Seven figure pharmacist

[Seriously Serious]

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Seems to be a lot of buzz with this new book, has anyone read it? I tend to ignore all of these cliche, all heat no fire, type of financial 'resources'... however, since it pertains to pharmacists specifically, I am thinking of biting... thoughts?

 

[Momus]

Nothing more than a shill who sell you their courses/services... you can learn it yourself.

 

[CARph]

Larry Merlo?

 

[PA_dud3]

Nah, man, listen to Dave Ramsey. 11% annual returns on growth stock mutual funds and a personal blessing from Dave himself if you graduate with no loans. That's how you "live like no one else"

/s

 

[WVUPharm2007]

Seems to be a lot of buzz with this new book, has anyone read it? I tend to ignore all of these cliche, all heat no fire, type of financial 'resources'... however, since it pertains to pharmacists specifically, I am thinking of biting... thoughts?

I'll give you the gameplan.

Max out your tax advantaged accounts. Pay yourself first. Invest in well diversified, low cost index funds. Max out Roth IRA, 401k, HSA.

Pay off student loans aggressively. Here's what I did. I had $20,000 liquid in the bank at all times. I'd let the month go by. After retirement savings, bills, mortgage, monthly paychecks, etc...I'd usually have a surplus. I'd take whatever was left above that $20,000 and send it to pay off the loans. I stopped this once I got down to the 2.5% subsidized loans and paid off other debt. But that's how I did it. Then when you are debt free, you can look at more interesting investments outside your retirement. REITs, individual stocks, whatever. I personally just give it to Vanguard's VTSAX.

Don't be stupid and buy a McMansion or a Benz. These are the two biggest pitfalls. Overdoing the house and car. Live comfortably, but not lavishly. Buy a modest house. Buy a 2-3 year old car with low miles that some other schmuck took the depreciation hit on. Buy the nicest version of the Toyota/Honda/Ford rather than the Lexus/Acura/Lincoln. They are basically the same car for thousands less these days. Pay for it and keep it for as long as possible.

Then wait.

Done. You win. You'll be worth seven figures a few times over when you retire.

Saved you the cost of the book.

It really isn't that hard to get your net worth over a million with our income levels.

 

[Lnsean]

I'll give you the gameplan.

Max out your tax advantaged accounts. Pay yourself first. Invest in well diversified, low cost index funds.

Pay off student loans aggressively.

Don't be stupid and buy a McMansion or a Benz.

Done. You win. You'll be worth seven figures a few times over.

Saved you the cost of the book.

It really isn't that hard to get your net worth over a million with our income levels.

The point isn't to get 7 figures and be in your 70s. Each year that passes is time that you can never get back with tomorrow being of no certainty. I really dont agree with the whole notion of getting rich in your 80s.

 

[WVUPharm2007]

The point isn't to get 7 figures and be in your 70s. Each year that passes is time that you can never get back with tomorrow being of no certainty. I really dont agree with the whole notion of getting rich in your 80s.

I'll probably cross the 7 figure mark in my 40s doing this. My net is about half that and I'm 35.

Once you get student loans done with...man, you really start to pile on the net worth. Because after that, all money is going into something that is appreciative. House, stocks, REITs, etc.

If you did that until you were 80...good lord, you'd be an 8 figure pharmacist.

 

[Lnsean]

I'll probably cross the 7 figure mark in my 40s doing this. My net is about half that and I'm 35.

I say congrats to you. I had similar numbers a couple years ago, but after a wedding, house, new car, and going part time and unexpected events...7 figures for alot of people is really more into their retirement than anything.


120k x 40 years = 4.8 million x effective take home rate of 0.70 = 3.36 million....with a savings rate of 40%, you walk away with barely 1.36 million over a life time of working. I also don't know anyone with a family that is saving anything close to 40%

Yes, you can grow your net by investing and doing side businesses but these also come with risks. Tit for tat.

 

[Momus]

I say congrats to you. I had similar numbers a couple years ago, but after a wedding, house, new car, and going part time and unexpected events...7 figures for alot of people is really more into their retirement than anything.


120k x 40 years = 4.8 million x effective take home rate of 0.70 = 3.36 million....with a savings rate of 40%, you walk away with barely 1.36 million over a life time of working. I also don't know anyone with a family that is saving anything close to 40%

Yes, you can grow your net by investing and doing side businesses but these also come with risks. Tit for tat.

Starting amount $0.00
Years 40 years.
Additional contributions $34,000.00 per year
Rate of return 9% compounded annually
Total amount you will have contributed $1,360,000.00
Total interest $11,161,923.76
Total at end of investment $12,521,923.76

Not bad for a single earner. I doubt you make the same amount for 40 yrs.

 

[Lnsean]

Starting amount $0.00
Years 40 years.
Additional contributions $34,000.00 per year
Rate of return 9% compounded annually
Total amount you will have contributed $1,360,000.00
Total interest $11,161,923.76
Total at end of investment $12,521,923.76

Not bad for a single earner. I doubt you make the same amount for 40 yrs.

Lol...you're being too optimistic with 9%...just fyi. Also the max 401k contribution is like 18k. I mean this is all basic information and you seem to be unaware of it.

 

[WVUPharm2007]

If you hold yourself back by buying new cars and big houses, having crazy weddings... that will happen to you. You get stuck. Live below your means.

I have two used cars. I got married for $16 at the local courthouse. I live in a modest $247k house.

 

[Lnsean]

If you hold yourself back by buying new cars and big houses, that will happen to you. You get stuck.

I agree. I just feel that life does get in the way and only a handful of people can put off not starting a family and buying a house

 

[WVUPharm2007]

I agree. I just feel that life does get in the way and only a handful of people can put off not starting a family and buying a house

Buying a house or a ridiculous house?

 

[Lnsean]

Buying a house or a ridiculous house?

Houses around me are 500-600k with 15-20k in taxes. Definitely would have to move.

 

[Momus]

Lol...you're being too optimistic with 9%...just fyi. Also the max 401k contribution is like 18k. I mean this is all basic information and you seem to be unaware of it.

Me, unaware? LMAO. You limit yourself to 18.5k/yr in pretax savings? Duh man... this is why people aren't rich. Call it optimistic, but it has been working for 200 years of stock history.

 

[WVUPharm2007]

Houses around me are 500-600k with 15-20k in taxes. Definitely would have to move.

Geographic arbitrage is another good strategy, but people are sometimes reluctant.

Let's be honest...if you live in the costly parts of California or NY, Miami, whatever...expect to not be able to save as much. That's the draw back of living where everyone wants to live.

That's why I love Philly. You have everything you would ever want close by and houses are cheap.

 

[Lnsean]

Me, unaware? LMAO. You limit yourself to 18.5k/yr in pretax savings? Duh man... this is why people aren't rich.

It's a legal limitation. What company allows you to contribute more. Inform me. Don't tell me you "roll" lmao.

I can already tell you have no clue what you are talking about. The 401k limitation is imposed by the IRS...it's not a self imposed limitation...okay? You get it now? Unless you and your employer are both doing illegal sht.. You are not contributing more than 18k in pre-tax dollars in anything

 

[Lnsean]

Geographic arbitrage is another good strategy, but people are sometimes reluctant.

Let's be honest...if you live in the costly parts of California or NY, Miami, whatever...expect to not be able to save as much. That's the draw back of living where everyone wants to live.

That's why I love Philly. You have everything you would ever want close by and houses are cheap.

Yea ...the location matters and cost of living is a huge factor.

 

[WVUPharm2007]

Lol...you're being too optimistic with 9%...just fyi. Also the max 401k contribution is like 18k. I mean this is all basic information and you seem to be unaware of it.

I'll help.

Here's what maxing your tax advantaged accounts looks like.

$18.5k 401k
$7k 401k match (5% CVS match)
$5500 Roth IRA
$6500 HSA
-----
$37,500 / year.

 

[Lnsean]

I'll help.

Here's what making your tax advantaged accounts looks like.

$18.5k 401k
$7k 401k match (5% CVS match)
$5500 Roth IRA
$6500 HSA
-----
$37,500 / year.

Definitely not count the HSA...for me it's a use it or lose it account. Some years you will lose out on this.

Roth is after tax dollars...you are already starting out in a hole.

The 401k and match agree with but it is hard to max out. I think everyone contributes up to the match but not everyone is able to max.

 

[Momus]

It's a legal limitation. What company allows you to contribute more. Inform me. Don't tell me you "roll" lmao.

120k x 40 years = 4.8 million x effective take home rate of 0.70 = 3.36 million....with a savings rate of 40%, you walk away with barely 1.36 million over a life time of working. I also don't know anyone with a family that is saving anything close to 40%

There is this thing called taxable account if you aren't eligible for retirement account (unlikely)... your calculation is based off after tax money, yes? So, what's so hard to dump what you need to save to taxable account?

 

[Lnsean]

There is this thing called taxable account if you aren't eligible for retirement account (unlikely)... your calculation is based off after tax money, yes? So, what's so hard to dump what you need to save to taxable account?

You didn't even know that the 18k is an IRS limitation dude. You have no credibility here. Like are you serious right now? Lmao

 

[Momus]

You didn't even know that the 18k is an IRS limitation dude. You have no credibility here. Like are you serious right now? Lmao

Do you know it's actually 18.5k, NOT 18k? Please get your facts straight.

 

[WVUPharm2007]

Definitely not count the HSA...for me it's a use it or lose it account. Some years you will lose out on this.

Roth is after tax dollars...you are already starting out in a hole.

The 401k and match agree with but it is hard to max out. I think everyone contributes up to the match but not everyone is able to max.

You make $120k+ a year and find it hard to max out 401k? Can you share your budget? That's crazy.

Also, if it's use it or lose it, it isn't an HSA. It's an FSA and those suck. And Roth IRA is tax free on withdrawal. It still certainly counts as tax advantaged.

 

[Lnsean]

You make $120k+ a year and find it hard to max out 401k? Can you share your budget? That's crazy.

Also, if it's use it or lose it, it isn't an HSA. It's an FSA and those suck. And Roth IRA is tax free on withdrawal. It still certainly counts as tax advantaged.

Maybe others can chime in if they can max out on their 401k and I'll see if it's just my cost of living. I know none of my friends are able to max their 401ks living in my area.

I honestly would not count HSA but if you insist I'll let you have it.

While the Roth is tax free on gains...gains are never guarranteed, it is also after tax dollars...you have already lost 30% on it tbh.

 

[Lnsean]

Do you know it's actually 18.5k, NOT 18k? Please get your facts straight.

Leave this discussion to the adults

 

[Momus]

Leave this discussion to the adults

Look at yourself in the mirror. Your financial illiteracy and inability to learn more boggle my mind.

"Oh, it's limited to 18k". I can't save more than that outside of my 401k... wow, just wow... /roll eyes. You should really buy this book. It MIGHT just help you get to seven figure.

 

[Lnsean]

Look at yourself in the mirror. Your financial illiteracy and inability to learn more boggle my mind.

"Oh, it's limited to 18k". I can't save more than that outside of my 401k... wow, just wow... /roll eyes. You should really buy this book. It MIGHT just help you get to seven figure.

You thought it was a self limitation...lol...come on dude...that is like basic basic basic information. It's like giving people reading lessons when you're blind.

 

[Momus]

You thought it was a self limitation...lol...come on dude...that is like basic basic basic information. It's like giving people reading lessons when you're blind.

Can't feed the trolls. It's obvious you are bitter that a lot of other people are able to save a lot more than you to other various investment vehicles on top of their 401k. Instead of learning, personal attacks are you go to defense mechanism. Thank god, I am not you.

 

[Momus]

I'll give you the gameplan.


Don't be stupid and buy a McMansion or a Benz. These are the two biggest pitfalls. Overdoing the house and car. Live comfortably, but not lavishly. Buy a modest house. Buy a 2-3 year old car with low miles that some other schmuck took the depreciation hit on. Buy the nicest version of the Toyota/Honda/Ford rather than the Lexus/Acura/Lincoln. They are basically the same car for thousands less these days. Pay for it and keep it for as long as possible.

I might buy Honda Insight in 2020 or beyond for my daily driver. Still loving my 08 paint chipped Accord coupe.

 

[Lnsean]

No

Can't feed the trolls. It's obvious you are bitter that a lot of other people are able to save a lot more than you to other various investment vehicles on top of their 401k. Instead of learning, personal attacks are you go to defense mechanism. Thank god, I am not you.

Huh? I have a different path....I'm only working part time. Why are you even getting personal with your argument. You should let the facts speak for themselves.

The point was that you didn't even know the very basics of 401k but you are here trying to give people advice on it. I find that very troubling. You were basically telling me I could contribute more than the limit on my 401k which is totally false.

It's a credibility thing....how can you expect people to take you seriously when you didn't even know the very basic fact on 401k

 

[Momus]

No

Huh? I have a different path....I'm only working part time. Why are you even getting personal with your argument. You should let the facts speak for themselves.

The point was that you didn't even know the very basics of 401k but you are here trying to give people advice on it. I find that very troubling. You were basically telling me I could contribute more than the limit on my 401k which is totally false. It's a credibility thing....how can you expect people to take you serious when you didn't even know the very basic fact on 401k

Please quote me on that. I try to make you contribute more than 401k limit? Do I even say 401k in my post? Quote me, so you can stop looking like an idiot in this forum.

 

[Momus]

I might buy Honda Insight in 2020 or beyond for my daily driver. Still loving my 08 paint chipped Accord coupe.

Looks pretty tight for a hybrid :-D

 

[Lnsean]

Please quote me on that. I try to make you contribute more than 401k limit? Do I even say 401k in my post? Quote me, so you can stop looking like an idiot in this forum.

People can read...just scroll up. You basically said it was a self limitation on pre-tax dollars. It's up there. I'm not here to argue with you. Just saying...should know your facts before opening your mouth.

 

[Momus]

People can read...just scroll up. You basically said it was a self limitation on pre-tax dollars. It's up there. I'm not here to argue with you. Just saying...should know your facts before opening your mouth.

Yes, people can read how idiotic you come across.

 

[Lnsean]

Yes, people can read how idiotic you come across.

Way too many personal attacks here. Why are you mad at me for correcting you? You should be appreciative. Others might think that they can actually contribute more than the limit had I not corrected you.

 

[Momus]

Way too many personal attacks here. Why are you mad at me for correcting you? You should be appreciative. Others might think that they can actually contribute more than the limit had I not corrected you.

You didn't correct me because there was nothing I posted needed correction. Anyone with a good reading comprehension knows this.

 

[Mad Jack]

I say congrats to you. I had similar numbers a couple years ago, but after a wedding, house, new car, and going part time and unexpected events...7 figures for alot of people is really more into their retirement than anything.


120k x 40 years = 4.8 million x effective take home rate of 0.70 = 3.36 million....with a savings rate of 40%, you walk away with barely 1.36 million over a life time of working. I also don't know anyone with a family that is saving anything close to 40%

Yes, you can grow your net by investing and doing side businesses but these also come with risks. Tit for tat.

If you aren't willing to invest, you're costing yourself literally millions of dollars. Almost everyone with a net worth of over a million dollars gets there by investing, not by throwing cash under a mattress or in a bank account. The only way to lose at investing in the market is if you do it short term- people who invested before the greatest crises in history ultimately turned a profit that was substantial as long as they kept investing consistently and didn't bail.

If you're looking to get rich quick, you don't deserve to be rich. Wealth ultimately belongs to those that responsibly steward it, not to impulsive "I want it now" types.

 

[WVUPharm2007]

Looks pretty tight for a hybrid :-D

I drive this plug in hybrid:

Original MSRP: $41000.
Bought two years old off lease: $16500

20 miles on electric. No gas at all during my work week!

And I still have an old 2008 Mercury Sable...

 

[Lnsean]

If you aren't willing to invest, you're costing yourself literally millions of dollars. Almost everyone with a net worth of over a million dollars gets there by investing, not by throwing cash under a mattress or in a bank account. The only way to lose at investing in the market is if you do it short term- people who invested before the greatest crises in history ultimately turned a profit that was substantial as long as they kept investing consistently and didn't bail.

If you're looking to get rich quick, you don't deserve to be rich. Wealth ultimately belongs to those that responsibly steward it, not to impulsive "I want it now" types.

No I agree...just not everyone saves enough each year. I'm just seeing if it's typical for ppl to max out their 401k.

 

[Lnsean]

You didn't correct me because there was nothing I posted needed correction. Anyone with a good reading comprehension knows this.

Bro, it was nothing personal. You said something that was not true and I corrected you. That's all. Let's end it there.

 

[sunshinefl]

The point isn't to get 7 figures and be in your 70s. Each year that passes is time that you can never get back with tomorrow being of no certainty. I really dont agree with the whole notion of getting rich in your 80s.

I say congrats to you. I had similar numbers a couple years ago, but after a wedding, house, new car, and going part time and unexpected events...7 figures for alot of people is really more into their retirement than anything.

If you hold yourself back by buying new cars and big houses, having crazy weddings... that will happen to you. You get stuck. Live below your means.

I have two used cars. I got married for $16 at the local courthouse. I live in a modest $247k house.

I’m not pro-McMansion (because I don’t want to be house poor) but I also definitely don’t understand having money just to have it.

I’m in medical school now so I’m not in this earning and saving mode of life like you guys.

BUT, seriously I’ve never understood bragging about being rich by not spending money. Like what even is the point? Sure you have to pay your debts, have emergency savings, fund your retirement, etc. I’m not saying don’t be financially responsible. But for me the point of having money is being able to spend it. Not just to stare at it as a number in an account. That’s meaningless. You have money so that you can buy a car, a house, a wedding, etc. You know, live your life.

 

[Momus]

Bro, it was nothing personal. You said something that was not true and I corrected you. That's all. Let's end it there.

Yes, instead of using a your brain, you immediately interpreted my post as if I told you to contribute ALL $34k to 401k, assumed that's what I TOLD you, and proceeded to tell me I didn't know the limit of 401k, and claimed you corrected me.

A smart man would have known any savings above $18.5k to reach 34k saving goal goes immediately to ROTH IRA/HSA, and taxable savings, but that ain't you. You need a play by play for every detail where the money has to go.

Let's end it here.

 

[Momus]

I drive this plug in hybrid:

Original MSRP: $41000.
Bought two years old off lease: $16500

20 miles on electric. No gas at all during my work week!

And I still have an old 2008 Mercury Sable...

Nice that's a deal only 2 years old ;o I can't bring myself to get a Tesla, psychologically I need 450-500 miles+ per fill up/charge. I need the range!

 

[Lnsean]

I’m not pro-McMansion (because I don’t want to be house poor) but I also definitely don’t understand having money just to have it.

I’m in medical school now so I’m not in this earning and saving mode of life like you guys.

BUT, seriously I’ve never understood bragging about being rich by not spending money. Like what even is the point? Sure you have to pay your debts, have emergency savings, fund your retirement, etc. I’m not saying don’t be financially responsible. But for me the point of having money is being able to spend it. Not just to stare at it as a number in an account. That’s meaningless. You have money so that you can buy a car, a house, a wedding, etc. You know, live your life.

I'm also in med school...looks like we're they low earners here...lol

 

[Lnsean]

Yes, instead of using a your brain, you immediately interpreted my post as if I told you to contribute ALL $34k to 401k, assumed that's what I TOLD you, and proceeded to tell me I didn't know the limit of 401k, and claimed you corrected me.

A smart man would have known any savings above $18.5k to reach 34k saving goal goes immediately to ROTH IRA/HSA, and taxable savings, but that ain't you. You need a play by play for every detail where the money has to go.

Let's end it here.

Except pre tax contributions are limited by the IRS...it is not a self limitation like you said earlier. What you are saying now is to contribute after tax dollars which was not what you said earlier. Be clear and honest about what you said.

Roth is an after tax contribution... Which means you would need like 30% to just breakeven on the tax.

 

[Momus]

Except pre tax contributions are limited by the IRS...it is not a self limitation like you said earlier. What you are saying now is to contribute after tax dollars which was not what you said earlier. Be clear and honest about what you said.

Did not NOT see a "?" mark. That mocking sentence is directed at you/your self imposed savings limit. Read the sentence after. Read in a context. No one said about 401k BEFORE that, you just mentioned 401k limit out of no where (which lead me to believe that's all you limit yourself to, and that's why people can't get rich, they just follow IRS limit???? hahahaha), instead of being smart (contribute to other accounts). Sarcasm and reading comprehension, do you have it?

 

[jblil]

Rate of return 9% compounded annually

Financial planners often use that argument ("return of x% per year").

However, real-life is more complicated: the market may be up 10% one year, then down -15% the next, then up 2%, then back down -3%. You get the idea... So assuming "x% yearly over y years" is unrealistic. Depending on how the sequence of returns line up in time, you will end up with vastly different numbers in the end.

The "x% yearly over y years" model is deterministic. A better way to forecast is to use a stochastic model or a Monte-Carlo simulation. There are a few free ones floating around. You could also write your own in Excel but it takes time, depending on how detailed you want it to be.

With everything said, it's still a good idea to put away as much money as early as you can, while not denying yourself some pleasures of life.

(Disclosure: I have a MBA with a concentration in Finance)

 

[Momus]

Financial planners often use that argument ("return of x% per year").

However, real-life is more complicated: the market may be up 10% one year, then down -15% the next, then up 2%, then back down -3%. You get the idea... So assuming "x% yearly over y years" is unrealistic. Depending on how the sequence of returns line up in time, you will end up with vastly different numbers in the end.

The "x% yearly over y years" model is deterministic. A better way to forecast is to use a stochastic model or a Monte-Carlo simulation. There are a few free ones floating around. You could also write your own in Excel but it takes time, depending on how detailed you want it to be.

With everything said, it's still a good idea to put away as much money and as early as you can, while not denying yourself some pleasures of life.

(Disclosure: I have a MBA with a concentration in Finance)

True to an extent but you don't invest once and forget it. You DCA into it every year as no one has $1-2M to invest immediately. Some year you lose money, some year you make money, and in every one of those year you get a discount when bear market hits. Depends on when (what year) you start investing yearly and when you start withdrawing, it will tell you how much return you get in the end. That 9% average return in the past is also nominal, real return is more like 7% avg.

 

[PharmtoCS]

BUT, seriously I’ve never understood bragging about being rich by not spending money. Like what even is the point? Sure you have to pay your debts, have emergency savings, fund your retirement, etc. I’m not saying don’t be financially responsible. But for me the point of having money is being able to spend it. Not just to stare at it as a number in an account. That’s meaningless. You have money so that you can buy a car, a house, a wedding, etc. You know, live your life.

When you have money you're less tied to your source of income for your livelihood. If you don't like your job then you have the option to quit and possibly find a lower paying job that you can tolerate or to go part time. A new grad with $200k+ in loans, someone who is overleveraged with a McMansion and/or BMW, or someone who spent all their savings on a vacation or wedding has far less freedom to walk away from an unfavorable job situation.