Finance and Farmacy

[Dr Wario]

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Greetings to all thee Pharmers out there in happy drug land, and to those aspiring pharmettes. I removed my magical lurker cloak to acknowledge the fairly commonly held opinion on the SDA forums that pharmacy is a profession in a state of great flux at the moment. I too could pour many glasses of aged whine to the conversation, but instead I attempt to offer a musing that may help our situation.

Something I have noticed throughout my professional education in pharmacy is that students are generally quite intelligent, but severely lack a particular life skill that, I believe, to be a major determent to all of us. The skill to which I am referring is finance. Now I know some of the members on this board are well versed in the art of using money, but let me speak to those of you who the education system has failed in this regard. Like it or not, money is the single most significant driver of our professional lives and in this spirit allow me to offer you a new golden rule for your consideration, "He whom has the gold, makes the rules."

Joking aside, why is it that such highly trained professionals coming out of 6+ years of intense education have no idea what a 401(k) is or the difference between a roth and traditional IRA? These things matter, and every day, like it or not, we must bow to their masters. CVS can run their company like they do because they hold the financial lives of their employees hostage, imagine if their employees held the financial life of CVS hostage how different the company would be.

So I ask all of you, help your fellow professional by sharing your financial knowledge, make pharmacy a good place to work again. Face the reality that money does hold power over you, educate yourselves and concur it. Money does not buy happiness, however it frees up a person's time to pursue happiness...so let's get happy for once.

DW

 

[Dr Wario]

Let me start the conversation by offering my story. Pharmacy has provided me with an abundance of gifts, please do not take my words as those of gloating, but of inspiration.

I am 26 years old 1.5 years out of pharmacy school working for a chain (the so-called chain from hell if you must know) but already I feel absolutely blessed that I was given the opportunity to get into the profession. My family comes from a long line of rail workers, my parents being the first generation to pursue higher education. Lucky for me they did, during their time it was actually much better to acquire a mill job paying the equivalent of $25/hr and forget about wasting time and money in college. For most of their lives they were excessively poor, but they crawled their way into the professional arena, just when it began to take off and all of the high paying mill jobs went to China and India. Even during their poorest times, they managed to save enough money to purchase a modest duplex home, one unit for them to live in and one unit to rent out. They also managed to put some money away for their son's education, and by the time he was eighteen, were able to fund his seven year path to pharmacy completely.

As I said I am 26, but being blessed with the kindness of my parents and with the financial lessons bestowed upon me, own a very beautiful home that is only a few years from being paid off, a nice retirement portfolio, and even investment real estate. Most importantly, however, I am only seven years away from complete financial freedom, at which point a miraculous thing happens...I hold power over my employer instead of them over me.

I know not many of you will have been bestowed with the gifts given to me by my parents, but imagine if more of us could be financially free and finally have pharmacists dictate the profession of pharmacy instead of business major managers. Please, if you like, share your story or financial advice for practicing or soon-to-be pharmacists. After all, in many respects, we are all in this together.

 

[SkiPharmer]

No offense dude.........but I really dont care to take money advice from someone who had their mommy and daddy pay for their entire undergrad and pharmacy school...............next thread!

 

[Dr Wario]

I am not asking you to take my money advice, I am asking people to learn about money for themselves, and possibly to have forum members share their knowledge with eachother.

 

[SkiPharmer]

I wanna know how fast are other people paying down student loans. My wife and I both pharmacists and we each had $150k.......now we are down to $123k each and I graduated in 2008 and she graduated in 2009. We pay a total of $4500 to our loans (I wanna increase that to $5,000 a month) and hope to have them done in 5 years............what is everyone else doing? She works for WAGS and I work for SUPERVALU and I do PRN at a hospital. We have lives too....go to Mexico couple times a year and go skiing in Colorado about 3 times a year (hitting up Breck, Keystone and the Basin on Tuesday!). We each bring home about $138k......I just HATE having these student loans!

 

[WVUPharm2007]

I wanna know how fast are other people paying down student loans. My wife and I both pharmacists and we each had $150k.......now we are down to $123k each and I graduated in 2008 and she graduated in 2009. We pay a total of $4500 to our loans (I wanna increase that to $5,000 a month) and hope to have them done in 5 years............what is everyone else doing? She works for WAGS and I work for SUPERVALU and I do PRN at a hospital. We have lives too....go to Mexico couple times a year and go skiing in Colorado about 3 times a year (hitting up Breck, Keystone and the Basin on Tuesday!). We each bring home about $138k......I just HATE having these student loans!

ASAP. I plan on sending the direct loans bank up to $3k a month just on my salary. I hope to have it paid off within 3 years. If my wife gets a job...we'll have it knocked out in a year and a half, easy. Then, debt free, I'll save for a year and buy a house half-cash...if she can find a job and we are making almost $250k combined...man...I'll be able to put myself in a nice position, fast. I'm living as if only I will be making money, though. Once the loans are done, and I've got a house to pay a smallish mortgage on, I'll begin heavier investments. But pay that loan off...think of it as a guaranteed return on investment of whatever your APR is. That is where ALL of my financial focus is right now. Live on the cheap...continue driving my Ford Taurus...pay those off ASAP...

 

[Dr Wario]

If I may, to those of you who have student loans or home mortgages out there, what are your interest rates and returns? My home is currently on a mortgage for 165,000 (purchased for 285,000) with a rate of 3% on a 5 year ARM.

p.s. I was able to earn enough money throughout my life/education that I would have been able to pay for pharmacy school myself without parental assistance. I would not exactly recommend this to everyone however because it entailed working many 60 hour weeks and not being able to enjoy the brief breaks given from school.

 

[hckyplyr]

If I may, to those of you who have student loans or home mortgages out there, what are your interest rates and returns? My home is currently on a mortgage for 165,000 (purchased for 285,000) with a rate of 3% on a 5 year ARM.

p.s. I was able to earn enough money throughout my life/education that I would have been able to pay for pharmacy school myself without parental assistance. I would not exactly recommend this to everyone however because it entailed working many 60 hour weeks and not being able to enjoy the brief breaks given from school.

So, your essentially saying that you had enough money saved to pay for your undergrad and pharmacy school, but you let your parents pay for it instead? Also, what job "working 60 hour weeks for a BRIEF break" made you enough money to pay off undergrad and pharmacy school? I dont buy it....I think you were just some spoiled kid, who was lucky enough to have your parents support you financially your entire academic life, then you graduate pharmacy school with no debt, a great income, and now believe that your financial success is due to your "financial wisdom." hahaha please.... Oh, and if you use the word "bestowed" one more time I'm going to puke.

 

[Mentis]

So what is everyone's student loan APR? If the APR is as high as 5-7%, the best investment is probably to pay it off ASAP. However, if you can consolidate below 5%, it may make more sense to invest elsewhere. Though for this and next year while the economy is recovering it will be hard to find anything over 5% return anywhere without significant risk.

 

[gambit78]

We have lives too....go to Mexico couple times a year and go skiing in Colorado about 3 times a year (hitting up Breck, Keystone and the Basin on Tuesday!).

Are you flipping kidding me? Your total annual income is 238,000 and you aren't paying down the debt? Coming from Dave Ramsey disciple here.

 

[SkiPharmer]

Are you flipping kidding me? Your total annual income is 238,000 and you aren't paying down the debt? Coming from Dave Ramsey disciple here.

I am not sure if you didn't read my whole post or what, but we are paying $4,500 a month to our student loans..........at that rate they will be done in 5 years

 

[Dr Wario]

So, your essentially saying that you had enough money saved to pay for your undergrad and pharmacy school, but you let your parents pay for it instead? Also, what job "working 60 hour weeks for a BRIEF break" made you enough money to pay off undergrad and pharmacy school? I dont buy it....I think you were just some spoiled kid, who was lucky enough to have your parents support you financially your entire academic life, then you graduate pharmacy school with no debt, a great income, and now believe that your financial success is due to your "financial wisdom." hahaha please.... Oh, and if you use the word "bestowed" one more time I'm going to puke.

Just because you cannot conceive of it being done does not make something impossible. From the age of seven, and possibly before, I was ingrained with the knowledge of the power of compound interest. Every single penny I earned, mowing grass, shoveling snow etc was "invested" with my father who would use the money to pay down the loans on his rental properties giving me a rate = the mortgage - tax deduction - 0.5%, this would usually net me about 3-4%, and yes it was very little money $100-200 but I was seven years old and had a large amount of time to let it grow. By the age of 16, I purchased my first rental property, 1/2 a duplex for 20,000 down payment, by 20 the rental was paid off and I had purchased my second. During this time, I worked as pharmacy technician 20 hrs/wk during school and 50-60 hrs/wk during breaks, which was also invested. In addition to attempting to make as much money as possible, I spent virtually nothing. I was not the kid that went and bought a burger/soda after school and never did I use a vending machine to buy junkfood. Entertainment was walking in the woods, reading whatever free books I could find and playing inexpensive games with friends. When my parents did want to buy me a gift/toy, I told them I'd rather they save the money and invest.

As to allowing my parents to pay for my education, that was their decision, but I once inquired how I was to pay them back. They told me to reciprocate by sending my children to school and giving them a better life than what they were able to give me.

I know this sounds very unusual for a child, and I am not saying the way I did things was right, but this is the way I did it. Now I'm 26 y/o with a net worth of about 1/3 million, honestly not that impressive for the gifts "bestowed" unto myself by my parents. I hope all of you young pharmacists out there can do much better than I have, for you will be the generation that solidifies pharmacy into a job, or a profession we can be proud of again.

 

[fullmetalphrm]

Just because you cannot conceive of it being done does not make something impossible. From the age of seven, and possibly before, I was ingrained with the knowledge of the power of compound interest. Every single penny I earned, mowing grass, shoveling snow etc was "invested" with my father who would use the money to pay down the loans on his rental properties giving me a rate = the mortgage - tax deduction - 0.5%, this would usually net me about 3-4%, and yes it was very little money $100-200 but I was seven years old and had a large amount of time to let it grow. By the age of 16, I purchased my first rental property, 1/2 a duplex for 20,000 down payment, by 20 the rental was paid off and I had purchased my second. During this time, I worked as pharmacy technician 20 hrs/wk during school and 50-60 hrs/wk during breaks, which was also invested. In addition to attempting to make as much money as possible, I spent virtually nothing. I was not the kid that went and bought a burger/soda after school and never did I use a vending machine to buy junkfood. Entertainment was walking in the woods, reading whatever free books I could find and playing inexpensive games with friends. When my parents did want to buy me a gift/toy, I told them I'd rather they save the money and invest.

As to allowing my parents to pay for my education, that was their decision, but I once inquired how I was to pay them back. They told me to reciprocate by sending my children to school and giving them a better life than what they were able to give me.

I know this sounds very unusual for a child, and I am not saying the way I did things was right, but this is the way I did it. Now I'm 26 y/o with a net worth of about 1/3 million, honestly not that impressive for the gifts "bestowed" unto myself by my parents. I hope all of you young pharmacists out there can do much better than I have, for you will be the generation that solidifies pharmacy into a job, or a profession we can be proud of again.

This may be envy speaking, but considering they apparently paid for your graduate level education how could you ever possibly upstage that?

I really don't see why you're flaunting around so much, considering your upbringing was far from average and most of us actually have little things called expenses that we will undoubtedly need stipends for from financial aid and can't tuck every cent we make into long term investment opportunities. Your base message to 'save and spend wisely' is honorable, but quite honestly it seems like you're just bragging or trolling for whatever reason.

 

[gotdrugs]

Your base message to 'save and spend wisely' is honorable, but quite honestly it seems like you're just bragging or trolling for whatever reason.

This

 

[awval999]

Are you flipping kidding me? Your total annual income is 238,000 and you aren't paying down the debt? Coming from Dave Ramsey disciple here.

Just FYI Dave Ramsey isn't the word of God. While him and Suze Orman make excellent points; we are only guarenteed today, and he very much so deserves to take a few holidays to Mexico with his young wife.

 

[hckyplyr]

Just because you cannot conceive of it being done does not make something impossible. From the age of seven, and possibly before, I was ingrained with the knowledge of the power of compound interest. Every single penny I earned, mowing grass, shoveling snow etc was "invested" with my father who would use the money to pay down the loans on his rental properties giving me a rate = the mortgage - tax deduction - 0.5%, this would usually net me about 3-4%, and yes it was very little money $100-200 but I was seven years old and had a large amount of time to let it grow. By the age of 16, I purchased my first rental property, 1/2 a duplex for 20,000 down payment, by 20 the rental was paid off and I had purchased my second. During this time, I worked as pharmacy technician 20 hrs/wk during school and 50-60 hrs/wk during breaks, which was also invested. In addition to attempting to make as much money as possible, I spent virtually nothing. I was not the kid that went and bought a burger/soda after school and never did I use a vending machine to buy junkfood. Entertainment was walking in the woods, reading whatever free books I could find and playing inexpensive games with friends. When my parents did want to buy me a gift/toy, I told them I'd rather they save the money and invest.

As to allowing my parents to pay for my education, that was their decision, but I once inquired how I was to pay them back. They told me to reciprocate by sending my children to school and giving them a better life than what they were able to give me.

I know this sounds very unusual for a child, and I am not saying the way I did things was right, but this is the way I did it. Now I'm 26 y/o with a net worth of about 1/3 million, honestly not that impressive for the gifts "bestowed" unto myself by my parents. I hope all of you young pharmacists out there can do much better than I have, for you will be the generation that solidifies pharmacy into a job, or a profession we can be proud of again.

I'm well aware of compounding interest. You had $100-$200 at age 7, and let it grow for 9 years until 16 at your fathers 3-4% rate? I'm sorry, but $150 at a 4% rate over 9 years probably is around $1000, not $20,000. So where were you getting this 50%+ return? Not the market, too young. Also, in many states, you must be atleast 18 years of age to purchase a home. In addition, how do you pay off a rental property in 4 years, even with $20,000 down, was the house worth $50,000? Your story seems made up to me, I think you probably must have read "Rich Dad Poor Dad," and dreamed of doing those things.
Where are you investing your retirement/stock funds at this time? I invest heavily in the market, and would like to get some ideas from you.....

 

[type b pharmD]

I'm well aware of compounding interest. You had $100-$200 at age 7, and let it grow for 9 years until 16 at your fathers 3-4% rate? I'm sorry, but $150 at a 4% rate over 9 years probably is around $1000, not $20,000. So where were you getting this 50%+ return? Not the market, too young. Also, in many states, you must be atleast 18 years of age to purchase a home. In addition, how do you pay off a rental property in 4 years, even with $20,000 down, was the house worth $50,000? Your story seems made up to me, I think you probably must have read "Rich Dad Poor Dad," and dreamed of doing those things.
Where are you investing your retirement/stock funds at this time? I invest heavily in the market, and would like to get some ideas from you.....

the story is a little bit unclear

 

[Dr Wario]

I'm well aware of compounding interest. You had $100-$200 at age 7, and let it grow for 9 years until 16 at your fathers 3-4% rate? I'm sorry, but $150 at a 4% rate over 9 years probably is around $1000, not $20,000. So where were you getting this 50%+ return? Not the market, too young. Also, in many states, you must be atleast 18 years of age to purchase a home. In addition, how do you pay off a rental property in 4 years, even with $20,000 down, was the house worth $50,000? Your story seems made up to me, I think you probably must have read "Rich Dad Poor Dad," and dreamed of doing those things.
Where are you investing your retirement/stock funds at this time? I invest heavily in the market, and would like to get some ideas from you.....

I didn't really want to make this thread about me, admittedly I perhaps went about it the wrong way. As to the account started around age seven with 100-200 dollars, additional money was of course allocated to it, I sadly did not see 50% return per year though that would have been nice. My first rental is near Pittsburgh PA and indeed being only half of a duplex (father owned the other half) was worth approx 50,000 at the time. As for named ownership of the property, my rentals are titled in my father's name because of tax deductions due to depreciation.

Now please, I'd much rather hear financial advice from other members, what have you done to save money? What have you done in the past that has made you a decent return?

 

[FarscapeGirl]

I didn't really want to make this thread about me, admittedly I perhaps went about it the wrong way. As to the account started around age seven with 100-200 dollars, additional money was of course allocated to it, I sadly did not see 50% return per year though that would have been nice. My first rental is near Pittsburgh PA and indeed being only half of a duplex (father owned the other half) was worth approx 50,000 at the time. As for named ownership of the property, my rentals are titled in my father's name because of tax deductions due to depreciation.

Now please, I'd much rather hear financial advice from other members, what have you done to save money? What have you done in the past that has made you a decent return?

You're asking us for financial advice? After bragging how wonderfully you've done and stating that you only need a few more years to be financially independent? Oh, and stating that most pharmacists have no idea how to manage their finances.

Here's my advice: don't let anything bad happen to you. Don't get sick. Don't lose your job. Pray the stock market/global market doesn't crash. And hope you get to enjoy your life at some point.

 

[hckyplyr]

I didn't really want to make this thread about me, admittedly I perhaps went about it the wrong way. As to the account started around age seven with 100-200 dollars, additional money was of course allocated to it, I sadly did not see 50% return per year though that would have been nice. My first rental is near Pittsburgh PA and indeed being only half of a duplex (father owned the other half) was worth approx 50,000 at the time. As for named ownership of the property, my rentals are titled in my father's name because of tax deductions due to depreciation.

Now please, I'd much rather hear financial advice from other members, what have you done to save money? What have you done in the past that has made you a decent return?

You did a good job of answering my questions in a professional manner, unlike most people that would get defensive and caustic. As far as myself? I really enjoy investing in the market. I have read every investing book I can get my hands on. My sister is a nurse practitioner and I handle her retirement portfolio, as well as my own. I no longer use mutual/index funds because of the expense ratios (even if they are low), and low relative growth compared to individual stocks. I won't use a financial advisor because they are a dime a dozen, and I can do better myself.
I had my best success investing back during the crash in 2008. I bought gold (gld), Caterpillar, Citi, Bank of America, and Ford. I've sold those, and recently I've picked up Coinstar (after the 35% correction), amazon, citi, huntington bankshares, Uranium Resources. At this time, I'm shooting more towards growth. Once things start calming down in the market, I'll buy the high dividend payers with great track records. For ex. NLY (15% dividend), Verizon (6%), and a couple others. Anyone else want to share some of their portfolios?

 

[tongiecc]

You did a good job of answering my questions in a professional manner, unlike most people that would get defensive and caustic. As far as myself? I really enjoy investing in the market. I have read every investing book I can get my hands on. My sister is a nurse practitioner and I handle her retirement portfolio, as well as my own. I no longer use mutual/index funds because of the expense ratios (even if they are low), and low relative growth compared to individual stocks. I won't use a financial advisor because they are a dime a dozen, and I can do better myself.
I had my best success investing back during the crash in 2008. I bought gold (gld), Caterpillar, Citi, Bank of America, and Ford. I've sold those, and recently I've picked up Coinstar (after the 35% correction), amazon, citi, huntington bankshares, Uranium Resources. At this time, I'm shooting more towards growth. Once things start calming down in the market, I'll buy the high dividend payers with great track records. For ex. NLY (15% dividend), Verizon (6%), and a couple others. Anyone else want to share some of their portfolios?

This. Finally some form of a utilizable discussion. We all know that our profession is being hit hard by the overproliferation of schools and that many people don't like working at CVS while others do; I personally would like to see more of threads where we can actually help each other ascertain knowledge whether it be clinical discussion or finance/life ideas. On that note I like your reply, I too had considerable success during the crash, particularly with things purchased in 2009, for instance I bought a bunch of AINV for a DCA of 2.24 just to catch its .26 dividend (a 10% gain) which had already been declared, waited for the bounce after the ex-date dropoff and it was upgraded 2 times in a 4 month period and went up to 7-8 buck range, sold some then and some in 11-12 dollar range all while collecting a nice dividend payout. On NLY, they just announced a big share offering priced at 17.30, so expect it to be beat down for a bit, it does have a good history of paying out divi's but like other mREITS it can be highly variable (ie it has not paid out 14+% but a variable divi based on FFO and if you look back to the late 90s you can see that at times it doesn't even crack 8%) **Also PLEASE keep in mind that with REITs, MLPs, BDCs, etc that you must pay ORDINARY income tax on these and not capital gains, thus they are only a true 14% yield if you have them in tax sheltered accounts (IRA, etc), otherwise if you make a six figure income you'd better subtract 30-40% from the yield in taxes paid (more like 25-30% more than other divi payers as cap gains would still require ~15% taxation). But I believe you are spot on with the idea of collecting dividends, as ~40+% of the gains in the S&P over the past 70 years have been attributed to dividends; reinvest those and the # would be even higher.
I want to preface this with the fact that I think things are way too pricey right now and somewhat overbought in a general overall sense, so I DO NOT want anyone to think this is a buy list without first researching things on their own (FYI never buy something on a tip without reading the 10K/Q on something and formulating an opinion on your OWN) but since you showed some of your picks I'll show you some of mine as well:
Tax deferred/sheltered accounts: LINE, VNR, BKCC, PSEC, AINV, PNNT, RSO (just bought RSO real cheap and letting it ride on the house $$ as I already recollected initial investment from divis, in other words a more risky bet so don't just go out and buy), several others....
Non tax deffered: T, VZ, XOM, COP, ATO, DUK, etc
these are again the dividend payers, there are a few for cap appreciation but will save for another time. Anyways, would be great to hear back from you on this 🙂
Maybe Z and Mikey want to chime in here, Z always seems to have some good investing ideas and money management suggestions. Z, I sure hope your CPU isn't broken b/c I haven't seen u on here in a few days.

 

[tongiecc]

Also, I find it quite amusing all the similarities of the individuals I find on here. For instance the OP states he has a few rental properties and so does his parents, and I have seen several other people on here post the same; and look at the military threads on here, there are quite a few pharmacists looking at going into a branch of the service, what would seem like a disproportionately large # compared to how many people are on here, there are many others as well. Its interesting to me b/c I too have several rental properties (7) and my parents have at least 50+ houses. It's funny b/c so many people glorify rental properties as such a great deal, but you'd need at least 20-25 houses paid off to live on an equivalent salary to what a pharmacist can make esp with OT/extra shifts. (ie lets say you can get 1000/month on a 3br/2ba home and your property tax is 2400/yr and ins is 1200/yr, then add in at least 10% holding for repairs/vacancy months and it would take you at least that many houses to make that kind of bank, then you have to pay self employment tax on all of it if its your only job, and it makes it very hard to move around the country; however it can be a great little addition to what you already have for other investments especially if you have another job that can provide you with good cash flow). Anyway, sorry about that little rant I just find it interesting about the perceptions of how great rental must be by the general public (not saying anyone on here said anything like that) and how much of an odd coincidence it is that there are so many similarities here on SDN.

 

[CUpharmD2013]

I would approve of this thread if I had any clue what you guys are talking about. 😕

 

[Momus]

Just finish your school first lol... pay down your 6% interest debt like a mad man and worry about this later >_>

 

[hckyplyr]

This. Finally some form of a utilizable discussion. We all know that our profession is being hit hard by the overproliferation of schools and that many people don't like working at CVS while others do; I personally would like to see more of threads where we can actually help each other ascertain knowledge whether it be clinical discussion or finance/life ideas. On that note I like your reply, I too had considerable success during the crash, particularly with things purchased in 2009, for instance I bought a bunch of AINV for a DCA of 2.24 just to catch its .26 dividend (a 10% gain) which had already been declared, waited for the bounce after the ex-date dropoff and it was upgraded 2 times in a 4 month period and went up to 7-8 buck range, sold some then and some in 11-12 dollar range all while collecting a nice dividend payout. On NLY, they just announced a big share offering priced at 17.30, so expect it to be beat down for a bit, it does have a good history of paying out divi's but like other mREITS it can be highly variable (ie it has not paid out 14+% but a variable divi based on FFO and if you look back to the late 90s you can see that at times it doesn't even crack 8%) **Also PLEASE keep in mind that with REITs, MLPs, BDCs, etc that you must pay ORDINARY income tax on these and not capital gains, thus they are only a true 14% yield if you have them in tax sheltered accounts (IRA, etc), otherwise if you make a six figure income you'd better subtract 30-40% from the yield in taxes paid (more like 25-30% more than other divi payers as cap gains would still require ~15% taxation). But I believe you are spot on with the idea of collecting dividends, as ~40+% of the gains in the S&P over the past 70 years have been attributed to dividends; reinvest those and the # would be even higher.
I want to preface this with the fact that I think things are way too pricey right now and somewhat overbought in a general overall sense, so I DO NOT want anyone to think this is a buy list without first researching things on their own (FYI never buy something on a tip without reading the 10K/Q on something and formulating an opinion on your OWN) but since you showed some of your picks I'll show you some of mine as well:
Tax deferred/sheltered accounts: LINE, VNR, BKCC, PSEC, AINV, PNNT, RSO (just bought RSO real cheap and letting it ride on the house $$ as I already recollected initial investment from divis, in other words a more risky bet so don't just go out and buy), several others....
Non tax deffered: T, VZ, XOM, COP, ATO, DUK, etc
these are again the dividend payers, there are a few for cap appreciation but will save for another time. Anyways, would be great to hear back from you on this 🙂
Maybe Z and Mikey want to chime in here, Z always seems to have some good investing ideas and money management suggestions. Z, I sure hope your CPU isn't broken b/c I haven't seen u on here in a few days.

My understanding of MLP's in tax sheltered accounts, is that they are not made for IRA/retirement accounts. I thought if the UBTI income earned per year is more than $1000, you have to file a K1, and jump through multiple hoops to file your return, and it costs an arm and a leg. I noticed you had LINE, which I believe is Linn Energy? This is treated as an MLP, and you have it is your IRA. Maybe you know more about this than I do, but if you can explain, please do. Is UBTI (unrelated business taxable income) the profit you make per year? If so, $1000/year is not much, considering you would most likely have a large portion of shares of it, in your retirement. I googled something real quick, and this is what I got, there are better sites explaining it though.
http://www.dividenddetective.com/mlp_tax_considerations.htm
Also, I'm in school, so I definately don't have to be worrying about being in a higher tax bracket for a while. ha. But, as long as I'm school, I'm trying to make the most I can out of my retirement/savings and hopefully pay off my loans with that money in the next few years.

 

[chubsley2000]

The details of my life are quite inconsequential. Very well, where do I begin? My father was a relentlessly self-improving boulangerie owner from Belgium with low-grade narcolepsy and a penchant for buggery. My mother was a fifteen-year-old French prostitute named Chloë with webbed feet. My father would womanize, he would drink. He would make outrageous claims like he invented the question mark. Sometimes he would accuse chestnuts of being lazy. The sort of general malaise that only the genius possess and the insane lament. My childhood was typical. Summers in Rangoon, luge lessons. In the spring we'd make meat helmets. When I was insolent I was placed in a burlap bag and beaten with reeds--pretty standard really.[FONT=Arial, Helvetica, Sans Serif]
.

 

[type b pharmD]

The details of my life are quite inconsequential. Very well, where do I begin? My father was a relentlessly self-improving boulangerie owner from Belgium with low-grade narcolepsy and a penchant for buggery. My mother was a fifteen-year-old French prostitute named Chloë with webbed feet. My father would womanize, he would drink. He would make outrageous claims like he invented the question mark. Sometimes he would accuse chestnuts of being lazy. The sort of general malaise that only the genius possess and the insane lament. My childhood was typical. Summers in Rangoon, luge lessons. In the spring we'd make meat helmets. When I was insolent I was placed in a burlap bag and beaten with reeds--pretty standard really.[FONT=Arial, Helvetica, Sans Serif]
.

👍👍👍👍

 

[Dr Wario]

Here is a situation that perhaps members can help me with (I get many differing opinions). I currently make 140k+ per year, already max out 401k, employee stock purchase plan (15% discount on company stock) and put 5k into a non-deductable IRA for roth conversion. I recently purchased my primary residence for 285k, recently refinanced for a 3% 5 year ARM, own 168k.

Here is my problem, I have about 3k extra per month after all expenses and the original plan was to plunk the money against the home loan, however it seems like I could do much better than a 3% return. I'm not an extremely aggressive investor at this point because I want to secure my "comfortable" money first. What investments could I make that would grant greater than 3% return, that would be available for withdraw in 5 years and have fairly little risk? Or should I just continue my current schedule, pay off my house in 3 years and then make more aggressive investments with the added peace of mind?

 

[tongiecc]

My understanding of MLP's in tax sheltered accounts, is that they are not made for IRA/retirement accounts. I thought if the UBTI income earned per year is more than $1000, you have to file a K1, and jump through multiple hoops to file your return, and it costs an arm and a leg. I noticed you had LINE, which I believe is Linn Energy? This is treated as an MLP, and you have it is your IRA. Maybe you know more about this than I do, but if you can explain, please do. Is UBTI (unrelated business taxable income) the profit you make per year? If so, $1000/year is not much, considering you would most likely have a large portion of shares of it, in your retirement. I googled something real quick, and this is what I got, there are better sites explaining it though.
http://www.dividenddetective.com/mlp_tax_considerations.htm
Also, I'm in school, so I definately don't have to be worrying about being in a higher tax bracket for a while. ha. But, as long as I'm school, I'm trying to make the most I can out of my retirement/savings and hopefully pay off my loans with that money in the next few years.

Thats right, sorry overgeneralization on my part when throwing the message together, MLPs are different. I do not make more the 1k in divi's on VNR/LINE per year.

 

[Pharmacy Kid]

The details of my life are quite inconsequential. Very well, where do I begin? My father was a relentlessly self-improving boulangerie owner from Belgium with low-grade narcolepsy and a penchant for buggery. My mother was a fifteen-year-old French prostitute named Chloë with webbed feet. My father would womanize, he would drink. He would make outrageous claims like he invented the question mark. Sometimes he would accuse chestnuts of being lazy. The sort of general malaise that only the genius possess and the insane lament. My childhood was typical. Summers in Rangoon, luge lessons. In the spring we'd make meat helmets. When I was insolent I was placed in a burlap bag and beaten with reeds--pretty standard really.[FONT=Arial, Helvetica, Sans Serif]
.

Wait, we're half-brothers??

 

[chubsley2000]

Wait, we're half-brothers??

So the rumors are true. It's me, your half-brother Renaldo

 

[WVUPharm2007]

Well...I am the biological grandson of the Exhalted Grand Cyclops of the Cleveland KKK. He had an affair with a girl that was quarter-black. And 15 years old. She would eventually die of a heroin overdose and he of acute alcohol poisoning. But not before they accidently popped my mother out. My mother was then shipped down the river as an infant to West Virginia where she was adopted by a local hilljack family. She would go on to birth me and later run away from her husband to marry her marijuana dealer. Who eventually expanded his market to cocaine and crack-cocaine. Upon which he became addicted to crack himself and almost burned our dilapidated house down in a drunken/high stupor, oh, I don't know, 5 or 6 times.
....

None of that is made up or imagined. 👍

Dr Evil ain't got **** on me, son.

 

[twiga]

Dr. Wario, I'm happy for you 🙂. You've done very well.

Unfortunately, in this day and age, you are not the norm. As much as you would like to persuade kids these days otherwise, they are not going to heed your advice about finance anymore than they would their own mother or father.

I am a little surprised that your extra 3k a month is not going into "aggressive risk stocks". Given what you have said so far, you can afford to lose that extra 3k easily and the upside would be a lot better than 3%. I am not a trader but think Tech/Big Oil/Alt. Energy.

Good luck and hope you find your number, dude.

 

[Dr Wario]

Dr. Wario, I'm happy for you 🙂. You've done very well.

Unfortunately, in this day and age, you are not the norm. As much as you would like to persuade kids these days otherwise, they are not going to heed your advice about finance anymore than they would their own mother or father.

I am a little surprised that your extra 3k a month is not going into "aggressive risk stocks". Given what you have said so far, you can afford to lose that extra 3k easily and the upside would be a lot better than 3%. I am not a trader but think Tech/Big Oil/Alt. Energy.

Good luck and hope you find your number, dude.

Thank you Twiga, and yes I am probably being too conservative but I honestly see bad things in this country's economic future. I don't expect people to take my financial advice, however I'd love for new pharmacists to realize that a good financial education will net them more $/hr than working in a pharmacy ever will. Perhaps this is something the APhA could actually do for pharmacists (instead of just being a massive waste of time and money) put together financial literacy classes specifically geared toward pharmacists. Financially strong pharmacists would do much more to empower the profession than they have ever done.

 

[Jabberwocky12]

Thank you Twiga, and yes I am probably being too conservative but I honestly see bad things in this country's economic future. I don't expect people to take my financial advice, however I'd love for new pharmacists to realize that a good financial education will net them more $/hr than working in a pharmacy ever will. Perhaps this is something the APhA could actually do for pharmacists (instead of just being a massive waste of time and money) put together financial literacy classes specifically geared toward pharmacists. Financially strong pharmacists would do much more to empower the profession than they have ever done.

What classes would exactly teach this? Do they do it in accounting or finance majors? MBAs? Seriously, in a university where would they teach these kinds of things? I've been interested but don't know where to start and what is relevant since most of the classes are for businesses and don't pertain to many personal finances. I know google can be your friend but it can be really hard to establish a foundation first to build off from, know what I mean?

Even some personal finance classes at community colleges really just teach you how to budget, know that money coming in should be more than money going out, planning, etc. which is common knowledge for pharmacists (one would hope.) They don't cover much with investing or things of that nature.

 

[twiga]

Jabber, if your biggest gap in knowledge is the part about "investing" than the only way to learn is by getting out there. Sort of like when you'll go out to a nursing home for a site visit during pharmacy school.

Check out ww*.gorillatrades.c*m for example. The tutorials there are pretty cool and give good basic info on trading. Then, open up an account with a brokerage for a couple hundred dollars and experiment with one stock. Well worth it.

Good luck.

 

[Jabberwocky12]

Jabber, if your biggest gap in knowledge is the part about "investing" than the only way to learn is by getting out there. Sort of like when you'll go out to a nursing home for a site visit during pharmacy school.

Check out ww*.gorillatrades.c*m for example. The tutorials there are pretty cool and give good basic info on trading. Then, open up an account with a brokerage for a couple hundred dollars and experiment with one stock. Well worth it.

Good luck.

Well the whole thing is new to me. I've never encountered any of it. IRA vs Roth IRA, 401k vs 403b (I think that's what it is) vs investing or doing stocks vs bonds, etc and etc and etc.

None of that was ever mentioned before in any of my schooling thus far.

 

[hckyplyr]

Well the whole thing is new to me. I've never encountered any of it. IRA vs Roth IRA, 401k vs 403b (I think that's what it is) vs investing or doing stocks vs bonds, etc and etc and etc.

None of that was ever mentioned before in any of my schooling thus far.

I wasn't "taught" anything. I taught myself everything by reading books, articles, paying attention to cnbc, thestreet, and finance.google on a daily basis. After awhile, it becomes fun. When I was 21-22, I was reading all kinds of real estate books about rentals, short sales, foreclosures, flipping, etc. Basically all the books that claim to make you rich/millionaire by doing these easy steps..haha. I've decided stocks are the way to go for me, atleast for now. I have no time or inclination to deal with renters who refuse to pay rent but yet you can't evict because of laws, people who trash rental properties,maintenance, late night calls about leaky roofs, attorneys, property taxes, etc. etc. etc. My father owned rental property, and I had a chance to see first hand how many problems there are. Stocks are pretty liquid for me. I can buy and sell one in a minute. I don't have to worry about any of that other stuff. But, I guess it's all about what your more interested in doing.

 

[FarscapeGirl]

What classes would exactly teach this? Do they do it in accounting or finance majors? MBAs? Seriously, in a university where would they teach these kinds of things? I've been interested but don't know where to start and what is relevant since most of the classes are for businesses and don't pertain to many personal finances. I know google can be your friend but it can be really hard to establish a foundation first to build off from, know what I mean?

Even some personal finance classes at community colleges really just teach you how to budget, know that money coming in should be more than money going out, planning, etc. which is common knowledge for pharmacists (one would hope.) They don't cover much with investing or things of that nature.

I actually saw a CE program for pharmacists on how to manage your financial life. Thought it was a weird thing to be able to get CE on, but it's a great idea.

I don't know if I have the patience to get involved in stocks, but I do want to make sure my husband and I make good headway saving for retirement once I'm out of school. I have a little saved from summer jobs in college, but I'll definitely need a lot more.

I've had good luck with getting financial info from The Motley Fool. I bought a financial workbook from them awhile ago, and it'll come in handy when we are trying to pay down student loans and save for retirement.

 

[fullmetalphrm]

I wasn't "taught" anything. I taught myself everything by reading books, articles, paying attention to cnbc, thestreet, and finance.google on a daily basis. After awhile, it becomes fun. When I was 21-22, I was reading all kinds of real estate books about rentals, short sales, foreclosures, flipping, etc. Basically all the books that claim to make you rich/millionaire by doing these easy steps..haha. I've decided stocks are the way to go for me, atleast for now. I have no time or inclination to deal with renters who refuse to pay rent but yet you can't evict because of laws, people who trash rental properties,maintenance, late night calls about leaky roofs, attorneys, property taxes, etc. etc. etc. My father owned rental property, and I had a chance to see first hand how many problems there are. Stocks are pretty liquid for me. I can buy and sell one in a minute. I don't have to worry about any of that other stuff. But, I guess it's all about what your more interested in doing.

Most times when I browse the business section in bookstores I hit brick walls very quickly. The problem I think is that most educational business books don't teach strategies, vocabulary, terms, etc but rather are just saying "YOU'RE NOT RICH BECAUSE YOU DON'T THINK YOU CAN BE. YOU CAN WORK 3 HOURS A WEEK AND GO ON VACATIONS IF YOU HAVE THE MINDSET".

So, in short, do you suggest any financial or investment 'Bibles'? Would actual business textbooks serve well? Becoming financially savvy is something I want to do, it's just hard to find sources of information that aren't bogged down with hollow promises, etc.

 

[Jabberwocky12]

Most times when I browse the business section in bookstores I hit brick walls very quickly. The problem I think is that most educational business books don't teach strategies, vocabulary, terms, etc but rather are just saying "YOU'RE NOT RICH BECAUSE YOU DON'T THINK YOU CAN BE. YOU CAN WORK 3 HOURS A WEEK AND GO ON VACATIONS IF YOU HAVE THE MINDSET".

So, in short, do you suggest any financial or investment 'Bibles'? Would actual business textbooks serve well? Becoming financially savvy is something I want to do, it's just hard to find sources of information that aren't bogged down with hollow promises, etc.

👍

Same issue here. Hence asking if there is a certain major or school profession best for this. I'll take some classes after pharm school, it'll help me with paying back loans anyway...

"ENVISION THE WEALTH!"

A lot of people make the money they say you can make by selling the book you're reading. That always annoyed me; they make money after the fact, not before.

 

[fullmetalphrm]

👍
A lot of people make the money they say you can make by selling the book you're reading. That always annoyed me; they make money after the fact, not before.

I find it concerning that people actually buy the books, there's so many of them as well it's like there's a whole sub-genre of "BECOME THE WEALTH" books. Just by flipping through one you see that it's just a series of anecdotes that are cute, but probably won't actually help you in making money at all.

I'm actually tempted to just go talk to all the professors in the business department here before I leave my undergrad, maybe they'll suggest something worthwhile and I'll report any results.

 

[Dr Wario]

I would suggest that before you start worrying about stocks, bonds, real estate, 401(k)s etc., learn about how to create your financial plan. The first, and most important, part of any financial plan is to determine your individual goals. Sometimes this is difficult because you have to learn financial basics before you can adequately define your goals. For example, just saying you want a lot of money is not a defined financial goal. How much money do you want? how much money can you live with having? how much are you willing to risk to get it? Another question you must ask yourself is, why do you want money? This may seem like a very simple question, but it is one not so easy to ascertain by the average person. The standard answers of, I want a new corvette or a new house are fine, but these are not perpetual things, they will only give happiness for a short period of time hence the saying "money cannot buy happiness". I challenge you to think of deeper and lasting reasons to acquire wealth, do you want to provide your children with a better life than you had? Do you want to not have financial stress? Perhaps your reason is akin to mine, as for me money can be exchanged for time. Time to be doing the things you want to do instead of the things forced upon you to do in the pursuit of money.

The next step I would encourage is to learn how to budget. This does not just mean cutting back on your daily latte, it also entails learning why it is important to budget. Learn about interest rates and how compounding is a major lever in your financial life. Do not just learn formulas and theory, find real examples and feel what these terms really mean. Talk to wealthy people and ask them how they did it, talk to struggling people and learn what hinders them.

Once you have a handle on the second step, you can begin moving into the third. The third step is to learn about investment vehicles and other financial products. Here is where you research the function of 401ks, IRAs, life insurance etc. During this step I suggest you pay particular attention to taxation. Like it or not, taxes will be the single largest expense most of us incur. Structuring finances well to minimize taxes can have massive rewards, likewise the opposite can have crippling punishments. This step is probably the most time consuming and frustrating for most people, this is an aspect of education sorely neglected in common schooling. Understand though, that through all of the difficulty the time spent in this area will have greater financial impact than time spent working in the highest paying job you can imagine. Remember, you can never work for money as quickly as money can work for you.

Finally, just do it. Here is the step where you put your planning and education into action. You know what a low cap index fund is, now you learn about which ones perform the best. You buy a rental property and actually manage it (making many mistakes along the way) and it feels like you can do anything. Your job no longer limits you because at the end of the day you know that you can survive, and that gives you great power.

The best of luck to all of you and let me leave you with a quick quote I picked up from rich dad. "Money can make you rich and money can make you poor, it is how you see it and what you do with it that determines the difference."

 

[Benelli]

If you have 3,000 a month leftover after your bills, I would invest it into something that is going to gain a lot of value. Right now, gold and silver are coming off 5-6x, and 1.5x increases of value over five years. So if you had about $20,000 in silver, thats a huge profit margin. The reason I would invest in silver is because it is becoming more and more common in our electronics conduit, just like gold. They are two extremely resilient metals and have always maintained their value well. Also, investing even 1 ounce of gold a month (purchased) over a year brings you to 12 ounces. 12 ounces at 1500 an ounce is 18k before any increase in value, and again, the profits could be huge.

 

[Momus]

What investments could I make that would grant greater than 3% return, that would be available for withdraw in 5 years and have fairly little risk? Or should I just continue my current schedule, pay off my house in 3 years and then make more aggressive investments with the added peace of mind?

For ultra conservative play:
-Invest in VFSTX - they do CD and money market return around 3%+
-To hedge against down market - if you are afraid of the market HSGFX (they lag when market rallies, but superior during market downturn)

Some risks:
You'll do much better than 3% this year if you just follow S&P 500 ETF

+Index ETF =
-VTI
-IVV

+Actively managed average 10% return =
-FAIRX
-FPACX
-YACKX

+Overseas (12% return):
-Index: VEIEX, EEM (ETF)
-Actively managed : HIINX, LZOEX, HLEMX

+Muni bond (Tax free - but keep in mind interest might go up soon, therefore reducing bond prices):
-HYD (ETF) - 6.1% yield equivalent to 9.4% (if you are in the highest tax bracket)
-MUH (close end fund) - 7.2% yield equivalent to 11.1% (if you are in the highest tax bracket)