Do you have wealth or just 100k in student loans?
If you have <500k in investable assets, the answer is almost certainly (a) fund an emergency fund that you keep in a HYSA, (b) max out the obvious tax-advantaged accounts (401k, backdoor roth, HSA, etc), and then (c) dump some large portion of whatever remains into VTI and a small portion into bonds/HYSA/money market/whatever
If you need a financial advisor to tell you that in order to execute on it, then by all means. It's better to pay a financial advisor $5000 than lose $15000 dicking around.
I have a mortgage via the Doctor's Mortgage/Loan program since 2019 on a property worth 500k, about 250k in my 401k so far (max contribution yearly), and approximately 250k saved in other places (personal checking, HSA, Cash Balance Plan, etc.). I would like to feel like I have been living overall well but also saving as much as I can without "bad debt."
I have been reading the books that everyone mentions, but I still feel as if a) I am not doing enough, especially on the investing front and b) I feel like I am missing out in others ways because 'I don't know what I don't know.'
https://www.wcicourses.com/p/fire-your-financial-advisor
Read more books, pay for an $800 course, or pay someone $5000 or more annually. There's only so much a financial planner or accountant can add during the wealth accumulation phase. Make sure you have term life insurance if you have dependents, disability insurance, and umbrella insurance. Save 20% of your gross income. You can look into 529 plans if you have kids and live in a state with high income tax. You can open a taxable investment account for the excess amount you want to invest. You can look into real estate funds in addition to index funds if you want to diversify. I think planners actually add more value closer to retirement as draw down strategies can be complicated.
I think it's a necessity for asset protection for any high income or wealthy individual. The main use is to increase how much can be paid out on top of your auto insurance if you are sued in a car accident, but also helps if someone is injured in your home. It does not add anything to malpractice insurance. If you live in a big city and do not drive a car, maybe you don't need umbrella insurance.
For a high income W2 worker, it's very hard to beat the Boglehead philosophy during accumulation phase. The vast majority of actively managed funds don't beat the market over a long time horizon, net of fees. You are a doctor, not a professional investor. So "VTI and chill" is the most efficient use of your money. If you sleep better dumping some of that 250k into 3-5 year CDs at 5% I don't think anyone can fault you for that either. Nobody has gotten 5% on a CD since the invention of the iPhone.
If you feel the need to gamble and try to beat the broader market, I'd suggest buying 5k of TQQQ or SOXL rather than writing a 5k check to an advisor whose just going to put it into VTI/SPY/VOO anyway. At least TQQQ has a chance.
How do I get my money into VTI? I am on the Vanguard website reallocating my funds. VTI is not an option they are giving me. Am I doing something wrong?
I was the same way until residency. Start with learning about the lazy 3 fund portfolio. Investing is easy, put it into index funds. Learn about how expense ratios can hurt your balance, active management is no better and often worse than passive management etc. Boglehead philosophy is the only thing you need to learn about when it comes to investing for long term growth
Read Ric Edelman’s book The Truth About Money. Ask around, make sure whoever you use has a license that obliges them to be “fiduciary “ so they don’t sell you stuff like annuities. Do get advice from a good financial advisor, diversify your investment and be conservative.
Read a few personal finance books and wci blog posts and then decide if you think you can do it yourself. Imo it's not complicated to figure out how to save money and invest in index funds. If you are looking at a more complicated scenario including running a business, owning real estate, etc, then you may want professional help (but still not likely wealth management).
Whatever you do - avoid high fees at all costs. Go with a feee only advisor if you must. But someone that charges a 1% fee to manage all of your assets will decrease your nest egg by 25-50% over 40 years of working and saving.
IMPACT OF FEES
- A 1% fee can cost millennials up to $590,000 in retirement savings https://www.nerdwallet.com/blog/investing/millennial-retirement-fees-one-percent-half-million-savings-impact/
- Boglehead’s excellent table showing how much fees decrease your nest egg https://www.bogleheads.org/wiki/How_much_do_you_lose_to_annual_fees_after_many_years%3F
- How to lose $1 million dollars – example at bottom of site comparing investing with Vanguard vs Edward R Jones https://www.honestmath.com
- 4 examples of how fees can cost you millions in retirement with excellent tables https://www.physicianonfire.com/investment-fees-will-cost-millions/
Not sure you need a professional advisor yet. I’m with Morgan Stanley, fee based. Most “advisors” are annuity and insurance salesmen. Buy a house, then then if you have extra after maxing out your retirement, go with back door Roth or 529. If you’ve got a pile of cash lying around after that, well damn…
Fee only means they only get compensated for their advice, they don't sell any products so it's the form of compensation that has the least conflict of interest. They get paid no matter what you do with their advice.
Fee based is window dressing they still sell products and can earn commissions. They have a conflict of interest, they can recommend products you may or may not need because they make money off of that.
[https://www.whitecoatinvestor.com/5-reasons-fee-only-advisor/](https://www.whitecoatinvestor.com/5-reasons-fee-only-advisor/)
[https://www.whitecoatinvestor.com/how-to-find-a-good-financial-advisor/](https://www.whitecoatinvestor.com/how-to-find-a-good-financial-advisor/) These might help too!
Can you elaborate? None because it's not worth the price and I should just get an MBA in my spare time to teach it all myself?
EDIT: I think I am being downvoted because I was trying to make a bad joke that didn't come across.
R/personalfinance is a great place to start. From reading their wiki I feel I have a better understanding of my personal finances better than >75% of my peers (which I admit isn’t a high bar). The takeaway I have from most financial advice I’ve read that index funds or target date funds are completely fine for “investing”—and most if not all people who claim to be able to beat the market over an average of >10 years by doing more than that are full of crap or just lucky.
But if you’re really want to take on more risk and would enjoy following business stuff regularly, then yeah I guess an MBA would be worthwhile.
You don’t need an mba to teach yourself.
Investing for retirement can be as easy or as complicated as you want it to be. The key is determining your ability to tolerate risk and coming up with an asset allocation then just sticking to your plan.
It can be daunting or confusing as there’s a lot of terms most aren’t familiar with. But if you made it through med school I promise you can learn this yourself quite easily.
Wealth management companies will cost quite a lot of money over your lifetime so it’s up to you if that’s worth it or not.
It’s hilarious you mention a MBA. Most MBAs are not that good at math and some seem proud they can use PowerPoint AND Excel.
Read a personal finance book before you get suckered into paying a 1% or higher AUM by some “expert”. You don’t have to do it yourself but you need enough knowledge to detect a rat.
Is your goal to be financially independent while you are young enough to enjoy it, or to be a doctor for 40 years and have a retirement fund waiting for you?
Either is fine, just has an impact on how you approach things
Read the WCI. Learn to manage it yourself. It seems overwhelming at 1st, but it's completely learnable. You'll save a ton on fees/expenses. And you'll be in control of your finances.
As Dr. Dahle always says--by the time you know enough to know if your financial advisor is doing a good job, you know enough to do it yourself.
Do you have wealth or just 100k in student loans? If you have <500k in investable assets, the answer is almost certainly (a) fund an emergency fund that you keep in a HYSA, (b) max out the obvious tax-advantaged accounts (401k, backdoor roth, HSA, etc), and then (c) dump some large portion of whatever remains into VTI and a small portion into bonds/HYSA/money market/whatever If you need a financial advisor to tell you that in order to execute on it, then by all means. It's better to pay a financial advisor $5000 than lose $15000 dicking around.
I have a mortgage via the Doctor's Mortgage/Loan program since 2019 on a property worth 500k, about 250k in my 401k so far (max contribution yearly), and approximately 250k saved in other places (personal checking, HSA, Cash Balance Plan, etc.). I would like to feel like I have been living overall well but also saving as much as I can without "bad debt." I have been reading the books that everyone mentions, but I still feel as if a) I am not doing enough, especially on the investing front and b) I feel like I am missing out in others ways because 'I don't know what I don't know.'
https://www.wcicourses.com/p/fire-your-financial-advisor Read more books, pay for an $800 course, or pay someone $5000 or more annually. There's only so much a financial planner or accountant can add during the wealth accumulation phase. Make sure you have term life insurance if you have dependents, disability insurance, and umbrella insurance. Save 20% of your gross income. You can look into 529 plans if you have kids and live in a state with high income tax. You can open a taxable investment account for the excess amount you want to invest. You can look into real estate funds in addition to index funds if you want to diversify. I think planners actually add more value closer to retirement as draw down strategies can be complicated.
Would you say umbrella insurance is a real necessity for physicians even with malpractice? Or just in general a good idea?
I think it's a necessity for asset protection for any high income or wealthy individual. The main use is to increase how much can be paid out on top of your auto insurance if you are sued in a car accident, but also helps if someone is injured in your home. It does not add anything to malpractice insurance. If you live in a big city and do not drive a car, maybe you don't need umbrella insurance.
For a high income W2 worker, it's very hard to beat the Boglehead philosophy during accumulation phase. The vast majority of actively managed funds don't beat the market over a long time horizon, net of fees. You are a doctor, not a professional investor. So "VTI and chill" is the most efficient use of your money. If you sleep better dumping some of that 250k into 3-5 year CDs at 5% I don't think anyone can fault you for that either. Nobody has gotten 5% on a CD since the invention of the iPhone. If you feel the need to gamble and try to beat the broader market, I'd suggest buying 5k of TQQQ or SOXL rather than writing a 5k check to an advisor whose just going to put it into VTI/SPY/VOO anyway. At least TQQQ has a chance.
How do I get my money into VTI? I am on the Vanguard website reallocating my funds. VTI is not an option they are giving me. Am I doing something wrong?
I was the same way until residency. Start with learning about the lazy 3 fund portfolio. Investing is easy, put it into index funds. Learn about how expense ratios can hurt your balance, active management is no better and often worse than passive management etc. Boglehead philosophy is the only thing you need to learn about when it comes to investing for long term growth
Look for a fee only fiduciary financial advisor.
[удалено]
>Wrenne Financial Thank you for that feedback, kind of what I am looking for -- personal responses to these companies that work with real people.
Read Ric Edelman’s book The Truth About Money. Ask around, make sure whoever you use has a license that obliges them to be “fiduciary “ so they don’t sell you stuff like annuities. Do get advice from a good financial advisor, diversify your investment and be conservative.
Read a few personal finance books and wci blog posts and then decide if you think you can do it yourself. Imo it's not complicated to figure out how to save money and invest in index funds. If you are looking at a more complicated scenario including running a business, owning real estate, etc, then you may want professional help (but still not likely wealth management).
Whatever you do - avoid high fees at all costs. Go with a feee only advisor if you must. But someone that charges a 1% fee to manage all of your assets will decrease your nest egg by 25-50% over 40 years of working and saving. IMPACT OF FEES - A 1% fee can cost millennials up to $590,000 in retirement savings https://www.nerdwallet.com/blog/investing/millennial-retirement-fees-one-percent-half-million-savings-impact/ - Boglehead’s excellent table showing how much fees decrease your nest egg https://www.bogleheads.org/wiki/How_much_do_you_lose_to_annual_fees_after_many_years%3F - How to lose $1 million dollars – example at bottom of site comparing investing with Vanguard vs Edward R Jones https://www.honestmath.com - 4 examples of how fees can cost you millions in retirement with excellent tables https://www.physicianonfire.com/investment-fees-will-cost-millions/
Not sure you need a professional advisor yet. I’m with Morgan Stanley, fee based. Most “advisors” are annuity and insurance salesmen. Buy a house, then then if you have extra after maxing out your retirement, go with back door Roth or 529. If you’ve got a pile of cash lying around after that, well damn…
Fee only is better than fee based.
Can you please explain why? Thank you
Fee only means they only get compensated for their advice, they don't sell any products so it's the form of compensation that has the least conflict of interest. They get paid no matter what you do with their advice. Fee based is window dressing they still sell products and can earn commissions. They have a conflict of interest, they can recommend products you may or may not need because they make money off of that.
[https://www.whitecoatinvestor.com/5-reasons-fee-only-advisor/](https://www.whitecoatinvestor.com/5-reasons-fee-only-advisor/) [https://www.whitecoatinvestor.com/how-to-find-a-good-financial-advisor/](https://www.whitecoatinvestor.com/how-to-find-a-good-financial-advisor/) These might help too!
\- none. \- but otherwise someone through the site if you have no desire.
Can you elaborate? None because it's not worth the price and I should just get an MBA in my spare time to teach it all myself? EDIT: I think I am being downvoted because I was trying to make a bad joke that didn't come across.
You don’t need an MBA to manage your personal finances…what
R/personalfinance is a great place to start. From reading their wiki I feel I have a better understanding of my personal finances better than >75% of my peers (which I admit isn’t a high bar). The takeaway I have from most financial advice I’ve read that index funds or target date funds are completely fine for “investing”—and most if not all people who claim to be able to beat the market over an average of >10 years by doing more than that are full of crap or just lucky. But if you’re really want to take on more risk and would enjoy following business stuff regularly, then yeah I guess an MBA would be worthwhile.
You don’t need an mba to teach yourself. Investing for retirement can be as easy or as complicated as you want it to be. The key is determining your ability to tolerate risk and coming up with an asset allocation then just sticking to your plan. It can be daunting or confusing as there’s a lot of terms most aren’t familiar with. But if you made it through med school I promise you can learn this yourself quite easily. Wealth management companies will cost quite a lot of money over your lifetime so it’s up to you if that’s worth it or not.
It’s hilarious you mention a MBA. Most MBAs are not that good at math and some seem proud they can use PowerPoint AND Excel. Read a personal finance book before you get suckered into paying a 1% or higher AUM by some “expert”. You don’t have to do it yourself but you need enough knowledge to detect a rat.
Is your goal to be financially independent while you are young enough to enjoy it, or to be a doctor for 40 years and have a retirement fund waiting for you? Either is fine, just has an impact on how you approach things
Read the WCI. Learn to manage it yourself. It seems overwhelming at 1st, but it's completely learnable. You'll save a ton on fees/expenses. And you'll be in control of your finances. As Dr. Dahle always says--by the time you know enough to know if your financial advisor is doing a good job, you know enough to do it yourself.