the budget of the "joneses" ?

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The SEP IRA is one of the best benefits of being an independent contractor and "self employed". It is not available to full-time employees paid by W2. Good employers should contribute the max to your 401K. For example with EMP 12% of your monthly gross is matched by the company and put into your 401K. That meant easily maxing out the employer component every year.

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Is the sep ira available only if you are an independent contractor or your group set it up? What about if you are an employee of a large system? I never understood while small business owners could shelter 50k or more whereas employees only get to shelter 17k (plus any match thats available)

SEP is a Simplified Employer Retirement account so the income has to flow to a business, sole proprietorship, S-Corp, C-Corp, LLC, LLP and so on. That plan ONLY allows for EMPLOYER contributions so the employee/employees do not put anything into the plan. In general there is a maximum employee deferral into retirement plans (401k, 403bs, and the such) which is $18k for under 50 and $24k for 50+ in 2015 but then you if you are employed by another company that is Non-affiliated you can have SEP contribution from a business you might then own.
 
Is the sep ira available only if you are an independent contractor or your group set it up? What about if you are an employee of a large system? I never understood while small business owners could shelter 50k or more whereas employees only get to shelter 17k (plus any match thats available)

Employees can't open their own SEP-IRA since all contributions to a SEP are made by the employer. Don't blame me, I don't make the rules.
 
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Just because it's germane to this topic, and I don't think he'll post a link to/review of his own book, WCI's eponymously-titled book was reviewed in Academic Life in EM's book club this month -- www.aliem.com/aliem-bookclub-the-white-coat-investor/ -- I have been reading his advice and comments in here since I was in medical school, and checked out the blog a few times, but this review (and it includes a nice bullet point summary for those who don't want to read the whole thing) convinced me to buy the book now that I'm in residency.

I'm halfway through so far, and it's good stuff. I'm finding it really helpful in terms of thinking about what my wife and I should be doing now / thinking about in the future in terms of budgeting, saving, investing, and all that. Probably needs supplementation with other resources and books if you want to really flesh out your understanding of the subtleties, but (and I love this part) that's part of the advice -- treat reading one finance book a year as your "continuing financial education". Thanks for writing this up and making it available, WCI -- I hope everyone else who has found your contributions to this forum valuable checks it out and gets as much out of it as I think I will.
 
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Sad I missed a chunk of this financial discussion. This is one of my passions.

Ill chime in.

If you are saving 100k/yr and you are under 40 you will be filthy rich when you retire. One of the things I have come to realize and appreciate recently is that you have to balance enjoying your life with the income. I have been an incredibly aggressive saver myself. Throw in some luck with some investments and other things and I feel like I am on the right path. Regarding the house, you have to look at a few things, not just the mortgage. I recently moved and my wife found a 10k sq ft home. Way more than my family of 4 needs. She was enthralled because of the size. Remember, thats 10k square feet to clean, heat and cool and repair. even cheap flooring x 10k square feet isnt cheap.

We settled for 6k+ in a house. IMO if you are making good EM money, dont have a huge amount of student loans and dont have a large number of other expensive hobbies you can do a house for $1M+. Interest rates are super low.

IMO you can splurge if you are an EM doc but you cant splurge in every area. You get to pick and choose 1) private school for kids 2) cars and other toys (boats) 3) vacations 4) housing 5) Retirement/savings

You can probably have 2-3 of the 4 depending on your job. That being said if you have 2 kids and both go to private school thats 30-40k per year (post tax), plus college savings for them (10k each). That gets you to 50-60k per year.

Cars, if you and your wife are in expensive cars thats 2k per month or 24k per yr. Vacations iMO over 20k is luxury..

Housing well I think the 5-600k is very doable, 800K is middle and 1m+ is luxury.

You have to decide what matters most to you.
 
I agree with above. We gave up our 20's (and in some cases a portion of our 30's) to do what we are doing now. Saving is important, and at the very least max out the retirement vehicles available to you. There is no reason why you shouldn't have an expensive house, a nice car (or two), send your kids to whatever school you want, and still take luxury vacations. I think you should enjoy life as you live it, and not live miserly just to save for your retirement.
 
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I agree with above. We gave up our 20's (and in some cases a portion of our 30's) to do what we are doing now. Saving is important, and at the very least max out the retirement vehicles available to you. There is no reason why you shouldn't have an expensive house, a nice car (or two), send your kids to whatever school you want, and still take luxury vacations. I think you should enjoy life as you live it, and not live miserly just to save for your retirement.
True dat.

Save some and spend some. It's all about balance, not one extreme or the other.
 
Sad I missed a chunk of this financial discussion. This is one of my passions.

Ill chime in.

If you are saving 100k/yr and you are under 40 you will be filthy rich when you retire. One of the things I have come to realize and appreciate recently is that you have to balance enjoying your life with the income. I have been an incredibly aggressive saver myself. Throw in some luck with some investments and other things and I feel like I am on the right path. Regarding the house, you have to look at a few things, not just the mortgage. I recently moved and my wife found a 10k sq ft home. Way more than my family of 4 needs. She was enthralled because of the size. Remember, thats 10k square feet to clean, heat and cool and repair. even cheap flooring x 10k square feet isnt cheap.

We settled for 6k+ in a house. IMO if you are making good EM money, dont have a huge amount of student loans and dont have a large number of other expensive hobbies you can do a house for $1M+. Interest rates are super low.

IMO you can splurge if you are an EM doc but you cant splurge in every area. You get to pick and choose 1) private school for kids 2) cars and other toys (boats) 3) vacations 4) housing 5) Retirement/savings

You can probably have 2-3 of the 4 depending on your job. That being said if you have 2 kids and both go to private school thats 30-40k per year (post tax), plus college savings for them (10k each). That gets you to 50-60k per year.

Cars, if you and your wife are in expensive cars thats 2k per month or 24k per yr. Vacations iMO over 20k is luxury..

Housing well I think the 5-600k is very doable, 800K is middle and 1m+ is luxury.

You have to decide what matters most to you.

I agree with above. We gave up our 20's (and in some cases a portion of our 30's) to do what we are doing now. Saving is important, and at the very least max out the retirement vehicles available to you. There is no reason why you shouldn't have an expensive house, a nice car (or two), send your kids to whatever school you want, and still take luxury vacations. I think you should enjoy life as you live it, and not live miserly just to save for your retirement.


I agree... I will probably get the lake house when I find one I like, with all the expenses I still plan on saving 15K a month , and that's with 14 shifts.. I will plan on working 16 over the next couple years because I like putting 20 K in savings every month

that's with the "possible future" big house payment, (I am looking for 3-5 K sq feet along the lake)

don't plan on having any more kids as the fiancé doesn't want any ... and neither do I .. but will see if this changes.. (not more than one for sure)

don't plan on putting kids in private school (most texas are religious and Im not a big fan ) but will see ... right now sons in a good district with a great school..

plus haven't even considered my future wifes income (she's in last year of nurse practitioner school) and will probably make anywhere from 100-180 K a year (depending if she does clinic or EM )

still feel uneasy at 32 to be talking of million dollar lake houses and boats though ..
 
IMO you can splurge if you are an EM doc but you cant splurge in every area. You get to pick and choose 1) private school for kids 2) cars and other toys (boats) 3) vacations 4) housing 5) Retirement/savings

You can probably have 2-3 of the 4 depending on your job.

I like that and think it is about right. I'd word it like this:

Everyone needs to save adequately for retirement. Beyond that, you have the following options:

1) An extra big/nice house (or one in California)
2) Very expensive vacations
3) Toys (airplane, boat, very expensive car) or second home
4) Early retirement
5) Private school
6) Spouse with a spending problem

You get 2 of these, that's it. Got to moderate the rest. So I chose the following:

1) An extra big/nice house (or one in California) - Nope, it's value is about 1X my income with a mortgage about 0.5X. That said, it's 4400 sq ft with a 100 mile view in the neighborhood of the third best elementary school in the state and 8 miles from a ski resort. You can buy a lot of house on an EP salary outside of the Bay Area and Manhattan.
2) Very expensive vacations - Not really. We do a lot of vacations, but expensive ones are pretty rare.
3) Toys (airplane, boat, very expensive car) or second home - Yup. Got one of those now, but waited 9 years out of residency to get it.
4) Early retirement - Yup, nearly FI already.
5) Private school - Nope.
6) Spouse with a spending problem - Definitely not.
 
Ballinsncbirth: How are things going with your financial plans? Did you get the large home? Curious how things are working out.
 
Ballinsncbirth: How are things going with your financial plans? Did you get the large home? Curious how things are working out.

Ha this was resurrected from the grave.
well I decided not to get the expensive mansion .Man am I glad I didn't . I brought a house for 650 k . still on the lake, boathouse. really nice. But its still just the 3 of us. and it fits us well.
Homeownership is definitely more expensive then I had planned on. Taxes, maintenance, insurance, cleaning , HOA fees etc would have severely cut into my savings rate had I opted for the bigger house. Property taxes just went up by 100K (home values) this year to!

So overall doing well
thanks for all the advice.
 
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