Student Loans
Welcome to another installment of Interviews with Real Female Physicians. The goal of this series is to share their story so that you, the reader, may learn and be inspired from their experiences – good and bad. We all come from different backgrounds and have different situations. Some of you are married, some are not, some with kids, some with blended families. Let’s show other women that any of these can work financially! So let's introduce our next woman physician rockstar – Stella.
Tell us about yourself:
I am a gastroenterologist working for Kaiser Permanente in the Bay Area but originally from Dallas, TX. My husband is a facial plastic surgeon in private practice. We’ve been out of training for ~7 years and both turning 40 this year. We live in San Francisco and have a 4 year old daughter and a son on the way this November. We are both avid travelers and foodies. I often hear the advice to move out of a HCOL area but to us, we love the city and all it has to offer and feel it’s worth it.
Did you graduate with student loans?
I had ~$120k in student loans following med school. I went to The University of Texas at Austin for undergrad and a public in-state med school. I’m the youngest of 6 kids and my family was not wealthy so I received grants and loans to get through my education, including Pell grants. I paid off the highest interest private loan (~$20k) when I worked as a hospitalist in between residency and fellowship but otherwise deferred my loans during training. I consolidated the loans with ACS. Luckily the interest on the remainder of my loans were relatively low at ~3%, and I paid them off in one fell swoop 5 years out of training. I would have done it sooner, but my then FA discouraged me from doing so stating it was “good debt” that helps my credit score and I’d be better off investing in the market w/ better returns. Glad I didn’t listen to that advice as it feels good to be almost debt free.
Financial aspects of kids
When did you have them?
We had our daughter 3 years after becoming an attending.
Are you planning to fund their college expenses?
My husband and I had completely different experiences in this regard growing up. As I mentioned earlier, my parents didn’t have much so I got through school with loans and work study programs in college. Even though this made me independent and resilient, I did feel limited in the options of where to attend school. I didn’t bother applying out of state or to expensive private universities. I think in retrospect I did fine for myself, but it must be refreshing to not have finances hinder the “the sky’s the limit” mentality. My husband’s family in contrast paid for 4 years at Stanford undergrad and out of state medical school including living expenses. Not only that but they also set up a modest trust fund for him that matured in his late 20’s to get a jump start on life. Despite this, he is incredibly grounded and rational with money. In fact, between the 2 of us, I tend to be the spendthrift. I often have to convince him to loosen up the pursestrings. We plan on fully funding for 4 year private school and grad school if need be. Partly this is cultural and partly this stems from both of our experiences. I think the most important factor is that we try to instill in our children a sense of hard work and empathy for others. We are front loading $140k for each kid early on in the Utah 529 and leaving it alone to let compound interest work its magic. We’ll bankroll the rest if that isn’t enough to cover the costs by the time they’re in school. If we’ve overfunded then I’ll transfer the beneficiary to nieces/nephews or perhaps grandkids. After 5 years out from front loading the 529, I’m considering funding an irrevocable trust for our kids that matures around age 30 similar to what my husband had as a starter fund. I know this is controversial and may engender “economic outpatient care” per the millionaire next door, but it was such a huge benefit for us starting out. We can fund the annual gift limit of $28k per couple without running into estate tax issues.
What are your child care expenses?
Our nanny’s take home pay was $40k a year for the first 3 years, then our daughter went to preschool. We still have a part time nanny/housekeeper who picks her up after preschool, and does all the grocery shopping/cooking/cleaning around the house. Her take home pay is ~$30k. With both of our schedules it wasn’t feasible to do daycare since we are often running late and needed the flexibility of a nanny.
Are your kids in private or public school?
My daughter is currently in a private pre K-8th grade school. It is ~$36k per year including aftercare and summer school which is pretty standard in SF. I would be lying if I said I didn’t have an existential crisis about this ALL the time. I grew up without means, a child of immigrant parents, went to public schools my whole life, and I think that really taught me resilience and how to relate to others. I’m concerned about my kids being around wealth and excess their whole lives, and I worry about how they will learn empathy for others. I’m fascinated by education policy and have read up on it quite a bit. I know all the studies and evidence that cites how diversity (socioeconomic and ethnic) is better for everyone, but when it came down to it I just couldn’t “experiment” with my child. Part of me feels like what is the point of working so hard to get where we are if we aren’t able to provide a better life than we had for our kids? I’m still working on getting clarity on this matter…we’ll see.
Financial aspects of marriage
We are legally married. I had no assets but my husband had a modest trust fund that really helped us get a jump start on life. Unfortunately it matured right after the crash in 2009, but it was still enough to pay for our wedding, start his practice without having to moonlight or take out loans, put a down payment on our home in a very HCOL area, and pay off my student loans. I recognize that I’ve lucked out in marrying someone without debt, and credit this “starter fund” with allowing us to get a headstart on our finances. We did not get a pre-nup. We are both very much of the mindset that what’s mine is yours and vice versa and trust each other inherently. This may sound naive or foolish but it’s worked for us thus far. Some couples have budgets for each other or have to ask permission to spend over a certain amount, but this is unheard of in our relationship. My husband and I agree on finances and speak openly about it–he trusts me to take care of the financial aspects for our family. I have more of an interest in personal finance and find it empowering to be knowledgeable about this stuff. Neither of us stay at home. I work 4 days a week instead of 5 which allows me some breathing room to run errands or self-care. I think the perception however is that I have much more free time so I’ve taken over the financial responsibilities for our household, which I’ve enjoyed anyways. We both are highly compensated, but he does earn more than me by a sizeable margin. However, I have the generous pension and provide our family’s health insurance through my employer. Together we earn >$1M a year. I think we both have mutual respect for each other that we both contribute equally to this relationship and not just in monetary terms. 
General Finances
What’s your FI (financial independence) number?
~$9 million. We will probably need ~$350k/year to cover expenses in retirement, and I multiplied this by 25. I do get a generous pension if I stick w/ my employer at least part time until I’m 60 which I’m not including in this calculation, but it would provide ~$250k/year at retirement until death–it’s hard to pass up that deal. We may get to our FI number in 10 years, but instead of retiring, will probably cut down to 3 days a week at some point until I officially retire at 60. In the meantime, I really need to cultivate some hobbies/interests so that I can look forward to retiring to something.
Who handles the finances in your relationship? Are you DIY or do you have a financial advisor?
I’m in a transitional period after recently getting rid of our financial advisor and in between a DIY stage and robo-advising. Currently our taxables accounts are in 2 places: I’m investing on my own at Vanguard using a lazy 4 fund portfolio AND using a robo-advisor at Betterment which charges .25% of AUM. It’s my own little experiment and so far the Betterment account has outperformed my DIY account at Vanguard by a few percentage points even including their fee. Plus they tax loss harvest which I don’t have much interest in doing. I’ve easily spoken to an advisor when I’ve needed to and they gave great, unbiased advice. I haven’t quite decided which way I’ll go just yet when I do consolidate my accounts.
What is your net worth?
$3.8 million including equity in our home. Without equity it’s ~$2.5M.
How are you saving for FI/retirement?
I contribute the max $18k to my 401k at work plus I get a >$20k match. In addition, I put in ~$15k in post tax money so I can do the mega backdoor Roth IRA conversion. We each do $5,500 in backdoor Roth IRAs every year. He maxes out his 401k + 3% match. I wish he had more tax advantaged space but is limited by his S-Corp safe harbor 401k plan. I have a defined benefit pension plan that will essentially provide half of my max income yearly at retirement until death if I stay with my employer until 60. I’m not including this in my FI number but it would provide the majority of my expenses in retirement. Beyond that we put the rest of our savings in taxable accounts. Our asset allocation is 90/10 stocks/bonds and rebalance by reinvesting dividends or contributing from our savings to the asset class that’s lagging behind about every quarter (as opposed to selling any funds). I place tax-inefficient funds in my Roth IRAs (REITs, emerging market, small cap value funds), and also use low ER target date funds (with the date beyond my expected retirement date to be more aggressive) in my 401k to avoid wash sale issues with my taxable accounts. We save 25-30% of our gross income a year. We basically live off my income and his income goes straight to our savings account so we don’t miss it, which I then transfer to our taxable accounts or other investments once it reaches a certain threshold.
Biggest financial regrets:
- Using a commissioned broker unknowingly as our first “financial planner” who charged a 6% front loading fee! I realized this when I looked at the paperwork from when he opened our 529 account. Opening a 529 account is super easy to do yourself and here he was skimming 6% off the top. It still makes my blood boil thinking about it, but you live and you learn. This was one of the main motivators I had to educating myself so I consider it a silver lining.
- Using the financial advisor at my banking institution to open up individual bond funds for me and charging me 0.8% AUM when he wasn’t managing anything–bonds manage themselves.
One thing you wish you knew:
It takes time and a lot of reading to feel really comfortable managing your own finances. I think it took me up to 2 years of extensive reading, and I’m still learning something new things all the time. So in the meantime, it’s okay to use a financial planner if you need one–just pick a fiduciary, fee-only, NOT fee-based FA. Also, target date funds with low expense ratios are okay to use while you’re learning the ropes.
Do you give to charity? If so, where and why?
I’ve always felt strongly about contributing to charities or organizations that empower other women or invest in women owned businesses. We give ~$20k a year (with goals to contribute more in the future) to a variety of charities including Women for Women International, Planned Parenthood, ACLU, and Amnesty International. A major goal for me this year is to set up a donor advised fund (DAF) for tax efficient charitable giving. Another one of my goals this year is to set up a small need based scholarship fund at my high school alma mater in honor of my father who passed away a few years ago that will be awarded to promising females who want to major in STEM fields. And while this isn’t charity, we are investors and hold equity in my sister’s startup tea company which has a social impact component helping female Kenyan tea workers establish financial independence and care for their families.
Any parting words of wisdom?
- Money affords you the opportunity to invest in meaningful projects. Now that we have some expendable income, I’ve felt this burning desire to give back and do something bigger than just practicing medicine. I’m still working on exactly how best to do that, but I’m thankful for the opportunity to explore these options.
- Outsource what you can afford if it gives you more time to spend with family or doing things that bring you joy (or maintain your sanity), and don’t feel guilty about it.
- Focus on gratitude–I struggle with this every day. I know that I have many advantages and am so fortunate in so many ways, but it’s easy to lose sight of this.
- Don’t marry a crazy person–I know that you can’t always control who you fall in love with but if there’s early warning signs that you aren’t going to be financially compatible or they seemed destined to live paycheck to paycheck, run the other way.
- Mo’ money mo’ problems–making more money brings a whole host of other issues to consider like asset protection, estate tax planning, trust funds, buying more insurance, etc. Work as much as you need and consider cutting back when you have enough.
And … that's a wrap! If you're interested in doing an interview please send me an email – I'd love to hear from you!
I hope you enjoyed reading about Stella and her family.]]>
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The White Coat Investor recently wrote an article about the financial milestones one should celebrate. Reaching net worth zero is milestone #1 on his list of 14 worth celebrating.
So yep, you read that right and I'm proud of it! I no longer have a negative net worth. It took me about 2 years out of residency to reach this:
I finished residency in June 2015 with a net worth of negative $207K which included about $210K in student loans. I finished 2016 with a NW of – $92K. Now I am at $0!
I still have student loans but my retirement accounts + cash savings now equal my student loans. I made a conscious decision to not delay retirement savings due to my extra late start to attending hood at age 38. I could not afford not to start building up my nest egg to pay off my student loan debt quickly.
Here are some of the other milestones I have reached:
# 5 – Retirement Portfolio of $100K
I reached this earlier this year. It does feel good to see 6 figures in them. Especially when your student loan debt is still 6 figures.
# 7 – Buy Your First New Car With Cash
Sort of. When I moved back to NYC from California, my parents let me take over a lease which had 1.5 years left. That lease ended last December. M happened to have a car that he no longer needed for his work commute. He still owed about $10,000 on it. I paid it off and now I drive it to work. Win/win.
To complicate things even further, M & I have just recently considered our finances combined. We work with a financial planner and we plan (and she guides us) as if we are married. So, from now on, I will discuss our combined finances. In that case, we have achieved:
# 6 – $500K Net Worth
Our combined NW just passed $500K earlier this year. This is largely due to equity in his condo. M likes to joke he is the one keeping our NW positive. True for now ;).
Although we aren't married, we have signed paperwork (wills, etc) that essentially bind us together. We also operate as a family now with Eggy due soon.
What milestones have you reached this year? Make sure you celebrate them!]]>
The goal of this series is to share their story so that you, my reader, may learn and be inspired from their experiences – good and bad. We all come from different backgrounds and have different situations. Some of you are married, some are not, some with kids, some with blended families. Let’s show other women that any of these can work financially! I'd like to thank the women who took the time to answer these questions and if you're interested in doing this, send me an email. So let's meet this debt-free female physician rockstar – Allison.
Tell us about yourself
I am an attending in my second year out of fellowship. My husband is a new attending and is 6 months into his job. We have been married for 3 years with baby #1 currently incubating. I am a surgeon with a specialty that allows a flexible schedule. I love traveling, volunteering, and working out. I live in a larger city in Wisconsin, but still low cost of living. I REALLY wanted to live in California or Chicago, but even as a two-physician family, my husband was adamant that we could not afford it and would not meet our financial goals. We settled on Milwaukee as it’s close to Chicago, on the lake, low COL, and still large enough for both of us to find work and some diversity. I chose a specialty I thought I liked. I always expected to be in academic surgery, only to realize that I do not like it and it does not meet my life goals. If I had to do it again, I probably would not have gone to medical school. I feel like I spent so much time training to do something that is not my passion. I will work hard and do a good job as a surgeon, but it is not the job that I was put on this Earth to do. The problem is that I’ve spent so much time developing these skills I can’t remember what my passions are! The only thing that kept me going through training was the fear of student loans – I could never quit because I had to have a high income to pay them off! It was also VERY important to me that I be able to support my family without issue if I had to be the breadwinner. I now realize that there are non-clinical jobs that would allow me to pay my loans off – and one semester of tuition was still cheaper than the years of sacrifice and the 3.5 years more of medical school fees!
Did you graduate with student loans?
I went to a private college that was mostly cash flowed by parents so did not have any significant debt. I went to a public medical school and received a tuition-free scholarship for 3 of the 4 years. I still managed to graduate with $110,000 of debt, which capitalized to $180,000 by the time I finished residency and started making income-based repayments. My interest rate was 6.75% with a 0.25% reduction for automatic withdrawal. The moment in fellowship that I accepted that I could not do this job full-time or forever and be happy was the moment I ditched PSLF. I am SO glad I did for many reasons. As a person with $180K in debt, yes, I was thrilled to find a program where the government would pay off my loans! All I had to do in return was my 7 years of training and IBR at less than $500/month and 3 years of IBR on an attending salary. What a steal! As a taxpayer, I do not think it’s right that taxes go toward paying for the nice apartment I had in medical school, the international travel I did on student loans, or the interest that accumulated and I ignored to buy myself a condo and new car instead of paying what I owed. Therefore, I decided I would delay gratification and pay off those student loans so I could be debt free! I paid them off in 14 months after fellowship. But, the first 3 months after fellowship I spent traveling and volunteering abroad. I used my first paycheck to celebrate and took 2 vacations: I took my mom on a 2-week tour of Europe (she never goes on vacation and would not be able to afford it) and then I took my husband on an African safari. It was SO painful, but I don’t have a debt in the world and it’s priceless! I have decreased my work to part-time because I only have rent and insurance to pay and am no longer concerned with PSLF. I did not refinance because I knew my goal was to pay it off immediately and wanted every incentive to do so. During my debt-free journey I spent~ 2.5 months to volunteer with my husband in Africa as well as splurge on a vacation to the Maldives. I also volunteered abroad with refugees for about another month. Those breaks rejuvenated me to work harder and finish off the debt quickly. They also reminded me why I do like medicine and am happy I have a needed skill to provide. Sometimes, time-sensitive opportunities come up and taking a detour is worth it – as long as you still have a plan and date for freedom. In hindsight, I should have started IBR in residency instead of having a house and car payments at that time. My debt would have been much less and IBR would have seemed less painful. Again, given the current political climate, I’m still glad things worked out where I just focused and paid them off. This means I sacrificed greatly – we moved to a low COL area despite my love for big cities, I sold my house and we are still renting, we waited to have kids, I am still driving my beater car from residency, and I moonlighted in the middle of nowhere for a week or 2 at a time away from my husband. We did still take vacations for our sanity ☺.
Safari Trip
Financial aspects of kids
Baby #1 on the way as an attending. No way I could afford them time or moneywise prior to now – and I was not ready myself for this responsibility.
Are you planning to fund their college expenses?
We are planning to frontload a 529 at the beginning of next year. We are planning to fully fund our child’s college expenses if able to.
Child Care expenses?
Since I am now working part-time, we will try daycare at first and see if a nanny is needed.
Financial aspects of marriage
Are you married?
Yes, this is the first marriage for both of us.
Did you get a pre-nuptial or post-nuptial agreement?
No pre-nup. I don’t wish I had one. We are working on building our wealth together.
Do you and your partner agree on finances?
We did not see eye to eye on finances until I went through the pain of paying off my debt. I finally understood the value of money, living within my budget, and honoring my commitments to pay debt I accumulated (student loans). We now have joint investment accounts and track our savings on a spreadsheet per paycheck. We have sacrificed to have low expenses – all of our friends have bought million-dollar homes and multiple Mercedes’. We are renting, debt free, save 70% of our income, and can breathe with ease.
Is your spouse stay at home?
No. I am still not sure I want to be the childcare provider for the days I’m not working – so we will have to figure this out as we go.
Are you the breadwinner?
I have always made more because I am a couple years ahead in training than my husband. But, I am also the only one who had debt and minimal savings. We are finally on even ground debt-wise, and now he is earning more than me because I dropped to part-time. We will see how it works out in the long run.
Have you experienced a financial catastrophe?
I consider student loans a financial catastrophe. I encourage everyone to stop paying a second mortgage and clean up the debt – it takes sacrifice, possibly moving, and definitely downsizing but it IS possible to not HAVE to work and feel like you’re living paycheck to paycheck.
General Finances
What’s your FI (financial independence) number?
$10 million dollars – we plan to be there in 25-30 years. FI means I quit medicine altogether. We are financially stable for me to work part-time now which is great. FI means we can afford all of our needs, have a paid-off house, drop all insurances, and pay for the needs and education of our children, as well as support our mothers if needed.
Who handles the finances in your relationship? Are you DIY or do you have a financial advisor?
My husband handles most of it – we discuss what investments we’d like to make and he will set up the account for that. We are DIY and are glad we never got pulled into having an advisor.
What is your net worth?
+ $250K – it does NOT include home equity (we don't own a home). It is cash, retirement accounts, and investment accounts.
How are you saving for FI/retirement?
We are doing: Roth 401(k)s x 2, 457(b) x 1, backdoor Roth IRAs x 2, taxable investment accounts, and an HSA. Most retirement accounts are in a target index fund; taxable account is 90/10 stocks and bonds.
Biggest financial failure/regret:
I should have done at the very least a Roth IRA during residency. I wish I started paying my student loans in residency – you’re not that poor – more than half of America lives on your resident salary and supports a family!
One thing you wish you knew:
All of my attendings told me to defer my loans – you’ll pay them as an attending. Guess what, you have many more expenses as an attending, the interest is no longer deductible, and you are taxed so much more!
What insurances do you have?
Long-term disability and life; currently looking into umbrella.
Do you give to charity?
12.5% to church and various organizations like UNICEF. We also donate appreciated stocks so we do not have to pay the capital gains on them and it counts as charity.
Any parting words of wisdom?
I encourage medical students to live frugally, and get out of medicine if you realize that this field is not for you. I also encourage residents to start paying at least the minimum amount due (do NOT defer) and try to put away money in a Roth IRA or other plan at your hospital has (many times they have 401(k)s and 403(b)s for residents, too!).
And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!
Wow, paying off $180K of student loan debt in 14 months! #likeaboss]]>
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legally married and not be aware of it. Ahem…we aren't.
Marriage has some legal benefits, but it also comes with several disadvantages as well. I've discussed before that marriage is a legal contract.
Most people do not think of it this way and do the typical “I love you” marriage. Historically, marriage was not meant for “love.” It was, in many ways, a business transaction between families.
Moreover, current marriage and divorce laws were put in place to mainly protect the woman as women often were homemakers and would be financially devastated in the event of a divorce. Hence why there are alimony or spousal support laws.
As more women join the workforce and become the breadwinning partner (this is often the case for women physicians!), these laws can seem antiquated and often work against us.
My goal is to make you aware of all the pros and cons of legal marriage. I am not suggesting that you never get married. But, it may make a lot of sense to delay marriage for some time.
So, here are the reasons to consider delaying legal marriage:
Marriage Penalty Tax
Most people think you get a tax break by getting married. It depends. Most people don’t realize that the married filing jointly tax brackets are not just a matter of doubling the single brackets.
Depending on how much you and your spouse make, you may actually pay a marriage penalty tax. This mainly occurs when both partners make a similar income. The marriage bonus mainly applies to couples where one spouse makes a lot less or is a stay at home parent. Here is a calculator to see if you'll get a marriage bonus or penalty.
Since this post went live there has been a major overhaul in the tax code in 2018, so the marriage penalty is lessened.
Blended Families
Blended families are commonly defined as one partner brings in children from a previous marriage or relationship. This factor can add complexity to the relationship. If this is your situation, that doesn't mean marriage is off the table. It's just worth considering the complexities of the situation.
You should be aware of all the financial obligations your partner has and consult a family lawyer in the state of custodial residence of the children. Child support laws are state specific. You may have heard that your income and assets won't matter since they are not your biological children but that may not be the case. This will not deter an ex-spouse from trying to get at your assets. Even if the suit is frivolous, you will still need to hire a lawyer (read: fees) and spend time on the matter.
In my opinion, this is a top reason to delay legal marriage until the children no longer require child support and college support. The FAFSA does not ask for your income, but the college can. If you are going to take this route, I highly recommend you get paperwork — Wills, Health Care Proxies, and Power of Attorneys — in place, especially if you have children with your partner.
Student Loans
Delaying legal marriage can make a lot of sense financially if you are with another high income earner and you're pursuing some some of income-based repayment for student loans. Otherwise, most attendings have their loan repayment as an attending capped out at the standard 10 year plan. That means that there is no benefit unless the debt to income ratio is above 2 for the attending.
If you are getting married, timing matters! Do not get married in November or December due to the timing of recertifying payments. January weddings are great because of when you need to certify repayment, which looks back at prior year tax returns. Before delaying marriage for this reason, I definitely recommend seeking professional student loan advice.
Financial Issues
One of the biggest challenges in a relationship comes when you and your partner are not on the same financial page. I recommend premarital financial counseling for all couples. Through this process you may find there are some major discrepancies.
Getting married will not magically fix them (or other pre-existing issues!). If both of you are committed to each other despite these differences, take the time to iron out them out before walking down the aisle.
The Divorce Rate
And finally, you might want to delay legal marriage because the divorce rate is > 0%. This may seem obvious, but no one really thinks about the divorce rate nor do they think they will get divorced. The divorce rate overall is not 50% as often quoted and even lower among physicians and highly educated folks. You're looking at 25-30ish%. But it still is not 0%.
I think it is foolish to think divorce cannot happen to you. This is not a reason in itself to not get married. Premarital counseling, discussing common life goals, and a well thought out prenuptial agreement will go a long way.
Why We Plan to Delay Legal Marriage
We will face a marriage penalty tax. I'd rather throw the 5-10K in penalty taxes towards my student loans. Also, my income would bump M up to my tax bracket, so that means less take home income for him.
We are a blended family. He has a son from a previous marriage. Unfortunately, us getting married puts us at financial risk. After consulting a few family lawyers, they all told me I should delay marriage until my bonus son has completed college as my income will likely be imputed for his financial aid eligibility.
Final Thoughts on Delaying Marriage
This isn't about not being in love or not being committed. In fact, deciding to wait to get married could be another way to show just how dedicated you are to your relationship. Whether you decide to wait or not, make sure you consider each of these reasons before tying the knot.
What do you think? Would you consider delaying marriage?
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Welcome to another installment of Interviews with Real Female Physicians. The goal of this series is to share their story so that you, the reader, may learn and be inspired from their experiences – good and bad. We all come from different backgrounds and have different situations. Some of you are married, some are not, some with kids, some with blended families. Let’s show other women that any of these can work financially!
So let's introduce our next woman physician rockstar – Laura.
Tell us about yourself:
I am a board-certified dermatologist practicing in Dallas, TX. I married my hubby (also an MD, same age) in 2008. We have 2 kids and a dog (our best behaved child…). I love running, reading, and travel. I live in urban Dallas, TX. My commute is 3 miles from my office, takes about 10 min door to door (not bad). I love where I live and work and feel grateful every single day. I have never lost sight of the fact that it is a rare privilege to become a doctor and even rarer to become a dermatologist. I feel very blessed. I teach medical students and residents and love sharing my knowledge with the next generation of dermatologists. I am a volunteer faculty member since 2009 and have lectured at national meetings since I graduated residency. I have always felt strongly about giving back to my field and advancing the specialty.Did you graduate with student loans?
I graduated with $110k in student debt from medical school. I did not have any debt from college because I had a large academic scholarship to a big public university and worked part time during college. The interest rate on the $110k was 1.6%. Yes, you are reading that number correctly. I paid it off in 1 year by continuing to live frugally after I graduated residency. My hubby went to private college and medical school in NY. He graduated with $280k worth of debt from undergraduate and graduate education. His loans were recently all paid off! His interest rate was around 2.8%. We have been finished with residency since 2009, so it took 8 years.Financial aspects of kids
When did you have them?
I had 2 kids after I finished residency. We utilize two 529 plans to fund their college education by 70%. The remainder we have set up in a brokerage account to fully fund the rest of their education. We had concerns about over funding if they decide on a Texas state school and didn’t want to face heavy penalties for withdrawing and not using the funds for education.What are your child care expenses?
We have a nanny who we pay $800 per week. She has been with us for the past 5 years. We plan to keep her until my oldest starts driving. She arrives early every day so my husband and I can get ready for work. She works approximately 40-45 hours per week. My husband is a partner in his group and takes a lot of call. I work 4 days per week. It is priceless knowing that she is there looking after them even when we aren’t there. We never considered day care because of our hectic and sometimes unpredictable schedules. My nanny is quite flexible and if I have to stay late because of patient care issues, she has no problems working late. My parents and my husband’s parents do not live close by.Are your kids in private or public school?
My children are both in a private pre-K and kindergarten. Cost for my youngest is $12,000 per year. Cost for the older is $17,000 per year.Financial aspects of marriage
Are you married?
I am married to my husband legally, with no prenuptial agreement. He and I were both dirt poor residents living paycheck to paycheck when we met. It was quite an amazing experience to travel the long road that we both have been through together. When I met him, he had a beat up Ford Taurus, with no mirrors and no air conditioning. We rolled down the windows back then. The car would bottom out when we went over a bump in the road and we were too poor to fix it. We have a joint account and separate accounts too. We are very open about finances and think almost exactly alike when it comes to finances. We meet with our financial advisor once a quarter and discuss the future openly. My husband was the breadwinner for the first 7 years of our marriage. Now – I am the breadwinner! Feels good. [caption id="attachment_1494" align="aligncenter" width="640"]
Dallas skyline[/caption]
General Finances
My financial priorities are: children's education, charity, paying off all debts, and living below our means. We use a financial advisor through Ameriprise. He charges 1% AUM (not including the 529s and variable universal life insurance policies x 2). He has been great. He has assisted with asset protection, wills, advance directives, and was very helpful in dealing with my personal accountant and practice accountants on various issues. We meet with him quarterly in person or via webinar.What is your net worth?
Our net worth: $2.6 million. This includes the $200k we have in VUL policies and equity in our home. We hope to keep saving and leave a legacy for our children.How are you saving for FI/retirement?
We max out our 401k(s)/profit sharing x 2. We are in a moderate aggressive portfolio with Ameriprise. We also have a joint brokerage that we contribute each month to ($5k per month per person). We have and max out a health savings account. We do $700 per month per child to the 529 plans. We superfund our VUL policy ($3500 per month per person). Anything in excess goes to paying off our mortgage. Our cars are paid off. Our home will be paid off in 2 years (by age 40), or shortly thereafter. We live in a modest, older home. Our mortgage is very affordable. We do not live beyond our means. We do not like debt or believe in having a lot of debt. I clip coupons and use the Target app. I shop sales.Do you have insurance?
We have two variable universal life insurance policies at 2 million each. We have disability insurance and business overhead insurance (for my practice). We have a 4 million umbrella policy through IDS Property Casualty Company. We have car insurance, homeowner’s insurance, also through IDS.What does FI/retirement mean to you?
Retirement to me means cutting back to 3 days per week…but I actually love what I do and could see myself working for many, many years. My husband and I would like to do mission work or healthcare work in underserved countries when our children are older (in college). We figure they always need doctors in underserved, impoverished countries. We would love to travel and help others with our skill set. God willing, I hope I stay healthy and be able to work for a long time!Do you give to charity?
Every year, we give to the Catholic church ($40,000+), Crohn's and Colitis society ($2,000-5,000), and this year plan to donate to the ASDS (American Society for Dermatologic Surgery) – looking to do a large donation.And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!
Laura and her husband are on track for financial freedom. Note the common themes in this series on living below your means to achieve this.]]> Read More
Welcome to another installment of Interviews with Real Female Physicians. The goal of this series is to share their story so that you, the reader, may learn and be inspired from their experiences – good and bad. We all come from different backgrounds and have different situations. Some of you are married, some are not, some with kids, some with blended families. Let’s show other women that any of these can work financially!
So let's introduce our next woman physician rockstar – Clarissa.
Tell us about yourself:
I am an Internal Medicine trained Hospitalist, mom of 2 preteens and married to my husband for over 10 years. I have been an attending for almost 12 years. I grew up in the South and have chosen to live there as well. I love to read and am finally in a place where time and finances are allowing a healthy travel life. I have always been on the frugal side and have managed to build some wealth this way but have really kicked it in gear this year (partly inspired by Doc Moms Finance Group on Facebook) to really make my money work for me and build wealth more quickly. In the past year, I've cut down on the shifts I have worked but have still been able to save more than I previously had by making smarter and more deliberate choices. I think was born to be an internist and have no qualms about the specialty I picked. I do like the flexibility of hospitalist work in that I can have some very intense periods of patient care and then be completely off. Its taken me awhile to find the right balance but I feel that I have found it in the past year. Having a spouse (or family or hired help) that can really dive in with the child care and housework is really a must for the hospitalist career to work for me. It does involve several weekends, holidays and evenings. I love the flexibility Internal Medicine gives to women even if you don't specialize. You have the most leverage if you can be per diem and don't depend on benefits. The hourly rate for hospitalist is very good and now that I found a schedule that works for me I have no regrets. I often tell medical students to pick a career where they feel the quality of their work and commitment while they are at work won't suffer if they plan to have kids. Although I work less, I am totally committed to my patients when I am in the hospital (this is the reason I picked a shift work type career). I live in a big city in the south. The cost of living is rising but much better than East coast or West coast and the lack of state income tax helps in reducing costs. I don't think I could work as little as I do if I was in a different HCOL area.Did you graduate with student loans?
I was very lucky in that my parents valued education above all else and my education was paid for. I went to a private undergraduate university but finished in 3 years with AP credit. I chose to go to a public state school which helped tremendously too (about 10K a year) . Because I had a certain amount budgeted for living expenses a year, I was careful with that money and often spent less than my colleagues that had loans because I was very debt averse. Knowing the advantage that no student loans gave me, one of my financial goals is to at least pay for the undergraduate education for my children.Financial aspects of kids
I had my first child as I was finishing my residency and my second 2 years after that. In some ways I would have liked to have more but circumstances had us stop at 2 . I also wasn't sure it would be feasible to fund the education of 3 children with my salary. Early on, we had a nanny which was a lifesaver for us. It probably cost us about $2000-2500 a month but the cost was much more reasonable than what I see people paying now. We did this for about 3-4 years. When we moved to our current city, our top priority was to be a great public school zone and we have managed to keep them in public school. This has been one of the number one ways that we have managed to build wealth. If it was the choice between a bad education and paying the cost, I would definitely pay but putting everything in place for them go to great public schools has paid off very well. On a side note, I think the pressure of lifestyle creep is less in the public school crowd (although can still be there if you live in an expensive area). As mentioned before, our intent is to pay for undergraduate education in full for both of our kids.Financial aspects of marriage
I have been married for almost 14 years. My husband and I married at the start of each of our careers. We didn't get a prenuptial agreement because we started out without any significant assets or previous children (first marriage for both). We are both similar in our philosophies– stay away from debt, live below our means and try to give generously when able. I handle 95 % of the finances because I enjoy it and it comes more naturally to me. Also as the primary breadwinner, I am more aware of what is coming in and going out. A few years ago, my husband made the decision to be a SAHD. He was unhappy with his work. Overall (after taxes, child care, etc) it didn't make a significant impact on our finances for him to stay. In general, he enjoys it and ideally, now that our kids are older, he would like some flexible contract work but it enhances both our quality of lives (and our kids) for him to be mainly a SAHD. There is less of a logistical headache with pick ups and summers and we can travel more with my flexible schedule. It definitely can be socially isolating for a man to be a SAHD but I think as more men choose this path, there will be more of a community and more get togethers. It can be emotionally hard to bear the burden of all the family's income but in the end I think the tradeoff is worth it for us. I think the only way it works is if both partners agree that it is the best arrangement.
Have you experienced a financial catastrophe?
My biggest mistake/catastrophe is that I should have signed up for disability insurance early in my career (like right out of residency) before I had any dings in my medical history. Even the most minor things can get you “blacklisted.” Luckily, I have a good policy through my employer but am limited in my job choices until I can become financially independent by my ability to get disability.General Finances
Who handles the finances in your relationship? Are you DIY or do you have a financial advisor?
I handle the finances in our relationship. We have met with advisors a couple of times in the past 5 years and adjusted our big picture accordingly (made sure we had wills, enough life insurance, started a taxable brokerage account) but I do the day to day stuff. Our invested money currently is either in targeted funds for retirement or college or in the Bogleheads portfolio. I keep it super simple.What is your net worth?
Our net worth at this point without 529s is about $850K, this includes equity in our home.How are you saving for FI/retirement?
For retirement, I have contributed max amounts to 403(b) for the past 10 years and get a fairly good match. I am just now wading into my hospital's 457(b) and a taxable brokerage account to augment. I will also be more diligent about yearly Backdoor Roth and spousal Roth IRAs. My 403(b) and Roth IRA is invested in a target fund. My taxable brokerage account is in a Bogleheads-type portfolio (40% bonds, 12% international and 48% total stock market) – it's more conservative because we may use it for short term issues as well . I rebalance the retirement accounts quarterly.One thing you wish you knew:
I waited a year before I started contributing to retirement during my first job and didn't contribute at all during residency so I missed out on free money with employer match that year. I also didn't invest in a Roth IRA like I should have. Other things I wish I had done is just taken a few hours to learn more about investments and expense ratios. We had money from previous jobs just sitting there doing nothing until we consolidated them all and put them in low fee accounts.Do you have insurance?
Long term disability is through my work and I bought a small supplemental policy when I left my job which is not great but is better than nothing. As of now, I thankfully have never had to use my policy.What does FI/retirement mean to you? What does it look like?
Financial independence to me means only working if I want to. I don't have a specific age but hope to get there at about age 55.Do you give to charity? If so, where and why?
We try to give at least $15-20K a year to charity – split between my church, fundraisers for reputable organizations my friends are involved in, Compassion International, kids' school and International Justice Mission. The reasons we give are multifold but from a religious perspective, we are called to tithe. Also, i feel that “to whom much has been given, much is expected.”
Any parting words of wisdom?
It's been a great year of organization and growth for me in the past year (thanks to the invigorating and encouraging community of Doc Moms Financial Group). My top pieces of advice are: Get started early It's easy to let the details overwhelm you. In retrospect, I wish I had started putting money consistently away even if they weren't perfect investments (by this I mean, even just 1 moderately well performing index fund would have been better than letting money languish). Don't let perfect be the enemy of the good. Take the time and effort (not as much as you think) to consolidate accounts It really doesn't take that much time to consolidate accounts and it gives you a lot more insight/wisdom. This year, my husband consolidated all of his accounts into a new Roth IRA. I consolidated my Profit sharing accounts and 401(k)/403(b)s into either Vanguard or my current employer's 403(b). I think this was about 5 different accounts. The people on the receiving end are very helpful. We lost a lot of virtual gains by letting money sit in accounts that were not well invested and charged high fees. Live below your means We are overall pretty good about this but there is always room for improvement. Ignore what people around you are buying and doing. If you looked at my coworkers who have the most enviable lives, they are also the ones with the lowest net worth. It's not worth it. If you can control your costs, it gives you so much flexibility in how much you work, where you can travel, etc. Bargains aren't bargains if you don't need them I have been totally guilty of buying too much off the clearance rack. As a result, I give a lot of clothes away that still have tags on them. I am trying to embrace a more minimalistic mindset. The savings in cost and clutter are amazing. I highly recommend Joshua Becker's “Becoming Minimalist ” blog and Facebook page.And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!
I loved reading Clarissa's story and I hope you did too. She's a pretty wise lady.]]> Read More
the many benefits of a solo 401(k) and the necessary conditions for opening one. So now you're convinced you need to open one. Here are answers to some common questions you might have about starting a solo 401(k).
What about the SEP-IRA?
Before you decide on starting a solo 401(K), let's discuss another retirement account.
You may have heard about the SEP-IRA (or just SEP) as another retirement account option for the very small business. The SEP-IRA has the same contribution limits as the solo-K, but contributions are made by the employER only. Additionally, SEP-IRAs do not allow for Roth contributions.
While you can contribute the same amount to a SEP as you can to a solo-K, having a SEP-IRA (since it is a pre-tax IRA) will prevent you from contributing, tax free, to a backdoor Roth IRA.
So, why would you open a SEP-IRA instead of a solo-K?
The main reason is that a SEP can be opened after the calendar year for which it applies. You can wait until your tax due date, including extensions (around October 15th), to open and fund a SEP-IRA.
For example, you have until 10/15/19 (with an extension!) to open and fund a SEP for 2018. (Even if you have already filed your 2017 return and didn’t know this rule, you still have time to amend your return and open a SEP for 2017!)
By contrast, you must open a solo-k by the end of the calendar year it is for. A very minor reason to open a SEP over a solo-K is that the paperwork to open a SEP is simpler. But don't do it just because you're lazy!
Contributions to either a Solo-K or a SEP are based on net profits adjusted by FICA taxes (Social Security + Medicare taxes). The contributions to a Solo-K and a SEP are the same if you have already made your $19k employee contribution at work. Otherwise, you can add what remains of your employee contribution, up to $19k/$25k to the maximum Solo-K contribution.
What should I consider before starting a solo 401(k)?
There are a few good solo 401(k) choices with low to no fee plan options. They differ mainly in:
- Fees: Some are free, some are not.
- Traditional vs. Roth employee contributions: Not all will offer the Roth option.
- Rollovers: Not all will accept rollovers from old IRAs, 403(b)s, 401(k)s. This is a deal breaker, in my opinion, since the ability to do this is one of the great reasons to have one.
Thankfully, someone else already did a great and thorough review on the most popular solo-K options.
Where should I open my solo-K?
Here are my top 3 picks:
- TD Ameritrade: Offers a Roth option. Has a good list of commission-free ETFs including many Vanguard ones. M has his solo-K here and I plan to open one here too.
- E-trade: Offers a Roth option. Lots of free funds.
- Fidelity: No Roth option. Lots of free funds and ETFs.
All of these accept rollovers of old IRAs, 401(k)s. Some offer loans (which I don't recommend ever doing), too.
At this time, I do not recommend opening a solo-K at Vanguard for two main reasons: they do not accept rollovers (deal breaker) and you can only invest in their investor share class funds. These funds have a higher expense ratio than their admiral class fund or ETF equivalents. They also charge a $20 fee per fund in the account annually until you reach a balance of $50K.
Final Thoughts on Starting a Solo 401(k)
For many of us, starting a solo 401(k) is the right money move.
If you're still not sure, review the impressive benefits of a solo 401(K) and determine if you qualify. But maybe you're already wanting to get started. Today is the perfect day to create that investment account.
Follow the steps outlined above and then drop us a note below to let us know how the process went. Your future self will thank you for not putting this off any longer!
Do you have a SEP or a solo-K? Are you planning on starting a solo 401(k)? Comment below!]]>
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Welcome to another installment of Interviews with Real Female Physicians. The goal of this series is to share their story so that you, the reader, may learn and be inspired from their experiences – good and bad. We all come from different backgrounds and have different situations. Some of you are married, some are not, some with kids, some with blended families. Let’s show other women that any of these can work financially! So let's introduce our next woman physician rockstar – Amanda.
Tell us about yourself:
I am a soon-to-be 40 year old Pediatric Emergency Medicine physician. I've been married for 6 years with one little girl. I am from California and my husband is from Puerto Rico. We met in medical school and after being together for 7 years, we finally got married. We waited on having kids to be “ready”, and that was a mistake because it was harder than we thought to have a baby. We spent a lot of time dealing with infertility issues. Thankfully, we had pretty good IVF coverage so while we had to pay some of it out of pocket, we were definitely lucky and it didn’t financially ruin us. We trained on both coasts and finally settled in Phoenix, AZ just last year. We had been in NYC for several years and were happy to finally leave for a better quality of life. Our hobbies, like most people, are traveling. I personally like shopping and reading when I’m not so tired! I definitely feel like I picked the right specialty. I love the kids and never know what my shift is going to bring. There’s A LOT to be said about doing shift work and leaving your work at the hospital. My advice would be to do what you love and get paid for it. I have been an attending since 2012, and my husband, a cardiothoracic surgeon, since 2016.
Did you graduate with student loans? How much & what are the interest rates?
I was lucky enough to receive full tuition reimbursement from USC for 4 years of undergrad and 1.5 yr of grad school since my mother worked there. I graduated with around 250k in debt between graduate school and medical school – a combination of federal and private loans. The private loans were at an interest rate of 7%, and those were paid off in full (approx 80k) as a gift from my mother. The remaining – I have been chiseling at it and am finally under the 100k mark at a rate of 2.1275%. My husband graduated with no loans – all paid in full by his parents. We are very lucky because our loan situation is a best case scenario compared to what other physicians face.
How fast (or not) are you paying them off?
Given my interest rate, I am taking my time paying back the loans. We would like to purchase a house in the next few years, so all of our ‘extra’ cash is going towards that. My husband is more debt averse than I am, but between the CFP and myself, we have convinced him that rushing to pay off the student loan is not financially advantageous. I am set to pay them off in 2037, however as my husband reaches his financial peak in the next few years, I anticipate being able to pay them off much sooner.
Financial aspects of kids
When did you have them?
We had our baby girl in 2016. We hope to have another, but we are not sure that will happen given my age. I also have no desire to pursue infertility treatments again, given how unsuccessful they were, and now we have a HDHP which has no infertility coverage.
Are you planning to fund their college expenses?
This is where my husband and I disagree. He wants to fully fund and I’m ok with her taking out some loans. We currently have 2 529s, a UTMA and a Coverdell ESA. There is a possibility of me joining a employer who will fund 75% of her tuition if she goes to an AZ state school. This is 17 years away, so really hard to know if AZ will be our ‘forever’ place.
What are your child care expenses?
We have a nanny and pay her $2600 monthly. I know of too many daycare nightmares and just didn’t feel comfortable with it.
Financial aspects of marriage
Are you married?
Yes we are married.
Did you get a prenuptial or postnuptial agreement?
No – we talked about it but essentially came into the marriage with nothing on both of our ends.
Do you and your husband agree on finances?
For the most part yes. We agree on needing to discuss big purchases and the need to save. (In my mind, for retirement and in his, for our daughter’s education). My husband however is less worried about having enough for retirement. He believes in enjoying his life now because you never know what is going to happen. I however tend to plan for the long-term. This is why we have a CFP because we aren’t always on the same page.
Have you experienced a financial catastrophe?
Thankfully, no.
General Finances
What’s your FI (financial independence) number?
We haven’t decided at this time.
Who handles the finances in your relationship? Are you DIY or do you have a financial advisor?
I handle the $$ and we have a CFP.
What is your net worth?
We are net positive several 100k – our only debt is my loan which is now under 6 figures. This however will change once we purchase a home.
How are you saving for FI/retirement?
We currently have 2 x 401(k)s and 2 x Roth IRAs. Previously, we had 403(b) and a 457(b). We just learned about Roth IRAs last year. We are investing only in equities with very low or no fee index funds.
One thing you wish you knew:
In the medical profession, we take an oath to do no harm. We take our profession very seriously and we make personal sacrifices to help others. We take this for granted and assume that other professionals have the same work ethic and integrity. This is how we get taken advantage of – our financial naïveté coupled with our assumption that other people are honest and have our best interest in mind.
Do you have insurance?
Yes, we have disability, life, auto and umbrella insurance.
What does FI/retirement mean to you? What does it look like?
Freedom and peace of mind. Being able to help our daughter without a second thought.
Do you give to charity? If so, where and why?
We are working on this. My husband would rather give to his immediate family or people that he personally knows who need help than a random charity where those who need it may only see a fraction of the donation.
Any parting words of wisdom?
Don’t assume the same level of competence, honesty and ethics from someone giving you financial advice that you exhibit in your profession.
And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!
I love that Amanda and her husband use a CFP to help mediate their financial differences. This is definitely one of the big reasons to work with one.]]>
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Welcome to another installment of Interviews with Real Female Physicians. The goal of this series is to share their story so that you, the reader, may learn and be inspired from their experiences – good and bad. We all come from different backgrounds and have different situations. Some of you are married, some are not, some with kids, some with blended families. Let’s show other women that any of these can work financially! So let's introduce our next woman physician rockstar – Liz.
Tell us about yourself:
Hi. I’m Liz. I’m an academic attending neonatologist 2 years out of fellowship training and I practice in Cincinnati, OH. 70% of my time is devoted to research. My pay is around the 25-30th percentile of other academic jobs in the area. I am married to a wonderful stay-at home-dad (SAHD) husband and we have a 3-year-old daughter with some special needs. I am happy with my specialty because I love my job, but it’s frustrating to get paid less than what most physicians make. Especially as the sole income earner. I’m doing better than general pediatricians, but I’m taking frequent call and dealing with very stressful situations. My colleagues in PICU are paid more and the discrepancy between my pay and adult intensivists is wide. If I had to do it all over again I would have gone into anesthesia or dermatology. I had the grades, board scores, etc, but neonatology had stolen my heart, so I’m in it until I burn out.
Did you graduate with student loans?
I graduated with $250,000 off student loans, most at 6.8% interest rate, that were in forbearance all through training. I do not recommend this. I didn’t know about PSLF until late in fellowship, and that was a terrible mistake. My husband also has about $60,000 in loans that are below 3%. I went to a public medical school specifically to save money. My parents were unable to contribute a dime to college or med school, so that influenced my decision. I had a great education and then went to top places for residency and fellowship. I have fully paid off my loans after a windfall I got after being hit by a car. I do not ever recommend this. I’m heading to a total knee replacement next month. But at least there’s a little silver lining. My husband’s loans are at such a low interest rate that we are slowly paying it off. 
Financial aspects of kids
When did you have them? Are you planning to fund their college expenses? What are your child care expenses?
We have one, and had a lot of difficulty having her, so I am not sure if two is in the future. I do not plan on making their 529s a priority until we are in a better situation with our finances. I did not have any money given to me for my college and I feel like it built a strong work ethic and I had no sense of entitlement. My husband became a SAHD shortly after my daughter was born, so the net cost of that is about $10,000 per year after accounting for lost income and not having to do day care. I had my heart set on public school because both my husband and I are products of public school, but with my daughter’s special needs, I’m not sure what we will do.
Financial aspects of marriage
Are you married? Did you get a prenuptial or postnuptial agreement? Do you and your husband agree on finances?
We are married, no prenup, and we agree mostly on finances and my husband stays at home. He had always wanted to do this and I am mostly happy with this arrangement. Therefore I am the sole breadwinner and it has caused no issues. My husband is the manliest man I know, but also one of the biggest male feminists I’ve met.
Have you experienced a financial catastrophe?
None except we both grew up relatively poor. We were extremely poor until just recently as my husband lost his job several times as I moved across the country to do training. 
General Finances
What’s your FI (financial independence) number?
Our FI number is around 2.5-3 million. We think living off of $100,000 per year is reasonable, which is how we reached that number. I will retire around 65, but probably won’t quit entirely for a few more years after.
Who handles the finances in your relationship? Are you DIY or do you have a financial advisor?
I mostly handle the finances. We have a great fee-only FA we found through the WCI list. She shares our same philosophies about passive investment with index funds. My partner and I both agree on this.
What is your net worth?
Probably around -$200,000 at this point, mostly due to mortgage debt.
How are you saving for FI/retirement?
We are maxing out my 403(b) and 457(b) at $18,000 per account. My work also puts 10% of my total salary into a separate retirement account. I’m using my HSA as a stealth IRA. We have one Roth IRA we’ve funded for one year. We also put part of our e-fund in a taxable account with a more conservative mix of index funds including bonds, international stocks, and total market funds.
Biggest financial failure:
Not knowing about PSLF.
One thing you wish you knew:
Get disability insurance as soon as humanly possible.
St. Lucia
Do you have insurance?
Due to my car accident issues and other health problems, I don’t qualify for any worthwhile disability insurance policies. I have ok long-term disability through work, but it’s only own occupation for 5 years. Still better than nothing. I’ve never had to use it. No life insurance yet, we do have a $1M umbrella policy.
What does FI/retirement mean to you? What does it look like?
FI/retirement means being able to work only when I want to. I’m pretty sure I’ll want to stop all clinical activities once I reach FI.
Do you give to charity? If so, where and why?
I donate monthly to Planned Parenthood and give intermittent donations to social causes I find important.
Any parting words of wisdom?
Get disability insurance as soon as possible, talk about financial goals with your partner before you get married, get a fee-only FA, use an HSA as a stealth IRA.
And finally, where can people connect with you?
You can find me on Twitter as @LizEnlowMD or Facebook Elizabeth Marie.
And … that's a wrap! If you're interested in doing this please send me an email – I'd love to hear from you!
I hope you enjoyed reading Liz' story. Her story is not only inspiring but shows that FI is possible even when life throws some unexpected wrenches along the way.]]>
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I am super excited to launch this series to the blog! The goal of this series is to share their story so that you, the reader, may learn and be inspired from their experiences – good and bad. We all come from different backgrounds and have different situations. Some of you are married, some are not, some with kids, some with blended families. Let’s show other women that any of these can work financially!
So let's introduce our first female physician rockstar – Michelle.
Tell us about yourself:
I’m a 41 year old dual boarded family medicine physician and psychiatrist who is currently working full-time in administration in a community mental health position in Southern California. I am 9 years out of residency and my husband, a full time hospitalist, is 11 years out. We are raising our three young children (2, 5, 8) with considerable support from family, childcare and a housekeeper. I feel very lucky to have a stable and loving family unit since there was a time that my life was pretty chaotic. I had the unfortunate experience of getting married and divorced within a year during the first year of medical school. On the upside my ex and I shared no assets and no kids, so I was lucky to get a fresh start when I met my current husband “on the rebound” as they say. This time though I wanted to be really, really sure so we dated through medical school and residency before getting married. We started our family when I was just out of training at age 31. We soon found out that starting a family though with two overworked, somewhat old physicians isn’t always a romp in the sheets. We ended up needing IVF to conceive each of our three babies. The cost of IVF was staggering since it wasn’t covered by insurance. We learned early on in our attending careers that we were not going to be the stereotypical rich doctors. Between a combined total of $300K in student debt and baby-making costing $25K a pop, our finances were tighter than our incomes would suggest. We could have made the decision to move to a low cost area, but both my husband and I are committed to paying our sun tax to live in this beautiful city. To do so, we’ve had to embrace that budgeting and planning our finances is part of the deal. I’ve packaged our story here pretty neatly but there were many twists and turns to get us to where we are today. Having said that, I’m very happy with many of the life choices we made along the way. I’m a dual-trained FM/Psych physician and healthcare integration is all the rage these days. There have been many good career options for me and now I’m in a fairly well paying administrative position (for public sector work.) Although I’ve lost much of my idealism of my early years, most days I feel like I’m doing the best I can to contribute to my community and serve patients that are usually largely underserved.Did you graduate with student loans? How much & what are the interest rates?
I went to a private college on a partial athletic scholarship. The other half was fully supported by my parents. I had no debt out of college. I paid for a state medical school using loans and really wish I had been more mindful to take out less. i graduated with $130K in loans. I was one of the lucky ones to come out at the right time and consolidate to a 2.8% interest rate with T.H.E loans which were great to work with.How fast (or not) are you paying them off?
I chose a 30 year payment plan which in retrospect was ridiculous. I thought with interest rates so low I should do it that way and could always pay ahead. I wasn’t motivated to pay ahead until recently. On the upside working in the non-profit sector has afforded me many loan repayment opportunities. I’ve had 50K paid back tax free by State loan repayment and over the next 2 years will have another 15K paid back. I’ve stopped paying and just keep applying for loan repayment programs.Financial aspects of kids
When did you have them?
As I mentioned above we started having kids just after residency. I’ve done okay on my career trajectory however my maternity leaves have delayed raises and I lost out on advancement opportunities I really wanted. I was actually told by the COO (and she is female!) “We thought of you for that position, but then I figured with your young kids the timing wasn’t good.” I think she was trying to be thoughtful, but boy did that make me mad!Are you planning to fund their college expenses?
We have a Utah 529 plan for each of our three kids. We started funding them are early ages, but we really wish we would have started them even before they were born. We’d like to fully fund the equivalent of state tuition, but we are funding our retirement as the priority. We’re adding extra as we can to get to our goal.What are your child care expenses?
We spend a small fortune on childcare and extra help with everyday household upkeep. I’m possibly the least domestic person I know and I outsource everything I can. We have hired a woman who helps with the kids and the general household upkeep for 23 hours a week. I’m just a doctor and a mom. I definitely don’t keep house. I have arranged my life to dedicate my time to the roles I enjoy most. It costs an arm and a leg, but it is worthwhile so that I get the downtime I need. Our kids also go to daycare. I love the structure and consistency of the hours of daycare. I love that the kids have a social group and can make friends there.Are your kids in private or public school? What is the cost including after care if needed.
Our kids are in public school. We choose our home based on where there are good schools. The housing prices are higher but at least that money is invested in the house. I’ve never had a good sense that private school gave any real life advantages so I figure we’ll only consider private school if there is some special consideration along the way for one of our kids.Financial aspects of marriage
Are you married?
I joke around and say that my first marriage didn’t stick. It was over in a blink while my head was buried in my books while my ex-husband was off with one of his co-workers. I left the situation as fast as I could and just took a few belongings off to my own apartment on campus for $125 per month that my family paid for a few months, so I could sort it all out. That was the best decision of my life right there. I lost everything to gain everything I have now. I met my current husband in medical school – I've made a much better selection!Did you get a pre-nuptial or post-nuptial agreement?
We didn’t. We had no assets.
Do you and your husband agree on finances?
My husband and I were both raised in fairly affluent (upper-middle class) communities. However there was big difference in the way our parents talked about money. My husband's parents basically never wanted their kids to be worried about money and wanted their kids to know that they would always support them. My father-in-law lost his father at the age of 13 growing up in Iran and found himself fending for himself at a young age. Fortunately he was taken in by other family members, but the fear of poverty was something he never wanted his own kids to experience. My father by contrast, was very frugal and rarely spent money on extras though we knew we had money and lived in a nice area, with a nice house and good schools. I was told not to order a drink with dinner at restaurants since that was too expensive. I was told many times “We don’t have enough money for that.” So needless to say, my spending patterns are very different from my husband. It was never much of an issue because we both made good salaries and didn’t really understand or see that we weren’t saving for our future or the futures of our kids. It wasn’t until I sort of randomly fell upon our female physician finance Facebook group that I started learning how little I knew. We had been working with a fee-based Financial Advisor up until that point and not once had she pointed out that our spending patterns were awful and not once was she clear with us that we needed to save more than we were. Various members posted some links to the White Coat Investor and I’d have to say that was a pivotal moment in my financial life. At that time I ordered the book and really have been on a learning journey since. This is sort of where the rubber hit the road for my husband and I. Up until that point his spending didn’t worry me since I figured “We are doctors, we make good money, what’s to worry about.” I started learning about personal finance and then I started getting very concerned that my husband and I were not going to be able to retire until age 90 and our children would get little to no support for college. My husband wasn't very interested in personal finance and to this day he is not. We do have a very good relationship and he trusts my intelligence and general ability to navigate life. So when I started to explain that we were woefully behind in our retirement and college savings, he did believe me. The trouble is that he wasn’t very interested in changing his spending. So I started reading some articles about how to get your spouse on board with finances. I was able to get him to agree to once a month couples meeting about our finances. During the meeting I’d outline our finances and show him the various calculators showing where we needed to be. He started understanding that where we needed to make some changes. He still had no real interest in reading or doing our budget, etc. I asked him how did he think he could cut back his spending and he said “Well, when the money is gone I always stop.” Fortunately, he didn’t have an issue with credit card debt. So from this we came to the agreement that I’d manage our finances and that we’d get him a pre-paid debit card. We put a fixed amount of spending money on the card each month and when it is done he stops. All other family spending are driven by our budget which I created and maintain (shout out to the world’s best budget software YNAB!!) In 5 months time from starting YNAB and my husband’s debit card we were funding a lot more in our retirement accounts, contributing more to college accounts and our cash reserve has quadrupled. I think my husband secretly likes the security of knowing we are on track financially and that our kids will be well supported in college. [Wow! How inspiring is this!]If you are divorced – what have you learned financially from this, and what advice would you give to unmarried women planning to marry?
I learned that I was extremely lucky to have family support to get me out of a bad situation. My advice to all women married or not is never be in a situation where you don’t have your own access to emergency funds. I was a first year medical student living off of loans and had no emergency pot set aside for me to access.Are you the breadwinner?
No, we are equal financial partners.Have you experienced a financial catastrophe?
See my first marriage & divorce, above.
