Pay for child's med school or invest money?

[mikejeshurun]

@robergrindhoff That's why doctors bow to pharmaceutical tyranny. how many doctors dare speak out of truth of COVID vaccines? Aren't they lying to people on the effectiveness of vaccine. Pathetic!

 

[upamountain]

@applesandangels Whatever you do stay away from student loans

 

[poporetto]

@upamountain I can see OP wanting to be careful about co-signing loans, but in terms of the child themselves taking out loans, for medical school that is often a perfectly reasonable thing to do. Yes it sounds like a lot of money to get in debt for, but you can also make a lot of money once you’re done.

 

[eaglemama70]

@applesandangels Invest it or use some to help with living expenses.

 

[meirdavid]

@applesandangels When all is said and done your kid will be better off financially after med school. Still I’d advise you to invest some cash, aside investing in real estate you could buy and hold stocks.

 

[boomquishi]

@applesandangels What we know from posts so far:

• You make $300K a year
• You plan to fund $400K over 4 years for your child to attend med school
• You plan to retire in 10 years with at most a $4M Net Worth
• You have $150K liquid today and a $2.3M Net Worth

You don't say where you live and how that net worth is distributed. Maybe you're in Palo Alto in a $3M home, with a $1M mortgage and only have $150K in retirement and $150K in cash? Or maybe you live in "flyover country" in a paid-for $500K home, and have $1.65M in retirement and investments plus the $150K "saved up"? Those are two very different pictures.

First off $100K/year seems rather on the high side for medical school unless you're planning on paying full freight tuition and living expenses at Harvard. Compare that with in-state tuition costs in Texas.

Second, if you're retiring early, your $4M is going to safely generate $160K/year. That is almost half what you currently make today. In 10 years time, inflation will take a significant chunk out of that. If you can take that level of lifestyle downgrade today, then you can probably cashflow college with the $150K and saving ~$70K a year. $5800/month savings could be doable if you make $300K/year and have low outgoings.

I'd be looking for a lower cost for med school, and having your child take on some significant share of debt so they have some skin in the game.

Investing that $150K is not going to make much of a short-term difference. Even if you could buy a $150K home and get a positive cashflow of $1500 a month (you can't), it doesn't make any kind of dent in the $400K bill that is going to be due.

 

[loquitalalita]

@boomquishi I agree with everything you said although 100k isn’t an unreasonable estimate. Texas schools are notorious for being the cheapest in the country. Most med schools private and state are going to be $50k+ a year without factoring cost of living. Mine is around ~75k/year tuition.

 

[boomquishi]

@loquitalalita Fair point. TX is special for sure. It's a hell of a thing to put kids through med school. $400K lump sum in a trust fund from age 22 to 67 would give them ~$10M (assume 7.5% CAGR for 45 years).

 

[resjudicata]

@applesandangels My wife's family took 3rds. Her father and mother both separately took on 1/3 of the debt and my wife took the last of it. Just an option if everyone works.

I like the option of investing in a home as I know someone that is doing that right now and saving a ton of money while "investing".

Lastly, and this won't be popular, but the military is hurting for people. They will pay for schooling as well. I say that with a very cautionary opinion as my own wife passed away due to a service connected disease (see username). I will admit it's unlikely anything will happen but it's an option with pro's and cons. Some of the worst and best doc's I've dealt with were military. The BEST NP I ever had was a flight nurse in the guard so he could pay off his debt. He got "deployed" to Europe for a summer.