We must do better

[Forcewielder]

New build 3600sqft not including unfinished basement… PA baby!

Good job man. I'm building a 3700sqft, 4 bed, 5 bath with an unfinished basement and it's 1.2mil lol and we are not in an urban area.

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[air bud]

Nice house is technically not a mistake from the investment standpoint (assuming it keeps its equity and there are buyers - aka borrowers - to take it someday when you need to sell).

The problem is, big mortgage payment cripples the budget... can't pay off the house fast, have to pay low/minimum on other debt if mortgage eats most of the monthly budget. You drown in interest. It is hard to have free cash for opportunities (start own biz, investment, retirement, solid EF, etc) when in perma-debt. The house/mortgage is an awesome thing IF you can afford it with budget space to spare (pay it down early, pay other debt, invest/retire).
Interest just crushes. For your example, you will basically pay 850k for a 560k house (if you can indeed pay it off in 12yrs)...
and you will pay on 400k++ in minimum payments on 300k student loans (assuming $20k/yr for 20yrs IBR and then they're eventually forgiven).

The caveat, for most ppl working podiatry, is that you don't know you'll even be at the same job in 12yrs. You don't know in 3 years.
If your income goes up, your minimum pays on student loans goes away. If you have to move, your mortgage plan goes away.
People get fed up with pod PP groups, PP groups cut them or shave their pay, PP groups will grind more work for same pay, a fair amount of PP groups are getting sunk or severely wounded by graft clawbacks right now. Even podiatry MSG or hospital jobs are not immune to changes; many well-trained docs on SDN and elsewhere have changed jobs quite a few times. Our job market is terrible. I personally worked for 4 PPs, one MSG, and one hospital, and one house call gig all in my first 10 years out. No joke. Sure, you're employed today, and that could change.

Moving and forcing a quick sale of a mortgage house can be anywhere from fairly good to disastrous... but any forced asset sale (house, stocks, etc) is very often during an overall economic downturn. At the end, you know what's best for you, though. I hope it works well (the job and the area/mortgage).

...I also concur that $560k is seldom a nicer or newer house with the inflation of real estate. It's a fairly good one where I live, but I'm pretty rural (no Walmart, CVS, TBell, etc)... and my partner paid ours which cost a bit over 600k off in under 3yrs (I just pay rent to her, and the utility bills). I would never dream of borrowing on a lux house or car myself until I finish my loans off (and catch up on retirement invest that I dwindled a bit to start solo PP). Jmo

You sound like a freeloader.

 

[Feli]

You sound like a freeloader.

I have never been late on rent.

Maybe I should be... chicka bow wow?

 

[dtrack22]

You sound like a freeloader.

Refers to girlfriend or wife as “partner” and pays her rent. Sounds like a ****hold more than a freeloader.

Any ways, what may be more sad about the Ramsey show caller is that I believe I know who it is and they own their own practice. You can do well in PP but with ever increasing labor costs and decreasing reimbursements, it’s not nearly as widely or consistently profitable as it was even 4-5 years ago. When solo practitioners are sub $200k of pay (not just associates in podiatry groups), you know your profession is becoming totally ****ed

 

[p100]

The Dave Ramsey caller is not in financial trouble because of podiatry. They are in trouble because they have a $400k+ mortgage and $20k in car debt on top of the $325k student loans. Maybe they need a minivan for the 3 kids but you can get a Sienna for $15k in good shape. At age 4X he either went to school late or has been practicing for 10 years with wife working part time and they are still broke. This is a pattern of poor financial decisions.

 

[Retrograde_Nail]

The Dave Ramsey caller is not in financial trouble because of podiatry. They are in trouble because they have a $400k+ mortgage and $20k in car debt on top of the $325k student loans. Maybe they need a minivan for the 3 kids but you can get a Sienna for $15k in good shape. At age 4X he either went to school late or has been practicing for 10 years with wife working part time and they are still broke. This is a pattern of poor financial decisions.

Forget about the house and car. They still have 325k debt making a crappy 180k per year. That’s still going to take a lot of time to pay off when you have a wife and three kids to support. ROI in private practice podiatry is crap.

 

[podiatryresident]

Refers to girlfriend or wife as “partner” and pays her rent. Sounds like a ****hold more than a freeloader.

Any ways, what may be more sad about the Ramsey show caller is that I believe I know who it is and they own their own practice. You can do well in PP but with ever increasing labor costs and decreasing reimbursements, it’s not nearly as widely or consistently profitable as it was even 4-5 years ago. When solo practitioners are sub $200k of pay (not just associates in podiatry groups), you know your profession is becoming totally ****ed

Your information is more depressing!

 

[Hybrocure]

Forget about the house and car. They still have 325k debt making a crappy 180k per year. That’s still going to take a lot of time to pay off when you have a wife and three kids to support. ROI in private practice podiatry is crap.

With SAVE I imagine their payments are probably 1k a month. It’s doable. But we as a profession definitely deserve a better situation especially because 180k is on the higher side of incomes these days..

 

[Hybrocure]

The Dave Ramsey caller is not in financial trouble because of podiatry. They are in trouble because they have a $400k+ mortgage and $20k in car debt on top of the $325k student loans. Maybe they need a minivan for the 3 kids but you can get a Sienna for $15k in good shape. At age 4X he either went to school late or has been practicing for 10 years with wife working part time and they are still broke. This is a pattern of poor financial decisions.

The emphasis Dave Ramsey puts on cars is ridiculous. 20k in car debt is nothing. Spending 2k a year on vacations is nothing. Eating normal food beyond beans and rice is nothing.

The real issues are massive student debt for a degree that pays what you can make with a bachelors. Which apparently he’s not even familiar with.


Also the elephant in the room here is having kids. But it is what it is it’s already done. Also 4 kids in Phoenix are they doing a 10% tithe to the church? What are all the other expenditures not mentioned. Church tithes are literally equal to the monthly student loan payment. But Ramsey loves to dodge that aspect of finances. He promotes tithing to the church but will tell a family to live off of rice while they struggle to get by.

 

[dtrack22]

The Dave Ramsey caller is not in financial trouble because of podiatry. They are in trouble because they have a $400k+ mortgage and $20k in car debt on top of the $325k student loans. Maybe they need a minivan for the 3 kids but you can get a Sienna for $15k in good shape. At age 4X he either went to school late or has been practicing for 10 years with wife working part time and they are still broke. This is a pattern of poor financial decisions.

Median home price in AZ is $435k. Their home is not unreasonable. $20k in car debt is not unreasonable for someone who underwent 7 years of post-graduate schooling and training with the ability to practice some form of medicine in this country. Even $325k of student loan debt isn’t bad for any other individual who is put into the category of “physician” by the feds.

Nothing about their debt is above average. The “problem” is not lifestyle creep. The problem is that 2 full time teachers in my state, for example, make more money than this “doctor” does. Sure they could reduce some stress and some payments with cheaper cars. But the house is average and the student loan debt isn’t abnormal for a DPM now a days. You can’t waste 7 years of your life, take out $300k in loans, only to make $180k. And not have ample opportunity to increase your income with extra shifts/job change/etc. As Dave would say, he needs a bigger shovel. My wife and I don’t think twice about what things cost, though we budget and are fairly financially disciplined. We could have all of the same numbers (we did buy a house that cost $409k right before the pandemic, dont owe on cars, but I haven’t quite paid off the boat yet) and it wouldn’t phase us. Because I make over twice as much money as the person whose wife called in.

 

[MicroPod]

I would think that 180k is on the low end of private practice owners/partners. I’ve never heard of a well established pod owner/partner making less than 250k/year. I have to think they are a PP associate.

 

[JustAPedicurist]

I would think that 180k is on the low end of private practice owners/partners. I’ve never heard of a well established pod owner/partner making less than 250k/year. I have to think they are a PP associate.

My coresidents are literally signing 75k-125k offers. lol

 

[iridocyclitiss]

My coresidents are literally signing 75k-125k offers. lol

75k is what i make as an intern

 

[Feli]

I would think that 180k is on the low end of private practice owners/partners. I’ve never heard of a well established pod owner/partner making less than 250k/year. I have to think they are a PP associate.

That is lower end, but it happens a fair bit.

There are a lot of factors...
If you don't have good payers.
If you have large loan payments for the office's buyout or equipment (usually on top of student loans... interest compounds).
If the area has high overhead in general (labor, rent, etc), that slims margins.
If you have a lot of nearby competition (schedule isn't full and/or marketing to keep it full is costly).
If you try to work part time or need multiple locations to keep the days full (overhead is still full time when you're not there).
Some podiatrists are just not very smart, likeable, well-trained, or biz-savvy.
Some offices make bad moves in hiring staff, accountant/attorney, billing service, IT, associate docs, wasted equipment, etc.

Having a successful PP is hard even if you have all of those personality tools, connections for the biz aspect, training to offer all F&A services. If you are missing key stuff or in a city that is very saturated and/or bad payers, then it's dog eat dog.

...I will also say the DPM discussed by his wife in the Ramsey vid is an employed DPM. It is not hard to look him up, but it's a sad story and should not be public info, even if it's a common theme for podiatrists and our debt and job outlook.

Overall, I know barely any solo/partner/owner DPMs beyond the startup year or two who are making under 200k personally, but it happens. Even most solo docs who are part-time or semi-retired are over $200k net once established. Some of them have a lot of family money and just do their pod office as more of a hobby than to max it out. If owners didn't typically make substantially more than employed colleagues (even without hiring associates), then there would be no reason to do the entrepreneur aspect and initial risk and hustle of it (aside from job security and autonomy... still pretty good reasoning).

Aside from floundering, the same goes for occasional solo offices or even pod groups struggling to the point of failing. Heck, even hospitals fail or falter and are forced into closure or acquisition. Labor is expensive, and employee loyalty is pretty low due to inflation and other factors. People will go where they are treated best, they change jobs frequently, many will jump ship for a couple bucks more per hour or better benefits or better schedule, and that even includes going to home on the couch or to a classroom - if they can get govt checks to do that instead of work.

Mainly, specific to podiatry, the demands for money back on the fake wound grafts are going to sink - or severely change - more than a few podiatry offices also. It will be worse than the many pod docs/offices who were coding pre-fab braces as custom braces around the time I was in residency about a dozen years ago. The audits are going out almost daily on the grafts now. The DPMs who were seeing ten patients per day with half of them wound graft applications and counting on those rebates are not sleeping very well right now.

 

[Forcewielder]

The emphasis Dave Ramsey puts on cars is ridiculous. 20k in car debt is nothing. Spending 2k a year on vacations is nothing. Eating normal food beyond beans and rice is nothing.

The real issues are massive student debt for a degree that pays what you can make with a bachelors. Which apparently he’s not even familiar with.


Also the elephant in the room here is having kids. But it is what it is it’s already done. Also 4 kids in Phoenix are they doing a 10% tithe to the church? What are all the other expenditures not mentioned. Church tithes are literally equal to the monthly student loan payment. But Ramsey loves to dodge that aspect of finances. He promotes tithing to the church but will tell a family to live off of rice while they struggle to get by.

You've mentioned the "beans and rice" multiple times. He says repeatedly that he doesn't literally mean living on beans and rice. That's ridiculous. He says you shouldn't see the inside of a restaurant unless you work there and by beans and rice he means keep your grocery bill down (avoiding pricier brands, no steak or lobster, etc). He also says sell so much the kids and dogs think they're next. This too is obvious hyperbole.

He also does not dodge the tithing issue. He's addressed it many times and has a whole page on his website discussing his beliefs. Tithe isn't required. It's a personal decision. It's fine you don't like him, but his advice is straightforward and has great principles for the average person to follow. I personally prefer the avalanche method vs his snowball method, but there's a psychological advantage to his method. I personally don't need that psychological boost because I'm already disciplined, but most people are not.

 

[HardRoadPaved]

It's fine you don't like him, but his advice is straightforward and has great principles for the average person to follow. I personally prefer the avalanche method vs his snowball method, but there's a psychological advantage to his method. I personally don't need that psychological boost because I'm already disciplined, but most people are not.

Remember he's the same person giving basic financial advice as us podiatrists telling people not to wear flipflops or walk barefoot.

 

[icebreaker32]

I feel real sorry with the kid situation.

Otherwise what is different here? An established podiatrist doing about average and living in a nice, but not low cost area. I do not feel he is living an extravagant lifestyle. The home was probably the best investment they made and I doubt they could rent for much less than their mortgage.

Just like Dave is, we should all be shocked/disgusted with our ROI.

 

[Hybrocure]

I feel real sorry with the kid situation.

Otherwise what is different here? An established podiatrist doing about average and living in a nice, but not low cost area. I do not feel he is living an extravagant lifestyle. The home was probably the best investment they made and I doubt they could rent for much less than their mortgage.

Just like Dave is, we should all be shocked/disgusted with our ROI.

Well, at least we are doctor.

 

[HeySister]

There was nothing left about saturation and pay to talk about and then somebody's spouse called Dave Ramsey

 

[Feli]

Remember he's the same person giving basic financial advice as us podiatrists telling people not to wear flipflops or walk barefoot.

Dave is fine, nothing amazing.
He has good info on how to live within one's means, pay down debt and live frugal to reduce stress.
Compounding interest is working either for or against every adult in the USA. He simply points that out.
His advice beyond debt (on investing) is overly simplistic and mediocre, and the religion part is batty (but he admits that's optional).

Overall, it's nothing new, and it's common sense (limit spending, pay debt)... but it helps ppl, and it's effective. I liked his original book (TMM). After that, just like most other financial ppl, they just keep making more books for the sake of making book$ and doing shows for the sake of doing $howS. It's usually hit or miss; they are just monetizing their breakthrough book at that point. It obviously helps his Ramsey biz also that they get dozens of CPAs and CFPs and insurance agencies and etc to pay them to be 'trusted services.'

Any financial 'guru' is basically just someone who explains fundamental things in a fun or easy-to-understand way (Dave, RDPD, Jim Cramer, Peter Lynch, Bogle, MMM, whatever). It can be debt, stocks, starting a biz, retirement planning, whatever... it's just good to see it presented in a way that people listen and respond to it.