Investing Archives - Page 2 of 4 - Physician on FIRE

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You Can Have More Than One 401(k)

Chicago Bean Wide Angle

With the addition of the pass-thru deduction that could be worth more than $15,000 to self-employed physician and much more to those with different types of pass-through businesses, this Saturday Selection is timely. The good Dr. Jim Dahle channels his inner CPA to describe in detail the rules allowing for multiple 401(k)s. This post actually gave me the idea to start an individual 401(k) for myself in 2016, and this is the third year in which I will contribute to two different 401(k)s. This article originally appeared on The White Coat Investor and has been updated for 2018. I […]

Paying Off Student Loans With Passive Income

dollars Grad cap

It’s Passive Income MD’s turn for a Saturday Selection. Today, we will learn how the anesthesiologist tackles his student loans with a passive income stream. Some people like to pay down debt as soon as possible; others like to hang on to low-interest loans indefinitely. I made it a goal to be debt-free by forty, but I did carry my student loans for quite some time after I had the money to pay it off. Let’s see the approach taken by PIMD. As always, this article first appeared on Passive Income MD. Paying Off Student Loans With Passive Income […]

Stupid Debts and the Doctors Who Love Them

Train Wreck Alaska

The White Coat Investor busts out one of his favorite words for today’s Saturday Selection. No, not “debt.” I’m talking about stupid. At least he used the word to describe the debt and not the doctors who carry them, right? I’m a live and let live kind of guy, but I have to say I have a similar aversion to debt as the good Dr. Dahle. I’ve been debt-free for a couple years now, and it makes me happy despite the potential arbitrage that can come from keeping low-interest debt and investing the balance in the stock market. But that’s […]

Vanguard Backdoor Roth 2018: a Step by Step Guide

Backdoor Roth 2018

This year, I made my sixth pair of “Backdoor Roth” contributions with Vanguard. If you’ve heard of the Backdoor Roth, that’s great! You’ve been paying attention. If not, I’ll give you a brief overview, and a number of links to additional articles with more complete descriptions of the history and important caveats. This post has been updated with fresh screenshots from my 2018 contribution and conversion, which was completed on January 3, 2018. I like to contribute the first day it’s allowed to start the tax-free earnings as soon as possible, but you have until Tax Day in 2019 to make […]

I Maxed My Retirement Accounts. Now What?

boys two thumbs up

Today’s Saturday Selection comes courtesy of The White Coat Investor. A reader faces a first-world “dilemma” that is not at all uncommon among financially savvy physicians. All available tax-advantaged space has been filled with investments. What should one do with additional “leftover” money? It’s going to depend on the situation, but the good Dr. Jim Dahle outlines a wide variety of options, some of which you might not have considered before. This article first appeared on The White Coat Investor. Dollar amounts have been updated for 2018. I Maxed My Retirement Accounts. Now What? Question: I’m an employee and […]

End of Year Rebalancing and a Required Minimum Distribution

seesaw balance

In January of this year, I wrote one of my favorite posts after helping a retired couple free themselves from their financial advisor, greatly simplify their portfolio, and saving them more than $20,000 per year in the process. For details, please read From 28 Funds to 3, then return here for a follow-up. In summary, the couple previously owned 28 funds (with 48 positions between three accounts). The weighted average expense ratio was 0.64 and they were subject to an AUM fee of 0.73%. By the time we were done, there was no AUM fee, the portfolio’s expense ratio was […]

The Zen of Diversity: Asset Classes, Epochs, and the Efficient Frontier

Minister's Tree House

After reading a number of insightful comments from “Gasem” that were almost as long and complete as some of the posts I write, I asked if would be interested in sharing some of his thoughts on investing in a more formal manner. The result is today’s post that spans a wide range of topics, including those mentioned in the title: asset classes, epochs, and the Efficient Frontier. The author suggested a couple titles to me. The first was “crazed ex-commodities trader, fills out matchbook cover, goes to med school and is led to seek the zen of diversity” Too long, […]

Should One Raid Retirement Funds as a Fellow?

la bufa hike

Today, Dr. Jim Dahle addresses a question from a resident about to enter fellowship. Cash-strapped, he asks if it would be reasonable to accept a penalty to access some of the money he saved in his 401(k) during residency. How do you think the White Coat Investor would respond? Let’s find out, shall we? As always, today’s Saturday Selection originally appeared on the White Coat Investor. Question: Are there situations when withdrawing the funds of my retirement account from the years during my residency is okay? Even after accepting the penalties from cashing out early I will get […]

What is Passive Income?

halona blowhole

Today’s Saturday Selection is the first from our newest addition to the network, Passive Income MD. In case you missed it, he was introduced on Monday, although he’s been actively blogging on passive income and related topics for at least a year and a half. So what is passive income? It can be tricky to pin down exactly what qualifies as “passive,” so I’ll let someone more qualified than me give you a working definition. This post originally appeared on Passive Income MD. So, PIMD, what exactly is passive income? Definitions of Passive Income The term “passive income” […]

What To Do With A Windfall

tahquamenon falls

Our Saturday Selection for today is another Q & A from nearly five years ago, but the answer hasn’t changed. Dr. Jim Dahle fields a question from a reader anticipating a large windfall. It’s a common question, and the answer often depends on your current financial situation. Obviously, you will have different needs if you are in intern with $300,000 in debt versus a financially independent physician with $3,000,000 to your name. Questions like this are often posed on the WCI forum. For example, Student question about a “windfall” How to best spend a windfall/inheritance? What to do with retired […]

2017 Q3 PoF Portfolio, Spending, and Blog Performance Update

It’s time for a quarterly update on our investment portfolio, our family’s spending, and blog stats. Another quarter has come and gone, and the overnight freeze warning notification on my new phone is one of many indications that fall has clearly arrived. I’ve been looking forward to this time of year. The part time portion of my career began last week, but I’m putting my time in this week, getting all my monthly hours in over the next eight days. Free time will be limited, so let’s get right to those updates. 2017 Q3 PoF Portfolio Update Below […]

The Dark Side of Physician Finance: Why You Have a Target On Your Back

Pearl Harbor Battle Ship

Today’s guest post comes from Ryan Inman, a fee-only financial planner who specializes in helping physicians and their families build a solid financial future through his firm, Physician Wealth Services. As the husband of a pediatric pulmonologist, Ryan has a unique insight into what it’s like to be a part of a physician family and thoroughly enjoys helping his clients. Additionally, Mr. Inman is the voice behind the Financial Residency podcast, on which I’ve been a guest. Now, let’s learn about The Dark Side. There is no such thing as a rotation in personal finance. I wish […]

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 […]

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 […]

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 […]

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, […]

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 […]

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 […]

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 […]

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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