Guidance aimed at those in the medical field, when financing while in Res/Fellowship.

[CatB]

"What the heart desires, the will chooses and the mind justifies" (Dr. Ashley Null, theologian, not MD)

I can help you with the last part:
- electricity is cheaper than gas
- maintenance costs are lower
- the car is super-safe (reduce risk for injury or worse, smart move along the lines of "life is short, don't shorten it further by driving an ICE")
- reduced emissions - think of all the asthma and lung disease you're not instigating or aggravating
- you're providing cashflow for a company that is committed towards saving the world, not gouging/destroying it
- @ChadFeldheimer's suggestion, introduce your children to the wonderful old American tradition of a "roadtrip" in the safest, coolest car in the world
- for your own peace of mind and enjoyment, treat yourself to a luxurious fun commute to prepare you for (and help you reset after) a very stressful job; mindfully and intentionally enjoy the car, the ride, the music, the single-pedal grace, and the delightful responsiveness - there's a lot of research out there indicating that this would improve your performance on the job and reduce your stress levels to improve your health.

Hope you have a *ton* of fun!

 

[bonaire]

Another thing to add to the mix is if quality of life of the couple can use some of their income to give to organizations they believe in. Whether it is in lump sum to Tesla to "support them" to charities with good intentions and who serve the community you live in to make it better off. One thing I have found when people go over their life story is how many made really good money who gave very little away until they reached their later years. I know it is Jan 2 now - and tax advantages to charities are a long-ago issue (since Dec. 31) but a couple may want to consider finding an avenue to give a few percent of that relatively large income to some good causes. And by not having kids yet, the consideration that raising just one child in today's economy from birth through college and into their own married life carries a cost of about $1/2 Million for a typical mid- to high- income family. (even more in NYC) I've been through it and I can say that it seems to be correct if the child is put through private school the whole time. $500K is not just "two years" of doctor-style income - it is more like 5+ years of disposable income aggregation after savings, debt pay-down and normal costs.

I've offered it here on TMC before and will always offer it to someone willing to take me up on it. I will pay for someone, such as the OP and his wife, to go through both of Dave Ramsey's classes. Financial Peace University and Legacy Journey. I think as a young couple, they certainly would benefit from it to establish a lifestyle that is sustainable and enriched. It's not all about making and spending money. It's about using money for the right reasons. Remember, it's a car and not a religion.

 

[CSFTN]

One last part I would like to add, as I don't see that anyone else has.

Roughly 40% of newly employed physicians leave that job within 2 years. Many are subsequently unemployed, if only for a short period, and some go back for even more training. So, please don't spend your income before you actually have it. I'd suggest that you be frugal for just 1-2 more years, get a used Tesla or something cheaper, get settled in, become a partner, pay off a good chunk of your loans, stow away a rainy-day fund, and then spend on things like cars.

 

[JohnSnowNW]

Lot of questions but most are subjective.
- Any plan on kids? would the wife drop the job if it "stunk" and stay at home w/ kids?
- Is $300K after residency "guaranteed"? I've been in IT for 30 years and just might go back to medical school....
- Someone working as a young doctor may not have that much time for fun and a big, expensive and fun car may sit idle much of the time.
- Have you considered other EVs? How about the range-extended plug-ins?
- Do you need the acceleration and size of a Tesla? Would something like a BMW i3, Volt or even (gasp) Leaf do the trick?
- Could you wait 1.5 years and try to get the lower-priced Tesla Model 3 at half the price?
- Other models come out in the sub $35K range very soon if cash considerations are still there.

1. We already have the kids, and house. She already works at the hospital where the job is offered...and loves it. No chance she'll decide to stay home.
2. It's Fellowship, and yes the salary is guaranteed...it is more than $300k, but less than $400k (not going to get specific)
3. The Model X will be used daily (will be main travel vehicle as well)
4&5. Have considered all other options, need the 7 passenger seating. Don't care about the performance of the Model X at all.
6. The vehicle being replaced is currently too small, limping by until we can get the Model X.
7. No other 7 passenger BEV/PHEVs with access to 3rd row with car seats in place seem to be coming on the market. (requirement to not remove car seats)

Since OP mentioned they plan to lease:

I have a lease on an S through Tesla (in my particular case, US Bank). The application form was very basic: SSN, current employer (job title, gross income, number of years), previous employer (same details), other income. There was no space on the form to provide any other details: source of other income, other debt, assets, future planned income, etc.

Your mileage may vary. I'm happy to provide the form so you can see for yourself.

My two cents: Lifestyle inflation is a real thing. $300k/year (or whatever) might sound like a lot now, but spending it is a whole lot easier than earning it - especially when the government is helping! Instead of a car, I'd be inclined to spend my fun money on travel - the kids will likely remember and appreciate that a lot more than an X. But maybe I'm biased since my parents didn't have a Model X!

Thanks for the information, I don't think I need to see the actual document but thanks for the offer. I traveled extensively, as did my wife, before we got married. Our kids are 2 & 4, so they wouldn't appreciate traveling at this point. We plan to travel quite a bit when they're older...including the wife taking several months to work internationally.

One last part I would like to add, as I don't see that anyone else has.

Roughly 40% of newly employed physicians leave that job within 2 years. Many are subsequently unemployed, if only for a short period, and some go back for even more training. So, please don't spend your income before you actually have it. I'd suggest that you be frugal for just 1-2 more years, get a used Tesla or something cheaper, get settled in, become a partner, pay off a good chunk of your loans, stow away a rainy-day fund, and then spend on things like cars.

I've mentioned before, but this is our only big purchase. The Model X is being bought for utility, the luxury aspects of the vehicle just happen to be a part of the package. I don't care about it at all. If there were used Model Xs...we would go CPO.

She already works at the hospital, for the group that offered, it is unlikely that she will all the sudden decide she doesn't like it. Anything is possible, of course.

 

[ModelX]

Enjoy the X!

 

[Canuck]

Tough crowd here.

That's probably because most of us here paid off everything first and had more than enough cash in the bank before spending $100k+ on a car. I come at from the legal, and not medical, profession but I don't think there's much difference.

Having said that, JohnSnowNW seems to have considered all angles and it looks like it makes sense for him to make the purchase now rather than wait. Life is short and I have probably been too conservative when it comes to finances.

We're actually meeting with a financial planner in Jan., so we'll see how much my budgeting meshes with a professional's recommendation.

It's always to good to get recommendations but at the same time most "financial planners" I've come across are more in it for themselves than for the client. I also found it interesting that they were telling me what to with my money when they themselves had a lot less than I did. It's best to look at what the smart investors have done and follow that path rather than to follow the path of someone whose job is to make money off of you. Invest in what you know and trust but not in what someone you don't know and trust tells you (as Warren Buffett says).

 

[JohnSnowNW]

Having said that, JohnSnowNW seems to have considered all angles and it looks like it makes sense for him to make the purchase now rather than wait.

Certainly attempting to do so, hopefully we have.

It's always to good to get recommendations but at the same time most "financial planners" I've come across are more in it for themselves than for the client. I also found it interesting that they were telling me what to with my money when they themselves had a lot less than I did. It's best to look at what the smart investors have done and follow that path rather than to follow the path of someone whose job is to make money off of you. Invest in what you know and trust but not in what someone you don't know and trust tells you (as Warren Buffett says).

Thanks for the suggestion, I admit we're going in a bit blind here.

 

[bonaire]

Here's a tip on investing. You know your wife is in health care and has a good salary. Well, that is a sign. My best performing mutual fund for the last three years is a healthcare fund. Over 20% returns for the last few years. Maybe invest in what you know - and if your wife sees healthcare declining with less services rendered, you can move to something else. Financial advisors all sound the same these days using "target date" funds and other crazy blending that is generic. I beat the averages this year on my own and even had some big losses in a few areas that I should have avoided. But to beat the averages, I relied on core holdings that were heavy in health care and capital opportunity funds.

You can actually get advice from Vanguard or Fidelity just for the asking. But they really want you to learn more about investing than just asking them what to do. And also - a dollar not invested is one that doesn't grow. Similarly, a dollar not spent can be saved or invested. Just avoid oil for now There probably will be opportunities to double your money in oil in a year once OPEC sets up their scenarios the way they want it to be, however. We have retail consumer prices rising now - even with falling oil. I will hate to see what happens once oil ramps up again. I've seen some products rise 10% this year alone at the supermarket.

 

[Magus]

The advice makes sense. I am rather fresh in the medical field as well. The financial advice was solid- wait to purchase my Tesla (Model S). However, I have wanting an electric from from the age of 15. Have always thought about converting my ICE cars, and extensively drove a Prius. Having an electric car was a life dream of mine. I don't at all regret purchasing my Tesla.


I do understand the monthly payments added up would have potentially resulted in significant future revenue. However, I've had a near death experience in a motor vehicle accident- walked out without a scratch- but easily inches from disability or death. To have not only the best car in the world, but also the safest, true ICE replacement, and living my electric car dream, was a no brainier. My autopilot has avoided one accident already.

In terms of being the new kid on the block, other residents in training had more expensive cars than attendings. Some attendings drive old or very inexpensive vehicles, like Corollas, and you would shooting very low to show deference for their choice of vehicle. I've had some popularity with the attendings. I don't sense any negative consequences from being the new kid on the block with a Tesla.

Welcome to the Tesla family. If we had a Model X growing up, I would be the most popular kid in high school. I may have been more motivated to pursue tech interests. Your children will have the most advanced production vehicle on the planet. Produced under a leader who at one point needed family and friends for financial support to live, and now has now successfully launched the first re usable rocket and the greatest vehicle in automative history (the Model X), after the most iconic (Model S).

I wonder if there will be people, simply because of the existence of Tesla, motivated toward higher level careers in order to have our Model X/S or be part of Tesla development. I had one gentleman publicly approach my Model S, whose goal was to progress into a higher level field and purchase a Tesla. He called owning a Tesla a mark of success.

 

[ChadFeldheimer]

4&5. Have considered all other options, need the 7 passenger seating. Don't care about the performance of the Model X at all.
6. The vehicle being replaced is currently too small, limping by until we can get the Model X.
7. No other 7 passenger BEV/PHEVs with access to 3rd row with car seats in place seem to be coming on the market. (requirement to not remove car seats)

The Model X is being bought for utility, the luxury aspects of the vehicle just happen to be a part of the package. I don't care about it at all.

Have you considered full size vans like the Ford Transit or Nissan NV? No electric powertrain, but they can be configured to fit all your other stated requirements. And they're available now, so you don't have to limp along any further.

A friend grew up with 7 siblings. They had Ford Econoline Wagons to haul everyone (and everything) in comfort. Worked well for them. The Transit is the replacement for the Econoline and the NV is a relative newcomer.

 

[JohnSnowNW]

Have you considered full size vans like the Ford Transit or Nissan NV? No electric powertrain, but they can be configured to fit all your other stated requirements. And they're available now, so you don't have to limp along any further.

A friend grew up with 7 siblings. They had Ford Econoline Wagons to haul everyone (and everything) in comfort. Worked well for them. The Transit is the replacement for the Econoline and the NV is a relative newcomer.

The wife vehemently refuses vans, which is why she was so excited about the Model X. I suppose I should have been more explicit, but AER is also a requirement. We've just outfitted our detached garage, at no small expense, to allow BEV charging. So, we're quite committed to an EV drive train. "Limping" may not have been the best word choice, but my back is tired of taking the kids in an out of my Suzuki SX4, and having to fit groceries/supplies in the front and rear foot-wells, due to the limited trunk space, is getting a bit tiresome.

 

[ChadFeldheimer]

Hey, happy wife, happy life =)

Enjoy the X!

 

[Model S M.D.]

Sounds like you've already made the decision to get it and just need a little reassurance and approval.

Just do it--Enjoy the Tesla!

 

[MikeC]

That's probably because most of us here paid off everything first and had more than enough cash in the bank before spending $100k+ on a car.

Yes, I think that's exactly why. But maybe it was a little easier because you all didn't have the temptation of a Tesla at the time. :wink:

 

[cmu5p]

Winter is coming, Jon Snow. (Good thing the X handles well.)
We've crossed paths before, so I won't repeat my advice from last year. You seem to have a good head on your shoulders and considered all the scenarios. Enjoy the X! (See, you DO know something, JonSnow.)

 

[Max*]

That's probably because most of us here paid off everything first and had more than enough cash in the bank before spending $100k+ on a car.

Maybe most people on the forum, but I would bet not most people who own a Tesla.

Tesla attracts a wide crowd, for some it's the new toy, for some it's 4x more expensive than their previous car. Some people pay cash, lots of people finance it (hence all the financing threads), and given some of those people have the cash to buy it but decided to invest instead, but others just plain don't.

Given the median age of a Tesla owner is probably 50-60years old, and Tesla is now attracting crowds of 30-40 year olds, not all of them have $100k in the bank account sitting with nothing to do.


Probably too late for the OP, but to whomever comes back to read this thread I'll add my 2c: I don't think it's necessarily a bad idea to spend money and finance a car if you can comfortably make the monthly payments, while retaining your current standard of living.

 

[JohnSnowNW]

Sounds like you've already made the decision to get it and just need a little reassurance and approval.

Just do it--Enjoy the Tesla!

Yes, we have. We've had the configurator open for a week now, but we haven't pulled the trigger yet.

One feature we're still undecided on is the ultra-white interior. We both really like it, even though weren't considering it at all before the design studio openned to us. A bit concerned about stains and wear...but we really do like the look.

Winter is coming, Jon Snow. (Good thing the X handles well.)
We've crossed paths before, so I won't repeat my advice from last year. You seem to have a good head on your shoulders and considered all the scenarios. Enjoy the X! (See, you DO know something, JonSnow.)

Thanks, certainly trying to be smart about it.

Maybe most people on the forum, but I would bet not most people who own a Tesla.

Tesla attracts a wide crowd, for some it's the new toy, for some it's 4x more expensive than their previous car. Some people pay cash, lots of people finance it (hence all the financing threads), and given some of those people have the cash to buy it but decided to invest instead, but others just plain don't.

Given the median age of a Tesla owner is probably 50-60years old, and Tesla is now attracting crowds of 30-40 year olds, not all of them have $100k in the bank account sitting with nothing to do.


Probably too late for the OP, but to whomever comes back to read this thread I'll add my 2c: I don't think it's necessarily a bad idea to spend money and finance a car if you can comfortably make the monthly payments, while retaining your current standard of living.

Thanks! Though I will add that if we were only able to retain our current standard of living we wouldn't be purchasing the Model X. We are desperately in need to catching up to where we should be with regard to retirement savings. So, if we couldn't purchase the Model X and also start saving (considerably) for retirement we probably wouldn't do it.

That said, I think our situation is probably unique to those in the medical field.

 

[Kandiru]

"What the heart desires, the will chooses and the mind justifies" (Dr. Ashley Null, theologian, not MD)

I can help you with the last part:
- electricity is cheaper than gas
- maintenance costs are lower
- the car is super-safe (reduce risk for injury or worse, smart move along the lines of "life is short, don't shorten it further by driving an ICE")
- reduced emissions - think of all the asthma and lung disease you're not instigating or aggravating
- you're providing cashflow for a company that is committed towards saving the world, not gouging/destroying it
- @ChadFeldheimer's suggestion, introduce your children to the wonderful old American tradition of a "roadtrip" in the safest, coolest car in the world
- for your own peace of mind and enjoyment, treat yourself to a luxurious fun commute to prepare you for (and help you reset after) a very stressful job; mindfully and intentionally enjoy the car, the ride, the music, the single-pedal grace, and the delightful responsiveness - there's a lot of research out there indicating that this would improve your performance on the job and reduce your stress levels to improve your health.

Hope you have a *ton* of fun!

Words of wisdom.

 

[sandeep_59]

As white coat investor says referring to physicians making good money, " You can have anything you want, you just can't have everything you want." And it appears that Model X is the one thing you want. And it seems you guys don't really have many other things you are splurging on. You also have noted above that with your income, not only can you maintain your lifestyle (which seems to be modest, and as a bonus it obviously helps you 'splurge' on model x) you can also ensure retirement savings. And the Teslas are extremely safe cars.

Seems to me you have thought it through and are in decent position to make it work. Despite the well intended and correct financial advice, I feel you are on the right track here.

 

[pedriscoll]

I have been in Family Medicine for 35 years and just bought my Tesla last June. Had to wait till kids college bills were paid off and other debts retired. However, you appear to have a solid plan and no other splurges. Go for it and enjoy the Model X!