By Dr. James M. Dahle, WCI Founder
One of the most useful techniques we used as we worked to become wealthy was to delay purchases. We didn't outright DENY ourselves the purchase. We simply delayed it. Sometimes that meant we changed our minds about it and never bought it at all, but most of the time we still bought it eventually. But that delay allowed the money that would have been used to purchase the item right away to be used to reduce debt, be saved up to allow us to pay cash for big-ticket items and, most importantly, be invested in tax-advantaged accounts.
We Love Retirement Accounts
You see, our tax-advantaged retirement accounts have always been a priority for us. The last time we didn't max one of ours out was in 2004, and we have no excuse for that but ignorance–I mean, we were still buying loaded mutual funds back then, cut us some slack. Maxing out our retirement accounts is no small feat. Some even consider me an expert in the use of multiple tax-advantaged accounts. In 2017 we put over $200K ($54K x 3 into 401(k)s, $30K into DBP, $11K into Roth IRAs, and $6750 into an HSA) into them, and I've got WCI readers encouraging me to start a defined benefit plan for WCI, LLC to be able to sock away even more.
But back to the subject at hand, which is delayed spending. What have we waited to buy, in retrospect was it worth it, and did/does it make us happier to own it?
Stuff We Waited to Buy
The Big Doctor House
This is perhaps the biggest ticket item for us. Our “live like a resident” period was 4 years (I generally recommend 2-5 years, 2 for those with a high income to student loan ratio and 5 for those with a low income to student loan ratio.) During that period we lived in a 1600 square foot townhouse we paid $138K for, in what my wife would describe, as a “not-so-nice” neighborhood.
After four years, we upgraded to the big doctor house — 4400 sq ft, 100-mile view, lots of other doctors in the neighborhood, top three elementary schools in the state, etc. Was it worth it to wait? Definitely. This was a major part of us becoming millionaires 7 years out of residency. Are we still happier to own it? It's honestly a little big for me. We have an entire floor we only use for storage and when guests come to stay (which is actually pretty often.) But I'm the least hoarder-like of everyone in my immediate family. I assure you that nobody else in the family thinks we have too much space or too much stuff in it.
[Update for 2019: When we moved into our fancy doctor house, we wife noted that there wasn't enough storage in the kitchen and that the kitchen was way too small for the size of house. I told her she could get a fancy new kitchen when we had the money. Well, we have the money now and have embarked on a big home renovation. But once more, we waited to renovate rather than doing it as soon as we moved in.]
The Fancy Car
We bought our “dream car” 3 1/2 years out of residency, in the depths of the bear market. Between the fact that we were the only ones buying, and the fact that we were paying cash, we got a great deal. 160,000 miles later, I still love the car. My wife still loves the car. We still often use it preferentially over the new one. But waiting a few years to buy it allowed us to put $17K toward debt and retirement accounts at a time when we really needed it. $17K at 8% x 3 1/2 years = $22,255. $5K here and there really adds up.
The Brand New Car
Eventually, we got around to buying a brand new $60K car, about 10 years out of residency. It's nice. It has Bluetooth. It does pull the boat up the hill 10 mph faster than the fancy car. Instead of buying it at the end of our “live like a resident” period, I bought that $4K Durango. $56K at 8% x 6 years = $89K. That extra $33K is more than lots of doctors put away for retirement in a year. If we let that $33K compound for another 30 years at 8%, it would grow to $332K. These decisions kind of add up after a while. I honestly don't know if we'll buy our next car brand new or not. It was fun to do it once, but it didn't make me any happier than when we bought the other one, which cost less than 1/3 as much for 80% of the usable life.
The Boats
Most of my readers may not remember the old boat. It cost us $6K when we bought it four years out of residency. Delaying that purchase for a few years allowed us to buy a little piece of financial independence. But using it for 5 years before upgrading to an $80K wakeboat probably bought a bigger piece. $80K – $6K = $74K. $74K * 8% x 5 years = $109K. There's another $35K compounding for the rest of our lives. Heck, that's 5 years tuition at our alma mater. Super glad to have waited on that one, but mostly just so we could buy what we really wanted- technology that wasn't available 5 years earlier.
Small Ticket Items
We bought a second cell phone when we got out of residency. That seemed pretty luxurious. We waited four more years to buy a smartphone with a data plan. And even then, we only bought one of them. Waited a couple more years to get a second one. The $1000 big screen TV? About 7 years out of residency. We were millionaires at that point. New furniture? Other than a handful of very inexpensive items purchased new after getting married, we basically have only ever bought one new piece of furniture, the infamous $11K table set. The trampoline? 5 years out of residency. Nice grill? 6 years out. The gas-powered lawnmower? 3 years out of residency. The fancy mountain bike? 9 years out of residency. Did my wife get one at the same time? No, she waited two more years. (“I won't get much use out of it since I'm pregnant and I'll have an infant attached to me for a year after that.”) First set of brand new skis? 11 years out of residency — hers, not mine. Furniture in every room of the house? Took 3 years after moving in. Wood floors? Waited two years before purchasing. The laptop WCI was started on? $400. Pretty good return on that investment. First overseas trip with the whole family? 11 years out of residency. But none of those kids will have undergraduate debt.
This information probably doesn't surprise anyone who's ever read The Millionaire Next Door, Stanley and Danko's classic. Delaying purchases is a well-known habit among millionaires. But I'll bet there are a whole lot of readers out there who aren't using this technique now that could be in order to speed their way to what they really want- to be in a financial position that provides them freedom and choices.
The problem with Heli-skiing is every run begins and ends in a windstorm
Cheapskates!
Were we unnecessarily frugal cheapskates? Are we now too old to enjoy our money and the time, freedom, and luxury items it can purchase? I don't think so. I'm only 44 and my wife is barely out of her 30s. Most would argue that my life is still less than half over. My “mandatory career” from first paycheck as a resident to financial independence was only about 13 years. 13 years of work to pay for 80 years of living. (Was WCI a big part of that? Sure. But we were on track to hit FI after 20 years even if WCI never made a dime.) I assure you that I'm at least as interested in luxuries in my 40s as I was in my 20s. I'll probably be more interested in my 50s and 60s.
What did all this delaying buy us? Let's make a list:
- I get to work as much or as little as I like.
- I get to do whatever work I want to do. 6 day shifts a month? No problem. Type random crap into the internet for money? No problem. Go be a river guide and skip the 10-year board recertification exam I am literally taking as you read this? No problem.
- My wife gets to do whatever she likes to do as well. Go to med school? It's an option. Paid in cash. Go volunteer in the schools? No problem. Go on a backpacking trip with your 10 best friends because your husband can be home to watch the kids for four days straight? Sure, why not? What do we talk about at the monthly money meeting? Should we pay off the mortgage this month or finish maxing out this 401(k)? Sure beats talking about how to keep the lights on and whether we can afford for Little Suzy to be in the school play.
- Zero money fights. Can you imagine never having to squabble about money again? There's plenty and to spare for any reasonable desire. What are we going to fight over? Whether we fund the HSA or the Roth IRAs first? Give me a break.
- A 1%er lifestyle. Family vacations were in Alaska and Japan this summer. I used a helicopter this Winter instead of a chairlift. There is no restaurant in the state we cannot afford to eat at and use $100 bills as napkins. Capitalism is a wonderful thing, but most of us have to turn our earned income into capital first!
- No longer have to delay any purchase. Want a new car? We can buy a Tesla with what's in the checking account. Each of them. Want to pick up an $800 set of ski boots? You don't even have to check with your spouse because you know the money is there.
- Ability to give large amounts to charity. We give four and five-figure gifts to multiple charities every year. We can “pay it forward” to those who come behind us with things like the WCI Scholarship. I applaud those financial bloggers out there who have dedicated $100K or more of their portfolio to charity. But just by delaying purchases in our life, we'll have given MILLIONS away BEFORE we die.
Why is this all so cool? Because we didn't have to deny ourselves anything. Nothing at all. All we ever wanted, we've bought. We just delayed when we bought it, and time made all the difference. Time. Time to earn more. Time to let compound interest do its thing. Time that debt wasn't functioning as an anchor on our financial lives. Time to learn what really makes us happy.
Life Without Payments
Imagine a life with no payments! No student loan payments. No life insurance payments. No disability insurance payments. No car payments. No credit card payments. No mortgage payments. No required retirement or college savings account payments (because you already have “enough.”) Yet you are still making your big fat doctor income. What can you do with it? You can buy your own freedom. You can buy any item or experience you want. You can really make a difference in the lives of real people with real struggles. Allow yourself to dream a little bit. And then realize that this is all within your grasp.
All you need to do is combine the high income you already have with the delaying of a few big purchases and take the difference and invest it in some reasonable way. That's it. Now, it might not happen to you in your early 40s like it did for us. But even if it happens in your 50s or even your 60s, isn't that still worth it? Could it possibly be worth delaying the purchase of the big doctor home until the student loans are gone? Could it be worth driving that beater another year or two? Could it be worth putting off that home improvement or fancy vacation?
As Home Depot says, “You can do it; we can help!” You CAN delay your purchases. You're in control. This is your life. Your choices. Your consequences. Instead of trying to figure out how quickly you can start living the “doctor lifestyle,” try to determine how long you can hold off doing it. “Future You” will kiss your feet for it.
What do you think? What role has delaying purchases played in your financial life? Do you think it is worth it? Why or why not? What percentage of purchases you delay do you end up not buying at all? How do you balance deferring gratification with seizing the day with the time we have on this planet? Comment below!
You knew this was coming. You asked for it, with an open invitation. In your last communication you mention that you would not do a cash balance plan because “you could not commit to it for the next several years.” But, what is not to commit to? It does not appear to me the blog will be going away, or its revenue will decrease. Additionally, you do not have to max it out, right? The cost is negligible. But most importantly, you can have it all. You can increase your taxable account, and fund the cash balance plan. Furthermore, I can’t stand to see you lose the competition to the IRS. I think even your book says you like competition just for the sake of competition. Can you write a post, “Why I Decided Not To Fund A Cash Balance Plan?” Alternatively, how about “I came in second place to the IRS, and have lost my competitive spirit!” Fellow WCI community buffs, join in and nudge this man—in the words of Nike—“Just Do It!” Heck, we even have it all plotted out with a talented vendor to do all the dirty work for you.
Ever hear of the marshmallow experiment? I think the brain is hard wired one way or another for this type of behavior. Here is the link: https://en.wikipedia.org/wiki/Stanford_marshmallow_experiment
I get your point that delayed gratification is important for people to understand and implement, I’m not arguing with that. But the extreme wealth you are describing has a lot more to do with your hard work as a high paid physician and, to probably a greater extent, your creation of WCI. You make A LOT of money and that has a lot more to do with your success than delaying buying your first house or boat or whatever. If you had been a carpenter and implemented delayed gratification, you wouldn’t be talking about using $100 dollar bills as napkins after just 10 years of work. Even most physicians implementing delayed gratification won’t have the kind of wealth you describe so early in life, unless they are extreme like MMM.
Regardless, you’re absolutely right that delaying big purchases is an important way to build wealth. Most Americans have no concept of this and as a result stay enslaved to their jobs their entire life. I certainly would be a lot better off today if I had adopted this frame of mind early in my career. But, that’s life. You live and you learn. I’m just happy I figured it out at the age of 34 and not 54 or older.
Agree completely. As a Pediatrician, I don’t make 200k a year and likely never will so the whole “You too can own a mansion in the mountains, go heliskiing in Japan, drive a luxury car, and give all you want to charity, if you only delay your gratification” pitch is a little hard to listen to. We do delay gratification in all the ways listed above but putting 200k towards retirement a year will never be our reality short of getting another source of income. I think what is hitting me the most this morning is the question of why my time as a Pediatrician is so less valuable than every other specialty out there. Do I need all the things discussed in the blog? Absolutely not, but it would be nice to be more equally compensated for the work I do. That was obviously not the intention of this post but throwing out numbers that are unattainable for most in primary care does ostracize a significant portion of the potential audience.
I spent 4 years of my attending career with an income less than that of the average pediatrician.
We became millionaires on an average income less than that of the average pediatrician.
Our family still spends less each year than the income of the average pediatrician, including all the stuff you mention.
If the average pediatrician takes care of business early in her career, she too can be living “the good life” by mid-career, including a “mansion in the mountains” (but maybe not the Bay Area), trips to Japan, and heli-skiing trips (although perhaps not heli-skiing trips in Japan.)
You might be surprised how far a pediatrician income goes when there are no student loans, car loans, or mortgages.
Your broader point about the inequality in the medical pay system is obviously valid, but I’ve always been more impressed by the intra-specialty pay differences in medicine than the inter-specialty pay differences.
Tracy, I don’t think WCI is trying to alienate you by talking about his material possessions. He essentially works 2 jobs in order to provide for his lifestyle. He is trying to write an inspirational post. He has achieved this by doing 1.2.3. and so can you. He makes a very good point about delaying purchases and letting the money compound. All of us had some sort of idea about what different specialities paid prior to doing a residency. Sure it would be nice if Peds paid better but it is what it is.
Tracy, I’ve heard it said, that in a free market, capitalist system, your pay isn’t based on your value, but what it costs to replace you. That may not apply directly to medicine, but we’d all agree that teacher’s produce more for society than LeBron James, but all teachers can’t make $31M a year.
Assuming you knew the pay rates for your specialty before you chose it, I hope you stay positive and stick with the good work you do for children. Even with the pay disparity, I’m sure you’d rather work in a market economy than one where everyone is equally miserable.
By no means was my intention to negate the importance of the advice being given. I also came from a family with minimal financial means, worked my way through undergrad without debt and am currently serving a military commitment for medical school. We live in a modest house in a very average Midwest town and currently have mortgage debt and nothing else. I drive a 16 year old car with 230k miles on it and am perfectly happy. By all means I live a privileged life compared to the majority of our country and the world. My comment was only to say that although the numbers in the blog sound excellent, unless I do something different for a career, putting 200k in retirement a year would be more than my pre-tax income. I commend WCI for all he has done with both of his careers and for inspiring better financial decisions in a group of people who are historically not financially wise. I chose Pediatrics because it made me happy and fully knew my income potential going in. Yes, that was my choice. Is the advice scalable to my current income? Absolutely! However I still maintain that it becomes much easier to save and donate the amounts discussed when your income far exceeds that of most primary care physicians. I will absolutely achieve my financial independence and appreciate the insight of WCI in helping me get there.
Tracy,
As far as financial success I’m always amazed at the people who call in to Dave Ramsey who on incomes of 50 and 60k end up totally debt free and financially independent. Often some of these people do call in and have 6 figure incomes and his response is that if you have really big hole its good to have a big shovel (or something like that). So yes, more money=easier path to financial independence. In the end its all relative and scalable.
To the point of physician salaries, I agree with WCI I am amazed. In Pediatrics, for example you can double a general pediatricians salary by going doing a PICU, NICU, Peds EM, or peds cardiology fellowship. Even in my own field of peds critical care the salary ranges (even for the multiple hospitals in my geographic area) vary pretty dramatically. What’s ironic though is that the starting salary for a peds EM physician is pretty much the same as an adult EM physician despite the 3 extra years of training. I often joke that the AAP advocates for children but not for pediatricians.
Unfortunately, I think the outlook on salaries is rather grim for peds. Most kids (especially the sick ones) are covered by medicaid which pays minimally. I guess if we all en masse dropped medicaid they’d have to improve payment. However, I don’t know too many pediatricians who go cash only or concierge practice since there’s a sense of obligation to see these kids (myself included). Also, for us subspecialists we’re all hospital based so we couldn’t drop medicaid even if we wanted too.
I’m getting a little wordy so I’ll stop, but there are a few posts on the site aimed at “low income” physicians which are rather useful. Remember, it could always be worse. You could be like my friends who are general pediatricians living in NYC who make less money than the midwest pediatricians. A few residents of mine got gen peds salaries out west that were more than my starting intensivist salary in the NYC area!
I suspect that pediatrician like incomes is what we would all have in a Medicare/Medicaid for all type scenario.
WCI, you should do a post on financial implications of Medicare for all. My engagement with FI has a lot to do with the fact that I believe medical salaries will be extremely cut 8-10 years from now.
I don’t do posts on political campaign proposals as a general rule. In fact, I generally don’t do them on bills in Congress either. I could blog all year about something one candidate or another said but since the vast majority of those never become law, it wouldn’t help much.
If you believe your salary will be “extremely cut” # 1 I think you’re wrong and # 2 you should have a 50%+ savings rate. I think a small cut is possible, maybe even probable (but probably not, at least on a nominal basis) but an extreme cut? Doctors still have valuable knowledge and skills people are willing to pay for, no matter what the model.
Love this WCI. Everyone always thinks the sky is falling. IM salaries have gone up the last 3-4 years and not by a small amount either. Couldn’t agree with #1 more!!
RE: Peds EM salaries- they are actually usually lower than EM salaries, but IMHO this is reasonable despite the extra training. They tend to be overstaffed, kids are generally less sick, and it always seemed to me that the sickest kids went straight to the PICU while the traumas are dealt with by surgery. A fantastic, low stress job that pays EXTREMELY well despite low acuity and low patients per hour.
Snowcanyon — idk what your peds EM experience is, but it lacks some perspective and accuracy.
Our patient population IS overall lower acuity — we have fewer patients die, fewer needing central lines/chest tubes/thoracotomies, so in that regard it is lower acuity (though an IO works in 98% of coding patients). However it still happens.
However having a lower average acuity does not equal low stress. I deal with all the traumas — surgeons show up, just like they do at many busy general/adult hospitals, but I don’t get to just walk away. The vast majority of the time I am the senior physician in the room: a surgery resident is not running the trauma , I am. Sometimes I’m also doing the airway while running the code/trauma, just like people do in non-academic places. Some places the Peds ICU has a several hour wait for an admission — it’s definitely worse in adult hospitals than peds, but it still happens.
In my residency I worked at a children’s hospital with 80k+ visits/year that was very high acuity, where having multiple intubations in different rooms actually was a real occurrence. Where I did my fellowship and am now the volume is lower because we split it with another freestanding childrens hospital not far away, but I see a ton of trauma. I see more gunshot wounds than a lot of general EM docs because of where I live (pediatrics GSWs unfortunately).
On a busy 9-hour overnight shift where I am the only attending (at my place we have only one attending from midnight to 7am or 9am depending on the day), I routinely see 30+ patients, and in awful shifts see 40-50 patients (I suppose “see” is a relative term). Sure there are some coughs/colds in there, but I’ve worked in a really high acuity adult ED, and they have plenty of non-emergent people overnight also sucking up time and resources (i.e. psych).
My guess is burnout is probably lower in our speciality because Peds EM docs. We seem to LIKE the job more than general EM docs, but that’s chicken and egg as well. I generally like working with kids, and really enjoy working with them in the ED, despite many difficult situations. We get cynical too, but I get to interact with EM residents and attendings all the time, and they often become cynical because of the patients — not the “sick” ones, but usually the “not sick” patients.
Given my lower acuity of patients I don’t think it’s a big deal to get paid a little less than general EM docs. It’s not low stress, and certainly isn’t low volume if you work in a real children’s hospital, which is where the vast majority of peds EM fellowship trained people are.
As a military pediatrician there still are things that you can do to maximize wealth. Take an HPSP scholarship so you have no monetary debt for med school, just the four year payback commitment. Get into USUHS if at all possible to be on active duty and earn time toward a military retirement. Favor military rotations and residencies over civilian programs (as appropriate, also keeping quality of training in mind).
Max out the TSP at $18K per year each and every year once you complete your residency. Go with low cost insurance from USAA and AAFMA or NMAA, but avoid First Command like the plague. Contribute $5500 to your Roth IRA and another $5500 to your spouse’s if you’re married.
When you go on deployment, make sure that you fully fund the savings deposit program (statutory guarantee of a risk free 10% return) and put tax free combat zone pay into your TSP to top things off for $53K per year instead of the regular $18K per year. Pick a tax free state of residence and keep it for as long as you serve on active duty.
Military officers generally don’t make as much as their civilian counterparts. However, there are plenty of good deals and freebies out there if you look. Take full advantage of them. If you have a choice between living on base or using your tax free basic allowance for housing (BAH) to pay for a mortgage, make a prudent choice based on the local housing market and the length of time that you will be on this assignment.
If you’re in a lower paying speciality or you like academics, consider staying on active duty for 20+ years. If you are in a lower paid specialty and you get out, consider taking a VA position or USPHS position after leaving active duty. Family practice, pediatricians, and nurse corps members may find that they do better in uniform than in the private sector.
If you do leave active duty and join the over-taxed for-profit world, don’t just take a W2 job working in another giant bureaucracy. Our sons’ former pediatrician was a great doctor, but we hated dealing with the administrative and billing personnel at the giant practice group where she worked. We recently switched pediatricians to a husband and wife team who are much closer to home. He’s retired Navy and she’s former active duty. They own the business themselves and the operation is small enough that the office manager and administrative staff really own their jobs and look out for the business owners’ interests while genuinely looking after their patients too.
The point of this long-winded response is that you can make your own destiny and profit handsomely, even in a relatively lower paid speciality.
Remember we were millionaires before WCI started making money. Would we be as wealthy as we are without WCI? Absolutely not. Would we still be very wealthy by physician standards. Absolutely.
So while delaying purchases might not be the absolutely most important thing in becoming financially successful, it certainly helps speed the process along. Particularly the part where you delay it until you have the money to pay cash. But even little things like funding your Roth IRA in January instead of April of the following year make a difference.
You keep bringing this up – we would’ve been millionaires…
1 Million is not what it used to be. You have a family of what 5? 1 million would be nothing to sustain them without solid doctor income. So claiming to be millionaire means nothing big. Thats the point of all these other folks and I agree with them.
WCI income has given you not only financial cushion but a VERY substantial psychological cushion to do whatever you want.
I highly doubt you’d write this article if you were still “only” making 350K or whatever in EM. Even at 44 in the best of scenario you’d have socked away 2 million lets say. Great but nothing like that alone as income from WCI. Big difference.
There’s no doubt I am far wealthier thanks to WCI than I would have been without it. Not sure I ever claimed different. I agree there is a financial and psychological cushion there. I also agree that each year $1M becomes worth less due to inflation and that $1M isn’t enough to sustain my family’s lifestyle.
But I was certainly on a path to become FI by 51-52 (and already a millionaire) before WCI made any significant money, and I probably would have beat that by a year or two. Not sure why you have a problem with either of those statements.
So how would the things I bought have been different without the WCI money? I think we might not have bought that brand new car. Probably would have bought another used one coming off lease instead. Probably would have put the new boat purchase off another year. Probably would have never done the home renovation we are now doing (a big part of which is to provide office space for WCI anyway).
But we’re still (obviously not counting the renovation) living on 50% of what I was making as a physician before cutting back. We would still be paying off the house very rapidly. We would still have been building wealth very rapidly etc. I almost feel from your comment like you want me to apologize for what WCI is making. Yet here I am at 9:14 at night still working on WCI after waking up early this morning to start working on it. If I put hours like this into medicine I’d be making $800K (and probably be totally burned out of course.) But it’s not like I did nothing to get it. I spent/spend a lot of time that I could have been doing something else like running a real estate empire or working more shifts or playing with the kids or taking trips or whatever.
Thanks for the reply. No, absolutely not – no need to apologize for WCI. Your work, your reward. Not trying to mean that at all. All I was pointing out is how big of a psychological advantage high income is (with simultaneous NW build, incidentally, a function of savings rate and reasonable asset accumulation).
What you provided as example though (FI by 51-52) is NOT highlighted in your article. What you emphasize is that you were a millionaire before WCI, which ..true…but I mean that only impresses the new grads may be. In reality your path is taking you into 50s to be FI. Good, but nothing earth shattering. What really turbo charged your FI is WCI and something not many have and that provides for a big psych boost to be able to write an article like this. For the rest of us, there is a bit of disconnect when you say delay stuff. TBH I can’t delay some purchases. Whats the point of delaying if I get arthritis by 50 or worse just die. That balance is personal and should be self evaluated. No formula or guideline for that.
TL;DR, please continue your excellent work. We all appreciate it, but for some (I bet many) it is difficult to delay , rather its a personal balance between save and losing best years to “living like a resident”.
But that’s exactly the point of WCI-you don’t have to do anything earth shattering as a doc to hit FI in your early 50s. You just have to live like a resident for 2-5 years, save 20% of your gross after that, spend the rest on whatever you want, and invest your savings in something simple like index funds. Maybe you’re not impressed with FI in your early 50s, but I can assure you that most docs are and would love to hit that goal. Heck, many docs are impressed by the simple fact that I’m a millionaire since 1/4 of them never actually hit that mark.
You know I wasn’t FI when this article was originally written, right? It was republished recently. So I disagree that that only reason I could write it was some “big psych boost.” At any rate, if you don’t find the article useful….leave it and move on to something else.
This is a doctor site for people who have doctor incomes. His is not unusual.
I think the commenter raised a somewhat valid concern. Delayed gratification makes a lot less difference on the items mentioned if you are making around 7 figures. While it may not be unusual, I don’t think most docs make that much, so there is some risk of losing the ability to relate to the financial concerns of “typical” docs.
Sounds like it is time to do more posts like these:
https://www.whitecoatinvestor.com/financial-advice-for-low-income-doctors/
https://www.whitecoatinvestor.com/low-income-doctor-in-a-high-cost-of-living-area/
I try to write articles that apply to people across the physician income spectrum from the military doc making $120K to the fancy-pants plastic surgeon raking in $1.5M. Given that I’ve been in every tax bracket, I don’t find that too hard to do. But bear in mind that just like a pediatrician making $150K married to a SAHM can’t relate to posts directed at someone with an income of $1M, that guy making $1M has different financial concerns compared to the pediatrician. I’m trying to write for all of them.
But when I write about MY situation, all I can write about is my situation and it is what it is. So take what is useful to your situation, and leave the rest without taking offense. But I can assure you that a pediatrician making $150K is held in awe by the vast majority of people who read the average financial blog. They would LOVE to be making that kind of money and most of the FIRE types wouldn’t have any trouble at all retiring in a decade on an income like that.
I agree with your reply and the majority of your initial post, and no, I certainly don’t take offense! The info on the site is comprehensive and informative and does a good job at relating to a broad range of people. Delayed gratification is important to accumulating wealth as you point out. Accumulating savings due to delayed gratification now allows you to spend a larger portion of your income once your savings goals are met later. If your income is large enough, loosening the purse strings later can even get you that helicopter vacation you always wanted!
DH and I are ‘lowly’ engineers and this post still resonated with me. We don’t and never will have a high doctor income but we still have a very good life. No mansion but a nice house that’s objectively too big for just two people; no heliskiing but we did ski Japan last year and go will to France next year; two luxury cars although mine is 15 years old (we probably should have waited to buy it but it worked out okay); and we give a lot to charity.
It costs just as much to go to Japan and go skiing as to go heli-skiing in NA once you add in airfare and opportunity cost for travel time.
Love this post, I guess I just disagree with some others who posted. Maybe it’s bc I grew up without money and had to work myself up the scholarship track, but I just don’t see that this applies less to pediatrics than others, after all anyone near six fogures is still so far above what most in the US make. We just paid off our loans and sure delayed purchases that year and a half. We moved to the Midwest too, which shocked many but we can rent a luxury condo for nothing and have actually found we love much about life while delaying buying a dream house. It’s all relative. Compared to my childhood and college experiences, and lifestyle while paying off student loans, everything we do every day feels like a charmed life. we delayed replacing my car till the spring, bought used, paid cash but flew out to LA to get exactly what we wanted. We may be in the condo we have no fights, and when we do get the dream house we have learned to love living in 1100 ft.² in the best location downtown, so there will be no desperation to buy or sell something that isn’t right for us.
Excellent post. I’ve found that when I allow for a brief delay following an impulse desire to buy something, more often than not I end up not even wanting the thing after having some time to really think about it. I think it’s a good practice for people in all income brackets.
I’m a regular employed physician with a lower than average income for my specialty and no paying side businesses whatsoever, but due to delayed gratification and good decisions made early on (with the help of this great website and others), I’ll likely hit my financial independence number in my early 40s; less than 10 years after having a net worth of zero.
Excellent point in your first paragraph. I’ve found that to be true as well and should have included it in the post. Huge savings there.
This is the entire business model of Amazon Prime. No delay= buying more.
This is one of the main reasons I don’t use Amazon prime or rewards credit cards. You don’t want motivation to buy more, you want motivation to buy LESS!
Not pertinent to the post, but I can say with certainty that rewards cards aren’t so bad. The credit cards we use (cash back) haven’t motivated us to increase our spending. We’ve done well with cash back cards (between 2 cards, have averaged ~$1800 cash back over the last year). We use that cash back to pay the balance and not for superfluous spending. I agree that Amazon Prime is problematic in that way though.
I look at that a lot like drug reps. Everyone says drug reps don’t have an effect on their prescribing practices, but the data says they do and the pharma companies keep spending money on them! I think it’s the same with credit cards. Make spending convenient and more of it happens on a subconscious level.
Interesting twist to the start early power of compound interest advice. Delaying the purchases to want is a great way to start saving early. Today I try to focus on making only the purchases we need so that one day (hopefully soon) we can buy anything we want.
Financial Samurai published an article this week about the 1%. My income definitely puts me in the 1% but my net worth has yet to. This is despite making over $350k in progress over the last 3 years of net worth tracking.
It’s funny how a few years (2 in my case) of not living like a resident can set you back. If I had paid more attention to my finances in 2012, I am sure we would be debt free by now. Oh well, better late then never. I am still under age 40 and figure my net worth will continue to sky rocket going forward.
Nice post. As I read this I have been delaying putting a big window in my house for my 40 mile view and changing the lawn in the front to drought resistant shrubbery. Neither are expensive to do, but both take away from my debt pay down plan.
Good post. I think “gas powered lawnmower” hit home the most 😀 (I’m still slinging around an extension cord behind my mower…was soldering on it a few weeks ago to avoid having to buy another mower).
For the bigger items, I think the “doctor house” and “dream car” are pretty spot-on to our current plan. We’ve had a bit of a head start with dual incomes, but the plan is to wait and build a house in about 2 years. The car will hopefully be a year or so after that, although it might be a car-and-boat-in-one as far as pricetag goes.
The small ticket items do add up. There’s tons of things that are just stuff that we have a whim to buy, but avoid. Things that cost $100, $200, $1,800, at a time. If I think hard, I can name dozens of odds and ends, probably at least $10,000 worth (including that nice mower). If we bought all these things as they popped into our heads, it would seriously impact our ability to save and pay down debt, and maybe even put a strain on the household. And once that $10k of stuff is bought, it doesn’t stop there, it continues on and on with this and that thing you never knew you absolutely needed, until you die or run out of money.
Its all about years of compounding that creates wealth. Those first years of contributing cannot be missed. Funding your try plan number 1 priority after graduation
Great post, WCI, and very inspiring.
Pardon my ignorance, but how do you have 3 401k accounts?
WCI has posted on this before and he will likely include a link to the exact post. But, if I remember correctly off hand. 1. 401K through his ER group 2. 401K for himself through WCI website 3. 401K for his wife through WCI website which she helps to manage. I’m sure we all wish we had access to 162K in pretax savings and accounts. Is it possible to have “401K account envy”. I’m pretty sure I have it. 😉 Not even speaking about what is in those accounts, but simply the 64K in tax savings every year!
True dat!
I keep getting chewed out for explaining this (“Quit rubbing in that you have three 401(k)s” but I get this question from someone every time I mention it.)
My partnership 401(k)
My WCI 401(k)
My Wife’s WCI 401(k)
I’ve got an old one (The TSP) that I can’t make new contributions to as well.
More details on multiple 401(k) rules here: https://www.whitecoatinvestor.com/multiple-401k-rules/
I think you should keep bringing it up. It’s huge for people to understand as they may be able to take advantage of the system similarly. We don’t make the rules, but that doesn’t mean we can’t use them to our biggest advantage.
Thanks for the replies! I learned something new today. And learning is half the battle.
I agree 100% with the premise of the article. We lived in an 800 sq ft house we bough for $43,000 all through medical school/residency/fellowship. Moved to a different state when I became an attending. There, our first house was $163,000 which still felt exorbitant at the time (even though it was less than 1 year’s salary). We didn’t buy the big house until 5 years out when we outgrew the first one (too many darn kids). Keeping housing costs and automotive costs low throughout training and the first 5 years as an attending allowed us to heavily front load our retirement and college savings. This, in turn, allowed us to achieve positive net-worth just 2 years out of training, and $1M net worth around 9 years out of training.
There is no way that we’d be in our current comfortable financial situation had we gone out and bought two new cars and a big house straight out of training. A large house and new car payments really strain your cash flow and seriously undermine your ability to save money. Given the late start physicians get because of the long training period, delaying starting a healthy savings program 5-10 years is truly a financial killer.
Was delaying these purchases really what bought you freedom? Or was it the incredible blog? I save and save and really live on nothing, mortgage nearly paid off, million plus in the market, two pensions on the horizon, but without an alternative source of income, I’m still stuck at the daily (and nightly) grind. No democratic groups within 30 miles, so I can’t cut down on shifts.
It’s really the entrepreneurship that has freed you, not the savings, no?
You still have freedom, just not as much of it.
If you’re living on a small fraction of what you make, and have seven figures socked away, you could potentially, in theory, quit now.
The editor is a little bit skewed due to having his income essentially doubled by the site, that doesn’t require him to work shifts everyday, but it’s still applicable. If he had blown through his money as many physicians tend to do, even at the 600k, 800k, 1M/year level, he wouldn’t have this freedom. The delayed (or abstained) gratification analysis still applies. Just like Millionaire Next Door.
With a nearly paid off mortgage and a million in the market, you could consider yourself financially independent if you were willing to live an average lifestyle.
There is no question that WCIs empire has gotten him to a certain level of FI more quickly. I think the point of all of this though is that the path to FI starts with saving, and many people have to delay gratification to save. His WCI business just allows him to save more (probably like being married to a super successful plastic surgeon)
Yea, a super successful plastic surgeon. Who was an emergency doc the year before. And a pediatrician the year before that. And worked for minimum wage the year before that. It’s been pretty crazy really. Someone down below mentioned that they couldn’t see anything happening to the WCI revenue stream. I assure you I can see LOTS of things that could happen to it that would decrease it dramatically.
I don’t know. I look at all the FI folks, and inevitably they have started a business- no one seems to be living on their savings. Sure, it helped get them to the point where they could launch their business, but I guess I’ve realized it’s hard to just quit. I am not entrepreneurial, and all my family and friends are in pricier parts of the world, so while my savings will certainly lead to a slightly earlier and presumably more secure retirement, I still haven’t found a way to escape my day job.
I think you’re just seeing the prominent bloggers etc. They have lots of readers who you don’t hear from.
That said, I think it’s actually pretty unusual for someone in their 40s or 50s to retire and DO NOTHING that generates income.
Good point!
Jim, you are right (this was another superb post btw, and I wish I had done much more of this 30 years ago. I would have cut 10 years off the march very easily).
I ended in my 50’s with 8 figures in net worth and am doing nothing to produce incomes going forward.
BUT, it took a higher average income than you have, for a good period of time, to do it.
Canadian tax rates and costs make it exceptionally difficult even with a very high income and a very diligent saving and investing process. However, if I had delayed gratification better this would have all happened much more quickly.
Congratulations on everything you have done for your family and for your reading community.
It’s the mindset that “frees” people (as you would put it), not any amount of income. There are countless examples of people in similar financial situations as WCI (and others with far larger bank accounts) who still feel anxiety about taking any time off for themselves. Plenty of them comment right here on a regular basis.
Almost paid off mortgage? 7 figure portfolio? 2 pensions in the pipeline?
Your situation would instantly vault the vast majority of the world into FI from their perspective. It’s instructive that you don’t feel the same way. One of the things I enjoy about the financial bragging in this post (and bragging it is, well intentioned or not) is how much WCI and family enjoy doing things with their money vs. sitting in the counting house all day.
Thank you, and I’m sure it’s a mindset issue- I guess my perspective comes from growing up in an (the?) most expensive coastal city with both friends who came from generational wealth and those who really struggled. It’s hard to reset my thinking, I guess, and hard not to be envious.
It is a general saying that you can’t eat your cake and have it back. No one can become rich or wealthy by eating with his two hands. Without investment mentality, wealth will just be an illusion. Anybody that eats his seed has denied himself of harvest tomorrow.
My only misgiving is claiming 8% returns though I know these are possible. I count on a much lower return, which is part of how we reached FI so much earlier- returns were better than we feared when we planned on retiring at 65.
Have to disagree with those saying WCI’s situation doesn’t apply to other doctors. As Jim notes, they had their first million prior to WCI income. And started EM/ER high earnings 4 years after residency, not earlier, though the military service DID avoid/reduce student loans. And WCI mentions having 4400 sq feet and not even using all the floors. We have 4000 sq ft, only 2 children, and didn’t stop using the top floor until both kids moved out! Do your kids share a room or do you have 4 floors?!?
As I told my staff when I gave a financial seminar to them while a clinic commander (and boy did the German employees think the American system is NUTS!!!), I don’t really know how to retire in your 50s if you only make $10,000 a year. But everyone has some choices to make, and most readers here are privileged to have non punitive choices- I doubt any of us have to choose whether to eat or get medications or clothes like some Americans do after bad luck/ bad choices earlier in life or that week. So a pediatrician can choose to marry another doc or other high earner (or not marry), choose not to have children, choose to live in Nowheresville in the fanciest house in town for less than most small apartments in BigCity, choose to drive cars into the ground instead of back to the dealer to trade for new every 2 years, etc etc. WCI family chose a homemaker wife (IIRC; for some part of their marriage) and 4 kids! As Utahans they don’t mind so much giving up life on the coast but that ‘sacrifice’ is part of their financial success.
And if I were pressed- as a progressive this is an important issue for me to contemplate- those making $10K/year probably need to live with several roommates or family (and I mean share a room, if not a bed), avoid having children if at all possible, take every over time shift offered, and plan for FI which includes going out to eat at restaurants more than once a month instead of the best one in town every night. And vote for those trying to raise wages and offer lower cost childcare, college, and health insurance 🙂 . And move to states that offer more of those benefits.
Us? We work hard to avoid keeping up with the Joneses. Resist a MIL who thinks we need to buy Mercedes new since we are docs. Living in rural AL and having mostly blue collar/ charity worker friends makes us feel like the big spender rich folk in town (though the other local doctors have even huger mansions and use private schools for their kids, we’re not in that social circle). I’ve always said, and counsel everyone no matter their income, if you don’t/can’t plan on retirement income adequate to fund retirement lifestyle you’re doomed to work until you die. Don’t be that guy.
For sure, when I use the word “mansion” it represents a different size house than some docs when they hear that word. But 4400 sq ft is a lot to us and clearly more than we need. We have 6 bedrooms and 4 kids, and two of the bedrooms are guest rooms. You do the math. I have never actually had a period in my entire life when I had my own room except those few early years before my younger brother was born.
WCI,
How do you get by the “highly compensated employee” rule in the 401ks?
In my partnership, all of the partners and most of the staff are highly compensated employees, so it works out. In the WCI 401(k), well, there are only two employees and we’re both highly compensated, so it passes.
It’s good that you found things to actually purchase after you’re hit your magical number. I’ve seen plenty of ultra-frugal folks that end up not willing to bend for luxury despite having saved for much a long time than you.
I’ve certainly let the reins loose a little prematurely, but it is all hopefully for the sake of sanity.
We have ended up making some of these purchases only 1.5 years out of residency, which feels foolish sometimes. However we picked a new car that was less than a month’s gross pay (CR-V) and a house less than a year’s gross pay (yay low CoL). Paid off the car note in 3 months, and on target to pay off loans and house in 5. I don’t feel as bad as a result.
The most shocking thing about this post is an ER doc buying a trampoline!
Yea, I thought about that for a long time. If it makes you feel any better, I think it is the safest trampoline on the market.
Any chance you want to share which trampoline that is? 🙂 We’re right on the verge of loosening the purse strings 4.5 years out of residency and my kids would go bananas for a trampoline… but I worry about the injuries as well.
Can’t remember the brand off-hand, but it was basically the safest one available the year we bought it. Real netting, secured to the ground, even the way the mat is set up is safer- 1/2 the springs engage and then a split second later the other half. The idea is not only can nobody come off the trampoline (where most accidents happen) but if they land on their head it’s softer than the typical trampoline.
Delayed gratification is what doctors do during school and training relative to age equal peers. We can’t wait to stop delaying so usually stop abruptly upon residency graduation. The mistakes we all made are the best part of this post to me.
I bought a 600K house with 100% financing with 250K in debt. I couldn’t sell the house when we moved to change from my first job. Oh, also the foundation was faulty and cost thousands in legal fees to fix. Lesson learned.
A rough guide to delayed gratification and avoidance of impulse buys is to use some time limit for purchase of different amounts. $100-1000/1week, $1000-5000/1 month, more than $10000/3-4 months. Some even have for below $100 which I use this when browsing amazon and I wait an hour. Most of the time for all above ranges I end up neither not buying, or getting great satisfaction from anticipation and anticipation may give as much or more happiness than the purchase itself according to the happiness literature.
Cool post WCI. Haters gonna hate on your triple income(s).
Do you have an article that discusses when to stop adding to tax deferred accounts? Given you put in over 200k per year your accounts could grow to a point where your RMD could put you in a higher tax brackets.
Lets say a married couple both turn 70 1/2 this year. They have 4,000,000 in a tax deferred account their RMD (150k) would put them in the 25% bracket. 2,000,000 or less would keep them at or below 15%. If one spouse passes away that would also have significant tax implications for the surviving spouse when the reach RMD age.
Would love to get your thoughts on overfunding tax deferred accounts.
I’ve written about it many times before, but I don’t know exactly where to send you to read it. You have an irrational fear of “overfunding” retirement accounts because then you’ll have RMDs. Think this one through and let’s throw up the options of what you’re going to do INSTEAD of this “overfunding.”
Option 1: Spend more. Sure, that’s reasonable. If you’re oversaving for your goals, then that’s fine to spend some more. If you’re not, better rethink skipping out on retirement account contributions.
Option 2: Continue to convert to the tax-deferred accounts, but also do as much Roth conversion as possible. That money won’t ever be taxed again, so no RMD taxation issue. This a great option for those in the top bracket now who will be in the top bracket in retirement too. Plus you get to asset protect even more of your money and keep it out of probate. But if you’re in the 39.6% bracket now and will be in the 28-35% brackets later…might not be the right move. Gotta run the numbers.
Option 3: Do Roth 401(k)/403(b)/457 instead of tax-deferred contributions. Exactly the same as option 2 in the end.
Option 4: Invest in taxable instead of putting more into a tax-deferred account. Hold on here. You’re going to give up your initial 39.6% deduction in order to avoid paying 39.6% later AND will pay capital gains taxes then AND will pay taxes on distributions as it grows AND will have it go through probate AND will have less asset protection? Does that make sense to you? It doesn’t to me. Even if you’re worried about the 59 1/2 rule you can just SEPP it. The only reason I can see to do this is if you have an investment opportunity that promises a return so high that it is worth losing all the benefits of the retirement account in order to invest in it, AND if you can’t invest in it within the retirement account. I’m thinking small businesses and real estate kind of stuff here.
But no, I don’t worry about the downside of having a $5M IRA and paying 39.6% on the RMDs. That sounds like a great problem to have.
100% agree overfunding is a great problem to have. But isn’t the goal to try to avoid that 39% bracket now and in the future?
I was more curious about how you plan to approach the “problem” as you get closer to RMD time.
I currently take complete advantage of all tax deferred accounts. Two 403B, and two 457 plans, and was fortunate to have converted all our traditional IRA’s into Roth at the bottom of the market and just before my wife and I started working as full time attendings.
I started reading your blog around the time you started it and I love how successful it has become. Who would have thought getting screwed by a whole life policy would be the best thing to ever happen to you financially. You have really helped me and most likely thousands of others feel confident that financial planning is pretty simple if you just take the time to get educated. Luckily, the biggest mistake I made was using a tax deferred 403b from the beginning and not using the Roth 403b during our fellowship years.
Whole life guys tried to get me early on the one who recommended buying a policy for my first child (who wasn’t born yet) made me realize I needed to do some reading.
Oh and thanks again, You just taught me that you can convert a 403b to a Roth and it does not become a roth 403b. I am confused about the probate part? With a properly drawn up estate plan none of your assets should ever go through probate.
Keep up the strong work!!!
If you retire in your 50s or early 60s, then you potentially can do Roth conversions until age 70 1/2. (You also might want to wait to claim Social Security until age 70 due to the non-compounding 8% Deferred Retirement Credits from full retirement age until age 70.)
If you want to get fancy, you could take a sector-specific approach and make 10 Roth conversions per year, then keep the one that did the best from a tax perspective and re-characterize the rest. Sure, this is convoluted and a lot of work, but you’re retired, so what else do you have to do with your time other than heli-skiing?
No, my goal isn’t to avoid paying 39% in taxes. It’s to pay as much in taxes at 39% as possible! Because that means I have oodles of money. But sure, I’ll do my best to maximize my post tax money and that includes decreasing taxes where possible through things like Roth conversions.
Lot’s of people with oodles of money and are no where near 39%.
I always ask my students and residents why the tax codes are so complicated. Nobody’s ever gives the correct answer. I bet everyone on this site knows the answer.
Agreed. Better to pay at capital gains rates for instance (or defer paying at all) than pay at 39%. But you get my point. If you’re paying at 39%, you’ve got a high income and that’s a good problem to have.
This strikes home at me today as I was pricing out new SUVs. Wife just started her hospitalist job a month ago, we have no student loans, house is 1.5x combined gross income. We have a 2014 car and a 2003 car. We had been wanting an SUV to replace the 2003 car. We’re well above the 20% gross income contributions to retirement accounts, but I still find myself hesitating to pull the trigger. I’m too indecisive between wanting the SUV and then thinking about the cost. Thanks for the timely post.
Gotta strike a balance. If you’re taking care of business, then don’t feel bad spending some. If you were just coming out of residency, delaying purchases can pay great dividends.
We waited until we had kids before buying the SUV. If you have kids it is a must.
It isn’t a must to own an SUV if you have kids. There are millions of people in the US who have kids and no SUV. Don’t confuse needs and wants. We had three kids before we bought an SUVl, but even then we could have gotten by with a sedan or certainly a minivan.
We have three kids also. No way we could fit everything for weekend trips in a sedan as it is we are now looking into rooftop cargo for the SUV.
That being said Mini van versus SUV is definitly a need versus want issue. I don’t much care about what type of car I pull into the physician lot with (unless it’s a mini van), my 09 Camry is just fine. So you’re right we probrably do need a mini van. But I definitly do not want one : )
You could take less stuff too. Or get a large rooftop carrier. Or pull a little trailer.
There are millions of Americans out there with 3 kids who don’t own SUVs and who go on weekend trips. And many who rarely go on a weekend trip.
So I guess it’s a “need” for your lifestyle, but the lifestyle itself is a “want.”
I don’t mean to harp on you, but I think it’s really important for readers to realize just how much of what we spend as high income professionals is really just on wants. Don’t get me wrong. I love SUVs. We have two. They’re great. But they’re not a need and confusing needs and wants is a good way to never build wealth.
I have definitely been deferring purchases since starting as an attending two years ago. I still live in my resident’s apartment, I drive an 8-year-old car, and none of my clothing is fancy. I know that the effect of compounding will never be as great as it is early in my career, so I want to take advantage of it as much as I can by investing as much as possible. I’m currently saving about 2/3 of my income, which I feel is pretty good.
The one thing that I am not willing to defer, however, is travel. With a finite number of healthy years in life, and a nearly infinite desire to see the world, I want to take advantage of every opportunity I can to travel. I do try to combine travel with work trips so that I get some tax deductions, and I use every means possible to keep the costs low (AirBnB, travel points, cooking some of my own meals, drinking wine in the AirBnB instead of the restaurant, etc.), but I am willing to spend money on trips even at this early stage in my career.
@Solitary Diner – Nice work. Keep it up as long as you can. Not to start any sort of spouse bashing commentary, but most of the physicians I know who start cranking up their expenditures do so at the spouse’s and kids’ urging. Good to have a mate who has at least similar financial goals no matter what sort of income you can bring in.
I wouldn’t feel guilty about spending money if you’re saving 2/3 of your income. That is a very rapid path to financial independence.
I find it kind of disappointing that all the talk is about delaying these purchases, rather than avoiding them altogether. We have plenty of money to retire but I have no intention of working only 6 days a month. If that was what I wanted to do I should have turned down my medical school slot and let it go to someone who actually intended to practice medicine. You know, as a career. For forty + years. Like a doctor.
Looking over the list of things WCI lists as ways he spends his money I fund nearly nothing appealing. Vacations in Alaska and Japan? I am far more likely to spend my vacations at the local library or in my living room. Expensive new cars? When my car with 200,000 miles finally died I got a new, used, car. It cost less than a third of the car described in the post. $1,000 for a television set? Not unless I can live in it. $11,000 piece of furniture? Speechless.
I don’t want any of that stuff. I want safe, reliable, good enough cars and reasonable comfort at home. Buying expensive things does not advance those goals. Much of this is manufactured demand. No one needs that junk but some people convince themselves they want it. Then they have to keep spending because whatever psychological need they were trying to satisfy by buying a lot of fancy expensive toys, it did not work. One response “you got conned into thinking you wanted this junk. Be glad you now know better, and put that money into a nice broad index fund instead”. Too often, unfortunately, the response is “The reason I am not satisfied is that I did not spend enough money on junk. I need to get rid of my lousy $60,000 car and buy something really great for $200,000. Then I will be happy.”. And more money gets flushed down the drain.
Instead of delaying gratification and staying on this hedonic treadmill of consumption, try giving up on the notion that spending money=happiness. Don’t buy box seats at the ball game. Take a walk instead. Don’t fly around the world to see another country. Read a book instead. No matter how much you have, someone will stand ready to sell you something that costs more than your networth. Realize you don’t need a yacht. You don’t need a boat. Just downsize your material expectations and save your money.
I bet you’re a lot of fun at a party.
You’re really not going to like this post: https://www.whitecoatinvestor.com/dealing-with-the-guilt-of-early-retirement/
but I think other readers will understand why it was written after reading your comment.
Feel free to spend, or not spend, your money anyway you like, but if your spending is as you describe and you work for 40+ years and you earn even the average physician income, you’ll definitely be the richest Spartan in the graveyard.
Fly first class or your heirs will. I think we’re on track to save something like 2/3 of our net income this year. I think that’s enough considering we’re already financially independent. I’ll spend the rest guilt-free.
foolish spending leads to later retirement
nothing more foolish than wasting money on cars
get off the lease treadmill and buy certified used