Financial independence through psychiatry

[yanks26dmb]

That is a very generous net pay in NY...

Calculated married, California. Per paycheckcity.

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[Trismegistus4]

The value of deductions depends on your marginal tax rate. My marginal tax rate is almost 50%. It's without a question every dollar above standard deduction is worth it.

The top marginal tax rate is currently 37%, and that's only if your total income is over $500k. Maybe you mean it's almost 50% when you add in state and local income taxes, but you don't get to deduct mortgage interest from those, do you?

Anyway, I would never say it isn't worth it, just that the benefits aren't as drastic as some people make them out to be. Here's a mortgage calculator for buying a $600k house with 20% down. You can see from the amortization schedule that in 2020 you will pay $20,792.09 in morgtage interest. Let's allow that you were paying that full 37% in federal income tax on that money. You can now deduct it, allowing you to keep $7,693.04 more per year. That's nice, but it's not like that's the kind of money that will allow you to buy a vacation house, or retire 5 years earlier than you otherwise would have been able to, or whatever.

That's how some people do think but the housing market is rather unpredictable so you shouldn't bank on your home for retirement. I bought my home in 2005 for around 377k now it's worth around 318k. So home values depreciate and you should never bank on your home being worth 3 million dollars. The market is unpredictable and if a recession hits the housing market will be impacted and you won't be able to sell your home for 3 million. As what finalpsychyear said there are no financial benefits to owning a home in the 500-700k range. Home ownership is quite expensive and you are responsible for anything that breaks. Homeowners can only deduct mortgage interest and property tax payments and other expenses from their federal taxable income. Starting as of 2018 when you claim dependents this no longer exempts you from having any of your income taxed. You do get some sort of deduction for children but it's a very low deduction as having children is very expensive.

What do you mean by the bolded? You make it sound like claiming dependents used to mean you didn't have to pay any taxes at all.

I purchased an investment property in 2011 for 150k (I put 20% down) now it's worth 320k and I only owe 60k on it. It's a 15-yr mortgage and once it's paid off, I am cashing in...

That's nice, but the point is you can't count on that happening. No one is coming on here to boast that they bought a property in 2011 for 150 and it's now worth... 140k. But that's happened to plenty of people.

Ouch, I hope its better now.

Not sure what you mean by that, unless you thought I was saying I was in fact spending 68% of my monthly income on housing, which I wasn't. If you're referring to my pre- vs. post-tax income, well, those are the tax perils of being single and having no dependents.

 

[Mass Effect]

If we are going by the rule of thumb that your mortgage payment should be no more than 25% of your take-home income, a $2000 mortgage payment would mean your take-home income is $8000 per month. According to this calculator, that would mean a gross annual income of $138,625. And that's without any other deductions like retirement contributions.

Is $139k per year lower-middle now? Or are a lot of people spending half their monthly take-home income on their mortgage payment?

I just changed jobs recently, but in my last job my annual salary was $230k, and, after taxes, my share of the benefits, and my 403(b) contribution rate at the maximum of 15%, my bi-weekly paycheck was $4673. So, $9346 per month. If I'd spent 33% of gross, that is, the $230k, on monthly housing costs, that would be $6325, which would have been 68% of my monthly take-home! Are people really doing that?

The 30% of gross rule of thumb isn't necessarily meant for high earners. Of course spending over $6000/month on housing would be ridiculous with such a low (relatively speaking) take-home pay. That rule is primarily for those making a lot less than we do and it's basically just a guideline. The alternative is lower rent, certainly, but in high CoL areas especially, it's something both landlords and renters calculate to make sure you can afford what you're signing.

 

[Mass Effect]

I think these rules are different for people living in NYC/socal/sf. You need to spend seven figures to get a decent place in one of these locales. But even still, it's very doable. looking at the numbers, a 1.2M house will generate a PITI of roughly 6k/mo with 20% down. Roughly 8k at 10%.

There are decent jobs easily found offering 275-300. Throw in a weekend moonlighting shift once a month and tack on another 80-100k a year.

Assuming married but no working spouse and total income of 380k annually, that's 17.8k monthly after contributing 10% of gross to retirement. This is also in a very high state income state.

When you lay it all out, it doesn't look that crazy to spend that kind of money of a house.

I disagree that you need to spend 7 figures for some place decent, unless your idea of decent greatly varies from mine. I know that million dollar homes are essentially 600K anywhere else, even then to suggest that anything less isn't decent is strange. Also, speaking as a new attending who just scoured the job market, that salary of 300K is high for easily found decent jobs (I'm sure it's average at shadier practices) and 80K for one weekend of moonlighting per month is also generous from the research I did. I didn't do the math, but is that 17.8K/month is before deductions for benefits?

People are brainwashed in the US... I remembered reading somewhere that over 70% of US household would not be able to 'bail' themselves out if they had to come up with 2k right away. Come to think of it, that might be true.

When my wife was working as nurse, one of her coworkers who happened to come to our place for a birthday party told another coworker she could not believe that my wife is living in that small house as a RN... That house was 1488 sqft under air (3BR/2BA). This is how stupid people can be.

Not to mention that's just poor manners! Ugh.

 

[Mass Effect]

Calculated married, California. Per paycheckcity.

California's a big place. Salaries in LA and San Fran don't equal salaries in Fresno.

 

[yanks26dmb]

I disagree that you need to spend 7 figures for some place decent, unless your idea of decent greatly varies from mine. I know that million dollar homes are essentially 600K anywhere else, even then to suggest that anything less isn't decent is strange. Also, speaking as a new attending who just scoured the job market, that salary of 300K is high for easily found decent jobs (I'm sure it's average at shadier practices) and 80K for one weekend of moonlighting per month is also generous from the research I did. I didn't do the math, but is that 17.8K/month is before deductions for benefits?



Not to mention that's just poor manners! Ugh.

Were you looking for jobs in California? I know Kaiser socal is starting right around 300. Kaiser NorCal is closer to 350. There are also a variety of groups out there advertising 175/hr for full time shift work in a crisis center along the Central coast. There's also pletny of telepsych companies offering 150/hr, that's 300k/yr at 40 hour weeks also. I feel like it shouldn't be hard for a new attending to pull 300 with their day job anymore.

The salary was after deductions. Go over to paycheckcity and play around with the numbers. I used 380k annual.

All of this also assumes no working spouse. Nowadays I think it's much more likely a spouse is also working, making all of this even more doable.

 

[Mass Effect]

Were you looking for jobs in California? I know Kaiser socal is starting right around 300. Kaiser NorCal is closer to 350. There are also a variety of groups out there advertising 175/hr for full time shift work in a crisis center along the Central coast. There's also pletny of telepsych companies offering 150/hr, that's 300k/yr at 40 hour weeks also. I feel like it shouldn't be hard for a new attending to pull 300 with their day job anymore.

The salary was after deductions. Go over to paycheckcity and play around with the numbers. I used 380k annual.

All of this also assumes no working spouse. Nowadays I think it's much more likely a spouse is also working, making all of this even more doable.

No one said this wasn't doable by any means. The post you're quoting is me saying that those figures didn't match my job search in NYC (proper). I also maintain LA versus Fresno are two different things, both in terms of salary, but also rent/mortgage and expenses. Tacking 80K onto a 300K salary is also not just a snap of the finger either. My baseline point, which I maintain, is that it is pretty ridiculous to say that you have to spend 1.2 million in order to get a "decent" place.

 

[deleted736562]

No one said this wasn't doable by any means. The post you're quoting is me saying that those figures didn't match my job search in NYC (proper). I also maintain LA versus Fresno are two different things, both in terms of salary, but also rent/mortgage and expenses. Tacking 80K onto a 300K salary is also not just a snap of the finger either. My baseline point, which I maintain, is that it is pretty ridiculous to say that you have to spend 1.2 million in order to get a "decent" place.

Not if you want to live in nyc. Can barely get a 2 bedroom with that.

 

[yanks26dmb]

Not if you want to live in nyc. Can barely get a 2 bedroom with that.

And I would add, unless you plan on never having a family or living in a <1000 sf 2 bedroom, you're looking at seven figures in SF too.

And in San Diego most of the 600k homes are in not so nice areas where you certainly won't be living with other doctors, lawyers, etc. Not to mention most of those homes are from.thr 60s or 70s and have never been updated.

 

[Splenda88]

And I would add, unless you plan on never having a family or living in a <1000 sf 2 bedroom, you're looking at seven figures in SF too.

And in San Diego most of the 600k homes are in not so nice areas where you certainly won't be living with other doctors, lawyers, etc. Not to mention most of those homes are from.thr 60s or 70s and have never been updated.

There must something VERY attractive about these places that make physicians whom literally can get a job almost anywhere is the US to want to live in these places.

Where I am now, you can get a 3000+ sqft home in a nice suburb for 450k--500k in a nice suburb with good school district, and still think that amount is outrageous.

 

[deleted736562]

There must something VERY attractive about these places that make physicians whom literally can get a job almost anywhere is the US to want to live in these places.

Where I am now, you can get a 3000+ sqft home in a nice suburb for 450k--500k in a nice suburb with good school district, and still think that amount is outrageous.

Yeah, it's called living in a world class city with access to actual culture. Some of us just can't deal with suburbs.

 

[yanks26dmb]

There must something VERY attractive about these places that make physicians whom literally can get a job almost anywhere is the US to want to live in these places.

Where I am now, you can get a 3000+ sqft home in a nice suburb for 450k--500k in a nice suburb with good school district, and still think that amount is outrageous.

It's all about preferences. Having lived many years in both SD and SF, I'd rather have the 1500 sf house and the ability to surf every morning because a pristine beach is a mile away. Not to mention all the food, wine, and great weather living in those locales affords. A bigger house in the suburbs doesn't do much for me, but for some it may. Different strokes. I'm very much looking forward to getting back to the high priced real estate of California after residency.

 

[Armadillos]

Given all the talk of houses, what you all think is reasonable max comfortable amount to spend for a couple with 230k income (easily could be higher w job changes if ever needed), 2 kids, 80k in PSLF loans will be forgiven in a couple years?

 

[finalpsychyear]

Given all the talk of houses, what you all think is reasonable max comfortable amount to spend for a couple with 230k income (easily could be higher w job changes if ever needed), 2 kids, 80k in PSLF loans will be forgiven in a couple years?

I'd gladly trade in a 30+ year working career to live in cali,nyc NOW and replace it with a 10 year career hitting FI living near a top 15-20 city then if desired move and live without any issues in those places working PT. To each their own. Some have all their family in those areas HCOL areas.

 

[Mass Effect]

Not if you want to live in nyc. Can barely get a 2 bedroom with that.

Better tell that to my college pal then. He just bought a 3000 sq ft home in Brooklyn for well below a million dollars.

And beyond anecdotal, there's this:

What Is the True Cost of Living in New York City? - SmartAsset

We all know NYC is expensive but we wanted to see all the numbers laid out. If you're wondering about the true cost of living in New York City, check out...

smartasset.com

I get that it's great to live in NYC and everyone's so proud of it, etc, but no need to inflate the numbers. You may need a million to live in Manhattan. You don't need a million to live in a "decent" place in NYC.

 

[yanks26dmb]

Given all the talk of houses, what you all think is reasonable max comfortable amount to spend for a couple with 230k income (easily could be higher w job changes if ever needed), 2 kids, 80k in PSLF loans will be forgiven in a couple years?

I've heard .28*gross income is a good estimate.

 

[yanks26dmb]

Better tell that to my college pal then. He just bought a 3000 sq ft home in Brooklyn for well below a million dollars.

Just like the psychiatrist pulling 750k/year, this is not common nor should it be counted on. This is very far below market value. I'm going to guess there are tons of issues with this house or it's in a very bad part of brooklyn, if he indeed got this for 700k. Because again, this is very far below market value for almost all of brooklyn.

 

[Mass Effect]

Just like the psychiatrist pulling 750k/year, this is not common nor should it be counted on. This is very far below market value. I'm going to guess there are tons of issues with this house or it's in a very bad part of brooklyn, if he indeed got this for 700k. Because again, this is very far below market value for almost all of brooklyn.

Really? Because homes.com has a ton of listings for similar prices in each of the boroughs, minus Manhattan. What's your source?

 

[Armadillos]

I've heard .28*gross income is a good estimate.

230k/12= 19,166 x .28 = 5366 a month which seems like an insane amount to spend on that income. That’s an almost 900k mortgage based on quick online calculator.

 

[Splenda88]

Given all the talk of houses, what you all think is reasonable max comfortable amount to spend for a couple with 230k income (easily could be higher w job changes if ever needed), 2 kids, 80k in PSLF loans will be forgiven in a couple years?

No more than 25% of your take home pay on a 15-yr note...

If you take home pay is 11k/month, you should have a mortgage payment of ~3k/month... I am assuming you will put 20% down, which is the right thing to do... You should be able to afford something in the range of 450-500k without being house poor.

 

[Armadillos]

No more than 25% of your take home pay on a 15-yr note...

If you take home pay is 11k/month, you should have a mortgage payment of ~3k/month... I am assuming you will put 20% down payment which is the right thing to do... You should be able to afford in the range of 450-500k

With mortgage rates being so low right now and ability for docs to get zero down mortgages with pretty decent rates and no PMI is that really best use of 100k right now vs getting more into retirement accounts/etc?

 

[Splenda88]

It's all about preferences. Having lived many years in both SD and SF, I'd rather have the 1500 sf house and the ability to surf every morning because a pristine beach is a mile away. Not to mention all the food, wine, and great weather living in those locales affords. A bigger house in the suburbs doesn't do much for me, but for some it may. Different strokes. I'm very much looking forward to getting back to the high priced real estate of California after residency.

I agree... I guess I would prefer to live in ok place and make a tons of $$$ and retired or semi retired at 45 in SF/SD

 

[Splenda88]

With mortgage rates being so low right now and ability for docs to get zero down mortgages with pretty decent rates is that really best use of 100k right now vs getting more into retirement accounts/etc?

I get that... I don't want to pay PMI. I guess I watch too much Dave Ramsey. I might subscribe too much to the Dave Ramsey philosophy. No debt, better peace of mind and more opportunity to invest.

 

[Armadillos]

I get that... I don't want to pay PMI. I guess I watch too much Dave Ramsey. I might subscribe too much to the Dave Ramsey philosophy. No debt, better peace of mind and more opportunity to invest.

I think it’s pretty easy to get a no PMI zero down loan as doc if house is in reasonable price range

 

[deleted736562]

Really? Because homes.com has a ton of listings for similar prices in each of the boroughs, minus Manhattan. What's your source?

You realize some parts of Brooklyn are 1 hour away from Manhattan? Frankly that example means nothing if we don't know which part of Brooklyn. That's nominally NYC but not what people traditional ly think of living in the city. You can do a Google or a Zillow search. 1m for a "decent place' is underestimatijg it.

 

[tr]

I think these rules are different for people living in NYC/socal/sf. You need to spend seven figures to get a decent place in one of these locales. But even still, it's very doable. looking at the numbers, a 1.2M house will generate a PITI of roughly 6k/mo with 20% down. Roughly 8k at 10%.

There are decent jobs easily found offering 275-300. Throw in a weekend moonlighting shift once a month and tack on another 80-100k a year.

Assuming married but no working spouse and total income of 380k annually, that's 17.8k monthly after contributing 10% of gross to retirement. This is also in a very high state income state.

When you lay it all out, it doesn't look that crazy to spend that kind of money of a house.

Agree rules are different in NY/CA. The prices are insane but the returns are high too. We bought in SF Bay Area in 2010 for mid/high six figures. Put 20% down and paid good chunk of principal on 15y mortgage, meanwhile the house doubled and we had well over 1M equity this year which we used to vault into the next tier after we moved to the *other* most expensive housing market in the country.

 

[Mass Effect]

I get that... I don't want to pay PMI. I guess I watch too much Dave Ramsey. I might subscribe too much to the Dave Ramsey philosophy. No debt, better peace of mind and more opportunity to invest.

I agree 100%.

You realize some parts of Brooklyn are 1 hour away from Manhattan? Frankly that example means nothing if we don't know which part of Brooklyn. That's nominally NYC but not what people traditional ly think of living in the city. You can do a Google or a Zillow search. 1m for a "decent place' is underestimatijg it.

The discussion was about NYC. Brooklyn is part of NYC. As I said, I wasn't talking about Manhattan.

I did do a Google search and as I posted above, there are a slew of homes, multi-thousand sq ft, available in NYC for under a million. You may not consider them close enough to Manhattan for your liking and that's fine, but to say that you can't get a decent place in NYC for under 1.2 million is not a fact.

 

[deleted736562]

I agree 100%.



The discussion was about NYC. Brooklyn is part of NYC. As I said, I wasn't talking about Manhattan.

I did do a Google search and as I posted above, there are a slew of homes, multi-thousand sq ft, available in NYC for under a million. You may not consider them close enough to Manhattan for your liking and that's fine, but to say that you can't get a decent place in NYC for under 1.2 million is not a fact.

Again which part of Brooklyn?

The comment you objected to is absolutely correct. If we're talking semantics NYC is a huge place. There are parts of NYC which are at least 50 min-1 hour away from what people usually associate with the city. These are not desirable areas, and when people say they want to live in the city they don't mean taking weekend trips to where the cultural attractions are.

 

[Trismegistus4]

Yeah, it's called living in a world class city with access to actual culture. Some of us just can't deal with suburbs.

It sounds like you really mean "some of us just can't deal with small towns." By definition a suburb is just outside a city. You can live in a suburb where the urban core with its restaurants, theaters, museums, etc. is half an hour away.

I get that... I don't want to pay PMI. I guess I watch too much Dave Ramsey. I might subscribe too much to the Dave Ramsey philosophy. No debt, better peace of mind and more opportunity to invest.

Many banks have "doctor loans" which will allow you to put less than 20% down yet not have to pay PMI. I get notices from my bank about their program all the time. But on the larger principle, I agree with you. I'd rather have more cash to put into diversified investments, than spend 50% of my monthly income on a mortgage payment and stake my entire retirement on a bet that my house is going to quadruple in value over 20 years.

 

[yanks26dmb]

I agree 100%.



The discussion was about NYC. Brooklyn is part of NYC. As I said, I wasn't talking about Manhattan.

I did do a Google search and as I posted above, there are a slew of homes, multi-thousand sq ft, available in NYC for under a million. You may not consider them close enough to Manhattan for your liking and that's fine, but to say that you can't get a decent place in NYC for under 1.2 million is not a fact.

I went to zillow and looked for houses (3000 sf minimum) for 650k or less. In all of Brooklyn, 10 showed up. I clicked on a few. 1 was an auction, all the others had the square footage mistakenly noted (187,000 sf for example). Another needed "gut renovation".

As I said, finding a 3000sf house, even in the far outskirts of brooklyn is extremely uncommon if not impossible.

 

[Mass Effect]

Again which part of Brooklyn?

The comment you objected to is absolutely correct. If we're talking semantics NYC is a huge place. There are parts of NYC which are at least 50 min-1 hour away from what people usually associate with the city. These are not desirable areas, and when people say they want to live in the city they don't mean taking weekend trips to where the cultural attractions are.

I went to zillow and looked for houses (3000 sf minimum) for 650k or less. In all of Brooklyn, 10 showed up. I clicked on a few. 1 was an auction, all the others had the square footage mistakenly noted (187,000 sf for example). Another needed "gut renovation".

As I said, finding a 3000sf house, even in the far outskirts of brooklyn is extremely uncommon if not impossible.

It's Sunday night and I'm not going to back and forth with you guys. If you want to believe you can't find a "decent" place in NYC for under 1.2 million, knock yourself out. I'll go with what I know to be true from having family in NYC all my life, and over the past decade, friends as well, and say I disagree. There are plenty of professionals I personally know, both in and out of medicine, in decent dwellings for under a million dollars in NYC, not to mention all the houses I found online and the articles that cite housing costs.

 

[OldPsychDoc]

Then I take it what a lot of these people are doing is banking on their house being their retirement. I.e., they figure, "when we retire, our house will be worth $3 million, and then we can sell it and buy a $500k condo in Florida." Which assumes that 1) real estate will continue to appreciate astronomically, indefinitely, in the area where your current house is located, while 2) it will NOT continue to appreciate astronomically in the community in which that condo is located in Florida. Which are not valid assumptions.

And assumes that Florida won't be submerged at time of retirement.

 

[Mad Jack]

My household income was ~120k/year prior starting med school and I will admit that we were not stranded for money, but we weren't swimming in cash either.

I think US census should at least start at 70k... I am barely making it with 60k/yr right now as resident...

You're pretty well disconnected from what most people earn in this country. Your prior income would place you somewhere around the 7th percentile of earners nationwide, and your income as a resident would land you around the 25th percentile. If the census started the middle class at 70k, greater than 80% of earners would be considered lower class. Here's the percentiles for given incomes:

• 1%: $250,000
• 5%: $135,000
• 10%: $95,000
• 20%: $65,000
• 30%: $50,000
• 40%: $40,000
• 50%: $30,000
• 60%: $20,000
• 70%: $15,000
• 80%: $5,000
• 90%: $0.01 — $4,999

 

[Splenda88]

You're pretty well disconnected from what most people earn in this country. Your prior income would place you somewhere around the 7th percentile of earners nationwide, and your income as a resident would land you around the 25th percentile. If the census started the middle class at 70k, greater than 80% of earners would be considered lower class. Here's the percentiles for given incomes:

• 1%: $250,000
• 5%: $135,000
• 10%: $95,000
• 20%: $65,000
• 30%: $50,000
• 40%: $40,000
• 50%: $30,000
• 60%: $20,000
• 70%: $15,000
• 80%: $5,000
• 90%: $0.01 — $4,999

I was talking about household income--not individual.

 

[yanks26dmb]

You're pretty well disconnected from what most people earn in this country. Your prior income would place you somewhere around the 7th percentile of earners nationwide, and your income as a resident would land you around the 25th percentile. If the census started the middle class at 70k, greater than 80% of earners would be considered lower class. Here's the percentiles for given incomes:

• 1%: $250,000
• 5%: $135,000
• 10%: $95,000
• 20%: $65,000
• 30%: $50,000
• 40%: $40,000
• 50%: $30,000
• 60%: $20,000
• 70%: $15,000
• 80%: $5,000
• 90%: $0.01 — $4,999

Think those numbers are off. At least the 1% figure.

Here's how much you have to earn to be in the top 1% in every US state

In Connecticut, you need an annual income of at least $700,800.

www.google.com

 

[Mad Jack]

I was talking about household income--not individual.

$70,000 still puts you at the 54th percentile for household income, hardly a starting point for middle class, while $120,000 puts you at 77th percentile. But assuming you have a household of one, these figures are kind of meaningless, as the average household is several people. Do you have a partner? Do they work?

 

[Mad Jack]

Think those numbers are off. At least the 1% figure.

Here's how much you have to earn to be in the top 1% in every US state

In Connecticut, you need an annual income of at least $700,800.

www.google.com

Those are household figures, I posted individual earnings.

 

[Splenda88]

$70,000 still puts you at the 54th percentile for household income, hardly a starting point for middle class, while $120,000 puts you at 77th percentile. But assuming you have a household of one, these figures are kind of meaningless, as the average household is several people. Do you have a partner? Do they work?

Before med school, my spouse was working and household was of 4. Now I am the only one working with half of money that we used to live on...

 

[dl2dp2]

The top marginal tax rate is currently 37%, and that's only if your total income is over $500k. Maybe you mean it's almost 50% when you add in state and local income taxes, but you don't get to deduct mortgage interest from those, do you?

I max out 750k mortgage interest at 3.75% = $28185 + $10000 SALT = $38185 deduction at ~50% (yes state/local income tax predicated on federal MAGI).

My marginal could have been: 37+2.35+6.85+3.88 = 50.5%. Actually it's somewhat lower (47%ish) due to me maxing out on some other deductions (401k, etc).

The amount of tax savings per se will absolutely make a difference in terms of timing to retirement. In fact, it maybe the only factor that's controllable that would make a substantial difference, given that investment yield on common financial instruments is not controllable, and other controllable factors (i.e. rebalancing, transaction fee, etc) usually only makes a small difference.

You should read WCI. A lot of what you post are inaccurate and misleading.

 

[dl2dp2]

Better tell that to my college pal then. He just bought a 3000 sq ft home in Brooklyn for well below a million dollars.

And beyond anecdotal, there's this:

What Is the True Cost of Living in New York City? - SmartAsset

We all know NYC is expensive but we wanted to see all the numbers laid out. If you're wondering about the true cost of living in New York City, check out...

smartasset.com

I get that it's great to live in NYC and everyone's so proud of it, etc, but no need to inflate the numbers. You may need a million to live in Manhattan. You don't need a million to live in a "decent" place in NYC.

I agree with this. People who make claims that you need 1.2M to live in NYC are making a semantic exchange between NYC and Manhattan.

Generally, greater NYC is quite a tad cheaper than SF/Bay Area these days, and may be cheaper than Boston depending on how you measure things. You can buy a very nice house in the sub 1M range in Westchester/Bergen County in a top school zone. Similar houses in South Bay in a good zone would cost 2-3M, and the commute into NYC is also much less painful. In Manhattan, you can get a 2 bed for 1M in a good zone, but you need between 1-1.5M for a better product. This may be still more expensive than SF proper on a per sqft basis, but you need a car in SF. Still, none of this is out of reach for a psychiatrist. It's tough obviously if you plan to do early retirement, but it's still doable. Generally, if you want to do early retirement in NYC on one psychiatrist salary with two kids, you'd buy a small house/apt in a good zone in the suburbs, or you rent a small 2 bedroom in a walkup. These options exist and are not particularly looked down upon. Things would be a bit more flush if you have a two-income family, which is common in the area.

Of course, if you want to go high end K-12 private school, new condos and vacation homes, etc. things tend to blow up quickly. Still, just a very unscientific data point: most [pseudo-academic] attendings I know who work in the tristate area end up having a second home in their 50s--so people arent hurting.

 

[AD04]

I max out 750k mortgage interest at 3.75% = $28185 + $10000 SALT = $38185 deduction at ~50% (yes state/local income tax predicated on federal MAGI).

My marginal could have been: 37+2.35+6.85+3.88 = 50.5%. Actually it's somewhat lower (47%ish) due to me maxing out on some other deductions (401k, etc).

The amount of tax savings per se will absolutely make a difference in terms of timing to retirement. In fact, it maybe the only factor that's controllable that would make a substantial difference, given that investment yield on common financial instruments is not controllable, and other controllable factors (i.e. rebalancing, transaction fee, etc) usually only makes a small difference.

You should read WCI. A lot of what you post are inaccurate and misleading.

If you're hitting that as a single or HoH filer, that is quite impressive.

 

[dl2dp2]

If you're hitting that as a single or HoH filer, that is quite impressive.

lol, why would you make such a sexist assumption. my non-binary spouse happens to be a baller.

let's just say, i don't make nearly as much as people [psychiatrists] i know... substantial number of people clearing 500g in my sub-market... i'm poor.

 

[yanks26dmb]

lol, why would you make such a sexist assumption. my non-binary spouse happens to be a baller.

let's just say, i don't make nearly as much as people [psychiatrists] i know... substantial number of people clearing 500g in my sub-market... i'm poor.

What are all these high earning psychiatrists doing?

 

[Mass Effect]

What are all these high earning psychiatrists doing?

Sketchy things most likely.

 

[Splenda88]

Sketchy things most likely.

Why do you think they have to do sketchy things to make a lot of money?

Some people do work hard. For instance, the average salary for hospitalist is ~260k/yr, but I know 2 people who make ~450k/yr. They just pick up more shifts.

 

[deleted736562]

Sketchy things most likely.

Or private practice in Mahattan, $450 an hour?

 

[Mass Effect]

Why do you think they have to do sketchy things to make a lot of money?

Some people do work hard. For instance, the average salary for hospitalist is ~260k/yr, but I know 2 people who make ~450k/yr. They just pick up more shifts.

I didn't say it's definitely sketchy things and I'm also not talking about unethical things. But a lot of the psychiatrists who are making that much are stacking all sorts of jobs and several (not all) job stacks I've seen are somewhat sketchy, in my experience.

 

[Trismegistus4]

I max out 750k mortgage interest at 3.75% = $28185 + $10000 SALT = $38185 deduction at ~50% (yes state/local income tax predicated on federal MAGI).

My marginal could have been: 37+2.35+6.85+3.88 = 50.5%. Actually it's somewhat lower (47%ish) due to me maxing out on some other deductions (401k, etc).

The amount of tax savings per se will absolutely make a difference in terms of timing to retirement. In fact, it maybe the only factor that's controllable that would make a substantial difference, given that investment yield on common financial instruments is not controllable, and other controllable factors (i.e. rebalancing, transaction fee, etc) usually only makes a small difference.

You should read WCI. A lot of what you post are inaccurate and misleading.

I have ready White Coat Investor, and you're the one being inaccurate and misleading, for example by using acronyms without spelling out what they stand for. You haven't said, but if your top marginal federal rate is 37%, and you're filing as single or head of household, you're making more than $510,301, which is double what the average psychiatrist makes, and thus your situation isn't very relevant to that of most posters here. If you weren't joking about having a spouse, your combined income is still well above the average of most posting here.

I didn't say it's definitely sketchy things and I'm also not talking about unethical things. But a lot of the psychiatrists who are making that much are stacking all sorts of jobs and several (not all) job stacks I've seen are somewhat sketchy, in my experience.

Yes, this issue has come up not too long ago. @Armadillos put it well:

Aside from cash only docs setting high cash hourly rates, if you hear of someone making 1.5x-3x what is typical for a full time psychiatrist it is because they are actually working what should be multiple full time jobs and are cramming them into one day by “being efficient” (cutting corners) at each.

 

[dl2dp2]

Or private practice in Mahattan, $450 an hour?

People (not me) who make 500g make more than $450 per hour.

I have ready White Coat Investor, and you're the one being inaccurate and misleading, for example by using acronyms without spelling out what they stand for. You haven't said, but if your top marginal federal rate is 37%, and you're filing as single or head of household, you're making more than $510,301, which is double what the average psychiatrist makes, and thus your situation isn't very relevant to that of most posters here. If you weren't joking about having a spouse, your combined income is still well above the average of most posting here.

There's nothing sketchy about two doctors (or one doctor, one lawyer, one doctor, one tech person, one doctor, one banker, one doctor, one biz owner, etc.) each making an average salary and hitting 37% bracket. Why would anyone assume that women don't work? Why would you assume that I'm in a hetero relationship? All these nonsensical, and most certainly sexist assumptions. At least 50% of younger psychiatrists are women, and a substantial number are non-hetero, and in my experience, most of these people get together with people who have comparable earning potential. Yes, many women go part-time, but they eventually will have no problem going back full time if they want. This IS a FI thread, right? You are completely off on my situation being not relevant to most posters here: my situation of two working stiffs in an urban area is pretty typical, and represents absolutely the majority of people who went to my med school. Incidentally, we are also 1) people who have a target on our back and have the highest tax burden 2) don't have enough money to hire an army of professionals, and not enough non-labor income to avoid taxes using other means.

In any case, I direct people who want the gold standard information on FI to go to WCI.

 

[hamstergang]

Why would anyone assume that women don't work? Why would you assume that I'm in a hetero relationship? All these nonsensical, and most certainly sexist assumptions.

Where are you getting these assumptions from? The post you quoted does not have any mention of gender that I can see.