Go to Med School or Work 5 More Years for FI?
Posted: Tue Jan 31, 2017 8:37 pm
Hi all
I posted this in response to a thread I created 18m ago in the Money forum, but it now comes at the end of a 2 page thread about various UK tax issues, so I thought I would post separately (and in a more relevant forum).
I am 30yo and have a wife and young child. I am currently working in investment banking. We have decided to move to the US (great timing post Brexit...), where I am planning to go back to medical school to retrain as a doctor. I got in to medical school a few years ago but decided against it, and have always regretted the decision. If I won 100m right now I would go to med school. This, essentially, is my retirement plan.
My finances are:
- £65k in a taxed brokerage account, entirely in absolute return funds and cash
- $50k of equity in a $400k house in the US, which we are currently renting out for $500 / month cash flow (NOT including vacancy or maintenance, but including taxes, insurance and management. Also not including tenant paying down principal).
- $56k of student loans at 2.75% average interest rate
So I'm roughly $150k better off than I was 18 months ago, which I'm very happy about, mostly due to:
- Outperformance at work, which led to higher bonus
- Wife's job is a nice little earner
- Strong stock market returns early last year
I am all set to move to the US later this year to go to medical school, but am having a case of (slightly) cold feet. Here are my revised options:
1. Go to school as planned. Easily blow through all savings rather quickly, and be reliant on wifes job, additional loans, scholarships, family loans / handouts, side hustles and potentially military / national guard service (also a desire of mine, not just for the $). All of which may be stressful with at least one young child, but would lead to an additional few years down the line practising medicine. My wife is supportive and ready. I am actually taking some time off of work to set up a side hustle website right now!
2. Work for another few years and become FIRE. Here's what my net worth (total assets - total liabilities ((inc. student loans)) would look like every year for the next few years (end of each year):
- 2016: $80k (now)
- 2017: $175k
- 2018: $320k
- 2019: $500k
- 2020: $750k
- 2021: $1,050k
These numbers assume:
- No reinvestment along the way - ie keeping it all in cash (conservative - could retire 1y earlier at least with smart investing)
- Wife keeps her job or equivalent (reasonable assumption)
- I receive average bonus (conservative, as with top bonus every year I could reach 1m 1-2 years faster, at least)
- Banking continues to pay for another couple of years
- Very conservative (ie large) cost of living budget...almost disgustingly so
I would then be able to live off the investment income and would have a large, growing nest egg that would serve as FU money forever and be probably quite large by the time I'm 50-60.
On the flip side, I reallly dislike my job and it requires 100% of me. There is no room to just hang around and collect a paycheck - I am required to be 100% engaged. Burnout is a very real possibility. That said, I am good at it and can learn to love it again with some effort, I think. I think that, also, after 1-2 more years I kinda have FU money in that I know I can leave any time to pursue my dream with a large cash buffer. Also, I would be starting medical school at 35-36. Not too old by any means, but a factor. I don't particularly mind being the "old" guy...particularly if I'm the old, rich guy
3. Some combination of the above. Maybe work for 1-3 more years, enough to see me through school but then with 0 left at the end, but a new career.
I am really struggling with this decision, and it has been made harder by the fact that I now have a child. Am I being selfish pursuing my dreams at the expense of financial security, when just 4-5 years more of work will see me and my family set up for life? I feel like I am lucky enough / have worked hard enough to be on a very high earning trajectory and can almost have my cake and eat it too, in a way...
Thank you all !
I posted this in response to a thread I created 18m ago in the Money forum, but it now comes at the end of a 2 page thread about various UK tax issues, so I thought I would post separately (and in a more relevant forum).
I am 30yo and have a wife and young child. I am currently working in investment banking. We have decided to move to the US (great timing post Brexit...), where I am planning to go back to medical school to retrain as a doctor. I got in to medical school a few years ago but decided against it, and have always regretted the decision. If I won 100m right now I would go to med school. This, essentially, is my retirement plan.
My finances are:
- £65k in a taxed brokerage account, entirely in absolute return funds and cash
- $50k of equity in a $400k house in the US, which we are currently renting out for $500 / month cash flow (NOT including vacancy or maintenance, but including taxes, insurance and management. Also not including tenant paying down principal).
- $56k of student loans at 2.75% average interest rate
So I'm roughly $150k better off than I was 18 months ago, which I'm very happy about, mostly due to:
- Outperformance at work, which led to higher bonus
- Wife's job is a nice little earner
- Strong stock market returns early last year
I am all set to move to the US later this year to go to medical school, but am having a case of (slightly) cold feet. Here are my revised options:
1. Go to school as planned. Easily blow through all savings rather quickly, and be reliant on wifes job, additional loans, scholarships, family loans / handouts, side hustles and potentially military / national guard service (also a desire of mine, not just for the $). All of which may be stressful with at least one young child, but would lead to an additional few years down the line practising medicine. My wife is supportive and ready. I am actually taking some time off of work to set up a side hustle website right now!
2. Work for another few years and become FIRE. Here's what my net worth (total assets - total liabilities ((inc. student loans)) would look like every year for the next few years (end of each year):
- 2016: $80k (now)
- 2017: $175k
- 2018: $320k
- 2019: $500k
- 2020: $750k
- 2021: $1,050k
These numbers assume:
- No reinvestment along the way - ie keeping it all in cash (conservative - could retire 1y earlier at least with smart investing)
- Wife keeps her job or equivalent (reasonable assumption)
- I receive average bonus (conservative, as with top bonus every year I could reach 1m 1-2 years faster, at least)
- Banking continues to pay for another couple of years
- Very conservative (ie large) cost of living budget...almost disgustingly so
I would then be able to live off the investment income and would have a large, growing nest egg that would serve as FU money forever and be probably quite large by the time I'm 50-60.
On the flip side, I reallly dislike my job and it requires 100% of me. There is no room to just hang around and collect a paycheck - I am required to be 100% engaged. Burnout is a very real possibility. That said, I am good at it and can learn to love it again with some effort, I think. I think that, also, after 1-2 more years I kinda have FU money in that I know I can leave any time to pursue my dream with a large cash buffer. Also, I would be starting medical school at 35-36. Not too old by any means, but a factor. I don't particularly mind being the "old" guy...particularly if I'm the old, rich guy
3. Some combination of the above. Maybe work for 1-3 more years, enough to see me through school but then with 0 left at the end, but a new career.
I am really struggling with this decision, and it has been made harder by the fact that I now have a child. Am I being selfish pursuing my dreams at the expense of financial security, when just 4-5 years more of work will see me and my family set up for life? I feel like I am lucky enough / have worked hard enough to be on a very high earning trajectory and can almost have my cake and eat it too, in a way...
Thank you all !