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What do I do with my money next?
Posted on 8/22/13 at 12:49 pm
Posted on 8/22/13 at 12:49 pm
My wife and I are both physicians, I've been done with residency for 4 years and she will be done with her fellowship in 3 months. We will each make an average physician salary (more than a primary care, but less than the super specialists). We both have maxed out 401ks. We both have permanent life insurance (I do question why our financial adviser pushed this on us, but I am sure he liked his commission). I really do like our adviser, but there is an obvious conflict of interest in what he tells us to buy. My wife and I are both conservative with our money. Where should we put any extra money? I'm sorry this is such a noob question, but I don't know much about finances. I just read Saving for Retirement by Gail MarksJarvis, but all that did was make me question why I'm paying a guy and not doing it myself lol. I'm asking you guys because he is coming in a few weeks for a meeting with us.
This post was edited on 8/22/13 at 12:51 pm
Posted on 8/22/13 at 1:12 pm to AndyJ
1)by permanent life, do you mean whole?
2)do you have an emergency fund (4-6 months living expenses)
3)do you own a house?
2)do you have an emergency fund (4-6 months living expenses)
3)do you own a house?
Posted on 8/22/13 at 1:58 pm to AndyJ
quote:
I do question why our financial adviser pushed this on us
Sounds like he's putting his own interests in front of yours. I'd drop him and get a new guy.
Posted on 8/22/13 at 2:11 pm to AndyJ
Do you have student loan debt?
Posted on 8/22/13 at 3:52 pm to AndyJ
Make a budget - pay yourself first, and follow the baby steps like the other poster said.
Other tips:
15-year mortgage
Don't finance cars
You'll be rich before you know it.
Other tips:
15-year mortgage
Don't finance cars
You'll be rich before you know it.
Posted on 8/22/13 at 3:55 pm to AndyJ
If you are a hospital employee, check to see if they offer a deferred compensation plan. Some places let you put an additional 16K or so a year into a retirement fund tax free (no match or anything like that) on top on the 401K/403b, if you are a "highly compensated employee."
Posted on 8/23/13 at 8:59 am to AndyJ
quote:
We both have permanent life insurance
Not to sound like a douche, but most people who don't have "extra" money will not understand buying whole life policies. I don't know the details on your policies, but generally, whole life insurance can be a good PART of the investment/savings strategy when you have actual money and not just a pile of Dave Ramsey books.
Posted on 8/25/13 at 9:12 am to AndyJ
First thing is to get "own occupation" disability insurance. Your biggest asset is your earning potential. Next thing I'd do is switch to level term life insurance.
Posted on 8/25/13 at 5:08 pm to AndyJ
I agree that a permanent insurance product serves your agent better than it serves you. You DO need insurance, but an appropriate size 20 year term policy, will protect your family until that time when you are self insured and no longer need insurance (substantial assets, no mortgage, kids grown and out of school, etc).
One exception to the insurance issue might be a maximum funded policy. Basically, it is for high income earners who have already exhausted their other tax deferred options. It allows you to create a policy with a set premium, but you can overfund that policy up to a certain amount and the cash value is invested in mutual funds and maintains it's tax deferral. Once you transition from the accumulation stage of your life to the distribution stage, you can withdraw the equivalent of your cash value without owing taxes on the withdrawals. In the meantime, the policy does have a death benefit if you pass away prematurely. You don't purchase this for the death benefit (again, that is where you buy term insurance), but the death benefit is what makes this strategy another tax deferred option. It is fairly complicated, but it works well if used appropriately and you have an advisor who is familiar with the concept.
I also totally disagree with those that say to open a Scottrade, Fidelity, etc account and buy mutual funds. You are going to be busy with life and a career, you want to hire a pro to run your money. If you want to open an account for some of your "play" money, that's perfectly acceptable.
One exception to the insurance issue might be a maximum funded policy. Basically, it is for high income earners who have already exhausted their other tax deferred options. It allows you to create a policy with a set premium, but you can overfund that policy up to a certain amount and the cash value is invested in mutual funds and maintains it's tax deferral. Once you transition from the accumulation stage of your life to the distribution stage, you can withdraw the equivalent of your cash value without owing taxes on the withdrawals. In the meantime, the policy does have a death benefit if you pass away prematurely. You don't purchase this for the death benefit (again, that is where you buy term insurance), but the death benefit is what makes this strategy another tax deferred option. It is fairly complicated, but it works well if used appropriately and you have an advisor who is familiar with the concept.
I also totally disagree with those that say to open a Scottrade, Fidelity, etc account and buy mutual funds. You are going to be busy with life and a career, you want to hire a pro to run your money. If you want to open an account for some of your "play" money, that's perfectly acceptable.
Posted on 8/27/13 at 8:12 pm to AndyJ
You should spend some time on this guy's blog, he is an emergency room physician and good investor. Well, other than him not listening to me about equity REIT risk going into 2008. Physicians, especially specialists and up the chain, are different than most retail investors due to much higher incomes, it's good you are thinking ahead.
white coat investor
white coat investor
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