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Any relatively low spenders out there?

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  • Avatar bobedwards 
    Participant
    Status: Physician
    Posts: 5
    Joined: 02/08/2019
    Disability Insurance

    I’m wondering if there are any relatively “low spenders” on this forum? I ask because I was thinking about the FI numbers given by people in previous posts and If I recall, most numbers were greater than $3million with many being above $5million.

    I think I would like to be done with the practice of medicine sooner rather than later and I’m curious if anyone here is in a similar situation or has any thoughts about general lower spending and a lower FI number (relative to physicians I guess as opposed to the general population)?

    I am 44 and my wife is 39. We are both in primary care. No children. No debt as student loans have been paid off. Our cars are paid for. We rent an apartment. Not a lot of stuff.
    Our annual spending is about $70k (which includes disability and life insurance for both of us). We travel and do what we like, but our spending has never really gone up.

    Our net worth is currently $1.6 million between retirement and taxable accounts. I am thinking about going down to part time or look for locums work until the net worth is about $2 million (less than 2 years away). If we want a house, I may work a little longer. At that point I am thinking of leaving medicine and pursuing some non-paying interests. My wife will go down to part time and probably bring in about $110k. We both feel comfortable with these numbers and I think our spending would actually go down to $60k (no more disability or life insurance payments).

    I understand why people are conservative with FI numbers, but any relatively low spenders out there with some thoughts on our plan or how you plan to handle your FI number if you no longer want to practice and don’t spend a lot?

    #189280 Reply
    Avatar wa2106 
    Participant
    Status: Physician
    Posts: 123
    Joined: 11/29/2017

    You’re doing great.  That’s a 3.5% SWR and for sure would make you FI.  It’s probably fine to “retire” especially if your wife continues to work and is basically covering living expenses + taxes.  Remember you have to cover your taxes with withdrawals, not just annual spending.  You should also have plans to cover future car purchases, any children’s weddings, plus cover for the possibility of long-term care which I would be most worried about.

    I’m in a similar situation (35y old, single, 48-50k annual expenses + taxes).  Could be FI in 5 years by my calculations but I wouldn’t be comfortable with that because of unknowns in the future – primarily changes to tax code and LTC.

    #189307 Reply
    Avatar bobedwards 
    Participant
    Status: Physician
    Posts: 5
    Joined: 02/08/2019

     

    Good points by wa2106.  We don’t plan on having children, so that is one less variable. I think we could swing cash purchases of used cars (as we have done before) from the part time income.  We were thinking of basically living off the my wife’s part time income and letting the savings grow some over time.  I don’t feel confident or comfortable with LTC policies out there currently (seems like they don’t really have to guarantee coverage or could just drop you) so that is something I need to look into.  With the potential for long term care spending, I guess the FI number needed for self insurance seems astronomical!  This may explain some of the responses other have given for a larger FI number.

    #189310 Reply
    Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
    Posts: 5496
    Joined: 01/12/2016

    Its all very personal and as long as your numbers work and you dont all the sudden become big spenders it looks like you have a good plan. Many here are looking to increase spending in retirement rather than continue a fixed or frugal (relatively) level.

    #189311 Reply
    Liked by Vagabond MD
    Drop it into MD Drop it into MD 
    Participant
    Status: Physician
    Posts: 440
    Joined: 09/20/2018

    I think PoF spends in that range.  Have you been reading his posts and using his spreadsheets?

    #189312 Reply
    Avatar danesgod 
    Participant
    Status: Spouse
    Posts: 48
    Joined: 09/12/2017

    We spend very little as well, if we left the Bay Area our expenses would be between 20-30k (could buy a house in cash in a LCOL area). Our FI number is driven up by the fact that we live here. Our low expenses + very good income make it very reasonable to live here, despite a big mortgage.

    #189321 Reply
    PhysicianOnFIRE PhysicianOnFIRE 
    Moderator
    Status: Physician
    Posts: 1494
    Joined: 01/08/2016

    I think PoF spends in that range.  Have you been reading his posts and using his spreadsheets?

    Click to expand…

    You rang?

    $62,000 Spent. Here’s Where it Went.

     

    My wife and I are 43 and 36. I’ll be leaving my anesthesia job this summer, and my wife has stayed home to raise our 2 kids. I’ll have this blogging gig, but may very well be done with medicine. Our net worth is in that $3M to $5M range, but on the very low end if we take away the primary home and 529 Plans.

    Cheers!
    -PoF

     

    40-something anesthesiologist and personal finance blogger @ https://physicianonfire.com [Part of the WCI Network] Find me on Twitter: @physicianonfire

    FIRE. Financial Independence. Retire Early.

    #189322 Reply
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 2867
    Joined: 01/14/2017

    Yeah, $65-70k here. Married with children. Though this spending will change soon.

    #189326 Reply
    Avatar bobedwards 
    Participant
    Status: Physician
    Posts: 5
    Joined: 02/08/2019

    Good posts by PoF, I’ve read many of them.  His spending is in our range, but the key difference being his paid off home and no longer paying for disability of life insurance (a good place to be no doubt). Since his spending is low and NW is much bigger I guess it still basically comes down to where each one of us feels comfortable with the failure rate of money lasting us, plans for future income, back up plans for future health care expenses etc.

    I presume ENT Doc has future college expenses changing his yearly spending.

    Maybe part time work and just padding the savings to a much larger number makes the most sense….funny, it seemed more clear to me when I first posted. Then again, maybe the feeling of burnout is much easier to handle part time. May others have alluded to this in other posts.

    #189333 Reply
    PhysicianOnFIRE PhysicianOnFIRE 
    Moderator
    Status: Physician
    Posts: 1494
    Joined: 01/08/2016

    In maybe 5 years, give or take a few, you’ll be where I’m at.

    If you’re ready to slow down now, not that you need permission from me or anyone else on the forum, go ahead. You can let the portfolio do the heavy lifting for you. I thought through this kind of scenario a while back.

    What’s Your Part Time Number?

     

    40-something anesthesiologist and personal finance blogger @ https://physicianonfire.com [Part of the WCI Network] Find me on Twitter: @physicianonfire

    FIRE. Financial Independence. Retire Early.

    #189358 Reply
    Liked by billy
    Avatar Peds 
    Participant
    Status: Physician
    Posts: 3315
    Joined: 01/08/2016

    we spend ~55 CC, ~25K rent, ~45K taxes….

    #189361 Reply
    Avatar Neuro-doc 
    Participant
    Status: Physician
    Posts: 163
    Joined: 02/16/2017

    We are not big spenders now, but my concern is that our spending will go up in retirement. My wife and I are currently working 0.75 and full time, and are often too busy to spend money on much except for daily essentials. But, when we retire, and have more time on our hands, we might start finding more ways to spend (travel, hobbies, etc).

    #189363 Reply
    Avatar billy 
    Participant
    Status: Physician
    Posts: 130
    Joined: 04/07/2016

    Cutting down hours definitely helped me avoid continuing down my path to burnout.  I still work a full daytime equivalent, but no more calls/weekend and Im out every day at 430 pm (anesthesiologist here).  Had I continued on my previous path, the extra $100,000/year I could’ve collected per year would’ve been wasted and not enjoyed.  I was on my way to very likely burning out and quitting medicine a lot earlier than I think I would now.  Part time may help you forget the BS parts of your job, work on your own terms, and you can work just enough to pay all your expenses for the year while letting your investments grow.  Hell in 10 years I may still cut back further (per diem/locums/3-4 day work week) to follow that path and enjoy life while I still can.

    #189366 Reply
    Avatar Anne 
    Participant
    Status: Physician
    Posts: 836
    Joined: 11/07/2017

    Relative to the average doctor, probably yes. Relative to my social circle, no.  We are also married without children, spend about 70-80k/year, including mortgage payment (are not planning to pay off mortgage early and instead leave the money in taxable), charitable giving, family giving, but not including taxes.  If we got really into some of our hobbies we could prob spend 100k/year in today’s dollars, I don’t see us spending much more than that but who knows.  We have enough that we could probably stop working now and be ok, but I actually still really like my job and my specialty in general.  If that changes, I have options.  My spouse has a really interesting job too–and even if that changes, I think his personality and skill set will probably keep him working long term.  I’m not worried about over saving though–I kind of see money as the side effect of my job and not the main purpose.  If I start to lose the main purpose, I’ll cut loose and go from there.

    If you are starting to feel burnt out, you are in a good position to explore your options including part time work, non-clinical work, even non-medical work.   I think it’s unlikely that pursuing your other interests won’t develop into some type of useful work, and useful work tends to make money.  Good luck!

    #189369 Reply
    Liked by Tim, hatton1
    Avatar ZZZ 
    Participant
    Status: Spouse
    Posts: 386
    Joined: 06/18/2018

    “We spend very little as well, if we left the Bay Area our expenses would be between 20-30k”

    These ‘we don’t spend any $” folks throwing out absurdly low #’s always crack me up. You’ll be hard pressed to pay for decent health insurance and food for 20-30k/yr…unless you’re planning on scamming Medicaid and food stamps.

    I guess if you go straight MMM western poverty lifestyle, maybe…or if you have some sort of gov’t pension with healthcare covered, too.

    #189370 Reply

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