1. Buy an index fund. Avoid 401ks like the plague. You'really subsidizing the Wall Street industry.
Don't believe me? I bet you 1% of your balance your 401k administrator can't or won't reveal your 401k fee (s).
Not quite feasible for most pharmacists who are employed and whose only preferred pre-tax vehicle is a 401k (or 403b).
ERISA requires plans to submit fee disclosures annually - I got mine a few months ago. Not like you have a choice, though... IRA limits are $5500/yr and you can't deduct unless you're not part of a qualified plan at work (most of us are).
2. IRA are acceptable, especially SEP IRAs, if self-employed. Max out with an a Vanguard index fund.
Yeah good luck unless you're self-employed (see above answer).
I'd actually make the argument that an individual 401k (aka i40k, aka solo 401k) is the superior product. A SEP IRA limits contributions to 25% of compensation (20% depending on your structure), so the break even is about $252k (accounting for SE taxes).
So for the average pharmacist who is employed and perhaps does consulting on the side, earning $30,000 self-employed, he/she gets to put away $18,000 + 20% of $30k ($6k) = $24,000 in a solo 401k vs. only (20% x 30k) = $6,000 via a SEP IRA.
Those with SEP IRA accounts can just open a solo 401k and utilize both -- I have friends that contribute the 20% profit sharing into a SEP and $18,000 personal contribution into the solo 401k. It's the same line item on the 1040 in aggregate anyway.
3. If you must, purchase a home cash, preferably an REO. Your monthly mortgage payment should be at least $400 less than what your property will earn in rent. If not you're probably paying too much.
Slim pickings in the REO market now, but generally good advice. I think people should buy houses systematically and not on emotion... emotion = you overpay.
4. Don't buy a car over 20k...mathematically, it won't hold enough residual value to justify the purchase. Again, cash only.
Agreed. Exception I think is you can do 0% financing over 5 years and set to auto-pay. I don't think I've ever paid interest for a car loan.
If yout must impress your friends, get new friends. Joking, kind of, but seriously sublease, rather than lease your new car. Taking over payments vs. paymens plus down payment is a better deal, without contract restriction.
For those that have it, look into just using Uber and/or car sharing -- it can be cheaper than owning/maintaining your own car.
5. Choose your spouse carefully. I've lost money chasing women, but never lost women chasing money, unless she had her own. Nuff said.
Lol. But half the fun is chasing women... at least put a stop date of 25 in there.
6. Invest 3% of your salary in your own education. Don't rest on your laurels after earning your degree. It's competitive out there, and this world economy demands that you're constantly developing new skills.
That's like $5000/yr on continuing education... look into MOOC's (like Coursera) which are free, codeacademy if you want to learn coding, and most employers have lots of internal CE/continuous training programs.
Don't forget to ask, many employers will invest in the right person additional training/certifications.
7. Throw away your television. If you must watch the game, personally visit a friend or make some new friends at a bar. Time is the one thing you cannot purchase with your salary. Spend it wisely.
#$@$ that. I'll spend more money at the bar anyway, over time (don't forget gas/etc...). TV's are cheap - $500 is like < a day's work for most of us.
Cut cable is more like it...but beware, sometimes it's more expensive to buy streaming separately.
Personally, I spend the $$ on the TV + high end cable package w/ DVR. It's cheaper to watch games on TV vs. my other option which is season tickets at the ballpark. Plus, with the DVR I can watch things when I want and fast forward through commercials (online streaming locks you in sometimes).
Besides, I'll save my season ticket money and spend the $$ for the postseason, which leads me to your next piece of advice...
8. Another shocker, make more memories than you buy more things. Nobody will care about your stuff at your funeral. Go travel. Take pictures. Leave work at home.
Yup. Agreed.
9. Spend twice as much to buy half as many. Your clothing should be made of quality materials. Cheap imitations always breadown. Go ahead and invest in the best brand.
Mostly yes...but don't confuse price for quality.
So you have to find a balance between spending and true investing.
