For an audio version of this post, please click on the speaker icon (top left).

 

Welcome to this episode of The Doctor’s Bill (Can You Afford It?).

Wonder if you should buy that big ticket item or not?

Well here’s your chance to have a wealth management expert, Johanna Fox Turner, of Fox & Company Wealth Management analyze your overall finances and make a final verdict on whether or not you can indeed swing for the fences and splurge on yourself or whether you should just walk away.

[Johanna and I have no current financial relationship]

Disclaimer:  This is not meant to be a substitute for paid professional advice but only meant to serve as a suggestion/guideline.

 

The following are the details from our submission form:

 

Item/Experience Desired:

Purchase New House In San Francisco in 1-2 years.

Approximate Cost:

$4.5M

How do you plan on paying for this item/experience?

$1M down payment.

$3.5M Mortgage.

On A Happiness Scale of 1-10 (10 Being Happiest), rate what this item/experience will do for you A) Short Term and B) Long Term:

A) 8    B)8

Age:

41

Gender:

Female

Occupation:

Gastroenterologist

Marital Status:

Married (husband also a physician)

Any Children (If so please provide ages)?

2 kids: 5 and 1.5 years.

How Many Years Till Planned Retirement?

20

What is your total household income?

$900K

State Income Tax (if Any)

11.3%

What is your % Annual Savings Rate? (savings/gross income)

25%

Estimated Annual Living Expenses (Current):

$300K

Estimated/Desired Annual Living Expenses (In Retirement):

$250K

Market Value of Primary Home [For Renter =$ 0]

$2.8M

Additional Real Estate Holdings Equity (Market Value-Debt):

$50K (real estate syndication)

Current Liquid Asset Value (Savings, Checking, Etc.):

$175K

Retirement Assets (401k/IRA/HSA):

$1.2M

Brokerage Account (Taxable):

$1.2M

Miscellaneous Asset Value (Please elaborate):

$250K (529 x 2)

Mortgage Balance:

$800K

Student Loan Balance:

$0

Additional Liabilities:

$0

Unfunded Future College Costs & Years Left Till Needed:

$0

Other Unfunded Goals and Years Remaining (Today’s Dollars):

$0

Any other pertinent information not addressed?

Husband and I disagree on keeping current home as a rental.

I feel like to get the $500k cap gain exclusion, we’d have to sell within the next 3 years so why wait?

Plus I don’t think we can afford 2 mortgages considering property taxes on the new home would be $50k a year (an increase of $15k from current property).

If we do sell our current home we would increase the downpayment to $3M ($2M from home proceeds and the rest from our taxable account).

 

 

 

So based on the financials provided, does this GI doc have a golden (gate) future?

Or will she instead land herself in financial Alcatraz?

 

Click on the Doctor’s Bill Image and find out the verdict:

 

 

After you see the verdict please come back to this page and comment whether you agree or not with the decision (and no cheating by looking at comments first!)

 

 

 

If you would like to submit your own Doctor’s Bill request please fill out the submission form.

 

Note:

If you are in search of financial help, please consider enlisting the service of any of the sponsors of this blog who I feel are part of the “good guys and gals of finance.”

Even a steadfast DIY’er can sometimes gain benefit from the occasional professional input.