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I had the same concern a few years back, unfortunately I had this discussion with a “financial advisor” who very easily sold me a Whole Life Policy based on my fear and stupidity. I still have concerns about the market, too a much lesser extent after becoming more educated. I continue to fully fund all retirement accounts and then split what remains after all bills are paid between taxable brokerage accounts and debt reduction.
Be patient. The more I travel and have the means to travel, the less I want a second home. It’s becoming even more so a renters world. A few things to consider, overall costs including insurance, taxes and maintenance. We looked at places, highly desirable locations, and taxes alone were more expensive than a nice hotel in the same area would be for a couple of weeks. Time, it’s just damn hard to spend a lot of time at your second home early in your career. For me, it has only been recent I have had more than 2 weeks off a year to travel. Add the potential for kids and this is even more difficult. Way too many good deals on VRBO and the like, who wants that headache of owning. I will be heading back home tomorrow from vacation and wont lift a finger cleaning this home we rented. Someone else’s problem. Also won’t be paying to have the pool/hot tub fixed that had problems during our stay.
I recently paid mine off in total. From a pure financial perspective it probably makes most sense to put all extra money toward the loan and get rid of them. No doubt they are a burden and you will be relieved and proud when they are gone. However, I established a sizable emergency fund first and contributed to a brokerage fund (Total Stock Index, no FI). Once I had reached a number in the brokerage account I was happy with, I started to consider FI for my portfolio and it made no sense buying this Asset Class with rates greater than 3.5 on my Student Loans. At that time I put all extra money toward debt and paid it off fast.
The question I would ask is do you think you will get an after tax/fees etc annualized return greater than your highest student loan interest rate? If no, pay off the debt. Another way to put it, if you could buy a AAA rated, triple tax free bond at 5.4 would you buy it. I know I would, and a lot of it. Good LuckJune 25, 2019 at 7:49 am MST in reply to: Any 15-year jumbo mortgages around low 3% out there ? #225044
I got 3.25, Jumbo, 15 year fixed with Quicken Loans. I shopped around and this was the best rate with closing cost costs at 5k. Also liked I didn’t have to move money to WF or BofA.June 24, 2019 at 5:19 pm MST in reply to: Any 15-year jumbo mortgages around low 3% out there ? #224891
My number has always been 10M. I simply wanted an amount where I could live off the dividends and interest and never have to touch principle. I was in such a hurry to get to that number as early as possible. Funny thing happened, I paid my student loans off, almost have my practice loan paid off and my mortgage is very manageable, and now work is significantly more enjoyable. I don’t stress about slow days, I take way more time off to enjoy my hobbies and have limited my call coverage. I now feel like I dont want to ever stop. As I have re-evaluated my long term goal, I am hoping for 5M by the time I’m 50, be able to have a more conservative portfolio and hope it double by the time I’m 63-67.
After 8 years of practice I finally paid mine off. For six years I made minimum payments because I believed I could earn a greater return with investing. My loans were locked in at 5.0%. Many of the years I likely did beat this, but accounting for risk, taxes, piece of mind, etc. I finally just decided to put all extra money toward the debt and was able to knock out approximately 285K in two years. It truly is a liberating feeling. I have decided to continue with the snowball and pay off my practice loan and home loan in the next 3 years. Despite having the low interest rates on these loans, I can only imagine the increased freedom I will have from these financial burdens. There are just some things you cant put a price tag on.June 20, 2019 at 7:52 am MST in reply to: *Official student loan pay off thread* #223595
If the non-compete will hold up in court and you need to establish outside of the area, then I would pursue your option one hour away. Particularly if your family is happy in their current location. You can not put a price on that. As for starting from scratch and having a profitable practice in 4 years, absolutely you can do that. Should be much quicker if indeed they are in need of your specialty. I would also proceed with caution if you are going there because a few of the DDS in the area say they need a specialist. These offices are creatures of habit and it is hard to break referral pattern. I would very closely look at the referral patterns and more importantly what the GP’s in the area perform. I have found that GP’s in rural areas are very adept at removing teeth, even third molars, as this is what their patients have grown to expect, they don’t want to travel into the city for these procedures. However, they don’t do much ortho bc the ortho’s are good at traveling and will come to them.
Something else you may consider is building a great practice over the next few years, then hire an associate/partner and re-enter your current location. This may be more profitable long term. You also may establish great working relations with your referrers and not want to completely start over. Having good working relations with referrers you trust is priceless, as you already know. Good luck
Rent a 3 million dollar house/condo/loft. I would bet all I have that your “Dream House” will change in 5 years.
If you want a financial advisor and the stress of doing it on your own is more than you want, then by all means hire one. I dont think you can put a price on stress reduction and spending your time doing the things you want to do. You will have enough on your plate being a new dentist. Trust me, you will have sleepless nights worrying about your cases, your skills and have you done the right thing for your patient. As my practice grew and I became less overwhelmed with the day to day of running it, I made a decision to learn more and I really enjoy learning about finance and alternative options, so I spend a ton of time on it. That, and I bought a Whole Life Policy and have tried to right that wrong for 3 years now.
All that being said, you more than owe it to yourself to spend some time learning the basics of financial planning. At a minimum enough to hold a conversation with your advisor so you can map out your goals together and not be confused.
And, if an advisor tries to sell you Insurance as an investment, run like hell. Good luck!June 12, 2019 at 7:24 am MST in reply to: New grad – Is it worth getting a financial advisor? (Fee only or AUM?) #221228
The problem is your patient payer mix. 80% Medicaid? That is extremely high. If you could cut that in half, you would see a significant raise. He is not making less than you unless he has extremely high overhead, which would be unusual for a Medicaid Practice. Medicaid Dental Practices benefit one person, the owner. I am a specialist, and have quite a few relationships with GP’s. The ones who own large Medicaid Practices generally are not looking for partners, they are looking for associates willing to work long enough to pay off their student debt, then on to the next fresh grad. My recommendation would be to find an associate opportunity, possibly Friday if you are not working, and improve your skills with adult patients. Hopefully that will lead to a better opportunity for you.June 4, 2019 at 7:55 pm MST in reply to: Dentist needing encouragement with pay expectations, asset allocation #219298Liked by Hank
Perhaps there is noting I am more ashamed of myself for doing than buying 1M WLI Policies on both my wife and I. Thankfully found this site early and “only” paid 1 year premiums. DONT DO IT!