Caller (George) (2:42)

I'm doing well. Thank you guys for having me on.

Jill Schlesinger (2:44)

Of course. What can we do for you?

Caller (George) (2:47)

Yeah, so I am relatively new in my job. I have been in medical training for a long time and feel very behind with financial planning. So. So get a lot of advice from different people, but not sure that it applies too well for me and was hoping to get an adult in the room and get some help.

Jill Schlesinger (3:06)

Well, we don't have adults, but Mark and I are definitely here to help you. So. So in your new job, how much do you earn?

Caller (George) (3:12)

About 300,000.

Jill Schlesinger (3:14)

Okay. And so you've been training a long time. This is very. People in the medical field, man. This is so very consistent. You know, it's like I've spent all this time going to school, doing residency, doing this, doing that, and then all of a sudden you're making real money. So what else is going on in your life, George? First of all, how old are you?

Caller (George) (3:33)

I'm 34.

Jill Schlesinger (3:35)

Okay. And are you partnered, married, single? Single. Single. Making 300 grand. Let's see if he has any debt, Mark, and then we can set him up. Did you acquire debt getting all that training?

Caller (George) (3:47)

Only for medical school. I got a scholarship, but all in probably 150,000 in student loans.

Jill Schlesinger (3:53)

Okay. And is the clock started to tick on all of that? Yes, yes.

Caller (George) (3:58)

So I'm paying 900amonth now and that's going to go up to 1700amonth. I'm doing PSLF and about four years in.

Jill Schlesinger (4:07)

Okay.

Caller (George) (4:08)

With about like $0 payments until just this past year.

Jill Schlesinger (4:12)

Are you feeling comfortable like on the public loan forgiveness plan at this point?

Caller (George) (4:19)

A little bit wary with the administration if they revoke not profit status from hospitals, but I'm still intending to go on with it.

Jill Schlesinger (4:26)

Okay. So are you. Are you renting right now or do you own something?

Caller (George) (4:32)

I rent. It's pretty expensive here to buy.

Jill Schlesinger (4:35)

And how much is the rent?

Caller (George) (4:37)

It is 3300 and I'm hoping to decrease that substantially in April when my lease ends.

Jill Schlesinger (4:42)

Oh, really? Moving somewhere else?

Caller (George) (4:45)

Yeah, I don't have a lot of need for the situation I have, and I'd rather downsize or have a little bit of a nicer place for cheaper.

Jill Schlesinger (4:52)

Okay, that seems good. And so in the new job, do you have a retirement plan available to you?

Caller (George) (4:59)

Yeah. So this is good timing. A lot of why I called is at two years at the job, which I'm about to. I just hit, actually, there is A profit sharing sort of thing that is still kind of confusing to me. But the broad strokes of it are 25% of your income pre tax is taken out of your check until you hit a cap of believe, 75,000 a year.

Jill Schlesinger (5:21)

Wow. And are you, but you're. Are you choosing 25% or do they make that as like. That is what it's taken out.

Caller (George) (5:28)

That's what's taken out at a minimum. So 90 days in, they make you elect. I like that. Yes. I'll do the plan. And then that apparently is what it works. Like.

Jill Schlesinger (5:38)

Yeah, it's probably a 401k with a profit sharing plan wrapper on it. Okay, so that's good. So you're putting 25% of your 300 grand away pre tax. Are you in the kind of medical profession where, where you will start earning more and more money or are you in the part that's sort of the unsexy part? Like, I'm a primary care doctor. That's all I'm going to make.

Caller (George) (5:57)

Unsexy adjacent. So.

Jill Schlesinger (5:59)

Okay.

Caller (George) (6:01)

It'll probably go up to, I'd say 315 to like 350. It's variable.

Jill Schlesinger (6:09)

Okay. Do you have any other. Besides the medical school debt, do you have any other debt?

Caller (George) (6:16)

No.

Jill Schlesinger (6:16)

Okay, great. How about money in the bank? Boring. Savings, just so you have it.

Caller (George) (6:21)

Yeah. So I kind of looked at the first two years before this retirement stuff kicked in to catch up. So I had nothing in high yield savings and kind of was paycheck to paycheck prior to this job. Right Now I have 60,000 in a high yield savings.

Jill Schlesinger (6:36)

Great.

Caller (George) (6:38)

I put 10,000 into a brokerage last year and that's at like 12,000 now.

Jill Schlesinger (6:42)

You're a genius. Genius investor also, thank God. Okay.

Caller (George) (6:46)

And then 52,000 in my Roth IRA that I contributed to in residency and then did a backdoor last year.

Jill Schlesinger (6:53)

Okay, great.

Caller (George) (6:54)

And then 74,000 in my 401k just because I started August 2023. I was able to put in in December of 2023 and I just maxed it out.

Jill Schlesinger (7:06)

So right now this 25% minimum has not yet taken effect. Or it's just taking effect now.

Caller (George) (7:13)

It takes effect on my Friday paycheck.

Jill Schlesinger (7:16)

You said that your rent is probably going to be reduced to. To what do you think?

Caller (George) (7:22)

I'm hoping to at least pay a couple hundred less. So I, I'm just open to it. I live in a place with like a yard that I don't need and, you know, it's private. I'm More open to just like a apartment building or something like that.

Jill Schlesinger (7:34)

Anyone need a roommate in California? And he also has medical training, so this is good. It would be a great renown. I'm just kidding. Okay, so like three grand a month. And so when I look at the numbers, I think this. I think your cash flow will absorb this, but it's going to be, I think, a bit of a shock. So I think the first thing is that profit sharing, that 25% minimum, there's no way to reduce it anyway, is there?

Caller (George) (7:58)

No.

Jill Schlesinger (7:59)

So we don't have a choice on that. There's not. There's like only so many variables you're controlling at this point. So the question you called in about was what, particularly as you started this new job, how are you feeling? What can we actually answer for you?

Caller (George) (8:12)

Yeah, for me, I think it's, you know, a lot of physicians I work with are bought houses early or dual income or have a lot of different things where they have one set of advice. And it's, for me, hard to know am I doing enough or is this okay? Right. I don't know that I want to be a homeowner and kind of run toward that target. Being single and sort of figuring out if I want to be here long term.

Jill Schlesinger (8:33)

Yeah, I mean, I would be. First of all, when you're in the medical profession, I mean, you may not make as much as many other doctors did in previous generations, but you're in demand. You'll always make a living. Right. And so you can go many places. I think you are prioritizing exactly what you should be prioritizing. Meaning I think it was really smart for you to get that 60 grand in the high yield savings savings account and pop the money in the Roth. And to do what you've been doing is really very good. I think that the focus should be making sure that your cash flow is stable over the next, you know, let's call it six years before we have this, the loan forgiveness that hopefully takes place. Right. So it's six years. The clock is ticking. I would be very careful with that. And obviously if there were some change in those, I would, in those rules. And they for some reason exclude. I mean, it's really going to be tough. If they exclude it for people who are already in, they might exclude it for new people coming in. But I'm. I'm not willing to take a bet that, like, something doesn't change dramatically. The good news is you've already set the money aside in, you know, you've done what you can do right now, and I think that you're right. I would absolutely prioritize retirement over a home. And it's hard to imagine, you know, you're in a high cost of living state, the state, California. I don't know where you could go to find a much better situation. I mean, three grand a month or 3,300amonth in rent is pretty good. So I guess the, the important thing for, from our perspective would be to keep putting that money away. See how it feels when that new $1700 a month, you know, starts up again for the debt and see how it feels at that profit sharing. You're going to get a little bit of a gulp if you run into a problem just cash flow wise, don't be afraid to just sell out the brokerage account. Use some of that money, pop it in the high yield savings. You made some money, great. But like, you don't need to have a brokerage account right now. I need you to absorb this hit of the higher expense of the higher retirement plan. It's much more important that you absorb that. Is there any way that you can make more money? Like, can you. We were talking to someone recently who said, you know, I can take an extra shift here and there. Is there any moonlighting you can do or not?

Caller (George) (10:52)

So the subspecialty I work in, there'd be some ability to moonlight in an adjacent part of that field, but it would be quite a quality of life hit for me because you'd be on call and I take no call right now.

Jill Schlesinger (11:04)

Oh, poor you. Okay, no problem, fine. Just our call, that's all. It's just, I mean, look, if you had to, that's all I would say. You know what I mean? Like, it's not, I'm not saying you have to do it. I would say that could be a break the glass scenario. If all of a sudden you're like, oh my God, you know, and I think that that's important for you to feel like, yes, of course I can do that. You know what I mean? So that's why. That's the only reason I asked, truly. Okay. All right, so what else can we do for you?

Caller (George) (11:34)

I think my question is if this cash flow thing ends up being fine with. Because it's up to that, Max. And so I think by halfway through the year, my cash flow will improve in terms of the retirement. What should I do with that leftover?

Jill Schlesinger (11:48)

All I could say is, God willing, you'll have leftover, and I'm not convinced of that. But let's say that there is, yes, leftover, and you're putting in all this money in the profit sharing, then that's the time you're building up your brokerage. And look, for all I know, like, you meet someone, you fall in love, and you're like, oh, my God, my cash flow is amazing. You know, I might and now, but who knows? But it's true that that can happen. Okay, I get it. But I want you to feel like you really get a sense of, like, what you have available to you in terms of, you know, opportunities to give yourself a little bit of wiggle room more than anything else. Right? That's all we're looking for. We're looking for a little bit of a way to just be like, okay, yeah, I can do this. This is cool. I'm good. And I think you will. I really do. I think it. I truly believe that you're in a situation where it's. It is. This is almost like a temporary moment or like a transitional moment and that I do think things will get better. But I also, you know, of course, always say to people, listen, you always have to give yourself as many opportunities as possible. And your bailout is like, hey, you know what? I can absolutely afford this. And if I had to, like, moonlight, yeah, my life might suck for a year or two, but I could do it. What else do we need to know about you?

Caller (George) (13:09)

Is this retirement plan, like, a really appealing type thing? Or basically, how married should I be to this job for that factor specifically?

Jill Schlesinger (13:17)

I mean, look, in medical practices, this is often how they work. They'll give you a plan like that. But, you know, there are a lot of different plans that are out there. So let's say another. Another organization came after you and said, we want you. You're the best. You know, there are certainly there are institutions that have more robust plans. There are some that put more. Put money in for you rather than you doing all the saving. I wouldn't be married to this because, oh, my God, this is the greatest plan in the world. It's like a very standard plan for a lot of practices. So. And I think that that's wonderful. It's just. I am also 100% crystal clear that, like, you will have many opportunities. There's no doubt in my mind. So don't feel like, oh, you know, sometimes we'll talk to people and we're like, oh, my God, that's a pension plan. It's so amazing. Don't. It's not that you're not. You don't have that. You have a good plan. It's good, it's fine. But don't go crazy. Like, you'll have good plans. Okay? Do you agree with that, Mark? Yeah, 100%. The retirement plan is not, Is not the reason to stay at a job. Definitely not. Definitely not. Especially if you find a plan where they're like, you know, listen, there are some for profit practices. They're like, we'll pay off your medical school debt for you. If you, if you run into a problem, you might be like, I don't want to leave because I'm in public loan forgiveness. And they'll be like, okay, well, we'll, we'll pay that for you. You know, you never know. All right, that's it. We're done with you. Stay on the line because of course, we'll be finding you an appropriate mate shortly. I'm only kidding, gang. I know some people are happy being by themselves, but, you know, also, it is. I was just talking to somebody, Mark, over the weekend last weekend, and I was laughing because she's like, all these people who have, like, partners, I'm so jealous of them. I'm like, you really don't, but you like being alone. She's like, yeah, but I need to defray my expense. That's the main dime. Like, unfortunately, you get the relationship with the defraying of spent expenses. You got to figure out which one's more important to you. So if you've got something going on in your financial life, new job, new retirement plan, maybe you're part of public loan forgiveness, maybe you're not. Whatever it is, get in touch with us. Go to Jill on money dot com. Click the contact us button. Write us a note if you want to join us on the air live. Check the box. Mark does everything else. Don't forget, forget to sign up for the free weekly newsletter and check out all the content that lives on the website. You can subscribe to us on the Odyssey app or wherever you find your favorite podcasts. And of course, do something nice for someone else today. Change your work, change your wealth, change your life. Thank you for listening. We'll talk to you tomorrow.

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