Forum Mailbag: 1-Hour Commute In Residency, 4-Year Vs. 5-Year Med School, Job Decision, And More!

There is so much great information on personal finance forums. I participate on several message boards, including the Bogleheads and White Coat Investor forums. Here are some of the discussions happening around the internet.

1. White Coat Investor: Resident Commuting 1 Hour To Save Money

Question: Kabooya is starting residency in July and can either live near the hospital for a minimum rent of $1600/month, or take a 1 hour subway from his parents house and get housing/food for free. He was wondering whether it was worth the hassle of commuting for $20,000/year.

WSP’s Take: I will be with the majority of physicians on this one and say that this resident should live close to the hospital, at least for intern year. Residency, especially intern year, is hard in pretty much any specialty. I understand that the subway, especially in New York City, can be convenient, if you can get a seat. But the last thing I’d want to do after an overnight call is be an hour away from my bed. And when I have to be at the hospital at 5AM, I’d rather wake up at 4:30AM than 3:30AM.

For some specialties and in some programs, the hours get easier in the later years of residency. At that time, you could always choose to move in with your parents to save money.

2. White Coat Investor: School Selection

Question: Manbug is deciding between a 4-year medical school with $160,000 in loans versus a 5-year medical school with $60,000 in loans. Both school match comparably well, and in general, he likes the 4-year school better.

WSP’s Take: I would attend the 4-year medical school with $160,000 in loans. If you live like a resident for that extra year you would otherwise be in school/residency, that would likely make up the difference in cost.

One caveat is that in some competitive specialties, medical students will voluntarily take a year off to do research. In that scenario, you would have just went to the more expensive school without saving any time. Make an extra effort to explore any possible competitive specialties you might be interested in earlier in medical school, and get involved with research early so that you won’t have to do a research year during medical school.

3. Bogleheads: Job Decision

Question: S4C5 will soon graduate from a competitive subspecialty and has a decision between two offers. He can either take a $600,000 in a rural Midwest town 5 hours from a major metropolitan area, or take a partnership-track job for $300,000, with a potential for $600-700k as a partner after three years.

WSP’s Take: I would take the partnership-track job. While some readers noted that you are not guaranteed partnership, this is probably a risk worth taking. The usual due diligence about calling any past physicians who did not make partner is appropriate here, but assuming no red flags, I would take the California job. If you make partner, you will be making the same as in the rural Midwest job, with better quality-of-life.

4. Physicians on FIRE Facebook Group: Vanguard International Fund?

Question: A doctor in the Physicians on FIRE Facebook group is looking to add a Vanguard international fund to her portfolio. She asks the community which one of the Vanguard international index funds she should use: VTIAX, VFWAX, or VGTSX?

WSP’s Take: VTIAX is the Admiral share version of the Vanguard Total International Stock Index Fund, while VGTSX is the Investor share version. She should invest in VTIAX so long as she can meet the minimum $10,000 investment; if she cannot meet that minimum, then she should invest in the ETF version of this index fund (VXUS). Both VTIAX and VXUS have expense ratios of 0.11%, while VGTSX has an expense ratio of 0.17% — and remember that all three versions are investing in the same stocks.

Deciding between VTIAX / VXUS or VFWAX is a matter of personal preference. VTIAX is far larger than VGTSX (~$350 billion in VTIAX versus ~$35 billion for VGTSX). The main difference between VTIAX and VFWAX when you look at the Morningstar style boxes is that VTIAX has a larger exposure to small-cap stocks than VFWAX. Since they have the same expense ratio and you get slightly more diversification with VTIAX, I would choose VTIAX as my international index fund for Vanguard investors.

Wall Street Shares: 5 Articles To Read This Week

1. Physician on FIRE: When Your Physician Career Doesn’t Go as Planned (Because It Won’t) — Some nice life lessons from this guest post from an early-career anesthesiologist.
2. Early Retirement Now: The Ultimate Guide to Safe Withdrawal Rates – Part 24: Flexibility Myths vs. Reality — Big ERN continues his lengthy and detailed SWR series with this post, where he investigates whether the ability to be flexible about retirement spending can affect your SWR.
3. A Good Life, MD: Investing Cash in Physician Well-Being: Return on Investment — this radiation oncologist argues that hospitals and medical systems investing in physician well-being provide financial benefits in the form of increased productivity and lower turnover.
4. Rogue Dad, MD: Life In the Ivory Tower — A Professor Always Pays His Debts — an pediatric ER physician reflects on some of the challenges (i.e. politics) of being an academic physician.
5. Chief Mom Officer: People Are Preying On Your Dreams – Beware “Get FI Quick” Schemes — achieving FI is a (relatively) slow process that takes years to realize; anyone who tells your otherwise has something to sell you.

What do you think? Do you agree or disagree with any of my responses? What’s your take on the topics in this week’s forum mailbag?