Category: lifestyle

Analyze fixed costs and destroy them

Posted on by SmartMoneyMD

This is the last post in my series on how to boost your net worth without having to increase you income.

 

Recurrent costs are expenses that we often subscribe to but may not necessarily be aware of. I often forget about certain monthly bills that I set to pay automatically. It should be good habit to reassess our needs to cut costs. Some recurring bills include:

  • Electricity bills
  • Gas bills
  • Sewage/HOA bills
  • Garbage disposal fees
  • car payments
  • rent/mortgage
  • property tax
  • vehicle registration and insurance
  • internet bills
  • cable/satellite bills
  • online subscription services: Pandora, Evernote, web server, Netflix, Hulu, Amazon Prime
  • magazine subscriptions
  • country club fees
  • golf course fees
  • telephone bills

 

Utilities (electricity, HOA, gas, sewage, trash)

These costs are mandatory, but you can still trim off the fees by paying attention to your usage. Basic supply line fees and taxes can’t be avoided, but decreasing consumption strategically will cut your bill with minimal disruption to your lifestyle. The majority of our electricity usage comes from our refrigerator, light bulbs, washer/dryer use, and air conditioning. Changing out your incandescent bulbs to CFLs or even LEDs will cut use dramatically. Insulation and increasing thermal mass of your house will help keep temperatures more stable through the day and decrease heating and cooling costs. Many modern homes aren’t designed to take advantage of the sun and the environment (which is a shame), but if you are able to find a home that has strategically placed windows (south facing windows if you are in the northern hemisphere), you can take advantage of the sun. You can track the electricity use of your appliances using a Kill-A-Watt meter. It’s surprising to see how much electricity certain appliances use. I found that my 40” LED television hardly drew any power while off, but consumed about 0.65kWh of electricity in 5 days of 1-3 hours of use. Find your appliances that have excessive phantom electricity draw and eliminate them! Options to decrease gas usage is more limited to decreasing your heat in the winter—obviously not an extremely popular option for many people to keep their homes much colder than comfortable. Again, the solution is actually to thermal insulate your home and increase thermal mass. If you can design your own home, look into Trombe walls and take advantage of the sun.

Cellphone bills

There has been an open battle among the big cellular companies and their offers to slash bills. If you are out of contract with your mainstream carrier, consider tracking your use and try some of reassess with alternative companies like Airvoice, FreedomPop, Ting, or Virgin Mobile. I was able to save at least $25 a month using Airvoice.

Internet bill

This is also a no brainer. Since the internet market is monopolized by a handful of companies, it is relatively easy to price shop. Use WhiteFence. If you live in a rural area, then your options will be more limited. Don’t be afraid to cut your provider in favor of a cheaper option.

Get cable along with Internet? Consider bundling if you must have cable or satellite, but you’d be better off cutting the cable. Likewise, if you find yourself too busy to use your Netflix subscription or online streaming memberships, considering cutting them.

Conclusion

Make it a habit to reassess your recurring costs annually. If there are services that you are not using, consider canceling. Be sure to check if you are spending too much on utilities, cellphone, or internet. I was surprised to find that many of my coworkers pay over $200 a month for bundled cable/internet!  Is premium television worth $2400 a year in after tax dollars?

What suggestions to you have to cut fixed costs? Comment below!

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How to Clean Lime and Rust Deposits In Your Toilet Bowl

Posted on by SmartMoneyMD

Previous articles on toiletology have discussed the following:

 

This article will include step-by-step instructions on removing lime and rust deposits from your toilet bowl.

 

The rental condominium that I recently moved into has nice Kohler brand toilets. Unfortunately, the previous tenant(s) did not maintain much of anything in the unit. The landlord also does not appear to care what goes on in the unit as long as the rent is paid. One gripe that I had was that the toilets all had significant lime and rust stains in the bowl and water spouts:

Lime and Rust Stain in Toilet

If prior tenants had spent any effort in keeping the toilet clean, these stains could have been easily prevented. I suspect that aside from an annual housekeeping service cleaning, there was little maintenance over the past decade. The first week I moved in, I cleaned the bathrooms as much as I could, which included scrubbing down the toilet seats with disinfectant, brushing the toilet bowl with bowl cleaner, and wiping down the tank and handles. Unfortunately, the rust stains were caked in the bowl no matter how I scrubbed.

I finally found the time to tackle the nasty rust buildup in the bowl last week. It typically comes from the high mineral content in the water and infrequent cleaning. Once a thick layer of rust and residue accumulates, it is nearly impossible to remove using standard toilet bowl cleaner. Fortunately, it only takes the proper equipment and a little elbow grease to clean things up. Here’s what I did:

Cleaning Agents

To remove rust and mineral buildup in the toilet, do NOT use bleach. Yes, bleach is great in cleaning and disinfecting many agents, but will basically smear the rust into the porcelain. Again, do NOT use bleach to clean rust.

Most caustic cleaning agents will do the trick. Remember back in high school chemistry class, sulfuric acid will burn through most objects (your hand included). Phosphoric acid also is a good cleaning agent. The active ingredient in Lime and Rust Remover is usually derived from one of these two chemicals. That is the key. I did not find my go-to product, The Works Toilet Bowl Cleaner, at Wal-mart. I did find an alternative cleaner called, “Lime A-Way”, which promised to remove rust and calcium stains. This brand does have a toilet cleaner version, my local store did not have it in stock. I just used the tile cleaner, which seemed to work okay (with extensive scrubbing).

If you are eco-conscious, you might be out of luck. Chemically, you could possibly use a lemon and salt to scrub the toilet, or even Coke! Yes, Coke! Carbonated soft drinks are acidic and actually have a low pH (and destroys your teeth). I’ve used it before, but it doesn’t work well with tough stains. Alternatively, you could also use a pumice stone as a mechanical means to clean rust stains. Be careful with pumice—you can scratch the porcelain bowl. Pumice has approximately the same hardness as porcelain, so I would expect microscopic scratches to build in the toilet. It may not make a huge difference in the short term, but over many years the shiny reflection will become dull (may not matter if you replace your toilet every decade or if you live in a rental).

How to clean

  • Turn off the water supply to the toilet. Remember, most valves are turned clockwise to shut off.
    • Toilet Shutoff Valve
  • Flush the toilet.
  • Use a toilet brush or plunger to depress the siphon to empty out most of the water in the bowl.
  • Spray or pour the cleaning agent in the bowl, aiming for the stains.
  • Use a toilet brush to scrub the stains!
  • Once stains are off, turn on the water supply, and flush.
  • If you are using a pumice, be sure to soak the pumice in water before scrubbing to soften it.
  • Make sure you have adequate ventilation and exhaust. The chemicals are corrosive and the fumes can irritate your eyes. Make sure you also have gloves.

That’s it. I ended up using several iterations of cleaning over 20 minutes to remove most of the stains:

toilet after rust removal

There are still rust stains in the bowl, but it can be cleaned in future washings.

Is it worth a doctor’s time cleaning the toilet? It depends if you have anything else more worthwhile that you could be doing. I’d imagine a professional housemaid service with specialized cleaning agents will take care of the bathroom for you, but it will come at a price. You could also ask your non-working spouse to do it. I spent $4.72 at Walmart to purchase the lime remover, and had a mail-in rebate coupon to make the item free. I’d imagine that there is enough chemical for at least 10 cleanings in a bottle.

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What are your experiences with cleaning agents? What has worked for you? Sound out below!

Complexities of a two physician household

Posted on by SmartMoneyMD

Previously we discussed a pros/cons list of a two physician household. In this article, we discuss financial considerations for a two physician household.

Doctors are busy. Most established doctors I know work at least 40 hours a week. Those running their own business tell me that their hours range from 45-55 hours a week in the office, but many of them also handle business matters after hours (in addition to taking call).  Surgeons or specialists can clock 60-80 hours a week. This doesn’t even include commute time to work or the time spent between waking up and seeing the first patient of the day.

With such a hectic work life, there are limited hours left to care for errands or everything else. Traditionally, such families have a non-working spouse who can take care of bills, repairs, and kids. As family compositions have evolved over the past decade, a larger percentage of doctor households have working spouses as well.

Obviously having a working spouse (better yet, a working doctor spouse) will add to the net income. But a dual income family does introduce both financial and logistical complexities. I have a few examples of colleagues that I know and the situations that they face:

Surgeon and School Teacher

This household has two young kids. The surgeon works 50 hours a week plus call. The school teacher works in Grades 3-5. There is a constant struggle to decide whether the school teacher should be working or staying at home. A teacher who makes $35,000 a year with a spouse who makes enough to put them in the 39+% federal marginal tax bracket will essentially give half of his earnings to federal, state, and local taxes. Ouch. Try to calculate that hourly rate. It won’t look good.

If this family has to hire a nanny for childcare, then it is a financial no brainer for the school teacher spouse to stay at home and care for the kids. It doesn’t matter if you live in Omaha or San Francisco–the nanny will more than offset the teacher’s income. At this point, the school teacher spouse could even consider home schooling the kids as a way to apply her education or branch out into alternative sources of income (a la MoneySavingMom).

Neurologist and Cardiologist

This couple also has one young child and a second along the way. While the neurologist’s salary will be in the six figure range if the job is full-time, it will still likely be taxed in the top marginal tax bracket if the cardiologist has a decent practice. In this situation, the financial options can include a part-time job for the Neurologist to keep the skills sharp while having part-time daycare. Alternatively, both spouses could consider a part-time or 0.8 status equivalent to spend some time with the children.

Another caveat for a two physician household is that it becomes harder for household chores to get done. Home maintenance, yard maintenance, dishes, laundry, cleaning, grocery shopping, and other simple tasks become exceedingly difficult to be performed during free time especially if both spouses are exhausted in the evenings. They could all be outsourced at a cost but still may be practical for the busy couple. In Thomas Stanley’s Millionaire Mind, one of the characteristics of millionaires is that they are NOT DIY-er’s and outsource tasks that aren’t directly related to advancing their net worth.

This family has more flexibility than the doctor/teacher couple mainly because their higher earning potential, but the work-lifestyle arrangement options are identical in both cases. Does the family want to focus their time on their careers? How much time does each spouse wish to spend with the children, at home, or with other secondary income streams? Would it be a waste of your many years of hard work and earning potential to give up your career?

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Do you have any working tips for a two physician household? Comment below!

Maintain Your Professional Clothing Yourself

Posted on by SmartMoneyMD

 

Professional expenses are only one aspect of cash outflow, but should not be ignored in your budget. Some clothing articles like lab coats that are worn only at the workplace can be deducted from your taxes. Unfortunately it would be difficult to deduct other professional attire like shoes, skirts, suits, and shirts that could be worn in other formal settings. These expenses do add up. I know a physician who spends over $2000 a year on professional outfits and shoes! Mind you, that’s $2000 in post-tax dollars.

The only way to reduce expenses on clothing is to reduce the number of purchases you make. Obviously not spending is the simple solution, but you can also make strategic purchases that allow you to match your existing wardrobe. Each time you are at the department store or are ordering clothing online, pay attention to what you already have. Can you match the new shirt with your blouse? Would this new shirt be compatible with any of your existing ties or shoes?

The second method of cost controlling your clothing is to maintain your wardrobe as much as possible to prolong their utility. The following are tips that I have implemented over the year:

Shoes

Shoe maintenance is relatively simple yet can be costly if you have it performed by someone else. Shoe polishers at the airport typically charge at least $6 per shoeshine—add tip and it could easily be $10 each time.  It takes me approximately 5 minutes or less to polish my shoes. At a working rate of $100 an hour, you’d save $8.34 for 5 minutes of polishing your own shoes. Post-tax dollars.  Consider polishing your own shoes as discipline. Marines do it. It is low risk even if you don’t want to crack your shellac polished nails or endanger your neurosurgical hands. You also don’t need much equipment to polish your shoes:

  • Wire brush to dust off dirt and grime—I actually use a tough paper towel to wipe through any dirt build-up. Wet the towel if you have tough stains that don’t come off easily.
  • Cotton cloth to apply shoe polish—I have plenty of clean and unusable athletic socks (read: holes/torn) to use.
  • low-lint cloth to polish off the wax—again I have old dress socks and other fabric that won’t scratch leather shoes.

 

Dress shirts and collars

Professional clothing becomes unusable if it becomes faded (looks old), torn, dirty, or simply out of fashion. The simple solution is to take your clothing to dry cleaning and have them deal with it. I’ve had great experiences with my dry cleaner, but the costs add up quickly especially if you are hitting up your dry cleaner every week or two. Unless you are wading in mud, your clothing should not be “dirty”. Many “dry clean only” clothing can still be immersed in water to clean out sweat or stains. Target areas in shirts include the collar (sweat accumulated from marathoning through 60 patients a day in your dermatology clinic) or the occasional coffee stain and armpit sweat. Here’s what I do to clean my dress shirts:

  • Gentle immersion in water (as soon as possible after a rough clinic day) with some laundry soap to clean off targeted sweat areas.
  • Resoak in clean water to rinse off any detergent
  • Targeted stain remover in the collar—let it soak for a few minutes.
  • Scrub collar gently. I use an old brushhead from my Clarisonic brush. The bristles are gentle enough not to cause piling but effective in stain removal.
  • Rinse stain remover from collar (should be pretty clean!)
  • Hang dry. If you are concerned that the fabric will stretch, hang horizontally on a drying rack.

Most of my dress shirts have a component of polyester in the fabric and do not require ironing.

Wrinkle removal – Ironing tips

Sometimes your clothes do become wrinkled after washing, and requiring ironing. Water and steam do wonders in straightening out cotton articles. I usually simply keep water in an atomizer, spray onto the clothing, and iron on medium heat, making sure that whatever I am ironing can tolerate the level of heat. Full cotton clothing can tolerate high settings and require it to straighten out.

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Any tips to offer on clothing maintenance and smart money tips? Sound out below!

Save on Groceries and Control Your Restaurant Expenses

Posted on by SmartMoneyMD

This article serves as part 3 of our series on growing net worth without having to increase your income.

 

Groceries

Saving on groceries doesn’t mean that you should clip and coupons, download browser plugins to print coupons, and combine them strategically to earn free dental floss and get store credit. It also doesn’t mean that you’re condemned to a life of eating beans in a crockpot or salty budget brand pasta sauce either. Obviously if you find that you have the time and interest to clip coupons, no one is stopping you. If you like beans, they are also nutritious and high in fiber.

That being said, grocery bills can easily get out of hand, especially if you do not pay attention to prices or shop only in gourmet organic stores. I’ve discovered over the years that deals can be had if you’re flexible and smart about seasonal    deals on fruits and vegetables.

Learning when grocery sales occur does require some homework initially but essentially becomes routine with time.

Step 1: Find the stores that are convenient to your normal routine. If you shop at stores along your commute to work, you can save time–even if eggs cost $0.35 more, it may be worth your sanity to get your grocery shopping out of the way instead of making a separate trip. Learn where your bulk grocers like Sam’s Club and Costco are located too.

Step 2: Learn where discount stores are located. I shop at a factory bread outlet where bread items are discounted over 50%. If there is a staple that you eat weekly, find out where you can buy it most conveniently and inexpensively.  There is a local grocer that sells grains in bulk where I buy steel cut oats on discount at $0.69/lb once a month.

Step 3: Keep track of specials and which stores discount their groceries. There are several grocers in my area that deeply discount certain items that are nearing expiration. Ironically, some of the most expensive organic stores tend to slash their prices the most. Half gallon of organic milk for $1? So what if it expires in 8 days? I usually go through a half gallon in 1 week anyway.

Step 4: Gift cards are important. While finding when grocery sales are discounted will likely save you the most money, gift card sales can help give you an extra boost. One of my grocery stores offers a 10% discount on store gift cards once a year. I buy several of them to use for the rest of the year. Sometimes credit card companies also offer certain discounts on grocery gift cards. Pay attention to them, but do not become obsessed. The most savings will come from Step 3, knowing when items are discounted, and where to buy them.

Restaurants

Contrary to grocery spending, savings on restaurant spending is almost always dictated by how frequently you eat at restaurants. Chain restaurants do offer specials and but obviously are only valid if you choose to dine with them. Other savings options include buying gift cards at the grocery stores or accruing credit card rewards through restaurant spending.

There are various other “restaurant hacks” that I have seen that include ordering items that have generous enough portions to take away the leftovers for a second meal or splitting entrees with your dinnermate.

Again, these strategies will all contribute towards restaurant savings, but ultimately the major savings comes from controlled the frequency you dine out.

Keep in mind that restaurant meals are traditionally less healthy than meals you cook at home. The ability for you to control you restaurant spending will not only protect your wallet but also help control your waistline as well!

Do you have smart money tips on groceries or restaurant eating? Comment below

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Do not own more house than you need

Posted on by SmartMoneyMD

This is the second article in a following series on saving money. 

Housing costs in America are cheap. If you look at the cost of rent of an average city in Western Europe, you will see that it is several times higher than most of the larger cities in the U.S. How about Tokyo or Hong Kong? Equivalent housing in New York is similar in pricing yet the GDP of Hong Kong is much lower than that of the U.S. If you are looking strictly in doctor income, you will come out ahead significantly in the U.S. If you compare the overall financial health of a doctor in an average midwestern city like Omaha to one in Hong Kong, the Omaha doctor wins by a landslide. A $3000/month mortgage in Omaha will get you a giant 4500 sq ft house with 4+ bathrooms while you get a 800 sq ft apartment in Hong Kong with questionable bathroom plumbing!

You can definitely make the payments as a doctor. But it doesn’t mean that you should splurge on your housing. Standard recommendation for housing is that you shouldn’t spend more than a third of your monthly income on housing. A doctor who still has student loan debt or is in her first five years of practice should not be spending nearly that amount. If you spend $1000 less a month on rent or mortgage, you’d save $12,000 in one year! A smaller home will also require less energy to heat and cool, less space to furnish, and less maintenance.

The perk of being a doctor in America is that you have a higher potential income and cheaper cost of living. Use that to your advantage. The amount saved can be used to fund your Roth IRAs or taxable investment accounts. Even with tax drag, a 4% annual growth on $12,000 will result in $21,611.32 after 15 years. Contribute this amount every year and you will have a hefty sum.

Ask yourself where you priorities are, and what activities, hobbies, or goods make you happy? Is it a new pair of Loubs every year? Is it an extended vacation? Or a fancy house?

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Do you choose to put your money in your house? What do you do to control costs in your home? Sound out below!

Growing your net worth by controlling your expenses – Introduction

Posted on by SmartMoneyMD

This article serves as the beginning of a series on growing your net worth without having to increase your income.

 

While you are building your medical practice and getting out of debt, your net income from your job may not rise.  It takes years to acquire patients and vest into a practice.  You may be in a permanently employed position where your salary may never increase. As insurance reimbursements tighten, you income as a physician may actually decrease!

All isn’t lost, however. You can still grow your net worth during these times. Invoke the strategies that you used during residency to survive. One foundation for growing your net worth is to control your costs.  The lessons you learn from cutting costs help regardless of income. As you rise from poverty to upper middle class, the same principles apply.

The toughest aspect of each step of income transition for a doctor is that the time and effort we’ve invested in our training and education revolves around delayed gratification. Now that I’m making $43,000 while working 77 hours a week, can I afford Loubs? Do I go for the jumbo mortgage McMansion now that I am an attending? These are real questions that doctors go through. Practicality often comes in second to idealism.

The problem with doctors is that once we obtain a good income, most of us do not do a great job converting it to net worth. It is also easy to assume that the good income stream doesn’t end either. Unexpected events do occur. Your hospital may cut its staff. Your practice may employ you for two years and then decide to make partnership unattainable. You lose your job, have to relocate your family thousands of miles away, and start over. Without a net worth to buffer life changes, your decade of hard work may become fruitless.

Don’t let this happen to you. Develop a strategy to control your costs while you grow your net worth. Make your money work harder than you. Read on to see what strategies I’ve used to help grow my net worth.

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Have you gone through life changes in your physician career? Comment below!