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  • White.Beard.Doc White.Beard.Doc 
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    Joined: 02/06/2016

    Definitely go for it.  Get a home your family will be happy to live in for the next 15 or 20 years as you raise your children.  And let go of any guilt and enjoy the house.

    We did just that in a top school district and it worked out great. Yes, it was more expensive in the highly desirable school district, and yes, it felt like a lot of money at the time as we live in a VHCOL city.

    At the same time it was worth it over the 21 years we lived in the house because our kids got a great education, we had comfortable space for everyone, and our 20% downpayment returned 12.5x in cash when we sold 21 years later after paying down the mortgage over those years.  In our area, renting and buying cost about the same in those days, so our mortgage payments were coming back to us in part as we paid off the principal and grew our equity.

    in reply to: Anxious about buying doctor house #254724 Reply
    White.Beard.Doc White.Beard.Doc 
    Participant
    Status: Physician
    Posts: 963
    Joined: 02/06/2016

    Tail coverage typically costs in the range of 2 to 2.5 x the annual policy premium.  However, there are ways to get this reduced in some specific circumstances, depending how long the underlying insurance was in place, depending how long the doc worked under the policy, and depending if the doc is retiring from practice.  The new employer may also be able to arrange “nose coverage” in concert with the new policy, in lieu of a tail on the old policy.

    For Adp1987, how long is the initial term of your contract?  Who pays the tail if you stay for the term of the contract and then leave?

    in reply to: Tail coverage for Claims based malpractice coverage #254578 Reply
    White.Beard.Doc White.Beard.Doc 
    Participant
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    Posts: 963
    Joined: 02/06/2016

    The docs I know who do consulting charge between $400-$600/hr in this VHCOL area and no one balks, it seems that is the going rate.  The docs who charge $350/hr are considered below market.

     

    in reply to: Depositions: What's the going charge…. #254574 Reply
    White.Beard.Doc White.Beard.Doc 
    Participant
    Status: Physician
    Posts: 963
    Joined: 02/06/2016

    When you do any type of outside consulting, your rate should be double what you could make per hour just showing up for work.  So perhaps you are a physician making 400k, roughly $200/hr, then you should charge $400/hr for any outside consulting work.

    If you have to cancel a full day of patients for a deposition, then $4000 is reasonable.  If it is only a short deposition, then $2000 is reasonable if they come to your office and make it convenient for you, or $3000 for a half day if there is travel time involved getting to them and then getting back to work.

     

    in reply to: Depositions: What's the going charge…. #254356 Reply
    White.Beard.Doc White.Beard.Doc 
    Participant
    Status: Physician
    Posts: 963
    Joined: 02/06/2016

    We had an outside pension plan designer pitch a cash balance plan to our business.  We went back to the TPA (third party administrator) we have been using for our 401k/profit sharing plan and got a second opinion.  The outside pension plan designer who pitched us a new plan was recommending some things that were too far into the gray zone of acceptable under the law.

    Maybe spirit rider will offer you a reference, he appears to have reliable, deep knowledge with respect to pension plans and cash balance plans.

    in reply to: I’m seeking a cash balance plan advisor #254226 Reply
    White.Beard.Doc White.Beard.Doc 
    Participant
    Status: Physician
    Posts: 963
    Joined: 02/06/2016

    And one more comment, as another high income supersaver, the cost of that initial house purchase within the reasonable range you are looking at played such a tiny role with where we are now, it is almost inconsequential.  For reference purposes, we were making decisions 2 decades ago in the same financial range that you currently are, albeit adjusted for inflation over time.

    White.Beard.Doc White.Beard.Doc 
    Participant
    Status: Physician
    Posts: 963
    Joined: 02/06/2016

    Your desires with housing will change with time, but if the idea of “forever” to you means you will live there for a long time, as in a decade or more, then buying generally works out quite well.

    And as a derm making the kind of money you are making, combined with good financial habits, go ahead and buy the 1.2MM house if it is what you want for yourself, your spouse and your family.  You will be in good financial shape in the future whether you spend 750k or 1.2MM on a house.  Only you and your spouse know how important the nicer house is for you, but financially you will be fine either way.

    White.Beard.Doc White.Beard.Doc 
    Participant
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    Joined: 02/06/2016

    The forum is behaving better for me today, the first time in a long time that I can see new posts when I refresh.

     

    in reply to: Dead forum? #254178 Reply
    Liked by SLC OB
    White.Beard.Doc White.Beard.Doc 
    Participant
    Status: Physician
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    Joined: 02/06/2016

    We live in a VHCOL area.  After 1 year of being an attending, we spent 2.3X income on our “forever” house.  After subtracting the downpayment, our mortgage was 1.9X annual income.  All of my calculations at the time said that the house expense was doable for us, but it felt scary to put a big chunk of our savings into the downpayment and the large monthly mortgage payments felt a bit scary for the first year.  As we got settled, we realized that we were still maxing retirement accounts and saving enough.  It ended up being a good decision.  We raised our family in that “forever” house and then ended up selling it after 21 years.  Our priorities had changed after the kids were done with school, so we moved for a better location and better lifestyle.

    How did the expensive house work out for us?  It worked out great.  We raised our children there, and the schools were top notch.  Over 21 years, the mortgage had been paid off, the house sold for 2.4X the original purchase price, and it contributed nicely to the growth in our net worth.  We ended up with cash out at the sale of 12.5X our original downpayment.

    White.Beard.Doc White.Beard.Doc 
    Participant
    Status: Physician
    Posts: 963
    Joined: 02/06/2016
    Splash Refinancing Bonus

    We don’t have time of use rates where we live, but we do have a plan where they track when you charge your car and reward you for charging at night when usage is low.  We get between $50 and $100 per month in cash every month for charging our cars after midnight.

    in reply to: Tesla #254035 Reply
    White.Beard.Doc White.Beard.Doc 
    Participant
    Status: Physician
    Posts: 963
    Joined: 02/06/2016

    If you assume the tax rates will be the same as current rates in the future when you retire, you still avoid the annual tax drag on your investment returns by putting the money in tax deferred accounts.  Very simply, the tax deferred account gets to grow more each year because you pay zero taxes on the dividends, capital gains, and any bond income.  Yes, you will pay taxes in the future on the RMDs on the back end once you reach age 70.5 and start withdrawing funds, but all those years of tax free growth add significantly to the value of your investment.

    I am in the highest bracket now and predict being in the highest bracket in retirement.  Yet I continue to max the tax deferred options every year to avoid the tax drag on the investments.

    The one thing that no one knows is whether income tax rates in the future will be the same, higher, or lower.  So if you want to guess that rates will be much higher in the future, then you could decide to pay the taxes now and invest in taxable accounts.  Personally, I have no idea what tax rates will be in the future.  As a result I have decided to avoid venturing guesses on questions that have no easy answers.

    White.Beard.Doc White.Beard.Doc 
    Participant
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    Joined: 02/06/2016

    Ok, I just cleared everything in cache, etc. and this time it seemed to work.  I hope it lasts.

     

    in reply to: Dead forum? #252986 Reply
    White.Beard.Doc White.Beard.Doc 
    Participant
    Status: Physician
    Posts: 963
    Joined: 02/06/2016
    Earnest refinancing bonus

    Yes, the forum is unusable for me.  I cannot see what was recently posted on the home page (what I see is the same for days on end), and I have intermittent trouble logging in.  I am hoping this will get fixed.

    Jim, if you read this, this is clearly not a good reflection on your WCI brand.  I am hoping your webmaster can fix this very soon.

    in reply to: Dead forum? #252984 Reply
    Liked by hatton1
    White.Beard.Doc White.Beard.Doc 
    Participant
    Status: Physician
    Posts: 963
    Joined: 02/06/2016

    Problems today with the red “cannot login” message.  Ouch!

     

    in reply to: Dead forum? #252297 Reply
    White.Beard.Doc White.Beard.Doc 
    Participant
    Status: Physician
    Posts: 963
    Joined: 02/06/2016

    How long will you stay in the house?

    Calculate your monthly savings, then calculate how long it will take to save more than the closing costs for the new loan.

    Or more simply, if you are staying in the house for many years, go ahead and refinance.

    And stop thinking about the points that you paid. That is water under the bridge. It has nothing to do with future financial decisions.

    in reply to: Refinance or Not. Please advice! #251802 Reply
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