You may not be familiar with P. T. Barnum, but you’d probably recognize the 19th century showman’s longstanding legacy: the Barnum & Bailey circus. In 1880, he also published the self-help/personal finance book, The Art of Money Getting; Or, Golden Rules for Making Money, which contains essentially everything you’ve ever read in a blog or book about the topic (in old timey English, for bonus points). The book is available for free on Kindle, but here are some of my favorite life lessons:Read More →
From Raffi Khatchadourian’s “The Doomsday Invention” in The New Yorker, a profile of philosopher of Nick Bostrom and discussion of the (highly dangerous) future of artificial intelligence:
He stopped and looked ahead. “What I want to avoid is to think from our parochial 2015 view—from my own limited life experience, my own limited brain—and super-confidentially postulate what is the best form for civilization a billion years from now, when you could have brains the size of planets and billion-year life spans. It seems unlikely that we will figure out some detailed blueprint for utopia. What if the great apes had asked whether they should evolve into Homo sapiens—pros and cons—and they had listed, on the pro side, ‘Oh, we could have a lot of bananas if we became human’? Well, we can have unlimited bananas now, but there is more to the human condition than that.”
Long, but well worth the read.
After you’ve switched employers, it’s time to think about what to do with the old retirement account(s) (401k/403b/457) you previously contributed to. But before you do anything, make sure any company match dollars you’ve earned have vested appropriately. Vesting schedules (i.e. when the money is yours free and clear) vary, and vesting may occur immediately, with some fixed percentage per year employed, completion of a specified residency program or contract period, etc.
As a personal anecdote, my transitional year internship had a 50% match up to 4% of salary with 100% vesting after the completion of a residency program (our TY qualified, as it was considered a complete 1-year program). I noticed that the vested portion of my employee contribution was still zero dollars after finishing two years ago, so I eventually got around to emailing them, they looked into it, realized the error, and contacted the plan: now I have my money. Now, my former employer was very responsive, and I doubt very much that this was done on purpose, but there is no denying that it would be in a company’s best interest to conveniently forget to vest their matching contributions and see who notices. Just saying.
Anyway, once you have all your hard earned money under your name, you have three real choices: cash out the plan, keep it where it is, or transfer/rollover to a new account.
Option 1: Spend it
No. Don’t cash out the plan. You’ll pay both federal and state taxes on it like it’s regular income PLUS an additional 10% early withdrawal penalty (because you’re probably not 59.5 years old). Your tax-sheltered retirement account distributions are limited on an annual basis (i.e. you can only contribute 18k in 2015/16), so why waste the benefits and tax-free growth?
Option 2: Leave it
Leave the money where it is. Nothing wrong with this, but your former employer’s plan may not have the best fund options or the lowest fees. Some employers also won’t let you do this if your balance is low, and others may hike up your fees without giving you a solid heads up once you’re no longer part of the team. Bottom line: if your old plan doesn’t have low management fees with access to low-cost index funds, then it’s not a great place for your money.
Option 3: Move it
For many people, moving it elsewhere is the best plan.
Your new employer
You can usually transfer funds into your new employer’s fund (assuming they accept rollovers), which is a good idea if your employer’s plan is better. But if the fees or fund options aren’t better, then the main advantage to a transfer in this setting is having fewer accounts to keep track of.
Roth IRA
If your income is within the Roth limits (which it almost certainly is as a resident or fellow), you can roll over a regular 401k/403b to a Roth IRA (you’ll pay taxes on the conversion, but then it’ll be tax-free on withdrawal). This may be the best option as a resident (if you have the money on hand to pay the taxes on it) and a good in general, particularly if your current income is lower than you expect during retirement. You can also always convert a Roth 401k/403b to Roth IRA with no penalty (Roth to Roth conversions are always Kosher), so if you have a Roth 401k/403b, just do this.
Individual (Solo) 401k
If you moonlight or have any self-employment 1099 income, then you could transfer your old money into a solo 401k that you set up for your side business’ income.1 Individual 401ks are pretty awesome. While you can still only contribute up 18k per year as an individual, your business can also offer up 20% of its (your) profits up to the 51k limit (which is a per business limit, not a per person limit).2 Vanguard, one of the best solo 401k options, doesn’t allow for 401k rollovers, but low-cost competitor Fidelity does. An individual 401k of your choosing should have lower fees and good fund options compared with most employer plans.
Traditional IRA
Lastly, you could roll it over into a traditional IRA. But putting pre-tax money into a tIRA means that if you attempt the “backdoor Roth” in the future (which you should/will), you’ll eventually have pay tax on the conversion. So probably not the best unless you then roll over the IRA into an employer’s 401k (that takes rollovers) in the future. There’s no reason to do this really unless both your old and current employer’s options have high fees and you don’t have any 1099 income at the moment to set up your own 401k.
The internet has a gazillion pages dedicated to this question. Here is some good further discussion of the options and their relative merits.
If your employer offers matching contributions to a tax-advantaged retirement account, then yes. You should be contributing to the match limit. That’s free money. Obviously, if you’re training in a high cost of living area and surviving on ramen you steal from a roommate you found on Craigslist, then nevermind.
From there, if you have more money, what to do next depends on the status of your loans.Read More →
I sporadically post “best books” recommendations for medical topics, which if you’re reading this you’ve likely also noticed sometimes cover topics that I’m not in expert in and discuss books I haven’t actually read. This is my general methodology, for those curious:
- For specialties and niches, I typically get a first-round of book recommendations from people I trust in the specialty in question.
- I simultaneously scour the Internet for all relevant recs including reading through every thread I can find on various forums as well as the remainder the Internet.
- I then search through Amazon to find additional potential books and read all of the reviews for literally everything.
- I then read through at least a sample of each book on Amazon to get a feel for the organization, quality, depth, style, and other such factors. This also helps me corroborate other people’s opinions that I’ve been exposed to. You might be surprised how good that quick gestalt can be (I highly recommend it before you buy anything).
The potential downside to this method is that I am not necessarily a subject matter expert on every topic or every book that I recommend. I also definitely have not read each (or sometimes any) book cover to cover.
The positive side is that I’m not just one guy telling you my personal opinion about what I personally like; I’m instead building a cohesive viewpoint based on a foundation of broader public opinion, somewhat similar to the old-school Wirecutter or US News cars reviews. I’d like to think it’s refreshing to see a reasonable grouping of book recommendations that can be attributed to a single person. I am not an expert in or even a trainee in every field, but I know from the continued popularity of my medical school posts and initial forays that people find these types of recommendations helpful and a one-stop shop anxiolytic.
I could call the series “good books that will likely serve you well,” but that doesn’t have much of a ring to it. These “best books” of course aren’t necessarily really the best books. Or sometimes they are, but they still might not be the best books for you. Nonetheless, the goal of these posts is to provide you with a simple straightforward reasonable selection of books that you can read or “read” without remorse.
[Last revised December 2020)
There are a few good options for refinancing your federal student loans and their unreasonably high interest rates into something more manageable during residency (currently: Laurel Road, SoFi, and Splash, discussed at length here).
Once you’re an attending, even more options enter the fray (enumerated at length here). Ideally though, unless you didn’t know you weren’t planning on going for PSLF, you’d have refinanced earlier in residency to maximize your savings.
But medical students have up until now been relegated to getting loans, not refinancing them. Recently, Laurel Road squeezed the competition into medical school proper: post-match fourth years can now apply for their student loan refinancing.
While you sadly can’t get a better interest rate earlier in your education, it does mean that the minute you get that match letter to prove you have a job, you can start the process. When you apply in March, Laurel Road honors the usual six-month grace period, so nothing changes in that sense compared with your federal loans. They require $100/month payments during training (residency + fellowship) after the grace period (which is much lower than the usual PAYE payment and won’t ever increase in size until attendinghood). By applying in March instead of July, you’d save around four months of capitalized interest.
A numerical illustration:
200k at 6.8% accrues around $1133/month in interest. Refinancing that to 5% would knock the monthly interest down to $833/month, thus saving you $1200 over that brief four month span. Neat.3
Also of potential interest, Laurel Road also offers a referee bonus of $300 for readers of this site if you refinance via one of the links on this page.
I’ve written at length about refinancing your student loans, but the short of it is that payments during residency are thus low to nonexistent, and you can save a lot of money even with a mild interest rate reduction over the life of your loan in terms of interest accumulation. The potential downside is that you give up the option for loan forgiveness, both PSLF and the 20/25 year forgiveness made theoretically possible by IBR/PAYE. For low to average loan burdens or short residencies, that’s not a big loss. If you want to do pediatric endocrinology and borrowed $500k, obviously that’s a bigger consideration.2
If you were planning on forbearing your loans because you won’t have the cashflow to make steady payments, then you should almost certainly refinance regardless. Going for loan forgiveness only make sense when you’ve been making years of low monthly payments during residency. For someone forbearing, refinancing saves thousands over the course of even a short residency.
It’s worth it to sit down for a few minutes with a loan calculator and some ideas about your residency, fellowship, and early attending pay to see how much you’d pay over 10 years of income-driven repayment, 20-25 years of IBR/PAYE, or with private refinancing. For many students, refinancing is the right choice financially as well as the most financially liberating during residency (and much much better than forbearance!). Doing so as early as possible is prudent, especially while interest rates remain low. Don’t forget, if the economy were to tank again and rates drop further, you could always refinance again (all of the student loan companies currently operating offer zero cost refinancing programs without origination fees or points required).
Marie Kondo’s The Life Changing Magic of Tidying Up was arguably the biggest ‘self-help’ book of the year (i.e. NYTimes #1 bestseller). The book’s central premise is something that I think everyone deep down knows and that that my wife and I rediscovered for ourselves while preparing for the birth of our first child. Organizational schemas are great, but nothing you do makes a difference if you have too much stuff. Doesn’t matter how you organize if there are more things that you can physically see or get to.
The KonMari method states that if something doesn’t spark joy, then you get rid of it. It doesn’t matter if it’s in perfect shape or if you bought it with every intention of wearing it but never did. The better condition it is, the happier you will make someone else who will have a chance to use it if you don’t need it.3
One of my favorite parts of the book is how she describes a better way to fold your clothing. Her method is one that is so awesome and simple that I can’t believe it’s not simply the default. It’s genius, and it essentially boils down to folding your clothing down tighter than you would otherwise expect, and in doing so, you can arrange your clothing almost like book shelf so that you can see everything contained within the drawer instead of having stacks where the items on the bottom never get worn because they never get seen. Goop has the illustrated guide here.
My very short story “Turkey on Wheat” is back online, republished in The Story Shack with accompanying art by Hong Rui Choo.
In answering some recent reader emails and doing some mock interviews with fourth-year medical students, I’ve noticed an interview deficiency that’s worth correcting. Residency interviews are generally benign, but you still want to be able to talk cogently about why you’ve chosen the field you have as well about the field itself.
You can start off by knowing that you generally will not be truly knowledgeable about your future in the chosen field after a rotation or two as a medical student. And frankly, if you talk about your future career and your opinions too brazenly, you may come off poorly. If you think back to your interviews for medical school (if you can remember them), then you probably remember how weak your grasp of medicine was. You may have said things that make you cringe now. It wasn’t uncommon for an applicant to tell me that they wanted to pursue “residency” in cardiology or oncology among other simple mistakes. Some didn’t even have a grasp of what residency was! You are probably substantially more informed now than you were then, but the same lessons still apply (especially in the fields that are not core rotations). Your interviews warrant a proper balance of critical thinking and humility.
So, why pick X?
An example: for radiology, it’s common for applicants to say things such as “I like the combination of medicine and technology.” Which is fine, but why? Why would that be meaningful for you? How does that interest in this intersection manifest? It would be just as easy for a urology applicant to say they like the innovative combination of urination and genitalia. Honest radiology applicants could then go to say they prefer patients when they are presented as a stack of two-dimensional images. Surgeons would then counter that they like them in 3D but best when they are anesthetized. None of this sounds that great.
This is all to say, think on it a little harder.
Beyond “why this,” there are some relatively common questions that I think are frequently overlooked opportunities to shine. Asking an applicant about the future of the field, changes to healthcare reimbursement, the push for quality improvement, patient-centered care, medical errors, etc are some of the best ways to see how someone thinks, how they feel, and how they reason through a big issue. You don’t usually memorize answers to these questions, nor should you. But you should think about them, not just for interviews, but also for the career you have chosen and your future within it. Note: You want to be able to answer these questions without potentially offending the interviewer or heavily invoking your political beliefs. You never knew the leanings of the person across the table from you.
For example, in radiology, good topics to think about would be the future of the field, the role of midlevel providers, changes to reimbursement, healthcare utilization, private practice versus academics, quality improvement, how to add “value” both to patient care and the ordering providers, patient-centered care, relationships with referents. You may not have fantastic answers (in many cases no true answer exists), but these questions, if asked, are where you have the opportunity to show critical thinking as it pertains to the field you’ve chosen. Approach these questions with care, humility, and the understanding that the person asking them can see through your BS.
I recently finished “reading” the audiobook of Aziz Ansari’s Modern Love (coincidentally narrated by Aziz Ansari), which is essentially an amusing presentation of real sociological research focused on how dating has changed in the internet era. Made for a good listen in the car on the way to daycare, which has become my primary reading time of late.2
It’s an interesting exercise to take a step back and see how in just a few years the foundation of our relationships and framework for making new ones has completely changed. The sections on international romance, particularly in Japan, were a highlight.
As someone who likes having their biases confirmed, my other favorite part of the book was its discussion of studies that demonstrate how social media is increasingly distorting how we view life satisfaction.
That’s the thing about the Internet: It doesn’t simply help us find the best thing out there; it has helped to produce the idea that there is a best thing and, if we search hard enough, we can find it. And in turn there are a whole bunch of inferior things that we’d be foolish to choose.
Too many choices can be paralyzing and just as depressing as having too few. Seeing other people’s curated images causes us to believe that other people are happier than we are, that their choices are better than ours, and that even if we are happy, maybe we could be happier. And all this in turn makes us sad. Perhaps, the solution:
Spend more time with people, less time in front of a screen, and—since we’re all in it together—be nice to people.