Investing in Residency

[Pudortu]

Hey Party Peeps,
I've saved about 10k through the end of my intern year. I'm single and spend money how/where I want but figure I should start saving for the future. Is there anything I should be doing? My hospital doesn't match a Roth IRA (I think that's what it's called...don't know much about it) and don't really know what to do with the $$$. Was thinking of taking $5k and fooling around the stock market for ****s and giggles so maybe when I'm an attending I'll know wtf I'm doing. Do you guys have any advice? Thanks a ton everyone.

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[FSU2013]

Hey Party Peeps,
I've saved about 10k through the end of my intern year. I'm single and spend money how/where I want but figure I should start saving for the future. Is there anything I should be doing? My hospital doesn't match a Roth IRA (I think that's what it's called...don't know much about it) and don't really know what to do with the $$$. Was thinking of taking $5k and fooling around the stock market for ****s and giggles so maybe when I'm an attending I'll know wtf I'm doing. Do you guys have any advice? Thanks a ton everyone.

Start with google. There's a lot that can be gleaned from a lot of good online sources. WhiteCoatInvestor.com is great too.

I think the biggest question would be whether or not you have student loans. If you don't, a Roth is a good choice. Assuming you do, paying down the principle on that would (in my opinion) be the wisest thing do to. If you knew you could make substantially more than 6.8% on an investment, that might be worth it, but you don't have a crystal ball.

 

[PennDippody]

Start with google. There's a lot that can be gleaned from a lot of good online sources. WhiteCoatInvestor.com is great too.

I think the biggest question would be whether or not you have student loans. If you don't, a Roth is a good choice. Assuming you do, paying down the principle on that would (in my opinion) be the wisest thing do to. If you knew you could make substantially more than 6.8% on an investment, that might be worth it, but you don't have a crystal ball.

pardon my ignorance but I don't see how this is feasible unless the amount of his student loans are around what he is planning to invest. I see this advice a lot but seem to be missing something. Care to elaborate?

 

[EM_Rebuilder]

Put it in a ROTH, then go learn about index funds.

Here is a good place to start: http://www.bogleheads.org/forum/index.php

Don't buy individual stocks; if your going to do that, earmark it for a few Vegas trips and actually have some fun...

 

[Pudortu]

I've been blessed to say that I dont have student loans. I'll read more about ROTHs. Thanks guys

 

[FSU2013]

pardon my ignorance but I don't see how this is feasible unless the amount of his student loans are around what he is planning to invest. I see this advice a lot but seem to be missing something. Care to elaborate?

I just meant to say that he will be annually losing 6.8% on any money not put towards student loans because of interest.

 

[DeadCactus]

Roth IRA, split between an S&P 500 index and a bonds fund (index or managed). Then leave it alone. If you must, keep a small amount on the side to "invest" in whatever individual stocks you want to "invest" in while accepting that you're just gambling...

 

[dotcb]

Roth is a good option. Others are disability insurance, or just keeping it in liquid form (maybe money market) in case of emergency, or need for relocation expenses after residency.

 

[RustedFox]

Roth is a good option. Others are disability insurance, or just keeping it in liquid form (maybe money market) in case of emergency, or need for relocation expenses after residency.

THIS.

I had no idea how expensive things like non-camp furniture could be.

 

[ptarmigan]

Contgrats on having 10K to invest as an intern!

Residency is the only time that you will be able to directly contribute to a Roth (other than the backdoor option), because after residency your salary will put you well above the income limits. So its a good time to take advantage of it.

Playing around in the stock market is one of the worst things you can do with the money. If you were going to do this, I would do it with $1000 not $5000. You will learn just as much and lose less. There is so much more to learn about investing than the stock market.

I would keep it relatively liquid, but in a seperate account so that I forgot about it, and keep adding to it in an atomated or semi-automated fashion. Maybe a municipal bond account or a safe blended fund. I would not be looking for high returns, but a return that beats inflation while providing relative stability. Set a monthly goal for contributions to that account, and this will give you a good start on your emergency fund. When you become an attending just increase your contributions to this account until you reach your desired # months of living expenses. Recommendations vary between 3-12 months with 6 months being the average that people shoot for.

Upon your graduation from residency, a solid emergency fund plus no educational debt will put you in a very strong financial position.

 

[FSU2013]

THIS.

I had no idea how expensive things like non-camp furniture could be.

that's no joke.

 

[RustedFox]

that's no joke.

Yep. I always bought Craigslist used stuff on the cheap or used folding chairs or whatever.

Furniture is nooo joke. You'd think that you were buying a rolls royce with all the nonsense involved.

 

[gutonc]

Yep. I always bought Craigslist used stuff on the cheap or used folding chairs or whatever.

Furniture is nooo joke. You'd think that you were buying a rolls royce with all the nonsense involved.

Seriously. I've recently bought a new car and a new couch. The new car was way less trouble than the couch.

 

[fahimaz7]

Put 5500 into your own Roth IRA every year.

 

[FSU2013]

Yep. I always bought Craigslist used stuff on the cheap or used folding chairs or whatever.

Furniture is nooo joke. You'd think that you were buying a rolls royce with all the nonsense involved.

I'm thinking that I'm probably just going to build myself a dining room table. A half way decent one approaches a grand and one I'd like to keep for after residency is.....well.....it's disgusting. Some 2x4's and 4x4's, some stain and a couple misc items probably wouldn't run me over $200. Just a question of time before July 1.