Category: Investing

Selling Shares Beats Collecting Dividends

Dividend Tax

When I described my drawdown strategy in early retirement, I stated we will “sell from the taxable account first.” I also plan to collect quarterly dividends from my index funds, but if Vanguard were Burger King and I could have it my way, I’d hold the dividends and take bites out of my account only as needed. When I discuss the downsides of dividends, note that I am only referring to receiving dividends in a plain old brokerage account, a.k.a a taxable account. Anything that happens in a tax advantaged account like a traditional or Roth IRA, 401(k) or similar […]

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Cash Balance Plans: Another Retirement Plan for Professionals

fistfull of cash

Today’s Saturday Selection from the White Coat Investor is an oldie but goodie discussing defined benefit pension plans, also known as cash balance plans. While the plans aren’t available to W-2 employees, they can be an option for those whose income is earned as a 1099, i.e. the self-employed and practice partners. The higher your marginal tax rate, the more benefit you’ll see from a cash balance plan. Read on to learn more of the pros and cons. As always, this classic article first appeared on The White Coat Investor.   The single best tax break available to you is maximizing your […]

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Why This Index Fund Investor Purchased an Individual Stock

I hopped out of the shower and into my Fruit of the Looms. After a quick electric shave, powered by Duracell, I put on my favorite Original Penguin shirt from Munsingwear and a pair of jeans and strapped on my Tony Lama boots. I looked pretty sharp. Not as cute as my son in his Garanimals or as dashing as my wife and her Helzberg Diamond ring and white gold necklace from Ben Bridge Jeweler. After perusing the Buffalo News and enjoying a hearty brunch prepared with our Pampered Chef cookware, I headed out for an important meeting, but not before […]

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SPIA: The Good Annuity

Savannah Headstones

Today’s Saturday Selection from the White Coat Investor comes from way back in 2012. I don’t spend a lot of time discussing annuities here, because in general, I’m not a big fan. There is one type of annuity I would potentially consider someday, however, and that is the Single Premium Immediate Annuity. If you take good care of yourself, have a family history of longevity, and are willing to bet on yourself, you might just come out ahead buying a SPIA at the right time. I’ll let the good Dr. Dahle explain in more detail, but by purchasing a SPIA, […]

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2017 Q2 PoF Portfolio, Spending, and Blog Performance Update

With the third quarter nearly halfway over, I may be a bit overdue with this one, but better late than never, right? One advantage to getting this out late is the ability to include some sites’ quarterly reviews which don’t come out until a few weeks into the subsequent quarter. I will share those with you, along with updates on our family’s spending, and a look at some blog statistics from its sixth quarter in existence. 2017 Q2 PoF Portfolio Update   I’ve described my portfolio and some rationale for what I own previously. The image below is a snapshot […]

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How to Think About Illiquid Investments

VML winery

Today’s post was written by the chartered financial analyst, Dave Denniston. The industrious husband and father is also a blogger and financial advisor. Today, he is writing about illiquid investments, a common type of investment among physicians. The screen is yours, Dave. How to Think About Illiquid Investments   By Dave Denniston, CFA In a recent presentation to the Osteopathic Society of Minnesota, I had the honor of discussing the ‘7 Deadly Sins of Physicians Finances’. Today, we are focusing on one of them. In this guest post on PhysicianOnFire, we’re going to be tackling deadly sin number six- investing in […]

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From Hubris to Humility – Dr. Segan’s Top 17 Investing Mistakes

largest rubber duck

PoF: You may recall Dr. Segan from his previous guest post on “failing” early retirement. Today, he details additional failures by sharing his top investing mistakes. Douglas Segan, MD JD (yes, he is a doctor and a lawyer) is an expert on insurance and asset protection, having written on the topics in numerous guest posts at The White Coat Investor.  Tell us where you went wrong, Dr. Segan. We’ll try not to repeat the same mistakes! From Hubris to Humility – My Top Investing Mistakes   Both physicians and investors have a challenging time admitting and discussing their mistakes with others. It […]

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Holy Stealth Wealth Part II: Developing an Investor Policy Statement

Black Hills railroad

To recap, in Part I, we met Dr. SW, decided on a simple three fund portfolio for his investments, and toyed with the idea of a donor advised fund. Today, we will expand upon that last idea, make a plan for his kids’ future, touch on insurance and asset protection, and last but not least, develop an investor policy statement. Please keep in mind that I am not a financial advisor and the only letters behind my name are M.D. I am relying on the knowledge I’ve gained from a healthy dose of reading and personal experience, and on the […]

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Pay Yourself First? No, Pay Yourself Last.

pontoon with slide

Today’s insightful guest post comes to you courtesy of a financially independent physician who has had a blog longer than WCI and I combined. Dating back to 2007, wealthydoc.com has been sharing wisdom in numerous areas including investments, financial planning, careers, and he has written a number of pertinent book reviews for the FIRE minded physician. Check out his counterintuitive advice below, check out his site, and look for him on Twitter with the handle @Wealthy_Doc.   Pay Yourself First? No, Pay Yourself Last.   If you have been reading about personal finance at all you likely came across the phrase, “Pay yourself […]

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He Earns $1,800,000 a year. He spends $70,000. Holy Stealth Wealth!

I was browsing the Bogleheads forum a few weeks ago, the way I often do. One particular thread title caught my attention. “High Income Earner Humbly Seeks Advice” I write for high-income professionals, and the humble ones are my favorites. I decided to take a peek to see if I could offer any advice. After reading through the post and mostly excellent responses, I didn’t necessarily have a lot to add — we Bogleheads know our stuff — but the sheer volume of information pouring in was a bit overwhelming, sometimes conflicting, and a whole lot to take in for the […]

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Retirement Planning for Doctors: Why It’s Tough and How to Get It Right

Today’s post is a guest post from Rick Pendykoski, the owner of Self Directed Retirement Plans LLC, a firm that specializes in the type accounts discussed in a recent post on real estate in a self-directed IRA. Mr. Pendykoski and I have no financial relationship.   Viewed from the outside, the medical profession looks highly lucrative, and most people think that doctors don’t have to worry about loan repayment, budgeting and retirement planning. The reality is not quite so rosy, though. Despite earning well, many doctors find themselves unable to max out their retirement plans and save enough for the […]

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Using Your IRA for Real Estate & Crowdfunding Investments

Dream Home Lake Michigan

Today’s guest post was written at my request by Chad Chubb, CFP of Wealthkeel. I am intrigued by the substantial returns being offered in the crowdfunded real estate space, but less enthused about the tax treatment of those returns, particularly while occupying the top tax brackets. Knowing that real estate can be owned in a self-directed IRA, I figured why not crowdfunded real estate investments? What follows is the result of my inquiry. I want to thank Mr. Chubb for the time he took to research the topic and write this informative article. His company, Wealthkeel, is an advertiser on […]

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8 Reasons Why You Should Invest With Mutual Funds Instead Of A Variable Annuity

Savannah Headstones

Today’s Saturday Selection is a classic post from The White Coat Investor. In the post, he outlines the numerous ways investing in plain old mutual funds beats a variable annuity. I obviously agree with the good doctor. Half of my investments are in passive index funds in a taxable account. Zero percent of my nest egg is tied up in a variable annuity, or any type of life insurance product for that matter. As per usual, this post originally appeared at the WCI network partner site The White Coat Investor. Variable annuities (VA) are an insurance product that is best […]

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The Story of Dr. Moneybags

Today’s post is a guest post rom Tom @ High Income Parents. A fellow anesthesiologist and father of five, he has burst onto the blogging scene in the last few months with some wonderful and relevant posts for high-income families.     A number of his articles have landed on the pages of The Sunday Best, and his writing was featured yesterday in a guest post @ The White Coat Investor. I encourage you to check him out! Now, please tell us a story, Dr. Tom.   The following is a dramatization. Names, characters, businesses, places, events and incidents are […]

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51 comments

Case Report: Roth or Traditional Contributions for a Low Six-Figure Household

Most of my writing is directed at physician households, and most (attending) full-time physician households have solid six-figure salaries. In a well-compensated specialty or with a dual income, it’s not unusual for a household to have income of $500,000 or more. However, not all of my readers are in that position. Some are students or residents. A resident couple will make $100,000 to $120,000. A PA or NP may have a similar salary, as will many different combinations of individual or dual income households. Today’s post was inspired by a reader who has a low six-figure household income. Six figures, yes, […]

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A Vanguard Three Fund Portfolio Just Got Cheaper!

Vanguard, the brokerage company that gave the world its first passive index fund in 1976, has been a low cost leader for over forty years. The firm has been known to have the lowest cost passive index funds, but recent moves by Fidelity and Schwab actually undercut Vanguard’s fees on a few popular funds. The other day, Vanguard announced it had lowered its fees on those key funds that make up the three fund portfolio, while also lowering its fees on a mere 164 other funds this year. The move makes Vanguard’s funds equal to or cheaper than Fidelity’s, but not […]

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The State of Real Estate Crowdfunding

Today’s post is a guest post from Soren Godbersen of EQUITYMULTIPLE, a crowdfunding commercial real estate investment company. The company is not a site sponsor, but I do have an affiliate partnership with them (if you invest with them via a link from this site, the site earns money).  I personally have not made crowdfunded real estate investments like my friends The White Coat Investor and Passive Income MD have, but the deals will start to look more attractive as my income drops and tax treatment of such deals will improve in the coming years. -PoF. Soren, the floor is […]

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2017 Q1 PoF Portfolio, Spending, and Blog Performance Update

Another quarter has come and gone, and I thought it would be a fine time to update you on my portfolio, the markets in general, and some facts and figures regarding the blog.   PoF Portfolio Update   I haven’t made any significant changes to my investment portfolio. I have added a solo 401(k), which gets a portion of website profits. The account represents 0.15% of the overall portfolio.     My taxable account has TLH (tax loss harvest) trading partners VFIAX (S&P 500) and VTSAX (total stock market). The international funds are also TLH partners, although not ideal, since one […]

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Debunking The Myths Of Whole Life Insurance

Saturday Selection: Debunking The Myths Of Whole Life Insurance This classic post originally appeared on The White Coat Investor.   There are more than 400,000 insurance agents in this country, and almost all of them would love to sell you a whole life insurance policy.  If you buy a policy with premiums of $40,000 per year, the commission would typically be somewhere between $20,000 and $44,000 for that agent. As you might imagine, that commission can be highly motivating, especially given the median insurance agent income of $47,000.  To make matters worse, many of the worst policies offer the highest commissions. As […]

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