WCI blog: 4 Physicians

[JaneDoe]

I just don't believe you can have life, disability and auto insurance (I'm not even including home owner's or health insurance in this) for $1,500 a year. We pay more like $3,500 for these three types of insurance.

I just realized that in the above I failed to include Dh's annual disability expenses. Disability costs us approximately $7,400 a year in addition to the $3,500 for auto and life insurance. For a blog that advocates having disability insurance, it seems to be wildly out of touch with the actual costs of insurance for these hypothetical doctors. It's easy to be the frugal physician when you have unrealistic expenses.

[TulipsAndSunscreen]

We are at $800 or maybe more a month for our insurance (disability, life) and that's in residency.

And if you tithe 10%, none of these are high enough.

I get the meta point. I just feel like these costs and what they're advocating aren't realistic. You can't drive a used Honda sedan as your only car if you have kids and live in a low COL area (because that usually means no public transport). I'm not saying they have to factor in private school or a country club but I think some of these costs are silly low.


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[Vishenka69]

It's interesting that there's no disability insurance in the expense list. Ours is almost $8K a year. Our total expenses equal Dr. B but our categories are different.

WCI had a post a while back about importance of picking specific categories for splurging, while remaining frugal elsewhere. We probably spend close to $50K on travel but drive our cars forever.

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[SoonerTexan]

I just realized that in the above I failed to include Dh's annual disability expenses. Disability costs us approximately $7,400 a year in addition to the $3,500 for auto and life insurance. For a blog that advocates having disability insurance, it seems to be wildly out of touch with the actual costs of insurance for these hypothetical doctors. It's easy to be the frugal physician when you have unrealistic expenses.

I made that comment on the blog and the original author agreed that number didn't include disability and life--they no longer pay for it as he has achieved financial independence. The $1000/year number is still really low for even car insurance, much less home insurance.

For me, the even bigger driver is kids. Kids are expensive. I think Dr. A is possible for a single person or childless couple committed to living very frugally for 10 years. It isn't impossible for a family, but it is going to be significantly more difficult.

In the end, I just don't see the point (for us) of trying to achieve financial independence by the time my husband is 40-45. We've invested a lot of time and money in this career--the poor baby can work til he's 55! If he doesn't enjoy what he does enough to work 20 years, we made a big mistake!

I do see that the point of the blog post isn't to necessarily advocate for the lifestyle of Dr. A for everyone--it is more to illustrate just how much that standard of living is going to affect your time to potential retirement.

[Vishenka69]

From an attending perspective, financial independence is not necessarily quitting medicine altogether. It's ability to no longer paying close to $10K a year for disability/life insurance, taking a job that has no call, doing locums for only a couple of weeks a month, etc.

Not all specialties take call and they vary greatly from place to place but after taking in-house call at a Trauma II and overflowing OB for almost 10 years, our main focus is not early retirement but no call by 50 or possibly 45. DH is turning 40 this year.

I also agree about child related expenses being absent from the spreadsheet. 2 kids in a medium COL location cost us close to $30K a year.

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[spotty_dog]

I co-facilitate a caregiver support group right now and it's been a somewhat common theme for members to say they'd scrimped and saved throughout their lives to "live the dream" in retirement, only to have their spouses develop dementia or some other health condition that really limits or outright prohibits travel or other activities. Many of them have said they wish they'd done it earlier so they could've shared those experiences with their loved ones.

But...does anyone say that they wish they'd worked longer hours for more years?

Keep in mind that we're talking about top 3% household incomes here. You don't have to eat cat food 3 meals a day to get the kinds of savings rates used in the example.

[rufflesanddots]

I'm not really sure how to answer your question.

It's a pretty high-income group who takes pride in their personal and professional accomplishments. It's not that they had zero fun, but that they'd saved their really big adventures or goals, or maybe just spending money in a way that they a view as "selfish", until later...And then life happened.

It depends on the individual or couple and their goals and experiences, too. Many of them lived in the depression era and fought in WW2 (so also think: earlier families, caring for aging parents in home v. putting those parents in a facility, women staying home and having limited experiences versus the men who may have been supporting them, etc.). They have a strong sense of obligation to family and career and community. I think the gist of their comments is that they wish they'd prioritized their enjoyment (and perhaps even superfluous fun) more instead of being so responsible all the time for decades and decades.

N=handful, so grain of salt and all. Just an interesting perspective I've heard that I think is important.

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[medpedspouse]

But...does anyone say that they wish they'd worked longer hours for more years?

Keep in mind that we're talking about top 3% household incomes here. You don't have to eat cat food 3 meals a day to get the kinds of savings rates used in the example.

I think it is a balance and preference. To some having X amount in savings yields a sense of accomplishment and comfort. To me, living among locals in a place foreign to me and learning to communicate in another language gives me comfort and a sense of accomplishment. We did not always prioritize our $ on travel. When we were younger and had less money we traveled much less because there was only so much money to go around between savings, living expenses and training costs. Then, there was not much left for travel. Now, we make more but do not have the time to travel. I could spend less on travel hoping we can retire sooner and have both the time and money...but this is where the balance comes in. It is quite a gamble to expect to be retired and still be able to travel. For example, even if I was healthy post retirement, as my mom gets older we will not be able to be away as long or travel as far.

[gcuthbe1]

we will not be able to be away as long or travel as far.

This is exactly why I think our travel budget is important/ a priority even in residency. Sure our retirement could've gotten that $, or we could've taken another chunk out of his med school debt. But, instead, before we started making a baby, we took two dream trips of a lifetime that will be more difficult or nearly impossible later on (New Zealand and Chilean Patagonia). I am very happy with our savings accounts and budgets going into fellowship and parenthood, and have no regrets. The med school debt and retirement savings will get their necessary bumps in priority in attendinghood (and it isn't like we've ignored them completely).

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[spaz]

I'm not sure where we are on that chart. We have no mortgage or car payment. We could retire now if we wished according to someone who looked at our finances. We have consistently lived on 120,000 a year since he started practice. We had a mortgage for 7 years of that and then the house was paid off, so we have that $2,500 automatically deducted and put into a taxable retirement account. We put away 500 a month for a car payment, but never have one because we always pay cash with what we have saved. We also drive our cars for 10-20 years ( unless someone totals it.... I wasn't ready for my car with 170,000 miles to go this year...it had NO problems...frustrating. ). That 120,000 also included $400 a month for each of our 3 children to go into a 529 account. We average 500 for groceries, but that is down from the high of 700 when both boys were still at home. We only have a 100 dollar a month eating out budget. We don't do it much. If we do, we go at lunch and order water. Kids knew when they graduated from kid meals they lost their soda. (: We don't do cable. I do budget 500 a month for travel. I don't know. We have plenty of fun. We do plenty of things. I certainly don't feel deprived. Our house is just fine. My husband's PA, however, has a MUCH nicer house. We like the one we are in. It is reasonable. His partners are much bigger, fancier and have look like some shows of the rich and famous. ( That is why we never have the office party here. (: But I would rather spend the money on the homeless shelters, food pantries, etc. We gave away over a ton of money this year and that is typical. That is the fun part about having money. I love being able to hear about a need and make it happen anonymously. The

Our middle one shakes his head at us. He doesn't get why we are so frugal. He says he is going to spend money .. We do. We are just smart about it. We took the 5 of us to Europe for a couple of weeks. We used frequent flier miles and found some incredible deals and spent less than $5,000 ( which I think is really good for two adults and 3 teens!!!) However, most of our vacations are camping. We love that.

So I don't know who we are on the chart.

[alotofyarn]

I'm not sure where we are. We spend more money on food and shopping than we should, but we have a reasonable house and cars - currently only one car payment. I'm putting the max into my retirement account that my employer matches, but not anything over that yet. We have a decent amount in savings. Once hubby finishes residency, we'll get a lot more aggressive about paying off his student loans and saving. We have life insurance, and we're looking into increasing it and adding disability.

[houseelf]

I've been following this for awhile. Obviously, WCI gives a very basic sketch and any number of variables could throw this off. A couple of glaring differences came to mind:

--We had kids early and had a damn long training haul, so the "real money" didn't start until almost 40. On the other hand, it is a very well paying specialty. Doubling down on retirement and student loan payments because you get to the game late sucks up the cash flow. Also, we had very little furniture, a beater of a car, licensing galore, financing a move and selling a home when we finally made it to the finish line. I've said this a million times all over this board---That gap between training and attending hood can be a financial vortex. Try to be prepared as best as you can. Medicine is dumb stupid with the way the pay and expenses are structured.

--Um, holy low property taxes Batman! 3k per year? That is a TINY fraction of what we pay for award winning schools. Our mortgage is getting to the point where almost 40% of the total payment is comprised of property taxes when all is considered. I'm not going to specify details, but seriously, I can't get over this figure for property taxes. The good news is that houses sell almost by word of mouth because people are dying to get into this school district. I guess it is what you value.

-1,000 for gym membership? Um hell no. I've run marathons and haven't spent that much in a year. That's way high. Drop in yoga and fitness classes at the community rec Center, baby. (See...live in a town with high property taxes. LOL).

-Car payments. Nah. You can drive used cars. Those seemed high. Only Dr. A seemed reasonable to me.

-Health and dental care. This could be a rogue factor. Things like dermatology, braces, wisdom teeth, orthopedic rehab, speech therapy, a 1,200 IUD, can obligate that figure and those aren't even extraordinary health care expenses. Obviously, YMMV.

--kid expenses like camps, birthday parties, after school care, etcetera. Hell, each AP course has a 95 fee attached. Kids are horrible for the budget.

--Perhaps most glaringly, where is mention of Dr. A through Dr. B student loan payments? This is a major line item budget for most docs.

I'm getting closer to becoming Dr. B but I definitely spent some time slumming down with Dr. D's budget folly during training, except without all the fanciness. LOL.

I do agree that life has to be a mix of living for tomorrow and living for today. I spend a lot of money on my kids and travel. I'm ridiculously cheap elsewhere. Like people make fun of me. Oh well. There goes my cool card.

ETA: as others have observed, insurance is way low in the article if you are financially responsible and purchase disability insurance, life insurance, and umbrella insurance. (our car insurance also includes a male adolescent driver so.....)