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  • Avatar jhwkr542 
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    Since it looks like interest accrues daily instead of monthly, making payments as early as possible does save some interest. Probably won’t amount to much in the long run but if you’re looking at the bottom line, earlier payments are better.

    Avatar jhwkr542 
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    I don’t know yearly, but our monthly budget is around $7-8k per month (90k yearly), but I’d say over half of that is student loans and mortgage.

    in reply to: What is your annual spending? #26129 Reply
    Avatar jhwkr542 
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    Lots of variables in play. Probably better to refinance if you can handle the higher payment (eg no student loans at 6%, etc). I’d plug the numbers into the mortgage professor’s refinance calculator. That should give you your answer if you have all the numbers.

    in reply to: Refinance home question #26022 Reply
    Avatar jhwkr542 
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    Yes, but I didn’t want to skew my answer because I took the OP’s question to imply how much on hand for regular spending day to day, month to month. If we weren’t saving up for a house, that account would be close to nothing and the answer would be 10-15k since any amount above that would go towards loans.

    in reply to: Poll idea – how much do you keep in the bank #25981 Reply
    Avatar jhwkr542 
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    https://www.bogleheads.org/forum/viewtopic.php?t=109250

    Obviously a different population but bogleheads has had similar threads. We keep about 10-15k in checking and the rest goes towards loans or an ally account we have set aside for a house down payment.

    in reply to: Poll idea – how much do you keep in the bank #25975 Reply
    Avatar jhwkr542 
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    There’s quite a few more costs of home ownership than just the rent vs pimi. Lots of upkeep to a house that really adds up. Yardwork, higher utilities, HOA fees, stuff that breaks, etc. Regarding moving, will you plan on staying in this house forever? I’m guessing no. Moving from an apartment to a forever home will likely be easier than from a $450k home to a forever home.

    Bottom line: using a doctor’s loan at this point will cost you a large chunk of money now that will make you financially independent at a later point in life.

    If this is worth it to you, then that is your choice. Personal finance is just that: personal. We all have our priorities with money. Some travel, some like fancy wine, some like fancy cars, etc. Our advice to rent is based mostly on the bottom dollar and is devoid of emotion.

    in reply to: Student Loan and Mortgage question #25952 Reply
    Liked by Josh0731
    Avatar jhwkr542 
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    Agree with everything above. Refinance. Save up for a down payment.

    My wife and I are in a similar position as new attendings. I find it hard to imagine after loans are gone, you’ll want to stay in that same house. I looked into doctor’s loans and they seem to take advantage of physicians with high pay and little to negative net worth by having high closing costs and/or high interest rates. Don’t do that to yourself. With that salary, you can save up a nice down payment within a year while also making a debt in loans. Once you get the house, then all that money you were saving up for a down payment can go towards loans.

    in reply to: Student Loan and Mortgage question #25912 Reply
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    Avatar jhwkr542 
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    Even with all its flaws, I still think medicine is a good field to go into. People complaining about the nuances of medicine would probably also complain about the nuances of many other fields. I probably wouldn’t encourage primary care unless they go to a cheap medical school. That mountain of debt is hard to tackle starting under $150k. As for me, I don’t know many other non medical fields I could work in making $200k+ at age 31 in an 8-5 job with the intellectual intrigue that is pathology.

    Avatar jhwkr542 
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    By paying off my loans rapidly *this* year, I’m going to sacrifice one year of contributions to a taxable account, therefore one less extra year of long-term compounded interest/growth.

    I think you’re missing the point some of us are making. The stock market is a fickle thing. Let’s give you $140k in cash right now. Do you pay off the loans or invest?  If you pay off the loans, you have avoided the $9k in interest that year, so you’ve come out ahead that much. If you put it into a taxable and the markets are down 5% after that year (not even worst case scenario), then not only have you lost 5% of that $140k, but now you owe $149 on the loans.

    Yes, investing in tax-advantaged spaces is better because the growth on your money is tax-free, and you also get the reduction from your marginal tax rate now to your future marginal rate in retirement (presumed to be lower).

    The consensus is also to refinance from 6.8%. Like I said earlier, if you’re worried about losing the ability to lower your payments if something happens in this short time interval, refinance with earnest.

    in reply to: Paying off loans quickly in near future versus saving/investing #24783 Reply
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    Avatar jhwkr542 
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    So by this logic, op should pay as little towards loans as possible and invest the rest…?

    Avatar jhwkr542 
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    taxable still wins. You’re comparing simple to compound interest and a bounded vs. unbounded term with your debt dying a smidgen every year due to inflation. Its really an unfair fight. Its actually a simple to find out amount, you know the exact finance charges associated with your loans so that is your holding costs for those, all in. The only thing you can work with in investing is historical numbers +/- some discounting factor, etc…Basic premise aside from compound interest rates can be smaller than simple and come out far far ahead, is that the nominal loan payment will stay the same but due to inflation will actually be a smaller payment over time. As opposed to the investment which has historically increased purchasing power/out paced inflation over 20-30+ years. May not happen in the beginning years, but the longer out you go the more likely and locked in it becomes. Doesnt make it the right choice for you but mathematically its pretty obvious. Same thing applies to mortgage prepayment only much worse since rates are super low and tax advantaged.

     

    The deferment forbearance is nice, but low probability. As is the repayment options, and in reality quite a few private lenders have similar options.

    Click to expand…

     

    While all correct, the 6.8% comes with zero risk.  The markets may be down the next 2 years, may be up, may be flat.  6.8% guaranteed simple interest isn’t bad.  You’d be gambling that the markets will return better in the 2 years.  Plus the peace of mind of having loans gone sooner and increased cashflow is not insignificant.

    I’d refinance the loans and pay them down.  If you think your job will be safe for another 2 years, there’d be very low risk of needing the federal benefits.  Use Earnest if you’re worried, which will let you change your repayment as you go if something happens.

    Avatar jhwkr542 
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    If he does not get “dream job” – should he only look for jobs in the area then?

    Click to expand…

    Yes since it sounds like your job is not very mobile.

    in reply to: Sacrificing or compromising one's career for a spouse? #24183 Reply
    Avatar jhwkr542 
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    I just donated my old clunker. KBB was probably under $1000 so I just googled my city and car donation. They came and got it. Pretty painless. I did it because my time and effort just wouldn’t be worth a couple hundred bucks. Just remember to take off the license plate ?

    in reply to: Anyone ever donated a car? #24140 Reply
    Avatar jhwkr542 
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    Pay off the car. Put some towards student loans.

    in reply to: Poll the room, what to do with bonus $ ? #24137 Reply
    Avatar jhwkr542 
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    There will be compromise.

    I think it’d be best for you two to consider each situation seriously. Try to look for middle ground. And be as honest as possible, even if the truth hurts. Does he take less pay? Does someone quit? I’ve seen decisions like this ruin marriages because both people were never on board with the other’s plan but they did it anyways. I would never consider any job a “dream” job if my spouse was unhappy.

    in reply to: Sacrificing or compromising one's career for a spouse? #24136 Reply
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