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Message
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
9
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 1:48 pm to Duckman13
Step 1) Emergency $$$
Step 2) Debt Snowball (Google)
Step 3) 3-6 Months living expenses
Step 4) Max out 401K to company matches
Step 5) Max out Roth IRA for each of you
Step 6) If you already make too much money or after you have maxed out ROTH IRA, max out traditional IRA
Step 6) Either Invest in Stock Market or you could start looking at investments in Real Estate and rental property
Thats all I have for now, good luck!
Step 2) Debt Snowball (Google)
Step 3) 3-6 Months living expenses
Step 4) Max out 401K to company matches
Step 5) Max out Roth IRA for each of you
Step 6) If you already make too much money or after you have maxed out ROTH IRA, max out traditional IRA
Step 6) Either Invest in Stock Market or you could start looking at investments in Real Estate and rental property
Thats all I have for now, good luck!
Posted on 8/22/13 at 1:51 pm to Duckman13
20 year term life is what you need. At ten years, replace the 20 yr. with a new 20 year.
Open account at Scottrade in your area & take a look at the 3 health care mutual funds: Vanguard (VGHAX), T.Rowe (PRHSX), and Fidelity (FSPHX). (You may to deal directly with T.Rowe). I have all 3 and they are making me money. Put in $10 - 20,000 each.
Find other mutual funds - look at T.Rowe's New Horizon, Vanguard Wellington, Vanguard 500 Index, Fidelity Low Price, and these ETF's - VIG and XLP. And the Spyder financial ETF.
And do get the emergency fund and a house!
Open account at Scottrade in your area & take a look at the 3 health care mutual funds: Vanguard (VGHAX), T.Rowe (PRHSX), and Fidelity (FSPHX). (You may to deal directly with T.Rowe). I have all 3 and they are making me money. Put in $10 - 20,000 each.
Find other mutual funds - look at T.Rowe's New Horizon, Vanguard Wellington, Vanguard 500 Index, Fidelity Low Price, and these ETF's - VIG and XLP. And the Spyder financial ETF.
And do get the emergency fund and 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 1:59 pm to tdavi48
Hey thanks y'all. So I can do an IRA even if I have a 401k? I have a 30 year mortgage on a house and an emergency fund. I also have whole life.
When you say invest in the stock market, what do you mean? Do research and pick stocks or just buy another mutual fund? My 401k is in mutual funds, but should I get more even without the tax benefit.
Again, thanks for the help.
When you say invest in the stock market, what do you mean? Do research and pick stocks or just buy another mutual fund? My 401k is in mutual funds, but should I get more even without the tax benefit.
Again, thanks for the help.
This post was edited on 8/22/13 at 2:01 pm
Posted on 8/22/13 at 2:11 pm to AndyJ
Do you have student loan debt?
Posted on 8/22/13 at 2:18 pm to elposter
Together we have $200,000 in student loan debt but our interest rate in 1.75%.
With the owning a house talk, do you mean paying the house off quickly? We are probably going to get a new house (selling the old) for a growing family.
With the owning a house talk, do you mean paying the house off quickly? We are probably going to get a new house (selling the old) for a growing family.
Posted on 8/22/13 at 2:31 pm to AndyJ
Yes once you max out what your company matched in your 401K then put the extra money into the IRA's. You might want to shop around also and see about Interest rates on a 15 year mortgage, even if the rates are a little higher over the life of the loan you will save an exponential amount of money switching from a 30 year to a 15 year and usually your payment isn't that much more per month.
Yes, you can invest additional money in anyway (ie stocks, mutual funds etc) The tax benefits on 401k and IRA's are great but once you max those out and you stop getting the tax benefits don't let that deter you from continue to invest later down the road.
Yes, you can invest additional money in anyway (ie stocks, mutual funds etc) The tax benefits on 401k and IRA's are great but once you max those out and you stop getting the tax benefits don't let that deter you from continue to invest later down the road.
Posted on 8/22/13 at 2:49 pm to AndyJ
Permanent life insurance as a credit shelter is a fantastic hedge against malpractice for docs and attorneys.
Posted on 8/22/13 at 3:02 pm to AndyJ
Your income will probably make you ineligible to deduct an IRA contribution if you are participating in a 401k plan. I am assuming that you will make too much money to even contribute to a Roth IRA. If your 401k has a Roth option, you may want to split your contributions (some pretax and some after tax).
Posted on 8/22/13 at 3:11 pm to AndyJ
quote:
Together we have $200,000 in student loan debt but our interest rate in 1.75%.
How the bleep did you get 1.75%?
Posted on 8/22/13 at 3:13 pm to tigerrocket
Invest in tax-free municipal bonds.
Current offerings in 5.0% to 5.5% range
at FMSbonds (see their website).
Ask for Jay Goldberg.
Current offerings in 5.0% to 5.5% range
at FMSbonds (see their website).
Ask for Jay Goldberg.
Posted on 8/22/13 at 3:38 pm to AndyJ
quote:
Together we have $200,000 in student loan debt but our interest rate in 1.75%.
Geez. Get this paid off asap.
Posted on 8/22/13 at 3:48 pm to Brian Wilson
Checkout LINK / the white coat investor.
Someone in the medical field that has a great investing blog. He's also a contributor at bogleheads.org (another good place to go reading)
Someone in the medical field that has a great investing blog. He's also a contributor at bogleheads.org (another good place to go reading)
This post was edited on 8/22/13 at 3:49 pm
Posted on 8/22/13 at 3:48 pm to tdavi48
quote:
Step 6) If you already make too much money or after you have maxed out ROTH IRA, max out traditional IRA
Correct me if I'm wrong, but I thought the IRA contribution limit applied to the combined contributions to both a traditional and ROTH IRA? Hence if you contributed $2,500 to a ROTH, you can only contribute $3,000 to a traditional.
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 8/22/13 at 3:55 pm to Brian Wilson
I'd consider DRIPs in dividend bearing stocks. You can be pretty conservative considering you & your wife's profession. Good luck
Posted on 8/22/13 at 4:03 pm to barry
For student loan rates we consolidated at the perfect time and locked in. Then we get 0.5% off for direct withdrawaland 1% off for 36 straight months of on time payments (not hard when you are on auto withdrawal)
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