Building Wealth

[Harry]

This thread blows my mind. So proud to see where life has taken the OP.

When I first met ghosthop he was this broke college kid sleeping in the bed of his POS Ford Ranger snuggling up to some beat to shit 4FRNT skis. I took pity on the poor wretch, invited him inside, and let him sleep on my sofa. Nice to see how his life turned out.

Hey ghosthop ! Glad to see your life is going well. Stay in touch buddy.


Sent from my iPhone using TGR Forums

[iceman]

Amazing what can happen in 6 months.

[Gepeto]

OP – I’ve had the pleasure to meet you and developed a good sense of the tools you bring to bear.

I can’t address the academic or medium/long term earnings potential but, you should seriously reconsider the family building time line. Every solvent, cogent, tangible love is forever, but life has a way of bending in ways you just cannot prepare for.

I had my one and only when I was 44 and managed to be home almost exclusively for his first five years while his mother hammered out a living. Changed his first 200 diapers and was in on every aspect of his everyday life while his mother suffered through severe postpartum depression for better than 18 months. My point being, there is no reason to dive into the family aspect to fit some predetermined timeline. Age is on your side. Unless you have some pressing issue; fertility, ideal birth window, parents are elderly, or concerns that both your careers will become so focused that you fear losing out on making a family farther in the future.

It’s easy to put your own personal goals on hold to keep the spinning plates going while your (I would die for) SO is build a professional foundation and the excitement of the immediate future = being mister mom, looks to be heaven on earth (it is).

The truth is you have at best, a 50/50 chance of succeeding between the two of you. Never mind introducing children into the equation.

You’ve made no mention of marriage? That contract changes the entire dynamic of a relationship and the place you two are in now will be a thing of the past. Negotiating the next 36/48 months as DINK’s and carving out your spaces professionally while remaining a healthy unit together is the challenge you should come to fully understand first.

Surviving the guaranteed impending turmoil will make the two of you a much more cohesive unit and much better parents when the time arrives.

Solid issues to be pondering - good times - congratulations

[old goat]

Tell me more about what surgical specialty you're talking about and why you think you'll need to borrow money to fund a fellowship.. I'm (was) a vascular surgeon and both my kids are surgical residents so I know something about the subject.

If your partner is finishing residency with no left over med school debt you guys are way, way ahead of the game at this point.

For all of you thinking that a surgical specialist will be rich--that doesn't apply to academic surgeons, who make significantly less than private surgeons. Some academic positions, at places like Stanford or Texas Heart, are more like private practice but working for a state university is considerably less lucrative.

[neufox47]

Why will a fellowship cost $15k? Travel expense for interviews / moving? My friends who went through them received a pay increase from their residency. They also funded their whole lives from med school to residency on student loans. When they finished their fellowship most were carrying $300-$450 k in student loans and all of them live very nice lives now (well except for their schedules, their schedules suck). But financially, they are fine.

[Bobby Stainless]

Building wealth =/= Having kids. Unless mom and dad have some scratch to help.

Have you looked at leasing a car?

[Benny Profane]

https://www.theatlantic.com/ideas/ar...cession/596728

[fastfred]

call the lawyer and get an advace on the trust fund
listen to the financial advisor tell you how you shouldn't withdrawl the money
repeat every year
remember how you got yelled at as a kid for elbows on the table and not holding your knife and fork the proper way at the country club
it was all worth it

[MontuckyFried]

My partner and I are in a happy, healthy, loving relationship. We plan to be married next summer.

Say whaaaaat?! CONGRATULATIONS MAN!!! Hanging up the ol' pimpin' hat, eh? You ladies man, you.

In all seriousness, though. Of all the young people I've met in that region, you have your head screwed on straighter than anybody I've seen. By miles. You and your future wife are going to do outstanding in life I'm sure. While most guys are up there dicking off, you're already looking ahead and trying to formulate some good plans. Most here have succeeded far more than me, so I'll defer to their wisdom when it comes to financial stuff since I crashed and burned pretty hard up there.

HOWEVER, you're planning on one thing that (statistically speaking) leads to more stability, erego financial success, and that is getting married to begin with. While I may not be one to look at for financial success, one thing I have learned over these last few years is that having a solid rock as a partner will help see you through the inevitable ups and downs you WILL experience in life. That's what will keep you charging through life and up that next hill. If it wasn't for my wife, I think I would have been in a far, far worse place mentally than I am now. By having each other, even though we may be broker than we were a decade ago, we're far happier. That gives us great hope that we'll be juuuuuuust fine financially in the end. We've had ups and downs to the tune of over a million dollars. I've learned that money comes (and goes) easily. True love and a great relationship is WAY harder to find than money. Start there like you are, and your long term financial goals will easily follow.

As far as kids go, good on ya! We need intelligent people like you to breed lest we end up with a world like Idiocracy. You'll DEFINITELY end up broker for it, though. Haha. It's all good, though. Having children (or adopting) with THE RIGHT woman is one of the most incredible experiences you could ever go through in life. 3 years first is a great game plan. That's about how long we took as well. Got married in 2012. Got a solid few years in to solidify our relationship before bringing our spawn into this world in 2015. Putting the horse BEFORE the cart definitely makes having kids infinitely easier than the ol' "woopsy," although if that happens you guys will figure it out just fine so don't panic.

Good luck and hope to catch up with you next time I'm up there! You and your lady should totally make it out to the Summer Beartooth Bash 2020!!! I'm planning on it. Dragging Harry's ass out there too whether he likes it or not. Haha.

[DJSapp]

Something doesn't add up here. If the two of you are currently pulling 70k and have no debt, why are you struggling to save? You should be pulling 4500-5000/month after taxes. Let's break that down:

Rent/mortgage: 2000
Utilities: 500
Food @ 25/day: 750
Transportation (80 gal/month = 24,000mi/yr @ $3/gal) + car insurance: 500
Clothing/other: 150
Fun: 200
Savings: 300

And that's 4500. Check your lifestyle hard (rent and food) and you should be saving 10k+/year EASILY. Or you're not telling us the whole story. Where do you currently live? The budget I laid out there should cover most of the US, but not the extreme cases like NYC or SF. And if the two of you are only pulling 70k, you have no business trying to live in NYC or SF. Get higher paying jobs or move.

The biggest thing about building wealth is to let your money work for you over time, and time is the main factor. There are kinds of debt that are bad, and some that are good. For example: my mortgage is fixed at 2.75%. I could work really hard and pay that down, or I could invest that in the market and get higher returns over the next 15 years. Further, I could invest that in tax-free accounts like a 401k or Roth Ira and stick it to the IRS while getting those returns and a tax break on mortgage interest paid. I net more money in the long haul by taking that money I could have used to pay down low-interest debt and investing that. That is leveraging good debt. 0% interest car loans are pretty much free money provided you don't wreck the car and you drive it into the ground. Do the math though, you might be giving up other incentives to get that which may be better. 17% interest credit card debt is awful and should be avoided at all costs.

Other wealth building strats: if your 401k contribution isn't maxed out yet, take every raise you get and put 100% of it into the raise until you're maxed. Then do that with a Roth IRA for you and the Mrs. You'll never know what you missed if you never saw that paycheck with the raise. Once you're maxing your 401k, invest in a S&P 500 fund with the Roth. Yes, some funds manage to barely beat the S&P in the long haul, but that's 2% of them. Play the long game. Don't panic about the near term and timing Trumps twitter queef of the day, you won't touch this money for 30 years.

Once you plop out a kid, open a 503 fund for your kid. Tell friends and family to drop money in there for birthdays/xmas/whatever instead of plastic crap the kid won't remember. Build up enough cash to fund a decent education, but if the kid wants to go to some ivy league bullshit for basket weaving, tell them what you have budgeted and let them figure out how to make the rest. College is a lot of diminishing returns and good value can be shopped for.

Purchasing a home is an investment, whereas rent is just making someone else rich. When you look at paying a rent vs. paying a mortgage, just call the interest portion of your payment 'rent' and the rest of it is investment savings that you're paying yourself. You'll see that your 'rent' goes down over time, and you're paying for it with inflated dollars, whereas always renting leads to increased rental prices.

This biggest piece of your story that is scary is this: what happens when the Ms. has that kid and decides she doesn't want to return to working 80 hour weeks? I'd also question the WHY of you going and getting an advanced degree? How much more is that going to immediately net you? Are you having trouble finding work in the current economy? FUCKING REALLY? After a couple year, experience trumps education is most fields. Really look hard at what that advanced degree is going to net you.

[skiballs]

[neufox47]

What’s a 503 fund?

[Marshall Tucker]

What’s a 503 fund?

think he means 529 plan.

My boss for many years didn't have kids and loved throwing his money around and loved telling you how to raise yours.

20 yrs later he's a lonely fuck now and will die as such and his only life is work. Pretty sad way to build wealth.

YMMV.

[Benny Profane]

But he won't die poor, waiting for the kids to visit.

[billyk]

I have to say I don’t like the part about putting your education on hold. Put off having the kid a little while until you are both ready. I’ve seen plenty of women have kids and carry on with their professional lives. I’d think an academic setting would be even more open to accommodating that.

Anyway, just my two cents. Good luck!

[glademaster]

Something doesn't add up here. If the two of you are currently pulling 70k and have no debt, why are you struggling to save? You should be pulling 4500-5000/month after taxes. Let's break that down:

Rent/mortgage: 2000
Utilities: 500
Food @ 25/day: 750
Transportation (80 gal/month = 24,000mi/yr @ $3/gal) + car insurance: 500
Clothing/other: 150
Fun: 200
Savings: 300

And that's 4500. Check your lifestyle hard (rent and food) and you should be saving 10k+/year EASILY.

If you make ~$70k a year, you're taking home $3500-4000 a month, not $4500-5000, and I live in a state that doesn't have income tax.

Also, how many months are there in your years? Your budget proposes saving $300 a month, but you follow that by saying they should be able to "easily" save $10K+ a year. That doesn't quite add up.

[DJSapp]

If you make ~$70k a year, you're taking home $3500-4000 a month, not $4500-5000, and I live in a state that doesn't have income tax.

Also, how many months are there in your years? Your budget proposes saving $300 a month, but you follow that by saying they should be able to "easily" save $10K+ a year. That doesn't quite add up.

70k/year by 2 people, not individually. Assuming an equal split (or married filing jointly) I used a 15% overall tax rate, so 59,500/yr or 4958/month. 4500-5000 was my range giving some wiggle room if one person makes more than the other, or state taxes, etc.

To 'easily' increase savings from 3600/yr to 10k/yr, this means to 'check your lifestyle hard'. 2k/month in rent can cover a couple in the bay area in a not great 1 bedroom apartment. What can 2k/month get you in bumfuck Kansas? Do you really need that 3000 sqft home for 2 working adults? $25/day in food is 175/week at the grocery store for two people? That's a bit excessive, start cooking for yourself instead of buying $5 lattes and $14 avocado toast. $200/month for fun? That's right out. 24,000 miles a year driving between two people? That's possible, but not likely. $1800/year in clothing? I'm in an occupation that only requires blue jeans and polo shirts, so I have no idea what is real here. I'm probably at $500/year all in.

People get trapped in keeping up with the Jones's and spending on status. There is a large portion of America that is a family of 4 living off of <50k and they're getting by, and you're telling me that an adult couple making 70k can't figure out how to save 10k of that? Work harder at saving if you want to save. Nobody said it was easy or comfortable.

[DJSapp]

think he means 529 plan.

Sorry, yes. I meant a 529 plan.

[MontuckyFried]

Something doesn't add up here. If the two of you are currently pulling 70k and have no debt, why are you struggling to save?

You're not too familiar with Bozeman, are ya? It's freaking EXPENSIVE to exist there.

[DJSapp]

You're not too familiar with Bozeman, are ya? It's freaking EXPENSIVE to exist there.

LOOOOL NO. You have no idea what bay area prices are if you think Bozeman is expensive. 70k in Bozeman for 2 adults is fine.

https://www.zillow.com/homedetails/1...82941871_zpid/

2 Bed apartment for 1050/month right in the center of town. Perfectly adequate for 2 people and it took me 3 seconds to search for that, and there's quite a few around that price point. FWIW, in my hometown a comparable 2 bed apartment/townhouse starts at 1500 and ramps up to 2k+ very quickly.

[neufox47]

think he means 529 plan.

My boss for many years didn't have kids and loved throwing his money around and loved telling you how to raise yours.

20 yrs later he's a lonely fuck now and will die as such and his only life is work. Pretty sad way to build wealth.

YMMV.

That’s what I thought he was referring to.

My old boss is a life long bachelor but was never obnoxious about it like yours. He’s now looking to get hitched and have kids at 49. As someone with a newborn, ouch, can’t imagine doing this at 50. At least he has plenty of cash so his wife can stay home or he can hire a nanny.

[glademaster]

70k/year by 2 people, not individually. Assuming an equal split (or married filing jointly) I used a 15% overall tax rate, so 59,500/yr or 4958/month. 4500-5000 was my range giving some wiggle room if one person makes more than the other, or state taxes, etc.

People get trapped in keeping up with the Jones's and spending on status. There is a large portion of America that is a family of 4 living off of <50k and they're getting by, and you're telling me that an adult couple making 70k can't figure out how to save 10k of that? Work harder at saving if you want to save. Nobody said it was easy or comfortable.

I didn't say it wasn't possible to save $10k/year, it absolutely is, I was just questioning the veracity of your numbers, and still do. What about health insurance? Your take home figures for a couple making $70k a year are still off though. Interesting discussion nonetheless.

[goldengatestinx]

OP – I’ve had the pleasure to meet you and developed a good sense of the tools you bring to bear.

I can’t address the academic or medium/long term earnings potential but, you should seriously reconsider the family building time line. Every solvent, cogent, tangible love is forever, but life has a way of bending in ways you just cannot prepare for.

I had my one and only when I was 44 and managed to be home almost exclusively for his first five years while his mother hammered out a living. Changed his first 200 diapers and was in on every aspect of his everyday life while his mother suffered through severe postpartum depression for better than 18 months. My point being, there is no reason to dive into the family aspect to fit some predetermined timeline. Age is on your side. Unless you have some pressing issue; fertility, ideal birth window, parents are elderly, or concerns that both your careers will become so focused that you fear losing out on making a family farther in the future.

It’s easy to put your own personal goals on hold to keep the spinning plates going while your (I would die for) SO is build a professional foundation and the excitement of the immediate future = being mister mom, looks to be heaven on earth (it is).

The truth is you have at best, a 50/50 chance of succeeding between the two of you. Never mind introducing children into the equation.

You’ve made no mention of marriage? That contract changes the entire dynamic of a relationship and the place you two are in now will be a thing of the past. Negotiating the next 36/48 months as DINK’s and carving out your spaces professionally while remaining a healthy unit together is the challenge you should come to fully understand first.

Surviving the guaranteed impending turmoil will make the two of you a much more cohesive unit and much better parents when the time arrives.

Solid issues to be pondering - good times - congratulations

Saw this sticker on a skier/fire fighter friends beater paid off truck parked in front of their cabin...



Something to be said for waiting.

[bodywhomper]

Several friends that are academics or worked in academia that do not know each other have shared their similar opinion that you cannot be a very present and engaged parent and be a successful academic. There is not enough time available in the day. Some of those tried and felt they failed at both. I do not know either that had the goal of building wealth.

I know a few people that have zero debt and not due to wealthy family. They made plenty of active decisions for it to happen along with some happenstance. Their sense of freedom is amazing.

[DJSapp]

I didn't say it wasn't possible to save $10k/year, it absolutely is, I was just questioning the veracity of your numbers, and still do. What about health insurance? Your take home figures for a couple making $70k a year are still off though. Interesting discussion nonetheless.

Come at me bro

Tax numbers for my state:
https://neuvoo.com/tax-calculator/?i...ion=California

For OP's state? (Does he live in Bozeman?)
https://neuvoo.com/tax-calculator/?i...region=Montana

Multiply that after tax income by 2 because marginal tax rates are a very real thing and we're talking about two incomes. $4750/month for MT, which is less than CA (WTF?)

As for health insurance, everyone under 30 knows that shit is for the birds. Besides, she's training to become a doctor. Realistically, there would be some sort of employer sponsored plan in there, but from what I know hospitals usually have very generous health benefits, because if they didn't the employees would just steal what they needed. If it helps, toss $100/month in there for health coverage assuming they are generally healthy people without major health issues.

That's not where the money is though. My entire point is with a couple lifestyle tweaks, saving 10k/year is more than possible. Or the OP hasn't told us everything.