FIRE'd from Medicine @ age 43!

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Baron Samedi said:
With a reasonably optimistic market return(7%) we should have between 10-15m banked at age 60, not including things like home equity. This is doing nothing major -- maxing out mine and my spouse's retirement funds and investing an additional 10% of our income in a taxable brokerage account. This also doesn't include additional sources of income like social security and pension.

We live in a nice house, drive nice cars, and take multiple international trips a year. We're not starving ourselves or denying ourselves worldly pleasures by any means. My wife and I are both physicians but probably gross less than most individual earning Pain docs.
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You must be a good saver. I will not have 15M by age 60.
 
You guys agree with 25x your annual expenditures as the magic number? I think my annnual expenses are around 60k. According to this I’d only need 1.5 million which ain’t much
 
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drusso said:
You must be a good saver. I will not have 15M by age 60.
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Assuming starting work at age 30 with 0 net worth I calculate this to be 10k/mo to reach that number. Personally I think 7% is overly optimistic but even at 4% puts you at 7m. Very doable but certainly harder if you have kids, 529s, and a single physician income.
 
clubdeac said:
You guys agree with 25x your annual expenditures as the magic number? I think my annnual expenses are around 60k. According to this I’d only need 1.5 million which ain’t much
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Agree with 25x but this leave you little room for error - consider giving yourself some wiggle room with 20% extra income per year and make sure health insurance is covered.

My number is 2-2.5 mil with house paid, 529s funded after which I won't retire but cut back significantly.
 
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clubdeac said:
You guys agree with 25x your annual expenditures as the magic number? I think my annnual expenses are around 60k. According to this I’d only need 1.5 million which ain’t much
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No freaking way. Unless you retire at 80y/o.

Our expenses are gonna climb as we get older. Inflation, our health care expenses, etc.
 
I think 25x will be okay for most people if its accompanied by downsizing. It also doesn't factor in things like home equity, paid off vehicles, Medicare, and social security. The tricky thing is truly understanding what your income needed to sustain in retirement actually is.

I suspect many docs won't be satisfied living on 60k/yr. I know I won't.

The 25x rule is so that you can probably withdraw about 4%/yr and not run out of money before dying. This also leaves you with no estate.
 
Baron Samedi said:
With a reasonably optimistic market return(7%) we should have between 10-15m banked at age 60, not including things like home equity. This is doing nothing major -- maxing out mine and my spouse's retirement funds and investing an additional 10% of our income in a taxable brokerage account. This also doesn't include additional sources of income like social security and pension.

We live in a nice house, drive nice cars, and take multiple international trips a year. We're not starving ourselves or denying ourselves worldly pleasures by any means. My wife and I are both physicians but probably gross less than most individual earning Pain docs.
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10-15M, hard to believe you could bank this much with 7% ROI on a 700k salary
 
BobBarker said:
Sorry, but if he keeps up the months long foreign vacations he will be back doing anesthesia in a few years.
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It's as cheap to live overseas as domestically, if not cheaper, so long as you do things properly. Each month abroad costs me around 3-4k, which is easily sustainable on FIRE income basically indefinitely
 
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hyperalgesia said:
How much are you saving per year and how many years until you retire?
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30 years from retirement, started 4 years ago as a resident where I was able to pay off student loans and build a portfolio

Zero debt
Approx 250k in current investment portfolio + some additional cash and equity
Future child has college covered already
12k/year in IRA(current contribution limit x2, likely to rise)
38k/year in 401 equivalents with + match
Additional 10% of income in brokerage account -- last year 25k, now going to be increased as spouse has finished training


So total 50k in retirement accounts and somewhere around 40k in brokerage each year. We will likely increase our saving's rate as our income grows.
 
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Baron Samedi said:
Our combined income is wayyyy less that -- more like 400k.
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With a combined salary of less than $400K per year, I think you are being a little overly optimistic about reaching $15 million. I don't know of a single doc who has accumulated that much with that low of an income. People would kill for a 7% return now, given that interest rates are so low. Further the stock market is way over valued and baby boomers (which drive the market) are going to be cashing out in some degree or another in retirement. So a huge source of demand for equities will be reduced. If I could get a guaranteed 7% return, I would be ecstatic. Don't expect stock market returns to be what they have been for the last ten years.

Further, keep in mind that when you have kids and get older, you will have more expenses. Kids are pretty expensive, particularly if you send them to private schools and or private colleges. MOST physicians (I don't know why) always seem to want big houses and fancy cars. I live in a house worth $380K and drive a ten year old Chevy pickup. Yet I made $1.3 million per year for 16 years and much, much higher than $400K for the rest of my career. I see MANY physicians living in million dollar plus houses and driving cars worth $80-$100K and taking trips to Europe a couple of times a year.

It seems like $300K is the break point- after that you can usually start saving some money out of your retirement account. The vast majority of my money is outside of my retirement (keep in mind you have to pay taxes on that when you retire).

I've talked with many docs who are in their early 60s and in nearly all instances, the projected amount of saved money was never achieved. Granted, they are not living in cardboard boxes, but the good savers end up with about $5-$7 million. If you can't live on that in retirement, you probably have a spending problem.

Look realistically at about a 3% return in retirement, as you are going to move to "safe" sources like bonds. So you probably need at minimum about $3 million in today's dollars to get by and about $7 million plus to live pretty comfortably. Also, don't forget about healthcare expenses, which is the main reason people choose to keep working.

Don't worry about the money- it will come over time. Too many docs get hung up on that and worry about it all the time.
 
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hawkeye2009 said:
With a combined salary of less than $400K per year, I think you are being a little overly optimistic about reaching $15 million. I don't know of a single doc who has accumulated that much with that low of an income. People would kill for a 7% return now, given that interest rates are so low. Further the stock market is way over valued and baby boomers (which drive the market) are going to be cashing out in some degree or another in retirement. So a huge source of demand for equities will be reduced. If I could get a guaranteed 7% return, I would be ecstatic. Don't expect stock market returns to be what they have been for the last ten years.

Further, keep in mind that when you have kids and get older, you will have more expenses. Kids are pretty expensive, particularly if you send them to private schools and or private colleges. MOST physicians (I don't know why) always seem to want big houses and fancy cars. I live in a house worth $380K and drive a ten year old Chevy pickup. Yet I made $1.3 million per year for 16 years and much, much higher than $400K for the rest of my career. I see MANY physicians living in million dollar plus houses and driving cars worth $80-$100K and taking trips to Europe a couple of times a year.

It seems like $300K is the break point- after that you can usually start saving some money out of your retirement account. The vast majority of my money is outside of my retirement (keep in mind you have to pay taxes on that when you retire).

I've talked with many docs who are in their early 60s and in nearly all instances, the projected amount of saved money was never achieved. Granted, they are not living in cardboard boxes, but the good savers end up with about $5-$7 million. If you can't live on that in retirement, you probably have a spending problem.

Look realistically at about a 3% return in retirement, as you are going to move to "safe" sources like bonds. So you probably need at minimum about $3 million in today's dollars to get by and about $7 million plus to live pretty comfortably. Also, don't forget about healthcare expenses, which is the main reason people choose to keep working.

Don't worry about the money- it will come over time. Too many docs get hung up on that and worry about it all the time.
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Fellows, new grads, and attendings in practice less than 10 years should print out what Hawkeye wrote above and recite it daily.

Also, read and meditate on this:

www.whitecoatinvestor.com

How to Get Rich by Driving a $5,000 Car | White Coat Investor

Driving an inexpensive car is a wealth-building machine. The difference between driving a $5,000 car and an expensive one is over $1 million in a lifetime.
www.whitecoatinvestor.com www.whitecoatinvestor.com

"One other benefit of driving an inexpensive car is you have a daily reminder that you are NOT rich, at least not yet. Expensive purchases tend to run in packs if you don’t spend very consciously. Nice clothes, nice cars, nice vacations, nice homes etc. It seems silly to park that $5K car in the driveway of a $2M house. So if you’ll drive a $5K car for a few years, chances are good you’ll spend a little less on some other luxuries, grow into your income a little more slowly and reach financial independence much faster. If nothing else, it will give you a daily reminder of your financial goals."
 
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With a 30 year window ...a 7% return with a heavy equity based portfolio sounds very reasonable historically
 
lonelobo said:
With a 30 year window ...a 7% return with a heavy equity based portfolio sounds very reasonable historically
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$15 million saved when combined salary is below $400K? I very, very much doubt that.

Just ask your average anesthesia guy who is retiring how much they saved. You will have your answer, as they make about $400K.

Again, expecting a 7% return over the next 30 years is unrealistic. We have had a good run in the market, but when the baby boomers are cashing out, you will have far less demand for equities.

You guys make it sound like it is easy to bank $15 million. I have done so, but I had an unusually high income for a long time. If it was that easy, almost all docs in the US would have that saved.

Aim high, but don’t be disappointed.

I want to know where we can get that guaranteed 7% return, as yields have dried up.
 
hawkeye2009 said:
$15 million saved when combined salary is below $400K? I very, very much doubt that.

Just ask your average anesthesia guy who is retiring how much they saved. You will have your answer, as they make about $400K.

Again, expecting a 7% return over the next 30 years is unrealistic. We have had a good run in the market, but when the baby boomers are cashing out, you will have far less demand for equities.

You guys make it sound like it is easy to bank $15 million. I have done so, but I had an unusually high income for a long time. If it was that easy, almost all docs in the US would have that saved.

Aim high, but don’t be disappointed.

I want to know where we can get that guaranteed 7% return, as yields have dried up.
Click to expand...

It's incredible that accumulating $15 million was once possible in a career in pain. I know other "1st wave" pain docs that hit that mark who weren't even the best or brightest of their time. I feel angry, resentful, and sad that our forefathers sold out younger generations. I covet the opportunity to have been born just 20 years sooner...
 
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drusso said:
It's incredible that accumulating $15 million was once possible in a career in pain. I know other "1st wave" pain docs that hit that mark who weren't even the best or brightest of their time. I feel angry, resentful, and sad that our forefathers sold out younger generations. I covet the opportunity to have been born just 20 years sooner...
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You and me both drusso!! And you’ve probably got 8-10 years on me. My generation is waaay behind the curve. If only I’d be born in the 60s!
 
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lonelobo said:
With a 30 year window ...a 7% return with a heavy equity based portfolio sounds very reasonable historically
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It's hard to assume 7% return without assuming substantial inflation as well. 15 million dollars in 30 years will probably be worth closer to 6 million dollars in today's dollars.

And the return is making very generous assumptions. The primary assumption is that he will work full time, invest virtually all his money in an index fund, for 30 consecutive years and not make any mistakes.
 
Why the pessimism when considering future rates of return in the long term? You can take almost any 30 year period over the last 100 years and the S&P has returned at least 8.5%. Especially if you have a diversified portfolio including real estate there’s no reason to think you can’t make at least that over the next 25-30 years.
Also I think a recession is probably around the corner in the next 5 years or so- this sucks for those later in their careers, but will probably ultimately help younger physicians in the long term since they can buy the market cheap and let it grow.
 
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Also just to clarify, that combined 400k income is just for now. Once my wife and I are no longer fed, that number will hopefully rise.

6% return puts me at 10m, 7% puts me at 13m, anything above that is unlikely.

Inflation is, of course, an issue. It all depends on if wages outpace inflation.
 
hawkeye2009 said:
$15 million saved when combined salary is below $400K? I very, very much doubt that.

Just ask your average anesthesia guy who is retiring how much they saved. You will have your answer, as they make about $400K.

Again, expecting a 7% return over the next 30 years is unrealistic. We have had a good run in the market, but when the baby boomers are cashing out, you will have far less demand for equities.

You guys make it sound like it is easy to bank $15 million. I have done so, but I had an unusually high income for a long time. If it was that easy, almost all docs in the US would have that saved.

Aim high, but don’t be disappointed.

I want to know where we can get that guaranteed 7% return, as yields have dried up.
Click to expand...
Ummm...... look at historical returns for the market 7% is easily doable especially over 30yr

I can't explain why you don't have more in savings if you earned as much as you say you did....sounds like maybe some bad decisions on your part
 
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Baron Samedi said:
Also just to clarify, that combined 400k income is just for now. Once my wife and I are no longer fed, that number will hopefully rise.

6% return puts me at 10m, 7% puts me at 13m, anything above that is unlikely.

Inflation is, of course, an issue. It all depends on if wages outpace inflation.
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the fact that you were able to develop a "portfolio" as a resident, have no student debt, and don't have to "worry" about your only unborn child's education is huge. that suggests that you have a benefactor.

most of us are not in that situation, but having that extra money laying around to invest makes a world of difference
 
SSdoc33 said:
the fact that you were able to develop a "portfolio" as a resident, have no student debt, and don't have to "worry" about your only unborn child's education is huge. that suggests that you have a benefactor.

most of us are not in that situation, but having that extra money laying around to invest makes a world of difference
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I grew up in poverty. My benefactor is the military, which most anyone can do.
 
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Baron Samedi said:
I grew up in poverty. My benefactor is the military, which most anyone can do.
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well done. who is paying for the kid's college, then?

you said it was "taken care of". does that mean you plunked 300K in a 529 plan?
 
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Baron Samedi said:
I can transfer my GI bill benefits, full ride.
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THE POWER OF THE POST-9/11 GI BILL
The Post-9/11 GI Bill provides 36 months of benefits that cover college tuition up to the maximum in-state college tuition rate, a Monthly Housing Allowance (MHA) equivalent to an E-5 with dependents rate, and a $1,000 annual stipend to help cover the cost of books and supplies. There are also other benefits such as the Yellow Ribbon program that help cover the cost of more expensive private colleges.


looks like it covers 3 years of in-state tuition. thats nice, but hardly a "full ride".
 
SSdoc33 said:
THE POWER OF THE POST-9/11 GI BILL
The Post-9/11 GI Bill provides 36 months of benefits that cover college tuition up to the maximum in-state college tuition rate, a Monthly Housing Allowance (MHA) equivalent to an E-5 with dependents rate, and a $1,000 annual stipend to help cover the cost of books and supplies. There are also other benefits such as the Yellow Ribbon program that help cover the cost of more expensive private colleges.


looks like it covers 3 years of in-state tuition. thats nice, but hardly a "full ride".
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36 months = 4 years, as its 9 months per year with summer breaks.
 
lonelobo said:
Ummm...... look at historical returns for the market 7% is easily doable especially over 30yr
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best guess for the long-run return on a globally diversified, stock-heavy portfolio would be an after-inflation “real” annual return of 4%
 
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Gauss said:
best guess for the long-run return on a globally diversified, stock-heavy portfolio would be an after-inflation “real” annual return of 4%
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I think that is more accurate.

People forget about little things like taxes and brokerage fees (unless you do a vanguard index fund).

Everyone would kill for that 7% return.

Past stock market performance is no guarantee of future performance.
 
lonelobo said:
Ummm...... look at historical returns for the market 7% is easily doable especially over 30yr

I can't explain why you don't have more in savings if you earned as much as you say you did....sounds like maybe some bad decisions on your part
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I wouldn't say easily doable just because it's true in one example. If you could make 7% over inflation in a treasury bond or CD or fdic insured savings account, that would be "easily doable". But for the past decade, those are yielding about 0.5% above inflation on a good year.
 
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Baron Samedi said:
I grew up in poverty. My benefactor is the military, which most anyone can do.
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Good for you. The military is a good deal.

I have not had any debt since age 37. So everything beyond spending goes into savings.

However, I paid for all my kids schooling, including one grad school and one med school, and bought each of the kids a starter home so they start their lives debt free. I grew up poor and didn’t want my kids to do what I had to do.

If you are disciplined and put away money every month, you will be fine.

Docs worry too much about money- 99% will be just fine and they all worry too much.
 
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clubdeac said:
You and me both drusso!! And you’ve probably got 8-10 years on me. My generation is waaay behind the curve. If only I’d be born in the 60s!
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um, no. Don’t even go there.

Otherwise you would right now be going through a midlife crisis in your mid 50s.


Just be thankful you didn’t have to go through disco....
 
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This thread is supposed to be about living modestly to retire early at 43. Not retiring from the military and then gleefully committing to a 30 year career in medicine to maximize 10+ million dollar wealth...
 
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If you wanted to retire at 43 and live modestly, then going through 26 years of gruelling compulsory, undergraduate, graduate, and post-graduate education is a weird way to get there.

You could probably become a UPS driver at age 18 and achieve the same result and enjoy your 20s and 30s a lot more.
 
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Baron Samedi said:
If you wanted to retire at 43 and live modestly, then going through 26 years of gruelling compulsory, undergraduate, graduate, and post-graduate education is a weird way to get there.

You could probably become a UPS driver at age 18 and achieve the same result and enjoy your 20s and 30s a lot more.
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My neighbor is a UPS driver **AND** owns a cannabis dispensary. His house his surrounded by doctors and dentists on three sides.
 
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drusso said:
My neighbor is a UPS driver **AND** owns a cannabis dispensary. His house his surrounded by doctors and dentists on three sides.
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That is “stealth wealth” of the highest form
 
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drusso said:
It's incredible that accumulating $15 million was once possible in a career in pain. I know other "1st wave" pain docs that hit that mark who weren't even the best or brightest of their time. I feel angry, resentful, and sad that our forefathers sold out younger generations. I covet the opportunity to have been born just 20 years sooner...
Click to expand...

But then you’d be 20 years closer to death...
 
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I am not sure why people are even interested in working into their 60s, especially full time. Some people on here proclaim, “I love what I do” but I question that. What exactly do you love? Endless discussions on a pretty finite number of options? Rote passages/opinions on a few articles you have soaked up over the years? Clicking in your emr? Joking around with the staff? Your 10,000th medial branch block? Checking for a babinski reflex? You quickly get to a point at which most patients you meet fall within a pattern you have tread previously many times. I am seriously intrigued by those who want to do this for 30 years. What do you see that I do not? What about all of the other things you could do with yourself, with or without money? Also, how many people in their 60s have amazing health and can actually spend that cash in ways that are truly amazing? I would argue that money becomes substantially less valuable as you age. Time is the real ****. This is only my opinion, and I am definitely open to yours (and I am definitely not pretending I don’t think TOO MUCH about money!). I really don’t see any need to save vast sums of money. It seems like one of many societal traps. That said, working for real love of the work...if you really have that going on, I salute you and envy you.
 
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ateria radicularis magna said:
I am not sure why people are even interested in working into their 60s, especially full time. Some people on here proclaim, “I love what I do” but I question that. What exactly do you love? Endless discussions on a pretty finite number of options? Rote passages/opinions on a few articles you have soaked up over the years? Clicking in your emr? Joking around with the staff? Your 10,000th medial branch block? Checking for a babinski reflex? You quickly get to a point at which most patients you meet fall within a pattern you have tread previously many times. I am seriously intrigued by those who want to do this for 30 years. What do you see that I do not? What about all of the other things you could do with yourself, with or without money? Also, how many people in their 60s have amazing health and can actually spend that cash in ways that are truly amazing? I would argue that money becomes substantially less valuable as you age. Time is the real ****. This is only my opinion, and I am definitely open to yours (and I am definitely not pretending I don’t think TOO MUCH about money!). I really don’t see any need to save vast sums of money. It seems like one of many societal traps. That said, working for real love of the work...if you really have that going on, I salute you and envy you.
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I will never forget this from my medical school mentor: "Everything in medicine eventually becomes boring. Once it becomes boring, all you're left with is the lifestyle."
 
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I grew up in a different era, with different career goals than you. I grew up in an era where jobs were "a calling" rather than something that pays the bills exclusively. that's what we did in the 60s and 70s.

the journey and the people you meet is what matters, not the money.

making people better, and helping them reach their best possible quality of lives...

of course, that's why I am not a needle jockey and don't make a ton of money, and will have to work even if I don't want to until I'm 70 75 82
 
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