Retired from Medicine at 43: Why, How, and What Now?

[pgg]

what is stopping it? College costs went up roughly 5x from the 70s to the 90s/00s, you don't think they can go up another 4-5x over the next 20 years?

I mean I agree it's insane, but if you plot out tuition costs from the 1960s to now and extend the graph another 20 years it gets crazy. My assumption is average private college or out of state public will be in the neighborhood of $100K per year in tuition alone in about 15 years. Throw in living costs and add in another kid or two and maybe some graduate school....

I don't think we can just extrapolate trends. Eternal exponential growth is a neat clean curve on paper, but the real world doesn't/can't work that way. If nothing else the stopping force would be the revolution of peasants with torches and pitchforks who see that higher education is simply unattainable. We're already seeing a groundswell of anger supporting the Warren and Sanders campaigns, and a big part of that is the growing student loan debt issue. At some point well before $500K there'd be a hard tipping point when ordinary people simply can't afford higher education.

Much of the supra-inflation annual increases in higher education costs have been a result of diminishing government/taxpayer support of public colleges. Some of these states, there's simply not that much more to cut. Private school costs are going up, but most of them have large endowments and almost every attendee gets significant need and non-need scholarship aid.

I have one kid currently in a superb public university, getting no financial assistance. I just wrote a check for $14,290 for spring semester including housing and meals. Add other incidental expenses and she's there for about $35K/year.

I have another kid in a private university where his annual cost is around $55K/year. He gets about $15K in aid from the school each year; nothing need based.

So rough outlay of maybe $160K per degree. You really think those costs could TRIPLE in real dollars in the next 20 years?

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[pgg]

What's lost in this bizarre discussion is that just because higher income families can CHOOSE to spend any amount of money on raising a kid, sky's the limit, that doesn't mean that's what it COSTS.

This is like saying that because baller MGMA-50th-%ile anesthesiologists have mid-6-figure incomes, and of course no SDN'er is sub-median in anything, that our "cost" to own a vehicle just to get to work is $60K per year, because that's what it "costs" to buy a new 7-series BMW every other year.

Financial threads in this forum are always something of a mathematical vortex zone, with people throwing out $5M and $10M as minimums to retire from working full time, guys coming in talking about currency day trading and the wisdom of buying silver ingots. But $1-2M to raise a child is another distorted tier of wackiness.

You don't need $1M, much less $2M, to raise a kid and send him to college. If you're spending that much you've got to ask yourself exactly what you're buying, and if it's worth the price, and if you're really doing it for him, or in the name of conspicuous consumption.

 

[Piebaldi]

What's lost in this bizarre discussion is that just because higher income families can CHOOSE to spend any amount of money on raising a kid, sky's the limit, that doesn't mean that's what it COSTS.

This is like saying that because baller MGMA-50th-%ile anesthesiologists have mid-6-figure incomes, and of course no SDN'er is sub-median in anything, that our "cost" to own a vehicle just to get to work is $60K per year, because that's what it "costs" to buy a new 7-series BMW every other year.

Financial threads in this forum are always something of a mathematical vortex zone, with people throwing out $5M and $10M as minimums to retire from working full time, guys coming in talking about currency day trading and the wisdom of buying silver ingots. But $1-2M to raise a child is another distorted tier of wackiness.

You don't need $1M, much less $2M, to raise a kid and send him to college. If you're spending that much you've got to ask yourself exactly what you're buying, and if it's worth the price, and if you're really doing it for him, or in the name of conspicuous consumption.

Aren't most discussions on SDN bizarre to some extent though?
I would agree. Kids don't cost 1-2million to raise.

 

[abolt18]

Wow so 3 kiddos and a wife I imagine? How do you do it? I am just curious, sorry again not judging anyone! I consider myself frugal although I have certain lifestyle preferences - travel, spa, fine dining, etc. On 300-400k and two of us, I feel that while we have saved a lot, it still feels like "not enough"

How do you afford to shelter, clothe, feed a family of 5 on 58k? Just a little surprised! Congrats though.

Can't help but smile at this. Different worlds my friend. Not so hard honestly. All our needs are met and most of our wants are also taken care of. Some of them require a few months of saving up, but the most important thing is budgeting, spending less than we earn.

Paid off all debts except our mortgage and student loans. Drive cheap but functional cars. Make our own meals with limited going out to eat. Public school that we love. Sorry, no spa days and our fine dining is typically chick fil a if with the whole fam, or something under 20 bucks a person when it's just my wife an I. Vacation often involves driving or special deals/credit card bonuses. Life is good. We have more money now than we ever have in our whole lives before. Regrettably we only manage to put a few thousand bucks into a Roth IRA each year. But that will change dramatically when our income goes up. When I finish training and am eventually making >$400K a year, I don't even know what I'll do with myself hahaha.

 

[Mman]

What's lost in this bizarre discussion is that just because higher income families can CHOOSE to spend any amount of money on raising a kid, sky's the limit, that doesn't mean that's what it COSTS.

This is like saying that because baller MGMA-50th-%ile anesthesiologists have mid-6-figure incomes, and of course no SDN'er is sub-median in anything, that our "cost" to own a vehicle just to get to work is $60K per year, because that's what it "costs" to buy a new 7-series BMW every other year.

Financial threads in this forum are always something of a mathematical vortex zone, with people throwing out $5M and $10M as minimums to retire from working full time, guys coming in talking about currency day trading and the wisdom of buying silver ingots. But $1-2M to raise a child is another distorted tier of wackiness.

You don't need $1M, much less $2M, to raise a kid and send him to college. If you're spending that much you've got to ask yourself exactly what you're buying, and if it's worth the price, and if you're really doing it for him, or in the name of conspicuous consumption.

1) I was talking about nominal dollars, not inflation adjusted.
2) in 1980, nobody thought college would cost what it would now. When I am planning for future costs, gotta assume worst case with something like this and if it is significantly less than that would be a pleasant surprise.

 

[Mman]

When I finish training and am eventually making >$400K a year, I don't even know what I'll do with myself hahaha.

 

[Angus Avagadro]

I don't think we can just extrapolate trends. Eternal exponential growth is a neat clean curve on paper, but the real world doesn't/can't work that way. If nothing else the stopping force would be the revolution of peasants with torches and pitchforks who see that higher education is simply unattainable. We're already seeing a groundswell of anger supporting the Warren and Sanders campaigns, and a big part of that is the growing student loan debt issue. At some point well before $500K there'd be a hard tipping point when ordinary people simply can't afford higher education.

Much of the supra-inflation annual increases in higher education costs have been a result of diminishing government/taxpayer support of public colleges. Some of these states, there's simply not that much more to cut. Private school costs are going up, but most of them have large endowments and almost every attendee gets significant need and non-need scholarship aid.

I have one kid currently in a superb public university, getting no financial assistance. I just wrote a check for $14,290 for spring semester including housing and meals. Add other incidental expenses and she's there for about $35K/year.

I have another kid in a private university where his annual cost is around $55K/year. He gets about $15K in aid from the school each year; nothing need based.

So rough outlay of maybe $160K per degree. You really think those costs could TRIPLE in real dollars in the next 20 years?

Mine did. Actually by a factor of 4 for over 30 yrs from when I started at my liberal arts pre med mill. Neither of my sons went there, but one private high school, 2 catholic universities, and 1 med school later, I figure 6 to 700k for the both of them for education costs. Now, 20 yrs from now at current education inflation rates, I could see it it being close to 1 million a piece. I dont see ed costs continuing at this rate of inflation. They will price themselves out of any market. With such giant endowments, I see more universities going to free tuition.

 

[deleted126335]

Do you really believe that can happen? I mean, within the bounds of rational possibility that makes planning for that kind of expense something a reasonable human would do? What would happen in this country if NO ONE could afford a college education? And essentially no one could, with costs like that.

In any case, this is all missing the point. The claim was that raising a kid costs $1-2M. It just doesn't, unless you are massively frivolous and wasteful.

Actually yes. If you look at the most competitive colleges in the country they can run approx $70K/year for full sticker price today. About half of the kids at the Ivies pay full sticker. The median salary and median net worth of an anesthesiologist with an 18 year old kid today is unlikely to get need based aid. So, if you aspire for your toddler to go to Stanford, the Ivies, U Chicago, MIT, U of Michigan and U Va. (for out of state residents), et al... Plan on writing that kind of check. I wrote those types of checks. Happily. One of the reasons I relocated far from home.

Is it worth it? Different discussion.

 

[deleted126335]

Mine did. Actually by a factor of 4 for over 30 yrs from when I started at my liberal arts pre med mill. Neither of my sons went there, but one private high school, 2 catholic universities, and 1 med school later, I figure 6 to 700k for the both of them for education costs. Now, 20 yrs from now at current education inflation rates, I could see it it being close to 1 million a piece. I dont see ed costs continuing at this rate of inflation. They will price themselves out of any market. With such giant endowments, I see more universities going to free tuition.

Not for the typical anesthesiologist's demographic. I see more generous means testing and income based repayment.

 

[deleted171991]

Can't help but smile at this. Different worlds my friend. Not so hard honestly. All our needs are met and most of our wants are also taken care of. Some of them require a few months of saving up, but the most important thing is budgeting, spending less than we earn.

Paid off all debts except our mortgage and student loans. Drive cheap but functional cars. Make our own meals with limited going out to eat. Public school that we love. Sorry, no spa days and our fine dining is typically chick fil a if with the whole fam, or something under 20 bucks a person when it's just my wife an I. Vacation often involves driving or special deals/credit card bonuses. Life is good. We have more money now than we ever have in our whole lives before. Regrettably we only manage to put a few thousand bucks into a Roth IRA each year. But that will change dramatically when our income goes up. When I finish training and am eventually making >$400K a year, I don't even know what I'll do with myself hahaha.

Dude, maximize your Roth IRAs FIRST. Best investment you can make at your age.

It's also the best present any parent can make to a kid who has income (offer to match their income with the maximum amount permitted in a Roth IRA).

Every $1000 at 6% (conservative) for 40 years equals $10,285. At 8% it's double that amount (20 times the original investment!), and it's tax free even when inherited.

 

[Angus Avagadro]

Not for the typical anesthesiologist's demographic. I see more generous means testing and income based repayment.

Quite possibly. I think it will be more merit based with some means testing. They will still want good students. I did pay full freight for my sons as I felt applying for aid would be futile.

 

[sevoflurane]

Somewhat related... but this thread makes me feel old.

My first semester tuition at a state college school was $850 for 15 credit hours (a little under 30 years ago).



Super cheap.

 

[IMGASMD]

Somewhat related... but this thread makes me feel old.

My first semester tuition at a state college school was $850 for 15 credit hours (a little under 30 years ago).



Super cheap.

As another thread talked about, tuition hike is unbelievable and probably outpaced anything that anyone can imagine.

My college tuition for a state-related school was about 8000 ish + another 3000 for Room and board, annually. This was 20 years ago.

 

[GravelRider]

Am I the only one not committed to paying for my kids to have a full ride on my dime to private undergrad and graduate schools? I paid for my education, so they can pay for theirs. I’m saving in my state’s 529 plan for the state tax deduction, but beyond that the rest of my money goes into my “travel the world before I’m too old to walk” fund.

 

[MoMoGesiologist]

Am I the only one not committed to paying for my kids to have a full ride on my dime to private undergrad and graduate schools? I paid for my education, so they can pay for theirs. I’m saving in my state’s 529 plan for the state tax deduction, but beyond that the rest of my money goes into my “travel the world before I’m too old to walk” fund.

Apparently the standard of care is to send your kids to private pre-k to high school then the ivies all while paying for private lessons in swimming and gymnastics by Michael phelps and Symone biles and weekends in the alps...

 

[Angus Avagadro]

Am I the only one not committed to paying for my kids to have a full ride on my dime to private undergrad and graduate schools? I paid for my education, so they can pay for theirs. I’m saving in my state’s 529 plan for the state tax deduction, but beyond that the rest of my money goes into my “travel the world before I’m too old to walk” fund.

My wife and I paid our way through college and med school. Our kids all were good athletes and had summer jobs ever since they were old enough to get a work permit. In our state its 14. They used that money for books and spending money so they would have skin in the game. We matched all of their earnings in a Roth IRA. This will be a great gift to them over 40 yrs. Funded UGMAs and 529s. If costs were outside of our ability to pay, they would have taken out loans. Very optimistic about retirement. Seems like our IRAs will sustain us along with SS and some secondary income. Now this was done on 2 physician income so YMMV. Right now working hard on self improvement so traveling will be possible and we can spend our children's inheritance. It can be done, just need a plan that works for you.

 

[deleted126335]

Apparently the standard of care is to send your kids to private pre-k to high school then the ivies all while paying for private lessons in swimming and gymnastics by Michael phelps and Symone biles and weekends in the alps...

Don't forget the near seven figure home, vacation home, new nearly six figure car every few years... Or a trophy wife.

 

[deleted171991]

Don't forget the near seven figure home, vacation home, new nearly six figure car every few years... Or a trophy wife.

A trophy wife that divorces them in a state where marital law is stuck in the 50s, especially after having made a couple of kids. Now that's the real killer.

 

[Hamhock]

Yeah, I agree with the recent sarcastic posts.

As I am often reminded (but don't accept), physicians are just a small segment of the larger population. This thread would support that thesis. It's filled with "yeah buts..." and "it's not fair because, I...."

Yet, that't really nonsense and ignorance and laziness (or at least pure CHOICE).

All of us are limited by our specific difficulties, but I doubt there is a poster on the SDN anesthesiology forum who couldn't FIRE in 15 years. This is the USA for the sake of god (says the near-atheist). Save 50% of your take home (with piss-poor investment strategy) and you are FIRE.

I know this is done in California (tax-hell) easily. It can be done anywhere else with little knowledge, research, or experience. Just let go of insane consumption (at least for the first 10 years), focus on what really gives happiness (as opposed to fleeting pleasures) -- and you are free.

Yeah, maybe I'm a Pollyanna...but in a few years I'll be a Pollyanna with freedom, as most (or all) posters here could be. It's just a choice.

Do you want to not work? Or better: do you want to work only when you feel like it?

I plan on working for many years, but if my group or hospital says that I have to work nights -- nope! Work holidays? Nope!

It's so easy to schedule when you can refuse to work at all.

Every step closer to FI, I find that I get more respect and less requirement from the hospital/group.

I realize I sound like a lucky d!ck here -- but I hope...well, I actually don't care that much.

HH

 

[mostwanted]

Part of our financial education plan for our kids is to instill work ethic and academic excellence. Many colleges across the country offer merit based scholarships, which often cover majority of undergrad expenses.

 

[pgg]

Am I the only one not committed to paying for my kids to have a full ride on my dime to private undergrad and graduate schools? I paid for my education, so they can pay for theirs. I’m saving in my state’s 529 plan for the state tax deduction, but beyond that the rest of my money goes into my “travel the world before I’m too old to walk” fund.

That's totally reasonable, of course. Your cash, your choice. Many if not most financial advisors, and this includes the prevailing opinion on the Bogleheads forums which I tend to value more than other opinions, will advise not compromising one's own retirement savings in the name of funding kids' educations.

However. My feeling on that is

1) I earn enough to do both. I personally want for essentially nothing materially significant at this point in my life, and I'm on track for FI in a handful of years. I won't actually retire for a while yet though, by choice.

2) These days, with undergrad debt being a millstone around so many young adults' neck, sending your kid out into the world with a degree and no debt is probably the 2nd-biggest advantage you can give them, right after raising them to be decent humans with a good work ethic and non-dingus personalities. Economic times are good right now, but we'll have bad times too. Having no educational debt gives them that much more baseline resiliency for if/when they have a period of un- or under-employment. If you think selfishly about it, the bigger the boost you give them the less likely they are to ever need your basement.

I've also funded custodial Roths for them since they were kids making babysitting and other odd job money. A big part of my purpose in life is to stack the deck in their favor as best I can.

So yeah - I do wonder why anyone who can fund their kids' education without major hardship, wouldn't.

 

[GravelRider]

That's totally reasonable, of course. Your cash, your choice. Many if not most financial advisors, and this includes the prevailing opinion on the Bogleheads forums which I tend to value more than other opinions, will advise not compromising one's own retirement savings in the name of funding kids' educations.

However. My feeling on that is

1) I earn enough to do both. I personally want for essentially nothing materially significant at this point in my life, and I'm on track for FI in a handful of years. I won't actually retire for a while yet though, by choice.

2) These days, with undergrad debt being a millstone around so many young adults' neck, sending your kid out into the world with a degree and no debt is probably the 2nd-biggest advantage you can give them, right after raising them to be decent humans with a good work ethic and non-dingus personalities. Economic times are good right now, but we'll have bad times too. Having no educational debt gives them that much more baseline resiliency for if/when they have a period of un- or under-employment. If you think selfishly about it, the bigger the boost you give them the less likely they are to ever need your basement.

I've also funded custodial Roths for them since they were kids making babysitting and other odd job money. A big part of my purpose in life is to stack the deck in their favor as best I can.

So yeah - I do wonder why anyone who can fund their kids' education without major hardship, wouldn't.

Sure, but as mentioned above, if all estimates of future private tuition costs are correct, I’m looking at $120k a year for a private school (I don’t think that will happen). The website of my 529 plan warns of probable annual education costs >$120k (my kids are young). Funding undergrad and 4 years of grad school is a million bucks per kid, give or take. That just seems like a bit much to me.

Everything else, like funding a custodial Roth, is just good financial education for your kids. That is much more valuable than any tuition payment for an overpriced private school. For me, if it comes down to sleeping in a call room when I’m 60 or making my kids take out loans, guess which one I’m picking. We’ll see how things go. A lot can happen in 18-20 years.

 

[Angus Avagadro]

Sure, but as mentioned above, if all estimates of future private tuition costs are correct, I’m looking at $120k a year for a private school (I don’t think that will happen). The website of my 529 plan warns of probable annual education costs >$120k (my kids are young). Funding undergrad and 4 years of grad school is a million bucks per kid, give or take. That just seems like a bit much to me.

Everything else, like funding a custodial Roth, is just good financial education for your kids. That is much more valuable than any tuition payment for an overpriced private school. For me, if it comes down to sleeping in a call room when I’m 60 or making my kids take out loans, guess which one I’m picking. We’ll see how things go. A lot can happen in 18-20 years.

I totally see where you are coming from. Taking call in your 60s sucks. It starts getting bad in your 50s, so your perspective may change. Your body just doesnt bounce back the way it used to. Secondly, having your kids take out some of the cost in loans gives them skin in the game and maybe take school a little more seriously along with sharing in their success. Hopefully a smaller portion of the cost of school wont be too much of a financial hurdle.

 

[sevoflurane]

Good discussion. I see both sides of the argument. I grew up in a third world country so I have deep understanding of poverty and working hard to get a foot up on life. My parents helped where they could, but I think amounting significant debt in college, med school and residency helped me become a more responsible money manager. Almost 300k in debt when I graduated residency.

On the other end, one of my best friends here is a Trauma surgeon. He has privileged kids. They go to private “tennis” school in California. They are very smart and very talented- they work hard. They will be going to some big name school for sure... and they are grateful for their opportunity in life. I am sure they will be successful.

 

[doctalaughs]

That's totally reasonable, of course. Your cash, your choice. Many if not most financial advisors, and this includes the prevailing opinion on the Bogleheads forums which I tend to value more than other opinions, will advise not compromising one's own retirement savings in the name of funding kids' educations.

However. My feeling on that is

1) I earn enough to do both. I personally want for essentially nothing materially significant at this point in my life, and I'm on track for FI in a handful of years. I won't actually retire for a while yet though, by choice.

2) These days, with undergrad debt being a millstone around so many young adults' neck, sending your kid out into the world with a degree and no debt is probably the 2nd-biggest advantage you can give them, right after raising them to be decent humans with a good work ethic and non-dingus personalities. Economic times are good right now, but we'll have bad times too. Having no educational debt gives them that much more baseline resiliency for if/when they have a period of un- or under-employment. If you think selfishly about it, the bigger the boost you give them the less likely they are to ever need your basement.

I've also funded custodial Roths for them since they were kids making babysitting and other odd job money. A big part of my purpose in life is to stack the deck in their favor as best I can.

So yeah - I do wonder why anyone who can fund their kids' education without major hardship, wouldn't.

Agree with this. If my kids end up getting into a top tier college then I’ve already succeeded in the #1 goal of making them hard self-driven workers. Most top end (and to some extent) all higher ed in the USA has become a two-tier pricing system. If you are “rich” (aka a doctor or similar earning profession) then you pay an ever-increasing ridiculous price tag. If you are middle or lower income then you get a steep, steep discount on the sticker price through various programs. THIS is why I think the prices can continue to go up exponentially and easily be 120k/yr by the time my kids go through. Sure, I hope that I’m wrong about the end “1-2 million dollar figure” to raise my kids when all is said and done— but I’m planning for the worst. The college sticker price is just another way to stick it to the “greedy rich” class (while the real ultra-wealthy class in the USA laughs).

If I’m wrong in a decade then I’ll be okay having that extra cash - not all of it is in 529s and even if the 529s are too much I’m happy to fund my grandkids (or my siblings kids) as a gift. I don’t plan to work beyond late 50s anyway (at most- and luckily take no call) and have no other good use for the money that I can think of.

 

[doctalaughs]

Sure, but as mentioned above, if all estimates of future private tuition costs are correct, I’m looking at $120k a year for a private school (I don’t think that will happen).
That just seems like a bit much to me.

Everything else, like funding a custodial Roth, is just good financial education for your kids. That is much more valuable than any tuition payment for an overpriced private school. For me, if it comes down to sleeping in a call room when I’m 60 or making my kids take out loans, guess which one I’m picking. We’ll see how things go. A lot can happen in 18-20 years.

bolded is exactly what I’m talking about- lot of posters here saying that 1-2 million per kid is bizarre and ridiculous but that’s based on basically *hoping* that the data driven predictions and current trend are wrong. Like I mentioned above- higher-Ed is a 2-tier pricing scheme now, and if you make 300k+ then you are paying sticker price.

I’m telling you - 1-2 million is a safe estimate without the Dr. Evil luge lessons in Ragoon. Possibly wrong - but not unreasonable.

 

[deleted171991]

bolded is exactly what I’m talking about- lot of posters here saying that 1-2 million per kid is bizarre and ridiculous but that’s based on basically *hoping* that the data driven predictions and current trend are wrong. Like I mentioned above- higher-Ed is a 2-tier pricing scheme now, and if you make 300k+ then you are paying sticker price.

I’m telling you - 1-2 million is a safe estimate without the Dr. Evil luge lessons in Ragoon. Possibly wrong - but not unreasonable.

That's SO dumb financially. Unless going into some well-paid occupation, it makes more sense to invest the money for the kid (in a trust fund) than pay a million for higher education. Especially since many state schools are actually good enough.

A financially-spoiled childhood is the recipe for a lifetime of financial failure.

 

[nimbus]

A financially-spoiled childhood is the recipe for a lifetime of financial failure.

I don’t know about that. I went to school with a bunch of financially spoiled children (private HS, private college, and private med school) who are now financially successful enough to financially spoil their own children with private schools.

 

[doctalaughs]

That's SO dumb financially. Unless going into some well-paid occupation, it makes more sense to invest the money for the kid (in a trust fund) than pay a million for higher education. Especially since many state schools are actually good enough.

A financially-spoiled childhood is the recipe for a lifetime of financial failure.

you are of course entitled to your own opinion but if you look at the data, the average difference in lifetime earnings from top-tier institutions more than makes up the difference, even with time value of money factored in. And I’m not talking just ivies- there are some amazing technical universities as well that may be even a better deal. Add that to the fact that your children are much more likely to marry someone of equal earning potential and the opportunity is worth the cash, IMO.

Don’t forget that many other disciplines like law, top-consulting, ibanking etc these places have a huge leg up (less so with medicine where you only get a modest bump).

I would argue the mid-tier private universities that are about the same price as ivies are the real rip-off. State schools far exceed these in value.

Also - notice that I never said that plenty of people aren’t very successful from mid-tier or state schools - so please don’t take it that way. I’m just talking cold hard statistical averages. If my kids go to state schools that is just fine with me - I’m just not going to tell them “you can’t go ivy if you do the work to get in, because financially it’s not worth it”.

I do agree with you that if your kid is 100% certain they will be a high school teacher, art major or plumber it would be dumb financially to send them to Harvard. But what 17-year old knows at that point in life?

 

[dpmd]

Wow so 3 kiddos and a wife I imagine? How do you do it? I am just curious, sorry again not judging anyone! I consider myself frugal although I have certain lifestyle preferences - travel, spa, fine dining, etc. On 300-400k and two of us, I feel that while we have saved a lot, it still feels like "not enough"

How do you afford to shelter, clothe, feed a family of 5 on 58k? Just a little surprised! Congrats though.

I think you have an inaccurate view of frugality.

 

[abolt18]

I think you have an inaccurate view of frugality.

All that matters is RELATIVE frugality. If you're throwing tons of money into savings (i.e. enough 5o achieve your financial goals), spend the rest however you want!

 

[dpmd]

All that matters is RELATIVE frugality. If you're throwing tons of money into savings (i.e. enough 5o achieve your financial goals), spend the rest however you want!

This is true. But even as income grows if one is able to keeps one's tastes simple then you can easily reach financial independence. Maybe instead of that high end spa you check out a massage school or a less fancy place. Instead of that Michelin star place with the tiny food for 200 bucks a pop you get a delicious but less fancy meal or make certain things yourself (grilled lobster tail at home is a lot cheaper than at a fancy place). For travel, do you really need that expensive luxury hotel or will a still nice but more affordable place like a marriott or similar suit your needs. It hard to not acquire a taste for luxury though. Once you take that first nice first class flight it is hard to go back to coach, but you make tradeoff decisions. Like we can take a European cruise with first class flights during high season for almost 20 grand or we can go on a really cool and fun 2 week road trip seeing a bunch of national parks for like 2 grand. And if we do that then we can try to do that European trip off season and still have money left over for a third trip (or whatever else might be fun like several fancy dinners). It doesn't just have to be eating beans every day (though if that is part of your strategy then buying dried and cooking them in a slow cooker is probably less than a 5th of the price of canned)

 

[Mman]

This is true. But even as income grows if one is able to keeps one's tastes simple then you can easily reach financial independence. Maybe instead of that high end spa you check out a massage school or a less fancy place.

Heck Bob Kraft owns the Patriots and even he will go for the $59 rub and tug every now and then. Apparently also $15 off early bird special before 11 AM!

disturbing saga of Robert Kraft

 

[deleted162650]

Heck Bob Kraft owns the Patriots and even he will go for the $59 rub and tub every now and then. Apparently also $15 off early bird special before 11 AM!

disturbing saga of Robert Kraft

Funny that he made all his money on boxes, and now apparently spends his money on boxes.

 

[GravelRider]

you are of course entitled to your own opinion but if you look at the data, the average difference in lifetime earnings from top-tier institutions more than makes up the difference, even with time value of money factored in. And I’m not talking just ivies- there are some amazing technical universities as well that may be even a better deal. Add that to the fact that your children are much more likely to marry someone of equal earning potential and the opportunity is worth the cash, IMO.

Don’t forget that many other disciplines like law, top-consulting, ibanking etc these places have a huge leg up (less so with medicine where you only get a modest bump).

I would argue the mid-tier private universities that are about the same price as ivies are the real rip-off. State schools far exceed these in value.

Also - notice that I never said that plenty of people aren’t very successful from mid-tier or state schools - so please don’t take it that way. I’m just talking cold hard statistical averages. If my kids go to state schools that is just fine with me - I’m just not going to tell them “you can’t go ivy if you do the work to get in, because financially it’s not worth it”.

I do agree with you that if your kid is 100% certain they will be a high school teacher, art major or plumber it would be dumb financially to send them to Harvard. But what 17-year old knows at that point in life?

That’s fine. My point is that I’m not sacrificing my own life to ensure that my kids can have a full ride to an Ivy League undergrad and graduate school. If my kids are able to achieve acceptance to those kinds of schools and the investment is worth it in terms of future earning potential then they can easily pay back that investment with their own income. I did, and it was not that difficult.

I’m not saying that I am not giving my kids a headstart. My kids will be better off than 99% of kids out there. What I am saying is that my financial planning does not include me setting aside a million dollars per kid so they can go to whatever school they want entirely on my dime. Doing so would require me babysitting epidurals at night much longer than I would like.

 

[doctalaughs]

Here’s an interesting fact:
- if you get into Harvard today and your family income is 65k or less then you automatically get a full ride (zero cost).
- if your family makes 120k/yr the sticker price per year is about 10-15k
- full cost (about 60k/yr) kicks in around 300k annual income a year.

I’m pretty sure the redistribution will continue to become steeper so that in the future paying 150k a year if you make 500k will be the norm, while “free” will continue to expand to lower incomes at a wider range of colleges (similar programs exist at most top tier programs).

Not saying this is right or wrong - it’s just a new creative sort of super-progressive tax that no one talks about. Unfortunately, just like the income tax system it “penalizes” success while not touching the real ultra-wealthy (who wouldn’t care if it were 500k a year, which is pennies to them).

 

[deleted697127]

Heck Bob Kraft owns the Patriots and even he will go for the $59 rub and tub every now and then. Apparently also $15 off early bird special before 11 AM!

disturbing saga of Robert Kraft

This quote from the article made me laugh:

“Over the bridge is West Palm Beach, a service town on the mainland, where the support staffs live: maids, gardeners, doctors, judges—anyone who has to work for a living.”

 

[Mman]

Here’s an interesting fact:
- if you get into Harvard today and your family income is 65k or less then you automatically get a full ride (zero cost).
- if your family makes 120k/yr the sticker price per year is about 10-15k
- full cost (about 60k/yr) kicks in around 300k annual income a year.

I’m pretty sure the redistribution will continue to become steeper so that in the future paying 150k a year if you make 500k will be the norm, while “free” will continue to expand to lower incomes at a wider range of colleges (similar programs exist at most top tier programs).

Not saying this is right or wrong - it’s just a new creative sort of super-progressive tax that no one talks about. Unfortunately, just like the income tax system it “penalizes” success while not touching the real ultra-wealthy (who wouldn’t care if it were 500k a year, which is pennies to them).

I'll make sure to retire before they apply for college so my income can be extremely low that year.

 

[doctalaughs]

I'll make sure to retire before they apply for college so my income can be extremely low that year.

Unfortunately they look at your total assets and what passive income can be generated too - so unless you are creative about hiding your money in the caymans....

 

[GravelRider]

Here’s an interesting fact:
- if you get into Harvard today and your family income is 65k or less then you automatically get a full ride (zero cost).
- if your family makes 120k/yr the sticker price per year is about 10-15k
- full cost (about 60k/yr) kicks in around 300k annual income a year.

I’m pretty sure the redistribution will continue to become steeper so that in the future paying 150k a year if you make 500k will be the norm, while “free” will continue to expand to lower incomes at a wider range of colleges (similar programs exist at most top tier programs).

Not saying this is right or wrong - it’s just a new creative sort of super-progressive tax that no one talks about. Unfortunately, just like the income tax system it “penalizes” success while not touching the real ultra-wealthy (who wouldn’t care if it were 500k a year, which is pennies to them).

Harvard is a private institution that can do whatever it wants with its tuition rates.

If you are talking about a public institution then that is a different discussion. Most of the “free college” talk now in politics applies only to public schools and the more progressive candidates are suggesting that “free” would apply to all regardless of income. Even billionaires would be able to go to a public university “for free.”

 

[Mman]

Unfortunately they look at your total assets and what passive income can be generated too - so unless you are creative about hiding your money in the caymans....

assets are not that difficult to hide. You can open a trust in South Dakota and not a soul in the world will be able to know who owns or benefits from it.

 

[nimbus]

Harvard is a private institution that can do whatever it wants with its tuition rates.

If you are talking about a public institution then that is a different discussion. Most of the “free college” talk now in politics applies only to public schools and the more progressive candidates are suggesting that “free” would apply to all regardless of income. Even billionaires would be able to go to a public university “for free.”

I was talking to a gastroenterologist who grew up and attended medical school in India. He said it was free so it’s not so unusual in other places. The downside is that you need to outscore a bunch of gunners who prep 10 years for their college entrance exams.

 

[ryanjmy]

I think it’d be selfish for someone making >$300k/year not to pay for thier kid’s undergrad. Especially if it’s so you could retire in your 40s. We all hope our kids will be super successful and make more money than us, but it’s far from a given.

And unless your kid is scoring 99th percentile on every tests he takes and is captain of all his sports teams you probably won’t have to worry about that Ivey league tuition.

 

[GA8314]

I'm going to be honest, amongst my attendings in trainings and my current colleagues who were/are in their mid-late 60s, none of them were exactly amazing clinicians. Super smart and experienced? Sure. But they were also generally not great technically, were not up to date with latest studies or technology, and were just slower. Caveat obviously being these are academic places so it probably self-selects for slower and you probably lose technical skills working with residents for 30+ years. No excuses for the other 2. Maybe too much specialization?

Maybe it's different in PP, I dunno. I just don't think anesthesia is an old person's field like psychiatry or IM or FM might be.

I think it depends on the doc. I know what you mean, but I really like to think it's more personality than anything else. A hard worker, who stays up to date and avoids stagnation into his/her 60's was probably the same way (or a bit less) in his/her 30/40's. The slackers, the same.

I definitely see slow down with docs in their 60's but it doesn't need to be compromising clinically or even production wise if managed well.

 

[GA8314]

I think it’d be selfish for someone making >$300k/year not to pay for thier kid’s undergrad. Especially if it’s so you could retire in your 40s. We all hope our kids will be super successful and make more money than us, but it’s far from a given.

And unless your kid is scoring 99th percentile on every tests he takes and is captain of all his sports teams you probably won’t have to worry about that Ivey league tuition.

I agree. I personally feel it's simply unrealistic for the average (or above average) kid to make what many of us make. I won't squander this opportunity for myself or family by squandering it away (not allowing for a comfy retirement) and I won't do so by allowing my son to be saddled with tuition debt one day.

It would be different if we were making much less, but we don't.

 

[caligas]

This is the number many of you say you need to retire: $5 million. That means you need to be saving $4500-$5,000 per month minimum to get there. But, most of you should be able to save a total of $60,000 per year between 401Ks and after tax accounts.

“You can’t do anything with five, Five’s a nightmare: You can’t retire. Not worth it to work. Poorest rich person in America. Five will drive you un poco loco, my fine-feathered friend.”

 

[okayplayer]

Outstanding reference.

 

[BLADEMDA]

I realize everyone has their own retirement “number” but I recall most young attendings on SDN stated $5 mil was their number. I think that is a bit low but each has his/her own calculation of living expenses. I also prefer a 2.5 percent annual withdrawal rate just to be safe.

10 MILLION DOLLARS

Is this the magic number needed to retire at any age from medicine and say F it all? What is everyone's magic number to get out?

forums.studentdoctor.net

 

[MoMoGesiologist]

How any of u guys are getting into the multi millions sounds like such magic to me. I just started my career and feel so behind both my MD and non-MD peers. Multi-million savings/investments is but a dream to me...

 

[okayplayer]

How any of u guys are getting into the multi millions sounds like such magic to me. I just started my career and feel so behind both my MD and non-MD peers. Multi-million savings/investments is but a dream to me...

Slow and steady my friend. 5.5 years in and this is what I’ve done (no new advice here):
-maximize all pretax options (401k/profit sharing plan for you and spouse, HSA, Cash Balance Plan if your group offers it)
-if your state offers a tax deduction, at least contribute enough in the 529 to max that out
-Backdoor Roth IRAs for you and your spouse
-all extra $ decide between: paying off student loans/mortgage, extra investments in brokerage account, additional money in 529 other than above OR some combination of the above.

Try not to grow your lifestyle too much (it will obviously grow some as your income grows, especially if you have a spouse and kids). Have sufficient disability and life insurance.

I’m a big believer in tracking net worth on a spreadsheet. I find it very affirming to update this monthly. It allows you to visibly see progress from paying all of this money towards student loans when it otherwise feels almost insurmountable.

Good luck.