Many more changes loom on the horizon with the great healthcare debate gripping our nation. I watch anxiously as our leaders decisions will determine to a large extent how intelligent of an investment I have made over the past nine years with my time and money. What was once considered a successful career decision may turn into a lengthy bad bet on a rapidly changing industry.

Regardless of the decisions they make, I am determined to come out on top in the end.

After borrowing extensively to complete my education, I finally get the opportunity to begin repaying these debts. As I watch the health care debate play out, I hope for the best from both a patient and physician perspective.

The healthcare debate has made me all to aware of the power of the rule makers to affect my livelihood. Dependent upon the outcome, it will be very interesting to see how smart of a decision I have made in my choice of a career.

Regardless of the outcome, I am confident in my ability to become successful.

The one consistent feature of my life for the past 20 years is finally coming to an end as I near the end of my fellowship. It will be interesting to see just how different the real world is. If my career changes as fast as the other facets of my life, I better hold on for a wild ride.

More to follow perhaps….

It will be interesting to see if this is the start of a sustained rally. My uneducated opinion is that we still have a little bit more time on this roller coster.

If you too want to complicate your financial life, here are my suggestions:

Step 1: Open up multiple accounts of every form of finacial product available in order to save a few bucks. To do this right will need multiple

• credit card accounts
• checking accounts
• savings accounts
• Investment accounts

Step 2: Borrow money from as many different institutions as possible Student loans, car loans, credit cards, mortagaes, HELOCs, personal loans, payday loans.

We haven’t done as good of a job here but the possibilities are almost endless.

Step 3: You must create multiple tracking systems to follow your infomation in the name of organization. This will make it almost impossible to keep anything up to date. You can create such a confusing situation that as soon as you get behind you will almost never catch up.

This Just a quick summary of what was going on the past few months. Life goes by fast and does not appear to be slowing down any time soon. My fellowship has been great but leaves little time for other interests. I have some time off and hope to have our finances up to date by the end of this weekend.

Thanks for following along.

Our June Monthly Update is to follow soon.

Here is what we have done in the past month.
1. Moved our family 2800 miles to a new city to continue my medical training and spent a small fortune in gas.
2. Started fellowship in a completely new system
3. Studied for my upcoming board exams so that I will be able to be a “board certified” physician
4. Spent way more money than we were able to take in.
5. Watched our equity accounts continue to dwindle.
6. Changed the mailing addresses on a million different accounts.

Hope everyone else has been having as much fun as we have this summer!

Of course, all kids need stuff, and there’s no reason to completely deprive them of things they’ll enjoy and even show off to their peers

Wow, I am already old fashioned and I haven’t even finished my education. There are lots of “things” children need but I doubt “stuff” is the most important one on the list.

I also wonder about the benefit of showing off to their peers. I remember playing the game of “my dad is …….” but an arms race of who has the most expensive gadget doesn’t teach children anything except that you are measured by your stuff.

If this is everyone’s approach to raising their children, no wonder the average upper middle class family spends $182,000 on each child by the age 17.

I will have to admit that I am tempted to follow what it costs us to raise our children. In a society in which the majority of households don’t budget and don’t know where they spend their money I find it hard to believe that they know how much they spend yearly on their children.

If this data is correct however I am in for a rude awakening.

I was surprised to see this in one of their articles:

even a $100,000 debt is a reasonable trade-off for a medical degree

This is the foundation of this blog. As I approach 30y/o our family’s net worth remains negative, mostly due to my educational costs and some poor finacial decisions in residency.

I have a hunch that I should be able to play catch up over the next decade but the long term picture of my career choice is hazy. I sense some discomfort among some of my collegues about the brewing health care crisis and the push for socialized medicine.

We shall see. There are no guarantee’s for tomorrow but I’ll keep you up to date.

In years past when stocks, or real estate were zooming up, all I could do was watch and get a sick feeling in my stomach. It was the feeling you get when you are way behind and you feel like everyone else is just getting further ahead. All I could see were opportunities lost.

This time it is different and I think I know why… This time I am at least investing SOME money in the market.

To me this emphasizes the importance of just starting an IRA or 401K. Even though I have a large amount of debt, some of it at interest rates just over 8%, I have been able to have peace of mind by investing $200/month in my Roth IRA. That is not a lot by most standards and the majority of our savings have been used to start our Emergency fund, but it is enough for me to think that at least I am doing something.

Although I am missing out on maximizing my growth by not investing lump sum, I am also more comfortable that I will not have invested at a peak by investing over time.

So if you have that hollow feeling in your stomach when you watch the evening news, Just Start and I guarantee you will feel better in no time at all.

I reached the point that I think many people in debt reach. You look at your balances, you look at your income and you realize that, whoa! If something doesn’t change soon I will not be able to keep my head above water. As a Resident, the majority of us have the benefit of knowing that we will be getting a big raise as soon as we finish Residency. Therefore, many of my colleagues in a similar situation just decided to keep piling the debt on with the assumption that once we finish they will be able to pay these debts off without having to change their lifestyle. This was a very tempting option. The problem was that I really didn’t think I would be able to pay my minimums if I continued to accumulate my debt at the same rate.

After running the numbers it was obvious that small changes were not going to make much of a difference. I don’t drink that much coffee or eat out that much. I first downsized my living space from a one bedroom to a studio. This helped me in two ways. First it made me realize that I had way too much junk that I would never use during residency; and second, it helped keep me from spending money on things I didn’t have space for and couldn’t afford. The biggest cost saver for me however was an obvious choice: get rid of the car.

This is the point that 99% of people stop reading, call me crazy and explain how for them, making such a move is just not possible. I will have to agree that with most people it would be very, very difficult to live without a car. What I am suggesting to consider if you really need (1+) cars for each member of your family. While I debated it for months, I did not sell my car until a few weeks before my wedding when I knew that we would have at least one working car in the family.

I did have some reservations at first, but after seeing an extra $600/month in my checking account I quickly decided that it was worth the inconvenience. We have been able to continue this for a whole 6 months by:

• using public transit and the shuttles offered by the hospital
• walking or riding our bikes when the weather allows(and occasionally when it doesn’t)
• pooling all of our errands into one weekly trip

Will we be able to continue this into the future? This will most likely be determined by where we eventually settle. Most towns and small cities don’t have adequate public transit. Will the roads be safe to ride a bike to work on? How far from work/town will we live? These are questions that we will have to address in the future. Our goal for now is to see if we can remain a single car family for at least the next 2 years.

Here is a quick list of what I felt were the best decisions I made in the past year:

• The biggest decision I made was to get engaged in April 2006 and married in December of 2006. In terms of dollars and cents, by combining households my wife and I managed to decrease our living expenses dramatically.
• The second biggest decision I made was to sell my truck. I had never been a budgeter but once I did I found out my truck was costing me over $700 a month in combined expenses(insurance, fuel, loans, parking, etc..) Since I happen to live close enough to the hospital and stores I decided to sell my truck. Financially it has been a tremendous benefit but it has been difficult at times, particularly meeting friends outside of work hours. We did keep my wife’s car and it continues to be a significant expense in our lives.

Amazingly those two decisions were enough to turn my finances around. I hope to have the rest of my credit card debt paid off by November 2007 when the last of my 0% balance transfers expires.

The story will not end there unfortunately; my private school loan comes out of forbearance in November as well and has accumulated over $2000 of interest in 3 short years on a balance of only $10,000. At an interest rate of 8% and I will have to make a decision to pay it off using our savings or to make the minimum payments until I finish residency.

I hope that this blog will be helpful. My end goal is to prove that no matter the current cost in dollars and time; it still makes financial sense to become more educated. It just requires a lot more tolerance for large negative numbers and a willingness to help your fellow man.

I haven’t checked their data but this is the first time that I have read about this disparity. The fact that there is a wealth gap makes sense because younger generations have not had time to accumulate a large amount of savings. I am sure they are picking the data that fits their story but here are some interesting numbers:

• ages 55-59: median net worth rose 97% over the past 15 years to $249,700 in 2004. Median income rose 52%
• ages 35-39: median net worth fell to $48,940 and median income fell 10%

After looking at the data I don’t know what is more concerning; the fact that there is an increasing spread or the fact that half of all 59 year olds have less then $250,000 saved for their impending retirement.

The rest of the article goes on to ask the question why is a poorer younger generation subsidizing a wealthier older generation in the form of Social Security and Medicare taxes.

All in all a pretty interesting article with some really good tidbits.

Currently I have come down with a mild case of financial apathy. There was a mild prodrome of symptoms in April but it is now in full effect. I likely exposed to it from multiple sources and have been unable to shake it over the past two weeks. This is likely due to multiple reasons:

1. My work hours in the hospital have increased somewhat making it more difficult to keep up with the blogsphere as well as my usual readings.
2. I have taken on added responsibility at work which has renewed my enthusiasm for the field of Medicine, relegating blogging to 3rd fiddle behind family and work.
3. We have hit a plateau in actively managing our money. Over the past 5 months we have done a good job of cutting expenses, budgeting and automating our savings. At this point we have fallen in a routine of saving X amount of our income per month +/- any unexpected expenses.
4. We remain about 2 years out from any “real” changes in net worth. In this regard our life is like that of most Americans. We will not see any large changes in our net worth one way or the other and will just continue to chip away at our 6-figure debt.

The elephant in the room that I need to address is the management of our retirement investments. Currently they remain invested in a mixture of overlapping funds in dire need of an overhaul. I have yet to bite the bullet and make a well balanced portfolio out of the mess. I think that I will be able to address this later in the year when things have settled down at work again.

Thanks for following along. Check back in 2010 when I finally finish my training. By then I should finally be able to start making a dent in my school loans and will be able to play catch up with my retirement savings.

I seem to walk a fine line between getting things done and being hopelessly overwhelmed by what needs to be done NOW.

I am begining to think that I am one of those people who always seems to bite off way more than I can chew. In all honesty, I realize that I do it because on some level I like it. Some people climb shear rock walls 200 feet above ground without a harness for their adrenaline. I just try to squeeze 80hrs of work, time for family, what used to be a social life, maintain a healthy lifestyle and attempt to get out of debt into a 168hr week.

But, I digress.

How does this apply to personal finance? What I perceive I can accomplish has been warped by our instant gratification, technology based, information society. People lease a new car every three years. Movie stars change their S.O’s about once every two years, I seem to need a new cell phone at least once a year and computers, ipods, TV’s, and the internet change almost monthly if not weekly.

The one thing that doesn’t seem to change is how often I get paid and how long it seems to take to accumulate savings. In comparison to how quickly I could spend my paycheck on new gadgets it seems like an eternity to watch our savings account grow each month.

I start to question what am I doing wrong? Did I choose the wrong field? Are the mistakes I made in the past going to haunt my forever?

Luckily these thoughts pass quickly. I look at my day to day life and realize that although I am perpetually tired(show me a Resident who isn’t!), I have a happy, comfortable life with many blessings.

The problem I suffer from is being impatient and having an altered sense of where I should be. Perhaps I should stop reading MM’s blog. When this happens, I try to redevote myself to “doing the right thing” and realize that I don’t have to be ready for retirement tomorrow. I have good old Uncle Sam to take care of me(wink, wink)
Heck, as I mentioned before, I still have a few years before I get what I would consider my first real job. I just have to remind myself from time to time to focus on forming good habits and pay attention to the big things.

such is life….

Here are some of the key points:

“About 150 years ago, Americans were dying from old-fashioned infectious-disease epidemics. Between 1813 and 1850 in Boston, Philadelphia, New York, and New Orleans, death rates increased by 42 percent thanks to such burdens of newly industrializing cities as crowding, dirty water, and open sewers. Cholera epidemics killed people by the tens of thousands.

The age’s medical experts didn’t actually know much about the causes of such diseases or how to fight epidemics. But noticing that poor immigrants in the filthy slums of port cities like Boston and New York were particularly likely to get sick and die, they concluded that their eating and drinking habits were “intemperate”; that, as public health historian John Duffy writes, “the basic problem with the poor lay in their lack of moral fiber.” The poor had no one but themselves to blame for their diseases. They needed to be taught a combination of personal hygiene and resistance to sin.”

Then Edwin Chadwick published The Sanitary Conditions of the Labouring Population, which argued that miserable working and living conditions made the poor sick and argued for ensuring clean water, building sanitary sewers, removing animal carcasses, and providing decent housing.   The result was a virtual elimination of the infectious disease epidemics and between 1850 and 1915, death rates fell by 55 percent.

The solution was public health reform which was undertaken for people, rather than by people.  As a society it may clear our conscience to say that obese people can control their habits in eating and exercise, but it will not touch the epidemic

If we are to “cure”  obesity it will take another great public health reform but there’s our cherished individual freedom. Some of our fierce individualism spills over into a vague feeling among eminently reasonable Americans that the government shouldn’t be telling its people where they can or can’t put a vending machine, and also translates into the sense that health is an individual responsibility. 

If we keep this attitude it will not be long before obesity is killing far more than 325,000 Americans a year.