The Dark side of Syndication investing

[emergentmd]

9 out of my 20 deals are through crowdstreet. Every poor performer is essentially through there. Crowdstreet due diligence failed on confirming basic information like loan details on one of them. And the other is 200 w Jackson where nightingale is sponsor so who knows what’s going to happen. You live and you learn. Im not investing much more through crowdstreet right now.

6/6 of my deals though equity multiple are out performers right now.

The remaining are private funds which are all doing okay.

I should still beat SPY by a margin in returns

Even if you have 50 percent under performance, you have to understand that most deals have a proforma irr of 17-19 percent if value adds and usually 20+ percent if a development deal. So a deal could return 14 percent and be underperforming, but still beating sp500. And then throw in significant tax benefits of depreciation leading to tax deferral then you really start benefiting from real estate investments. Historically if you put 25k in every single crowdstreet deal, you would have averaged 17 percent IRR - despite 50 percent underperformance.

That sort of under performance i will take.

IMO, docs who are doing S&P 500 investing, are missing a vehicle with a better return/risk profile.

I am 7/7 with appx 30% return.

I have 5/5 currently that has no issues so I assume will do well.

As I spread mine out on multiple operators/projects, I could hit 7/10 and beat the S&P.

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[cyanide12345678]

Lol yeah wtf 50k/yr? I’m PM&R and invest way more than that. 1 million net worth in ~4 yrs after residency. Just hustled at my 1099 job and invested the money bogleheads style. No extra time and effort spent on any type of side gig, real estate, crypto, vetting syndicated real estate etc.

I primarily focused on making a lot of money in my day job and work no more than 35-40 hrs/week. View attachment 375125

Congratulations. Good for you. Pm&r is such a hidden gem specialty.

This is a winning formula for most.

 

[cyanide12345678]

Only saving $50k/year for a physician isn’t going to cut it.

I mean it’s not the worst retirement. 4.2M at retirement assuming a 6 percent average return which is a little on the conservative side.

 

[cyanide12345678]

IMO, docs who are doing S&P 500 investing, are missing a vehicle with a better return/risk profile.

I am 7/7 with appx 30% return.

I have 5/5 currently that has no issues so I assume will do well.

As I spread mine out on multiple operators/projects, I could hit 7/10 and beat the S&P.

I fully agree with you. Spread risk and ultimately you should be okay.

The biggest thing people don’t understand is the under performance risk of not taking enough risk. If you haven’t lost money on a deal or two, you have left money on the table by not taking enough risk in life.

 

[cyanide12345678]

These all require extra time you could dedicate to your primary job and then pour the extra money into index funds. They also come with risk. We are constantly trading both money and time at best exchange rates possible for more money and time.

Sure but still it’s not the best return on time.

My best return on time will give me about 28k (4.4 percent return) in 78 days (2.5 months).

I put in roughly about 1 hour Monday to Friday in my trading around market open. Well worth the time.

 

[JacobMcCandles]

My guess is that a physician who wants to retire, yet can only save $50k/year, will probably need more in retirement given their spending.

 

[cyanide12345678]

My guess is that a physician who wants to retire, yet can only save $50k/year, will probably need more in retirement given their spending.

Agreed. Retirement is more of an equation dependent on expenses.

But assuming some form of social security survives 30 years from now, and a home mortgage is paid off in 30 years, then chances are most people with 4M should be able to modify lifestyle to some degree to live on 100-150k.

 

[AD04]

Lol yeah wtf 50k/yr? I’m PM&R and invest way more than that. 1 million net worth in ~4 yrs after residency. Just hustled at my 1099 job and invested the money bogleheads style. No extra time and effort spent on any type of side gig, real estate, crypto, vetting syndicated real estate etc.

Awesome job. We're around the same year. In 2022, I lost $1 million thanks to daddy Powell. I thought US treasuries were the safest assets out there. Lol.

 

[cyanide12345678]

Awesome job. We're around the same year. In 2022, I lost $1 million thanks to daddy Powell. I thought US treasuries were the safest assets out there. Lol.

They are if you hold them to expiration. Paper losses.

 

[Siggy]

Your missing the fact that I didn't include reinvesting the apt syndication dividends/distributions which typically is more than S&P dividends. I know that reinvested S&P dividends jump it over 9%. Its just hard to get a handle on Apt REIT/syndication distributions but typically RE REIT distributions are way higher than S&P which runs about 1.5%

I bet if REIT/syndication distribution was reinvested, you would be well over 20%

REITs I can see reinvesting dividends easily enough, however they have lower risk and reward vs direct ownership or syndication.

However, serious question, how easy is it to reinvest dividends from syndication deals? Stock (be it direct stock or ETFs including REITs) dividend reinvestments are done automatically and in fractional shares. However you can't just go, "Instead of a dividend, I'd take another 0.001% of the property instead." Sure, once you save up enough, you can invest in a new property, but then you're losing out on compound interest.

Of course the reality is that we're talking about portfolios that's 100% RE or 100% SP500. Neither option in my mind is ideal. Diversification is key.

 

[cyanide12345678]

REITs I can see reinvesting dividends easily enough, however they have lower risk and reward vs direct ownership or syndication.

However, serious question, how easy is it to reinvest dividends from syndication deals? Stock (be it direct stock or ETFs including REITs) dividend reinvestments are done automatically and in fractional shares. However you can't just go, "Instead of a dividend, I'd take another 0.001% of the property instead." Sure, once you save up enough, you can invest in a new property, but then you're losing out on compound interest.

Of course the reality is that we're talking about portfolios that's 100% RE or 100% SP500. Neither option in my mind is ideal. Diversification is key.

You can’t reinvest Unless you get into a new deal or just put your money in the stock market.

Reits don’t necessarily have to be lower reward. From my post above that shows my current portfolio, i have 450 contracts sold for mpw reit.

Mpw owns >400 hospital And healthcare buildings (think surgical centers, free standing ERs, rehab facilities etc) with a portfolio of around $19 billion and debt of around 10.5 billion (that’s the numbers before the Australian portfolio sale which happened a month ago). Currently trading at 70 or so cents on the dollar for its asset values due to tenant issues that they are working on and due to interest rate hikes as well as hospital financials struggling during covid. Market cap of 6 billion while book value is literally at 8.5-9 billion. Long history of operational execution, dividend maintenance, and growth.

Shares trading at $9.84. About 11.8 percent annualized current dividend (which may potentially be dropped but currently $0.29 per share per quarter of dividend).

Here’s a 20+ percent cash on cash play through a very very diversified publicly traded reit with 0 leverage.

Buy 10000 shares at $98400. Receive $0.29 per share per quarter in dividend = 11.8 percent annualized return

Sell covered call: 100 contracts. 260 days out. April 2024. $10 strike. Receive $1.2 per share (trade is attached. $1.2 is current market price for this trade ) = $12000 premium (in 8 months). 12000/98400 is 12.2 percent return in 8 months - which is 18.3 percent annualized return.

So two outcomes:

Mpw ends up > 10

You get 11.8 percent annualized dividend, plus 18.3 percent annualized premium, plus capital gain of $0.16 per share since you bought at 9.84 (todays price) and sold at $10. So > 30 percent annualized return.

Mpw < 10

Keep collecting 0.29 quarterly dividend. Rinse and repeat keep selling covered call and collecting premium.

So……Reits don’t have to be ‘lower risk and lower reward’. Arguably this is a safer real estate play than investing with any private syndication right now - hence my 450 contracts (the way I’m doing it is a 13 percent cash on cash return in 2.5 months ~ 60 percent annualized cash on cash return because of leveraged out of the money naked puts but the above is 100 percent cash covered and 0 leverage).

 

[Groove]

Lol yeah wtf 50k/yr? I’m PM&R and invest way more than that. 1 million net worth in ~4 yrs after residency. Just hustled at my 1099 job and invested the money bogleheads style. No extra time and effort spent on any type of side gig, real estate, crypto, vetting syndicated real estate etc.

I primarily focused on making a lot of money in my day job and work no more than 35-40 hrs/week. View attachment 375125

That's badass! DAMN. Puts my annual contributions to shame. Good grief. The Cookie Monster of savings.

 

[GonnaBeADoc2222]

That's badass! DAMN. Puts my annual contributions to shame. Good grief. The Cookie Monster of savings.

Meh it all depends on how much you want to work.

If I worked 40 hrs a week, I would make an extra 120k and would save the same.

I choose to work less and maintain some level of sanity.

 

[Groove]

Meh it all depends on how much you want to work.

If I worked 40 hrs a week, I would make an extra 120k and would save the same.

I choose to work less and maintain some level of sanity.

Yeah but check out his balance. Dude turned 100K into 1 million in less than 3 years with extremely conservative investing. Most of those gains came just from saving. I feel good if I contribute 100K each year. I feel great if I contribute 125K. Some of you guys that sock over 250K into your retirement accounts each year just blows my mind.

Speaking of things blowing up...anybody else long on POWL? Spiked 40% after earnings. I got so close to selling my position last week. It's my new SMCI. I wish I had bought more of it. CAGR currently sitting at 95.1%. YTD = 50% Who needs shady syndicate investing? (Ducks the rotten fruit.)

 

[cyanide12345678]

Yeah but check out his balance. Dude turned 100K into 1 million in less than 3 years with extremely conservative investing. Most of those gains came just from saving. I feel good if I contribute 100K each year. I feel great if I contribute 125K. Some of you guys that sock over 250K into your retirement accounts each year just blows my mind.

Speaking of things blowing up...anybody else long on POWL? Spiked 40% after earnings. I got so close to selling my position last week. It's my new SMCI. I wish I had bought more of it. CAGR currently sitting at 95.1%. YTD = 50% Who needs shady syndicate investing? (Ducks the rotten fruit.)

Honestly becoming a millionaire should be the norm in 4-5 years for physicians. It’s weird how most people don’t do it.

I’m also exactly 4 years out and sitting at 1.7M net worth. Take out my wife’s 230k for the last 1.5 yrs and her 55k for 3 years of residency (total 350k post tax earnings) and we probably would have been at 1.3M net worth with my income alone at 4 years.

It helps living in the mid west. Saved 20k/month since day 1 of becoming an attending. I don’t even know how much we save now because the returns from other assets muddles the picture.

 

[Groove]

Honestly becoming a millionaire should be the norm in 4-5 years for physicians. It’s weird how most people don’t do it.

I’m also exactly 4 years out and sitting at 1.7M net worth. Take out my wife’s 230k for the last 1.5 yrs and her 55k for 3 years of residency (total 350k post tax earnings) and we probably would have been at 1.3M net worth with my income alone at 4 years.

It helps living in the mid west. Saved 20k/month since day 1 of becoming an attending. I don’t even know how much we save now because the returns from other assets muddles the picture.

That's awesome. I'm most def a victim of lifestyle creep. I've got a colleague who is the ultra frugal type. Cat lady. The ultimate scrooge. The kind that tries to get you to pay for everything. I don't even think she has a full set of furniture in her house. She is so stingy...that she can't bear the thought of investing her money and taking the normal transient losses during stock pull backs so she sticks 100% of her cash into her bank account and doesn't touch it. She's got a mountain of cash now but I just shake my head every time I see her and think about how she could have put that money to work. It's a normal bank account mind you, not even a money market fund or savings account. It just goes to show how BAD some docs can be with their money.

 

[cyanide12345678]

That's awesome. I'm most def a victim of lifestyle creep. I've got a colleague who is the ultra frugal type. Cat lady. The ultimate scrooge. The kind that tries to get you to pay for everything. I don't even think she has a full set of furniture in her house. She is so stingy...that she can't bear the thought of investing her money and taking the normal transient losses during stock pull backs so she sticks 100% of her cash into her bank account and doesn't touch it. She's got a mountain of cash now but I just shake my head every time I see her and think about how she could have put that money to work. It's a normal bank account mind you, not even a money market fund or savings account. It just goes to show how BAD some docs can be with their money.

Wow…. Someone needs to introduce her to at least a high yield savings account or a money market fund. That’s just ridiculous.

I think we’ve had quite a bit of lifestyle creep personally. But that’s because we upgraded from a 2 bedroom apartment to a 6000 sqft home in 2021. Even with that and 4 vacations a year, i don’t think we even spend 100k a year, though i don’t measure our spending at all, and only measure our net worth. That net worth has averaged an increase of 50k a month for the last 12 months, so that’s the only measure to me that matters. Don’t care what we spend and make as long as our net worth grows.

 

[BoardingDoc]

I think we’ve had quite a bit of lifestyle creep personally. .... i don’t think we even spend 100k a year,

You and I have different definitions of "lifestyle creep." Granted, I live in a VHCOL area but still. I spend at least double what you do in a year. I do occasionally think about how I could retire so much earlier if we cut spending. As I've mentioned elsewhere though, I've slowly shifted my mentality from "retire ASAP" to "enjoy life now while still socking some money away." I've always been very "points" oriented in life. Dollars are points. Collect more and I'm generally happier. Over the past few years I've been deriving more utility from spending those points on fancy family trips which make us all happy than I do collecting those points. As long as I can keep dropping ~150/yr into VTSAX/401k/roth/etc while doing so, I'm happy to forego the gains I'd make putting an extra 100k away.

 

[GonnaBeADoc2222]

Honestly becoming a millionaire should be the norm in 4-5 years for physicians. It’s weird how most people don’t do it.

I’m also exactly 4 years out and sitting at 1.7M net worth. Take out my wife’s 230k for the last 1.5 yrs and her 55k for 3 years of residency (total 350k post tax earnings) and we probably would have been at 1.3M net worth with my income alone at 4 years.

It helps living in the mid west. Saved 20k/month since day 1 of becoming an attending. I don’t even know how much we save now because the returns from other assets muddles the picture.

Not really.

Not everyone lives in a zero income tax state, nor can they move to one.

Cue the "just moveeeeee and work for an SDGGGGG"

I'm at about 850k after 250k loans and a divorce, 6 years out. Without divorce I'd prob be 1 mil maybe.

Ask your coresidents what their net worth is 5 yrs out...most will say less than 500k.

I save somewhat aggressively and spend on what I want (conservatively but not frugally). The point of making money is to spend it, and just chasing the number in your account leads to dimishing returns.

 

[cyanide12345678]

You and I have different definitions of "lifestyle creep." Granted, I live in a VHCOL area but still. I spend at least double what you do in a year. I do occasionally think about how I could retire so much earlier if we cut spending. As I've mentioned elsewhere though, I've slowly shifted my mentality from "retire ASAP" to "enjoy life now while still socking some money away." I've always been very "points" oriented in life. Dollars are points. Collect more and I'm generally happier. Over the past few years I've been deriving more utility from spending those points on fancy family trips which make us all happy than I do collecting those points. As long as I can keep dropping ~150/yr into VTSAX/401k/roth/etc while doing so, I'm happy to forego the gains I'd make putting an extra 100k away.

haha yeah but it feels like lifestyle creep because our spending went from ~ 50k a year to more or less double that within the last couple of years. That's lifestyle creep to me. I mean literally lived in a 2 bedroom 2 bathroom apartment for the first 2 years of being an attending until my wife finished her residency and we moved cities and bought our "forever home". We went from a VERY low cost of living place to an average cost of living place. Money sure went a long way in Northwest ohio lol.

 

[cyanide12345678]

Not really.

Not everyone lives in a zero income tax state, nor can they move to one.

Cue the "just moveeeeee and work for an SDGGGGG"

I'm at about 850k after 250k loans and a divorce, 6 years out. Without divorce I'd prob be 1 mil maybe.

Ask your coresidents what their net worth is 5 yrs out...most will say less than 500k.

I save somewhat aggressively and spend on what I want (conservatively but not frugally). The point of making money is to spend it, and just chasing the number in your account leads to dimishing returns.

Yeah it's the divorce that cost you.

I don't know the exact numbers for my co-residents, but one of them is now running a bunch of Airbnbs in florida and taking depreciation losses against his w2 income so basically not paying taxes lol. One of them works 18-20 shifts a month and just bought his second home in california. He also bought a property in pheonix in 2019 before prices climbed 40-50%. Those were the money minded residents at least.

 

[sloh]

Honestly becoming a millionaire should be the norm in 4-5 years for physicians. It’s weird how most people don’t do it.

I’m also exactly 4 years out and sitting at 1.7M net worth. Take out my wife’s 230k for the last 1.5 yrs and her 55k for 3 years of residency (total 350k post tax earnings) and we probably would have been at 1.3M net worth with my income alone at 4 years.

It helps living in the mid west. Saved 20k/month since day 1 of becoming an attending. I don’t even know how much we save now because the returns from other assets muddles the picture.

Despite our disagreement on investing approaches I do find your trajectory inspiring.

I should also mention I live in holy f*** expensive Los Angeles haha. Also bought a 911 turbo S on my way to 1 million net worth in ~4 yrs (first year out I was a W2 grunt at Kaiser).

Excited to see what the future brings. My partner is an anesthesiologist, no debt, will be starting at ~500k first job. Looking for our first house in 1-2 years. Likely 2.5 million range in the suburbs of SoCal.

 

[sloh]

Not really.

Not everyone lives in a zero income tax state, nor can they move to one.

Cue the "just moveeeeee and work for an SDGGGGG"

I'm at about 850k after 250k loans and a divorce, 6 years out. Without divorce I'd prob be 1 mil maybe.

Ask your coresidents what their net worth is 5 yrs out...most will say less than 500k.

I save somewhat aggressively and spend on what I want (conservatively but not frugally). The point of making money is to spend it, and just chasing the number in your account leads to dimishing returns.

Yep, just hitting net worth of ZERO by mid 30’s is aggressive for most physicians. It’s quite sad.

 

[Mount Asclepius]

EPs should save $100K/year at a minimum. We are much more likely to have the career of the average NFL player than that of the superstar. The jobs beats you up and burns you out.

I think it's sometimes easier to find a job that pays $100-200K more and save the difference than it is for someone to learn how to become more frugal if they aren't already. I know of SDG jobs that pay partners in the $400-600K range versus some in academics or other positions making in the $200-300K annual range. Multiple that by 10-20 years.

My net worth hit $1M around four years out of residency at age 32-33 despite $300K education debt that I paid off and a prepartnership track with reduced income during that time. I have a dual income family, but my spouse isn't a physician and makes significantly less. We also pay for child care because there is value in her having her own career even if not financially.

I personally aim to average $200K/year in savings/investments between tax-deferred and post-tax investments. A few years I save more and sometimes less. I’ve spent a decent amount of money remodeling my home, which is a quasi-investment. I won’t necessarily see it all back, but I also spend the vast majority of my time in my home and want my family to enjoy it. I find myself somewhere between the mindsets of @cyanide12345678 and @BoardingDoc. As time goes by I value my time more than ever. My spending oddly then goes down as I value future time in the pit less and value money in the future more given compounding return with time.

Regarding frugality, during all of those education years taking on debt I also calculated how much something costed plus the interest in tomorrow’s dollars to see if it was still worth buying at that time at an inflated price. I think that way currently when I buy something new. If I instead saved the money and let it grow would I rather have that new thing now, or that plus more in the future given compounded growth with time. Sometimes the answer is yes and sometimes no.

My initial goal was FIRE, but have since also felt a little lifestyle creep. I'm at times burned out on the job, but my s**t tank isn't full and I think I'd like to live a little more luxurious life than I once thought. I agree a little with @emergentmd. I also realize more and more as I get older that I could die at any moment. Once I transitioned away from FIRE I roughly set new goals of $3M net worth by 40 and $10M net worth by 50. I'm hard pressed to see myself working past 50 in the pit. I can pretty easily see living on $10K/month in retirement, which I know many of you think isn't much. Despite $120K year withdrawal my net worth could grow to $30M+ by age 70 just with simple low fee-index fund investing. I could also see myself living on more, but I don't have to. It is also very important to remember that your expenses go down in retirement. No mortgage, no disability insurance and no child care expenses.

I have FOMO on a better return with RE, but also don't want to take time to dive into it at this point when index funds are so easy. Don't have enough interest to take even that little bit of time away from my kids. Perhaps at some point I'll join you cool kids though when I want more diversification as my net worth grows further.

 

[GonnaBeADoc2222]

Yeah it's the divorce that cost you.

I don't know the exact numbers for my co-residents, but one of them is now running a bunch of Airbnbs in florida and taking depreciation losses against his w2 income so basically not paying taxes lol. One of them works 18-20 shifts a month and just bought his second home in california. He also bought a property in pheonix in 2019 before prices climbed 40-50%. Those were the money minded residents at least.

I didn't lose much in the divorce and don't have any child support or alimony.

The selection bias here is pretty nuts.

Some combo of lives in middle of nowhere, works 20 shifts a month, manages airbnbs (very active; btw hows that going lately), bought RE randomly at the best time in the history of RE, oh and my wife makes 500k lol.

I make and save way less than most on this thread, and yet am light years ahead of most of my cohort of colleagues. I feel very comfortable and secure working 13 days a month and spending my time on non money generating pursuits.

 

[sloh]

EPs should save $100K/year at a minimum. We are much more likely to have the career of the average NFL player than that of the superstar. The jobs beats you up and burns you out.

I think it's sometimes easier to find a job that pays $100-200K more and save the difference than it is for someone to learn how to become more frugal if they aren't already. I know of SDG jobs that pay partners in the $400-600K range versus some in academics or other positions making in the $200-300K annual range. Multiple that by 10-20 years.

My net worth hit $1M around four years out of residency at age 32-33 despite $300K education debt that I paid off and a prepartnership track with reduced income during that time. I have a dual income family, but my spouse isn't a physician and makes significantly less. We also pay for child care because there is value in her having her own career even if not financially.

I personally aim to average $200K/year in savings/investments between tax-deferred and post-tax investments. A few years I save more and sometimes less. I’ve spent a decent amount of money remodeling my home, which is a quasi-investment. I won’t necessarily see it all back, but I also spend the vast majority of my time in my home and want my family to enjoy it. I find myself somewhere between the mindsets of @cyanide12345678 and @BoardingDoc. As time goes by I value my time more than ever. My spending oddly then goes down as I value future time in the pit less and value money in the future more given compounding return with time.

Regarding frugality, during all of those education years taking on debt I also calculated how much something costed plus the interest in tomorrow’s dollars to see if it was still worth buying at that time at an inflated price. I think that way currently when I buy something new. If I instead saved the money and let it grow would I rather have that new thing now, or that plus more in the future given compounded growth with time. Sometimes the answer is yes and sometimes no.

My initial goal was FIRE, but have since also felt a little lifestyle creep. I'm at times burned out on the job, but my s**t tank isn't full and I think I'd like to live a little more luxurious life than I once thought. I agree a little with @emergentmd. I also realize more and more as I get older that I could die at any moment. Once I transitioned away from FIRE I roughly set new goals of $3M net worth by 40 and $10M net worth by 50. I'm hard pressed to see myself working past 50 in the pit. I can pretty easily see living on $10K/month in retirement, which I know many of you think isn't much. Despite $120K year withdrawal my net worth could grow to $30M+ by age 70 just with simple low fee-index fund investing. I could also see myself living on more, but I don't have to. It is also very important to remember that your expenses go down in retirement. No mortgage, no disability insurance and no child care expenses.

I have FOMO on a better return with RE, but also don't want to take time to dive into it at this point when index funds are so easy. Don't have enough interest to take even that little bit of time away from my kids. Perhaps at some point I'll join you cool kids though when I want more diversification as my net worth grows further.

Super impressive hitting 1M net worth at 32-33. Hit mine at 34 so you have me beat. How much were you working and what was your yearly income those years you hustled and hit your initial 1M?

 

[sloh]

oh and my wife makes 500k lol.

Not sure if this was in reference to me but my net worth does not count my partner’s net worth. She just finished fellowship and probably has a net worth of under 100k

 

[cyanide12345678]

Not sure if this was in reference to me but my net worth does not count my partner’s net worth. She just finished fellowship and probably has a net worth of under 100k

I wish my wife made 500k. I'd be a stay at home dad.

 

[Mount Asclepius]

Super impressive hitting 1M net worth at 32-33. Hit mine at 34 so you have me beat. How much were you working and what was your yearly income those years you hustled and hit your initial 1M?

I went straight through. I'm mostly glad I did as my drive is no longer what it once was. Priorities also change.

Started just above $300K annually and ended that period making just shy of $500K annually. Initially worked about 175 hrs/month and then decreased to about 140 hrs/month after achieved partnership and students loans were paid off. My income and hours worked are different today. My job is likely better than most, but it's only 90% of a unicorn. I didn't hit the free-standing mecca.

I just want the message that sticks to be: 1) Choose your job wisely, 2) Work hard initially, 3) Save aggressively.

 

[GonnaBeADoc2222]

I went straight through. I'm mostly glad I did as my drive is no longer what it once was. Priorities also change.

Started just above $300K annually and ended that period making just shy of $500K annually. Initially worked about 175 hrs/month and then decreased to about 140 hrs/month after achieved partnership and students loans were paid off. My income and hours worked are different today. My job is likely better than most, but it's only 90% of a unicorn. I didn't hit the free-standing mecca.

I just want the message that sticks to be: 1) Choose your job wisely, 2) Work hard initially, 3) Save aggressively.

Lol 175 is brutal and 140 not great either

 

[Mount Asclepius]

Lol 175 is brutal and 140 not great either

I'm not going to disagree and sugar coat it.

I probably averaged around 180 hours/month during my ED months of residency. I just continued working and saving like a resident until my loans were paid off and I made partner. I didn't work this much for terribly long in the grand scheme of things.

140 hours/month is 32 hours/week. I don't think that is too bad. I certainly don't fault people for working fewer hours than that. Anywhere from 100-140 hours/month for full time work is reasonable. Some transition to part time work at fewer hours towards the end of their careers in EM, which is also reasonable.

 

[skougess]

I didn't lose much in the divorce and don't have any child support or alimony.

The selection bias here is pretty nuts.

Some combo of lives in middle of nowhere, works 20 shifts a month, manages airbnbs (very active; btw hows that going lately), bought RE randomly at the best time in the history of RE, oh and my wife makes 500k lol.

I make and save way less than most on this thread, and yet am light years ahead of most of my cohort of colleagues. I feel very comfortable and secure working 13 days a month and spending my time on non money generating pursuits.

Agreed. If we’re counting my student payments which should be done in a few years, I’m saving roughly $9k monthly and you’d think I was on a hunger strike by how my colleagues/the average American spends.

 

[JacobMcCandles]

Yep, just hitting net worth of ZERO by mid 30’s is aggressive for most physicians. It’s quite sad. View attachment 375198

This really has nothing to do with being a physician or not. It’s the fact most Americans are uneducated when it comes to finances.

 

[Splenda88]

Agreed. Retirement is more of an equation dependent on expenses.

But assuming some form of social security survives 30 years from now, and a home mortgage is paid off in 30 years, then chances are most people with 4M should be able to modify lifestyle to some degree to live on 100-150k.

If your mortgage is paid off and you can't live on 120k or 10k/month (assuming 3% withdrawal rate on 4M), you do have spending issues.

 

[ProReduction]

Since I've been one of the biggest proponents of syndications, in full disclosure fashion I want to share the situation of when things DONT do well. So that anyone considering syndications goes in with a full understanding.

I'm in 20 syndications. 16 are doing well. 2 are doing alright, they should survive and squeeze out some return. 2 are probably losses. How big of a loss? Time will tell.

First and foremost, lets talk about one of the biggest frauds in the history of crowdfunding unveiling and I'm getting a rather up close and personal look at the proceedings.

Nightingale properties was purchasing the AFC (Atlanta financial center) and was under contract to buy this massive monumental building in Atlanta. They were getting it at a major discount compared to the previous owner who was taking a multimillion dollar discount. It was an incredible deal, the sponsor was established since 2006 and had 10B of assets under management. Crowdstreet raised 54 million for this deal. The same sponsor was fund raising spontaneously for a miami office building and raised a few million for that as well.

Almost 1 year later, neither property was ever closed upon. And an independent audit was done which essentially showed that the money was gone. Evaporated. Fraud. Infact, the funds were immediately withdrawal by sponsor upon receiving them within days and funneled elsewhere.

Some investors had gotten lucky and had gotten out of this deal after a Wall street journal article that came out during the fund raising originally about 10-11 months ago that stated that Nightingale did not fully disclose their full track record where they had lost money on 2 deals and essentially didn't disclose those losses. This wallstreet journal report luckily resulted in the sponsor offering a refund 10-11 months ago, I was one of the lucky people who had decided to walk away and asked for a refund. I believe I had 28k invested and I got my money back. 60M was raised total between the two deals. 9 million was returned to lucky investors like me who walked away leaving some ~50M with nightingale. To date, 50M is essentially gone, and there's no property purchased.

The lawyer firm hired by crowdstreet and the independent party is basically the same law firm that went after Madoff - It's officially a big case. A wallstreet journal financial crimes journalist is piecing a story together as well which will probably come out soon - Ben Foldy being the journalist.

While I got lucky there, one of my properties that I'm considering an absolute loss is 200 W jackson in chicago, the 30-ish floor office building next to Sears tower. Purchased at a 9 cap, fixed 4.7% debt for 5 years. Great cash flow, in fact one of the best cash flow properties ever. The property last year paid 10% in rental income to me. The problem? Nightingale is the sponsor. The property was purchased. A lot of our funds are officially locked in the property asset which is good. So Now crowdstreet, the independent party, and the LP investors are trying to find a way to remove Nightingale. Nightingale has shut down - Dont respond to answers, and are refusing to give books and proof of funds. LPs were going to hire an attorney to sue the company into getting books, but crowdstreet beat us to it.

But yeah...fun times. Lawyers. Fraud. Investigation journalists. Front row seat y'all. Price of the ticket was 30k for me. We have an investor whatsapp group, several people with 200k+ in both deals.

But yes...even when a property looks good on paper, cash flows tremendously, and you pick an experienced sponsor with a 25 year track record of 50+ profitable deals, yet you could lose your entire capital.

Nothing to add just a shout-out to Cyanide for always keeping it real. I shun most MD-based investment forums (and most populism investment forums in general like Seeking Alpha and popular finance blogs) in favor of the old guard of slow finance (Barron's, FT, etc.) mostly because all the former's uniform "Everything I invest in has a cap rate of 1000% and all my options strategies have returned 500% this year" is just amateurs showing their inexperience. The seasoned, honest investor will tell the tale of wins and losses.

 

[AD04]

They are if you hold them to expiration. Paper losses.

Real losses when you factor in inflation. It's no biggie though. I realized my losses, pivoted, and then gained more than I lost YTD in 2023. The ride has been kind of wild. And I learned a valuable lesson about how trashy bonds are, even US treasuries.

my net worth does not count my partner’s net worth

The question is:

Does she include your net worth in her net worth?

Nothing to add just a shout-out to Cyanide for always keeping it real. I shun most MD-based investment forums (and most populism investment forums in general like Seeking Alpha and popular finance blogs) in favor of the old guard of slow finance (Barron's, FT, etc.) mostly because all the former's uniform "Everything I invest in has a cap rate of 1000% and all my options strategies have returned 500% this year" is just amateurs showing their inexperience. The seasoned, honest investor will tell the tale of wins and losses.

I really appreciate @cyanide12345678 posts about investing because they're unique. I like reading about other people's strategies, especially if they're different from buy and hold index funds. Most unique strategies are overfitted nonsense or quite dumb and are clearly by amateur investors. But there are a few gems by some really smart and talented investors / traders that fall outside the realm of what is accepted by the common person. Massive returns (and losses) are common for those whom want outsized returns and can bear outsized risk. This is more prevalent in family offices with long term perspectives.

 

[cyanide12345678]

Real losses when you factor in inflation. It's no biggie though. I realized my losses, pivoted, and then gained more than I lost YTD in 2023. The ride has been kind of wild. And I learned a valuable lesson about how trashy bonds are, even US treasuries.



The question is:

Does she include your net worth in her net worth?



I really appreciate @cyanide12345678 posts about investing because they're unique. I like reading about other people's strategies, especially if they're different from buy and hold index funds. Most unique strategies are overfitted nonsense or quite dumb and are clearly by amateur investors. But there are a few gems by some really smart and talented investors / traders that fall outside the realm of what is accepted by the common person. Massive returns (and losses) are common for those whom want outsized returns and can bear outsized risk. This is more prevalent in family offices with long term perspectives.

You might enjoy reading about a play on mpw that i wrote about in a few posts above. It’s a pretty detailed post some 15 or so posts ago. Pretty simple trade. Reit based real estate play. No leverage. ~ 30 ish percent annualized gain if things go well. If things don’t go well then continued 11 ish percent dividend plus continued very high premium from covered calls and a portfolio backed by real estate with a book value of 8.5B currently trading at 0.7 x book value so around 6ish billion market cap. Though earnings in 6 days so expect volatility.

I personally have sold 450 naked put contracts for it for October $8 strike have received 14k premium for it. Because of really high premium and dividend, I’m fairly confident that I’ll make a lot of money on this, even if things don’t go well short term.

 

[cyanide12345678]

Real losses when you factor in inflation. It's no biggie though. I realized my losses, pivoted, and then gained more than I lost YTD in 2023. The ride has been kind of wild. And I learned a valuable lesson about how trashy bonds are, even US treasuries.



The question is:

Does she include your net worth in her net worth?



I really appreciate @cyanide12345678 posts about investing because they're unique. I like reading about other people's strategies, especially if they're different from buy and hold index funds. Most unique strategies are overfitted nonsense or quite dumb and are clearly by amateur investors. But there are a few gems by some really smart and talented investors / traders that fall outside the realm of what is accepted by the common person. Massive returns (and losses) are common for those whom want outsized returns and can bear outsized risk. This is more prevalent in family offices with long term perspectives.

Bonds are trashy when giving 2 percent. Nowadays they aren’t the worst thing out there.

 

[Siggy]

Real losses when you factor in inflation. It's no biggie though. I realized my losses, pivoted, and then gained more than I lost YTD in 2023. The ride has been kind of wild. And I learned a valuable lesson about how trashy bonds are, even US treasuries.



The question is:

Does she include your net worth in her net worth?



I really appreciate @cyanide12345678 posts about investing because they're unique. I like reading about other people's strategies, especially if they're different from buy and hold index funds. Most unique strategies are overfitted nonsense or quite dumb and are clearly by amateur investors. But there are a few gems by some really smart and talented investors / traders that fall outside the realm of what is accepted by the common person. Massive returns (and losses) are common for those whom want outsized returns and can bear outsized risk. This is more prevalent in family offices with long term perspectives.

I agree.

I feel also it’s a bit hard to recommend what people should do. The academic recommendation is SPY buy and hold. If you want to eke out a few more basis points, add small cap. If you want to lose a few basis points but cut volatility, add a sliver of bonds.

If you want to juice a little, but have a higher tax burden (or hold only in a retirement account), add REITs. I, personally, find this difficult to do since I basically ignore my 401k and Roth.

If you want to go less academic, then you get into single stocks or various real estate options. I lost a good chunk of change screwing with SPACs (cough BFLY/LGVW, XOS, and MVST). I learned a lot. Probably the best advice I read was in Peter Lynch’s “One Up on Wall Street” which was invest in what you know. The literal example was “oil men invest in Biomed and doctors invest in oil, and this is stupid.” By far the best gains I’ve had have been Biomed stocks with Dexcom (currently $122 because it ALWAYS drops after earnings, but bought in in the $30s), Inari (VTE removal catheter systems, up 20+% today on earnings), and Cano (swing trading the $1.35-1.50 channel).

However I can’t in good faith recommend this to other people due to the risk involved.

 

[cyanide12345678]

I agree.

I feel also it’s a bit hard to recommend what people should do. The academic recommendation is SPY buy and hold. If you want to eke out a few more basis points, add small cap. If you want to lose a few basis points but cut volatility, add a sliver of bonds.

If you want to juice a little, but have a higher tax burden (or hold only in a retirement account), add REITs. I, personally, find this difficult to do since I basically ignore my 401k and Roth.

If you want to go less academic, then you get into single stocks or various real estate options. I lost a good chunk of change screwing with SPACs (cough BFLY/LGVW, XOS, and MVST). I learned a lot. Probably the best advice I read was in Peter Lynch’s “One Up on Wall Street” which was invest in what you know. The literal example was “oil men invest in Biomed and doctors invest in oil, and this is stupid.” By far the best gains I’ve had have been Biomed stocks with Dexcom (currently $122 because it ALWAYS drops after earnings, but bought in in the $30s), Inari (VTE removal catheter systems, up 20+% today on earnings), and Cano (swing trading the $1.35-1.50 channel).

However I can’t in good faith recommend this to other people due to the risk involved.

Traditional recommendations are meant for the average joe i feel. It’s easy.

There are interesting new etfs now that i feel are superior to SPY in a retired person’s portfolio. A 70/30 portfolio just doesn’t replicate some low volatility income focused products like JEPI.

Jepi should get around 6-10 percent annualized cash on cash return. It’s a retirement person’s dream - consistent monthly cash flow. When stocks go down, premiums go up to maintain cash flow. When stocks go up, you still participate in a limited upside. I think products like this could literally redefine the 4 percent rule to maybe the 5 percent rule lol.

 

[JacobMcCandles]

However I can’t in good faith recommend this to other people due to the risk involved.

Typically, it’s the lifetime underperformance on why it isn’t a good recommendation.

 

[emergentmd]

Life happens, kids happens, expenses goes up. Yes, its easy to say save 100K on a 400K salary but it really isn't. 400K is 300K take home. 100K retirement and you have 200K left.

Walk out of residency married at 30 yrs old with 300K debt. New Car, New house, etc. Finally pay off 300K debt after3 yrs.

Have 2-3 kids. Wife stays at home, single income. Unless your wife makes over 100K, working is just not worth it putting 2-3 kids in daycare.

Private school, club sports, nice vacations, clothes, bigger home, home repairs, new car, etc....

If your DINK or your wife makes 200K/yr, then yeah saving 100K/yr is a breeze.

Throw in kids and its just not as easy as it seems. 200K is alot and no one should complain but its not like your swimming in luxury.

Texas property tax on a 1M home is like 25K. Utilities/cell/basic living expenses is 15K. Private school for 3 kids another 45K minimum. Club sports 15K.

That leaves 100K for vacation, food, clothes, entertainment, and everything else.

I am not saying anyone needs a 1M home, private school, club sports, etc. But that is just the reality of being a high income doc where your kids/spouse's peers have similar activities. Lifestyle creep is real and inflation lately is ridiculous.

 

[skougess]

Life happens, kids happens, expenses goes up. Yes, its easy to say save 100K on a 400K salary but it really isn't. 400K is 300K take home. 100K retirement and you have 200K left.

Walk out of residency married at 30 yrs old with 300K debt. New Car, New house, etc. Finally pay off 300K debt after3 yrs.

Have 2-3 kids. Wife stays at home, single income. Unless your wife makes over 100K, working is just not worth it putting 2-3 kids in daycare.

Private school, club sports, nice vacations, clothes, bigger home, home repairs, new car, etc....

If your DINK or your wife makes 200K/yr, then yeah saving 100K/yr is a breeze.

Throw in kids and its just not as easy as it seems. 200K is alot and no one should complain but its not like your swimming in luxury.

Texas property tax on a 1M home is like 25K. Utilities/cell/basic living expenses is 15K. Private school for 3 kids another 45K minimum. Club sports 15K.

That leaves 100K for vacation, food, clothes, entertainment, and everything else.

I am not saying anyone needs a 1M home, private school, club sports, etc. But that is just the reality of being a high income doc where your kids/spouse's peers have similar activities. Lifestyle creep is real and inflation lately is ridiculous.

Respectfully, everything you wrote in this post reinforces that not being able to saving large amounts of money on $400k is a lifestyle choice. At that income level, if you are making excuses, you’d probably make them at $1 million too. Fine is that’s what you want to do with your money, but let’s not pretend it isn’t completely by choice.

You could pretend to live on a *gasp* $200k salary and spend every bit (so not even really living on that salary because most people at that level are ALSO saving for retirement) and still be able to save your $100k.

 

[cyanide12345678]

Life happens, kids happens, expenses goes up. Yes, its easy to say save 100K on a 400K salary but it really isn't. 400K is 300K take home. 100K retirement and you have 200K left.

Walk out of residency married at 30 yrs old with 300K debt. New Car, New house, etc. Finally pay off 300K debt after3 yrs.

Have 2-3 kids. Wife stays at home, single income. Unless your wife makes over 100K, working is just not worth it putting 2-3 kids in daycare.

Private school, club sports, nice vacations, clothes, bigger home, home repairs, new car, etc....

If your DINK or your wife makes 200K/yr, then yeah saving 100K/yr is a breeze.

Throw in kids and its just not as easy as it seems. 200K is alot and no one should complain but its not like your swimming in luxury.

Texas property tax on a 1M home is like 25K. Utilities/cell/basic living expenses is 15K. Private school for 3 kids another 45K minimum. Club sports 15K.

That leaves 100K for vacation, food, clothes, entertainment, and everything else.

I am not saying anyone needs a 1M home, private school, club sports, etc. But that is just the reality of being a high income doc where your kids/spouse's peers have similar activities. Lifestyle creep is real and inflation lately is ridiculous.

Yeah most of those are personal choices. I live in a top 1% school district per niche.com; pretty much every school is an 8, 9, or 10 in the entire county per greatschools.org. Somehow i still know people sending their kids to private school here and spending 30k per kid. What’s the point of that?

1M homes outside of Austin and some parts of Dallas are huge mansions in Texas. Again a personal choice, plenty of options in the 500-750k range as well that have more than enough space for a family. And those million dollar homes in Texas are usually going to be in great school districts as well, making private schools unnecessary.

400k is just so much money honestly. But then again ive lived on minimal money for 13 out of the last 15 years that I’ve spent in America, so it comes down to perspective.

 

[Splenda88]

Life happens, kids happens, expenses goes up. Yes, its easy to say save 100K on a 400K salary but it really isn't. 400K is 300K take home. 100K retirement and you have 200K left.

Walk out of residency married at 30 yrs old with 300K debt. New Car, New house, etc. Finally pay off 300K debt after3 yrs.

Have 2-3 kids. Wife stays at home, single income. Unless your wife makes over 100K, working is just not worth it putting 2-3 kids in daycare.

Private school, club sports, nice vacations, clothes, bigger home, home repairs, new car, etc....

If your DINK or your wife makes 200K/yr, then yeah saving 100K/yr is a breeze.

Throw in kids and its just not as easy as it seems. 200K is alot and no one should complain but its not like your swimming in luxury.

Texas property tax on a 1M home is like 25K. Utilities/cell/basic living expenses is 15K. Private school for 3 kids another 45K minimum. Club sports 15K.

That leaves 100K for vacation, food, clothes, entertainment, and everything else.

I am not saying anyone needs a 1M home, private school, club sports, etc. But that is just the reality of being a high income doc where your kids/spouse's peers have similar activities. Lifestyle creep is real and inflation lately is ridiculous.

Saving 100-125k/yr on a 400k/yr is doable; >150k is very good and >175k is exceptional IMO

I agree with you that lifestyle creep is real. I find myself paying $500-700/night (family of 4) for hotel I think it's ok. It is NOT ok.

 

[cyanide12345678]

Saving 100-125k/yr on a 400k/yr is doable; >150k is very good and >175k is exceptional IMO

Do we have data on how students in the top 25% of private vs public schools do in life?

I will probably with stack away 125k/yr between retirement(s) and savings etc on probably ~400k/yr income this year... and I think I got to do better since I haven't been making payment on my student loan.

I agree with you that lifestyle creep is real. I find myself paying $500-700/night (family of 4) for hotel I think it's ok. It is NOT ok.

My understanding is that the only thing that has consistently shown a correlation with school success is socioeconomic status of the household.

I’m not sure if i want my kids around snobby rich kids either.

 

[sloh]

My understanding is that the only thing that has consistently shown a correlation with school success is socioeconomic status of the household.

I’m not sure if i want my kids around snobby rich kids either.

Confounded by IQ—which has heritability of 0.8

 

[emergentmd]

I live in a top 1% school district per niche.com; pretty much every school is an 8, 9, or 10 in the entire county per greatschools.org. Somehow i still know people sending their kids to private school here and spending 30k per kid. What’s the point of that?

Many do not send kids to private strictly due to academics. Top performing schools are not a byproduct of how well they are taught in school but how they are taught/supported at home.

 

[anonperson]

My understanding is that the only thing that has consistently shown a correlation with school success is socioeconomic status of the household.

I’m not sure if i want my kids around snobby rich kids either.

I'm a product of public school and support the concept but I can understand why some parents would send their kids to a private school. My kids go to a public school.

Private schools can waive the stick of expulsion since they are not beholden to any district rules. This can typically keep kids in line and specifically their parents as well. Even in good public school districts, you will have some @$$h0le kids that can cause trouble.

 

[anonperson]

Life happens, kids happens, expenses goes up. Yes, its easy to say save 100K on a 400K salary but it really isn't. 400K is 300K take home. 100K retirement and you have 200K left.

Walk out of residency married at 30 yrs old with 300K debt. New Car, New house, etc. Finally pay off 300K debt after3 yrs.

Have 2-3 kids. Wife stays at home, single income. Unless your wife makes over 100K, working is just not worth it putting 2-3 kids in daycare.

Private school, club sports, nice vacations, clothes, bigger home, home repairs, new car, etc....

If your DINK or your wife makes 200K/yr, then yeah saving 100K/yr is a breeze.

Throw in kids and its just not as easy as it seems. 200K is alot and no one should complain but its not like your swimming in luxury.

Texas property tax on a 1M home is like 25K. Utilities/cell/basic living expenses is 15K. Private school for 3 kids another 45K minimum. Club sports 15K.

That leaves 100K for vacation, food, clothes, entertainment, and everything else.

I am not saying anyone needs a 1M home, private school, club sports, etc. But that is just the reality of being a high income doc where your kids/spouse's peers have similar activities. Lifestyle creep is real and inflation lately is ridiculous.

100% agreed.

Kids change the equation hugely.

If you have a special need kids, that really changes the equation.

Food costs, tutoring, health needs, extra activities etc.

And it's hard to convince a spouse to live a monastic lifestyle when you're pulling in $300k plus.

My spouse is very reasonable but stuff still costs money. I'm not really into traveling but they are. Guess what. Will have to shell out $$$ on some international trips at some point.

Even if you don't do private school you will need to live in an area with a good school district. So does everyone else. This pushes the price of housing.

I paid extra to live in an area with a good school district. This is common.

If you're a minority or need to be close to family, not uncommon to pay a premium for that as well.