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  • Avatar hightower 
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    alpha investing

    The high deductible plan should have a max out of pocket as well, even for out of network services and providers.  You wouldn’t be hit with a 40k bill unless it’s the worst plan on the planet.  We have a high deductible plan and when my wife and baby were hospitalized (pre-eclampsia and pre-term birth), the bills racked up to well over 100k…we didn’t have to pay anywhere near that.  I think we have a 13k out of pocket max, some of which had already been met with various office visits and such before hand.  We used our HSA and didn’t feel a thing financially.  I was VERY thankful that I had our HSA at that time.  I am currently working on building it back up and I plan on continuing to have one as long as possible.

    Also, if you’re worried about travel, there is such thing as travel insurance that would cover emergencies anywhere you go.

     

    I don’t know why you would pay for a zero deductible plan if you’re otherwise fairly healthy and younger.  That HSA space is very valuable at this age.  Fill it up IMO

    in reply to: HSA seems like a bad idea – for emergencies #240096 Reply
    Liked by childay, Zaphod
    Avatar hightower 
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    I think it’s inevitable and completely necessary that we adopt socialized healthcare like the rest of the world, but also a silly thing to fret about.  It would be good for all of us in the end as citizens…imagine how much easier early retirement would be if you didn’t have to worry about paying for health insurance.  It’s our biggest question mark moving forward when it comes to retirement planning.

    Either way, I’m not doing anything differently regardless of who gets elected.  I currently live far, far below my means and could easily get a “normal” job paying 25-30% of what I currently make and we’d be fine paying our bills and maintaining our lifestyle.  I doubt I’d ever have to accept a physician job for 25% of what I currently make.  Just look at what docs make around the rest of the world and you’ll see they still live very comfortable lifestyles, even the general practitioners.

    Anyway, all of this fear of democratic socialism cracks me up.  Especially since it’s mostly coming from people who are unaware that they already depend on socialism to survive (social security, medicare…).  Democratic socialism is a good thing. Maybe not if you’re a multi-billionaire, but I think those people can afford to pay a bit more in taxes.  They’ll still be able to live ridiculously lush lifestyles that the rest of us can’t even dream of.

    Avatar hightower 
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    First, I can’t let this one go without being challenged…someone said something about “our current present going from broke to billions…” Hardly what happened…daddy gave him millions to start with and his leveraging practices were and still are borderline criminal, shady, and definitely con-man style (trump university). He’s wealthy because he’s cheated and stolen his way there. Definitely not an example to follow.

    Anyway, I digress. I think the key thing to keep in mind when you hear people preaching the zero debt philosophy is the target audience. Most Americans, doctors included, are IDIOTS with their money. If it wasn’t for the conservative nature of this site and other sources such as Dave Ramsey, I’d still be an idiot too. It’s a dangerous thing to say that debt is ok to the masses because they will take that to mean they should borrow for everything and never worry about their insane spending problems and end up with hundreds of thousands of dollars of consumer debt. For highly financially educated and disciplined people, such as Zaphod, carefully leveraging yourself and investing your cash can certainly build wealth quickly. It is also risky and not for everyone. And it certainly wouldn’t be wise to recommend that method to the masses because the risk of doing more harm than good is high in my opinion. Preaching debt avoidance and frugality is far safer. More “advanced” readers will eventually learn how to carefully and intelligently use debt to their advantage. But not everyone is going to get to that level.

    in reply to: \"I know what the math says, but….\" #239337 Reply
    Liked by xraygoggles
    Avatar hightower 
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    Hi all,

     

    I currently started my first attending job and realized it’s about time I played a more active investing role. Throughout residency I maxed my Roth IRA, but now with more disposable income, I’m starting to explore other options.

    For some background, I’m ~30 years old and have been blessed to have no outstanding student loans at this time. My current job has a variety of retirement account options with a 10% match for a 401(a). I also have access to a couple supplemental retirement accounts and I plan to backdoor to my Roth yearly. As such, I’m looking at putting away ~100k yearly in retirement funds. I’m also currently single and have low living expenses, so if my calculations hold true I should have 100k in disposable income (plus some other liquid money) that I’d like to put towards something. With the above, what sort of investment options would you guys recommend?

    Should I open a Vanguard account and just continue to diversify my portfolio? Or would you look at more passive investment options such as turnkey rentals or something in that ilk? Would love to hear your thoughts.

     

    Thanks!

    Click to expand…

    Congrats on your success and good fortune (no student loans is amazing).  Anyway, in my opinion, alternative investments in real estate or other avenues should be reserved for those who already have sizable taxable accounts in addition to the usual tax advantaged accounts.  If I were you, I’d spend a few years continuing to build up your tax advantaged accounts and put all “extra” money into a taxable account.  If you’re successful at staying disciplined with that, then start saving for an alternative investment such as a turnkey rental if that’s what you’re interested in.  IMHO your alternative investments should be a relatively small portion of your portfolio, especially early on.

    in reply to: Appraise my current situation? #239076 Reply
    Avatar hightower 
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    I could care less about my investment accounts right now (in fact, I’m looking forward to buying shares on sale)…what I’m worried about is the fact that we’ve decided to buy a new house (closing Monday) and sell our current house.  If we go into a big recession and prices drop, we’re going to lose money on the sale.  We have tons of equity in this house (300k+) and we were hoping to cash out, but who knows now…Maybe we’ll become landlords and wait around until prices recover.  We’ll just have to list it and see what happens I guess.

    in reply to: HUGE sell off today! #239074 Reply
    Avatar hightower 
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    All that’s left is 8k at 2.6% serviced by Navient, but it just feels like extra baggage. I am gunning for PSLF for my med school loans, but I don’t see the point of dragging along my undergrad loan.

    Also it’s an annoyance because when I re-apply for REPAYE every year, it also sends that request to Navient. I pay $90 monthly now, and I’m tempted to just pull the trigger on the entire loan amount at this point.

    I have 80k sitting in the bank that I’m not doing anything with. We’ll be maxing out our pretax and backdoor Roth with no trouble. Can’t I just pay the dang thing off? I guess the alternative would be to throw it at our mortgage, but I have a feeling we’ll be refinancing that soon from the current 3.65 to a lower rate soon anyway.

    Click to expand…

    It’s posts like this that illustrate why the PSLF program needs major overhaul.  Not directed at the OP, but just saying.  It seems kind of wrong that a physician making hundreds of thousands a year and sitting on tens of thousands of dollars should be getting tax dollars to forgive their loans.  Especially when so many people who actually need the help are getting denied for forgiveness.  The whole program needs to be overhauled dramatically.  They need to make the forgiveness process more fair so that 99% of applications aren’t denied as they currently are AND I think they should place an income limit on forgiveness of some sort.

    Yeah, of course you should pay off your undergrad loans.  You should also take the rest of that 80k and pay off your med school loans as well.  Everyone else should write to their congressman/woman and open their eyes to how ridiculous the program currently is.

    in reply to: I feel like paying off my small undergrad loan #237886 Reply
    Liked by ZZZ, AZPT
    Avatar hightower 
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    Question of opinion for you all.

    Being in my early thirties and only having completed one home transaction, I don’t have much experience with the fluctuation of housing prices over time as some of you. Housing prices to-date are no doubt inflated and have been trending up in most areas for the past few years. I’ve been looking at homes near us on Zillow in suburbia Phoenix which are quintessential “middle class”, that were going for $240k in 2004-05 and are now up to $400-500k.

    With the crash in 2008, I don’t think some of my generation really understood at the time what a dramatic event that was. Homes were losing hundreds of thousands of dollars in value, which wasn’t simply a “downturn”. With this, in talking with friends and colleagues recently I hear phrases being thrown out like “when the housing market comes down again…” or “I’m waiting for the prices to drop”. I’m not an economist, but unless something catastrophic happens it doesn’t seem like we will see the 2008-type collapse again in such a short time.

    So my question is, when the market does eventually “downturn”, how far do you think home prices will realistically decline? 5%? 10%? 20%? Will the house that is currently going for $500k in suburbia Phoenix, without much land or anything special about it, ever return to a $400k range? Or has the old $250k home become the new $450k home and is here to stay?

     

    Click to expand…

    I actually think we’re going to see a significant slow down in the “extreme markets” places like Los Angeles, San Francisco, NYC, etc.  Meanwhile, I think homes in more reasonably priced areas like Columbus Ohio for example, are going to remain relatively stable, but not climb much more.  I think it’s all going to come from the recent tax law changes.  People with over priced monstrosities on the coasts are going to start seeing how much money they’re losing now compared to when they could deduct all of that mortgage interest and they are going to want to downsize to “cash out.”  This will flood the market with high priced homes that no one wants any more and prices will plummet.  I see it happening over the next 5 years.

    Someone remind me of this post in 5 years so I can see if my crystal ball was correct! Haha

    in reply to: Housing prices #237708 Reply
    Avatar hightower 
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    If they are offering to help you, there is nothing wrong with accepting that help.

    If they have plenty of money to do this with, that’s fine for them.

    Do they want you to pay them back? Interest free loan kind of situation? We need more info if you want us to analyze how much sense it makes.

    Avatar hightower 
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    …..that LED light bulbs last 22 years. I’ve had two to go out in my house in last 24 hours. BTW, there is apparently a incandescent bulb in NYC, under a bridge, that has been burning continually for over 100 years.

    Click to expand…

    When we bought our old house before renovations (built in 1885), the guy who had been living there since the 1960’s was bragging about how the light bulb in the hallway was over 40 years old and “still going strong.”

    But, yes, LED can go bad.  It’s likely due to a manufacturing problem IMO than actually wearing out the diode.  They can theoretically burn continuously for decades.  It’s all the complex electrical stuff that keeps them lit that can go bad from what I understand.  Buy only high quality LEDs from trusted manufacturers and you should have better luck.

    in reply to: Is the biggest hoax pulled on mankind….. #237534 Reply
    Avatar hightower 
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    OP, I’ve worked as a hospitalist now for 9 years, so I completely understand everything you’re saying about being frustrated with the job.  You have legitimate points.  I’ve been super frustrated with all the things you mention many times in the past.  I’ve dealt with burn out and looked for ways out and considered switching to something else as well.  The thing that prevents me from actually following through (though I someday dream of leaving medicine altogether), is the fact that I have such a flexible schedule and the job requires relatively little effort on my part.  Especially since I’m working as a prn…meaning I don’t have a full time contract with benefits.  I’m paid per shift, basically however many I want.  Right now I’m only working 11 or 12 shifts a month, 12 hours each.  The rest of the month I’m OFF.  I have zero responsibilities.  I can travel if I want (though I have a 1 year old, so not really happening much these days).  But, even working a reduced schedule of only 11 days a month, I can still pull off close to $250k a year no problem and with my wife working full time we’re pulling $310k/yr easy.  If I want to work just 1 or 2 more shifts per month, that number can hit $350k no problem. And the work is pretty easy for the most part.  I work in a rural location about 30 minutes outside of the city, so that’s how I pull off a higher rate in combination with the prn status.  The other benefit to working rurally is that it’s a smaller, generally less busy place, with lower acuity patients…i.e. less stress.  It’s not perfect by any stretch of the imagination, especially during flu season, but compared to when I worked at a busy community hospital in the city, I feel like I’m on vacation most days.

    I’ve learned to just ignore the things that irritate me (like the bedside multi-disciplinary rounds they make us do, or the BS admits for consultants, or the fact that I have to baby sit NPs, inheriting someone else’s mess, etc)…because at the end of the day, I realize I’m very unlikely to find a job that pays this well and requires so little of my time and effort.  Any fellowship and subsequent sub-specialty practice is likely going to require a lot more of your time with fewer days off.  And definitely being a PCP is going to be a lot more difficult.  Again, I can take vacations whenever I want without even asking permission or needing to worry about my partners covering for me.  I just ask that they don’t schedule me for shifts.  I can go overseas for 2 weeks and no one in my group even knows about it.

    Sure, I can find a lot to complain about with this job, but I can easily just ignore that stuff and look at what I’m making and how many days off I have and be just fine.  It’s a pretty sweet deal right now.  I don’t necessarily think it’s going to last though.  Eventually we’ll see NPs/PAs taking over most hospitalist positions IMO and we’re likely to see drastic cuts in physician pay in the future, but I’ll continue to make hay while the sun is shining for now.

    Avatar hightower 
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    To the OP’s question, this is how I think of it. I’m sure an economist would have a better way of explaining it and my version is probably way over simplified but it’s in essence correct…

    VTSAX and VTI are different funds that track the exact same thing and are made up of the exact same mix of stocks, but they were not started at the same time and their size and trading volumes are therefore different. Those differences in volume of shares are what account for the differences in share price. But, if you own $100,000 of VTI it is the exact same investment as $100,000 of VTSAX. The number of shares is irrelevant.
    By your reasoning (thinking that the cheaper share price is somehow a better deal), a single share of Berkshire Hathaway “A” would be a bad deal (currently these trade for around $306k per share!). But, in fact, if you own 306k of Berkshire “B”, you have exactly the same investment as 1 share of the A. Number of shares doesn’t matter. The market value of your shares is all that matters.
    Think of it in terms of retirement…if you were retired and needed to take out 100k this year for living expenses, you would need to sell more shares of VTI then VTSAX to get your 100k. It doesn’t actually matter which fund you sell, the dollar amount you need is the same.

    in reply to: VTSAX vs VTI #236152 Reply
    Liked by AZPT
    Avatar hightower 
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    Any of you think that you might regret saving too much money now and not being able to do some of those activities when you’re older? An example is a supercar that was brought up in one of the threads or traveling to remote locations. You can enjoy a Ferrari or travel to Antartica now in your 30s and 40s and you probably won’t be able to do that in the 70s.

    Click to expand…

    This is something I often think about.  I was somewhat late to the party when it comes to investing and I feel like I am a bit behind my peers.  Part of the reason we’re behind is because we spent a lot of money right after residency traveling and renovating a house (which had been a dream of ours).  Even though I wish I had more money invested now, I’m actually very glad we did things this way.  We went on some pretty amazing trips, many of which involved backpacking in the mountains out west.  These are things I wouldn’t be able to start doing as a 55 year old or whatever, especially now that we have a daughter, trips like that are just unlikely to happen (unless you’re a rock star like WCI).

    So, yes, I think there’s real value in finding a proper balance between enjoying life today while you can AND saving for the future.  You can’t be too extreme with either.

    in reply to: Enjoying your money while you're young #235764 Reply
    Avatar hightower 
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    Hi everyone,

     

    I started a thread looking for advice about pursuing internal medicine a few months back (https://www.whitecoatinvestor.com/forums/topic/thoughts-on-pursuing-im-residency-to-become-hospitalist-m3-specialty-question/). To summarize, I was really attracted to the flexibility of a generalist specialty with so many options.  After completing my 3rd year of medical school along with my internal medicine sub-internship, I’m having some second thoughts. Here are a few:

    • I don’t really care much for continuity of care.  This was a term I heard get thrown around a lot that I figured I would begin to appreciate more the further along I went in training, but I’ve realized that just isn’t going to be the case.  For me, the exciting part of medicine is diagnosis, or at most treating acute problems.  I don’t enjoy juggling several non-acute medical issues for long periods of time.  It’s not that the next patient may be the nth UTI/AMS or CAP/COPD exacerbation that day that bothers me, but how long it takes to get them off the list and move on to something new.  A really telling sign was when I was looking forward to call on my sub-I because it meant I would be going to the ED and doing H&P’s on new admits one after another.
    • To be brutally honest I do not care about getting to know my patients personal lives or following them for years.
    • I don’t think I have it in me to commit to 6 additional years of training to become sub-specialized. Even if I did, as naive as it sounds, I only recently realized that the majority of time someone like an oncologist or rheumatologist spends is in the clinic optimizing medications, not pouring over interesting/difficult consults.

    I know some of this makes me sound like a terrible student, which may be true. I recently started my EM rotation which I’m hoping provides me with all the answers I need by the end of it, but due to the unique/time sensitive application requirements of EM (video interview, SLOEs) I think I need to decide whether to pursue it further in the next week or so, prompting this thread.

    EM was actually one of the first specialties that I heavily considered but basically wrote it off due to one problem; shift work.  I am not a strong sleeper and have a very fragile circadian rhythm.  For example, even after years of disciplined sleep hygiene and nightly dose of melatonin, I fell asleep close to 4 hours after intended just last night for reasons I don’t think I’ll ever know. I’m worried that even 10 years of a typical EM schedule may be too much for me.  My question is one that I think has been asked probably by thousands of medical students, but how feasible is it to avoid overnight shifts as an attending.  I would be happy working extra evening/swing shifts, weekends, and holidays if it meant I could keep a relatively normal schedule.  I used to think an option would be to take a pay cut for less nights, but after some reading it seems like that would still be problematic because people don’t want to hire a part-timer that requires the same overhead for the group (malpractice, certification, etc).  I don’t want to be a burden for my colleagues.  Is there hope for me in this field, or should I just stick to something more stable even if it may not be the absolute perfect specialty for me? (if such a thing exists)

    Thanks again for any advice, I know this is a bit long-winded.  All of the responses from my previous thread were extremely helpful and greatly appreciated.

    Click to expand…

    I too would look into hospitalist work if you’re not a fan of traditional IM.  I don’t want to do traditional IM for the same reasons you pointed out.  You can also do hospitalist work for awhile while applying to fellowships.  I work as a hospitalist and I don’t have to do nights at all.  There are plenty of opportunities like that if you can’t do nights.  That won’t be the same with EM.  You will have to do nights in EM, especially as a new hire.
    EM can be a very stressful job.  Do you like being bombarded with 10 h&p’s all at once, some of which may be very critically ill?  Do you like being in the middle of seeing a patient and getting called to a code blue to intubate someone and place a central line?  You need to like that kind of environment to do well in EM.  I’m not EM, but I realized very quickly that it wasn’t for me during med school.

    What makes you think you have a “fragile circadian rhythm?”  If you’re referring to having difficulty sleeping as a medical student doing stressful work and trying to figure out what you want to do for the rest of your life, you’re probably just experiencing anxiety and the sleep difficulty is the result of that, not a problem with your body.  A lot of people have insomnia related to anxiety and they are totally unaware of the fact that they are so anxious.  And the lack of sleep and the fear of lack of sleep can make the insomnia worse.  Sleep is important obviously so I would get to the bottom of why you’re having such difficulty at such a young age.  I don’t believe melatonin is generally considered effective and I would caution that it could be screwing you up if it’s causing your levels to peak at the wrong time in the night.  Definitely continue to practice good sleep hygiene, get exercise every day, and go to bed and wake up at the same time each day if possible.

     

    Avatar hightower 
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    I expect to close on a new home in the next couple of weeks.  I’m not holding my breath for any sort of rate drop.  We’re getting a 30 yr fixed at 3.85%.  Historically speaking, that’s a ridiculously good rate to have for 30 years.  Anything in the 4% range is a win right now IMO.

    I find it funny that so many people were paying attention to the feds rate cut yesterday.  I think it shows that the media is desperate for news stories/clicks right now.  As DCdoc pointed out, all the rate cut means is that the economy is likely slowing.  They are trying to find a sweet spot between keeping inflation in check and preventing causing further slowing of the economy by having rates too high.  It’s not going to effect much on the consumer side if you ask me…Although, I wouldn’t be surprised if Ally drops it’s savings account rates a little again.  They are currently at 2.1% after a recent drop from 2.2%.

    in reply to: Fed Rate Cut #235526 Reply
    Liked by Tangler
    Avatar hightower 
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    I’m always going back and forth on this subject.  Mathematically it makes a lot more sense to invest assuming a long time in the market and assuming that the US economy continues to grow as it always has.  In the short term, paying off debt might make more sense if we run into a recession any time soon.  That is, if it will bother you to invest money now and see it drop in value over the coming years.  If that doesn’t bother you and you’re going to keep investing and not sell at a low, then it doesn’t really matter what the economy does in the short term.  Being able to say “I’m completely debt free” is also a very tempting prospect, so it can be tough to over look that.

    Will freeing up the cash flow associated with this debt allow you to invest more freely during the next recession?  Perhaps then paying it off now might make more sense.

    How much debt do you have?

    in reply to: Taxable investing vs debt paydown #234235 Reply
    Liked by saildawg
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