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  • Financial Management and Business stuff

    Posted by Melenas on February 18, 2013 at 8:32 pm

    I’m about to start my first job and don’t have much knowledge about money, stocks, savings etc.. (and no family members or close relatives who know this stuff either).  
     
    that being said, without going out to get an MBA or other degrees, what is the best way to learn a little bit about these topics?
     
    What online course would teach me about how to save money? Are there particular types of courses that would be helpful? financial management? tax laws?  do intro business classes at local colleges teach you this stuff? 
     
    Or do most people just hiring a manager to do these for them ?? I have always done my own taxes for years but I never had much to really add so they have been simple.  Therefore, I don’t mind learning a little bit more about this kind of stuff but obviously don’t wanna get an MBA or some business degree. 
     
    I just wanna be able to learn more about stocks, markets, retirement planning etc.. 
     
     

    pankajkaira1982_700 replied 1 year, 9 months ago 52 Members · 237 Replies
  • 237 Replies
  • Dr_Cocciolillo

    Member
    February 18, 2013 at 8:56 pm

    go to fidelity.com, vanguard.com, schwab.com and start reading about IRAs, roth IRAs, 401ks, rolloevers, etc, etc 
     
    that will give you some basic idea if you don’t know anything about these.  there are 100s of books on the topics of investing with opinions diverging as little and as much as you can imagine.  This was a topic on here about 3-4 months ago with a lot of diverging input.  see if you can find it.  
     
    one way for certain not to go wrong is to save as much as you can.  whether that be 50 or 100k a year is up to you.  can’t go wrong by doing that.  

    • jacobdaviseras_585

      Member
      February 18, 2013 at 9:02 pm

      i recommend the bogleheads forum for financial planning and investment advice.

      • Unknown Member

        Deleted User
        February 18, 2013 at 9:40 pm

        dave ramsey.com
         

  • Unknown Member

    Deleted User
    February 18, 2013 at 9:58 pm

    I think a lot of young doctors get twisted in knots trying to figure out the perfect financial vehicle for the money they save, and lose track of the fact that maximizing the amount saved (especially early on) is the most important thing.
     
    Sound advice on managing your expenses is what you need the most, if you’re not a natural saver.
     
    Basically, try to pretend that your salary is 50% of what it actually is, and save the rest.
     

    • Dr_Cocciolillo

      Member
      February 18, 2013 at 10:03 pm

      the quicker you can get to savings of 250k, 500k, etc…the quicker you can double once you get comfortable with investing.
       
      it will take 100k @ 8% annual return something like 8 years to get to 200k…but you can see that if you can get to 250k on your own in 3-4 yrs somehow…all you need to do is double twice from there (16 yrs) to get to 1mil… 8% Return, unfortunately, is no joke given the last decade

      • Unknown Member

        Deleted User
        February 18, 2013 at 11:18 pm

        Even if you know nothing, all you need to do reasonably well is this:
         
        1) “Pay yourself first:”  That means, max your retirement accounts each year before buying the new BMW.  
         
        2) Invest in diversified index funds, or even a lifecycle fund.  Sure, you can play the market and try to eke out a percent or two extra, but if you have no interest or passion for finance (and even if you do), you can’t go wrong putting 50k/year into a low-expense ratio fund, and letting it grow.  Don’t buy and sell (even if the market tanks).  Leave it there, and watch the money pile up.

        • heinz.juenger_624

          Member
          February 18, 2013 at 11:45 pm

          Do not buy an annuity
          Do not buy any life insurance except TERM if you have kids or s.o.
           
          Read, read, read. It’s not that complicated or hard. The financial world would like you to believe it’s rocket surgery and sell you products and make commissions with loads and annual fees.

          • Unknown Member

            Deleted User
            February 19, 2013 at 12:16 am

            money makes money. the first million is the hardest

            • Unknown Member

              Deleted User
              February 19, 2013 at 6:34 am

              One needs to learn some personal finance. Subjects such as personal debt, home buying, budgeting, car buying, life and disability insurance need to be understood.
              Investing is another area. Keep it simple. Save as much as you can. One could do better than most doctors over 30 years by putting half in stocks and half in bonds, rebalancing every year, and quit thinking about it.
              Over the years, I have found Jack Bogle’s advice to be most helpful.
              Dont forget to spend some and have fun. There is no guarantee you will live or be healthy enough to enjoy it past age 50. And give to God as much as you can til it hurts.

              • btomba_77

                Member
                February 19, 2013 at 6:51 am

                Another vote for the Jack Bogle approach. Be a boglehead!
                 
                [link=http://www.bogleheads.org/]http://www.bogleheads.org/[/link]
                 
                When I came out into practice I also had no idea of how to handle money or personal finance.  Here is what I did:
                 
                Smart things:
                #1) Paid off my student loans. (My loans were from the late ’80s and early 90’s with rates as high as 14%)
                #2) Bought a modest condominium for $180k with a 10 year tax abatement rather than buying a big house
                #3) Started maxing out every possible group provided retirement plan.
                #4) Started saving an additional 20% of my salary beyond the pre-tax retirement savings. (After I got the loans paid off)
                 
                Stupid Things I did:
                #1) I bought an expensive sports car.  I didn’t even really use it regularly….. a rear wheel drive roadster in Cleveland winters….. dumb.
                 
                __
                Finally- I hired a financial advisor.  At the time I was unwilling to invest the time to acquire the basic knowledge of investing.  His fees didn’t sting so badly when I didn’t have much money, but as my portfolio grew it hurt more and more.   I eventually got rid of him and now do it myself.  One of my biggest regrets is that I didn’t learn to do it myself earlier.  It is intimidating at first, but IT IS NOT THAT HARD. You can do it! ๐Ÿ™‚
                 
                 
                If you’re in your early 30’s or so, it should be easy to open a low coast brokerage account (Schwab, Ameritrade, etc) and set up automatic deposit on a monthly basis.  Save as high a  percentage of your pay check as you can.  The earlier you save the more advantage of compound interest you get. It also has the added benefit of pulling the money out before you can spend it on stupid stuff ๐Ÿ˜‰
                 
                At first just invest every month into the market rain or shine, bull or bear.  Spread out the money through low-cost index funds in a diversified portfolio.   Don’t worry if it goes up or down on a month to month basis.  Remember, you’re not planning to touch that money for 30+ years. 
                 
                Keep your discipline and don’t let short term market trends uppset your long term strategy.  Do all these things and in a few decades you will look up and be a very wealthy man.  ๐Ÿ™‚
                 
                 
                 
                read these if you like:  [link=http://www.amazon.com/gp/product/0470455578?ie=UTF8&tag=bogleheads.org-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=0470455578]http://www.amazon.com/gp/product/0470455578?ie=UTF8&tag=bogleheads.org-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=0470455578[/link]
                 
                [link=http://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0471730335/ref=pd_bxgy_b_img_y/189-7769107-7817415]http://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0471730335/ref=pd_bxgy_b_img_y/189-7769107-7817415[/link]

                • Unknown Member

                  Deleted User
                  February 19, 2013 at 10:27 am

                  the only investment guide you’ll ever need…by andrew tobias. is a good simple book.  he advocates saving money and index funds.
                   
                  just dont live beyond youre means, save as much as you can, max out on 401k and IRA’s. 
                   
                  dont get divorced…bad for your health and your wealth. 

                • jun52.park

                  Member
                  February 26, 2015 at 8:19 am

                  Dergon….i think i remember you talking about TASR….ERs were bad and stock is down 15%…..time to get in??

                  • btomba_77

                    Member
                    March 3, 2015 at 6:57 am

                    Quote from delawarerad

                    Dergon….i think i remember you talking about TASR….ERs were bad and stock is down 15%…..time to get in??

                     
                    I haven’t looked at it at all since I popped off about it a few months ago.    I don’t own it… it was just a thought about a play on the future of wearable body cameras in US law enforcement where TASR has a good leg up on the market.

            • mikestein

              Member
              February 19, 2013 at 4:38 pm

              Quote from radinc

              money makes money. the first million is the hardest

              the second ain’t any easier, especially nowadays!

              • btomba_77

                Member
                February 22, 2013 at 12:46 pm

                Oh…. and don’t listen to the financial pundits on TV for anything more than entertainment value.  Jim Cramer is sometimes right, sometimes wrong.
                [link=http://www.theonion.com/articles/cnbc-anyone-who-owns-a-suit-can-come-on-television,6846/]http://www.theonion.com/articles/cnbc-anyone-who-owns-a-suit-can-come-on-television,6846/[/link]
                It’s the Onion but it rings true
                 

                Citing a need to provide quality programming 24 hours a day, CNBC has extended an invitation to anyone who owns a suit to drop by the financial news network and be a guest expert, cohost a show with Larry Kudlow, or do whatever. “Don’t worry about what kind of shape your suit is in,” said CNBC president Mark Hoffman, who explained that his network’s studio has an iron and some old phone books that people can press their jackets on. “Just come on down, run a comb through your hair, and if you’re here by 8 a.m., we’ll have you on [i]Squawk Box[/i] at 8:15 making stock picks. But don’t forget your suit!” Hoffman added that men of ruddy complexion with neck sizes exceeding 19 inches are not required to wear a tie.

                 
                Tune out day-to-day, week-to-week and month volatility in the market and stick with your plan.

                • aldoctc

                  Member
                  February 23, 2013 at 12:41 pm

                  Fun experiment:  Record an hour or so of CNBC and keep it on your DVR/computer/tablet/whatever for a year.  A year later (set a reminder on your calendar) watch the hour and ask yourself how much is relevant and how many of the predictions have come true.  I did this recently.  Hilarious!
                   

                  Quote from dergon

                  Oh…. and don’t listen to the financial pundits on TV for anything more than entertainment value.  Jim Cramer is sometimes right, sometimes wrong.
                  [link=http://www.theonion.com/articles/cnbc-anyone-who-owns-a-suit-can-come-on-television,6846/]http://www.theonion.com/articles/cnbc-anyone-who-owns-a-suit-can-come-on-television,6846/[/link]
                  It’s the Onion but it rings true

                  Citing a need to provide quality programming 24 hours a day, CNBC has extended an invitation to anyone who owns a suit to drop by the financial news network and be a guest expert, cohost a show with Larry Kudlow, or do whatever. “Don’t worry about what kind of shape your suit is in,” said CNBC president Mark Hoffman, who explained that his network’s studio has an iron and some old phone books that people can press their jackets on. “Just come on down, run a comb through your hair, and if you’re here by 8 a.m., we’ll have you on [i]Squawk Box[/i] at 8:15 making stock picks. But don’t forget your suit!” Hoffman added that men of ruddy complexion with neck sizes exceeding 19 inches are not required to wear a tie.

                  Tune out day-to-day, week-to-week and month volatility in the market and stick with your plan.

                  • btomba_77

                    Member
                    March 27, 2013 at 8:38 am

                    More on why indexing is a good idea:
                     
                    [link=http://www.fool.com/investing/general/2013/03/25/fund-managers-really-really-bad-at-what-they-do.aspx]http://www.fool.com/investing/general/2013/03/25/fund-managers-really-really-bad-at-what-they-do.aspx[/link]
                    [b]Fund Managers: Really, Really Bad at What They Do[/b]

                    In any given year, the majority of professional fund managers underperform their benchmark index — a virtual certainty given a limited amount of return to capture and an unlimited amount of fees to charge.
                    Now, take a specific year. In 2011, 84% of U.S. stock fund managers underperformed the [b]S&P 500[/b] (SNPINDEX: [link=http://caps.fool.com/Ticker/%5EGSPC.aspx?source=isssitthv0000001]^GSPC[/link] ) , according to Standard & Poor’s.
                    That stat alone would be dreadful. But digging deeper, it gets far worse.
                    The S&P 500 returned 2.07% in 2011, including dividends. The majority of fund managers underperformed this amount because they picked the wrong stocks. Yet of the 489 S&P 500 companies that Capital IQ still has data on (the other 11 no longer exist), 247 — or greater than half — returned more than 2.07%.
                    In other words, the [i]overwhelming majority[/i] of professional fund managers picked the [i]minority [/i]of stocks that underperformed the market. It takes skill to be that bad.
                     
                    This isn’t rare, and it extends beyond fund managers to Wall Street analysts. According to Bloomberg, “The 50 stocks in the S&P 500 with the lowest analyst ratings at the end of 2011 posted an average return of 23 percent [in 2012], outperforming the index by 7 percentage points.” In a study of 3,000 stocks from 1983 to 2007, Longboard Asset Management showed that 64% of stocks underperformed the market. Yet, according to the Vanguard Group, 72% of actively managed funds underperform their benchmark over a 20-year period, removing the effects of survivorship bias. So over the long haul, a higher percentage of fund managers underperform an index than stocks underperform an index. On average, fund managers appear to be worse than dart-throwing chimps. And they charge big fees to boot.
                    The fees are what’s unfortunate here. In one report, IBM concluded that global money managers overcharge investors by $300 billion a year for failing to deliver returns above a benchmark index. Vanguard cites data by the Financial Research Corporation showing that the single best predictor of a fund’s future performance is its expense ratio.

                    • btomba_77

                      Member
                      March 31, 2013 at 7:04 am

                      Another Foolish link (they spam my facebook page ๐Ÿ™‚  ) :
                      [link=http://www.fool.com/investing/general/2013/03/28/25-important-things-to-remember-as-an-investor.aspx]http://www.fool.com/investing/general/2013/03/28/25-important-things-to-remember-as-an-investor.aspx[/link]
                       
                      [b]25 Important Things to Remember As an Investor[/b]
                       
                      2. Several academic studies have shown that those who trade the most earn the lowest returns. Remember Pascal’s wisdom: “All man’s miseries derive from not being able to sit in a quiet room alone.”
                       
                      5. There is virtually no correlation between what the economy is doing and stock market returns. According to Vanguard, rainfall [link=http://www.fool.com/investing/general/2012/11/27/what-makes-the-stock-market-tick.aspx]is actually a better[/link] predictor of future stock returns than GDP growth. (Both explain slightly more than nothing.)
                       
                       
                      7. There are no investment points awarded for difficulty or complexity. Simple stocks [link=http://www.fool.com/investing/general/2012/06/29/simple-wins.aspx]can make[/link] outstanding investments.
                      8. 90% of Warren Buffett’s success can be explained by three factors: Patience, compound interest, and time.
                       
                       
                      15. You are under no obligation to read or watch financial news. If you do, you are under no obligation to take any of it seriously.
                       
                      18. Daily market movements are driven by people with short investment horizons. Are you a long-term investor? Then nothing they do applies to you. Ignore it.
                       
                      20. Take the highest level the S&P 500 traded at in every decade going back to 1880. At some point during the subsequent 10 years, stocks fell at least 10% [i]every single time[/i], with an average decline of 39%. Market crashes are perfectly normal.
                       
                      25. The single most important investment question you need to ask yourself is, “How long am I investing for?” How you answer it can change your perspective on everything.
                       
                       
                       

                    • MTI101

                      Member
                      May 2, 2013 at 7:03 pm

                      Has anyone had any experience with a firm called Larson Financial?  I’m a big fan of the Bogleheads forum and books but I think I need my hand held a little since I’m just finishing training.  

                    • btomba_77

                      Member
                      May 18, 2013 at 7:17 am

                      You do not need your hand held.   Just do a “lazy portfolio” through one of the low cost brokerages as you get yourself up to speed.  When you’re just getting out it’s even easier, since you can be pretty much 100% long equities.   Dollar cost average as much money as you can every month.
                       
                      If you need to as a futurehigh net worth investor, a place like Shwab or Fidelity will provide you with an advisor (not a broker) for free to help you with the basics of diversification etc.  …. and it won’t cost you 1%/year.
                       
                       

                    • btomba_77

                      Member
                      May 18, 2013 at 7:21 am

                      [image]http://rodgers-associates.com/wp-content/uploads/average-stock-fund-return1.jpg[/image]
                       
                      A great slide on why just making a plan and sticking with it works.
                       
                      [align=left] [/align] [align=left] 

                      [/align] [size=”2″]A study by Dalbar underscores the importance of controlling emotions and avoiding self-destructive investor [/size]
                      [size=”2″]behavior. From 19922011, the average stock fund returned 8.2% annually while the average stock fund investor earned only 3.5%. We call the gap between these results the “investor behavior penalty.” [/size]
                      [align=left] [/align] [size=”2″]Why have investors historically sacrificed more than half their potential return? Driven by emotions like fear and greed, they succumbed to negative behavior such as:[/size]
                       
                      [size=”2″]Pouring money into the latest top-performing manager or asset class, expecting the winning streak to continue.[/size]
                       
                      [size=”2″] [/size][size=”2″]Avoiding areas of the market that have performed poorly, assuming recovery will never occur.[/size]
                       
                       [size=”2″]Abandoning their investment plan by attempting to successfully time moves in and out of the market, a near impossible feat.[/size]

                       

                      [size=”1″]
                      [/size]
                      [size=”1″]Successful investors throughout history have understood that building long-term wealth requires the ability to control emotions and avoid self-destructive investor behavior. [/size]
                       
                      [size=”1″]

                      [/size]
                       

                       
                       
                       
                       

                    • Unknown Member

                      Deleted User
                      May 20, 2013 at 1:43 pm

                      I use vangaurd also – just two funds really – a balanced fund and a target retirement one. Set it and forget it — I am my own worst enemy when it comes to investing so this works well for me. 
                       
                       

                    • ruszja

                      Member
                      May 20, 2013 at 4:31 pm

                      Doctors retire poor. At least compared with their lifetime income. There are x-ray techs and bus-drivers who retire with a better funded retirement than many doctors. What the docs never lack are flashy cars, flashy houses and gold-digger ex-wives. The best financial plan is the 1 house, 1 car, 1 wife plan, the most important component in this being the ‘1 wife’ part. The biggest detriment to long-term financial planning is a divorce or two so do whatever it takes (excluding traceable murder) to never get divorced. If you think you can’t settle on one, just don’t get married until you can. Just because everyone else marries does not mean you are obliged to do so. Same with cars, boats and planes. Nobody gives a s### whether you pull into the doctors lot in a Camry, it’ll fit in just swell with all the indian hospitalists camrys ๐Ÿ˜‰ .
                      There are two other things that cause doctors to suck at investing: The compulsion to try to ‘save taxes’ and the shady financial advisors that this brings along. By all means, if you know something about the restaurant business, bankroll a restaurant or franchise  sandwich place. If you grew up on the farm, sure buy some land, have someone farm it for you. If you have never stood in a commercial kitchen and wouldn’t be able to tell Corn from Barley, don’t get suckered into investing ‘to save taxes’. Taking a loss on your taxes is only fun if the underlying business actually makes you money. If you are taking a loss because your principal is gone (which is the case 99/100 times with inexperienced doctor-restaurant-owners and doctor-ranchers), it is not a good deal. The other thing that trips up doctors is their arrogance when they think that they are smarter than everyone else. This causes them to hire the hot-shot financial advisor who while showing them great returns every year eats away at their bottom line.
                       
                      While we are feeding scamsters, struggling restaurants and financial advisors, your neighbor who works for the federal government just maxes out his thrift savings account and fills his vanguard index fund with 0.1% management fee. You’ll still be paying off your 8000sqft mc-mansion when he sells his free+clear home at age 61 to move to Tennessee.
                       
                       

                    • Dr_Cocciolillo

                      Member
                      May 20, 2013 at 7:18 pm

                      great post fw…
                       
                      the wife thing is actually very true.   the best way to make a small fortune is to start with a big one and get divorced.
                       
                      also, since it’s difficult to predict exactly how your marriage will end up down the road, and i dare say almost impossible to do so…marry someone who is a high earner if you can help it.  it will make your own personal life so much less stressful…and should you get to a divorce, it should also make the separation palatable where you don’t lose your pants…another person making 100k-200k, is like you going from ok job to one of the highest paying in the country…huge difference. 
                       
                       

                    • ruszja

                      Member
                      May 20, 2013 at 11:05 pm

                      Quote from wisdom

                      also, since it’s difficult to predict exactly how your marriage will end up down the road, and i dare say almost impossible to do so…marry someone who is a high earner if you can help it.  it will make your own personal life so much less stressful…and should you get to a divorce, it should also make the separation palatable where you don’t lose your pants…

                       
                      Lol, yeah I married ‘up’ ๐Ÿ™‚
                       
                      Still gotta be careful with this. I married Ms workaholic who gets as much satisfaction out of cutting people up and putting them back together as out of being a mom. So I dont worry much about that aspect.
                       
                      I have however seen some pretty sad-sack cases where someone married a professional and ‘click’ at age 36 a switch got turned and they either:
                      – decided that ‘it isn’t really worth going to work and then to spend all that money on childcare’ (true for an elementary school teacher, a lie for a moderately well paying professional)
                      – ‘there are no part-time jobs in law’ (big fat lie, lots of part-time jobs in law, you may have to make your own job if you dont get it served on a silver platter. If you dont practice law, you dont [u]want[/u] to practice law.)
                      – go bat-$hit crazy, hit the drugs and accuse you of domestic violence.
                      So it’s not a safe bet either.
                      Btw. this cuts both ways. Just as many hubbies who rather hunt and fish than to contribute to the bottom line a couple of years after marrying a doctor.

                    • btomba_77

                      Member
                      May 21, 2013 at 4:06 am

                      There are two other things that cause doctors to suck at investing: The compulsion to try to ‘save taxes’ and the shady financial advisors that this brings along.

                      +1
                       
                      Yep.   You’re a W-2 wage earner. Get used to it.  You’re gonna have an effective rate in the low 30’s or something. Uncle Sam knows what you made before you even made it.
                       
                      For one rad I know the magical tax solution was rental real estate.  He owned 4 rental duplexes which eventually drove him nearly insane. Same as in the post above— if you’re handy, have the know how to swap out a hot water tank and snake a drain, canhandle the stress of an eviction, and don’t mind spending that saturday you’re *not* on call by mowing a lawn at a rental then…. great! Go for it!     Otherwise just take the easy and lazy pathway and use that real estate investment money to invest.
                       
                       
                       
                       
                      One thing you *can* do to avoid extra taxes is to make sure you balance your tax favored retirement vehincles (401k, IRA, 403b) and yourtaxable accounts appropriately.
                       
                      Any funds or stocks that are going to generate a lot of $ in dividends or income can go into the tax prefferred accounts, while growth can go into your brockerage (particulary passive index funds).
                       
                       
                       
                      And STOP TRADING! Once you buy buy, hold it.  Especially tax inefficient is short term tading.
                       

                    • ruszja

                      Member
                      May 21, 2013 at 8:17 am

                      Quote from dergon

                      For one rad I know the magical tax solution was rental real estate.  He owned 4 rental duplexes which eventually drove him nearly insane. Same as in the post above— if you’re handy, have the know how to swap out a hot water tank and snake a drain, canhandle the stress of an eviction, and don’t mind spending that saturday you’re *not* on call by mowing a lawn at a rental then…. great! Go for it!     Otherwise just take the easy and lazy pathway and use that real estate investment money to invest.

                       
                      That said, for the right person, rental real estate can be a good option. One relative of mine did very well with section 8 housing in the small southern city where he practices. He is an ER doc and works nights, so he has time to keep an eye on his holdings. Just like many businesses, rental real estate is a pain in the rear as long as you are small. If you want to get into this, you have to start out with enough units to hire a full-time manager/handyman. That way, you dont have to deal with the pleasantries of dealing with the rental crowd. The reality in the US is that outside of NYC, very few people rent for any other reason than the fact that they suck with handling money. It’s not about being poor or seasonal work, it is about being bad with money. If you as the owner are personally the one who has to chase them down, it makes for a lot of frustration. If your manager handles that end of the deal until you sign the eviction order for the sheriff, it is a lot less painful. The tenants dont know who their landlord is, it is all shielded behind several trusts and LLCs.
                       
                      The same applies to flipping real estate. You dont have knock down drywall yourself to make money. You just have to have knocked down enough drywall in your life to know how many hours it should take.  If you have to pay retail to a general contractor to rehab your homes, he is going to make the money, not you. If you have your own set of subs to do the work, you can make some money. Again, if YOU have to stand in line at the buildings department to pull your permits or argue with the inspector about a stop work order it is no fun. If your project manager who is cut in on a percentage of the profits does that part, it is much less of a headache for you. Now to make that work, you can’t do one property per year, you got to have a couple of them running at the same time. But again, it’s only money and potentially tax benefit if you run it as an active business, it doesn’t work as a passive investment.

                    • Unknown Member

                      Deleted User
                      May 22, 2013 at 12:13 pm

                      Late 30s early 40s rad were nerdy kinda guys and now have money and status and hot young blonde techs suddenly interested – wife has packed on the pounds etc and soon your wetting ur wick in all those young hot girls. You get emotionally involved thinking these girls really like or love you.

                      Then comes the divorce and financial ruin.

                      Those young hotties move on.

                      Try to avoid this, seen it a million times.

                    • medical8

                      Member
                      May 23, 2013 at 9:40 am

                      Read as much as you can. If you are smart enough to become a doctor and a radiologist, then you are smarter then 95% of investment advisors. My best friend is a successful analyst at a big firm in NYC. He tells me all the time, what he does is not hard, and I am much smarter then he is. 
                       
                      As others have said, save lots, you can always spend it later, but you can never spend money you don’t save in the first place. Buy a house. Make sure you can afford said house. With current mortgage rates, you should be able to easily afford a home @ 3x your gross salary. (IE, 1M home if 300K salary) Contrary to what many will profess, a home is still a great investment. Buy in a great town and neighborhood with good schools. Then save on private school tuition by sending your kids to public school, and deduct mortgage and real estate taxes.
                       
                      Diversify!!! Balance out high risk investments with low-risk investments. And as you age, adjust your asset allocation to shift money to more low-risk and guaranteed investments. Learn from the mistakes of the older rads who lost 1/2 their wealth in the market collapse of 2008.
                       
                      Buy large cap stocks which pay dividends and set-up dividend reinvestment. Sit back and watch your money grow. For example, IBM is up 100% since 2000.

                    • btomba_77

                      Member
                      May 22, 2014 at 4:30 am

                      Quote from fw

                      Quote from dergon

                      For one rad I know the magical tax solution was rental real estate.  He owned 4 rental duplexes which eventually drove him nearly insane. Same as in the post above— if you’re handy, have the know how to swap out a hot water tank and snake a drain, canhandle the stress of an eviction, and don’t mind spending that saturday you’re *not* on call by mowing a lawn at a rental then…. great! Go for it!     Otherwise just take the easy and lazy pathway and use that real estate investment money to invest.

                      That said, for the right person, rental real estate can be a good option. One relative of mine did very well with section 8 housing in the small southern city where he practices. He is an ER doc and works nights, so he has time to keep an eye on his holdings. Just like many businesses, rental real estate is a pain in the rear as long as you are small. If you want to get into this, you have to start out with enough units to hire a full-time manager/handyman. That way, you dont have to deal with the pleasantries of dealing with the rental crowd. The reality in the US is that outside of NYC, very few people rent for any other reason than the fact that they suck with handling money. It’s not about being poor or seasonal work, it is about being bad with money. If you as the owner are personally the one who has to chase them down, it makes for a lot of frustration. If your manager handles that end of the deal until you sign the eviction order for the sheriff, it is a lot less painful. The tenants dont know who their landlord is, it is all shielded behind several trusts and LLCs.

                      The same applies to flipping real estate. You dont have knock down drywall yourself to make money. You just have to have knocked down enough drywall in your life to know how many hours it should take.  If you have to pay retail to a general contractor to rehab your homes, he is going to make the money, not you. If you have your own set of subs to do the work, you can make some money. Again, if YOU have to stand in line at the buildings department to pull your permits or argue with the inspector about a stop work order it is no fun. If your project manager who is cut in on a percentage of the profits does that part, it is much less of a headache for you. Now to make that work, you can’t do one property per year, you got to have a couple of them running at the same time. But again, it’s only money and potentially tax benefit if you run it as an active business, it doesn’t work as a passive investment.

                       
                      A nice little article on the pros/cons of rental property ownership for passive income generation:
                       
                      [link=http://www.getrichslowly.org/blog/2014/05/21/the-pursuit-of-passive-income-is-it-time-to-become-a-landlord/]http://www.getrichslowly….-to-become-a-landlord/[/link]

                    • ruszja

                      Member
                      May 22, 2014 at 8:22 am

                      Quote from dergon

                      A nice little article on the pros/cons of rental property ownership for passive income generation:

                      [link=http://www.getrichslowly.org/blog/2014/05/21/the-pursuit-of-passive-income-is-it-time-to-become-a-landlord/]http://www.getrichslowly….-to-become-a-landlord/[/link]

                       
                      Here is the pertinent section:
                       
                      [i][link=http://www.getrichslowly.org/blog/2012/10/18/being-a-landlord-is-it-worth-it/]Becoming a landlord[/link] might sound tempting, but trust me its not as glamorous as it seems. Its also not nearly as passive as many think it to be, despite what Investopedia or others claim. As someone who has owned and managed two single-family rental properties for almost a decade, I must confess that the income Ive earned has been anything but effortless. The truth: [i]Its actually been a lot of work.[/i][/i]

                    • Unknown Member

                      Deleted User
                      May 22, 2014 at 8:34 am

                      For some people managing properties really is not work
                       
                      Most of the stuff you do is by telephone and once you get into it you get a good handyman he can do 90% of your repairs
                       
                      Some people Love IR……………Some people hate and despise procedures.  Its all how you look at it

                    • ruszja

                      Member
                      May 22, 2014 at 8:36 am

                      Quote from kpack123

                      For some people managing properties really is not work

                      Most of the stuff you do is by telephone and once you get into it you get a good handyman he can do 90% of your repairs

                       
                      If you are big enough to have a manager/handyman who takes care of the day to day affairs, it can be worthwhile. With two properties and having to do your own work like the writer of the article, it can be miserable.

                    • Unknown Member

                      Deleted User
                      May 23, 2014 at 11:37 am

                      Managing my properties is really not work for me, since I have professional managers.  They make it easy to scale up.

                    • tgw11224_43

                      Member
                      May 21, 2013 at 6:51 am

                      All of the advice above is great.  To second all of that insight, read the book The Millionaire Next Door.  The guys compiled research over many years on millionaires and their spending habits.  There is a whole chapter on how bad doctors are at saving money.

                    • btomba_77

                      Member
                      May 23, 2014 at 2:12 pm

                      Quote from surgonc

                      Has anyone had any experience with a firm called Larson Financial?  I’m a big fan of the Bogleheads forum and books but I think I need my hand held a little since I’m just finishing training.  

                       
                      I just received an email from Larson Financial.  They must have my name on a mailing list.
                       
                      They have invited me to a dinner at Hyde Park Steakhouse to discuss Investments, Asset Protection and Tax Strategies”.
                       
                      The published investment management fees are:
                      [ul][*]<$250K        1.75% AUM[*]$250-500K   1.5% AUM[*]$500K-$1M 1.25% AUM[*]$1-2M          1% AUM[*]$2-3M          0.9% AUM[*]$3-4M          0.8% AUM[*]$4-5M          0.7% AUM[*]>$5M           Negotiable [/ul]  
                      Holy cow!
                       
                      No wonder they can afford to buy me a nice steak!
                      [align=center] [/align]  
                       
                      I’ll just stick to my Bogleheads indexing and monthly investing…. after I eat a 12 oz filet mignon ๐Ÿ˜‰ 
                       
                       

                  • btomba_77

                    Member
                    October 5, 2022 at 4:53 pm

                    Quote from Dr. Joseph Mama

                    Fun experiment:  Record an hour or so of CNBC and keep it on your DVR/computer/tablet/whatever for a year.  A year later (set a reminder on your calendar) watch the hour and ask yourself how much is relevant and how many of the predictions have come true.  I did this recently.  Hilarious!

                    Quote from dergon

                    Oh…. and don’t listen to the financial pundits on TV for anything more than entertainment value.  Jim Cramer is sometimes right, sometimes wrong.
                    [link=http://www.theonion.com/articles/cnbc-anyone-who-owns-a-suit-can-come-on-television,6846/]http://www.theonion.com/articles/cnbc-anyone-who-owns-a-suit-can-come-on-television,6846/[/link]
                    It’s the Onion but it rings true

                    Citing a need to provide quality programming 24 hours a day, CNBC has extended an invitation to anyone who owns a suit to drop by the financial news network and be a guest expert, cohost a show with Larry Kudlow, or do whatever. “Don’t worry about what kind of shape your suit is in,” said CNBC president Mark Hoffman, who explained that his network’s studio has an iron and some old phone books that people can press their jackets on. “Just come on down, run a comb through your hair, and if you’re here by 8 a.m., we’ll have you on [i]Squawk Box[/i] at 8:15 making stock picks. But don’t forget your suit!” Hoffman added that men of ruddy complexion with neck sizes exceeding 19 inches are not required to wear a tie.

                    Tune out day-to-day, week-to-week and month volatility in the market and stick with your plan.

                     
                     
                     
                    [b]”Inverse Cramer ETF” prospectus filed on EDGAR[/b]
                    [hr]

                    FUND SUMMARY INVERSE CRAMER ETF

                    Investment Objective: The Inverse Cramer ETF (the Fund) seeks to provide investments results that are approximately the opposite of, before fees and expenses, the results of the investments recommended by television personality Jim Cramer.

                    Link: [link=https://www.flyertalk.com/forum/redirect-to/?redirect=https%3A%2F%2Fwww.sec.gov%2FArchives%2Fedgar%2Fdata%2F1644419%2F000158064222005066%2Ftuttleetfs485a.htm]SEC.gov – Preliminary Prospectus – Tuttle Capital Management – Inverse Cramer ETF and Long Cramer ETF[/link]

        • Unknown Member

          Deleted User
          April 13, 2015 at 12:56 pm

          Diversified Index Funds are the way to go in my opinion.  There are very few people, if any, that can predict what the overall market will do.   The only thing history has told us is that historically  the market goes up in the long term.
          I’ve been on the bad end of financial advice from investment professionals and whether I made money or lost money, they made money. 
          There’s no way to get any guarantees for returns. Professionals may talk about ‘historical returns’ of 8% or whatever, but that doesn’t mean much.  They’ll show you numbers for 5 years if it makes the average look better instead of 10 years for example. Financial services is a business and they are there to make money.
           
          Advisers also will charge you a fee, then you have to minus the ‘cost of living’ increase.  In Canada for example, there are some Mutual Fund management fees of 2-2.5% the COL is 2-2.5%, so there’s 4-5% right off the  top.  Even if you were lucky enough to make 8%, you would still have to -5%, so in reality you are making 3%.  What the Management expense because they can really eat up a lot of returns in the long run.
           
          Getting a self directed account and  buying some diversified index funds with low MERs sense in my opinion.  You can diversify risk as well by buying bonds, GICs, gold certificates.
           
          Take  some classes if you can and do a lot of reading.  I could write a whole book on ‘What not to do’ lol.
           
          Anyway that’s my two cents…
           
           

          • Unknown Member

            Deleted User
            April 13, 2015 at 1:40 pm

            I’ll echo the recommendations on the White Coat Investor.  Start with the blog, and then get the book and read it through a couple of times.  In the past, whenever I met with the bank or financial advisors, it was always a foreign language to me, but now, having read a few books on the subject, including this one, the lights are starting to come on.  At least when they tell me something or offer a deal, I know what they’re saying.
             
            It also helps to get organized, with some sort of filing system or binder to keep all the information together in one place.  We did our taxes this weekend, and when the accountant asked for certain documents, it was helpful to have a filing system and locate the forms easily rather than turning over the furniture to find some obscure form.
             
            Back to WCI:  get rid of your debt first.  We did that several years ago,  with cars, student loans, etc.,  and what a difference it has made.  Now, we’re working to get rid of the mortgage, and once that’s gone, it’s a whole new world…
             
             

            • jun52.park

              Member
              April 13, 2015 at 1:47 pm

              I still dont understand the hurried need to get rid of the mortgage when money is cheap right now….you can write off the interest on the loan and earn more than the 3-4% interest in many stable investments….why the rush to end this set up…. psychological i guess, but financially not the best move

              • Unknown Member

                Deleted User
                April 13, 2015 at 4:41 pm

                Although I paid off my house note in two years, I would not do it again probably.  A mortgage is a pretty safe way to leverage yourself, and frankly the best chance us “ordinary” folks to use leverage to our benefit. 
                I paid it off mainly for psychological reasons and at the time people were predicting poor market returns “the new normal” etc. so I decided to pay down debt. 
                If I had to do it again I would probably take the largest and longest mortgage I could get and invest instead of pay it off.
                Having said that being totally debt free is pretty cool and the extra cash flow per month is nice.

  • Unknown Member

    Deleted User
    February 19, 2013 at 10:37 am

    First things to do

    1. Get a disability policy and if you have a family term life insurance

    2. Establish an emergency fund in either Cash money market or very short term CD’s of 2-3 months salary just for emergencies

    3. Once you do that save a certain amount of your salary every month and earmark it for investment

    Read everything you can and educate yourself. There is a lot of advice out there some good some not educate yourself to the point that you can pick things to accomplish your goals with the appropriate risk tolerance or lack there of

    • Dr_Cocciolillo

      Member
      May 20, 2013 at 7:46 pm

      i wouldn’t say that whole life is necessarily a bad investment.  if you think that almost guaranteed 6% over a lifetime is a bad deal, then it’s not for you.   to me, 6% in ultra low risk is actually a good investment.  It’s all going to depend on how  much you put into it.  needless to say, you need to have a policy of 1.5mil + to make the #s work…to me, as a part of a broader strategy where 20% of your targeted savings are going into a whole life policy, it makes a ton of sense.  
       
      in any case, this has been beaten to death with the life insurance.  

  • kanlilo

    Member
    May 20, 2013 at 4:02 pm

    I have found this website:
    [link=http://whitecoatinvestor.com/]http://whitecoatinvestor.com/[/link]
     
    to be a good beginner’s introduction to finances, geared towards physicians.

  • Unknown Member

    Deleted User
    May 23, 2013 at 4:25 pm

    Why spend time trying to become an “expert” on investing? It seems like, at best, you can become as good as a professional investment advisor, and on average underperform a total stock market index fund. 
     
    To me, it seems better to throw your money into a few diversified index funds (mix of domestic and int’l stock index funds, and bond index funds, ratio dependent on your volatility tolerance and age), completely forget about it for a year at a time, and then only pay attention to it for the few minutes that it takes to rebalance your portfolio. I keep enough of a cash cushion to feel comfortable absorbing normal fluctuations in spending, but otherwise just invest every month without any thought to what the market has done or what I think it’s going to do. The biggest benefit of doing this is that I am FAR less likely to do something stupid like sell after a crash or buy during a boom. 
     
    Whatever time and energy you were going to spend on learning to become a professional investor, spend it on becoming a better doctor, or just doing something fun for yourself.
     
     
     
     

    • hugolpneves_898

      Member
      May 25, 2013 at 7:52 pm

      Semi off topic but does anyone have tips for avoiding AMT? Wife and I thinking of house buying but AMT may be phased for out for married couples above certain income.

      • ruszja

        Member
        May 25, 2013 at 8:41 pm

        Quote from Flip

        Semi off topic but does anyone have tips for avoiding AMT? Wife and I thinking of house buying but AMT may be phased for out for married couples above certain income.

         
        Move to a state with a lower state income tax. AMT is the feds way of telling you that living in NY, California or Minnesota is a bad idea in the first place.

        • Unknown Member

          Deleted User
          May 26, 2013 at 7:32 am

          several errors I have seen, and many of them are outlined above. 
           
          Here is a point that you need to understand:
          Understand the concept of the “safe withdrawal rate”. That is the rate at which you can withdraw from your savings, and  never run out. Meaning – when backtested against all historical stock and bond market scenarios, this withdrawal rate results in never losing your entire principle. Even if you retired in 1929. 
          That number is 4.5%. This means that to be “safe” you need about 22x your yearly draw in investments.
           
          Now – here is the fine print. 
          1) You have to decide how much you want to take out. 
          2) The amount you want to take out has to be corrected for inflation. So take the amount you think you want today, and project ahead 25 years at roughly 3% inflation to get your number. 
          3) Understand that this amount you need to live is AFTER TAXES. Much of the money you have in the bank is PRE-TAX. So you need to correct for that. 
           
          As an example:
          Say you want 100K after tax to live on per year
          In 25 years, that will be  209,377 (3% inflation)
          Which will require $4,652,840 in the bank in AFTER TAX value.
           
          If half is in an IRA or similar and half in capital gains taxable investments (i.e. stocks/bonds etc that have been purchased with after tax money), that would require $3.81M in IRA’s and $2.71M in after tax stocks/bonds. Total = $6.5 m.  This is to safely withdraw 100k (in todays $) per year.
           
          This sounds like a lot. It is. Point is that your permitted retiremetn contributiosn of 40K per year at a very nice return of 10% per year will result in a nest egg of $4.36m. NOT NEARLY ENOUGH.
          You must save substantial amounts outside of your permitted contributions. 
          For the past 20 years, I have been putting away about 25-33% of my take home pay (not gross). I have enough to retire. Many of my colleagues do not. How do you save that much? Well, it wasn’t by settling on a specific number to save, it was by consciously living below our means. We rent places for vacation, we do not have a second home. I drive cars until they are 10 years old, and don’t pay more than 35k for them. With this said, we live very very well, much better than I ever imagined I would in college. 
          When you do this you get an exponential increase in your retirement lifestyle. How? Well – you have scaled your life to fit the money available, and by doing this your expenses are less, and your savings are more. 
          Further – I would advise placing the maximum amount allowable into funds for each kids college starting the day they are born. Currently, the gift allowed is 13k per child. So, you can give 13k to tommy, and so can your wife – total 26K. Invest it. By the time my kids were 12, they had more than enough for college. They are out of school now and these funds paid for college, professional school, and there was enough left over for them to pay for a house (small one). Keep in mind that this is a form of savings for you as well. When my kids were in college, I had no need to work to pay for tuition. I have seen several people who had to continue to work for this reason.
          While I am thinking about this- Do not send your kids to private school. That tuition can be invested and used to send them to college and beyond. Move to an area that has good public schools. You will pay the taxes for the schools anyway, may as well reap the benefits. 
          Also – place a strict limit of two on the kids. Kids are very expensive. 
           
           
          If this sounds grim – well – good. I have seen many people get in trouble because they got the big checks from their first job and got the most house they could, not understanding that big houses require a lot of furniture and draperies, and landscaping and maintenance. Then they put their kids in private schools, and got expensive hobbies like horses, or airplanes, and they wind up with a lifestyle that is not supportable except with constant infusions of large amounts of cash. They have no breathing room. Don’t do this.
          Remember this:
          The more you save
          They less you spend
          The earlier you can retire.
           
           

          • btomba_77

            Member
            June 2, 2013 at 6:52 am

            [link=http://www.fool.com/investing/general/2013/05/31/where-are-the-customers-yachts-2013-edition.aspx]http://www.fool.com/investing/general/2013/05/31/where-are-the-customers-yachts-2013-edition.aspx[/link]
             
            How most mutual funds end up in the long run ….. no better (and usually worse) than cheap index funds.
             

            Of the 358 equity funds in 1970, 36 (10%) survived and outperformed the S&P 500 through 2012. That’s probably close to what you’d expect to happen by random chance.
            What about the rest of the funds? Malkiel writes:
            [blockquote]We can be confident that the 266 funds that did not survive had poorer records than did the surviving funds! Funds with especially poor records in a mutual fund complex are often merged into other funds with better past records.
            [/blockquote] This might be unfair to individual fund managers. Forty-three years is a long enough period that each fund likely cycled through several, maybe even dozens, of managers. Peter Lynch, for example, was an excellent fund manager, but his performance won’t show up in this chart because his fund — Fidelity’s Magellan — was subsequently run by other, less talented managers.
            But the fact remains: The huge majority of professionally managed funds will bow down to a brainless index fund over time. And it’s only getting worse. So few professional funds existed in 1970 that most could, in theory, outperform the market. Today the industry is so large that it’s a mathematical impossibility — most funds can’t beat the market because they effectively [i]are[/i] the market.
            But what really shocked me about Malkiel’s data is that dozens of funds have underperform their benchmark for 43 years, [i]and[/i] [i]they are still in business[/i].

            [image]http://g.foolcdn.com/editorial/images/46446/malk2_large.png[/image]

            • ljohnson_509

              Member
              June 2, 2013 at 6:57 am

              Nice post Dr. Sard. Can not tell you how many of my colleagues do the exact opposite of what you say.  
               
              But you say the more we save the earlier we can retire?  Why would we want to do that? [:)]

              • Unknown Member

                Deleted User
                June 3, 2013 at 9:51 am

                I don’t think private school is a bad investment.  Giving ur kids the best education is worth it imo.  
                 
                I used to be a public school advocate and product of them myself, but all I see happening in my state is cuts to education left and right. 

                • Dr_Cocciolillo

                  Member
                  June 3, 2013 at 10:04 am

                  it depends on your kids and how involved you are as a parent. it’s not a terrible investment, just may be on that isn’t necessary.  it depends on multitude of factors, the largest of which how “ok” are the non private schools available to you.  where i grew up, the private cath school still only charges ~6k tuition.  that’s not a bad investment even if not needed.  but to pay upwards of 20k a year for 12 yrs when you have reasonable alternatives, to me is very poor investment. 
                  time and time again it has been proven that what correlates most closely to how kids do is degree of parental involvement in child’s education.  

                  • Unknown Member

                    Deleted User
                    June 3, 2013 at 2:58 pm

                    Well unless you are some kind of welfare queen, kids in general are a horrible investment, from a financial standpoint.

                    • jun52.park

                      Member
                      June 3, 2013 at 3:12 pm

                      Not true…if youre lucky enough to be in family oriented culture, your kids will take care of you for life….financially, physically, etc….no need to waste money on life insurance

                    • Dr_Cocciolillo

                      Member
                      June 3, 2013 at 4:06 pm

                      I don’t know about relying on your kids for anything… The world and employment isn’t what it used to be.  are you 98% certain that your kids will make enough to be able to take care of you?  that none will get divorced and with 1/2 income, end up as a single parent, get sick, do drugs, etc, etc, etc?  and what if something happens to you when your kids are in their teens?  
                      family oriented culture could break down by the time they get to be employed adults…
                       

                  • ruszja

                    Member
                    June 3, 2013 at 4:38 pm

                    Quote from wisdom

                    it depends on your kids and how involved you are as a parent. it’s not a terrible investment, just may be on that isn’t necessary.  it depends on multitude of factors, the largest of which how “ok” are the non private schools available to you.  where i grew up, the private cath school still only charges ~6k tuition.  that’s not a bad investment even if not needed.  but to pay upwards of 20k a year for 12 yrs when you have reasonable alternatives, to me is very poor investment. 

                     
                    I knew my kids would be in catholic school, pretty much regardless of what public schools are available. That allowed us to move to a place with so-so public schools, lower real estate values and a lower tax burden. What is dumb is to move to some chi-chi town, pay twice as much for a comparable home, get socked with debt service and real estate taxes and THEN to decide that your kids need private school.

                    • Dr_Cocciolillo

                      Member
                      June 3, 2013 at 4:42 pm

                      well, your situation is somewhat unique then.  
                      the only point to consider, IMO, is that kids will do pretty well when they have the basic DNA and parents who are very interested/involved.  property taxes and mortgages are tax deductible.  private tuition is not.  

                    • ruszja

                      Member
                      June 3, 2013 at 4:59 pm

                      Quote from wisdom

                      well, your situation is somewhat unique then.  
                      the only point to consider, IMO, is that kids will do pretty well when they have the basic DNA and parents who are very interested/involved.  property taxes and mortgages are tax deductible.  private tuition is not.  

                       
                      In business, some of my decisions are guided by their tax consequences. When it comes to my kids, I try not let the knuckleheads at the statehouse or in DC decide what is right for them.

                    • Unknown Member

                      Deleted User
                      June 3, 2013 at 6:23 pm

                      Peer group is very important imo. After parents, I would say peer group is probably next most influential group on kids. Not saying private school kids are better, but probably odds are a bit better they will have a good peer group. 

                  • Unknown Member

                    Deleted User
                    April 9, 2014 at 11:24 am

                    I second White Coast Investor and Bogleheads forums

                  • briankn58gmail.com

                    Member
                    May 9, 2014 at 1:02 pm

                    Dr Sard – question for you when you are calculating amount needed in your Ira when you retire – my understanding is when it is being withdrawn , the tax rate will be very low(since you are retired) – is this correct?

                    • btomba_77

                      Member
                      May 9, 2014 at 5:14 pm

                      Quote from rozakk

                      Dr Sard – question for you when you are calculating amount needed in your Ira when you retire – my understanding is when it is being withdrawn , the tax rate will be very low(since you are retired) – is this correct?

                       
                      “Very low” is a relative term.    It depends on how much income you have to pay income tax on.   But let’s say you’re around the  $100k in Sard’s post  (early in retirement it could certainly be possible to spend more).  That’s still the 25% bracket at today’s rate filing joint … 28% filing single.     It’s likely that you’ll hit the post-tax stuff early in retirement and take out the deferred stuff later if you have enough post tax assets to do that.   
                       
                      But still,  you have to think about the taxes you have to pay on those tax deferred investments.
                       
                       

                    • jquinones8812_854

                      Member
                      May 9, 2014 at 6:38 pm

                      Quote from rozakk

                      Dr Sard – question for you when you are calculating amount needed in your Ira when you retire – my understanding is when it is being withdrawn , the tax rate will be very low(since you are retired) – is this correct?

                       
                      PROBABLYl lower than your current tax rate…but that even varies. 

                      Say both you and your spouse are higher earners.  You need to take out 4% of your savings per year once retired per IRS rules.  Say you both have $2 million in savings. That means you have to take out $80k EACH.  Then add in Social Security, possible pensions, any additional income…you could be over $250k in annual income, and basically be paying the same tax rate you pay today.

                      Of cours…if you really have $250k in retirement income…nobody is going to feel too sorry for you. 

                  • jeffrey.hartnett_961

                    Member
                    May 14, 2014 at 2:50 pm

                    Would do the following:
                     
                    1- Open AMEX savings account and make sure you have a safety stash for at least 3-6 months (or more depending on your stability and/or if your spouse works). 
                     
                    2- Open a Vanguard IRA or 401k as well as a taxable account and stick to only Vanguard funds and ETFs. The goal is to minimize your fees. 
                     
                    3- Go to bogleheads and read up there. Lot of books on Amazon about this but basic rules: don’t bother picking stocks unless you quit your job and go to Wall Street. In the long run you will not win. Wall Street and hedge funds will always beat you as they have all of the insider information. I cannot emphasize this enough. Usually if you simply pick a Vanguard stock fund covering all stocks and Bond fund covering a broad selection of bonds and rebalance annually you will receive returns in the top 1% of all investors (including those which invest in hedge funds).

                    • Unknown Member

                      Deleted User
                      May 15, 2014 at 9:40 am

                      The stereotype of docs being bad investors is silly.  We’re just like any other profession, plenty of people who are gullible, emotional, impulsive with their money…well…they will be gutted.  If you are patient and do things right, you’ll do fine over time.  Dergon’s posts sums it up pretty well.  The only thing I would add, is if you’re coming in with a nice bolus of cash now, the market as a whole has a somewhat rich valuation.  I would not jump in all at once.  Maybe dollar cost average things over a 2-3 year period.

                    • scottgood421

                      Member
                      May 15, 2014 at 2:59 pm

                      I fit the stereotype – I am a terrible investor!  Learnt to index and diversify the hard way – after trying unsuccessfully to “play the markets”.  Thankfully these lessons were learnt on a residents income…………….

                    • ruszja

                      Member
                      May 15, 2014 at 6:23 pm

                      Quote from Voxeled

                      The stereotype of docs being bad investors is silly.  We’re just like any other profession, plenty of people who are gullible, emotional, impulsive with their money…well…they will be gutted.  If you are patient and do things right, you’ll do fine over time.

                       
                      I think it is a stereotype based on observation. Doesn’t mean that ALL docs are bad with financials, but many are.

                  • Unknown Member

                    Deleted User
                    May 23, 2014 at 12:14 pm

                    Great posts and a lot of sage advice, but none beats wisdom’s
                    “…..the best way to make a small fortune is to start with a big one and get divorced.”  
                    It’s always “cheaper to keep her”. 

                    • heafeycgmail.com

                      Member
                      January 18, 2019 at 9:04 am

                      A spouse at home makes a huge difference to quality of life in my opinion. Its not for every family, but for mine it has meant being able to do all sorts of things which would be too hard in a super busy two income household. For us it means enjoying life as we go, not just waiting for retirement. We have a very comfortable life with relatively inexpensive hobbies, and try to focus on quality relationships – which require time and effort.

                    • Dr_Cocciolillo

                      Member
                      January 18, 2019 at 9:28 am

                      This is a difficult subject where there really isnt a good answer or a right answer. I have witnessed situations where too much time/not working has led to boredom, unhappiness and affairs resulting in the destruction of a marriage. The way the courts are set up with child support , alimony and the like, the working spouse is a big loser.

                    • heafeycgmail.com

                      Member
                      January 18, 2019 at 9:19 pm

                      These things are true. I guess each couple has to find what works, which may change over time. And hope kindness persists. Either role after a split can be miserable from what Ive seen. I would not want to be financially dependent. No thanks.

                    • btomba_77

                      Member
                      April 13, 2020 at 6:01 am

                      Well, today is the day I start back in to investing.

                      I’ve been waiting for a few things to happen before I return to my regularly scheduled dollar cost averaging investment.

                         My taxes are done and it turns out that I get a little refund. I had been anticipating a potential multi-5-figure tax bill this year, so I won’t have that big expense to deal with ๐Ÿ™‚ 

                            I now have a full year in cash plus a little. I am going to stay with the high level cash for now just in case we go into a true depression and my own circumstances turn for the worse.

                      That said, my employer has assured us no pay cuts at least through the end of May, so that’s a half way decent sign. (Although I think many doctors, possibly myself,  are going to be taking significant hits to their income later this year and into next)

                      And finally, mrs_dergon and I have paid off everything.  We had a couple of major life expenses over the last two years. But I did a ton of over-time, got my cash balances back up, and now it’s time to start pumping $$ back into the stock market.

                      This has nothing to do with market timing. It’s all based on personal circumstances that had previously caused me to have to halt my normal DCA.

                      So today I will take 40% of my March pay and invest it. Probably just add to S&P 500 index fund.

                    • ljohnson_509

                      Member
                      April 13, 2020 at 6:41 am

                      Good luck to you Dergon. I continue to invest as I always have but fear that the worst is yet to come. Fed can only do so much. Not sure how the country can open up if we have no vaccine, proven therapeutics, and everyone is scared to leave their house or travel. Body counts will spike again in my opinion.

                  • JohnnyFever

                    Member
                    April 13, 2020 at 9:32 am

                    Here’s what I’m doing as a newer attending:

                    Saved up a 12-month emergency fund
                    Refinanced student loans into a 5-year repayment plan.
                    Maxed out 401k

                    Still have a lot of money left over every month. All of that is going towards the student loans which I hope to pay off within a year or two. After that, everything will go to pay off my mortgage and cars. When I’m completely debt-free, will start putting more money in a mix of vanguard index funds and bonds.

                    It’s a simple strategy with lower risk than aggressively getting into the stock market, but I want more financial security

                    • Unknown Member

                      Deleted User
                      April 13, 2020 at 10:17 am

                      Quote from RoleCall

                      Here’s what I’m doing as a newer attending:

                      Saved up a 12-month emergency fund
                      Refinanced student loans into a 5-year repayment plan.
                      Maxed out 401k

                      Still have a lot of money left over every month. All of that is going towards the student loans which I hope to pay off within a year or two. After that, everything will go to pay off my mortgage and cars. When I’m completely debt-free, will start putting more money in a mix of vanguard index funds and bonds.

                      It’s a simple strategy with lower risk than aggressively getting into the stock market, but I want more financial security

                       I agree with paying students loans ASAP. 
                      But I won’t delay investing until I pay off my mortgage. Investing should start from the beginning. Time in market is the most important factor to win the game. 

                       

                    • afazio.uk_887

                      Member
                      April 13, 2020 at 7:16 pm

                      People below 45 yo at pretty low risk of death from COVID.  Sequester those at highest risk once the graph is near the low and open up things to the rest of society.  People can wear masks etc and get the rapid test at first sign of any symptoms…. if positive sequester themselves.   Sure, we may be putting out small fires for a while, like until vaccination, but shutting down the entire economy isn’t a long-term solution.  
                       
                      Certain areas likely will suffer for a while, like restaurants etc, until people are confident again they are safe. 

                    • JohnnyFever

                      Member
                      April 14, 2020 at 2:09 pm

                      Depends on how much risk you want to take. Paying my mortgage gives me a guaranteed 3-4% return. Stock market has been really good historically, however nothing is guaranteed and just like we saw last month, it can lose 30% very fast. It took 13 years to recover from the drop in 2000. We could easily be sitting on a giant bubble right now, no one will really know until the dust has settled

                      That said, I do Max out my 401k into an index fund. I will be investing heavily in the stock market once all my other accounts are settled.

                    • Unknown Member

                      Deleted User
                      April 14, 2020 at 3:50 pm

                      Quote from RoleCall

                      Depends on how much risk you want to take. Paying my mortgage gives me a guaranteed 3-4% return. Stock market has been really good historically, however nothing is guaranteed and just like we saw last month, it can lose 30% very fast. It took 13 years to recover from the drop in 2000. We could easily be sitting on a giant bubble right now, no one will really know until the dust has settled

                      That said, I do Max out my 401k into an index fund. I will be investing heavily in the stock market once all my other accounts are settled.

                       
                      The 3-4% interest that you pay on your mortgage is tax deductible. So the real return will be 1.5-2%.

                       

                • scottgood421

                  Member
                  April 10, 2014 at 3:22 pm

                  Macrophallus:
                   
                  “[i][b]I don’t think private school is a bad investment.  Giving ur kids the best education is worth it imo.    [/b][/i]
                  [i][b] I used to be a public school advocate and product of them myself, but all I see happening in my state is cuts to education left and right.[/b][/i]”
                   
                  Depends Macrophallus.  Everything about Private Schools is “buyer beware”.  Private schools are in the business of telling affluent parents what they want to hear.  
                   
                  If a child is struggling and getting poor grades in the public system – parents will make sacrifices to get them to one of these schools.  Transfer to private school and they will see a spike in the grades and hear praise from teachers who have tapped his / her “hidden potential” – it is like music to the desperate parents’ ears!  
                   
                  The child is now in a class with similar strugglees – who all have substantial disposable incomes and access to all sorts of quality agro-pharmaceuticals………  At a boarding school they also have a tonne of free time.
                   
                  In our neck of the woods the private school teachers earn considerably less than their public school counterparts and are considerably less qualified and capable.  Ontario regulation of private schools is lax compared to the public sector.
                   
                  Check out Malcolm Gladwell’s latest book David and Goliath – it has a fascinating chapter on private grade schools in New England and another on the elite / ivy league school vs more mainstream colleges.  Basically it is all about appealing to parental needs – social cachet, elitism, etc etc.
                   
                  Alternatively send me a check for 50 grand and I will put together a glowing report about how gifted and talented your children are via PM.  

                  • Unknown Member

                    Deleted User
                    April 10, 2014 at 4:59 pm

                    Agree generally but “it depends”. Some US states, particularly in the south and in Texas have practically turned their backs on education and see it as a good place to cut costs and it’s up to the parents to get their children decent education and the private sector fits the bill well in some areas, at considerable cost.

                  • jun52.park

                    Member
                    April 10, 2014 at 7:41 pm

                    Canuck, big generalization that needs to be corrected…
                     
                    Private schools are not solely in the business of telling parents what they want to hear.  Some are in the business of being better than than public schools.  Depending on the school and location, this is where they have a role…
                     
                    I was a public school kid in Delaware up until high school.  In public schools you get made fun and picked on for being smart.  In most, you are in a class of 20-30 kids sitting at a desk and can easily be a wall flower and get lost in the shuffle.
                     
                    Went to boarding school for high school (St. Andrews School) and it was the best experience of my life.  I was lucky as my parents only lived 20 minutes away, however, growing up in an environment surrounded by peers that also have goals of excelling speaks volumes.   When you are 15-19 you are heavily influenced by your peers and you dont want crack heads surrounding you.  Also you dont have a “ton of free time at a boarding school”….My school was 6 days a week and there was a mandatory 2 hour study hall every night.  Classes were 10-12 kids each and we sat around a round table and everybody participated.  This was not a private school where parents sent their kids to be better behaved or because they were doing poorly.  You could only get in if you were way above average.  
                     
                    The school changed my perspective on how to approach life and more importantly allowed for connections that would never be possible in a DE public school (multinational kids from every background and socioeconomic level….billionaire kids to kids whose parents were on welfare as the school had a prep program for gifted kids without money).  The kids at my school were there as they earned it.  
                     
                    The point of a private school is that it not only provides a “better education” which i understand is partially subjective, however, the real benefit is surrounding your kids with peers who have similar interests and goals of being something more than a local monkey.  Teenage years are heavily influenced by peers and its better to have your kids surrounded by other parents and their kids who have similar interests and goals…
                     

                    Quote from adopted canuck

                    Macrophallus:

                    “[i][b]I don’t think private school is a bad investment.  Giving ur kids the best education is worth it imo.    [/b][/i]
                    [i][b] I used to be a public school advocate and product of them myself, but all I see happening in my state is cuts to education left and right.[/b][/i]”

                    Depends Macrophallus.  Everything about Private Schools is “buyer beware”.  Private schools are in the business of telling affluent parents what they want to hear.  

                    If a child is struggling and getting poor grades in the public system – parents will make sacrifices to get them to one of these schools.  Transfer to private school and they will see a spike in the grades and hear praise from teachers who have tapped his / her “hidden potential” – it is like music to the desperate parents’ ears!  

                    The child is now in a class with similar strugglees – who all have substantial disposable incomes and access to all sorts of quality agro-pharmaceuticals………  At a boarding school they also have a tonne of free time.

                    In our neck of the woods the private school teachers earn considerably less than their public school counterparts and are considerably less qualified and capable.  Ontario regulation of private schools is lax compared to the public sector.

                    Check out Malcolm Gladwell’s latest book David and Goliath – it has a fascinating chapter on private grade schools in New England and another on the elite / ivy league school vs more mainstream colleges.  Basically it is all about appealing to parental needs – social cachet, elitism, etc etc.

                    Alternatively send me a check for 50 grand and I will put together a glowing report about how gifted and talented your children are via PM.  

                    • scottgood421

                      Member
                      April 11, 2014 at 4:11 am

                      glad it worked for you Delaware.
                       
                      Given two similar candidates – one from St Andrews and one from a large public high school – I know which I will be appointing………………………….  The candidate who prevailed despite the hardships of 20 – 30 in a class!
                       
                      Check out David and Goliath – it is well worth a read.

                    • btomba_77

                      Member
                      April 11, 2014 at 5:28 am

                      The problem with public v private shcools in the US is …
                       
                       
                      Generally the people that can afford private schools tend to have access to high quality public schools that can do the job essentially just as well. 
                       
                      The people that cold most benefit from the private schools are those that have crappy public schools … but they tend to be too poor to afford private.
                       
                      ___
                       
                       
                      Anyway –  All the gains for the year in the market wiped out this week.   In response I am going to …
                       
                      do absolutely nothing different.  
                       
                      I’ll DCA the same percentage of paycheck into my basket of lowcost index funds in the same allocation as always.
                       
                      Stay the course!

                    • hal1019

                      Member
                      April 11, 2014 at 9:42 am

                      Does anyone have an opinion on 457B? Would you suggest maxing that out as well?

                    • btomba_77

                      Member
                      April 11, 2014 at 11:42 am

                      457b absolutely!
                       
                      If you are with a non-profit and it is offered then max it out!
                       
                      $17,500 a year with contributions and earning tax deferred.
                       
                       
                      There are some differences with regards to withdrawal penalties and options but  if you plan to use this for retiremnt money that you won’t touch until you stop working it’s a great vehicle!
                       

                    • Unknown Member

                      Deleted User
                      April 12, 2014 at 2:07 am

                      There is a very low probability that you will run out of money.  The odds are 100%  that you will run out of time.  Money is worth less and less the older you get.  Personally, I value having the best of everything life offers while I can enjoy it.

                    • mario.mtz30_447

                      Member
                      April 12, 2014 at 9:34 am

                      Quote from radguy

                      There is a very low probability that you will run out of money.  The odds are 100%  that you will run out of time.  Money is worth less and less the older you get.  Personally, I value having the best of everything life offers while I can enjoy it.

                      Wow… I haven’t read something so true and profound in a while. Thank you!

                    • btomba_77

                      Member
                      May 8, 2014 at 6:24 am

                      [link=http://www.bloombergview.com/articles/2014-05-07/hedge-fund-guys-and-their-stock-tips]http://www.bloombergview….s-and-their-stock-tips[/link]
                       
                      On how the biggest names in hedge fund investing underperform index funds.
                       

                      This week was the 19th annual Ira Sohn [link=http://www.sohnconference.org/events/new-york/]conference[/link]. It is an opportunity to raise money for a good cause (pediatric cancer research and treatment), and hobnob with rock star hedge-fund managers. It has become a must-attend event.
                      Just remember one important thing: Ignore the stock tips.
                      It is true that the picks and pans at the Sohn conference can move individual stocks 10 percent or more. Yet, as a number of folks have pointed out, the picks of the pros typically underperform the broad market or even lose money. Traders don’t seem to care.
                       
                      By coincidence, in addition to the Sohn conference, this week also saw the release of Institutional Investors [link=http://www.institutionalinvestorsalpha.com/HedgeFundRichList]Alpha Rich[/link] list. It details the top funds, not in terms of performance, but in terms of manager compensation. 
                       
                      These hedge-fund managers are all very bright, skilled guys (and yes, they are all men). There is a modest overlap between the list of Sohn conference presenters and the highest-paid managers.
                      But it isn’t just their individual picks that underperform; the HFR Equity Hedge Fund Index — a basket of long and short positions — also would have cost you money, declining 5.9 percent since 2010 compared with a 61 percent gain in the S&P 500.
                      One can’t help but look at these results, and wonder: If the skill set isn’t stock-picking, then what is it?
                       

                       
                       
                       

    • btomba_77

      Member
      April 9, 2014 at 10:20 am

      Quote from Wild Stallyns

       just invest every month without any thought to what the market has done or what I think it’s going to do. The biggest benefit of doing this is that I am FAR less likely to do something stupid like sell after a crash or buy during a boom. 

      A nice little read on the psychological basis of bad investing –
      [link=http://www.bloombergview.com/articles/2014-04-09/why-do-investors-make-bad-choices]http://www.bloombergview….stors-make-bad-choices[/link]
       
       

       
      Of the behavioral mistakes…  the first is called availability bias. Behavioral scientists have shown that if something has happened in the recent past, it is cognitively available, and people tend to exaggerate the probability that it will happen in the future.
       
      Availability bias isnt exactly irrational, but it can produce big mistakes. The stock market did collapse in 2008, but it doesnt collapse very often, and in 2011 I shouldn’t have focused on the risk of another meltdown.
       
      The second mistake involves “loss aversion.” People tend to hate losses from the status quo in fact, they hate them far more than they like equivalent gains. If you suddenly lose $10,000, the distress you would feel would almost certainly be greater than the joy you would feel if you suddenly gained $10,000.
       
      The irony is that if we make our decisions on the basis of loss aversion, well end up as big losers. A case in point: As the stock market started to fall, I wanted to prevent losses, and as a result, I lost a lot.
       
      The third bias is called “probability neglect.” Human beings tend to focus on worst-case scenarios, especially when their emotions are running high, and not on the likelihood that such scenarios will actually come about. When I made my stupid decision, the worst-case scenario (another collapse!) loomed large. I devoted far too little attention to the question of whether it was probable.
       
      Behavioral economists now have a detailed account of the biases to which investors are subject. For example, they are also prone to the disposition effect, which means that they sell stocks too quickly when they have appreciated in price while holding on too long to stocks that have depreciated in price.
       
      In addition, a lot of individual investors are overconfident. (Men are worse than women on this count.) They like to buy, and they like to sell, and they think that they can work some magic to make a lot of money. Forget about it. The stock market isnt a Steven Spielberg movie.
       
      It cannot be said too often that the best advice, for most people, is boring and simple, so here’s a nudge: Have a diversified portfolio, consisting in large part of low-cost index funds, weighted toward equities; add money as you get it, and diversify it as well; keep the cash you need; and otherwise hold steady (and spend a lot of time with the sports pages).
       
      If your emotions start to get the better of you, and you think its time to make a big move in a significantly different direction, its good to have {that}voice in your head, saying a single, beautiful word: “No.”
       

       

  • Dr_Cocciolillo

    Member
    June 3, 2013 at 4:06 pm

    I don’t know about relying on your kids for anything… The world and employment isn’t what it used to be.  are you 98% certain that your kids will make enough to be able to take care of you?  that none will get divorced and with 1/2 income, end up as a single parent, get sick, do drugs, etc, etc, etc?  and what if something happens to you when your kids are in their teens?  
    family oriented culture could break down by the time they get to be employed adults…
     

    • ruszja

      Member
      June 3, 2013 at 4:33 pm

      Quote from wisdom

      I don’t know about relying on your kids for anything… The world and employment isn’t what it used to be.  are you 98% certain that your kids will make enough to be able to take care of you?  that none will get divorced and with 1/2 income, end up as a single parent, get sick, do drugs, etc, etc, etc?  and what if something happens to you when your kids are in their teens?  

       
      That is only a problem if have less than 5 of them. Six or seven and you’ll have at least two who are going to change the tennis balls on your walker.
       
       

  • Unknown Member

    Deleted User
    April 9, 2014 at 12:17 pm

    Put your money in a Vanguard index fund and forget about it.  Set up a money market fund with them and transfer whatever amount you feel comfortable to total sock market index [size=”0″]VTSMX.  Can also have them transfer a set amount each month from money market to the mutual fund.[/size]
     
    [size=”5″]BTW, not a good sign you are asking doctors for financial advise.[/size]

    • Unknown Member

      Deleted User
      April 9, 2014 at 7:43 pm

      [b][ 
       
      I would say the same about a vanguard index fund

  • jun52.park

    Member
    April 9, 2014 at 12:49 pm

    actually look into VTSAX….its the same as just mentioned but admiral shares where there is a lower fee

  • ruszja

    Member
    April 12, 2014 at 9:01 am

    Quote from delawarerad

    actually look into VTSAX….its the same as just mentioned but admiral shares where there is a lower fee

    Just found something interesting. VTSAX doesn’t show up in the list of funds to select for a regular IRA. If you select VTSMX with a large enough purchase amount, it offers you VTSAX instead.

  • btomba_77

    Member
    May 21, 2014 at 7:28 pm

    Quote from Voxeled

    The stereotype of docs being bad investors is silly.  We’re just like any other profession, plenty of people who are gullible, emotional, impulsive with their money…well…they will be gutted.  If you are patient and do things right, you’ll do fine over time.  Dergon’s posts sums it up pretty well.  The only thing I would add, is if you’re coming in with a nice bolus of cash now, the market as a whole has a somewhat rich valuation.  I would not jump in all at once.  Maybe dollar cost average things over a 2-3 year period.

     
    Psychologically DCA often feels better….. like inching your way into the pool compared to the diving in of lump sum investment.   
     
    But  lump sum actually does better  over time statistically speaking— so long as you have a long time horizon for the money in case there is a transient loss on a risk asset in the short term after a lump sum.
     
     
     
    That said, for the purposes of this thread, anything that gets the $$ into a rad’s retirement savings rather than buying a new BMW 7 series is good thing ๐Ÿ™‚
     
     

  • btomba_77

    Member
    July 30, 2014 at 9:31 am

    An article on the worst thing you can do:
     
    [link=http://www.bloombergview.com/articles/2014-07-29/spread-your-wealth-or-lose-it]http://www.bloombergview….your-wealth-or-lose-it[/link]
     

    [b]
    Spread Your Wealth or Lose It[/b][/h1]  

    tudies[link=http://faculty.haas.berkeley.edu/odean/papers%20current%20versions/behavior%20of%20individual%20investors.pdf]repeatedly find[/link] that only 5 percent of individual investors can consistently do better than an index fund.
    Why are you and I so bad at managing our investments? A lot of psychological explanations have been offered.
     
    Theres [link=http://faculty.haas.berkeley.edu/odean/papers/gender/boyswillbeboys.pdf][i]overconfidence[/i][/link] — the tendency of people trading stocks not to worry about why the person on the other end of the trade is so eager to take the opposite bet. Theres the [link=http://www.bauer.uh.edu/wu/Papers/Disposition.pdf][i]disposition effect[/i][/link] — the tendency of people to sell winning stocks too early in order to lock in profits, or hold on to losing stocks too long in the desperate hope that they will recover. Theres the [i]hot-hand fallacy[/i], which is the tendency to mistake statistical blips for durable trends, and its [link=http://eml.berkeley.edu/~rabin/GHFTA_RESf.pdf]twin brother[/link] the [i]gamblers fallacy[/i], which is the mistaken notion that a run of bad luck has to be followed by a run of good luck. Theres [link=http://faculty.haas.berkeley.edu/odean/papers/attention/all%20that%20glitters.pdf][i]attention bias[/i][/link], which draws peoples eyes to glamorous or familiar stocks and cause them to overlook more lucrative opportunities.
     
    [b]But according to [link=http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2381435]a recent paper[/link] by a team of German economists from Goethe University in Frankfurt, there is one mistake above all others that hamstrings individual investors — the [i]failure to diversify[/i].[/b]
     
    he German economists study an absolutely huge database of individual investors, and find that lack of diversification reduces the average investors performance by 4 percentage points a year!
     
    To give you a rough ballpark idea of how much this matters consider this: if you saved $3,000 a month every month for 30 years and earned a return of 7 percent, you would end up with more than $3.6 million. But if you got a 3 percent return, you would end up with only $1.7 million, or less than half. Thats a pretty big deal.
     
    The authors of the paper find that compared with under-diversification, all the other biases dont matter much. Thats hardly surprising, because the more you diversify, the less room there is for any bad stock pick to affect your overall wealth.
     
    How do you avoid the failure to diversify? Simple: Invest in index funds, or in exchange-traded funds that are similar to index funds. In other words, follow the example of a rapidly [link=http://ibd.morningstar.com/article/article.asp?id=624328&CN=brf295,[link=http://ibd.morningstar.com/archive/archive.asp?inputs=days=14;frmtId=12,%20brf295]http://ibd.morningstar.co…14;frmtId=12,%20brf295[/link]]rising number[/link] of investors.
     

    • Unknown Member

      Deleted User
      July 30, 2014 at 12:23 pm

      Good job, dergon.
       
      How was dinner?
       
      Don’t know if this is in a prior post – don’t want to read the whole thing, but Vanguard has some diversified “mutual funds” that really look more like a diversified investment portfolio like many financial advisors would do. They are labeled according to the year that you intend to retire, and have the bond/stock/real estate/foreign/domestic ratios adjusted to match the goal of the fund. They get rebalanced as time goes on, and of course they are rock bottom low fees, being vanguard.
       

      • btomba_77

        Member
        July 30, 2014 at 2:34 pm

        Quote from Dr.Sardonicus

        Good job, dergon.

        How was dinner?

        Don’t know if this is in a prior post – don’t want to read the whole thing, but Vanguard has some diversified “mutual funds” that really look more like a diversified investment portfolio like many financial advisors would do. They are labeled according to the year that you intend to retire, and have the bond/stock/real estate/foreign/domestic ratios adjusted to match the goal of the fund. They get rebalanced as time goes on, and of course they are rock bottom low fees, being vanguard.

        I decided to let Larson off the hook for my planned dinner of  “filet, Chimay, creme  brulee ”  (the standard when it’s someone else’s tab ๐Ÿ˜‰  )  .  It was sailing night so I sailed instead.    
         
        _
         
        You’re probably talking about these things from Vanguard:
         
        [link=https://investor.vanguard.com/mutual-funds/target-retirement/#/]https://investor.vanguard…s/target-retirement/#/[/link]
         

        [size=”4″]Vanguard Target Retirement Funds[/size] [size=”4″]Get a complete portfolio in a single fund[/size] Vanguard Target Retirement Funds give you a straightforward approach to a sophisticated problem: how to invest successfully for retirement.
        Each fund is designed to help manage risk while trying to grow your retirement savings.
         

         
         
        The Vanguard target funds have E/Rs at 0.17 compared to an industry average at around 1%. 
         
         

      • btomba_77

        Member
        August 12, 2014 at 4:19 pm

        Quote from Dr.Sardonicus

        Good job, dergon.

        How was dinner?

        The Larson people really don’t want to take no for an answer.   More free steak dinners being offered next week in Cleveland. 
         
         

  • Unknown Member

    Deleted User
    July 30, 2014 at 8:16 pm

    Where do paying off student loans fall into this plan? 
    Would you say to start aggressively paying off student loans now instead of doing the above advice?
    My husband is still a resident with student loans as well? Should we file jointly or separately? Will my income affect his ability to make lower student loan payments? 
     
     

    • btomba_77

      Member
      July 31, 2014 at 4:01 am

      Quote from indebt4life

      Where do paying off student loans fall into this plan? 
      Would you say to start aggressively paying off student loans now instead of doing the above advice?
      My husband is still a resident with student loans as well? Should we file jointly or separately? Will my income affect his ability to make lower student loan payments? 

       
      It depends on the interest rate of your loans.
       
      When I finished medical school my $100,000 of debt was in loans at 10%, 12%, and even 14% !       At those rates paying down debt was the highest priority.     
       
      However, if a person had a very low rate on their loans (lower rate than would be the expected rate of return for middle-of-road investments)  then a slow payback over time might be better to free up some capital for investment.
       
      ____
       
       
      The other questions are ones to bring to your accountant.   My guy has software he runs every year.  With the click of a button he can compare joint versus separate.   For us filing jointly works out better … not great but better.
       
       

    • btomba_77

      Member
      July 31, 2014 at 6:11 am

      Quote from indebt4life

      Where do paying off student loans fall into this plan? 
      Would you say to start aggressively paying off student loans now instead of doing the above advice?

      A little discussion to give examples:
       
      [link=http://www.forbes.com/sites/moneybuilder/2011/08/09/should-you-pay-off-debt-or-invest/]http://www.forbes.com/sit…ay-off-debt-or-invest/[/link]
       

      To address this issue, you have to understand all the components of the question.
       
      First, there is the financial question which is rather simple. Ask yourself which number is greater; the [link=http://www.fivecentnickel.com/2010/06/09/investment-performance-average-vs-compound-returns/]return on your investment[/link] or the interest you are paying. If you are paying more interest than you could earn, you are far better off by paying down the debt.
      For example, assume you owe $10,000 on a credit card. Say you actually have $10,000 in the bank which you could use to get out of debt completely. The credit card interest rate is 10% and the bank is paying you 1%. At first, this seems like a slam dunk. Pay off the credit card. Right? Not so fast.
      Assume you also have an opportunity to invest $10,000 in your brothers cant lose vending machine business. He tells you that investments are earning 30%. Now, the choice becomes more complicated.
      If you pay off the credit card, you are making a guaranteed 10% because thats money that youll keep in your pocket rather than send off to [link=http://www.forbes.com/companies/visa/]Visa[/link] or[link=http://www.fivecentnickel.com/2010/03/05/mastercard-credit-card-acceptance-guidelines/]Mastercard[/link]. If you invest in the vending machine business, you are guaranteed nothing. You might earn 30% or more. But you could also lose everything. Its happened once or twice in the past when people invest in small business.
      So which is greater? A guaranteed 10% or a [i]possible[/i] 30%? The only way to approach this is to estimate the likelihood of earning that 30%. If the chances are high, you might go for it. If not, you might pass.
      But there are other scenarios. What if the [link=http://www.fivecentnickel.com/2010/08/13/the-high-cost-of-credit-card-debt/]cost of that credit card debt[/link] was only 5%, and your alternative to paying that off is to invest in some mutual funds? What if your time frame was 5 years for those mutual funds. Assume you estimate that the average return of the funds over that period of time will be at least 8%? Which do you choose?
      While you still have to do the above calculation of estimating the likelihood of achieving those results, you have the added element of time to consider. What is the expected return of the alternatives over the given time horizon?
       
       
      So from a financial stand point, you have to consider alternatives, the cost of the debt and the likelihood of potential alternatives coming about and the downside risks over a given time frame. Its a lot to consider. Beyond these financial considerations, there are also the emotional points. How would you feel if you paid off the debt? How would you feel if you dont invest? How would you feel if the investment doesnt work out?
       
      I have found that these emotional questions are just as important as the financial questions. What good is it to make an otherwise smart financial decision if at the end of the day you are left feeling miserable?

      In most cases, you can simply ask yourself a few questions and come up with a really solid decision to address both the financial and the emotional issues:
      [b]1.[/b] What happens if you pay off the debt and the other investment does well?
      Your answer will be unique depending on the situation. If the investment turns out great, how might it change your life? Are you giving up your chance of a lifetime? Or are the upsides of the investment actually very limited? What are you giving up in order to pay off the debt? Does it make sense to make that decision?
      [b]2.[/b] What happens if you pay off the debt and the other investment does poorly?
      If this happens, youll probably feel like a genius. No problem here.
      [b]3.[/b] What happens if you dont pay off the debt, make the investment and it turns out well?
      What is a reasonable expectation for a good outcome and what does that look like? Can your money double? Triple? Or is the upside, even in the best case, so limited that it just isnt worth it? What is a reasonable expectation?
      [b]4.[/b] What happens if you hold the debt, make the investment and it turns out badly?
      Can you afford to lose the money and be stuck with the debt? A man I know borrowed money to invest in the stock market. Not only that, but he invested very aggressively and lost 30% in 3 months. At the end of the day, he was $150,000 underwater and needed to pay 10% to his lender. This bad decision forced him to sell his business and declare bankruptcy. Clearly, he never thought about the downside before choosing the investment over staying out of debt. He was an optimist who never considered the risk.

      I have found that by asking myself these 4 questions, I make better financial decisions between two competing alternatives. How do you decide between paying down debt or investing?
       

      • kaldridgewv2211

        Member
        July 31, 2014 at 8:17 am

        “The biggest suggestion I have is to avoid credit cards. Interest rates are very high on credit cards. Sometimes they are 18 percent. Sometimes they are 20 percent. If I borrowed money at 18 or 20 percent, Id be broke…. So if I had one piece of advice for young people generally it would be to just avoid credit cards.” – Warren Buffett
         
         

        • btomba_77

          Member
          July 31, 2014 at 8:35 am

          Quote from DICOM_Dan

          “The biggest suggestion I have is to avoid credit cards. Interest rates are very high on credit cards. Sometimes they are 18 percent. Sometimes they are 20 percent. If I borrowed money at 18 or 20 percent, Id be broke…. So if I had one piece of advice for young people generally it would be to just avoid credit cards.” – Warren Buffett

           
          That said, high income people who pay off their card balances monthly can get a lot of benefits from reard cards.
           
          My United (ex-Continental) card pays off thousands of dollars in domestic and international upgrades yearly.  You have to know how to use it properly, but once you do it can be great.
           
          But if you can’t absolutely positively pay off your balance every month without fail .. don’t use it.

          • Unknown Member

            Deleted User
            July 31, 2014 at 8:43 am

            Removed due to GDPR request

          • danielstack

            Member
            July 31, 2014 at 9:20 am

            I think I would have to agree, I go for cash back rewards and can vary anywhere from 1-5% of the purchases.  Although it could be argued that credit cards may lead you to spend more versus letting go of your hard earned cash when it comes to purchasing decisions.

          • kaldridgewv2211

            Member
            July 31, 2014 at 1:43 pm

            Quote from dergon

            Quote from DICOM_Dan

            “The biggest suggestion I have is to avoid credit cards. Interest rates are very high on credit cards. Sometimes they are 18 percent. Sometimes they are 20 percent. If I borrowed money at 18 or 20 percent, Id be broke…. So if I had one piece of advice for young people generally it would be to just avoid credit cards.” – Warren Buffett

            That said, high income people who pay off their card balances monthly can get a lot of benefits from reard cards.

            My United (ex-Continental) card pays off thousands of dollars in domestic and international upgrades yearly.  You have to know how to use it properly, but once you do it can be great.

            But if you can’t absolutely positively pay off your balance every month without fail .. don’t use it.

             
            Not many people are high income.  If you’re already in debt, running up credit card debt is insanity even if you’re earning rewards.  If you can pay it off monthly, you can earn some benefits on certain cards.  I use a Barclays Arrival Travel Card to earn points for cash back on travel, if I charge something I usually make payments as soon as a charge posts. 

            • btomba_77

              Member
              July 31, 2014 at 1:53 pm

              Quote from DICOM_Dan

              Quote from dergon

              Quote from DICOM_Dan

              “The biggest suggestion I have is to avoid credit cards. Interest rates are very high on credit cards. Sometimes they are 18 percent. Sometimes they are 20 percent. If I borrowed money at 18 or 20 percent, Id be broke…. So if I had one piece of advice for young people generally it would be to just avoid credit cards.” – Warren Buffett

              That said, high income people who pay off their card balances monthly can get a lot of benefits from reard cards.

              My United (ex-Continental) card pays off thousands of dollars in domestic and international upgrades yearly.  You have to know how to use it properly, but once you do it can be great.

              But if you can’t absolutely positively pay off your balance every month without fail .. don’t use it.

              Not many people are high income.  If you’re already in debt, running up credit card debt is insanity even if you’re earning rewards.  If you can pay it off monthly, you can earn some benefits on certain cards.  I use a Barclays Arrival Travel Card to earn points for cash back on travel, if I charge something I usually make payments as soon as a charge posts. 

              *nods* Mine are structured to auto-deduct from my checking account before the statement close date if I forget to pay.  
               
              I funnel just about everything I do through my credit card, avoiding cash so I get the miles. ๐Ÿ™‚
               

    • danielstack

      Member
      July 31, 2014 at 9:16 am

      Quote from indebt4life

      Where do paying off student loans fall into this plan? 
      Would you say to start aggressively paying off student loans now instead of doing the above advice?
      My husband is still a resident with student loans as well? Should we file jointly or separately? Will my income affect his ability to make lower student loan payments? 

       
      A very high yield and short book that covers a lot of the basic topics in physician finance is with this guy who runs a website called [link=http://www.whitecoatinvestor.com]www.whitecoatinvestor.com[/link].  He sells an [link=http://www.amazon.com/White-Coat-Investor-Personal-Investing-ebook/dp/B00ICXCUJ6/ref=tmm_kin_swatch_0?_encoding=UTF8&sr=8-1&qid=1406823323]ebook on Amazon[/link] that is excellent for rads early in their careers (covers topics on student loan payback strategies, dealing or not dealing with financial advisers, insurance needs such as disability, life, umbrella, investing strategies including rental property, stocks, bonds, and specific goals you should set for yourself).
       
      Older rads may find it a good read although many topics they probably already know about. The website is also an excellent resource and largely what the book is based on.  His information is largely based on the [link=http://www.bogleheads.org/]Bogleheads[/link] site which takes it’s name from[link=http://en.wikipedia.org/wiki/John_C._Bogle] Jack Bogle[/link], the original founder of index funds.

  • Unknown Member

    Deleted User
    July 31, 2014 at 4:24 pm

    My biggest financial regret so far:  Paying off my house.
     Sounds crazy I know, but I paid it off in 2 years. Should have keep that cheap money in the market or alternative investments and would be richer today.  I guess reducing debt is always a good thing, but mortgage debt is different. There are a lot of laws on the book protecting you, tax deductions, and it is probably the only chance most people will have to gain access to relatively cheap and large amount of credit.  Proper use of debt instruments can help one get wealthy faster.
     
    Hopefully, someone out there will benefit from this message.

    • Unknown Member

      Deleted User
      July 31, 2014 at 7:17 pm

      I paid off my first house in 2.5 years. I understood the situation balancing what it was costing with what I could earn in the market, etc, but the grand poo-bah of the group I was working for was an ass, and I wanted to be sure if I needed to quit, I wouldn’t lose my house. Very emotional reason I understand, but still….. 

    • joshua.glaze_811

      Member
      August 1, 2014 at 7:04 am

      I have to disagree with you.  [size=”0″]You are living the dream. Debt free. It’s luxurious.[/size]
       
      My advice, stop looking back and look forward. 
      Your mortgage payment is now yours for life.
      Spend it. Or dollar cost average it into investments.  [size=”0″]This is the luxury.[/size]
       
      Almost everyone is paying a large percentage of their income for housing. And cars. And… 
      It’s awesome to be in a position where you do not have to pay for a house, car, etc.  Congrats.
       
      [size=”0″]
      [/size]
       
       

      Quote from macrophallus

      My biggest financial regret so far:  Paying off my house.
      Sounds crazy I know, but I paid it off in 2 years. Should have keep that cheap money in the market or alternative investments and would be richer today.  I guess reducing debt is always a good thing, but mortgage debt is different. There are a lot of laws on the book protecting you, tax deductions, and it is probably the only chance most people will have to gain access to relatively cheap and large amount of credit.  Proper use of debt instruments can help one get wealthy faster.

      Hopefully, someone out there will benefit from this message.

      • reuven

        Member
        August 1, 2014 at 11:11 pm

        Vanguard has dropped their advisory fees to as low as .30.  They have etfs as low as .05-.10.  Therefore you could have an adviser as well as your investment portfolio for as low as .40 total in fees.  This is the best deal that you will find.
         
         

        • btomba_77

          Member
          August 15, 2014 at 12:24 pm

          Barry Ritholz writing about gloom and investing.   
           
          [link=http://www.bloombergview.com/articles/2014-08-15/gloom-as-an-investor-s-best-friend]http://www.bloombergview….investor-s-best-friend[/link]
           

          The classic risk-aversion ratio holds that investors feel two times as much pain from losses as the pleasure they get from gains. Hence, the effect of a crash leaves psychic wounds that can take years or decades to heal. It took 25 years for the stock market to reach the highs of 1929 (at least on a nominal price basis). It was as if it took an entire generation without memories of the 29 crash to grow up, get jobs and start investing.
           
          The legacy of these crashes stays with many folks for a long time. It colors everything they see for years.
           
           
          As the New York Times put it more than a generation ago:
          [blockquote]The last leg of a bear market is often crushing – a swift plunge in stock prices on heavy volume that pounds small investors and institutions alike, leaving them with big losses and shattered emotions. The effect can be cathartic. But in the vacuum that remains, investors can begin rebuilding their confidence.[/blockquote] One of the few to recognize the cathartic cleansing generated by capitulation was Robert Farrell, then chief market analyst at Merrill Lynch. That same article contained a quote that summarizes why he became an investing legend: I believe you really will see the start of the Great Bull Market of the 80’s.
          I wonder what Farrell would say today?

           

          • Unknown Member

            Deleted User
            August 15, 2014 at 3:19 pm

            I personally like Suze Orman.  “People first, then money, then things.”  
             
            Save, save, save, and save some more until it hurts.  Max out your 401k/403b, and your IRA.  Do this for you and your spouse.
             
            Pay off high interest debt first – student loans, credit cards, etc.  If you haven’t already, consolidate student loans at today great rates.   Paying them off depends on your individual circumstance.  Some people feel better not having that student debt and more secure.  However, I look at it differently.  I believe most student loan debt is secured, meaning that you are collateral.  If you are completely disabled or die, the loan is forgiven.  So I pay off student loan as slowly as possible, since my survivors would NOT be responsible for this debt.  
             
            Home loans are different.  The home is the collateral.  If someone happens to you, the home loan still needs to be paid.  So I have the incentive to pay off a home as fast as possible, for the security of knowing I have a place to live, and my family will if I die.
             
            Underbuy your home as much as possible.  Take out a conventional fixed mortgage, no creative interest-only financing.
             
            Underbuy your cars, used is best.
             
            Marry wisely, someone who works for their money, is frugal, and doesn’t need a lot of expensive things.
             
            Send kids to public school, at least for secondary education.
             
            Use low-cost funds.  I like Vanguard.  They also have an investing-advising service that isn’t too expensive.  I also like the FinancialEngines service through Vanguard (likely also available through Fidelity and others).
             
            Get disability insurance and a term policy if you have dependents.
             
            Avoid “get-rich-quick” schemes.  Avoid advisors that can “beat the market”.  If they are so good, why are the working for YOU?  Why are they working at all?
             
            Start there, and if you still have extra money, then get references for a financial advisor, consider investment property, etc., but only if you know what you are doing.  Good luck!

            • reuven

              Member
              August 16, 2014 at 8:21 am

              I have been reading forum questions like these and their responses on a yearly basis for many years.  Most of the advice is solid, such as use index funds, like within your means, keep you debt low, and do not get divorced.  However there are 2 repeated points of advice that are should be clarified that I will address below:
               
              1. Mortgage debt is not bad but good debt.  My effective post tax mortgage rate is 2.75%.  So if I can make more than 2.75% with each dollar after taxes then I should invest the money rather than paying down my mortgage.  In 2000 one could get a 1-5 year CD with an interest rate of 5.5%.  This if you pay 40% in taxes results then this results in a 3.24% return per year or .50% more than the mortgage.  This is free money. This is just an example but similar math holds for stock and bond investing.
               
              2. You think that you can beat the stock market but you really cannot because you lack the knowledge, math skills, time, and temperament.  It will take an equivalent knowledge base to going through medical school again plus the other criteria above to do this successfully and most of you are not going to put in the effort ( I have successfully and consistently).  As such my suggestion is as above, use Vanguard etfs and index funds, dollar cost average, get low cost financial advice at Vanguard if you need it, ignore the financial media noise, and be happy with putting in no work to get average returns.

              • Unknown Member

                Deleted User
                August 16, 2014 at 1:14 pm

                 
                I would caution against believing that beating the stock market is not possible.  It is most certainly possible and happens all the time — but here is the thing, the AVERAGE RETAIL INVESTOR can’t do it.
                 
                What beating the market requires is AN EDGE.  Something you have that others don’t.  I recommend you all watch the PBS FRONTLINE on Stephen Cohen and his hedge fund.  These people have enourous advantages over the retail investor. THey can easily beat the S&P every year.
                 
                The stock market is NOT a level playing field. We regular folks are at a disadvantage from the get go.
                 
                So I would say get involved in stocks if you can find a small edge someway or somehow. I have a few strategies I am going to implement using personal connections I have made.  I am starting with a small amount of money, but I bet I will beat the return for my own index funds I hold.

                • Unknown Member

                  Deleted User
                  August 16, 2014 at 1:16 pm

                  If I consistently am able to do it, I would like to get the point where I make enough to run my household just from investing, and the radiology money just being a bonus. Then I could stop working anytime although I have no plans to stop ever either.

              • nipple3

                Member
                November 24, 2014 at 9:08 pm

                Quote from JTG

                 
                be happy with putting in no work to get average returns.

                Amen

                • nipple3

                  Member
                  November 24, 2014 at 9:23 pm

                  If you are invested in any Mutual Fund check the prospectus for expenses.  There will be an annual fee however if you check the fine print this does not include “trading expenses”. To find this out you have to make a special request.  I read this some where and when I checked the fine print in my mutual funds sure enough it was there. I now buy individual stocks.

                  • Unknown Member

                    Deleted User
                    November 24, 2014 at 10:02 pm

                     
                    Individual bonds vs. bond funds shouldn’t matter.  Any gain in income from rising rates should be reflected in loss of NAV.

                    • nipple3

                      Member
                      November 24, 2014 at 11:23 pm

                      If I hold a bond to maturity I will get paid the face value of that bond plus the interest I have accumulated since  I bought the bond.  If interest rates rise the price of that bond will diminish but I will still get the face value at maturity plus interest which is the amount I calculated when I bought the bond initially. If I had the ability to know when interest rates were to rise so as to correctly time the purchase of these bonds I would be sipping a drink with an umbrella rather than posting on this site.
                      The NAV, in my understanding, refers to a collection of bonds rather than an individual one.

                    • danieledibiagio_135

                      Member
                      November 25, 2014 at 7:44 am

                      Basically a bond is priced at auction to provide a certain return (yield to maturity). You figure this out by discounting the sum total of all of the coupon payments (a fixed % payment made semi-annually) and the face value of the bond at time of maturity. The yield to maturity and coupon payment aren’t always the same thing and depend heavily on the interest rate environment and what the bond issuer.
                       
                      So as PCLive states, if you hold a bond to maturity, assuming there is no credit risk for your issuer, you will receive the face value and all coupon payments over the life of the bond. The problem with rising interest rates is that the yield to maturity that you are receiving from your bond may very well be below market interest rates and possibly inflation. This means that your asset which may be locked in long term and may carries some credit risk could be worth less than a money market share. 
                       
                      If one wants to sell the bond before maturity then one needs to re-price the bond downward to account for a higher yield to maturity that is needed in the new interest rate environment. This is why the NAV of bond funds fall when rates go up. To get the new higher return which is demanded by the market the sale price needs to go down because the coupon payment and face value of the bond are fixed.
                       
                      Bonds that are reissued in the new environment are priced in the initial auction to account for the new yield that is demanded by the market.
                       
                      The whole idea works for zero-coupon bonds too, you just don’t have to discount the coupon payments so it’s a relatively easier thing to figure out.

                    • Unknown Member

                      Deleted User
                      November 25, 2014 at 10:09 am

                       My point was only that there is little benefit to buying individual bond over just a low cost bond fund.  In fact, a bond fund is probably better than collecting individual bonds.
                      If rates rise, your individual bond will lose value equivalent to the how much interest income you are losing by being locked in at a lower rate.

                    • radgre305

                      Member
                      April 15, 2015 at 11:47 am

                      If you believe in efficient market theory then the bond funds already have the impending interest rate increase priced in. What you are suggesting is essentially trying to market time the bond market. I doubt the billionaire bond fund managers are unaware upcoming interest rate changes. To think we know more than Wall Street about appropriate stock and bond pricing is ridiculous.

                      My advice is the ignore the talking heads and go vanguard stock and bond index funds. Save as much as you can and let it grow and a retire early.

    • nipple3

      Member
      November 24, 2014 at 9:01 pm

      Quote from macrophallus

      My biggest financial regret so far:  Paying off my house.
      Sounds crazy I know, but I paid it off in 2 years. Should have keep that cheap money in the market or alternative investments and would be richer today.  I guess reducing debt is always a good thing, but mortgage debt is different. There are a lot of laws on the book protecting you, tax deductions, and it is probably the only chance most people will have to gain access to relatively cheap and large amount of credit.  Proper use of debt instruments can help one get wealthy faster. 
      Hopefully, someone out there will benefit from this message.

       
      This may not be a bad thing in the long run.  The dollar has rallied and I bet the value of your free cash flow is more than the appreciation in your house over the last few years. Depending when you paid off your house you may  have done so with dollars worth less than now.  Once the housing market recovers you have the equity to get some cash.

  • reuven

    Member
    August 16, 2014 at 6:18 pm

    nobody can easily beat the stock market every year.  In fact even the best investors have years where they lag.  It requires an enormous amount of background knowledge, time and hard work. You have many advantages over the big firms and they have many advantages over you. Nobody will hand you a statistically significant market beating strategy for free.  You will have to find it, test it, and then implement it.  I wish you luck if you think that an acquintance has handed you the golden goose to superior returns. Let us know how it works out after expenses in a year or two. 

    • Unknown Member

      Deleted User
      August 16, 2014 at 6:34 pm

      Personal connections are powerful, in this world it is who you know, not what you know.
       

      • btomba_77

        Member
        November 6, 2014 at 12:48 pm

        Just doing my annual rebalancing to get back to target asset allocation.
         
        This year I am moving — in baby steps — toward a less aggressive allocation based on my advancing age.
         
        I am moving to 10% fixed income in a couple of bond funds.  Now I’ll be 90% stocks 10% bonds.      
         
         Plan to continue to increase my fixed income exposure over the coming years, but it’s not without a bit of hesitation.  The urge to stay fully invested in stocks is strong in this one.

        • Unknown Member

          Deleted User
          November 6, 2014 at 8:47 pm

          This is a terrible time to buy bonds. Interest rates have no place to go but up. 
          IF you don’t need the money for 7 to 10 years why buy bonds?
          I own no bonds and hopefully never will. 100% stock portfolio and will hopefully never sell a security in my lifetime.

          • Unknown Member

            Deleted User
            November 6, 2014 at 9:44 pm

            was wondering – do you guys solicit help from a finance guy (one-time fee) to look over your portfolio and help rebalance? thanks to advice from here I fired my financial advisor 2 months ago and my portfolio and money mgt have gotten a real boost. by just having my own eyes on the dashboard I’ve been able to squirrel away more, without the constant leak to the middleman.

            • btomba_77

              Member
              November 6, 2014 at 9:53 pm

              I actually tend to agree with Macro … it [i]might[/i] be a really bad time to buy bonds.   I originally told myself that I would start getting toward a more traditional asset allocation after the stock market market rebounded.
               
              But then I just held off and held off.
               
              Now I start to think I might have a shorter time horizon than I had anticipated and need to smooth it out a bit … another big crash could set off my retirement … so I ever-so-slowly become an old man with my portfolio.
               

              • Unknown Member

                Deleted User
                November 6, 2014 at 10:12 pm

                Dergon:
                 
                You aren’t becoming a market timer, are you?
                 
                That’s supposed to be very bad.
                 

                • btomba_77

                  Member
                  November 7, 2014 at 6:06 am

                  Quote from Dr.Sardonicus

                  Dergon:

                  You aren’t becoming a market timer, are you?

                  That’s supposed to be very bad.

                  Nope.  Just normal changes in asset allocation based on time horizon to retirement.    I will confess though that I have been delayed (not due to attempts at market timing, but due to lack of detailed forumla) in moving toward any fixed income.     
                   
                  Asset allocation is a very individualized thing, based not only on risk tolerance and time horizon but other factors.   One of the good things about radiology and my particular circumstance is the option to work part time rather than choosing full retirement.   That small income stream could be relied upon during a severe market downturn to prevent chewing too deeply into principal until it recovers.      I could still get fired or disabled … so there is always other risk.
                   
                  But having some component of lower risk asset classes (I’ll probably be age – 30-35% or so) to smooth it out a bit is a tolerable end result for me.

                  • btomba_77

                    Member
                    November 24, 2014 at 9:04 am

                    [link=http://online.barrons.com/articles/a-stock-fund-report-card-1415382997]http://online.barrons.com…report-card-1415382997[/link]
                     
                    Still more data leaning toward index funds.
                     

                    [b]Bank of America finds that 82% of active managers are lagging the indexes in 2014. [/b][/h2]  
                    [h4][/h4] Last month performance weighed on the year-to-date resultsso far this year just 18% of active managers are ahead of the benchmark, the weakest YTD print seen in 2014, and if the year ended today this would be the lowest hit rate we have seen in at least a decade. The average fund now lags the market by 2ppt;  

                     

                    • khodadadi_babak89

                      Member
                      November 24, 2014 at 11:04 am

                      I think that 75-80% is about the historical average.
                       
                      That was what Motley fool preached for years. 
                       
                      Then something happened – it may have been around the crash of ’01 – They started to sound like every other charlatan with their come – ons. They started selling advice, and the information about the weaknesses of stock picking and market timing disappeared.
                       
                      Liked them better before

                    • btomba_77

                      Member
                      November 24, 2014 at 5:23 pm

                      Motley Fool jumped the shark for sure.    I think they looked for a way to monetize more and started being shills for the industry.
                       
                       
                      I actually blocked them from my FB feed a while back.
                       
                       

          • nipple3

            Member
            November 24, 2014 at 8:06 pm

            Quote from macrophallus

             
            In response to Dergon
            This is a terrible time to buy bonds. Interest rates have no place to go but up. 
            IF you don’t need the money for 7 to 10 years why buy bonds? 

             

            Individual bonds of a company that will survive until held to maturity are a relatively safe investment. Return does not change if interest rates go up.  You calculate your returns at the outset (based on the interest rate of the bond, the price you pay, and the face value of the bond) and that is what you get at maturity. A basket of bonds (fund) on the other hand is prone to changes in interest rates, short term bonds less than long term bonds from what I read.
            I am slowly moving into bonds as described above and by Dergon because at my age the return [size=”4″]of[/size] my capital is becoming just as, if not more important than the return [size=”4″]on[/size] my capital.
             
             

  • briankn58gmail.com

    Member
    November 24, 2014 at 12:23 pm

    I’ve made nearly a decade’s worth of income just from buying/ reselling real estate here (sf/bay area). Having said that, I don’t think it’s the wisest strategy and took a lot of luck. and if I’m right I think it’s a good time to move into safer bets

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