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Physician Spending: April 2018

Every month I publish how much I spend as a single physician living in Portland. For this month, April 2018, I spent $5,170 of which $1,396 was my core spending for the month and the rest… well, we’ll get into that.

 

April 2018 Spending

I earned $6,400 in April to cover my spending which includes living in a paid off condo in Portland, public transportation, cooking mostly at home, and some entertainment expenses.

But there always seems to be something unexpected or unplanned – this month it was paying for my lawyer for the medical board investigation and the immigration lawyer for the visa to Spain.

Fortunately, I am good at adjusting my spending. As soon as I learned that I am going to get bent over the by the medical board I switched to preparing all my meals at home, spent less on coffee, and cut out my entertainment expenses.

 

Core Spending

Our core spending only needs to cover housing, food, health, and transportation. For some “health” means health insurance, for others it might just be living a healthy lifestyle in order to prevent diseases.

My core spending for the month was $1,396. This also includes my coffee addiction, some entertainment, cell phone, and a gym membership. Are these necessary? No. Are they worth having and budgeting for? In my case, yes.

 

Elective/Unexpected Spending

My legal fees fighting the medical board and my legal fees obtaining my Spain visa have set me back nearly $4,000 for the month.

I am paying $300/hour to my lawyer and I have had to renew my medical licenses as well.

I don’t have much else left to do for the Spain visa. I have purchased the airline tickets there, I have reserved my flat, and I have paid all my lawyer’s fees.

 

Sustainable Spending

I’ve observed that the less I worry about spending the easier I justify further spending. And the more I spend for the month the less I try to curb further spending – it’s an interesting spending spiral.

After finding out that my medical license will soon get retired I have cut my spending drastically. As we speak I am preparing my dinner for the day at home – rice and curried cauliflower.

Weirdly, I prefer frugal spending more. It seems that by giving myself fewer options I have less spending stress. Perhaps it’s also the pleasure of knowing that I retain the right to not have to work for an income.

 

Investment Income

I am still reluctant to start nibbling on my investments despite having plenty saved up. It just feels premature to do so.

From the above graph you can see that my passive income from my investments is somewhere around $2,200/month which doesn’t include my cash or real estate.

In early 2015 the graph shows that my spending (red) was not only all over the place but also too high to be covered by my passive income (blue).

2017 shows that my spending is getting closer and closer to what my passive income is earning and 2018 shows that my core spending is well below my passive income. This is my definition of financial independence which might differ from yours.

 

Tax Strategies

Either I can structure my income so that I can write most of my expenses on a Schedule C for a 1:1 deduction or I can place the expense burden on an employer.

If you are doing a telemedicine gig and you can convince your employer to pay for you home internet then you essentially got rid of that expense – you cut that expense out of your spending. This is by far the most effective thing to do.

Alternatively, if you are an independent contractor – such as a sex worker – then you can write off your laser hair removal directly against your income from your John’s.

If you’re an employee then you’re fucked. You can only write a tiny bit off especially with our new tax code.

 

Budgeting Anhedonia

Does it suck to budget, to cut your spending, to forgo your exfoliating cream? Yes, it does. But the anhedonia you experience for cutting your spending is replaced with a chubby you get from seeing your investment grow.

Investment Growth

I don’t personally get excited about my savings account growing – it feels like I had to do most of the work. But when I see my investment account grow then I get a sense of accomplishment – sure, I added most of the money through my savings-rate but the compounding returns helped raise the value of my account.

My $142,900 investment has a value of $160,500. That’s a profit of +$17,600 or a 12% profit. I can’t get that from a savings account.



 

Debt Payoff

You might get the same positive feeling from seeing your debt balance drop. If you forego spending $100 on dining out and immediately send that money towards your student loans then it’s a good way to get a similar spending rush.

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