Attn: Pharmacists Question about Investments

[eleanor_rigby]

Approximately what percentage of your income do you put into investments? Most of the pharmacists I've spoken with have given me a range from 30-40%. Do you pay some finance guru to crunch the numbers and make decisions for you if you're investing in stocks, mutual funds, etc.?

---

Members don't see this ad.

 

[pharmaz88]

I can't speak to what % of income RPh's funnel into investments, but having seen enough financially-naive recent pharm grads get taken advantage of by a local 'financial advisor', I offer two bits of advice:

1. Take the time to learn how to invest on your own. You REALLY do NOT need a financial advisor. However, if you insist on using one, make sure that he/she is fee-based, and not commission-based! Sure, $150/hr may seem like a rip-off for someone's advice, but that's better than 'free' financial advice where you're getting pushed into less-than-optimal investment vehicles, just so your advisor can make a fat commission off of you.

2. Run away from anyone trying to sell you on variable annuities or any type of investment wrapped in life-insurance. They'll make them sound like great deals, but the couple of percentage points you give up yearly in fees will translate to being tens to hundreds of thousands of dollars behind when you retire. ...save the annuities for when you're old and gray and are looking for a constant source of income.

 

[All4MyDaughter]

I can't speak to what % of income RPh's funnel into investments, but having seen enough financially-naive recent pharm grads get taken advantage of by a local 'financial advisor', I offer two bits of advice:

1. Take the time to learn how to invest on your own. You REALLY do NOT need a financial advisor. However, if you insist on using one, make sure that he/she is fee-based, and not commission-based! Sure, $150/hr may seem like a rip-off for someone's advice, but that's better than 'free' financial advice where you're getting pushed into less-than-optimal investment vehicles, just so your advisor can make a fat commission off of you.

2. Run away from anyone trying to sell you on variable annuities or any type of investment wrapped in life-insurance. They'll make them sound like great deals, but the couple of percentage points you give up yearly in fees will translate to being tens to hundreds of thousands of dollars behind when you retire. ...save the annuities for when you're old and gray and are looking for a constant source of income.

Good advice.

Life insurance is not an investment. It's just insurance. All anyone needs is term life insurance and the amount needed is variable. We have a lot because we have a young child who would need years of care if anything were to happen to us. We buy group term through my husband's work and it is cheap.

We have my husband's 401-K, my retirement account from my old career (not contributing to it currently) and a Roth IRA. We also have and Educational Savings Account for our daughter. Any cash gifts we receive for her go into that.

 

[dr of rx]

I was taught 20% of your pre-tax income is the number to shoot for. Invest heavily while you are young.

 

[Farmercyst]

Not a pharmacist (yet), but I do the 6% 401K that my employer has a 50% match on. I don't have spare money to funnel into investments from my salary, but I invested the proceeds from the sale of my condo and without a financial advisor have made 22% in the last 6 months. I'm not saying I'm a saavy investor. It's been a lot of study and a little bit of luck. But ditto on not needing a financial advisor. Once I get out, depending on how much I have to take out in loans, I'm hoping to invest 25-30%, plus any 401k that gets matched.

 

[eleanor_rigby]

are you using an online broker?

 

[arkanaspharmacy]

I am in a personal finance course at UAMS pharmacy school. The two best books my prof recommends is:
1. The Automatic Millionaire by David Bach
2. The Everything Personal Finance in Your 20s & 30s Book by Debby Fowles

I just finished the complete financial guide for couples by Larry Burkett. I feel very wise after reading it b/c I learned so much from things like interest to very unwise investments. He also has several other books of which I own three of them. I use a personal financial consultant through Morgan Stanley. She has helped me to double my portfolio in 8 years. There is some benefit to paying for the advice. I just pay it through commission fees.

 

[Farmercyst]

are you using an online broker?

Yeah. I do general stuff through one brokerage company and Roth IRA on another.