Financial Strategies/Plans During and After DMD/DDS Schools?

[yappy]

Just wanted to throw this out there: Great vid with Peter Thiel on student loan debt bubble.

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[omgroll]

That's what I'm trying to figure out how to pay less tax

I live in Canada so we have a different system but hey you are already 1 step ahead of me. You pay less tax b/c you live in the states!

 

[dieanotherday]

Just wanted to throw this out there: Great vid with Peter Thiel on student loan debt bubble.

like we shouldn't question paying into social security when its collapse has been predicted for the very near future
at least even if im getting ripped off of my education i will get something out of it
cant say the same for SSI
all of my attempts to search and figure out ways in which people can lower their taxable incomes has all lead to the same conclusion

401k's, IRA's, HSA's, stocks, housing/property/land, college education fund, gifting $$ to your children, and all of this has a fixed amount that you can actually put in

it seems like people dont have the option to completely save 100% of their money for retirement without getting taxed on it, at least some big portion of it will still be taxable income

reading this over people might ask how i would be able to completely save any money that i would make, well having a successful working spouse definitely helps

i definitely don't plan on living like a dentist, but when I'm old and slowly approaching disability it would be nice to make plans to live out your remaining years approaching death in comfort of not having to do chores when you physically aren't able to do them anymore

 

[CleverThought]

Okay here's what I got out of my husband (he told me this all last night, so it might be missing some details) If you have specific questions please ask and I will pass them on to him!

He recommends that you invest a minimum of 15% of your gross income, but the more the better. Perhaps he has a biased view as this is his job, but he recommends getting a financial advisor above using something like Vanguard. You want to go in day 1 that you are making money and make a plan based on how long you want to work and how much money per year you want to draw on. Depending on the age you want to retire your advisor will help you decide where to put money considering the age you can draw it and the taxes on it. For example, if you intend to retire around the traditional 65 age, you might put more money in retirement specific account. If you are retiring at a younger age, it might be in your best interest to put your money in the types of investments that you don't have a penalty to drawing on.

First and foremost, he says max out your work retirement accounts, which depending on the situation may be a 401k, roth ira, or traditional ira. Most likely the later. It is very important that you max it out!

So, now that you've maxed out retirement specific funds you need a place to put the difference to make up a 15%. H says that there is no secret formula to this. A lot depends again on the risk you want to take on and how much you want at the end (and how long you have to get to that amount). As far as some of the options he mentioned

• Mutual Funds - according to my husband you will want to do a mixture of different types (growth stock, international, etc)
• REIT - (Real Estate Investment Trust) he says this is a really good option if you want to invest in real estate, but don't want the hassle of being a landlord or flipping houses
• "Traditional Real Estate" - if you enjoy the idea of being a landlord and want to make some passive income. You can do this by buying rental properties, buying land and letting it appreciate, flipping houses, etc (although he recommends to invest the profit, don't just pocket it - but it's not a requirement). Make sure you make it a LLC
• 529 Savings Plan - Now, this isn't the investments that "benefit you" necessarily, but is still important. 529 is an education savings plan, that as a previous poster mentioned can even be started before you have a child. In addition, if your child(ren) don't use all the money in the fund it can be transferred to other children, such as future grandchildren, your other kids, nieces/nephews, and so on. It is very important to invest in your children's education. We all know first hand the costs to achieving a professional degree, and the likelihood of children of professionals becoming professionals is 14% greater than that of children without a professional parent - so start saving!

H also mentioned to look into estate planning immediately after you acquire assets (such as a practice or real estate), if you were to die suddenly (or even not) your financial advisor can help your family and beneficiary's avoid as much taxes and headaches as possible.

I feel like he told me way more, but I've forgotten. But please let me know if there are any other questions!

I'll make a separate post on what I have been doing and plan to do.

 

[dieanotherday]

Okay here's what I got out of my husband (he told me this all last night, so it might be missing some details) If you have specific questions please ask and I will pass them on to him!

He recommends that you invest a minimum of 15% of your gross income, but the more the better. Perhaps he has a biased view as this is his job, but he recommends getting a financial advisor above using something like Vanguard. You want to go in day 1 that you are making money and make a plan based on how long you want to work and how much money per year you want to draw on. Depending on the age you want to retire your advisor will help you decide where to put money considering the age you can draw it and the taxes on it. For example, if you intend to retire around the traditional 65 age, you might put more money in retirement specific account. If you are retiring at a younger age, it might be in your best interest to put your money in the types of investments that you don't have a penalty to drawing on.

First and foremost, he says max out your work retirement accounts, which depending on the situation may be a 401k, roth ira, or traditional ira. Most likely the later. It is very important that you max it out!

So, now that you've maxed out retirement specific funds you need a place to put the difference to make up a 15%. H says that there is no secret formula to this. A lot depends again on the risk you want to take on and how much you want at the end (and how long you have to get to that amount). As far as some of the options he mentioned

• Mutual Funds - according to my husband you will want to do a mixture of different types (growth stock, international, etc)
• REIT - (Real Estate Investment Trust) he says this is a really good option if you want to invest in real estate, but don't want the hassle of being a landlord or flipping houses
• "Traditional Real Estate" - if you enjoy the idea of being a landlord and want to make some passive income. You can do this by buying rental properties, buying land and letting it appreciate, flipping houses, etc (although he recommends to invest the profit, don't just pocket it - but it's not a requirement). Make sure you make it a LLC
• 529 Savings Plan - Now, this isn't the investments that "benefit you" necessarily, but is still important. 529 is an education savings plan, that as a previous poster mentioned can even be started before you have a child. In addition, if your child(ren) don't use all the money in the fund it can be transferred to other children, such as future grandchildren, your other kids, nieces/nephews, and so on. It is very important to invest in your children's education. We all know first hand the costs to achieving a professional degree, and the likelihood of children of professionals becoming professionals is 14% greater than that of children without a professional parent - so start saving!

H also mentioned to look into estate planning immediately after you acquire assets (such as a practice or real estate), if you were to die suddenly (or even not) your financial advisor can help your family and beneficiary's avoid as much taxes and headaches as possible.

I feel like he told me way more, but I've forgotten. But please let me know if there are any other questions!

I'll make a separate post on what I have been doing and plan to do.

is a financial adviser the same as a CPA or do they hold different degrees/certifications?
how often should one speak to a financial adviser
how much do they typically charge per hour?
are there financial advisers that are specialized/specific to small business owners vs general cpa?
right now my taxes are fairly simple using standard deductions so i only talk to my cpa come tax season

 

[Ferneezy]

Just wanted to throw this out there: Great vid with Peter Thiel on student loan debt bubble.

great clip. if thiel wasn't a billionaire i'd buy him an aged scotch just for this...instead of making him buy the first round. juiciest part is around the twelve minute mark

 

[dieanotherday]

not related but its hard to follow/listen to him in this clip
he likes to talk in circles and has a lot of awkward pausing with "uhh, umm's"

 

[CleverThought]

As far as what is my plan, I'm in a very fortunate and unique situation that I will be graduating dental school without any debt and no obligations with military or underserved areas.

So I have already been afforded an excellent start to my dental career.

I'm much like @Glimmer1991 in that I've been a classic pre-planner. I have no plans to specialize and might do a GPR, but I've got plans to hit the ground running. I am confident that DS will give me the skills to be a good dentist, it's the business sense that will make or break me. I've been reading tons of business books, scouring through DentalTown, listening to The Thriving Dentist Show podcasts, and making a running word document of practice ideas. I've been basically giving myself a business crash course and I plan to continue through dental school. The best advice my dentist gave me is to spend lots of time in the business office and learning insurance billing and codes and all the good stuff. So I plan to be the annoying student down there at all times.

As far as financially, as previously mentioned I'm married to a financial adviser, so I've got that covered whether I ask for advice or not. I've been personally investing since I was legally able to do so and been putting money in a 401k. It's not much, but even if I leave it and don't add it should grow to be something fairly decent. H and I will continue investing throughout our lives - our goal is to draw on ~120k a year in retirement (in today's money, inflation will make that more). We will have everything paid off, so that will be largely put towards travel and other fun things. Some years we will draw more, others less - but thats the goal for now. Who knows, it may change as the years go on.

Beyond investments, I plan to buy a practice shortly after school. I may associate for a few years, but the dentist I shadowed did a start up right after she graduated, so she is biased and highly recommends buying right away - so that's something I might consider. It all depends on how confident I am with my dentistry and business skills at the time. In the long term, I want to buy several practices in the general area and manage them. I might work a day a week in each, but will have an associate or two in each. I've been following a dentist on dental town who does this successfully, so once again, pending I have the business skills and the market to sustain this I would love to do something like this.

H and I also want to invest in rental and flipping real estate to generate extra income.

In short, I plan on busting my butt and getting the most out that dentistry has to offer. I honestly think the key to success lies in good business sense and ability. The skills will come, but the business mind needs to be exercised just as frequently.

 

[CleverThought]

is a financial adviser the same as a CPA or do they hold different degrees/certifications?
Nope, they are different. A financial advisor most likely studied finance in college and they hold different certifications. For example, my husband has the certifications that allow him to sell all types of investments (Stocks, bonds, etc) and another that lets him sell all types of insurances (life and health, mostly). Financial advisors handle wealth management and retirement planning for clients. They don't focus as much on the taxes, other than the tax penalties and drawing out money. Most high wealth people have both a CPA and a financial adviser
how often should one speak to a financial adviser
It depends on your financial needs (more often as you have more assets), but usually around 2 times a year.
how much do they typically charge per hour?
Many financial advisors are commission based, which varies based on what company they work for - although usually 0.75 - 1.5% of the assets. Some cases they may charge a flat fee if they are actively managing a portfolio for. This depends how much they are involved, but it can range from $3,000-$7,000/year, but it can be even more if you have a complex, high dollar portfolio
are there financial advisers that are specialized/specific to small business owners vs general cpa?
Some specialize, for example my husband tries to concentrate on estate planning and 529's. However, most all advisers handle retirement planning in addition to if they "specialize". In addition, some advisers will only take clients with a minimum net worth (such as, must have a $5 million dollar net worth). They are used to dealing with high earning clients, but be somewhat careful with that. In this area at least, people with high net worth's do include medical professionals, but here it is a majority of farmers - once you consider land and equipment they have a large net worth, however they don't tend to have the investment needs as a doctor or dentist. They learn towards more estate planning needs and some investing, whereas a dentist would want to focus on retirement savings. So, just because they work with high net worth clients, it doesn't mean they will meet your needs
right now my taxes are fairly simple using standard deductions so i only talk to my cpa come tax season

See answers above!

 

[gn4]

good ideas here

 

[HaverfoodsDDS]

Does anybody have any info on getting the ASDA BankAmerica Visa Card as a first credit card ?

 

[sjv]

Does anybody have any info on getting the ASDA BankAmerica Visa Card as a first credit card ?

Do you have any credit history? It is a Visa Signature card which requires a minimum $5000 credit limit so approval chance is slim if you have no history. Also, the benefits are the same as normal BankAmericard Cash Rewards card with the exception of some benefit to ASDA.

 

[HaverfoodsDDS]

Do you have any credit history? It is a Visa Signature card which requires a minimum $5000 credit limit so approval chance is slim if you have no history. Also, the benefits are the same as normal BankAmericard Cash Rewards card with the exception of some benefit to ASDA.

No I don't have any credit history - although I've had a Visa Black card under my parents account for about 5 years and they both have credit scores of 800+ (I don't think this matters to me in terms of getting a credit card right?). From what I've gathered here I should start building my credit history with a DiscoverIT card.....is there any others anybody else cares to recommend ?

 

[ktran17]

If you're an authorized user on a visa black card, you more than likely have sufficient credit history. However, even with a FICO over 760 it won't guarantee you a visa signature card because of your lack of income. A visa signature has no official credit-limit so its quite a tricky card to deal with for beginners.

Why don't you apply for the chase freedom or any other top rewards cards.
Amex blue, discover it, chase freedom, and boa rewards card are the top 4 rewards credit card requiring a fico of 720 minimum. (These four cards do not have annual minimum either)

Before you apply, you can request a fico score ( must pay if you want the real fico, not the credit union version) to check if you really do have credit =)

 

[sjv]

No I don't have any credit history - although I've had a Visa Black card under my parents account for about 5 years and they both have credit scores of 800+ (I don't think this matters to me in terms of getting a credit card right?). From what I've gathered here I should start building my credit history with a DiscoverIT card.....is there any others anybody else cares to recommend ?

First, you should pull your credit report, you get 1 from each of the 3 bureau's every 12 months: https://www.annualcreditreport.com/index.action Take a look to see if being an authorized user has contributed to your credit history.

DiscoverIT may not necessarily be the best card for you but is recommended because you are likely to get approved and it gives you a free FICO score each month.
Chase Freedom is nearly the same card minus the free FICO score.
If you purchase gas/groceries you could start here with BoA student card: https://www.bankofamerica.com/credit-cards/products/student-cash-back-credit-card.go (Essentially same as ASDA card but more likely to get approved since it is not a Visa Signature).
SallieMae is another Gas/Groceries card: https://www.salliemae.com/credit-cards/sallie-mae-card/
Citi's version of DiscoverIT/Chase Freedom: https://www.citi.com/credit-cards/c...credit-card&category=all-student-credit-cards
AMEX Gas/Groceries/Department Stores: https://www304.americanexpress.com/credit-card/blue-cash-everyday
Which bank do you have a relationship with? You may want to start there.

Also can monitor your credit with Credit Karma: https://www.creditkarma.com/, Credit Sesame: http://www.creditsesame.com/ or Quizzle: https://www.quizzle.com/.

 

[durden]

Try something like index funds. They outperform managed funds due to the low fees.



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[tandem7]

I highly recommend the American Express Fidelity Rewards Card. No annual fee and 2% cash back on everything--no limit. All the cash back goes into a fidelity account and you can either use it like cash, or if you're like me, just invest it in ETF funds. The money really adds up over time.

 

[dieanotherday]

I highly recommend the American Express Fidelity Rewards Card. No annual fee and 2% cash back on everything--no limit. All the cash back goes into a fidelity account and you can either use it like cash, or if you're like me, just invest it in ETF funds. The money really adds up over time.

plus you get 3% on costco purchases with an executive membership.

 

[tbond5]

I highly recommend the American Express Fidelity Rewards Card. No annual fee and 2% cash back on everything--no limit. All the cash back goes into a fidelity account and you can either use it like cash, or if you're like me, just invest it in ETF funds. The money really adds up over time.

only downside for me getting that card is that its American express. I'm looking at getting the visa version of this card.