I get lots of doctors asking me for advice from time to time. The day before I wrote this piece, I had two online conversations with two separate docs, with two different financial situations, but both illustrate an important principle.
The principle is that a doctor's most important wealth-building tool is their income, and the more of that you can siphon off from your lifestyle in order to build wealth, and the longer you can do that, the better off you'll be. The more wealth you can build, the sooner you will be financially free to do whatever you like. Now, none of us are immortal. Delaying gratification indefinitely just causes you to be the richest person in the graveyard. Moderation in all things. But the lack of patience I see in young doctors within the first few years out of training is appalling.
Grow some patience people! Grow some financial muscles! Just because you don't want to defer gratification forever doesn't mean you can't defer it a little.
Let's look at the two situations, and realize that both of these docs are doing pretty well compared to most of their peers, so I don't mean to be critical of them personally. I've disguised and removed enough details that nobody but the writers will recognize their situation.
Doctor #1 Great Income, Massive Debts, Antsy to Build Dream Home
Doc #1 is a dental subspecialist with a barely seven figure income within just a few years of training.
Assets include:
- $250K in retirement funds
- $750K in cash
- Owns home, practice building, and a lot to build dream home on
Debts include:
- Home: $300K
- Practice Building: $700K
- Practice: $250K
- Student Loans: $400K
- Cars: $50K
- Lot for dream home: $400K
- Total: $2.1M
This doc and partner are anxious to build their dream home on this lot. So anxious they've not only purchased the lot, spent $50K on having plans drawn up, gotten a bid on construction (>$1M), found financing, and made plans for a boat lift for a boat they don't even own yet. But just before pulling the trigger, they hesitate and write me, basically asking for “permission” to start building. They note they're going to build the dream house at some point in the next 3-5 years, it's just a question of when.
My answer was, “Soon, but not yet.” The reason why comes from reading between the lines. Here are a few quotes:
“I stress every day and every minute because I'm only booked out 1 month max.”
“If we add another $1M [in debt] that makes $120K/year in interest alone! That is crazy. We would be totally committed to the bank and if my practice went downhill we would end up being house/practice/real estate poor—making monthly payments and barely getting by. If we pay off all these loans and crank out another 2-3 good years in practice, we could honestly pay for construction with cash if we needed to.”
“When it comes down to it, I want to do the most financially smart thing to do. I can envision not having any debt and making $1M a year and how incredibly free and powerful that would feel.”
“I go back and forth like an insane person about this.”
This doc is falling prey to this idea pushed by society that owning fancy cars and houses brings happiness. But what is making them miserable? Okay, that's probably too strong a word. But what is causing the stress? All this debt is. They know that something could happen to the doc or the practice and they'd be left with a $2M millstone around their necks. They know that despite a seven-figure income, they still have more in student loans than in retirement savings. They're leveraged up to their neck, and it wouldn't take much of a wave to put them underwater. This doc is running on the practice treadmill at 60 mph hoping not to stumble.
Meanwhile, they're paralyzed from moving forward because of too much analysis. $750K in cash and $2M in moderate interest-rate debt. Earning at 1% (before tax) and paying 5% (after tax) isn't a winning strategy.
But the main problem is a lack of patience. If they would take care of business and stop spending money they don't have (don't kid yourself, that's what debt is), they would have all of this stuff they desire AND be financially independent within 5-10 years. Putting that house off for 2-3 years, directing that $750K at the debt, and putting everything else toward the other debts for the next couple of years would make a world of difference in their financial lives. I am positive they would be happier in the long run by delaying building on the lot. What I really worry about though is their habits. They've made a habit out of buying stuff before they have the money. They think in their minds that this process will stop after they build their dream house. But will it? Maybe not. Is someone that bought an education, two homes, a practice, and two cars on credit really going to turn around and pay cash for that boat? Not without changing their habits.
This couple is probably going to be fine eventually (I think) because I see them gradually changing habits. Plus, with that sort of income, you've really got to screw up to not become wealthy at some point. But it's hard to watch when you see just how close to financial freedom this couple could already be with a few different decisions.
Doctor #2 That Burning Desire to Buy a House and Its Consequences
At the same time, I was exchanging emails with doc #1, I was having an online conversation with doc #2.
Doc #2 is a one-physician couple 3 months out of residency. Despite having read my blog for years, they have already purchased a home as soon as they got out of residency. They have less than $50K, and most of it is in an escrow fund designated for repairs on the house they purchased. And those repairs really are mandatory, given that they're currently living in a corner of the basement of the house. The questions they wrote me with were really about how much to pay for their fourth-quarter estimated tax payment in January.
But what I took away from the conversation was just how many awesome uses of money are calling for that first year of attending paychecks. I mean, think about all the stuff that most docs can do with their first 12 big paychecks.
- Pay off credit card debt they've had for years in one fell swoop
- Pay off their cars
- Save up a real emergency fund for the first time in their life
- Backdoor Roth IRAs
- Roth conversions of any tax-deferred retirement accounts started before or during residency
- Individual or employer 401(k) (preferably Roth in the year they graduate from residency)
- Save up a home down payment
- Estimated tax payments
- Final tax payment due in April
- Next year's Backdoor Roth IRAs and individual or employer 401(k)
- Maybe a 403(b)/457(b)/401(a) for academics
- Pay off student loans
- Start 529s for the kids
13 things and we haven't even talked about anything that increases your lifestyle yet! I don't see how anyone can be even semi-responsible financially without living like a resident for at least one year. The cash flow challenges that first year are tremendous!
Now, add on to that buying a house, especially one that needs repairs, and then figure out how many of those above items you're going to leave undone in order to buy the house. I would argue that for a first-year attending, getting into the big house is the least important of those items. In fact, it's so unimportant I left it off the list completely! I put saving up a down payment on the list, but not the actual purchase. That's completely intentional.
Delay, delay, delay.
What is making doctors buy a big house as soon as they walk out of training? Impatience. That's it. Sure, the mortgage and realtor industries aren't helping, but at the end of the day, doctors think they'll be happier if they get into the big house right away. It just isn't true. Have some patience people! Rather than having to choose whether to pay off your student loans or max out your retirement accounts, do both by not buying that big house right out of residency.
Doctors just can't see the end from the beginning. It's the classic tale of two docs. One buys the big fancy house right out of residency. The other does not. 15 years later one doc is financially independent and contemplating early retirement and the other is running on the practice treadmill as fast as he can, feeling burnt out, and wondering if he can hold out to 65 or 70. What does it all go back to? That house purchase. Not so much JUST the house, but the house is the symptom of the disease. The disease is impatience. An attending physician can buy any reasonable thing she wants. But she can't do it all right now. Besides, if you bought everything you wanted in the beginning, you don't get to experience the joy that comes from a gradually rising standard of living. Choose wisely, my friends. It could make all the difference.
What do you think? Why do you think doctors are so financially impatient when they come out of training? Is it societal expectations? Is it our own pent-up demand from years of deferred gratification? Is it exactly the same desires as everyone else coupled with a higher income? Comment below!
Dr. Dahle at his best. Patience is certainly not my strong suit, but the times when I have wielded it I have generally been rewarded.
The irony is not lost on me that the doc at the beginning of the career cannot wait to get into the “forever” house, and the doc nearing the end of the career (aka me) cannot wait to ditch the “forever” house.
That is exactly right. I can’t wait to sell our custom McMansion, built in 2003, right after we paid off our student loans ($120,000), when I was 39. It cost about $560,000. Unfortunately, it’s currently worth only about what it cost to build. I think if it as my worst financial mistake and it cost me 10-15 years of retirement in comparison to staying in the starter home we bought for $102,000 in 1994. That one, I still own, and it’s a rental worth $80,000 despite the 24 years.
Wow. That’s some pretty low “ROI” for those homes. What geographic area?
This is great, and the reason I tell my residents about your site.
I think most of it comes from deferred gratification during training and they now feel like they “deserve it.”. Not just for the doc, but often for the spouse who has delayed their gratification for years, too. “What do you mean you are finished with training and you want us to live like this for another two years? I’ve waited long enough.”
However, they fail to realize that a bigger house six months from now just feels the same as the house they currently live in… Just bigger and more expensive .
The best decision I made when finishing training was to wait until my student loans are paid off to by the house. It’ll be 190k over about 20 months. That’s not possible if you expand your lifestyle greatly after finishing. You can expand it a little (I recommend about 10% of your pay increase after training)… But you can’t expand to cover all of your increased pay.
The problem is that they haven’t realized how much the debt is crushing then and how great it would feel to he out from underneath it. If they wanted that freedom as badly as they want the house, then they would be set.
Thanks for the good reminder! I’ll be sharing this one.
TPP
Great post and great examples. Patience is not my strong suit for things like waiting in line at the store or at the lift-ticket line at the ski resort. But I managed to cultivate strong patience for wanting “things”, and that delayed gratification muscle served me very very well. It’s a key skill to have if you want to get to FI.
Agree about above. For us we also have the costs of childcare, medical expenses (in our case infertility treatments), relocation (we had to buy two cars since we lived in NYC during training), etc. All competing for that paycheck.
I’m glad you keep writing about this. Those first few years influence -and almost determine- the rest of your financial future. I can’t seem to convince many residents of this. Most buy a house (many even during residency) and a new high-end car when they get their first job. They don’t have a plan to attack their debt. It is scary to watch. Making wise choices during those first 2-3 years and you will have all kinds of options down the road. During my first few years of practice, I boosted my earnings, kept expenses low, and paid off debt. Now I’m FI. It was the same plan followed by WCI and Dr. Fawcett. Simple, but not easy. It works.
I waited until our combined student loans of $120,000 were paid off and then built the 3800 sq ft McMansion on 4 wooded acres for a total of $560,000. It was a horrible financial decision.
1) Never build more house than you need
2) Never build a house in a “non-growth area”
3) Consider the big house also has bigger everything: taxes, utilities, yard care, maintenance and repairs, etc.
4) The difference between an expensive house and a more moderately priced home may cost you up to 10 years of retirement.
Were I to do it over again, my dream home would have been about half the size and the money saved would have been put towards the kids college funds and retirement in equal measure.
I never understood this obsession to be a home owner ASAP.
For me, the appeal would be to finally stop having to move! I had to move twice in residency, once for a one year fellowship, and now once into a rental for my 1st year as an attending, and again once when I buy a house as an attending. It’s a giant pain in the butt, especially with kids. And if you get a bad landlord who doesn’t look after the house or uses an incompetent handyman, like my current rental, you’re hosed while you’re staying at the rental.
All that said, I’m still renting this upcoming year out of fellowship, but I can see the appeal of just buying and getting it over with.
We bought a home for our 4-year residency, and another one in our new city after residency (sorry, WCI). May not have been the best decision financially, but we had to factor in emotional items too. In residency, my wife wanted to end each day at OUR home, not a rental, when taxing herself 60-90 hours per week at the hospital. We were planning to have our 2nd kid during the first year post-residency (making his appearance tomorrow actually!) so made the decision to buy right away. Fortunately we didn’t suffer any financial calamity related to the house in residency and her practice so far is everything we could want it to be.
For us, it’s not the new car or expensive travelling. It’s the $4k to get the house painted, $6k for the fence, $15k for the bathroom remodel, etc. These sure eat into that attending salary.
We do our best to follow ‘Moderation in all things’!
Great post. Made this mistake amongst many many others when we finished training 6 years ago. But I see the current residents and fellows planning on doing the same thing. Not much has changed. And it probably wont anytime soon. Our medical training does not prepare us for real life and finances in any way whatsoever. I have known residency programs where financial advisors will come and give some talks but then those residents get suckered into buying whole life insurance policies. Sadly these mistakes will continue to be a part and parcel of being a physician until ACGME realizes preparing residents for real life is far more important than the ridiculous core competencies they come up with. I read the WCI book and took the course recently. If reading that book could be a part of residency training, I think it would prepare our future generations well. Maybe time to retire House of God and replace it with the WCI book.
the schools should not permit these insurance salesmen into the building
probably the school’s administrators know no better
Right out of residency in 2013 we bought a 1600 square feet house for $138,500. We paid off our student loans. We paid off our house. We have been very happy here. It was a lot of space when we moved in. But with 2 children added in, it is time for a little bigger house.
Now we have the dilemma of being able to buy most any house we want, but in what size, location would we be happiest in. Views of the mountain or the water? Packed together in a suburb? Larger lot for the kids to run around on? Renovated older house? At this point, how do I seriously decide between $500,000 houses vs $800,000 houses? The $300,000 difference is a lot of money, both in total amount and monthly cash flow. Would I rather spend my extra money on vacations, toys, giving, or the house?
Go on the low end. The new tax law makes it even less advantageous to own a bigger home. It’s been estimated that 90% of people will be using the higher $24,000 standard deduction rather than itemizing due to the new tax law, making mortgage interest useless.
We anticipate still using the itemized deductions each year due to charitable giving. So the mortgage interest will still come into play. But having the interest modestly subsidized doesn’t mean we would come out ahead by buying the bigger house. It just makes the sting of it a little less severe.
The more I think about it, the more I can imagine having fun with the extra $300,000 while still being happy in a smaller house. Luckily, we’ll be moving in with our parents until we find a place we like, so we will not be in a rush to buy.
For those living is “high tax states” (e.g. NY, CT, CA, WI, IL) it seems to me that the Tax Cuts and Jobs Act’s $10,000 SALT (State and Local Tax – (state income tax and local property tax)) limit along with the higher standard deduction combine to make it “even less advantageous to own a bigger home” going forward, especially when the home is ultimately owned mortgage fre
Do what you feel will make you happier. My life changes last year when my father died young (58) . He was worth $20m and worked hard. His biggest concern every year was how to pay as little tax as possible. He spent money on the things he loved, but I wonder now if he would have changed anything about his life.
I enjoy work, I’ve paid off my student loans ($380k), have a small practice loan. Overall I’ve been responsible, but my drive to become FI super early in life has changed. As WCI preaches, I’ve delayed early in my career, just like you obviously have.
Given the changes in my life, I’ve decided to shift my paradigm. I’m going to spend money on the things that will make my life more enjoyable, to the extent those things can do that. If I have to work a few extra years because of that, then so be it.
It sounds like you’re in the position that either choice isn’t going to change your life. If you can honestly afford $800k and still same for retirement and other stuff, and you, your partner and family will maybe be happier, do it. If it won’t improve your life satisfaction one bit, don’t do it.
The best part about personal finance is that it is both finance, and personal. How wonderful that you’re in a position to be able to apply your values to those questions!
It is great to be in that position. It is largely due to following your advice. It hasn’t been until the last year since paying off student loans that I’ve been able to do this.
I love working, and my future prospects are exciting. If I had to work until 60 instead of 45, I’d be thrilled. So I really don’t mind spending more now to maximize what I do with my free time with my family.
Since we don’t know how long we’ll have the gift of life, I’ve tried to balance what I think my possible future self might want versus what my today self really wants.
This commenter should just buy the house that’s best for his/her situation and what they want out of life.
As a newer physician out of trainining I definitely understand the desire to get a home. I purchased one less than a year out of fellowship. My spouse is a physician and we have children. After a couple of years in a NYC aparment, we were both in agreement to purchase a home when we moved out of NYC. Probably not the best financial decision, but the happiness and space we obtained were meaningful. Being able to host family members who may have been neglected for a period of time has been great. Also, finding out that having a mortgage gave us one of our very few tax breaks was great too. I definitely understand the financial wisdom of not buying a home immediately but I don’t think that every new physician should think that its a financial catastrophe if they do so.
It’s only a financial catastrophe if you have to move again a year later because the job doesn’t work out.
Can I suggest – with respect – as I have been a fellow sufferer of this malaise- that the problem for these 2 doctors is primarily greed rather than impatience?
Greed certainly implies accumulating more of everything, but I wouldn’t expect massive debt to be on anyone’s Xmas list.
I guess greedy versus reasonable is in the eye of the beholder. One could argue that all those who live in Western nations are greedy from a certain perspective.
This reminds me of two quotes; the first two from King Solomon several thousand years ago and the third from the 70’s TV show, Kung Fu.
“Steady plodding brings prosperity. Haste speculation brings poverty.”
“Don’t build your house and establish a home until your fields are ready, and you are sure that you can earn a living.”
“Patience Grasshopper. Patience.”
I believe it is the lack of contentment that drives our lack of patience. We must learn to be content with what we have. That is where we will find happiness. Happiness is not found in a bigger house, or an expensive car. Happiness is found when we learn to be content with what we have. More debt will not create more happiness.
This is probably a good place to say to read my book, The Doctors Guide to Eliminating Debt, before you buy that piece of land for your dream house. Everyone I know who has become debt free, is much happier that way. They don’t tend to go back to living with debt again.
Thanks for pointing out the importance of patience. It is a big key to success.
Dr. Cory S. Fawcett
Prescription for Financial Success
The list of 12 things to do with your bigger attending paychecks is great. Very concrete examples of what you can do with the extra money to get your financial life in order while living like a resident after finishing training. I am doing all these now, but I wish I had been more in tune with this when I finished training, but better late than never.
Dear WCI,
Although I am basically FI at this point with a flourishing practice (knock on wood), I still enjoy reading your blog every day. About 1.5 years ago, I fit the criteria of doctor number one in your scenario….not exactly, but in a similar situation. We were approaching the decision of whether we wanted to move and buy our “dream home” or stay where we were at. I REALLY wanted to move. But the economics just didn’t make sense. We would have had to go back in to massive debt to purchase our 2-4 million dollar dream home and then I would have HAD to continue working my butt off for the next 15 years just to ensure I could live in said home and still retire at some point. Based on the state I live, we would have been paying more than 4k a month in property tax alone!
I kept reading your, and other info and decided the best course was to stay put for the time. We dumped 175K in renovations into our current house and have another 100-150K to go, but love what we are doing with it. Also, I could retire now if I really needed to. The delayed gratification concept is one people really need to keep in mind. If all keeps going well, I can still move in 3-5 years into a rediculously huge “McMansion” if I want to and I won’t have to do it with any debt. Keep reading and listening to what WCI preaches people.
Congratulations on your success. Sounds like a great place to be.
I think part of the problem is just not understanding that this huge paycheck, making monthly what we used to make in a year during residency, is not limitless. I remember when my husband finished residency in 2014 and we got his first contract, I just felt like the world was our oyster and finally we could purchase EVERYTHING we had been waiting to get. Fortunately, between signing the contract and actually starting his first day of work, I found this blog and cut back on my daydreams a little bit. But talking to many of our med school friends, they felt the same way about the potential of their new paycheck and it was a bit of a shock how quickly it all drained away when they started committing it to fulfilling all of their big financial dream purchases. Once you get locked into a home, nice car, lots of good vacations, student loan debt, etc, it’s pretty crazy how quickly the money disappears and how this huge paycheck doesn’t feel so huge anymore.
We didn’t do everything perfectly (we bought our dream home 6 months into training, but I think my definition of dream home compared to others is a little more modest as it cost us about 1.2X our current yearly salary, about 2X his starting salary…but we had just had our 4th child and we were tired of his 1+ hour commute) but we paid off his student debt in 2.5 years, our current net worth just hit $1M, the kids all have a good start on their 529s, and we are on a 15 year low rate mortgage. Although our lifestyle has definitely inflated to what feels to be very extravagant (8 weeks of vacation…and we use every single one of them for a trip of some sort…including Europe on a budget as well as a road trip to Mount Rushmore that only cost $600, including hotels/food/activities…#balance), yet we are still saving a minimum of 30% gross with plenty leftover for all our fun things. We were lucky that in the 2 years to make partner, his income only gradually increased and we got used to living on his pre-partner salary and I quickly realized that I could throw his quarterly bonuses into paying off debt/building wealth without feeling a pinch on our new lifestyle.
But periodically my husband will make a remark about a frivolous purchase along the lines of “I just made $1800 today, we can afford that…” and I get to remind him that he only takes home $1150 of that money, and it’s already spoken for our mortgage, retirement savings, etc. Fortunately, we are pretty frugal about most things (cheap taste, to be honest) so the frivolous purchases tend to stay under $100…in which case, yes, we can afford it. 🙂 But I think that so many new physicians just remember the gross amount they are making and how it seems limitless and they could NEVER actually spend it all. They haven’t realized yet that the money is already committed to X, Y, and Z and therefore not really available for them to use for this new big purchase.
Anyway, excellent post as always. Glad I found your blog before I started making too many mistakes and that we’ve been able to be smart about most financial things since then!
Having made the same mistakes myself I definitely know that the urge to reward yourself after decades of sacrifice is very strong. It doesn’t take much to convince you that you deserve it. All my friends finished college and had homes and starting families, and here I was 5 years later and still living like a college student. It was almost like I had to buy in order to just catch up to them. I didn’t have these financial blogs when I was going through this (finished med school in 97) but I would like to think if they were around I might have gotten off to a better path.
Looking back now, in the end those mistakes made me into the person I am now with a much stronger interest in learning about financial matters.
In your first example it is amazing how that dentist is sitting on $750k of cash. That’s losing money right there just by inflation erosion and the fact that he doesn’t throw the majority of it at debt like you suggested means he’s not taking advantage of the interest arbitrage. I hope he does have a follow up on whether he has followed your advice or not (my feeling is if they have already spent so much money into plans right now, etc, that they almost committed themselves to proceeding and were just hoping for your greenlight at the last minute and probably would proceed regardless). With that level of salary, 2 years of status quo living would wipe out all their debt and they would be able to make significant strides to financial independence shortly after.
If possible, can you tell us what specialty the dentist is in and is that his income alone? To be making close to 7 figures a few years out of training is absolutely amazing!
orthodontist, oral surgeon, maybe endodontist. Probably in a rural area with little/no competition…it’s more common than you think.
Could be a pediatric dentist also. Just sayin’…
I can’t recall right now, but in a well run practice I have seen orthodontists, OMFS, periodontists and endodontists all doing that well, even if the averages are much lower.
Back when I was applying to med school, my dad and I had a conversation about the military. He is a retired military doc. He said I could either pay back debt by being in the military for 4 years after training, or by living like a resident for 4 years. Either way the med school debt is gone 4 years after training (but non-military I get to pick where to live). Long pipeline to fully having that attending salary either way. Easy decision. I actually paid off my student loans in less than 3 years. THEN we built our dream house. I still cannot understand why people are so anxious to jump straight into that attending salary when they haven’t paid for med school yet. I agree those first years are so critical!
I am/was the typical physician right out of training. Started building my dream house and even bought a boat before even beginning my student loan repayment! I didn’t even stay at that job for more than 8 months before moving on.
Next location, SAME mistakes. Only this time, the dream house construction was costing even more than the last! One day, my wife and I were sitting on an outcropping of rocks on the edge of the beach discussing all the things we wanted to own. THEN we started talking about what kind of monthly payments these things would entail. All the blood drained from my face when I realized the monthly earnings necessary for this lifestyle. Thankfully, very shortly thereafter, I stumbled upon Dave Ramsey’s radio show. To some, his advice isn’t necessary aimed toward high income individuals. To me/us, it saved our lives and marriage.
Beans and rice started shortly thereafter. I’ve been fortunate to have a good income all of this time, and knocked the student loans and car debts out of the park. Without skipping a beat, we stayed on rice and beans, and paid off our dream house. to become completely debt free.
I am now 46 years old, with a current savings of $3M and a paid off house worth around $1.2M. And no debt. Despite the fact that we would be much further along without it, and the fact that it is not worth what we paid, I don’t regret the house. My job has seemingly been 1 frustration after another all these years. My wife and I are very private people, and we see our house as our safe haven. It gets us away from the world, and has actually helped us through all of this.
Initial plan was to either go part time or retire at age 50. Several weeks ago, I finally reached my tipping point with my job. My wife and I are back to beans and rice. New goal is savings of $4.5M with paid off house. Plan is to retire or go part time now at age 48. Would really love to stay in our house. Our other vice is travelling. Kind of expensively…….!
Anyways, just another data point regarding the house buying thing!
Congratulations on seeing the light and doing a financial 180. I have made similar mistakes (not the construction one but I trump that with an incredible messy bitter congested divorce that gutted me when I was about to turn 40 (check my blog because I am currently chronicling each mistake as a post (5 total) and the end total hit to my net worth was eye opening). Now I have turned my life around that I too have a positive net worth breaching the 3 million mark (I am 47 and was in the negative post divorce at 40 so the turnaround was substantial in the short time). I hope to retire at 55 at the latest and more likely 53 when my daughter leaves for college). Could probably do a lean fire now but shooting for a fat fire personally (ultimate goal is to get to 125k/mo from assets).
Congratulations to you as well! How to I get to your blog?
my blog is https://xrayvsn.com
the post describing my issues with lifestyle creep specifically is: https://xrayvsn.com/2018/05/08/i-have-pretty-much-made-every-mistake-in-the-book-part-iii/
If you live beneath below your means you will retire well above your means
Savings has to be acquired from your parents
If you spend like crazy, where did ynou learn this behavior; probably spoiled from parents
Agree completely on this post, and it’s good to get frequent reminders from WCI, PoF, etc on this vital information. Other factors that can play into this issue of young doctors avoiding “delayed gratification” are the millennial social media culture, and the length of training between residencies.
I’m a millennial ortho resident, I grew up through the end of high school and beyond, with my life saturated with social media. These days, after spending another full day in the hospital, between cases I browse apps like Facebook and Snapchat. I gotta tell you, it doesn’t feel too good watching your med school friends (now final year residents in shorter residencies) and college friends posting almost monthly pics and videos of their next travel destination, while I’m running on little sleep and haven’t been on a formal vacation in nearly a year.
Watching your ED/IM/peds friends, with whom you persevered and survived medical school, signing onto good jobs while you still have double the time left in training, can beat you down. But seeing these posts and comments from physicians who are very successful, gives me the fortitude to continue on. Just keep swimming!
Decrease your social media if you feel envious. Replace it with some good blogs like this one. People will always post about consumption but you do not have to fall victim to it. You also might benefit from reading MMM.
Thank you for the reply Hatton1.
I actually find myself decreasing my use of social media as time moves forward. I consume a great deal of great FI content, including the WCI network, MMM, BigLaw Investor, etc. Thanks to the work of these individuals, I’ve been able to formulate a solid financial plan moving forward.
My over-arching point I was trying to make (and probably did so poorly), was that the great message and example being demonstrated by delayed gratification, living below your means, and financial freedom, can be more difficult to communicate to younger physicians due to the nature of their social lives and upbringing. Being a late 20s/early 30s physician has some different stressors and influences on choice than being a physician in even your late 30s and beyond (as I spoke from personal experience). Posts like these from WCI are important, and understanding the social power that social media has on younger professionals can help shape the FI message from successful physicians to help younger people make positive changes in their lives.
As an orthopedist, you’ll likely have the last laugh thanks to what is usually a very good income at the end of your long tunnel.
Good point, WCI. I am fortunate that my chosen specialty generally receives a higher income than others. It seems I’m in the ultimate long-term game: Long training, high student loan debt, and long “delayed gratification,” but higher income, achievable FI, and having the coolest job in the world (I mean, who doesn’t love reducing fractures!?). Thank you for helping me keep the future in perspective!
Lived like a resident for 2 years. Paid off student loans. Ok, I did get a shiny new mid sized SUV. Moved locations 2 years later, made 50k on our inexpensive house, bought OUR version of the dream house (still only about 2x our gross income). Now 15 years later, at age 45, house paid off. Vacation condo could be paid off with a check, but the interest is gone, so we’re investing that. Getting close to FI with saving and investing- 4 more years. I’m Peds and hubby has been retired to raise the kids for 9 years. So glad we waited!
Great post. All about managing expectations and taking the long view. And good habits – thanks mom and dad and nan! Have tried to impart the same to our children – they are no doubt tired of hearing about the time value of money and the positive and negative effects of compounding.
Nice post WCI! I have an emotional battle with this housing issue every day. We too were all eager to build the dream home, bought the 5 acres, paid a ridiculous amount for an architect, and miraculously put the plans on hold. Best decision ever, so glad we waited. But we still have the 5 acres sitting there with all that money tied up in it. Also there’s the emotional connection of already designing the home and envisioning your life on the land. I think the most logical decision is to sell the land and be content with what we have but it is so darn emotional! AGHH! I wrote a post in the forum if any of you are interested. https://www.whitecoatinvestor.com/forums/topic/anyone-regret-their-decision-to-custom-build/