Money Advice

[dentjusay]

Hey y'all I just want to ask if there are any suggestions you have for how to wisely use/invest/save money. I'm applying to med school this year and looking at some future medical school debt, but hoping to learn things I could potentially do even now or in the future too. Any books you found useful or tips from your own experiences would be mighty helpful!

 

Some things I've started so far have been opening a high-interest savings account, light investing with Robinhood, and just tracking income/expenses with a monthly budget excel sheet I made.

[Kevin Slater]

One simple, easy to read book to cover the basics is The Elements of Investing. http://www.amazon.com/The-Elements-Investing-Burton-Malkiel/dp/0470528494

 

Kevin Slater

[+ JEC]

Do NOT run up credit cards. If you can't pay cash, you can't afford it.

[+ JEC]

Consider hiring a financial planner. It might feel contradictory to spend money on someone when you don't have a lot of money, but any good financial planner should earn you many times more than they cost. We hired one last year for the first time. Had we had done that 30 years ago...I might be retired now

[+ Topseed]

Dentjusay, you're off to a fine start. Getting yourself into the mode of weekly/monthly savings is a big step.Congrats. Having school debt does NOT preclude you from starting to save. Open a IRA account to start your retirement saving plan. Yes, this may seem like a long, long way off, but that's the point: time is on your side. Whomever invented that wonderful concept called "compound interest" should have a statue erected in his/her honor.

[+ FrankR]

Hey y'all I just want to ask if there are any suggestions you have for how to wisely use/invest/save money. I'm applying to med school this year and looking at some future medical school debt, but hoping to learn things I could potentially do even now or in the future too. Any books you found useful or tips from your own experiences would be mighty helpful!

 

Some things I've started so far have been opening a high-interest savings account, light investing with Robinhood, and just tracking income/expenses with a monthly budget excel sheet I made.

In my experience, most people don’t pay attention to their personal finance - they just coast through life basically paycheck to paycheck. So in that regard you are ahead in the game!

 

1) Make the time, every two weeks to punch some numbers into a spreadsheet -one side of the sheet is what money you have coming in, the other side of the sheet is where your money is going. Know your spending.

2) Do keep your expenses down as much as possible.

3) Do keep a reasonable emergency fund for unexpected expenses - a high yield savings account is great for this purpose.

4) Dont invest money you will need in the next few years - keep it in a high yield savings account instead as a market crash would require some recovery time you may not have in the short term.

5) Do go to med school - but apply for scholarships and try to stay out of debt. Study hard and keep your grades up as high as you possibly can. This will help you gain more scholarships and support.

6) Do find a mentor - preferable an old rich guy/gal that has some wisdom to share

7) Get Dave Ramsey’s “The Total Money Makeover” from your local library and read it. It is great for budgeting and savings goals (I dont like his investing approach - see next item)

8) Listen to the “moneyguy” podcast or youtube channel - great advice for investing

 

Good luck to you!

[MassageAdam]

Hey y'all I just want to ask if there are any suggestions you have for how to wisely use/invest/save money. I'm applying to med school this year and looking at some future medical school debt, but hoping to learn things I could potentially do even now or in the future too. Any books you found useful or tips from your own experiences would be mighty helpful!

 

Some things I've started so far have been opening a high-interest savings account, light investing with Robinhood, and just tracking income/expenses with a monthly budget excel sheet I made.

I have been reading Suze Orman and listening to her bi weekly podcast for about a year and a half now and it's put me on a great track. I'm saving money and investing it well. I finally feel like I got a handle on it and feeling secure financially.

[kingsley88]

A few years ago a friend recommended I read JL Collins's book "Simple Path to Wealth" and I wish it was published years ago when I started working at age 17. It's the 'lazy' way of investing and something you may be interested in so you may put your energy/focus more on your studies in med school and residency. If you don't have time to read his book, go to his blog or watch some of his interviews on youtube.

 

Also listen to Dave Ramsey from time to time on youtube as a way to help avoid getting yourself into credit card debt.

[+ BenjaminNicholas]

Lots of great advice here.

 

I can only add that, yes, credit cards can be a slippery slope, but if you can pay them off monthly (or carry a balance using cards with 0% APR), they can serve well to utilize points systems, cashback and perks.

 

It's a game, but one that can pay off greatly if you play it well.

Edited May 12, 2021 by Benjamin_Nicholas

[Guest]

With a 4-year time-frame, it's risky to invest in the stock market. A bond fund would be safer. Treasury bills if you want to be really safe. Once you're ready to invest long-term (10 years+), you should have most of the money in the stock market, in mutual funds and ETF's with as low a fee as possible, and as broad-based as possible (i.e. tied to the S&P 500, low-cap funds, and international market funds). Whatever you do, the most important advice has already been given: avoid credit card debt like the plague. Once you have most of your money in the stock market, you can diversify some more with a small amount in commodities and real estate investment trusts.

When you're ready to buy mutual funds, it's very important you look for funds with the lowest expenses. Unmanaged funds tied to indeces such as the S&P 500 are usually the wisest, and they usually do better over time than managed funds in any case.

Edited May 12, 2021 by Unicorn

[marylander1940]

Consider hiring a financial planner. It might feel contradictory to spend money on someone when you don't have a lot of money, but any good financial planner should earn you many times more than they cost. We hired one last year for the first time. Had we had done that 30 years ago...I might be retired now

 

Actually DO use CC but pay them off in order to get good credit.

[lonely_john]

Do NOT run up credit cards. If you can't pay cash, you can't afford it.

Actually DO use CC but pay them off in order to get good credit.

These 2 pieces of advice combined:

Use Credit Cards with a Cash budget in mind.

Pay what you CAN afford, and immediately pay the Credit Card.

[lonely_john]

Also, invest in low-cost Index Funds.

Diversify investments in 2 or 3 financial institutions that offer attractive packages.

Some people are making big gains with cryptocurrencies but to me, it seems too artificial. Proceed with caution.

[+ Topseed]

Rising interest rates over the next several years (and yes, I'm willing to make that prediction) will be rough on equities and bonds. In short: "return-free risk" is quite possibly what those markets will offer in the near term.

I'd advise getting in the habit of saving, buy short-term CD's (and yes, the rates are nearly non-existent, but at least they're positive, and it's unlikely you'll experience as sizable a loss as equities and bonds may experience), and bide your time. As rates go up, put your money in intermediate term bonds, corporate preferred stocks, or other equities that pay a reasonable (and secure) dividend. At your young age, slow and steady wins the race.

[+ friendofsheila]

Increase your financial literacy BEFORE giving money to a financial adviser.

[+ sam.fitzpatrick]

Some things I've started so far have been opening a high-interest savings account, light investing with Robinhood, and just tracking income/expenses with a monthly budget excel sheet I made.

 

This is great - make sure that your monthly budget includes a line item for savings with a regular contribution to your savings. Every time your baseline income increases, increase your savings contribution by that amount.

 

Dentjusay, you're off to a fine start. Getting yourself into the mode of weekly/monthly savings is a big step.Congrats. Having school debt does NOT preclude you from starting to save. Open a IRA account to start your retirement saving plan. Yes, this may seem like a long, long way off, but that's the point: time is on your side. Whomever invented that wonderful concept called "compound interest" should have a statue erected in his/her honor.

 

Yes, Yes, Yes - - I personally have split my savings dollars between savings for emergency and bigger items (cars, trips, residence) and retirement funds for years.

[top_guy_atl]

Some things I've started so far have been opening a high-interest savings account,

 

Keep in mind that if your interest rate is less than the rate of inflation (and these days, it probably is), you're losing money.

[down_to_business]

Great start, you're well on your way.

 

If I could give any advice/ what worked for me:

 

Investing:

 

Treat investing for your future as a monthly expense item.. (pay the rent, pay yourself)

 

Keep it simple- unless you really want to spend the time and have a really active hands on approach... try something like the couch potato portfolio which is so easy and very low cost

 

• The couch-potato portfolio is an indexing strategy that requires only annual monitoring and rebalancing but offers significant returns in the long run.
  
• Couch potato portfolios invest equally in two assets, common stocks, and bonds (via index funds or ETFs), and maintain this 50/50 split year in and year out.
  
• In the couch potato portfolio, the equities allow for growth, while the debt instruments provide protection against market volatility.
  
• Couch potato portfolios decline less than the market in down periods but also appreciate less in up markets.
  

Diversify if you are going to pick individual stocks instead of picking low cost index funds.

 

 

Savings:

Keep 3-6 months cash on hand in an online savings bank or credit union that pays higher interest than the traditional bank.

Always participate in your employers 401K plans at least up to the $ level they match. Always fund your Roth IRA to the allowable level.

Consider using a "bucket" approach (for example).

 

Spending:

Don't rack up credit card debt. I use credit but don't carry over monthly balances.

Do you really need a new car every 2 years? Consider a Honda before buying that BMW. Can you be happy in that nice $1500 a month apartment, or do you really need to rent that $3000 a month condo? Do you really need to eat out every night or will 2-3 times a week suffice?

[topunderachiever]

I'm new here but when did these forums become WebMD or Morgan Stanley?

[JayCeeKy]

I have lots of relatives who are are docs/dentists/vets. Medical School debts are usually huge and normal - don't get overwhelmed - banks love ya cause you're a good risk b/c med students are normally pretty stable and not spendthrifts. On the other side of graduation I would suggest asking other docs/residents for a referral to a fiduciary financial advisor who can set you up on a long-term plan for savings/investment so that you can live a life of hard work and above-average social-economic status (i.e. you and your family will be comfortable for the rest of your life). Normally, I would suggest Vanguard/Fidelity for investment strategies, but the income of docs are so spectacular that you probably need a personal financial advisor.

 

Just remember: the hardest part of medical school is getting in - and don't get upset if it doesn't happen on the first attempt - and there are other options such of Schools of Osteopathic Medicine and medical schools in the Caribbean and elsewhere. And, don't feel less of a doc if your degree comes from one of those schools - cause it's more than smarts that determine which school you get in.

[+ FrankR]

I'm new here but when did these forums become WebMD or Morgan Stanley?

[+ bashful]

It's a game, but one that can pay off greatly if you play it well.

 

Very true. Spent five days once in mid January on Miami Beach Royal palm, and flew F class, all on points and miles. Next goal is Grand Wailea in Maui.

 

thinking of staying at Four Seasons one more time, and put bill on Hilton Amx to use points at Grand Wailea later.

Edited May 15, 2021 by bashful

[dbar123]

I wish I had put more money into my Roth IRA when I was younger and had a lower income. Now that I’m retired my income is higher than it was when I made a lot of that money. Taxes are likely to go up in the future and all that Roth money grows tax free.

 

Interest rates are at all time lows and there has never been a better time to finance things like houses and education. If medicine is your calling then go for it.

 

Don’t beat yourself up trying to maximize return on every dollar- diversify your risk by trying lots of different things. Some will be winners and some will be losers...that’s life. Worry more about your happiness than your bank account

[+ BenjaminNicholas]

I'm new here but when did these forums become WebMD or Morgan Stanley?

 

You're new here, so we'll cut you a tiny bit of slack. Don't get too used to it

 

These forums have always been diverse. The Lounge is for anything and everything.

[dentjusay]

Thanks for your input everyone! I definitely need to increase my financial literacy as this feels like a whole new world I'm learning about. 👍🏼