By Dr. Margaret Curtis, WCI ColumnistThis time last year, I wrote about the year of personal and professional change my family had just gone through—a move, two new jobs, and two of three kids in new schools—and laid out some aspirations for the coming year. If 2023 was the year of change, 2024 was the year of settling in. I’m here to report that some goals were realized and some were laid aside for different or better ones. Some just didn’t happen. Life would be boring if it always went according to plan.
I am also here to say that we were and are incredibly fortunate. Our children are thriving, and we enjoy our work and love our community. So, here is the year-end column for 2024 and what might happen in 2025.
What Worked in 2024
I settled into my new role at a teaching hospital. After many years at rural community practices, I had to up my academic game, especially since they invented some new drugs (CFTR modulators) and some new diseases (ARFID) while I was away. I added some per diem hospitalist work with the support of colleagues and a bunch of CME. I’m teaching at the medical school. I went back to Alaska for two weeks of locums in July, and I’m starting to feel like I know the lay of the land. I gave two talks at WCICON, and I guest-hosted the podcast. If you listened to any of those, thank you.
My husband, Mike, continued as a part-time employed urologist and started his own practice: vasectomies only (for now), cash only with a sliding scale. He charges about half of the out-of-pocket cost of the tertiary care center. We have not made any T-shirts yet. He is going to Alaska with me in February to see if he can start an outpatient urology program to serve the remote populations there. He also made 30 gallons of maple syrup, ran the shot clock for the local women’s hockey team, and did a lot of deer hunting. No deer catching but lots of hunting.
This year, for the first time, we felt financially independent thanks to stock market gains and a one-time real estate sale. I don’t mean the kind of financial independence with a capital F and a capital I: we continue to work, save, and invest, and retirement is still a ways off for both of us. But we both work part-time now and feel we can spend time and money in ways we might not have considered in the past. Case in point: we don’t play the airline points game, but we got a Chase Sapphire Reserve credit card that gets us access to airport lounges for a $95 annual fee. I will never, ever go back to waiting with the masses.
We got a real, live accountant this year. Our taxes will be more complicated in 2024 because we started the business, and he is going to do our personal taxes as well. I’m glad I did our taxes in the past because I understand the whole process, and I don’t mind handing it over to him. Another first for us this year: a big Roth conversion of some of our retirement money. Here’s why:
Our taxable income will be lower this year than in the past, for a few reasons: 1) The money Mike earned doing vasectomies went back into the business; 2) We will get state and federal tax credits for the energy efficiency work on our house, totaling about $15,000; and 3) We made a few large charitable donations this year, around $53,000 (a deduction, not a credit). Of course, we don’t know exactly what our income will be in retirement or how taxes might change, but we do know for sure that this is the lowest our income has been in about 15 years and maybe the lowest we will have while we are both still working. Since most of our retirement money is pre-tax, not Roth, we are looking at paying a lot of taxes once we start withdrawing money. Doing a Roth conversion this year will give us a hedge against high tax rates in retirement.
We finalized an estate plan that includes a trust for each of us. In the past, our assets fell under the estate tax threshold, so we were content with just a will and a single trust. Now, we live in a state with a lower threshold, and we actually come in above that number.
We changed our asset allocation this year to reflect both our age and our financial status. Up until recently, our investments were roughly 60% in stocks and 40% in bonds. That’s pretty aggressive for two middle-aged people if you use the “100 minus your age in stocks” rule. There are two reasons for this: the first is that the stock market has been on such a tear for the past two years that the portion of our portfolio in stocks kept creeping up despite my best efforts. The second reason is that my best efforts really aren’t very good. “Rebalance portfolio” is on the financial calendar, but I do it when I think of it, which is not very often. This has worked out for us in a bull market. This makes me like an anti-vaccine parent whose kid hasn’t died of Haemophilus yet: lucky, but not smart.
We bought the small office building that houses my husband’s practice, so now our asset allocation is closer to 40% stocks/40% bonds/20% real estate. I will let you know how our portfolio looks in a year, which is probably when I will think to check it again.
I read Dr. Jim Dahle’s article on 529 plans and realized we could save money on our state taxes. Vermont offers a tax credit of 10% of the amount transferred or deposited in a Vermont state 529, up to a max of $500 per account, for each of the first three years the account is open. I briefly considered just transferring all three accounts all at once like a normal person, but instead, I’m going to transfer $5,000 from each account yearly for the next three years for a total tax savings of $4,500. It’s on the financial calendar.
We gave away our sidewalk sofa.
More information here:
You Should Invest Like a 50-Year-Old Woman
Living Our Lives in a Dual-Physician Income Household
What Fell by the Wayside in 2024
We didn’t buy a rental property. We went so far as to get an inspection done on a four-unit that checked out on paper, but it turned out to have major structural issues and we withdrew our offer. I consider the $1,000 we spent on the inspection an excellent investment—it saved us a huge headache. We might try again in the future, but for now, we are sinking our money into the small office building we bought and into our own house. We are doing a major energy overhaul of our house—solar, new insulation and windows, heat pumps—and it is costing closer to $500,000 than the $300,000 I predicted. This turn of events should surprise no one.
Once again, I did not write a book.
What Kept Us Humble in 2024
We lost our sweet old dog in June and our sweet old cat in July. Thank you, Dempsey and Juniper; we'll see you on the other side. We were still mourning in August when a friend asked if we had room for the stray cat living in her garage. Of course we said yes, and we are so glad we did. Welcome Cleo. The day before Thanksgiving, our younger dog had to undergo a “stick-ectomy” to remove the piece of wood he got lodged under his tongue, a reminder that there is no such thing as a free dog.
This year, we celebrated my husband’s 62nd birthday. He was briefly depressed and then remembered that 62-year-olds get 5% off on Tuesdays at the grocery store across from his office, and all was right with the world again.
More information here:
Actual Money Fights We’ve Had (and How We Solved Them)
What Might Happen in 2025
I will continue to refine my role at work. I will formalize my hospitalist role and do some work for the child abuse program. My husband’s goal for his practice is eight vasectomies a month, which is enough to pay all expenses. Once he turns a profit, I will open a solo 401(k) for him, and we will qualify for the auto-contribution credit. We have expansionist visions for the building, too, but those are still too early to mention. Maybe next year I’ll have something to report.
I will establish a resident rotation in Alaska.
What Will Happen in 2025
I will enjoy the snug house; the new cat; and, above all, the thriving children. Life will never be boring.
If you had New Year's resolutions, how did they turn out? Do you have any resolutions for 2025?
Dear Dr. Curtis,
Congratulations on your smart money moves. I, too, live in VT. I don’t believe the 529 tax credit is limited to the first three years the account is open. I reviewed the tax department’s guidance. If there is a provision I’m unaware of, please let me know.
Thank you for reading, and for commenting! and if this is the Richard Donahey who is the CFO of the Vermont Agency of Human Services, then I defer to you in all things VT finance.
I can’t find the three year provision now either, but will keep looking. And I should add that the credit only applies to $2500 of transferred basis, not earnings.
Thanks for the update. I’m a big fan of the 40:40:20 asset allocation. It has served me well for many years. It could be better, or it could be worse. It captures growth with tolerable risk.
“I will enjoy the snug house; the new cat; and, above all, the thriving children. Life will never be boring.” This sounds like my house too!
Your house sounds lovely. Thank you for reading.
Congratulations on a good year and smart moves.
It seems as if your energy improvements cost $500,000. That number is staggering to me. I too made energy improvements on my home this year, I insulated a 30×50 metal building ($12,000 materials $1000 labor to two teenagers), I upgraded heatpumps from an old 10 seer to a new Mitsubishi 20 seer ($8000 materials and $2500 labor though I did some myself). Installed a new minisplit in the basement ($3000 materials my labor). Added insulation to the basement ($823 materials).
I have a family member who sells solar installs. I feel like it is a similar wild west to the financial services. He gave me several quotes, and the best he could come up with was $29,000 for a 10 kw array, likely needing to replace our 9 year old roof. Our electricity co-op charges 6.02 cents per kwh and the price went down from 2015 to now. They don’t net meter. The payback on solar greatly exceeds the usable life of a solar panel and may as well be infinite.
When thinking about this, I feel like there are a few justifications: (1) to save money. This is the hardest for us with a newer house. Very little we do will ever save us enough money to pay back the cost in the lifetimes of the equipment or the buyer (one solar quote had a payback of >100 years) (2) comfort. The new heat pump is a variable speed inverter system that dehumidifies better than a single stage. (3) care for the environment. This is a worthy goal, but I feel like there are better ways to do this with the same amount of money in my case.
And as a (now disabled) employed urologist, more power to your husband
This is a terrific narrative and really puts all of the various planning strategies into a real world context! I like how you include real estate owned in your allocation, so many people forget about the house that they live in.
Great move on the energy efficiency projects. One question – you mention that these lower taxable income among other items for the year. Having filed Form 5695 in the past, I believe that the credits appear “below the line” on the 1040: in other words they don’t impact taxable income or tax due, but reduce the tax payable. Depending on one’s tax bracket, the credit offsets more or less income.
Anyway great article!
Most include the house they live in in their net worth, but not their nest egg.
It is a lot of money – I break it down, below. We could have build a whole house for that pre-inflation. Instead we are dramatically improving the efficiency of a not-very-well-built 1980s spec house. These improvements won’t pay for themselves, at least during our ownership of the house, so we consider this discretionary spending, in the same category as redoing a bathroom or kitchen. I would rather have a well-insulated, draft-free house and be energy neutral than have the latest kitchen appliances.
Excellent work!
I thought the $500,000 “solar, new insulation, new windows, and heat pumps” energy renovation was a typo.
Our electric/gas bill in the Michigan McMansion averaged $450 a month back in “pre-inflation 2021” but here in NC, it averages $180. No pay back there for solar/insulation. We did get a new heat pump installed for about $13K and installed an on demand hot water heater and a gas stove for another $4000.
Our total of renovations for nine years cost 20% of your current plan and included a redo of the kitchen, new appliances, new roof, a repaint, new garage door, and bathroom countertops, sinks, and toilets…but 80% of it was done before inflation hit hard.
I like your allocation idea. I’m doing a bit of reading about it. I assume in your case, you mean 20% actual owned real estate as opposed to syndicated real estate or REIT’s?
Not a typo. Right now the breakdown looks like this:
$42k for a new roof
$15k for insulation
$25k for new wiring
$21.5k for heat pumps
$73k for new windows
$154 for labor.
plus lumber, other supplies etc. The total so far: $334 K, but we aren’t done yet. I’m planning on 500K as a conservative estimate.
Some of these are “deferred maintenance” (roof, ), and all of them reflect the reality of construction right now. Building costs are up 20% from 2020 per the Bureau of Labor Statistics, and my very small sampling of people doing similar projects agrees.
And yes when I refer to RE in our asset allocation I’m including actual property (namely, my husband’s office building).
Labor in construction is out of control right now no doubt. When I was putting air conditioners in I got so frustrated with the labor costs that I actually took my EPA 608 Universal certification exam so I could legally handle refrigerant and install my own. Probably not a great use of my time but given that I have installed four minisplits and a central air handler in the past 2 years before I got sick, it wasn’t a terrible idea. I was able to pay my 16 year old to do the physical labor, he gets paid and gets the daddy match into a Roth ira, I get labor at far less than market rates. It has worked so far. I generally do my own plumbing and electric too, but I’m not climbing on a roof for anything.
Labor and construction costs are very high now. We just got a bid on gutting and redoing our master bathroom. It’s not a big bathroom and the bid is $45,000. The entire house and the ten acres it sits on cost only six times this amount in 2016. Of course, we will be using this bathroom and new tub for two decades.
Once we spend that money, our renovations and upgrades amount will equal half of the original price of the place here. We essentially bought an old house (built 2003) and have put half the purchase price in it since 2016.
But, Nearby right now, a mobile or modular 2000 sq ft home dropped on a flat piece of 0.25-0.5 acre land with no view is $350,000. To buy a site built “spec” home of 2000 sq ft on a tiny lot is now about $400-$450K. To get acreage with a view, the few empty lots with acreage around here now are $180-$250K, then the 2500 sq ft house costs another half million minimum.
We could not get another place like this now for our McMansion equity. In fact, that equity would only have bought a mobile home on a tiny flat lot in 2022.
Yea, it’s crazy. So many communities in our country now the average house is not affordable for anything near the average household income. In Salt Lake it’s $546K to $75K. 7X. In the Bay Area it’s $1.2-3.2 million to $128K. 10X. I guess there’s still Indianapolis. $250K to $56K. But even that is nearly 5X. I would put the cap on affordability at something closer to 3X. Maybe 4X.
according to google. Cleveland median house price is 130,633 and median house hold income 39,187 ratio of 3.33
obviously less than 3 would be ideal
can get there in smaller cities looks like Akron is closer to 2.7
where I did residency the county had a median house price to median income ratio of >5 and my first job was in a county where that ratio is 3.2
We didn’t want to move and it stinks but people have moved for economics reasons through out history
Congrats! Quick question how did you get Chase Sapphire Reserve for annual $95. We pay $500 annually with $300 travel credit.
Following…same question
I believe she confused the chase sapphire reserve with the sapphire card (formerly sapphire preferred). The reserve is $550 and includes lounge access, the sapphire is $95 but doesn’t have lounge access.
awesome article Margaret! for your hubbie are you utilizing a custom solo 401 like one offered by mysolo401k? are you going to have the ability to do the mega backdoor Roth?
Hi Rikki, and thank you! We are using his solo 401k at Fidelity, where the rest of our retirement accounts are.
I am also a urologist who is interested in doing a vasectomy clinic. Did he have to maintain hospital privileges somewhere in case of a complication? I guess that would depend on the state that the clinic is in. I have worried about that as an obstacle to moving to something outpatient only, although I have never actually had that kind of complication from a vasectomy. Thanks for the great article!
thanks for your comment! here is my hubby’s reply:
The short answer is NO, I do not have to maintain hospital privileges in order to have a vasectomy clinic.
The longer answer: I have chosen not to be a “participating provider” with any insurance companies. I have been pleasantly surprised how little is “required” of me by various authorities, at least in the State of Vermont. As independent licensed physicians with our own practices, the Joint Commission and its “accreditation” has nothing to do with us.
In order to be “in network,” some third-party-payers will add various requirements, and by being a non-participating provider, I can make decisions that make sense to me . It may be the case that an insurance provider requires you to have hospital admitting rights in order to be in-network. From my perspective, this is yet another reason to work independent of non-clinicians telling us how to practice medicine.
I do take seriously the responsibility of a potential complication in a patient upon whom I do a vasectomy. Like you, I have actually never had a post vasectomy complication that requires a hospital visit, but I do give patients my cell phone number so if they have concerns about a possible complication they can call me. I very rarely even get a call and I have always been able to confidently place a concern “in the range of normal.”
I have other thoughts and ideas about starting up an independent practice. I have certainly made mistakes and would love to help you avoid them. Feel free to contact me and steal liberally from my website: twinriverurology.com.
Michael Curtis MD
Sounds like you had a great year! I feel your pain about not buying real estate- that happened to me in 2023 and I ended up owing more taxes when filing. Fortunately, I purchased a property in 2024 and will have a large amount of depreciation. Ultimately, it’s good that we use our judgement and only buy good investments and not “let the tax tail wag the dog.”
Agreed. I have certainly fallen prey to the hype around real estate investment, a la Bigger Pockets, but I’m glad I had a stringent list of criteria and didn’t move ahead just so I could be part of the REI crowd. The right investment(s) will come along, or not.
You know, it’s interesting, I spent a few minutes yesterday on the Bigger Pockets forum and it was like a list of all the mistakes that could be made in real estate investing. Every thread was a different mistake.
It’s a viable route to wealth but it does require more effort and expertise than a boring old index fund portfolio no matter how you do it.
The BP forum tends to have a real mix of success stories and cautionary tales, and new members who post enthusiastically once or twice and then seem to disappear – whether because they’ve found success or moved on, there’s no telling. The BP podcast is unadulterated cheering for REI, as are most REI podcasts. You can get good information but you have to be skeptical and willing to check many sources.