doom and gloom in EM passes through (hoping it does)

Partly to help stay focused and partly to encourage others to pursue FIRE as well, I started blogging. Actually taking the time to research, plan out, and write a good blog post has given me some good perspective on how we can approach FI and manage our finances. It turns out even with the average loans (~200k) a doc can achieve FI in 10-20 years. If you count Coast FI the timeline is even shorter.

In the next year, we're hoping to have our loans completely paid off and stay employed. SO and I both like our jobs and if we follow this, could be FI in 5 years, fatFI in 10 years?
Click to expand...

What do you consider FI and FatFI?
I hope the market comes back. I doubt it....
 
Fox800 said:
I'm early-career, about to have a net worth in the black in the next two months (finally). Still have >$200k of loans to pay off.
I like my job and I'm paid well compared to many of my colleagues. Volumes are lower and patients are nice. I'm in a geographically isolated area though, which affords some protection against hordes of unemployed docs.

I was planning to dump as much money into my loans as possible but now I think I need to have a six month emergency fund on-hand in case the sky falls.

I plan to pay most of my loan balance down over the next year then I'll likely be looking for an international position in one of the Commonwealth countries, where they still seem to respect physicians. I don't think I can go back to a typical US ED.

Have also considered a fellowship in pain, aerospace, or CCM.

I have to admit, I wish I was doing this job 5-10 years ago, the days of $300+hr locums and FSEDs abound. We really missed out.
Click to expand...
Aerospace medicine peaked my interest too, but it looks like you need to be able to fly? I don't have 20/20 vision lol so I guess that will count against me. Starting pay is around $200k a year with good benefits if i'm not mistaken, so not great.


Yeah I kind of lucked out in that I headed to texas in 2015, when the job market was red hot. Paid off 350k loans in 2.5 years, and saved up enough to make a 50% downpayment on the house, and have a half mil invested. Unfortunately now between multiple FSED part time jobs pulling 180-200 hrs a month, which makes up for reduced income. The 2.5 million dollar question for me is can I continue making this money for the next ten years? If yes, I can keep socking away 10g's a month and hit FIRE in the next 8 to 10 years. But I just don't know what is going to happen. Geographically tied to my city so can't really move.

Like others, I've mostly thrown in my lot with the stock market. Would like to dabble in real estate, and get at least one positive cash flow rental property. But have zero experience, and comfort level is not high here.

EDIT: Also put in a decent chunk of funds into promising startups aka ‘angel investing’. These investments are risky as plenty of startups fail. But you only need one or two to make it to IPO status to make bank. The other plus is any gains you make from startup investing are 100% tax free upto $10 million,
Per the QSBS law - only applies to US startups though.
 
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bravotwozero said:
Aerospace medicine peaked my interest too, but it looks like you need to be able to fly? I don't have 20/20 vision lol so I guess that will count against me. Starting pay is around $200k a year with good benefits if i'm not mistaken, so not great.


Yeah I kind of lucked out in that I head to texas in 2015, when the job market was red hot. Paid off 350k loans in 2.5 years, and saved up enough to make a 50% downpayment on the house, and have a half mil invested. Unfortunately now between multiple FSED part time jobs pulling 180-200 hrs a month, which makes up for reduced income. The 2.5 million dollar question for me is can I continue making this money for the next ten years? If yes, I can keep socking away 10g's a month and hit FIRE in the next 8 to 10 years. But I just don't know what is going to happen. Geographically tied to my city so can't really move.

Like others, I've mostly thrown in my lot with the stock market. Would like to dabble in real estate, and get at least one positive cash flow rental property. But have zero experience, and comfort level is not high here.
Click to expand...

Aerospace sounds cool.
Is 2.5 mm plus house your FIRE?
 
3 mill is my retirement goal as well, though I don't need that much, or even close to that much, to actually retire, because I don't lead a very luxurious lifestyle. Ultimately, my goal has always been to walk away whenever I wanted. If that's between 55-60, then maybe I just stop altogether. If that's before 50, then maybe I do something else. I've always oddly wanted to do palliative care. I also really like urgent care. Both in my mind would be fun jobs to me when I no longer care about my salary and I'm just trying not to dip into my retirement funds yet. But who knows.
 
gamerEMdoc said:
3 mill is my retirement goal as well, though I don't need that much, or even close to that much, to actually retire, because I don't lead a very luxurious lifestyle. Ultimately, my goal has always been to walk away whenever I wanted. If that's between 55-60, then maybe I just stop altogether. If that's before 50, then maybe I do something else. I've always oddly wanted to do palliative care. I also really like urgent care. Both in my mind would be fun jobs to me when I no longer care about my salary and I'm just trying not to dip into my retirement funds yet. But who knows.
Click to expand...

3 mill including primary residence? Or 3 mill investable?
 
miacomet said:
3 mill including primary residence? Or 3 mill investable?
Click to expand...

Ideally 3 mill in investments. IDK if I'll get there or not. I try to put away 50K a year most years on average since I started investing about 7 years ago, though I'm up to about 80k now. Once home is fully paid off, I should be able to invest at least 100k/year. With doubling times, I think I can get to 3 mill.. But if not, its no big deal. I could easily live off 2 mill for the rest of my life. Especially if I wasn't retiring early and not touching that money until like 65, but instead just working some easier job just to have some income and not touch the investment money.
 
miacomet said:
There is a ton of doom and gloom (and rightfully so) on the EM board.

I wanted to start a thread on financial independence, escape strategies, fellowships- what are our plans?

I'll start. I have a decent gig that I hope will be doable for the next two years. My goal will be to retire with 3-3.2 mm in the bank and a paid off house (done, although I hate my house). If gig continues, so will I, but I think I can walk away at that point fairly safely.

Looking to the future, I'd like to get involved in real estate investing, and would love to hear from others who are pursuing this.
Click to expand...
I’m big into the FI movement, and I think one of the big upsides to our specialty that no one talks about is our ability to hit FI earlier than most specialties. Not because we are the highest paid specialty, but because we have so many more “regular work day” hours off. We work hard while we are in the ED, but we have a lot of time available for side projects during the typical 9-5 weekday slots.

I have worked in a great SDG for the last 12 years and still definitely enjoy EM, but I plan to be able to drop to half time at some point in the next 5-10 years. My path for doing that is through using some of the free time EM affords to set up passive income streams (as have several of the other posters on here). I highly recommend this, especially for anyone just starting out in EM. I opened up a UC 2 years out of residency as a side hustle that is now primarily passive income. That has been a huge boon for me financially and took no crazy knowledge base to pull off. There’s no better time to hustle than when you are just starting out and still used to residency workload. Instead of working like a resident by picking up extra shifts though, use that hustle to set up other income streams.

At this point, I’m focusing a lot of my efforts on multi family real estate and creating multiple passive income streams there. My FatFI scenario is 3M in the market and $10k-15k/mo in real estate cash flow after expenses. Market-wise, I target putting in ~$100k/yr in retirement/back door roth/hsa as well as another $20-30k/yr into a taxable account. I’ve still got about $750k to go on the market side and still need another 2-4 multifamily properties to hit the cash flow side.

Again, for FI purposes I can’t stress what an advantage we have by being off during so many daylight hours. Good luck to everyone on their FI journey!
 
The concept of FIRE and which occupations/medical specialities gravitate towards it tells a lot about the state of society and human nature.

I never hear about surgeons and/or docs who own their own practices talking about FIRE. These guys may make enough money to be financially independent relatively easily but they usually aren’t retiring any time soon. Most go on as long as they can and often find emptiness in their lives when they do finally retire. They don’t obsess about personal finances and instead about their craft and their practice.

compared to shift workers like EM, anesthesia, radiology or professions like programmers where they’re seen as mere replaceable parts in a corporate machine meant to grind out RVU’s/projects for someone else without any real purpose or stake in their job. These folks are often obsessed with FIRE especially since it has become more mainstream recently. It’s a form of escapism.

And it just highlights how human beings need purpose and meaning behind their day to day lives. Just retiring won’t do that for you. Sitting on a beach watching passive income roll in isn’t enough. Make sure you retire *towards* something not away from your current gig. It’s unfortunate that many if not most parts of modern corporate medicine have become so unpalatable that people are trying to escape.

www.sciencedaily.com

Early retirement can accelerate cognitive decline

Early retirement can accelerate cognitive decline among the elderly, according to new research.
www.sciencedaily.com
 
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I still love my Job so likely never completely quit until I can't get out of bed anymore. I am not sure what I would do without a purpose waking up and keep my mind sharp, but maybe I will find something outside of work. Plus I never really feel retired when kids are still in elementary school

The important FIRE for me is when my passive is equivalent to my early attending career, about 300K/yr free cash flow.

Fire = $5M (currently 4M not including primary home) net worth plus cash flowing 300k/yr. Never touch my retirement that keeps on going and sending my kids off with a legacy.

As above, EM docs need a side hustle. I have never worked more than 140hr/month so this allows alot of side hustles especially with a high income.

Hope to hit 300K/yr net cash flow from real estate in the next 2 yrs. Once you hit critical mass, these numbers go up quickly.
Have FSER ownership that generates the most cash flow but value too nebulous/uncertain future to count towards retirement
Opening an UC soon that should generate 25-50K/yr due to low equity/low risk.
Have a few more opportunities but not sure I want to put the time/risk to get it started.

Currently working 6 dys (24hrs) from 8-9 last year which is a game changer. 2-3 shifts/month doesn't sound like alot but lifestyle is night/day such as taking a 3 wk vacation soon without feeling I am front/back loading a bunch of shifts. Hopefully drop to 4 shifts/mo in the next 1-2 yrs and then settle into 2-4 shifts a month when my real estate hits 300k/yr net income.
 
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So... I did retire. Sorta.

I was so crispy and burned out, that I almost walked away. Thankfully, I was raised by very frugal parents and mom made me keep an expense journal once when I was in high school. It made me quickly realize that a little here and a little there added up, and from that point on, had a high degree of awareness of how easy it is to fritter away funds without realizing it. This is ALL lifestyle. I also heard plenty about the power of compounding interest and my Dad has been investing since he was very young so it was beat into me at an early age.

Couple that with a high paying field and a lot of luck (very low student loan rates, some lucky real estate moves, didn't get totally burned on my divorce, although I should have done it sooner...) and I had enough FU money to transition to a not-as-high-paying but mentally/physically/existentially less stressful subspecialty. It was a transition over about 3 years, but most of it was psychological.

I had always thought that 5M would be my FIRE number, but I have realized that I don't sit around well. I NEED something to do - and if that something is meaningful and happens to pay me, I'm perfectly happy living on a lot less and continuing to sock away more. Throw in a global pandemic where I can't spend money traveling... Bottom line, is that with just shy of 2M in investments, a paid off home, and an income, I'm there. I also don't have offspring that will need college expenses, although I am forking over a decent chunk for stepdaughter's wedding next year.

My work (which I do refer to as my retirement gig) is engaging, challenging, and keeps me busy. But a lot less busy than I used to be.
 
I’m about 11yr out of residency, and have not explored the truly advanced techniques involved in churning rental properties with multiple mortgages, professional real estate status, etc etc.

But I’m good at the fundamentals—> work a bunch. Get rid of high interest loans. Save about 50% of what you bring in. Nice house in expensive town but with two cheap cars. Job has wonderful 403b “matching”. 1099 gigs open Solo401k usage. Put that cash you save into the market. 90% in the standard domestic market / international market / total stock market big funds, feel free to play with the rest. Use the back door Roth. But in the end, its all just about savings rate, and putting said savings into the market so it grows. All these other things are icing.

You are left with simple math= if you can save half what you make, you’ll easily be in a position to do as you wish in 10-20yr of work, depending on your precise spending habits...

I’m having a harder time deciding what is the magic number? When do you take your foot off the gas, and stop pushing at 120% to grab shifts and make money and save aggressively? How do you slow down a notch, but not move to half time or retire? We all see the train a-comin’ at our specialty, so my general mantra of “make hay while the sun shines” is still my primary driver... but we also see the fragility of life every day at work.

Maybe I should find a therapist 😉
 
So great to hear of others' experiences; thanks for all the info.
For the real estate crowd, if you don't mind, how did you start looking for properties? It seems so intimidating compared to pouring money into the stock market, but it seems important for diversification/multiple streams of income.

I live in an expensive area with poor cash flow; would love any pointers if folks are willing to share.
 
brycew85 said:
The concept of FIRE and which occupations/medical specialities gravitate towards it tells a lot about the state of society and human nature.

I never hear about surgeons and/or docs who own their own practices talking about FIRE. These guys may make enough money to be financially independent relatively easily but they usually aren’t retiring any time soon. Most go on as long as they can and often find emptiness in their lives when they do finally retire. They don’t obsess about personal finances and instead about their craft and their practice.

compared to shift workers like EM, anesthesia, radiology or professions like programmers where they’re seen as mere replaceable parts in a corporate machine meant to grind out RVU’s/projects for someone else without any real purpose or stake in their job. These folks are often obsessed with FIRE especially since it has become more mainstream recently. It’s a form of escapism.

And it just highlights how human beings need purpose and meaning behind their day to day lives. Just retiring won’t do that for you. Sitting on a beach watching passive income roll in isn’t enough. Make sure you retire *towards* something not away from your current gig. It’s unfortunate that many if not most parts of modern corporate medicine have become so unpalatable that people are trying to escape.

www.sciencedaily.com

Early retirement can accelerate cognitive decline

Early retirement can accelerate cognitive decline among the elderly, according to new research.
www.sciencedaily.com
Click to expand...

Oh I assure you, I will be retiring towards something. Senior club championship at my country club. I'm golfing every damn day when I retire, maybe twice a day. And in the evenings I'm going to play whatever newest video game is out. Its going to be glorious.

I do think I would like to stay involved in residency training in some way. Free of charge of course. Not work clinically, but maybe still lecture from time to time. IDK. I do think it would be hard to walk away from that part of the job, for sure.
 
miacomet said:
What do you consider FI and FatFI?
I hope the market comes back. I doubt it....
Click to expand...

(you didn't ask this first one but I think it's worth mentioning) CoastFI depends on how far into your journey you are. It's easy to calculate using a present value calculator on excel or numbers. I treat it more or less like a gauge for how far ahead or behind you are from your goal rather than a tool for retiring. It is a really nice safety net though if you think you might be unemployed.

FI to me is 2.5M. I don't see any reason why 4% of that ($100,000/yr) wouldn't be enough to live a pretty standard happy, healthy typical physician life.

fatFI comes in at either 5M or 10M for different people. $200,000 is a LOT to retire on annually and lets you buy some fancy stuff on top of a "typical" lifestyle. But 10M means you're pulling in almost 1M/year just from your investments every year (assuming 8% returns).
 
miacomet said:
So great to hear of others' experiences; thanks for all the info.
For the real estate crowd, if you don't mind, how did you start looking for properties? It seems so intimidating compared to pouring money into the stock market, but it seems important for diversification/multiple streams of income.

I live in an expensive area with poor cash flow; would love any pointers if folks are willing to share.
Click to expand...

If you're in Cali, not a great place for rentals unless you're not going to use leverage and go all cash.

The key metric with rental properties is rent to price ratio. The market value of the monthly rent for the property should be at least 1% of the property's total value, for the rental to be profitable. It's a general rule of thumb, but in California property values are so high that you're not going to get anywhere close to that ratio.
 
In the old days, the rule of thumb was 2% as this is the sweet spot for cash flow and lowered risks. I live in Austin so nothing was even close to 2% even 20+ years ago. Cali, Austin, Denver, and all the sought after cities will never be close to 2%

When I bought my first place for 160K 5 years ago, I believe rent was like 1400 so under 1%. Fast forward 5 yrs and rent is up to 2200/mo which still is not even close to 2% but value prob 350k now.

Typically you have to decide between low appreciation/high rent vs low rent/high appreciation and somewhere in the middle. You will never find both.

What I would tell anyone wanting to start buying rental properties is to educate yourself. Spend 1-2 yrs just looking at areas where you live, see where the market is going, find the nicer areas, save a good down payment/cash reserve, find a good mortgage broker, find a good local bank and there will be good buying opportunities. Don't just jump in without educating yourself, and sometimes it takes months if not years to find a good investment property because they do not come up often.

I still continue to look for properties and just keep loading up on cash so I can jump quickly when it comes up.

I continually look at the Austin and lake LBJ areas b/c I am very familiar with the trends and valuation. I finally found a water front property a year ago that was way under valued for some reason relative to rental potential. Paid 380K (I believe the property was worth closer to 500K), put down 100K and 50K renovations in 3 months. Rental should be about 60k/yr, market value around 750K and did a cash out refi for 200K. Great deal to essentially be paid $50k and hold a property with 300k equity that will cash flow about 15k/yr.

I can not make it more clear to people starting out to take your time, do your research, have cash ready, and go quickly when you find something. Take 1-2 years just to learn the market, there is no reason to rush into this. BiggerPockets is a good site to read up on property investing.
 
Backpack234 said:
(you didn't ask this first one but I think it's worth mentioning) CoastFI depends on how far into your journey you are. It's easy to calculate using a present value calculator on excel or numbers. I treat it more or less like a gauge for how far ahead or behind you are from your goal rather than a tool for retiring. It is a really nice safety net though if you think you might be unemployed.

FI to me is 2.5M. I don't see any reason why 4% of that ($100,000/yr) wouldn't be enough to live a pretty standard happy, healthy typical physician life.

fatFI comes in at either 5M or 10M for different people. $200,000 is a LOT to retire on annually and lets you buy some fancy stuff on top of a "typical" lifestyle. But 10M means you're pulling in almost 1M/year just from your investments every year (assuming 8% returns).
Click to expand...
My biggest issue with assuming an 8% return and having everything in the stock market is 2001 and 2008 happens.

Imagine if you have a FatFl at 5M and assume you can pull 400K @ 8% return. In 2001, Nasdq dropped 80% from its high. Imagine quitting your job and seeing your 5M drop to 1M in a year.

If you are in the market for the long term, its reasonably safe. If you are retired, you can't put it in the equity market and hope for 8%. Switch to less volatile investments or rental properties which are not as volatile.
 
emergentmd said:
My biggest issue with assuming an 8% return and having everything in the stock market is 2001 and 2008 happens.

Imagine if you have a FatFl at 5M and assume you can pull 400K @ 8% return. In 2001, Nasdq dropped 80% from its high. Imagine quitting your job and seeing your 5M drop to 1M in a year.

If you are in the market for the long term, its reasonably safe. If you are retired, you can't put it in the equity market and hope for 8%. Switch to less volatile investments or rental properties which are not as volatile.
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Agree. While the market will likely return 8% easily over a long horizon you can’t rely on it. Even over a decade.

Look 1997-2009. Your annual return in S&P and most other indexes would be less than 1% and that’s a 12-year period.

Best to move to something like 60/40 at retirement and have less than 8% return but also less risk (and the 40 might not just be bonds, just not equities).
 
miacomet said:
I'll start. I have a decent gig that I hope will be doable for the next two years. My goal will be to retire with 3-3.2 mm in the bank and a paid off house (done, although I hate my house). If gig continues, so will I, but I think I can walk away at that point fairly safely.
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Why do you hate your house?
 
29 and finishing residency this year. Plan on maxing 401k/IRA for my wife and I while I pay down my loans. Thinking I will get into real estate once loans are paid off. Anything else I should be doing short term?
 
Buckeye1992 said:
29 and finishing residency this year. Plan on maxing 401k/IRA for my wife and I while I pay down my loans. Thinking I will get into real estate once loans are paid off. Anything else I should be doing short term?
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Depending on your interest rate, I would recommend putting the extra loan payments into a relatively safe investment until you have enough to pay off the balance, or your loan rates go above whatever your risk tolerance is. Then at least you have options rather than just immediately paying them down.
 
doctalaughs said:
Agree. While the market will likely return 8% easily over a long horizon you can’t rely on it. Even over a decade.

Look 1997-2009. Your annual return in S&P and most other indexes would be less than 1% and that’s a 12-year period.

Best to move to something like 60/40 at retirement and have less than 8% return but also less risk (and the 40 might not just be bonds, just not equities).
Click to expand...

Once retired, I would hope most people have the majority of their money in a very conservative portfolio with little risk, and just accept less gain. If you have 3 million, that's 90k/year just in interest alone at 3%. Plus you can always start using some of the funds. We may (or may not) also have some social security income. Etc. Your house will hopefully be paid off. Your kids through college. Hopefully, for most people, you could easily live off just the interest, but even if you are dipping into the money itself, you aren't going to use all that cash by the time you die unless you start spending an outrageous amount.
 
90K a year seems too light for me. I want to be able to travel, buy nice stuff still. Property tax alone takes 10-20K for a decent house where I live. That leaves about 6K/month to spend. Insurance, utility, grocery, incidentals would be 2K. 4K/month would afford me just a few nice trips a year.
 
miacomet said:
So great to hear of others' experiences; thanks for all the info.
For the real estate crowd, if you don't mind, how did you start looking for properties? It seems so intimidating compared to pouring money into the stock market, but it seems important for diversification/multiple streams of income.

I live in an expensive area with poor cash flow; would love any pointers if folks are willing to share.
Click to expand...

If you hate your house, have you considering buying a different one using the down payment you would use to buy a rental and then renting out your current home?

This process can be repeated every few years.

HH
 
Hercules said:
I’m big into the FI movement, and I think one of the big upsides to our specialty that no one talks about is our ability to hit FI earlier than most specialties. Not because we are the highest paid specialty, but because we have so many more “regular work day” hours off. We work hard while we are in the ED, but we have a lot of time available for side projects during the typical 9-5 weekday slots.

I have worked in a great SDG for the last 12 years and still definitely enjoy EM, but I plan to be able to drop to half time at some point in the next 5-10 years. My path for doing that is through using some of the free time EM affords to set up passive income streams (as have several of the other posters on here). I highly recommend this, especially for anyone just starting out in EM. I opened up a UC 2 years out of residency as a side hustle that is now primarily passive income. That has been a huge boon for me financially and took no crazy knowledge base to pull off. There’s no better time to hustle than when you are just starting out and still used to residency workload. Instead of working like a resident by picking up extra shifts though, use that hustle to set up other income streams.

At this point, I’m focusing a lot of my efforts on multi family real estate and creating multiple passive income streams there. My FatFI scenario is 3M in the market and $10k-15k/mo in real estate cash flow after expenses. Market-wise, I target putting in ~$100k/yr in retirement/back door roth/hsa as well as another $20-30k/yr into a taxable account. I’ve still got about $750k to go on the market side and still need another 2-4 multifamily properties to hit the cash flow side.

Again, for FI purposes I can’t stress what an advantage we have by being off during so many daylight hours. Good luck to everyone on their FI journey!
Click to expand...
Appreciate you sharing. This is an amazing model for others to follow. We are all different though pay close attention youngsters. This is how it is done.

I am like you Hercules. I want a bunch in the bank and then some passive money from rental real estate. Finding good deals has been incredibly hard but you truly can get 10k in rental income if you buy a house a year for a few years. In my market I have been able to buy MF where my cash flow is about half of the rent. if rent is 2k a month I keep about 1k of that. Its not the 1% rule but with cheap rates it doesnt have to be.

I would also advise the youngsters to be mindful of how you spend your time. If your goal is FI then spend that free time working on passive income streams. It can be investing, real estate or a side gig like UCs. As mentioned we have time, we are generally smart and we make decent money. Dont let it go to waste. Also invest invest invest. Let compounding be your friend.

@Hercules curious is your 3M pre tax, both or post tax? Reading your post it seems its a combo.
 
emergentmd said:
90K a year seems too light for me. I want to be able to travel, buy nice stuff still. Property tax alone takes 10-20K for a decent house where I live. That leaves about 6K/month to spend. Insurance, utility, grocery, incidentals would be 2K. 4K/month would afford me just a few nice trips a year.
Click to expand...

Yes. 3% of 10M = 300k, which leaves a lot more room for nice “stuff” plus vacations/travel. I don’t think twice now when my wife decides spontaneously to drop 30k for a home improvement project, and I don’t want to in retirement either.

Or 5M plus 150k/yr in other passive income streams.
 
gamerEMdoc said:
Once retired, I would hope most people have the majority of their money in a very conservative portfolio with little risk, and just accept less gain. If you have 3 million, that's 90k/year just in interest alone at 3%. Plus you can always start using some of the funds. We may (or may not) also have some social security income. Etc. Your house will hopefully be paid off. Your kids through college. Hopefully, for most people, you could easily live off just the interest, but even if you are dipping into the money itself, you aren't going to use all that cash by the time you die unless you start spending an outrageous amount.
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This doesn’t really make sense to me. If you are going to be retired for 30-40 or more years a huge chunk of your money has all that time to absorb market swings and even bad decades.

When you’re 50 you should not be “conservative” with money you won’t need until 90 unless you can’t handle volatility but that’s another discussion.

I would agree that at least like 3-5 years of annual spending should be kept in low risk assets but beyond that it would seem not smart to be overly conservative.

And if you’re in the accumulation phase market pullbacks are really a good thing. Look at what money invested into the S&P last spring has done in 12 months.
 
ERDude said:
This doesn’t really make sense to me. If you are going to be retired for 30-40 or more years a huge chunk of your money has all that time to absorb market swings and even bad decades.

When you’re 50 you should not be “conservative” with money you won’t need until 90 unless you can’t handle volatility but that’s another discussion.

I would agree that at least like 3-5 years of annual spending should be kept in low risk assets but beyond that it would seem not smart to be overly conservative.

And if you’re in the accumulation phase market pullbacks are really a good thing. Look at what money invested into the S&P last spring has done in 12 months.
Click to expand...
But if you're relying on the interest to live off of, market volatility can really screw things up if you aren't invested conservatively. The general long-term FI rule for what you can rely on was something like 4% IIRC. I personally think the classic idea of having some money on a long time horizon in more volatile investments and some more conservative actually makes the most sense than all of either. Then as you age you slowly move to more and more conservative.
 
Hamhock said:
If you hate your house, have you considering buying a different one using the down payment you would use to buy a rental and then renting out your current home?

This process can be repeated every few years.

HH
Click to expand...


Yes, I have.
A fixer upper where I live starts at 1.5 mm, and contractors are booked a year ahead.
It's just too much.
 
gamerEMdoc said:
Once retired, I would hope most people have the majority of their money in a very conservative portfolio with little risk, and just accept less gain. If you have 3 million, that's 90k/year just in interest alone at 3%. Plus you can always start using some of the funds. We may (or may not) also have some social security income. Etc. Your house will hopefully be paid off. Your kids through college. Hopefully, for most people, you could easily live off just the interest, but even if you are dipping into the money itself, you aren't going to use all that cash by the time you die unless you start spending an outrageous amount.
Click to expand...

Inflation is a huge risk. Even early retirees need a chunk in stocks if their horizon is more than a decade.
 
ERDude said:
This doesn’t really make sense to me. If you are going to be retired for 30-40 or more years a huge chunk of your money has all that time to absorb market swings and even bad decades.

When you’re 50 you should not be “conservative” with money you won’t need until 90 unless you can’t handle volatility but that’s another discussion.

I would agree that at least like 3-5 years of annual spending should be kept in low risk assets but beyond that it would seem not smart to be overly conservative.

And if you’re in the accumulation phase market pullbacks are really a good thing. Look at what money invested into the S&P last spring has done in 12 months.
Click to expand...

You can look at something from a logical standpoint but hard to take emotions out of it. Imagine you had $5M in the bank at age 50.

You get a 2001 when the Nasdaq dropped 80%. You wake up at age 55 with now 1M in the bank. Do you feel you are able to ride it out taking 4% or 40K to live on for the upcoming year? Of course not, you panic and start to look for a job and there goes your retirement.
 
emergentmd said:
You can look at something from a logical standpoint but hard to take emotions out of it. Imagine you had $5M in the bank at age 50.

You get a 2001 when the Nasdaq dropped 80%. You wake up at age 55 with now 1M in the bank. Do you feel you are able to ride it out taking 4% or 40K to live on for the upcoming year? Of course not, you panic and start to look for a job and there goes your retirement.
Click to expand...

Well, the most vulnerable period of retirement with regard to impact of a market downturn is the first year or two (assuming someone planning a 4% SWR).

But if one feels the need to plan for what is basically a black swan event (80% market downturn) that is a personal choice. I’d rather plan for the 95% likelihood that it won’t happen and take the risk. Also going back to work to generate some income for a couple years isn’t the end of the world and doesn’t necessarily derail an entire 30-40 year retirement.
 
ERDude said:
Well, the most vulnerable period of retirement with regard to impact of a market downturn is the first year or two (assuming someone planning a 4% SWR).

But if one feels the need to plan for what is basically a black swan event (80% market downturn) that is a personal choice. I’d rather plan for the 95% likelihood that it won’t happen and take the risk. Also going back to work to generate some income for a couple years isn’t the end of the world and doesn’t necessarily derail an entire 30-40 year retirement.
Click to expand...
Agreed. We all have different risk tolerances. Heck we have different ones than our spouses. What I plan on doing is 80/20 until I hit my FI number. Once I am there its all going into the stock market. I think I will work another 10 years post FI so all that money is either going to be used to bump up my living / traveling or will pass along to my kids. either way its neither needed nor required to retire. As such I will risk it.

one thing that needs to be taken into account and rarely is are taxes. on 100k a year income you will be paying some taxes. Seemingly here and many other discussions people treat their 401k money equivalent to their post tax brokerage accounts.

Thats a mistake
 
EctopicFetus said:
Agreed. We all have different risk tolerances. Heck we have different ones than our spouses. What I plan on doing is 80/20 until I hit my FI number. Once I am there its all going into the stock market. I think I will work another 10 years post FI so all that money is either going to be used to bump up my living / traveling or will pass along to my kids. either way its neither needed nor required to retire. As such I will risk it.

one thing that needs to be taken into account and rarely is are taxes. on 100k a year income you will be paying some taxes. Seemingly here and many other discussions people treat their 401k money equivalent to their post tax brokerage accounts.

Thats a mistake
Click to expand...

Great point. People act like 10M or whatever is a ridiculous amount to shoot for, but most of that will be taxed when you use it. So if I do 3% SWR on 10M that isn’t 300k/yr. More like 200K— plus that’s in future dollars (so less than 200k now). I live on more than 200k post-tax now after savings, mortgage etc.

I also do plan to work after I hit my number— just sporadically to keep busy between frequent 3-month stretches off.
 
ERDude said:
Well, the most vulnerable period of retirement with regard to impact of a market downturn is the first year or two (assuming someone planning a 4% SWR).

But if one feels the need to plan for what is basically a black swan event (80% market downturn) that is a personal choice. I’d rather plan for the 95% likelihood that it won’t happen and take the risk. Also going back to work to generate some income for a couple years isn’t the end of the world and doesn’t necessarily derail an entire 30-40 year retirement.
Click to expand...

With the unspoken part of this not derailing your retirement being the assumption you do not take out the money when you panic (I think this is what emergent was getting at).


It’s an overused analogy but the whole “explaining a market downturn to an investor who hasn’t been through it is like explaining sex to a virgin” is probably not completely unreasonable. If you’re in you low 40s or younger you’ve probably been investing in one of the most persistent bull markets there has been.

My own parents (bright, reasonable people) got their retirement postponed by a solid decade panicking in 2008
 
doctalaughs said:
Great point. People act like 10M or whatever is a ridiculous amount to shoot for, but most of that will be taxed when you use it. So if I do 3% SWR on 10M that isn’t 300k/yr. More like 200K— plus that’s in future dollars (so less than 200k now). I live on more than 200k post-tax now after savings, mortgage etc.

I also do plan to work after I hit my number— just sporadically to keep busy between frequent 3-month stretches off.
Click to expand...
I will say that is why I mix my money between pre tax and post tax. This will provide maximal flexibility when withdrawing from my 401k. Will allow me to minimize taxes.
 
EctopicFetus said:
I will say that is why I mix my money between pre tax and post tax. This will provide maximal flexibility when withdrawing from my 401k. Will allow me to minimize taxes.
Click to expand...

Yea, I do as well and it’s a good strategy. That being said, there is only so much you can put in each bucket before you are investing in fully taxable non-sheltered vehicles. Also you will eventually hit minimum distribution age.
 
doctalaughs said:
Great point. People act like 10M or whatever is a ridiculous amount to shoot for, but most of that will be taxed when you use it. So if I do 3% SWR on 10M that isn’t 300k/yr. More like 200K— plus that’s in future dollars (so less than 200k now). I live on more than 200k post-tax now after savings, mortgage etc.

I also do plan to work after I hit my number— just sporadically to keep busy between frequent 3-month stretches off.
Click to expand...

Yeah I think its what you live on. I live on way less, with a mortgage, 2 kids. My biggest expense is my investments, which won't exist, and my mortgage, which wont exist. After that I have very little expenses and live in a very low cost of living area. I'm pretty sure I could live off 50k/year comfortably in retirement, let alone 100, 200, or 300k.
 
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