Go to Med School or Work 5 More Years for FI?

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banker22
Posts: 94
Joined: Mon Aug 03, 2015 1:17 pm

Go to Med School or Work 5 More Years for FI?

Post by banker22 » 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 !

thrifty++
Posts: 645
Joined: Sat May 23, 2015 3:46 pm

Re: Go to Med School or Work 5 More Years for FI?

Post by thrifty++ » Wed Feb 01, 2017 3:57 am

I have experienced high stress jobs before and have found that the more frugal I become and the more my wealth grows the less stressful I find it due to reduced dependency on the job - the consequences of under performance become increasingly less of a deal. It seems like the less you are concerned though the better you can perform due to more confidence and more leverage and bargaining power, can take more risks etc.

f I were in your shoes from the snippet you have advised I would definitely stay employed and go to medical school later. I remember you asking this earlier (if I am thinking right) and I remember you having quite a huge salary. Would so stick with it I reckon. Maybe instead focus on escalating your plans and making it quicker with more investment strategy and frugality strategy. Turn that 5 years into 3.

You would still be young when you go to medical school regardless. Why are you interested in medical school? Becoming a doctor seems like such a high stress job with high entry costs.

I guess maybe also think how would you feel if you went to med school now, lost the amazing opportunity you are in to become FI quick, end up with huge debt, and find out that the job is mega stressful and you dont like it.

RealPerson
Posts: 634
Joined: Thu Nov 22, 2012 4:33 pm

Re: Go to Med School or Work 5 More Years for FI?

Post by RealPerson » Wed Feb 01, 2017 6:14 am

It sounds like you are doing great. Congratulations.

If the choice is between a few more years in banking to achieve FI, vs moving to the US and starting medical school, I would highly suggest you do the first. Before making a decision that will set you back maybe decades, make sure you talk to younger, recently graduated medical doctors of various types in the US. Ask them if they would do it again and what ACA has meant for their careers. Many of the younger docs would not do it again. Many are leaving routine medical practice to escape the ACA drudgery and try to reinvent themselves with conscierge medicine and other alternative practice forms to make a living in medicine. The mystique of medical practice and the actual daily reality are only very distant cousins of one another. The calling when entering medical school seems to fade fast once exposed to the realities of the industry.

Also, with a young child, medical school means you will spend very little time with your young child. These years will never come back. Another issue is that your current career is not a stepping stone to medicine. You are not building on something. You are essentially starting from scratch, with very little benefit from your financial career.

If you really feel the calling, consider first becoming FI, and then checking into medical school through the US military. All paid for, so debt. Plus you will remain FI for life. If you have to pay for the education yourself, you are exchanging a few years of hard work to reach financial independence for maybe decades of indentured servitude to pay back those student loans.

I don't mean to discourage or kill the enthusiasm of a young dreamer. I just want to go into this with your eyes wide open. Best of luck to you.

banker22
Posts: 94
Joined: Mon Aug 03, 2015 1:17 pm

Re: Go to Med School or Work 5 More Years for FI?

Post by banker22 » Wed Feb 01, 2017 6:47 am

Thanks both for the excellent advice - I really love these forums. There are truly brilliant (but also generous) people on here.

@RealPerson

I have a good amount of friends who are doctors, and most really enjoy their jobs. The ones who don't seem to be those who entered the profession hoping to become rich...in reality it's much easier to make money in other ways. Yes, the military definitely appeals to me for the same reason medical school appeals to me frankly - my long held desire to be a public servant...funny considering in my current occupation many would see me as the opposite! Worth noting that isn't a decision I have taken lightly, or by watching too much Gray's Anatomy. I had wanted to be a physician since I was a young child and have spent hundreds of hours volunteering, shadowing, conducting medical research, etc etc. Great advice - thank you.

@thrifty++

Great advice - thanks. You are right, it does feel nice knowing that I could walk away at literally any time. Being FI through medical school would also take the stress off massively and help me keep everything in perspective, I imagine. I just really dislike my current job! But I suppose I could grin and bear it for another few years. Most people, if you gave them the choice of spending 5 years in prison for $1m would take it...I suppose what I'm doing isn't exactly prison!

Thanks all

thrifty++
Posts: 645
Joined: Sat May 23, 2015 3:46 pm

Re: Go to Med School or Work 5 More Years for FI?

Post by thrifty++ » Wed Feb 01, 2017 1:07 pm

banker22 wrote:Being FI through medical school would also take the stress off massively and help me keep everything in perspective, I imagine. I just really dislike my current job! But I suppose I could grin and bear it for another few years.
I wonder if there is a way you can segue in your job or industry to something related or similar but which you will like a bit better to assist with your short FI journey.

Scott 2
Posts: 811
Joined: Sun Feb 12, 2012 10:34 pm

Re: Go to Med School or Work 5 More Years for FI?

Post by Scott 2 » Wed Feb 01, 2017 2:54 pm

thrifty++ is thinking along the same lines as me

Can you leverage what you are already doing into a role that fills the need to be a public servant? Retooling is an expensive and time consuming proposition. It also limits your potential, in that you lose 6+ years to the transition, plus throw away a lot of the skill development you have already completed.

banker22
Posts: 94
Joined: Mon Aug 03, 2015 1:17 pm

Re: Go to Med School or Work 5 More Years for FI?

Post by banker22 » Thu Feb 02, 2017 4:54 am

Good ideas guys, thanks. There are certainly teams at work who cover more healthcare related companies. I will look into it!

Andre900
Posts: 96
Joined: Sun Mar 27, 2011 10:25 pm

Re: Go to Med School or Work 5 More Years for FI?

Post by Andre900 » Fri Mar 03, 2017 7:52 am

Do you have any experience working in health care? I know your current high-paying job offers little free time, but I would try to volunteer in a hospital, shadow practicing docs, and interview several of them as a way to collect more direct hands-on information about a career in medicine.

I take it that you did very well on the MCAT? How certain are you that you have a spot in a US medical school? Are you sure you could handle and complete the 4-year grind followed by 2+ years of torturous residency? How satisfied would you be to learn, after earning your MD degree, that you didn't get accepted into the residency or specialty that you hoped for.

A close family member graduated from DO school in the early '90s, practiced as an employee with an established firm for a about eight years (at a starting salary at $110K, rising to $135K, at 60+ hours per week!); eventually accepting an management position with a large health insurance company and doubling his salary. She's had to keep her medical license current, but hasn't practiced hands-on medicine an almost twenty years!

Andre900
Posts: 96
Joined: Sun Mar 27, 2011 10:25 pm

Re: Go to Med School or Work 5 More Years for FI?

Post by Andre900 » Fri Mar 03, 2017 7:52 am

Do you have any experience working in health care? I know your current high-paying job offers little free time, but I would try to volunteer in a hospital, shadow practicing docs, and interview several of them as a way to collect more direct hands-on information about a career in medicine.

I take it that you did very well on the MCAT? How certain are you that you have a spot in a US medical school? Are you sure you could handle and complete the 4-year grind followed by 2+ years of torturous residency? How satisfied would you be to learn, after earning your MD degree, that you didn't get accepted into the residency or specialty that you hoped for.

A close family member graduated from DO school in the early '90s, practiced as an employee with an established firm for a about eight years (at a starting salary at $110K, rising to $135K, at 60+ hours per week!); eventually accepting an management position with a large health insurance company and doubling his salary. She's had to keep her medical license current, but hasn't practiced hands-on medicine an almost twenty years!

Andre900
Posts: 96
Joined: Sun Mar 27, 2011 10:25 pm

Re: Go to Med School or Work 5 More Years for FI?

Post by Andre900 » Fri Mar 03, 2017 8:00 am

Your 5-year net worth projections are staggering! What's the likelihood that a recession, corporate restructuring, getting cross-wise with your boss, or some personal matter won't blow that all up?

I've always earned well below 6-figures, but helped along by a reasonably low cost of living, good savings habits, and a couple of serendipitous real estate purchases, it took me almost 30 years of working in corporate America to crack $1 million net worth.

Scott 2
Posts: 811
Joined: Sun Feb 12, 2012 10:34 pm

Re: Go to Med School or Work 5 More Years for FI?

Post by Scott 2 » Fri Mar 03, 2017 9:44 am

I was speaking with a co-worker whose husband is currently in residency to become an anesthesiologist. She said everyone he works with, says it isn't worth it, they are trapped by the loans, and if there was another way out they'd take it. One of the most prestigious programs, from what I can tell.

He won't catch up to her earning potential until he's almost 40. Then he has to pay back $100's of thousands in loans. Currently between work shifts and studying, he's well over 100 hour weeks. Hours suck - holidays, nights, weekends. He can barely afford a meal out. After he finishes residency, if he wants to work in the major metropolitan area, he needs to spend another year or two, doing one or two fellowships.

Meanwhile people think she must have "so much money", because she's married to an anesthesiologist. The reality is she has to plan weeks ahead of time to go on a date with her husband. Most nights she's home alone. Her time with him is dictated by the work schedule, and often he just wants to escape into a video game, because stress. Forget about coordinating something like a couples dinner.

I never wanted to be a doctor, but oh that sounds miserable.

Did
Posts: 612
Joined: Mon Apr 01, 2013 7:50 am

Re: Go to Med School or Work 5 More Years for FI?

Post by Did » Sat Mar 04, 2017 2:53 pm

Stick with the cash as long as possible. Try and avoid stress as much as you can while staying in the game. Avoid lifestyle creep. Medicine is a long, miserable debt ridden slog. That's my 2c worth.

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