PRIORITIES – PART THREE: THE REBUTTAL
Like I said, I don’t expect you to live in squalor nor do I think you should sacrifice your safety for financial benefit. Also, trust me; I do understand that you are no longer a college student and that having a roommate might be unacceptable to some. I also understand that after a long day of work being able to retire to the solitude of your “castle” has its own level of importance. Even so, I would be remiss if I did not bring up the huge financial benefits to having roommates or living at home during residency. The money you save each month will help you so much more as a young attending, so please give it serious consideration. At the very least, try to dial back your needs/wants when looking for a apartment to rent.
The posh apartment
There is something to be said for having comfortable surroundings. For some, having nice furniture is important for the emotional and mental health. Being able to come home to “your space” does have some intangible benefits. However, these “intangible” benefits provide no financial benefit. In fact, they provide a financial deficit in their initial cost, and then more difficulty in moving these pieces of furniture you have become attached to. Note, moving stuff, especially large, heavy stuff is very expensive.
Pets are awesome. I always have and always will love dogs. For some people, they simply need to have a pet for their mental and emotional health. As I alluded to before, these people probably already have had pets during medical school and have made their pets a priority. These same people will make them a priority during internship and residency and will probably be ok. However, for the rest of us, buying a cute puppy during internship during a time of weakness where you really wanted something to just love you unconditionally and be so cute and cuddly… is so worth it, for maybe a week.
Then it becomes another responsibility, which you already have too much of. If you are willing to sacrifice a lot of your very little free time for a pet, then so be it. But please, sleep on it first. It’s a disservice to you and to your pet for it to be cooped up in a house all day while you are at work, and even longer on days when you are on call.
Ok. Some people are “car people”. You know the type; all they care about is their car… It’s always been recently washed and waxed and smells awesome and you swear it’s all they ever talk about. For these people leasing an expensive car is the most important thing in the world to them… and neither you nor I will be able to convince them otherwise. I thought I was one of these people, since I wanted an M5 since college. Reality kicked me in the head pretty hard when I started residency and it became very apparent to me just how much money I would be setting on a fire in order to buy and maintain one.
It was at this point I realized that I am not a “car guy”. However, for you real “car guys”, please listen to my plea. Don’t lease a nice German car. Save and buy a used car that you really like. For example, a used WRX, S2000, E46 M3, you know, something with good bang for your buck. Hell, you could even buy an older model Porsche if you really wanted to. To me, that is a better use of your money. Driving a new German car is not a status symbol…
You should be saving money every month. The only reason to be in the red for a month would be because you overextended yourself slightly for a special occasion. Otherwise, you should be in the green every month, even including your loan payments. Ideally, you should also be putting extra money toward a 401k or 403b. I will discuss this more in a future post. You are a working adult now, every year you don’t put money into and/or max a 401k/403b/457 is considered a lost year… and trust me when I say that you are already years behind…
I am not saying be a scumbag friend and leech off your friends with “real jobs”. I am just saying don’t always feel the need to cover everyone. Splitting the bill should be the standard. Get used to saying “I’m still a poor resident” to all your friends who read the NYT articles that say doctors are ridiculously rich and make it rain at the club all day.
Credit Card Debt
Honestly, there is no excuse for credit card debt. It needs to be gone… like yesterday. Credit card debt is like cancer, just paying it down a little at a time does nothing for you… It just prolongs your agony. Get rid of it. If you have to decide between whether to eat out a few times a month or paying down your credit card debt, that’s a no brainer —- TOP RAMEN IT IS, BRO. But seriously, make it gone. Your credit card bill should be on full balance auto-pay every month. Also, don’t talk about 0% APR or 0% balance transfers or that kind of stuff to me. That is simply prolonging and moving around debt you cannot afford to have. I will do a post in the future specifically on just how cancerous credit card debt is.
Lastly… DON’T BUY A HOUSE
Trust me; I’ve heard all the arguments and all the pitches. I almost bought a house during residency even. However… unless you can 100% guarantee that the house you buy will appreciate enough to be able to either break even or make a profit by the time you leave, you shouldn’t buy. Also, if you understand anything about buying a house, there are NO GUARANTEES. You might change residencies or need to move closer to home for other reasons. Long story short, a house TRAPS you where you are.
This is a liability you simply cannot afford as a resident. It is a liability you cannot afford even as a young attending.
Yes, I have friends who bought during residency, must of them did POORLY.
A few of them managed to keep their residency property and rent it out while doing fellowship and as young attendings. However, the hassle was not worth it.
They wanted to sell when they left residency but couldn’t because they would have to take a huge loss. Don’t let this be you. You have been warned.
Ok… now real talk:
“But Sensei, my situation is different… I have X, Y, and Z factors and because I live in location A, there is no way I will lose money.”
The answer is still no. It’s simply too much risk. Could you come out on top? Sure. Unless you get ridiculously lucky, “coming out on top” would be break even or a few thousand dollars, maybe even 10 or 20 thousand. However, the flip side of the coin is that you lose a few thousand, 10 or 20 thousand, or even worse, you can’t sell and get foreclosed on.
Is that risk worth it to you so early in your career?
Do you want to have the possibility of a house foreclosure looming over your head, or worry about paying another mortgage on top of a new mortgage or your monthly rental as a young attending? It is happened to a few friends of mine. Please don’t make that mistake.
Like I said… it’s not about whether you do ok or make a profit or not, the risk/benefit ratio is simply too low. If there is more interest in this particular subject I will dedicate a whole post to it in an attempt to dissuade you guys from buying a house too early.
There are exceptions to every rule… and there are exceptions to every guideline I have posted about.
However, these exceptions are a personal choice… just make sure the exceptions are really worth it to you.
Agree? Disagree? Questions, Comments and Suggestions are welcome.
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