Dermatology resident considering a move back home after my training, SO is a PA in primary care. Current NW 1.85M considering moving back to SoCal to be closer to her family after my training.
Any docs in the area who could comment on hurdles to hit FIRE while living in VHCOL area? We are debt free, no kids but plan on 3. In our early 30s. Does the pay for gen derm in SoCal keep up with the COL? Thanks
NW of close to $2 million while a resident and no debt, yeah i think you’ll be fine unless every sunday you have a bonfire of $100 bills
Even if you don’t contribute literslly anything you’ll cross $5M in 15 years.
But you are asking what hurdles might be to this, there are three of them in your plan
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The three kids you wanna have lol
Early 30s, net worth of almost 2 million, plus a high paying specialty. This is a joke/troll right?
Average home price is >2.5M for a house accommodating 5 people
Don’t know what gen derms make in the area but physician salaries in these areas generally don’t keep up with COL. In fact, people take a pay cut before even accounting for COL and CA taxes because groups and employers know they can get away with it simply because people want to be in the area. I’d go as far as to say that getting to live in SD/OC is part of the package so people still sign up to work here knowing full well it’s a terrible financial decision but an amazing from a quality of life standpoint.
Probably wouldn’t come here if FIRE is the number one goal. An home for a family of 5 will start at 1.5M but probably closer to 2M-2.5M. Definitely hard to FIRE with a 10k+ mortgage a month.
Except OP has $1.85M NW AS A RESIDENT and no student debt. They don’t really need to save much of anything to retire comfortably in their 50s.
You’re not an attending and you already have near $2m. So what are you looking for? Retiring after 7 years as an attending?
Anyways, as for compensation, the answer in LA / OC / SD is how much cash pay procedures you plan to do.
Not in SoCal, but you’re early 30s with close to a 2M net worth. “Head start” isn’t even the right term for that kind of lead over other graduating derms. I don’t know how much of that is liquid. But you should be fine - if FIRE is the priority.
Now I don’t know if you can live in a $4M home and send the kids to private school and FIRE. You’ll have to figure out where your priorities are. COL and high taxes makes FIRE much harder. You may be better off aiming for COAST FIRE - easier to get to that goal in a VHCOL area.
SoCal derms can chime in. I’d imagine base salaries are lower and lower collections than in other parts of the country, like many desirable cities. But once you get busy, with a PA spouse, you should have a HHI of $600k on the conservative side.
If you save just $75k a year and start with a $1M liquid retirement portfolio, 20 years of contributions at 5% real returns gets you a $5M portfolio in today’s dollars at age 65. Adjust those numbers if you want to be fully FI at a sooner age.
Agreed, I don’t think aggressive saving while enjoying the perks of SoCal is feasible. about half is liquid. Alternatively, we would move to the Midwest closer to my family where a hospital employed position would allow us to save 350-450/year for 5 or so years and then make the move out west w a NW closer to 4.5-5M. I’ll have to talk to the wife. Thanks
Yup. That’s the route I would take if FIRE was the goal. I’ve practiced in the Midwest. Best contracts I saw comparing across different regions.
This story needs some context as 1.85m NW as a resident? Hmmm. Sounds like inheritance assisted? Anyway, planning on FIRE, yet also planning on having 3 kids (in the near future as you guys are in early 30s). So kids are freaking expensive, and you will likely have to buy a house in that VHCOL area you describe. Also have to fund their 529, and you will be financing this w/ only one spouse working, at least for a while. I would chill w/ the FIRE thoughts for now. Enjoy "debt free" living, because it sounds like tat may change soon! Most importantly, I am not trying to be rude, funny, or clever. Just some facts from a guy wo as been there and done that.
Yes, you can easily FIRE. What that means depends entirely on how early you want to retire and at what level of spending, but when you factor in the 1.85mill in current NW, it's a no brainer that you will be the ones choosing when and how lavishly to retire, rather than traditional financial constraints.
The notable extra expenses for you will be housing, education (i.e., private school, if you choose it), and childcare (relatively short-lived vs. the others, but still significant). Obviously CA/NYC-level taxes don't help either.