Your "perfect" life: adding up the costs

Most doctors dream about life after medicine. This Vancouver couple
have a good idea of what they'll need to pay for it

By Theo Sands

Though consultations with brokers, bankers and insurance pedlars are often the first step most MDs take in coming up with a financial plan for the future, they shouldn't be. Your first job is to decide what kind of life you'd like to have if and when you ever direct yourself away from medicine, and then determine how much it's going to cost.

BUDGET BREAKDOWN
Surprisingly, perhaps, coming up with a plan for what you and your partner would like to do post-practice is often the more difficult of the two. Though you may dream of writing the great Canadian novel, or a series of brilliant best-selling detective stories based on forensic evidence, or sailing off to Baja or Bermuda, when it comes right down to it the decision can be a tough one.

For these purposes, let's consider the case of a Vancouver cardiologist in his early 50s whom we'll call Dr Durst. He's married with two daughters, one in her late teens and the other just completing university. His wife, Lin, runs a successful interior decorating business. In this case, the couple know exactly how they want to spend the future.

The doctor, dedicated to his patients as he is, longs for the day he can spend most of his time at their place on Vancouver Island sailing, reading and playing his much-neglected baby grand. Lin, still in her 40s, is loath to give up her business. After a month of going back and forth they've come up with a compromise of sorts. Over the next 10 years he'll cut back on his practice hours and spend more and more time on the island, eventually phasing out practice entirely. She'll keep the decorating business going but will eventually work only Tuesday, Wednesday and, Thursday, with long weekends in the country.

MAKE A BUDGET
Nice life if you can get it � but can they? The first question to answer is how much is it going to cost? On a rare sunny Saturday morning in October, the Dursts took their coffee out to the patio of their North Vancouver home and spent an hour drawing up a budget based on the "what if..." scenario that both their daughters were on their own and they could initiate the plan.

Here's what they thought their post-practice budget might look like:

At a pre-tax sum of $88,800 it might seem a shade rich, so let's have a closer look at where the money goes.

Vancouver home: Real estate prices have skyrocketed in the last five years and the home they purchased in 1995 for $650,000 would likely fetch over $1 million in today's market. Still, they have current mortgage payments of about $2,500 a month with 21 years left to run. They estimate these will drop to about $2,000 by 2014 depending on prevailing interest rates. They've allowed $6,000 for insurance and upkeep.

They wrestled with the question of whether to sell the house and buy a condo or rent an apartment. After looking at the market, they concluded that there wouldn't be any savings and that it might cost as much as $4,000 a month to get something they both like nearly as much as they do the house. The exercise done, they decide to sit tight with the home knowing they could sell it in a pinch.

Vacation home: It's paid for and the amount should cover expenses and upkeep.

Utilities: A guestimate that $200 a month will cover them for both houses.

Cars: Since Lin plans to continue to work in Vancouver, the couple will need two cars. They consider the $15,000 enough but just, given depreciation, repairs and insurance costs.

Fuel: With no idea of where gas prices � or more fuel efficient automobiles � are headed they've allowed for $100 a week � a tank full for each vehicle.

Food/drink: At $200 a week, the Dursts clearly plan to do most of their dining at home and on the boat.

Clothes: Dr Durst doesn't think he'll spend more than $200 a year, mostly on new running shoes.

Boat: He concedes that $3,000 is generous � but points out that this will be one of his prime post-practice activities and he isn't prepared to stint.

Hobbies: Mostly piano lessons for him and exercise classes for her.

Travel: They both want to be able to get away for at least a week once a year � or to apportion it out to mini-vacations during the year.

Contingencies: To cover the many items they fear they've left out.