Got momentum? [Certain Times]

Yesterday I unboxed my family’s new Handy Gourmet Swirl Around Organizer, a lazy-Susan-like gizmo that holds plastic containers that store leftovers, like turkey and dressing. When I gave it a spin, my 11-year old asked, “Dad, why does it just keep going around and around?”

I told her, “It’s got momentum.”

She also noticed that it swirled around longer after it was fully loaded with containers and lids, which gave me a chance to explain how momentum works.

Momentum equals mass times velocity. Simply put, more food containers (more mass) translates to more momentum (more spinning).

Then I noticed something I’ve been seeing in my work with physicians: those who save more (like mass) and save regularly (like velocity) tend to have larger account balances and tend to remain in motion toward their goals (momentum).

I didn’t dream this up, of course.

I’m sure Sir Isaac Newton first saw this phenomenon in his work with physicians long ago. I think Newton’s First Law of Personal Finance Physics goes something like, “A physician who is saving regularly tends to continue to save regularly, while a physician who is not saving regularly tends to spend.”

Of course, I’m paraphrasing here but my point is that you must save, and you must save regularly when you want to reach your goals like paying for college, enjoying retirement, or even buying a dream home.

Speaking of housing, let’s take a look at this month’s numbers...


US National Average Home Price1: $217,300 (+4.9%)

Total Homes Sold1: 5.12 million (-3.8%)

Average Home Supply1: 5.4 months (+6%)

Average 30-year fixed home loan rate2: 4.16% (-7%)

Average 15-year fixed home loan rate2: 3.31% (-6%)

Jumbo home loan limit: $417,000 ($625,500 in pricier markets)

Average 30-yr jumbo home loan rate3:  4.20% (-7%)

As employment continued to improve and the economy continued to strengthen, home prices continued to rise over the past twelve months. The average home supply also increased, shifting the balance of power toward buyers, who will now find it easier to finance a home since loan rates have dropped by about 7%.

The payment on a $1 million home, assuming 20% down and a 30-year note, has fallen since this time last year by $146 to $3,912 per month.


  1. National Association of REALTORS
  2. Freddie Mac
  3. Mortgage News Daily (thanks to Josh Mettle for helping me find the Jumbo rates!)


The Wall Street Journal had a nice article about how and why to clean up a cluttered portfolio, saying “it’s about more than mere organizing; it can save money, smooth out investment returns and, later in life, make it simpler for family members should they need to help manage your finances.” What’s not to like about that?

Even though the rules can be a little confusing, The New York Times thinks Flexible Spending Accounts are still worth a second look for physicians in the top tax brackets. If your employer offers these plans, you might gain up to  $4,000 in permanent tax savings, so look for this option during open enrollment this year.

Inflation has been so tame in the past year that the IRS’s recently announced “changes” to retirement plan contribution limits for 2015 have barely budged. The limits on IRA’s remain at $5,500 ($6,500 for those aged 50+), while 401k/403b deferral limits will increase by $500 to $18,000 ($24,000 for those aged 50+). One fastidious HR person I know has already contacted the physicians I know to bump up their 401k deferrals. Maybe your HR person will too… or maybe not.


Now is the very best time to contact your tax guru and do some planning for next year. The final deadline for extended filers is behind us and the next tax year has yet to begin, so tax people are sunning themselves in tropical locales, catching up on continuing education, and eagerly awaiting your call to schedule a time to reduce your tax bill this April.

Wishing you and your family a Happy Thanksgiving and the best of the rest of November.

W. Ben Utley CFP® Physician Family Financial Advisors Inc. Visit: Call: 541-463-0899 Be certain.™