WCI blog: 4 Physicians

[spotty_dog]

I found this blog kind of interesting, in the way it solidified things that one might have heard or known intuitively, by quantifying and calculating them.

Do you have an affinity with any of the hypothetical physicians in the article and their lifestyle? Did the person who made the calculations miss anything glaring?

http://whitecoatinvestor.com/a-tale-...-of-lifestyle/

I think we've moved from one category into another over the years as income has risen, but I'm still pretty okay about where we are and about our retirement prospects.

[Thirteen]

We are somewhere between Benson and Anderson (our nest egg has saved us with my husband's current treatment costs, and must be rebuilt), and our grocery expenditure/going out to eat cost went up significantly for a few months.
I'm actually reconfiguring our budget this week to see where we need to save more.


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[poky]

Just based on the hard numbers, we're a mix of the first two (most frugal ones). Our situation is different from typical (no kids, older out of training), and our budget categories and amounts don't quite match either one, but our total amounts are in between the two of them. I'm confident that barring any huge changes in our lives, we can live comfortably now and retire comfortably in 15 or so years, which is our goal. We're keeping our eye on that prize, and our lifestyle hasn't expanded beyond our ability to do that. This year is the first year we'll be able to put the FULL amount we should into investments (buying the house last year cut us back to just maxing out tax protected accounts for last year, no extra, but our advisor reminded us last year that the house we own and rent out, that we lived in before med school, can count as an investment account, which puts us still on track).

[TulipsAndSunscreen]

I think we will be second most frugal. Our housing, church tithe, and kid costs will push us out of category 1. But we don't care about cars and we've got a little savings (although fellowship may kill that).


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[Vanquisher]

😳

We are a little of B, C, and D. Sigh.

[SoonerTexan]

I think we will be second most frugal. Our housing, church tithe, and kid costs will push us out of category 1. But we don't care about cars and we've got a little savings (although fellowship may kill that).

Yes, exactly this, (except for the fellowship part. That remains to be seen!)

The cost of raising kids (especially during residency) is really the big one. We could achieve the percentage of Doctor #1 after residency, but I just don't see the point given we are young and working until 55 or 60 doesn't seem unreasonable at all, especially when it has taken 14 years to get into the field! I definitely don't want to live completely for "now," but there are things in my life that are happening now that I can never get back.

Personally, I don't think I like the idea of being a "Dr. Anderson." I don't think it is inherently a bad way to live, but I do think you are at risk of being a slave to your finances emotionally on both far ends of the debt spectrum.

[TulipsAndSunscreen]

I completely agree [MENTION=1889]SoonerTexan[/MENTION]. My parents tried to live like Dr. Anderson for SO long and it killed their marriage. They would agree to "not celebrate birthdays or holidays" or "dome [fill in the blank] on the cheap" and my mom ALWAYS felt slighted because she actually really does love the finer things in life. So it sucked because my dad was always trying to save, trying to get ahead and my mom literally felt suffocated. I have memories of her hiding clothes that she bought from my dad.

So...a little balance is ok. If people making $300k can't have a FEW luxuries, life sucks (I'm obviously being tongue in cheek).

[SoonerTexan]

Do you have an affinity with any of the hypothetical physicians in the article and their lifestyle? Did the person who made the calculations miss anything glaring?

It's been pointed out in the comments, but some of the estimates are low, primarily if you have a family:

--Our property taxes (for a 2000 sq ft 3/2 home) are ~$5500 in Texas. That is offset by no state income tax, though.

--We blow his healthcare numbers out of the water. $7200 in premiums alone as residents

--The grocery bill is going to be more variable with a larger family. I'm struggling to keep ours at $700 a month to feed a young family of 5 and I most definitely shop sales.

[TulipsAndSunscreen]

I completely agree re:grocery budgets. We struggle to keep below $700/month. We eat very little meat (like less than once a week) but that is offset by organic dairy and some produce. We also buy local produce which is more pricey. We literally buy nothing regularly from the interior of the grocery store but flour, oatmeal, and canned beans.


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[JaneDoe]

We are pretty much on point with the second most frugal physician. I track our expenses and we are within five thousand dollars of the Dr. B. It feels like we live very modestly compared to our physician friends. We live in a relatively lower cost area and we don't send our kids to private school. Judging by the homes of many of our physician friends, our's is very modest. Our annual mortgage expenses are less than Dr. B's; however, Dr. B's insurance expenses and property taxes are much lower than what we pay. 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. We do have a lot of kids, which drives up our grocery, dining out and kid-related expenses. Our health care expenses are much, much higher than what these hypothetical doctors pay. In this era, I don't believe any person with a family pays $5,000 a year in healthcare expenses. As a self-employed physician, Dh foots the entire cost of our family's healthcare insurance premiums as well as our deductibles.

I think we are well on our way for retirement. Dh is maxing out his 401k, and he has ownership interests in his ASC and clinic buildings from which he currently gets rental income. He also has ownership interests in his private practice and ASC. He pays a lot in loans for all of these interests, some of which will be paid off very shortly. These are all assets we can hopefully count on for retirement.

This was an interesting article and I appreciate the point of it. Even though we do not match up with Dr. A, the most frugal, I really think we are doing the best we can financially without feeling like we are delaying too much gratification. We do indulge in a few luxuries. It also feels good to be able to save for our kids' college education and easily pay for our kids' sports/club expenses, which are becoming increasingly more expensive the older they get. I know that these can really stretch many families.

[medpedspouse]

We are between B and C. We live like B but spend our money on traveling. I have mixed feelings about A and B. On one hand I want to save (and we do - our house and cars are what we would buy while in training). On the other, I don't want to die and not get to do the things I love....like travel.

[SoonerTexan]

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

Oh wow, I realized I was thinking the $1000 number for Dr. A was monthly, not yearly!

Yeah, no way in hell.

Our umbrella & auto is $2300/year. We drive 2 cars that are on the newer end (3 & 6 years old), but not luxury (both were purchased for under $20k) DH has an accident that might be driving that up a tad, but I also used an insurance broker and picked the lowest number, so I know the rate is about as good as we can get.

Our life ($2 million) and own-occupation disability is $2664 a year. It's possible we could shop that a tad more and get it lower, but keep in mind that is a disability policy for a resident-level salary and was purchased for a completely healthy 27 year old.

[metroguy]

i never really calculate our expenses anymore ever since dw is an attending.. i'm still cheap but now i shop in whole foods.. yay!!

[rufflesanddots]

We are between B and C. We live like B but spend our money on traveling. I have mixed feelings about A and B. On one hand I want to save (and we do - our house and cars are what we would buy while in training). On the other, I don't want to die and not get to do the things I love....like travel.

I feel this.

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.



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[Thirteen]

WCI blog: 4 Physicians

I second [MENTION=1889]SoonerTexan[/MENTION] on insurance costs: we easily spend $850/mo on various types of insurance, and that's not counting what comes out automatically as benefits form his employer.

Our church tithe is also larger than the donations for Anderson.

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