Hey everyone, it’s Whatever Wednesdays again. I’m here with a short post to kind of reflect on my past articles from the last year. After browsing through my post I’ve come to the conclusion that a good amount of what I advise my readers to do, is not what I’ve done. For this reason, I wanted to explain why you should “do as I say, not as I do.”
Stock Photo from: Pexels
What does this picture have to do with “Do As I Say, Not As I Do”?
On first glance, it has absolutely nothing to do with “Do As I Say, Not As I Do”, however, let me explain:
These three phones illustrate the evolution of phones, from rotary, to touchtone, to wireless… and you could argue nowadays that the cellular phones are the most recent evolution. Since buying my house I’ve probably used the my landline wireless phone a total of 8 times… and that was in order to open the gate. Ever since I’ve transferred the calls from the gate to my cell phone, I haven’t used it since, except to clear its call log.
So this picture illustrates evolution, in this case of phones. This applies to each generation. I would consider myself to be in the wireless phone generation, and my parents were in the touchtone phone generation. I didn’t get my first cell phone until college. My little brother, 10 years younger than me is probably somewhere in between the wireless and cell phone generations. However, the current generation of kids are in the cell phone generation… in fact, the icon for “answering” a call probably doesn’t make sense to the:
I mean, they’ve probably never seen or held a phone that even looks like that. The same is true for the “save” icon we’re so used to:
They probably don’t know that this represents a 3.5″ floppy disk, or that there were 5.25″ floppy disks too.
These are relics of a prior generation. However, we can still learn from them.
Umm ok… and what does this have to do with “Do As I Say, Not As I Do”?
I’m part of a different generation that the doctors that came before me, and a different generation than the ones who come after me.
As I’ve talked about in my prior post The New Meta of Medicine, things have changed and will continue to change.
“Back in my day” things were different. Not only that, everyone’s situation is unique and doesn’t fit neatly into box. What I try to provide my readers are guidelines to follow, and I also rely on them to tell me if I am wrong, and update me if things change.
So for example, I advocate:
Paying off your loans as soon as possible, like in 5 years or so.
I’m not doing this quite yet, but I am doing what I think is best for my situation. I finished fellowship in 2013 and it’s 2017, so it’s been 4 years for me. I’ve put a dent in my loans, but they will not be gone before 10 years. The reason is because my situation is a little different than the current generation. My loans were already fixed at < 4% interest, so that gives me a little bit more wiggle room. Additionally, I prioritized buying a house over paying off my loans because it was very important for me to have my children go to a public school. I rationalized by telling myself that during the time my children are in public school I will be able to pay down my loans. With that said, I should still be able to pay off most, if not all of my loans in 10 years, so let’s say 2023.
What would you have preferred to do?
If I had stayed in Rhode Island at my first job, I would have stayed in our little apartment for 5 years or so and paid down all our loans before buying a house. In that situation we were already renting an apartment in a good public school district and our landlords were very nice people.
Upon moving to Hawaii, if I had found a place to rent for a reasonable price in a good public school district then I might have done something similar. However, the difference is that the rent for Hawaii was 2.5x that of Rhode Island. This would have increased the time to pay back loans a few years probably.
I also advocate:
Not buying a house until at least 3+ years as an attending.
And what did I do? I bought a house at around 2 years in…
However, I did not come to this decision lightly. I had already felt the sting of having to move before after losing my first job. My major concern was to secure a house in an area with good public schools. I wanted to buy a house with “good bones” that I could move into and make small changes to over the next 5-10 years. Since arriving to Hawaii I had researched to the best of my ability where I wanted to live long term and established my own internal compass for what was a good deal.
Was buying a house at that time ideal for me?
Coming up with the down payment and figuring out the month-to-month expenses were stressful. The first few months were rough because you have all these expenses that come with buying a house that you don’t really think about. Buying furniture, getting a gardener, finding a good plumber, etc. etc. Things you take for granted when living in an apartment are suddenly your problem.
However, now that I’ve been here for a year and a half, things have kind of settled down. However, there is still a lot to be done to this house… but that’s a post for another day.
I also tell everyone to:
Refinance their loans.
I didn’t need to go this route because my loans were already fixed at a relatively low rate. I briefly considered refinancing at a variable rate to try to get the lowest rate possible and then paying off my loans when I was in Rhode Island. However, after finding out that I was going to need find another job, I put that on hold.
Then, since I moved to Hawaii, my budget and my priorities changed, as described above.
Those are just a few examples of things I advise my readers to do, that I didn’t do.
Here are some examples of things I tell my readers to do that, that I didn’t do (but should have):
Save yourself some time and headache. Get this information all together and keep it safe and accessible. You may need it more often than you think.
The Biggest Mistake of Your Life
I didn’t put away money into my wife’s 403b for her first half year as an attending… big mistake.
Roth 401k/403b in Residency and (How To / Portfolio / Analysis)
I didn’t put away any money as a Resident…. big mistake.
529s and (Let’s Talk / Choosing / My Allocation)
I should have started a 529 earlier, probably as soon as Kylie was born. But… I put it off and it fell by the wayside for a bit.
I bought convertible term life insurance, instead of just term life insurance… a small mistake, but still a mistake. (At least it wasn’t whole life.)
Backdoor Roth IRA and Why You Need One
I should have been doing this as soon as I was able. But… I was lazy, and now I’ve lost some years of compound interest.
Hair Loss and Denial
This is kind of a vain thing… but hey, a mistake is a mistake. Don’t be in Denial, save your hair.
I’m sure there are others, but those are the ones I recognize from memory when browsing Start Here page.
Do As I Say Not As I Do.
In my case, it does not mean, “Just listen to me without question.” For me, it means:
“Learn from my mistakes.” or “Learn from my experience.”
I think either is fine.
The prior generation is not the same as the current or the past.
What works for me may not work for you.
Learn my mistakes, or from my experience. Do As I Say, Not As I Do
Agree? Disagree? Questions, Comments and Suggestions are welcome.
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I am/was in a similar sort of situation. I knew all the “right” things to do with my money when I was in residency, but ultimately, I didn’t put money in a Roth or any retirement account for that matter. I had no family who would be able to financially support me if I became disabled or even fired from residency (had seen it enough that it was certainly something to be afraid of). Also, when I applied for fellowship (I did two), there were unknown costs of moving and when moving to a high cost of living city, I had tremendous difficulty finding an inexpensive place to live (my first year in Philadelphia). For those reasons, I wasn’t able to put money aside and needed to keep liquidity (and an emergency fund just in case).
Then as a first year attending, I bought a house because I simply could not imagine moving again after having moved 3 years in a row no matter how bad the job… Well, I was wrong and moved to a different job. Go figure. Now that I had decided to rent for 3 years, my landlord decided to sell after one year in, so of course, decide whether to rent or buy… deciding to buy because 1) I love my job, but 2) moving is freakin’ expensive once you’ve accumulated furniture. My initial move back cost my institution 12K (considered taxable income for me which sucks). So, now I’ll have to probably pay close to 10K for a similar move to my new house. Who wants to pay that again just to rent… for that price, it’s worth just paying loan fees for a mortgage.
I also didn’t do the backdoor Roth initially, primarily because I didn’t understand it. This site really helped me with that before I delayed another year.
Luckily I read a lot about life insurance not to make the mistake of buying any crazy products my CFP tried to push.
My one regret is that I didn’t learn financial literacy in time to save some of my wife’s retirement fund being taken advantage of by my “CFP” via massive management funds… literally no gains in two years simply because of the massive fees. I didn’t understand all the statements being sent to us and even trusted our “CFP” when I told him things didn’t look right and he said I was wrong and it was just the market that was bad… basically a bold faced lie. The moral of that story is don’t trust CFPs… only trust yourself… but become financially literate. It cost me a few thousand dollars, rather than millions, but reading sites like this, WCI and PoF can save you MILLIONS in the long run!
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