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  • Avatar FCP 
    Participant
    Status: Physician
    Posts: 89
    Joined: 01/26/2016

    Thank you all for your responses.  One final question: for those of you that do invest in foreign REITs and foreign bonds, do you invest these in your taxable account (brokerage account)?  if so, do you find that the tax consequences of doing so (I am not sure if I am fully aware of whether there are more consequences of these compared to domestic reits/bonds) is worth it for the extra diversification?

    Avatar FCP 
    Participant
    Status: Physician
    Posts: 89
    Joined: 01/26/2016

    I also wanted to ask this.  If this happens, would this mean one would have to invest in a money market fund instead of a bond fund (for their bond allocation) or would that be considered market timing?

    in reply to: Negative bond yield? #238837 Reply
    Avatar FCP 
    Participant
    Status: Physician
    Posts: 89
    Joined: 01/26/2016

    i charge full fee (between 200-300dollars) for a no show for a 15-30 min appt. very rarely will i make an exception. everyone pays it because i refuse to schedule another appt without any outstanding balances fully paid.

    in reply to: No-shows and cancellations #235460 Reply
    Liked by StateOfMyHead
    Avatar FCP 
    Participant
    Status: Physician
    Posts: 89
    Joined: 01/26/2016

    I also posted about this recently, and after reading all of the helpful responses I became even more confused and realized that it has the potential to be more complicated than it seems.

     

    I would like to add a question related to the OP’s questions: for those who tax-loss harvest, do you feel that the benefits outweigh any risk of screwing things up and causing possible wash sales?

    in reply to: Tax loss harvesting – can I do it myself? #235175 Reply
    Avatar FCP 
    Participant
    Status: Physician
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    Joined: 01/26/2016

    Thank you all for your thoughtful and helpful responses.  I am definitely not going to buy a 3 or 4m house anytime soon (at least not in the next 5 years) after reading these responses.  I appreciate it.

    Avatar FCP 
    Participant
    Status: Physician
    Posts: 89
    Joined: 01/26/2016
    I just want to protect against all possible scenarios 

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    You can insure against certain risks (life, house, disability, medical malpractice).  There is not an insurance policy protecting one legally from knowingly stupid decisions.  Practicing good medicine and otherwise being a good law abiding citizen is your best and only defense.   You see physicians at times being accused of some pretty bad behavior, yet the punishment from state licensing boards is really tame IMO (relative to the alleged crimes).   Depending upon the State of license cross-border enforcement is weak or non-existent.

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    do you think there is any wisdom then in holding multiple state licenses as a form of insurance, in case an accusation leads to suspension or loss of license in one state, then you can at least hop over to the next state to continue practicing?

    Avatar FCP 
    Participant
    Status: Physician
    Posts: 89
    Joined: 01/26/2016

    Yep I have disability insurance. I assume that would not cover loss of medical license. Or…does it? I have guardian/berkshire. (side note: my license is fine but I just want to protect against all possible scenarios).

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    Do you have a legitimate reason on why you think you may lose your medical license? As long as you aren’t Dr. Death or running a cash for pills practice then I think the chance of completely losing a medical license isn’t something that I would necessarily waste my time thinking about.

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    I just want to protect against all possible scenarios 

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    You can insure against certain risks (life, house, disability, medical malpractice).  There is not an insurance policy protecting one legally from knowingly stupid decisions.  Practicing good medicine and otherwise being a good law abiding citizen is your best and only defense.   You see physicians at times being accused of some pretty bad behavior, yet the punishment from state licensing boards is really tame IMO (relative to the alleged crimes).   Depending upon the State of license cross-border enforcement is weak or non-existent.

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    Reply Content:

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    Thank you for all of your replies.  No, I don’t have any concern that I may lose my license, but as my practice grows, and the volume of patients running through it grows (especially with nurse practitioners underneath me and my involvement in every detail of their patient encounters lessening), I can’t help but think about all possible worst case scenarios, ie if a nurse practitioner screws up by prescribing something incorrectly despite me giving correct instructions, an adverse event occurring, I get found to be at fault, and somehow that translates to me losing my license.

    Avatar FCP 
    Participant
    Status: Physician
    Posts: 89
    Joined: 01/26/2016

    Generally, the advice I heard from WCI was 1) pay off your loans, 2) save 20% for retirement, 3) live like a resident for 2-5 yrs, and 4) only take out a loan for a dream home once these things are done. I have done 1-3, but I think for situations involving higher dollar mortgages and having assets worth multiple millions, this advice would need to be tailored differently to avoid/minimize catastrophe.

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    You should have disability insurance that can cover your expenses until 65. If you aren’t able to obtain proper disability insurance then you would need to alter your plans. There’s no need to tailor this advice if you buy a home you can “afford”.

    So, the hypothetical worst case situation I am talking about is if I can’t use disability insurance (ie if I lost my medical license or some other terrible thing happened where I assume I wouldn’t be able to get disability coverage).

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    Do you have disability insurance now? If not, that’s your problem.

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    Yep I have disability insurance.  I assume that would not cover loss of medical license.  Or…does it?  I have guardian/berkshire.  (side note: my license is fine but I just want to protect against all possible scenarios).

     

    Avatar FCP 
    Participant
    Status: Physician
    Posts: 89
    Joined: 01/26/2016

    Generally, the advice I heard from WCI was 1) pay off your loans, 2) save 20% for retirement, 3) live like a resident for 2-5 yrs, and 4) only take out a loan for a dream home once these things are done. I have done 1-3, but I think for situations involving higher dollar mortgages and having assets worth multiple millions, this advice would need to be tailored differently to avoid/minimize catastrophe.

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    You should have disability insurance that can cover your expenses until 65. If you aren’t able to obtain proper disability insurance then you would need to alter your plans. There’s no need to tailor this advice if you buy a home you can “afford”.

    So, the hypothetical worst case situation I am talking about is if I can’t use disability insurance (ie if I lost my medical license or some other terrible thing happened where I assume I wouldn’t be able to get disability coverage).

    Avatar FCP 
    Participant
    Status: Physician
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    Joined: 01/26/2016
    Splash Refinancing Bonus

    too hard to resist the urge, so i will just (be the first) to offer that you should not buy the house until you can afford it.  you are doing great, why risk it?

     

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    So, I for sure am not going to buy anything like this within the next year.  I was thinking maybe once I have at least 1.5 million in a brokerage account, that I’d consider it.  However, after thinking of ultra worst case scenarios, I am trying to figure out if even having 1.5 million in a brokerage account when buying a place like this is still too risky, and whether to be more conservative (ie having 4-5 million) so that I have enough in liquid assets to not only cover the mortgage in such a scenario but also cover my expenses for life.

    I guess I am posting this because I don’t think I’ve ever been advised (here or elsewhere, except for maybe on Dave Ramseys site) to either pay for a house in cash or have enough liquid assets to pay for a house in cash.  Generally, the advice I heard from WCI was 1) pay off your loans, 2) save 20% for retirement, 3) live like a resident for 2-5 yrs, and 4) only take out a loan for a dream home once these things are done.  I have done 1-3, but I think for situations involving higher dollar mortgages and having assets worth multiple millions, this advice would need to be tailored differently to avoid/minimize catastrophe.

    Avatar FCP 
    Participant
    Status: Physician
    Posts: 89
    Joined: 01/26/2016

    During residency:

    1) started moonlighting the earliest possible time I was legally able, and did as much as my program director allowed.

    2) maxed out every tax-advantaged savings account possible from the moment I started “1” above, onward.

    3) invested in real estate the moment I was financially able to do so (upon graduating medical school), and rented out multiple rooms within that home within months of buying it.

    During year 1 of being an attending:

    1) continued all of the above

    2) paid off all student loans

    3) worked harder than I ever did as a resident, and spent less than I ever did on daily expenses than I ever did as a resident, during entire 1st year of being an attending

    4) started my own private practice, purchased my own commercial property to have my practice rent from, purchased additional residential rental properties during year 1

    5) rented my primary residence instead of purchasing

    I could go on and on.

    Avatar FCP 
    Participant
    Status: Physician
    Posts: 89
    Joined: 01/26/2016

    I think you can readily afford the 3 mill home. You don’t have wife or kids so working to generate that income without schedule conflicts won’t be an issue. You love your work so burnout won’t be an issue.

    I love young people willing to work and contribute to the machine:equity wise, tax wise, and economically promoting wise.

    You’re not going to make a big decision like this based on some random advice from strangers. I suspect there’s some flexing happening here amongst peers, that’s okay. I’m impressed with those numbers., even a little bit

    No doubt you can afford a 3 million dollar house. But as a single person without kids, why would you want that? I hate my house and all the costs associated with it. And it’s definitely not 3 million. In your shoes I would be renting a hip downtown condo under kiddies were on the way. No driveway to seal-coat. No mulch to have put down. No grass to mow. Seriously, you’re young. Why would you ever want a 3 million dollar house now? I can almost guarantee a similar house will be available in 3-5 years when you’re ready for that.

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    There’s no such thing as a “forever house”.    That’s a unicorn that will disappoint.    Go VRBO a house that big for a month and see how it feels if you truly think that isn’t too big.  The upkeep/maintenance/cleaning lady cost is just the start.  It’ll prob throw some amazing parties with a house like that but it won’t be your forever home.

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    jealous. That’s ok cause my above sentiment is sincere. I say go for it.

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    I appreciate everyone’s responses.  I can assure everyone I am not trying to flex here on an anonymous forum.  The problem is, these are not the kinds of questions I can ask any of my friends or family (who are mostly all middle class), without sounding like a jackass; this is one of the only places where I can ask a question like this and actually get some very useful input that can help shape these major decisions.

    After hearing everyone’s input on how much of a pain a large home can be, I will likely just pay cash for a small home and only expand to a larger one if absolutely necessary.

    Some reasons why I am even asking this include:

    1) transaction costs: whether it’s better to just buy what I believe I’d be happy with for the next 20+ years now, versus buying something temporary for 5 yrs then moving on.

    2) no guarantee on having same rental year after year, so I am looking to buy soon: I’ve had more than one landlord decide to sell their house when my lease was up, so I had to move instead of being able to renew my lease.  I’d rent continuously if there was a guarantee I could keep renting the same place for 5+ years

    3) diminishing returns with additional savings: currently, I think I’d be bored if I wasn’t working full time for most of my life, so as I see my savings pile up, I figure I might as well just put it toward an amazing place to stay, but at the same time there are diminishing returns to living space, and who knows whether I’ll still feel the same way about my work in 5 years, or whether there will be changes in reimbursements that will make my work unattractive.

    4) related to #1, I recall a poster recently stating that buying is generally a good idea if you stay in a house for 20+ years, so if you can find a place where you have a high chance of doing that, it could be a good move.  as a result, that further influenced this decision process.

     

     

    in reply to: 700k house in cash or 3m house with mortgage? #221129 Reply
    Avatar FCP 
    Participant
    Status: Physician
    Posts: 89
    Joined: 01/26/2016
    medical school scholarship sponsor

    I have multiple contracts with various hospitals and own my own practice, so financial security is good unless I were to get disabled or lose my license.

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    I would start with a good disability insurance policy if you actually do not have that piece yet.

    Dreams change and a home costs a lot more than the purchase price. Is there a middle ground between the $700k house for cash and the $3 Million dream home?

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    Ah, I have a good disability insurance policy; I should have rephrased that.  However, it would not be a policy that covers a mortgage on a 3 million house.

    There is definitely a middle ground; I just feel like I wouldn’t be that happy with a house in the middle over the long term (over 10 years), and it would be harder to sell without a bigger hit (usually the more expensive the home, harder it is to sell, more transaction costs, etc).

    You are young. You can easily enjoy a $700K house. And the money saved with less maintenance, furnishing and all the additional costs of a expensive house ( taxes, insurance… ) can be used to invest. When the time comes you can move into the then dream house ( not current dream house) in 10 years time.

    Improve your net worth more ( for your salary) before going into extravagant purchase.

    JMHO.

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    This is what I am leaning toward but I wasn’t sure if it was a waste of time/energy/money to be hopping around from one house to the next within 5-10 years.  Thank you for your thoughts.

    in reply to: 700k house in cash or 3m house with mortgage? #221082 Reply
    Avatar FCP 
    Participant
    Status: Physician
    Posts: 89
    Joined: 01/26/2016

    That’s an expensive house for a relatively small NW.  Can’t quite get the numbers to add up with a $2M income; but whatever, I’m not really sure why you would hesitate if it’s really a dream home.  You can afford it:  Take the mortgage and pay it off in a couple years.

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    Appreciate your thoughts.

    I think it won’t matter. But will the dream house you get today be the same as in 5 years? Probably not….

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    That is my concern.

    You can certainly afford the dream home.  But I’d stop and consider first:  what exactly is it that makes it your dream home?  If it’s location, that’s one thing.  But if it’s size and finishes, that’s different.  An overly-large house can become a burden to clean and also to maintain, and new house excitement is like new car smell:  it fades over time. Ultimately a countertop is a countertop, regardless of what it is made of.

    (And remember, if you ever get married, your 3-million dollar house may no longer be your dream home.  That goes double if you then decide to have kids!  And a house that works for you at age 30 may not work for you at all at age 65.  The odds are good that you will NOT be living in the 3 million dollar dream home until you die, so don’t think of it as a place you’ll own forever.)

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    It is a house in a wealthy suburb with excellent school district, etc.  The reason I think I’d live there forever, is because many neighboring houses include people in their 70s and 80s who have lived in the same home for 40+ years.  The home would be perfect for kids/married life/etc.  It is both appealing in size (over 5000 sqft, so I can have my parents/siblings/nieces/nephews stay over during holidays and other celebrations without feeling cramped) and finishes.

    Giving a million dollar range in income is big and kind of odd. Nonetheless, a lot more information is needed, more specifically, your spending and ultimate goals. What’s the real price of the $3M+ house? That’s a huge range with literally no ceiling. Also, lifestyle spending will also drastically increase with a home that expensive. Given the limited information here, I would say no. You give up so many future options if you get house crazy now.

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    The vast majority of my money is saved or invested; I spend less than 1/4 of my after tax income.  The real price of the 3M+ home is 3M exactly (I modified the + just now).   Thank you for your thoughts though.

    in reply to: 700k house in cash or 3m house with mortgage? #221080 Reply
    Avatar FCP 
    Participant
    Status: Physician
    Posts: 89
    Joined: 01/26/2016

    I appreciate everyone’s feedback.  I will go ahead and have some additional meetings with my accountant and tax attorney to see how I can do things differently to minimize risk of having my trades be considered wash sales.  If I ended up creating any wash sales in these past two months; I don’t mind; it hasn’t been even two years since I finished fellowship, and the amounts of money I’ve been doing this with has been small, so it’s not a big deal (I have less than 500k in my brokerage accounts).  I am posting this for the sake of learning how to do this correctly so I don’t have any regrets 10/20/30 years down the line when my brokerage accounts are in the millions/tens of millions.  Thank you.

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