Jul 11, 2017
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Attending Physician
What should I do/invest with $60k (bonus)?
37yo, late start to medical field, no student loans. Wife works part time making 20k per year.
Have 3 kids, saving monthly for college through 529 (projected $180k for their college each).
Already making extra payments on mortgage with $20k per year (9 payments left) interest is 3.75%
Planning to pay off $15k auto loan this year
I max out 401k (no employer match unfortunately)
Have a $20k cash emergency fun
I save an additional $30k per year outside of the bonus
Have 20% in bonds, 10% in mutual funds, rest in individual dividend stocks with DRIPs setup (total value around $250k)
I need to build up my portfolio, but hesitant with current evaluations.
Already do backdoor Roth’s yearly
Any suggestions? Looking for 4-5% return
 

managedcarefin

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Oct 18, 2015
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Real Estate, assuming you live in a low cost state, try to buy some cheap real estate rent it out....? Profit. However, it will not be easy.
 
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Stroganoff

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Planning to pay off $15k auto loan this year
What APR? Could just pay in full and be done with this.

Have a $20k cash emergency fun
Obviously this is personal preference and dependent on many things like job stability, home and auto ownership, financial picture and access to other liquidity, but I feel like $20k emergency fund is low for married couple with 3 kids. I guess you could tap into the taxable account as needed, but then you'd be forced to withdraw even if the market is low.

Have 20% in bonds, 10% in mutual funds, rest in individual dividend stocks with DRIPs setup (total value around $250k)
I prefer funds over individual stocks, even dividend producing ones, but to each his/her own. I read other forums that encourage people to gradually move out of individual stocks.

Any suggestions? Looking for 4-5% return
What's your desired Asset Allocation, 80/20? Stocks are returning around that, so maybe contribute more to your taxable account index funds in accordance with your AA?

Could just pay off the mortgage and be done with that too, realizing your rate is pretty low.

Are peer-to-peer companies like Prosper and LendingClub still viable options? I haven't kept track in recent years.
Nevermind, looks like high default rate. The Lending Club Experiment
 
OP
D
Jul 11, 2017
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Attending Physician
What APR? Could just pay in full and be done with this.


Obviously this is personal preference and dependent on many things like job stability, home and auto ownership, financial picture and access to other liquidity, but I feel like $20k emergency fund is low for married couple with 3 kids. I guess you could tap into the taxable account as needed, but then you'd be forced to withdraw even if the market is low.


I prefer funds over individual stocks, even dividend producing ones, but to each his/her own. I read other forums that encourage people to gradually move out of individual stocks.


What's your desired Asset Allocation, 80/20? Stocks are returning around that, so maybe contribute more to your taxable account index funds in accordance with your AA?

Could just pay off the mortgage and be done with that too, realizing your rate is pretty low.

Are peer-to-peer companies like Prosper and LendingClub still viable options? I haven't kept track in recent years.
Nevermind, looks like high default rate. The Lending Club Experiment
I was planning to pay the car loan off in one shot this year (apr around 3.5%)
I’d like to get more involved with index funds and will likely average at $10k each quarter.

It wouldn’t be hard to have emergency fund at $40k, would like to have a higher yield than your general savings account, which is why I haven’t increased it to that level.

Eventually I would transition to less stocks and more fixed income in my late 40s-50s.

Rental properties require too much maintenance in my opinion. Looking more into commercial real estate with 2 other physicians.
 

LookForZebras

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Oct 8, 2016
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Vanguard index funds are a great way to go if you don't want to dedicate a lot of time to your investments or put much effort learning about a new investment type.
 

calvnandhobbs68

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What APR? Could just pay in full and be done with this.


Obviously this is personal preference and dependent on many things like job stability, home and auto ownership, financial picture and access to other liquidity, but I feel like $20k emergency fund is low for married couple with 3 kids. I guess you could tap into the taxable account as needed, but then you'd be forced to withdraw even if the market is low.


I prefer funds over individual stocks, even dividend producing ones, but to each his/her own. I read other forums that encourage people to gradually move out of individual stocks.


What's your desired Asset Allocation, 80/20? Stocks are returning around that, so maybe contribute more to your taxable account index funds in accordance with your AA?

Could just pay off the mortgage and be done with that too, realizing your rate is pretty low.

Are peer-to-peer companies like Prosper and LendingClub still viable options? I haven't kept track in recent years.
Nevermind, looks like high default rate. The Lending Club Experiment
Ya lending club blows. I only had about 5K in a Roth IRA in there but it only averages returns of like 3-4% over the past few years. The default rate is outta control which I should have expected with unsecured loans. I’m rolling money over to a different Roth IRA account every year from that account, problem is you have to wait for people to pay on their loans to pull money out so it’s a stepwise process.
 

abolt18

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I was planning to pay the car loan off in one shot this year (apr around 3.5%)
I’d like to get more involved with index funds and will likely average at $10k each quarter.

It wouldn’t be hard to have emergency fund at $40k, would like to have a higher yield than your general savings account, which is why I haven’t increased it to that level.

Eventually I would transition to less stocks and more fixed income in my late 40s-50s.

Rental properties require too much maintenance in my opinion. Looking more into commercial real estate with 2 other physicians.
Ally bank high yield savings account now gives like 2.2% right now! It's where I keep my emergency fund.
 

werd

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i'd say increase your emergency fund to cover 6 months of cash flow, then put the rest in the stock market. I use vanguard and mostly index funds. as others have said above, you can get a decent yield from online savings accounts, so those are good places to keep your emergency funds.
 

d2305

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Open an account at Vanguard or Fidelity and start buying no load mutual funds. Buy index 500 if you want hands off, sector funds are fun if you want to get involved.
 

Womb Raider

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Agreed with the above to definitely get rid of individual stocks... It’s taking on unnecessary risk for no reason. Dividends are also not tax efficient so if those dividend stocks aren’t in a tax-protected account then you’re doing yourself a big disservice. Since your bonus is going into a taxable account put it into something tax efficient like total stock market index funds/ETFs at vanguard or muni bonds. REITS as advised above are very tax inefficient. Also consider hedging against the inevitable stagflation of the US economy in the near future - consider gold or international stock indexes.
 
Last edited:
Jun 20, 2019
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Open a Vanguard taxable brokerage account. Split your money between VTSAX (Total Stock Market Fund) and a bond fund. A total bond fund is fine, but if you really want to optimize tax efficient go for municipal bonds. If you want to, you can add in a total international fund like VTIAX for diversification purposes.

If you want to get into REITs, I'd recommend doing so in your tax-protected accounts as noted above by @Womb Raider.

Keep it simple. Your split should be based entirely on your risk tolerance, but there's no need to add a ton of complexity.

Like others here, not a huge fan of the individual stock portfolio you've got going on, but to each their own. A lot of unnecessary risk and tax inefficiency for the illusion of passive income. Selling at gains now would be inadvisable. So I would just recommend putting all new investment money into this Vanguard asset allocation and over time it will outstrip your dividend investing, although you will always have significant tax drag in your portfolio.
 

Stroganoff

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Selling at gains now would be inadvisable. So I would just recommend putting all new investment money into this Vanguard asset allocation and over time it will outstrip your dividend investing, although you will always have significant tax drag in your portfolio.
I'm personally more a fan of strategically dumping them over time (exchanging shares of individual stocks for shares of a stock index fund) vs. continuing to hold them, but to each their own.