Graduating without debt

[nymedschoolfan]

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Hi, I'm going to med school debt free thanks to a very nice scholarship and was wondering what folks who are graduating with no debt do with their extra money? Is it suggested to start investing early?

 

[deleted936470]

 

[Modstopizdy]

There's kids starving in Africa, not sending them money is basically the same thing as murder according to experts. Fortunately, I have recently come into a large inheritance and will be able to solve the problem of hungry African kids once and for all. That's the good news. The bad news is that my international money transfer is being held up due to various factors I don't want to bore you with. Fortunately, I just need a few thousand dollars to straighten everything up and save those kids. If you send me $5k by the end of the week we can stop African poverty and save you from being a murderer. PM me for next steps.

 

[Tenk]

Home | White Coat Investor

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www.whitecoatinvestor.com

 

[Just Call Me Doc]

Focus on your retirement investments first. I'd recommend maxing out your Roth IRA contributions as much as you can (residency will most likely be your lowest income bracket for the rest of your life). You'll probably transition to a traditional IRA or 401K once you become an attending.

 

[wxman]

Dave Ramsey was very helpful to my entire family before medical school, during medical school, and now in residency. His tactics may be considered extreme by many people, but he changed our lives, and I'm glad neither my spouse nor I have a credit score. No more bowing down to the almighty FICO.

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[GreenDuck12]

Emergency fund first: to avoid relying on high interest loans and credit cards for unexpected expenses
Probably can’t do IRA due to not having an earned income
If no earned income, a brokerage account using low cost index funds or ETFs: check out vanguard, fidelity, schwab, etc
No need to shoot for the moon - invest according to your tolerance for market fluctuations and loss.
In the last month, sp500 lost 1/3 of its value in record time. Make sure any equities you have that you are able to stomach the rises and the falls and not sell in a panic.

 

[ReturnToMed]

I would go with what Greenduck said.
1. Emergency fund. 8-12 months of income (this is based upon how risk averse you are)
2. Investments (greater percentage towards higher yield asset classes ie more equities and less bonds
3. Look at opportunities to diversify your sources of income post medical school/residency

 

[nymedschoolfan]

View attachment 303864

There's kids starving in Africa, not sending them money is basically the same thing as murder according to experts. Fortunately, I have recently come into a large inheritance and will be able to solve the problem of hungry African kids once and for all. That's the good news. The bad news is that my international money transfer is being held up due to various factors I don't want to bore you with. Fortunately, I just need a few thousand dollars to straighten everything up and save those kids. If you send me $5k by the end of the week we can stop African poverty and save you from being a murderer. PM me for next steps.

Not gonna lie I was looking forward to these ****posts 😉

Home | White Coat Investor

Sick of feeling like you're being taken advantage of by the financial services industry just because you have a high income? Wondering what to do with your student loans or how to get a mortgage? Not sure how to buy disability insurance or how to invest your money? Here's a site written for...

www.whitecoatinvestor.com

Thanks!!! Very helpful site

 

[throwaway1000000]

How much do you have saved up? Throw it in a emergency fund for 6 months of expenses and throw the rest in a roth account.
Since you won't have any income in med school, a dollar saved is a dollar earned. Look to save as much as possible IF you are willing to make the sacrifices. Not all can.
Live with roommates, pay the least rent possible but optimize safety and comfort. If in-state, live with your parents.
Learn to cook. Should save you a lot.
Rent within walking distance to the hospital and don't buy a car.
That's pretty much all I can think of if you really want to lower your expenses. If you are able to follow all these things, you will be spending 10k-15k less than your classmates, which is about 40k-60k throughout med school. Most people don't save that kind of money in residency when they are earning an income.

 

[eduh]

I echo what @GreenDuck12 @ReturnToMed @Tenk and @throwaway1000000 said about investing. Money now is less work later.

I'll go against what @wxman about credit only because in certain cities you're FICO score is required to rent an apartment, no FICO no place to live (major cities: NYC, Chicago, Boston, LA, Seattle, etc) or you'll need someone to co-sign the lease.

I personally am lucky to have no debt from school. To add to the above: in residency you'll have less time so prioritize your personal needs and convenience. For me these are: living close to the hospital, cleaning lady 1-2x a month, good bed, black out curtains, gadgets that make my life easier/better (air fryer, rice cooker, back massager), costco & amazon prime memberships, using delivery services to save me time.

Make your life easier for you, value your time.

 

[ReturnToMed]

Since @eduh brought up credit score. I would recommend building credit and learning about how to use credit cards to save money. I got into personal credit card game and points/cash back to save money. There are some good youtube channels like AskSebby and Credit Shifu. Advice: Treat a credit card as if it's a debit card. Always pay your balance. Never buy what you can't afford.

 

[mmchick]

Would recommend this book to learn about investing.

Max out your retirement contributions as someone said. Start a personal portfolio (you don't need a financial advisor, it's a waste of money) via investing in equity-heavy (value or growth funds/ETFs, some mix of stocks based on your knowledge, international value funds) and low-side short/long-term bonds. Have anywhere from 3-9 months of emergency funds saved up based on your risk aversion and put a good little aside in immediate cash (CDs, savings, etc.).

Coming out of med school debt-free is like being handed the golden ticket that says "money in medicine does matter!". You'll have so many more years of enjoying/saving your income and you should do so wisely. If so, you'll be paying for your grandchildren's college tuitions.

 

[mm5869]

looking at your other posts, it appears you're about to be starting school. congrats on those top tier acceptances.

going to post a slightly alternative point of view from others in this thread...
(in addition to learning how to start saving/investing), consider spending money on things that will create an easier/more efficient/better(?) medical school experience. not saying to go around on a spending spree (and definitely dont go into debt with it), but it might not be necessary to penny pinch. if you prefer to live by yourself, do it! you can afford to! if youre truly interested in orthopedic surgery while at Cornell, seek out things that can save you time/comfort/aid you in in this (top tier headphones, meal delivery service, a really comfy office chair)

 

[Small Cell Carcinoma]

Hi, I'm going to med school debt free thanks to a very nice scholarship and was wondering what folks who are graduating with no debt do with their extra money? Is it suggested to start investing early?

Yes. Buy stocks. Now is the best time and its one of the best ways to generate more wealth from whatever you already have. Most people have to wait until they have been in practice for 10 years and have paid off all their loans/other expenses until they can realistically begin to do this.

But based on your username you live in NY. Given the insane cost of living, I don't think you'll have much money saved before graduation. Just less debt than others.