By Dr. Erik Hofmeister, DVM, DACVAA, DECBAA, MA, MS, Guest Writer
I have been reading this blog for several years. I read all of the blog posts and comments (except the whole life comment threads, because I don’t actually have infinite time) and just finished my second read-through. I am a veterinary academic and my wife is a pharmacy academic, and we are financially independent in our early 40s, largely thanks to Mr. Money Mustache and The White Coat Investor. In Top 10 Things Bogleheads Get Wrong, a commenter suggested Dr. Dahle write a post about things the WCI gets wrong. He indicated he isn’t qualified to write that post but solicited a guest post about it.
I find this to be an incredibly hard post to write—not only because of all the things WCI gets right, but because the authors of all the posts on here are incredibly humble. How do you find a flaw with someone who says, “So you don’t think a landlord should use a credit score as one of their tenant screens? I guess you’re entitled to that opinion.”? WCI even acknowledges that, for some people, whole life insurance can be a good idea! In the Bogleheads critique, Dr. Dahle included things that the members there say but that Jack Bogle probably wouldn’t. In that spirit, I also included some themes I have noticed with the commenters. So, what does the WCI get wrong?
#1 One Job
The litany of “one house, one spouse, one job” is often recited here. I think it’s a pretty good guide. I can imagine in private practice you develop your referral base; have patient word-of-mouth; and build a happy, productive team. But, in academia, the one job rule would most likely see you making much less than if you moved around a couple of times.
Each year, the dean and department heads get a certain amount of money to spread among the faculty for raises. Sometimes, this amount doesn’t even allow for salaries to keep up with inflation. At one flagship R1 state university where I worked, no one got a raise for many years after the Great Recession. Many full professors who stay with the same university for 30 years end up making only slightly more than the new-hire assistant professor. At some universities (notably Ivy Leagues), the bump in salary when you are promoted to associate and full professor is substantial. At others, it’s only a few thousand dollars.
There are really only two ways to bump your salary substantially: move to a new job or threaten to do so and get a retention offer. For the retention offer, you get a job offer from another university, then ask your current institution to match or beat it to keep you. So, if you want to stay at the same job and improve your financial situation, you need to ACT like you are going to another job. I’m sure there are other professions where the one job rule doesn’t work—let us know in the comments!
#2 Kids
I’m not sure if it's the types of people who comment on this blog, physicians, my own social circle, or something else, but y’all have a lot of kids. I lost track of how many comments I saw along the lines of, “I make $400K, have a stay-at-home spouse, have 5 kids, and can’t afford to save anything.” I suppose you can’t get rid of kids like you can the lease on your BMW, but I think the tone of advice given to these posters is different from the tone given to people who went to Harvard. We hear repeatedly about how you shouldn’t attend an expensive school, which is fantastic advice and something I wish prospective veterinary students would listen to more. And, to the site’s credit, a columnist recently admitted their kids are luxury items.
Kids are expensive
I’m not suggesting that we shame commenters who had kids or censure them in any way. But I think it needs to be part of the conversation. “You had too many kids,” and, “If you want to make it easier to be financially secure, have fewer kids,” are messages that I really think are lacking on the site. I have several friends who stopped at one child (or didn’t have any) because of finances. One of my good friends said, “We could give two kids an OK life financially, or we could give one kid a great life.”
I understand there are complex cultural, religious, and personal reasons that people have children. But I think you could find someone who could argue the same for going to Harvard and leasing a BMW. So I think a better balance could be struck on this point.
#3 Tax Preparation Software
You all know the software I’m talking about—the name is nearly synonymous with tax prep software (like Q-tip for cotton-tipped applicators). I think they’re an advertiser, so I don’t want to call them out by name, but I doubt they are “one of the good guys”. They may be why the tax code is so complicated and are almost certainly responsible for why you can’t file your taxes without tax prep software or an accountant (I realize WCI has done this by hand, but I doubt many readers do).
I appreciate everything WCI does to make sure his recommended pages are “one of the good guys,” so this one is confusing. It’s particularly remarkable given that he has called out this very problem in a blog post. Like most of you, my taxes aren’t the easiest to figure out, so the free-file is not an option. I had used the big name company for years to do my taxes, but just last year found some alternatives. In researching this post, I discovered the new company I found may also be up to some shenanigans. OK, you may not be able to win with tax software. Welcome to America. At least you can find less expensive options than you-know-who.
[Editor's Note: In response to this, we removed Turbotax from our recommended list, even though I used them successfully for years. No sense looking bad in the eyes of even one reader for what we ever earned off that partnership (a two-figure amount annually).]
#4 Contribution vs. Conversion
I know, I know, this one’s rather nit-picky. I appreciate that there are “Back to Basics” posts to deal with topics like this, but I haven’t seen one on the blog yet that covers this particular problem regarding IRAs. It became acute for me when I was listening to the podcast about the five-year rule for Roth IRAs. There are different rules for conversions vs. contributions. It was suggested to read the Kitces article for more detail, so I did. But I still didn’t understand. What’s a contribution? What’s a conversion? Is what I’ve done for the past few years for a backdoor Roth IRA a contribution or conversion? How do they differ?
I finally understood it after diving into 403(b) vs. Roth 403(b) contributions and I think I know what the problem is. As a high-earning professional, most of us have never had the option to contribute to an IRA. A contribution is made into the account. In the case of an employee, the money that gets sent to your 401(k) or 403(b) is a contribution. When you already have money in an account (such as an IRA) and then move that money into a Roth account (such as a Roth IRA), it is a conversion.
It doesn’t help that the clock on one of the five-year rules is started by either a contribution or a conversion, even though “contribution” is consistently used to describe when the clock starts. My conclusion is that you can withdraw your Backdoor Roth IRA conversions (max of $6,000 in 2021) after five years, but you can’t withdraw the earnings until after you turn 59.5 years old and have had any Roth IRA for five or more years. My point is, a “Back to Basics” on this topic would be welcome, emphasizing that IRA contributions are probably unknown to us because we can’t do them due to our high income.
[Editor's Note: A post on the five-year rules is on the to-do list; until then, this one will have to do.]
#5 Personal Stories on SPIA, CRUTs, and Pensions
We all know about the one good annuity—SPIA. But … have you ever read a comment by anyone who bought one? I haven’t yet. I would LOVE to hear what that process is like, their experience, why they made that decision, and how it has worked out for them for 5-10 years. I’m sure those people are out there. Given that WCI suggests you seriously consider a SPIA, is anyone doing them? If not, why not?
What about CRUTs? Has anyone actually done one of these? What’s your experience like? Why not give money to a charitable trust instead of flushing 
gains out to another charitable contribution? How did they find the charity to give to? Although I’ve seen one comment by someone who started one, I don’t think I’ve seen any by people who have designed their retirement strategy for them or who have used them several years down the line.
Has anyone tried to buy years of service from their organization that offers a pension or worked for two government entities that each offered a pension? How does your math work out if your pension doesn’t kick in until 60 but you plan to retire at 45? Has anyone had a small pension and then covered the balance with your investment portfolio?
[Editor's Note: If any readers HAVE used a SPIA, a CRUT, or a pension and would like to write their own guest post detailing their experiences, here is the guest post policy. We'd love to hear from you.]
Maybe answers to these are all lurking in the forum—which, to be clear, I have not read consistently. And I appreciate that WCI can only post what he gets. It’s just surprising to me that there are topics that come up on the blog but which, apparently, none of the readers are interested in sharing their experience with. It would be nice to get more of these personal stories.
I really had to dig for four of those (the kids thing I noticed in the first 30 blog posts or so). I thought I would take a stab at this incredibly difficult topic, being a serious WCI fan and aficionado. I have started teaching personal finance to the veterinary students, and maybe I can make a tiny fraction of the difference WCI has made. I expect there will be rejoinders to all of these, which I welcome. Thank you so much to EVERYONE at the WCI for what you do—this is an absolutely amazing resource and I am continuously struck by how generous, patient, and kind the organization is.
What do you think? What does WCI get wrong? Where else are there gaps that WCI needs to fill? More whole life? More crypto? More stock picking and options? Comment below!
[Editor's Note: Dr. Hofmeister is a Professor of Veterinary Anesthesia at Auburn University and blogs about veterinary academics at vetducator.com. This article was submitted and approved according to our Guest Post Policy. We have no financial relationship.]
ER doc and former wannabe academic physician here.
Agree about the “one job” thing. In addition to academia, it applies to medical specialties like EM where we don’t get to keep the patients we see.
I suspect that as more and more medical practices are bought up by large hospital systems and corporations, this will apply to more and more specialties. In the name of profits and stability, doctors are increasingly anonymized, made interchangeable, and otherwise separated from their patients. Additionally, private equity-backed groups and other large corporations are now starting their own residencies, and whatever their intentions the effect of this will be an oversupply of docs in EM and potentially even, eg, derm and general surgery within the next decade. The surgical subspecialties do not yet seem hit as hard.
Eg, my smallish ER contract management group (CMG) recently merged with a very large CMG. Despite the CMG’s rhetoric, this has resulted in less ownership and financial control for us pit docs in one big way and many small ways. This same CMG has 6 of its own residencies already, giving it a steady supply of new docs that tow their line and making my continued employment a bit more precarious.
The best response that I can see is to have eggs in multiple baskets. I recently got into telehealth as a side gig that is hopefully sustainable (although this field also seems ripe for disruption by the corporate whales and MBA types who know all the tricks to cut costs). I also maintain credentialing at multiple back-up ERs in case I am displaced from my main shop.
I think WCI and older docs often have the “one job” perspective because they got into their fields at a time before all this consolidation, when individual relationships mattered more. WCI took a plum job at a small democratic group (SDG). These jobs are now very rare and are the envy of EM residents about to hit the workforce. As a decision-maker in the group, of course he has great job security, so why wouldn’t he stick with his one job?
What this post demonstrates is that we’ll run just about any guest post sent in by a regular reader. There is great value in having multiple voices on this blog. Now if I could figure out how to do it for the podcast.
Ha, I never actually listen to podcasts (tooooo sloooow), but I would enjoy ranting about corporate medicine and its effect on personal finance on a guest podcast. Not sure that’d be great for my job security though!
You gotta sort out how to listen at 1.5 or 2x speed- changed my CME life!
I appreciate this post. Primarily since WCI allowed and encouraged. Additionally he humbly did not offer rebuttals after each point!
War Eagle!
I have a CRT (IRA) and used the hospital in which I worked in EM. It’s a beautiful hospital, well-run, and with the donation came VIP status as a patient, which I hope I’ll rarely need, but probably will. The process was quick, they hired the attorney, and paid all the fees. It was prefect for me as I have no spouse. I can change the “Recipient” anytime. All I finally had to do was to name the trust on the beneficiary line in my Vanguard IRA account. James Lange’s book “Beating the New Death Tax is helpful as is the WCI’s podcast on the subject.
I agree that kids are the third rail of financial management advice. But the younger docs need to hear all sides of the issue and probably should be addressed more often.
Of all the things I use, my tax software program is definitely one thing most fairly priced to me, no matter the “shenanigans”. Last year, I ran Turbotax and H+R Block side by side and they came out identical, both state and fed. I prefer H+R but that maybe be because I’m more used to it.
This post is another great example of the honesty and transparency exhibited at WCI. Why can’t the rest of the internet be this open and civil?
I think WCI makes a mistake regarding HPSP and the cost of military service – He is 99% correct but his personal choices and values color his opinion in a way that wouldn’t apply to some other docs:
a) he chose to do a (lower paying) civilian residency rather than a higher paying military one. This choice affects all of the finances associated with overall service – fewer years in grade, less service time towards transferring your post-9/11 GI bill to a child, less money as a resident when you could really use it, and way less pull with your specialty leader when it comes to getting the best assignments and locations…). For most HPSP docs, you are the most financially secure medical student, then the most financially secure resident, and then a lower paid attending.
—To be clear – I am NOT saying WCI’s choice to do a civ residency was a mistake – I am pointing out that the choice costs $60-$100K of mostly tax free money that may color his opinion of the value of an HPSP contract.
b) he wound up in a high paying specialty, with a short residency, that deploys a lot. As a college senior (when you typically sign the HPSP contract) you don’t know what specialty you will wind up in, and for many docs you come out even or ahead by going military – Peds, FP, Int Med, Pathology, etc.) Counting this as a financial mistake after the fact is a little analogous to lamenting that you didn’t by just Apple and Tesla and Bitcoin years ago despite not knowing then where they would be today.
c) the option to practice in different areas of the country/world was possibly of less value to him than to many others who choose the military. For me, this was the single biggest reason I joined. I was not ready to commit to one region, and loved taking my family to live in Virginia, Maryland, Germany, California, and Hawaii. Obviously, no guarantees, and many people hate living in those places or in others where they were stationed.
All said, these are minor quibbles and WCI is hard to criticize. He is correct about HPSP not being worth it unless you want to serve your country in the military and are willing to put up with significant loss of autonomy while in.
Thanks again for the great post and the tolerance for dissent!
All true. Personally, even if I had received another $100K in tax-free money I still would have come out behind with HPSP. My calculation at the time was I came out $180K behind. Hard to predict that in advance though since you really don’t know your specialty when you sign-up. And in 1999 when I signed up, nobody was deployed or had deployed for a long, long time. I was an MS3 on 9/11.
It helps you went to just about the cheapest school in the country!
Eventually pay gets to OK – I was making $280,000 in my final years in the military (20+ served – I was a general surgeon) and making over $140,000 per year in retirement (including the tax free VA disability).
I agree nobody should do it for the money, but it can work out really well for many.
The smaller the difference between civilian pay and military pay for the specialty/job and the more expensive the med school, the better it works out. Lots of factors that kept it from working out for me-well paying specialty, cheap med school, low interest rates etc.
I didn’t understand the point about TurboTax
Is it a bad tax preparation vehicle as I was thinking of using it this time around.
THanks
To me it wasn’t a bad tax program.
It works fine for taxes. The problem people have with Turbotax is they literally lobby Congress to keep the tax code more complicated than it needs to be.
The funny thing is, CPAs benefit from this as much as Intuit. And the CPAs don’t even need to lobby actively.
I get a lot of cognitive dissonance reconciling little horror stories like this with the fact that I own INTU in my VTSAX and I hope it will in part fund my retirement.
Which TurboTax version should we get:
My husband is an Independent contractor with an EIN and solo 401K. I have W2 income as well as 1099 income on EIN, and have solo 401K and Backdoor Roth. We each also have a rental property.
Thanks!
TurboTax Home & Business can handle this. It can’t handle S-corps though (Form 1120S), only self-employed.
The best thing my CPA ever told me was that given a certain level of tax understanding, I didn’t need to pay her. I could just plug numbers into last year’s version of TurboTax to get the same level of tax planning.
Neither. H&R Block has consistently been cheaper year after year I’ve evaluated and it works exactly the same way, you can even import your old TurboTax file. TurboTax being the king of tax prep is just a highly successful marketing campaign. Just a note; when you look into the forms you need realize that with TurboTax and H&R Block the online versions always include fewer forms than the software version, so always go with the software versions. They’ll always try to up sell you, but just look at the forms listed and choose from there.
Years ago (I think 2014) TT started “making” you upgrade, even if you had the CD version of the program to get some forms for a simple return. That is when I jumped ship to H&R and never looked back. Last year I spent $21 for the Deluxe version which does everything you need even for a small business. Amazon had it for $23 on black Friday. The previous year I wasn’t quite so picky and spent $37.
Who can’t spend that small amount of money, just to avoid any math errors?
TurboTax is not bad software per se. I have used it for years. Much better to get the download version during one of the January sales rather than the web version to get access to all the forms (see The Finance Buff). However, there have been news stories this year about Inuit’s massive lobby and influence to make taxes more complicated and keep low income filers from getting free tax filing. I’d love to find any cheap alternative products, but it seems like they own all the big ones. I want to do my own taxes by hand someday and use IRS Free File Fillable Forms, but I feel like I still need software to check myself as a backup.
“Much better to get the download version during one of the January sales rather than the web version to get access to all the forms (see The Finance Buff).”
Tax Software: Buy the Download, Not the Online Service
https://thefinancebuff.com/tax-software-online-or-desktop.html
I’ve actually found at least one big error with TT each year (one year I think it was 3), and my taxes are not complicated (W2+1099, no spouse, no real estate).
I stick with it because it’s what I’m used to, but I started using the download version and check forms for when things don’t make sense or it’s unclear what the questions are asking for.
I think I find the biggest issues with the questions not asking things in ways to get correct answers.
Also some things it asks you about 1099, it doesn’t put the same answers into your W2 (e.g. property tax for home office vs tax refund), such that it sets you up to double dip.
“It was suggested to read the Kitces article for more detail, so I did.”
Link, please.
https://www.kitces.com/blog/understanding-the-two-5-year-rules-for-roth-ira-contributions-and-conversions/
“ “You had too many kids,” and, “If you want to make it easier to be financially secure, have fewer kids,” are messages that I really think are lacking on the site.”
Seriously? You think one of the top 5 weaknesses of WCI is that Jim doesn’t tell the readers often enough that they “had too many kids?” I, personally, prefer that my professional advisers propose actionable changes I can make to improve my circumstances. Even if I agreed with your sad attitude toward kids, what advice would you suggest to a reader who , in your view, “has too many kids?” What could or should that reader do about it? It sounds to me like what you’re really seeking is a pat on the back from WCI for the financial prudence of your personal family planning decisions.
“I have several friends who stopped at one child (or didn’t have any) because of finances. One of my good friends said, “We could give two kids an OK life financially, or we could give one kid a great life.””
If your good friend’s super sad comment is an indication of your own warped worldview, I pity you. A “great life” for a kid has nothing to do with money. So, so, sad and shallow.
Beautifully said, Nicholas!
Agree that he could have framed that better, but I think I get his point. It’s that people without kids should be aware of all the financial ramifications before they have kids. We should not be afraid to discuss those ramifications and we shouldn’t pretend that everyone can afford to raise kids in the style they expect or even the style in which they themselves were raised. Ideally it’s not about money, yes, but not everyone believes that and the world is getting more crowded and expensive.
Full disclosure: I have two kids but went in with my eyes wide open, make enough to support them well (we’re frugal by nature), and wouldn’t take them back for anything.
People get up in arms if you even mention this sacred cow, so good on the author for bringing it up. His point was that kids are expensive, and should be “created” with all due consideration, instead of cranked out willy nilly. Beyond the financial considerations, if you have more than enough to replace yourself/spouse, you are creating an additional environmental burden, especially as an American. Ultimately, kids born now will have a steadily decreasing standard of living as the impacts of climate change accelerate. Of course, if you are relatively well-off, the slope of the decline will be a bit less. In any event, folks should think before they procreate. Novel concept I’ll admit.
Should I cry or laugh? I hope you are just sarcastic.
I don’t think it sarcastic. There’s a reason the pentagon under both parties has been planning for changes related to climate changes. In fact, Bush 1 was the first to mention the effects climate change will be having on future generations and the need to plan for those effects. I don’t want to turn this into a political debate, but literally every administration has been planning for this since the early 90’s including the past 2 presidents.
Sorry, I agree completely with the poster. Wife and I waited until 41/37. One kid. Finance is certainly some of the reason. I didn’t finish residency until 2017 and I am I in a somewhat lower paying specialty.
@HDO and @Geoff: Congratulations on your families. Raising children is an expensive endeavor. There is no dispute about this. That said, perhaps you agree with me that it is a fallacy to conclude that the quality of a child’s life (whether it will be “OK” or “great”) is determined by a parent’s budget. Or, that one “great” is better than two “OKs”. These conclusions are not from someone who understands children or their needs. It is from misguided adults who think that money is happiness.
Nicholas, that was part of my point. Money does not buy happiness or good child-rearing. But part of our culture, and frankly a large driver of that subset of our economy, is the idea that parents *do* need to spend a whole bunch of money. Private schools, expensive college prep stuff, etc. Culture guilts parents into thinking we have more influence on our kids’ development than we do, if only we’d buy the right stuff. Then we combine this with the whole concept of “meritocracy”, and things only get worse.
If a future parent gets indoctrinated with this terrible idea and then goes into debt doing all that silly stuff rather than being realistic about how to raise their kid, that’s when you will have misery.
Like I said, I have a lot of cognitive dissonance both believing this and also investing in companies like Fisher Price, Kaplan, etc (take your pick!) as part of my strategy to fund retirement. But, in the end, I do what will profit my family and myself for better or worse.
Nicholas, that was part of my point. Money does not buy happiness or good child-rearing. But part of our culture, and frankly a large driver of that subset of our economy, is the idea that parents *do* need to spend a whole bunch of money. Private schools, expensive college prep stuff, etc. Culture guilts parents into thinking we have more influence on our kids’ development than we do, if only we’d buy the right stuff. Then we combine this with the whole concept of “meritocracy”, and things only get worse.
If a future parent gets indoctrinated with these terrible ideas and then goes into debt doing all that silly stuff rather than being realistic about how to raise their kid, that’s when you have misery. I see it all the time with my ER nurses and their families.
Like I said, I have a lot of cognitive dissonance both believing the above and also investing, via VTSAX, in publicly-traded companies that make money off these misconceptions. But, in the end, I do what will profit my family and myself for better or worse. If you believe someone like Mark Spitznagel (great new book out!), that in fact is the only proper definition of investing.
People get so defensive at the mention about the financial impacts of having children. This is a finance blog and children are a huge financial consideration. I see it in my attendings – day care, fancy preschool, private school, college fund. Then he complains about not being paid enough.
Maybe he isn’t being paid enough, but he also has a huge financial diversion for a significant amount of his income
Kids are certainly the 3rd rail topic and it overlaps with the other third rail … politics. There are lots of famalies that have lots of kids then “complain” that Pre-K childcare is not affordable and government should help (e.g. higher taxes), college is not affordable and govenment should help (e.g. higher taxes, free tuition, loan forgiveness), etc. Then there are those that say my kid is deprived because they can’t afford ballet lessons, piano lessons, travel club sports teams, private schools and/or a nice “doctor house” in the best public school district for all my kids on a single salary. The financial planning aspects of having kids should and need to be discussed but IMO, WCI isn’t the best forum for those discussions as I think folks are already too polarized on this topic and more discussion on this blog would be too much of a distraction.
Disclaimer: I stayed home with my kids for 5+ years of spouse’s military career. But he never moonlighted, always lived in the same house with them when not deployed, and retired before I did!
Not necessarily a common doctor issue, more amongst my ‘homesteading’ forums, but a huge cost of children can be opting for a stay at home perhaps homeschooling parent. An important benefit for kids and parents of having children is spending time with each other. Current doctor dads are less likely to work 90 hour weeks, but if Dr Dad (or Dr Mom) is moonlighting after a typical doc work week while Dr Mom (or Dr Dad) is getting out of medicine or other high paying work to stay home with the kids both absent parent and solo parented children are the losers. At lower income levels it is sad that a stay at home Mom doesn’t somehow do part time at Walmart* so Dad doesn’t have to do that as his third job, almost never seeing his kids awake but golly having a stay at home wife. Doctors should consider a lower lifestyle with more parent time over long workweeks and private school, and as in books I think would benefit your daughters (and sons!) The Price of Motherhood by Ann Crittendon and Getting to 50/50: How Working Parents Can Have It All by Sharon Meers and Joanna Strober, childhood is short and life afterwards is long- think carefully before giving up a career because those 5-20 years will be stressful.
*Though Walmart probably makes scheduling impossible for a two to three job couple.
How about this argument in favor of parenthood:
If your kid is half you. Then at least your “half you” can continue to produce income even after the full you retires. it may not be as good as a whole income for a whole you… but at least it’s somethin’
I think this topic doesn’t get much attention on a financial blog because it’s not really a financial decision… it’s a life decision but with financial consequences.
(Ps. I have 4 kids here).
Kids were non-negotiable for me, and their financial impact has been even more substantial than I expected.
Would I have made a different decision if I knew then what I know now? If I did, it wouldn’t have been about finances.
But a newer bigger house was also my preference. For some the HCOL areas are non-negotiable because they love them too much. Some just love their toys and it brings them pleasure.
Recognizing the financial impact of ALL these things are important.
Kids are more than just an expense item, and long term, the growth of the stock market is tied to the growth of the population (ie having kids + immigration) via growth in GDP. This is more so than margin expansion, interest rates, etc., so this collective opinion really is a ST benefit but LT cost.
To your point, his comment could also have been worded more charitably, but I think it was a bit of a Freudian slip. Anti-natalism is already everywhere in our culture, so it is no surprise that it shows up in financial planning and that people get up in arms when others defend having children.
Parents should be realistic as well, of course, but recognize where meaning and fulfillment in life comes from.
NB: If you accumulate wealth, but have no heirs- is that wealth really yours to begin with?
WHOA. MIND BLOWN.
There’s a conspiracy theory floating around the internet that when you see a billionaire pledge into to give away his wealth- that it’s because it wasn’t really his to begin with.
I find it sad that the people who would probably be the best parents and produce the best people to be stewards of creation are voluntarily choosing to remove themselves from the gene pool. I know eugenics is a dirty word, and for good reason- but at what point are we basically promoting dysgenics?
Finally- I’m not an endocrinologist or OBGYN, but I believe as a society that we are not educating women on the risks of taking hormonal birth control. If one of your patients came to and said, “Doctor Dahle, I WesternUnioned money to Macedonia and the guy sent me back veterinary-grade Testosterone Cyprionate, and I’m injecting 500mg b.i.d., and then I’m going to take tamoxifen citrate because I read about it on bodybuilding.com gotta get jacked yo get swole”. I’m guessing a referral to an endocrinologist and a psychiatrist? But we pump our wives and daughters full of estrogen and progesterone and nobody cares about the OBVIOUS AND SERIOUS side effects. Anyway- how do you not have kids if you aren’t doing abortions, sterilizing people or taking crazy hormones? I didn’t “plan” my two kids. They just “happened” 😝.
Meanwhile, certain portions of the population- and I don’t know how to say this tactfully; uhm less capable? are popping out kids like crazy.
Anyway- I have two and want to have as many as God will bless me with. I make a living pulling teeth, but I derive my true identity and joy from being a husband and father. I truly believe in the Protestant work ethic; and I find this idea of “I’m 26, eat Alpo, have $15k saved up- can I coastFIRE?” weird. Have kids. maybe you can’t obeseFIRE at 40- but your life will be more fulfilling. Maybe the lack of joy is why people can’t see my mockery of the most shameful parts of our profession, like dentists prescribing psych meds, pill mills, 10 patient per hour med checks, pain as the fifth vital, &c. is satire- THEY ASSUME ITS REAL!
Have kids. Have lots.
IUD, condoms, rhythm method, tubal ligation, vasectomy. Lots of non-hormonal options.
I know this is an unpopular opinion, but I am opposed to all forms of contraception except for the rhythm and withdrawal methods.
I know you are LDS, and I don’t know what the LDS Church teaches about this matter- but Pope Paul IV wrote an encyclical many years ago called HUMANAE VITAE and in it he made 4 bold predictions about what would happen if humanity embraced contraception and abortion:
1) increased infidelity and moral decline
2) loss of respect for women
3) that the widespread acceptance of contraception would place a “dangerous weapon… in the hands of those public authorities who take no heed of moral exigencies.” (Think China’s one child policy, Israeli gov sterilizing African immigrants, &c.)
4) man to think that he had unlimited dominion over his own body. (People actually believing they can freeze their eggs and have kids at 45 because they saw it in TV)
All four of these predictions came true. Honestly – the thing that saddens me the most is people viewing children as Veblen Goods or luxuries and not as gifts and blessings. I mean- I want to live life to the fullest! What is the point of life? Is it to live sterile lives because we are receding out of an ice age? Is it hedonism? Is it “do what feels good in the moment now”? Maybe there is more to life than just consuming product, living off interest , and retiring early.
Your “unpopular” opinion gave me a lot to think about, so I’d like to return the favor. There are many counterarguments to the ideas you are advancing, but I will limit myself to this: the notion that the embrace of contraception and abortion resulted in “loss of respect for women.”
How can someone argue that this has “come true” since the encyclical was written in 1968? It would seem to require that 1) women are less respected now than they were in the late 1960s and 2) the embrace of contraception has caused this loss of respect.
It’s hard to make a case for 1) unless you wish to argue that the vastly expanded role of women in all areas of society (medicine, politics, business, law, etc) is a distraction from their most important role of birthing and raising children.
If 2) is correct, one would expect an inverse relationship between the embrace of contraception and the status of women. Instead, by most measures it seems to be a direct relationship. There are probably dozens of examples but I will choose one: Afghanistan, which worldatlas.com lists at 6th lowest rate of contraceptive use. It’s hard to think of a metric for women that would put that nation into the top half of nations worldwide.
At least you and I agree that we should focus on being good fathers and husbands. I am glad that you can fully embrace your faith, but the cognitive dissonance for me dwarfs anything I feel about the stock market.
I initially had a similar thought when I first read this comment about a “loss of respect for women”
It is certainly true that women hold more “respected” roles in society than they ever had.
However, when the Pope said there would be a “loss of respect for women,” perhaps he meant more of a loss of chivalry and reverence toward women. Which, I agree that there has been a loss of respect for women in that sense.
Hook up culture, widespread porn use, unrealistic depictions of women in popular culture, etc. would be a good piece of evidence of what the Pope was likely saying would happen.
Per CS Lewis, the homemaker is the ultimate profession, of which all the others ultimately served. The Pope likely had similar beliefs and would not see the recent rise in female income as a necessarily higher pedestal.
The difference between Islamic Afghanistan and the Christian, though recently secular, West is likely more driven by Islam than any other factor.
Idiocracy- that’s its entire premise.
@Space Doc: Speaking of cows, now that you’re done congratulating the veterinary prof author for his brave advice to human parents, perhaps you could educate him on the benefits of ridding the earth of all the livestock and superfluous domesticated animals on which he earns his living. Just think of the environmental burden caused and perpetuated by practitioners of veterinary medicine and their clients. It raises my temperature just to think about it. The hot air and excrement you (and the animals) expel accelerates the slope of decline in American kids’ standard of living far more than those “willy nilly” procreaters. Please be a hero and stop it for all of our sakes.
Dude, take a break. Leave this comment for Twitter.
The “one job” advice definitely comes down to “it depends.” For employed shift work physicians, it is worthwhile to keep options open at all times; the Great Furlough of spring 2020 opened a lot of eyes among my peers who thought the possibility of being laid off was 0. For a referral-based subspeciality, frequent moves are very likely to be a drag on income, particularly going from pre-partnership to pre-partnership.
Dr Hofmeister, really great job on your post.
The financial burden of having kids is an intriguing debate. I suppose the topic is difficult to address because it is so personal… and because nobody becomes a parent for financial purposes.
But here’s the thing. We high-income professionals are in a better position to have kids than anyone else.
or here’s another thought… if your kids are half you, then at least your “half you” can continue earning an income even after you retire.
Why wait until the possible reproduction phase of life to save money? What about not marrying, or marrying rich? That’s how my partner is doing so well.
Which TurboTax version should we get:
My husband is an Independent contractor with an EIN and solo 401K. I have W2 income as well as 1099 income on EIN, and have solo 401K and Backdoor Roth. We each also have a rental property.
Thanks!
Sounds just like my situation. Get the most expensive one. I think they call it Self-Employed now.
I still need to read up on why these guys don’t like TurboTax. I hired a CPA a couple of years when I was unsure about some items (started 1099 moonlighting, did backdoor Roth). But I followed along reading up on some topics (Bogleheads, WCI, others), and using TurboTax simultaneously and found he’d made some mistakes that cost me hundreds, and screwed up my backdoor roth one time so we had to spend hours on the phone together clearing it up with IRS. I plan to DIY taxes as long as I can hang in there. Definitely wish is wasn’t so damned complicated though. I mean, I went to friggin’ med school and I still find filing taxes overwhelmingly complex.
Those who dont want to have kids, or have just one, thats OK with me. I have 4 kids, and maybe have couple more. Demography is destiny. I rather influence this planet by spreading my gene pool, then die with few additional millions in my bank account.
I like WCI. It’s one of the best personal finance blogs for high earners! Maybe this site and bogleheads.org.
The only thing WCI and Bogleheads get wrong is their hatred of actively managed funds.
Nb4, if you paying a 150bps management fee at TOTAL MERILL + 5.75% load + 160bpd expense ratio, then sure- you’re gunna lose that game.
If you are buying American Funds Growth Fund of America R-6 shares for 27bps in your 401… uh maybe that’s not such a bad idea. John Bogle said you with indexing by winning on expenses. He never said that markets were efficient, he NEVER approved of factor tilts, and he himself said active management had a place in tax-advantaged accounts. Hating on active management has become a cargo cult virtue signaling dogma of the midwit. Sorry- it truly is a religion now. The whole world can’t be passively invested. When you adjust for AUM, active does beat passive. If you believe in the pseudo-science that is factor investing- then active management shouldn’t be a leap of faith. It’s fun to hate on Dave Ramsey and think you’re smarter than him- but active management obviously does work. Picking managers is tricky- and that’s a whole other discussion. If you parrot the cargo cult “80% of fund managers underperformed” it’s not because you have empirical data to back that up.
But heck- if someone can get R shares, is Contrafund, Growth Fund of America, DODGX, etc. Really that bad of an idea?
I hold vanguard passive funds in taxable because low fees and tax efficiency- not because I believe alpha is impossible. I do believe that Fama/French and Carhart overfitted their models. DFA hired people who blew up funds like Merton- stay the F away! AQR is imploding as we speak! Nassim Taleb is deadlifting on their grave; while drinking 10000 year old wine and eating squid ink pasta with Mark Rippetoe.
NB: the only factor that has empirical evidence of working today is MOMENTUM- but that makes academic nerds’ head explode.
The other thing I disagree with WCI is making you children drive unsafe cars. Victor at 39.6 had a great explanation of how your greatest risk of being sued if from your driving- and how automatic emergency braking and rear facing child seats change outcome. Go down that rabbit hole! You can’t take it with you; give your kids safe cars!!!
Finally- I think there is a place in your portfolio for doomsday assets: Krugerrands, 5.56, tail-risk hedging, &c.
*I do not own Growth Fund of America, because I believe their largest holding (TSLA) is overvalued.
I’ve been trying to learn more about tail risk hedging. Do you have any favorite resources for me to get started as a DIYer? Just enabled Level 2 options trading in my VG Roth and will soon do the same for my 401(k).
My understanding of the zeitgeist is that it was easier to do for appropriate cost after the GFC 10 years ago. At this point, people like Taleb and Spitznagel seem to mock it because they think OOTM put options are overpriced now that “everyone’s” doing it and there isn’t actually any profit to be made in the options that exist for non-whale investors such as myself.
(I know options or tail risk hedging are not in line with the orthodox version of the Boglehead religion, which I follow 90% of the time. But I think they are in line with, eg, Bernstein’s writing… if the cost is low enough!)
PS. I’m not on board with factor investing because I believe in Soros’ human uncertainty principle. Ie, once investors “know” about an investment strategy, this will change the rules of the game via feedback loops.
Bogleheads heads think living through the greatest bull market of all time is normal and going to continue ad infinitum. I’m long only, because my crystal ball is cloudy and markets can stay irrational longer than you can stay solvent.
You can offset the cost of your OTM puts with OTM calls, creating a collar. You can also purchase structured notes from bilge bracket banks if your account is large enough. Your upside and downsides are limited with these.
For tail risk hedging for dummies: just use https://portfolioarmor.com. The creator wrote a great blog post on SA: https://www.google.com/amp/s/seekingalpha.com/amp/instablog/131469-david-pinsen/5471415-taking-talebs-tail-risk-hedging-advice.
Also agree about Soros. While he’s evil and totally destroying our world- he’s right about reflexivity.
I recommend Options Markets by Cox and Rubinstein to start. Just remember to assume every option you purchase will go to zero. It’s insurance, not a way to make money.
I certainly enjoyed the post and feel that the WCI is pretty much on target.
However, I do agree with you about WCI purchasing old clunkers for his kids. Safety is an issue. Just help them purchase a new Honda CIVIC.
And while WCI is out car shopping for his kids, he should take a test drive in an all-electric Porsche Taycan, just for him. After a lifetime of keeping my cars for decades, I did. Wow!
I agree; his daughters biggest risk (besides rock climbing with him) is a car accident. This is one place not to skimp. New cars are safer.
Lol sounds like this guy might be a frequent visitor of that judgmental holier-than-thou “childfree” subreddit.
But in all seriousness, does Dr. Erik Hofmeister actually read White Coat Investor? Or is he just trying out a contrarian schtick? Kids and finances are absolutely discussed frequently. Forum, facebook, podcasts, blog post, and even book. Discussing that ought to be part of your financial plan for a successful future if you are a parent. Utterly crazy how someone can miss that.
Maybe Dr. Erik just ran out of ideas to make it an even 5. He could have easily criticized the heavy real estate-focus of Dr. Dahle. A lot more substance to that criticism there if you ask me.
I know, right?! Every single forum topic about the stressed out doctor who has a lot of loans and a family always has the same bit of advice. Do you REALLY need private school tuition? Are you saving for YOUR retirement first so as to not be a burden on your children in the future? How will you handle ALL the expenses that come with kiddos? Have you considered a LOWER cost area? 529? Childcare? Forum users realize that having children can be expensive, and unfortunately this fact is totally lost on this article’s author.
Pretty sure you already know what I think WCI gets wrong. It starts with a B and ends with a Coin 😉
This is what I was looking for in the article, can’t believe they didn’t mention that
That’s because those who pay attention to what I really say about cryptocurrency find they don’t actually disagree with me very often. I’ve been in long arguments with people about it only to find out they put 1% of their portfolio into it, which I think is fine. In fact, one guy I talked into increasing his stake to 5%. Basically I told him if he believed in it as much as he said he did that he should put his money where his mouth is.
Yeah, I would buy cryptocurrencies, but I don’t understand where the returns are expected to come from.
With a total stock market fund, you expect the entire workforce of the world to go into work everyday and add value, and as an owner, some of that value comes to you. Sure, the analysis is more complicated with things like the price of the stock being different from the book value and so on, but it’s possible to get understanding of where the returns come from.
With crypto, where do we expect the future value to come from? Just from the expectation of constantly rising demand driving up the price?
Well, whatever cryptocurrency “wins” can be used to value a whole lot of the world. For example, if you divided the value of the whole world by the amount of Bitcoin out there, each Bitcoin would be worth $15 million.
I’ll hold on to my skepticism. Will sure be fun to watch over the years.