How do you feel about mutal funds, stocks, bonds?

[goldsummer]

Good way to invest? Whats the best way to do it?

I recently met with a financial advisor through my credit union... he mentioned they offer a mutual fund through his company...all clients are grouped up and they have a panel of people that do the investing, and they kick profits to us. Minimum starting amount is $250. Considering it, but I have no clue where to start with this whole investing thing.

Is that a fair way to get started? Or doing on my own through Etrade and or something is better?

Thanks.

---

Members don't see this ad.

 

[sliceofbread136]

Do you have debt? Pay that first.

Do you have an emergency fund? Build up 3-6 months of expenses.

do you have a 401k? Invest to max match, put in a total stock index, s and p 500 index or a target date fund if it has an expense ratio that is atleast less than 0.5% and preferably much lower

next max your Roth IRA. This should all be in a us total stock market index like vtsax or fskax.

remainder should go into maxing out your 401k.

money after that can be split between your mortgage and a brokerage account. Google 3 fund portfolio and set up your total assets in certain percentages of us total stock index, international stock index and a bond index. I do 70/20/10. Keep all low cost index funds, you can easily get no fees or something like 0.04%. Your credit union mutual fund probably has high fees so would not recommend. They will still try to rope you in with promises of a higher rate of return however absence of fees is what is most consistently linked to long term investment success.

 

[The PA Investor]

I agree with sliceofbread136 except for paying off debt. It depends on how much you have and at what percentage but as a general rule it's not bad to do.
For example if you make 100k and your debt is 200k or greater then I would pay off the debt to decrease your debt to income ratio. Also if your debt interest is 5-6% or higher I would strongly pay those off. Credit cards can have higher interest rates of 12% or more. If you have any credit card debt I would suggest aggressively paying those off.

Stick with low cost index funds. Fidelity has some of the lowest expense ratios, or fees, right now. Give them a shot. Forget the financial advisor. They often have experience in whole life insurance versus financial advise. Plus they're expensive and will eat away at your gains.

I would strongly suggest reading even just a couple of finance books. I made a list of recommended books that you can start with.

Books -

Here’s a list of all the finance books that I’ve read. I wrote a quick summary and score system for you to get an idea of which books I suggest reading. Click to jump to: Basic Finances Advanced Finances Taxes Real Estate Investing Basic FinancesThe White Coat Investor: A Doctor’s Guide to...

www.thepainvestor.com

Reading just a couple of books is so worth it.

Best of luck.

 

[LookForZebras]

Given that you feel clueless about how to get started, I do think a financial advisor is a smart idea. I recommend a fee-only advisor, though. He might have a certain platform that he uses with all clients for investments and accounts (eg, Ameritrade), but doesn't earn a commission off of selling you his own company's investment products.

 

[Stroganoff]

This sort of "Where do I start?" question comes up often enough in this subforum it may be worth cleaning up and updating the Stickied threads.

 

[goldsummer]

I do have medical school debt, about 260k at 6% interest. It's been consolidated. I'll be making about 210k/year. Was thinking I would just keep living like a resident and pay it way down for the first few years?

I do already have an emergency fund, more than 6 months...Should I just dump all that extra cash >6 months on the debt? I'm currently just sitting on, no real investments with it either.

I dont have a 401k yet, but will be starting a job after completing residency that has a 401k with 4% match (100% of 4%) after 1 year working with them. I was planning to do 4% so they match another 4% for a total of 8%. Maybe this is not high enough?

 

[sliceofbread136]

I do have medical school debt, about 260k at 6% interest. It's been consolidated. I'll be making about 210k/year. Was thinking I would just keep living like a resident and pay it way down for the first few years?

I do already have an emergency fund, more than 6 months...Should I just dump all that extra cash >6 months on the debt? I'm currently just sitting on, no real investments with it either.

I dont have a 401k yet, but will be starting a job after completing residency that has a 401k with 4% match (100% of 4%) after 1 year working with them. I was planning to do 4% so they match another 4% for a total of 8%. Maybe this is not high enough?

do you have a family, a house or other things that could require expensive fixes? If not I would cut your fund to half and throw the rest at your debt

6% is pretty high. I would throw all your excess income at that debt, live like a resident like you said and pay it off in less than three years.

personally I wouldn’t do anything above the 401k match. Take the free money and the rest goes to your debt

 

[The PA Investor]

I do have medical school debt, about 260k at 6% interest. It's been consolidated. I'll be making about 210k/year. Was thinking I would just keep living like a resident and pay it way down for the first few years?

I do already have an emergency fund, more than 6 months...Should I just dump all that extra cash >6 months on the debt? I'm currently just sitting on, no real investments with it either.

I dont have a 401k yet, but will be starting a job after completing residency that has a 401k with 4% match (100% of 4%) after 1 year working with them. I was planning to do 4% so they match another 4% for a total of 8%. Maybe this is not high enough?

I would also refinance your student loans to a lower rate. 6% is pretty high. Here's a list from the WCI of companies that you can privately refinance to a lower interest rate.

Refinance Medical School Student Loans [Complete Guide] | The White Coat Investor

Most professionals should take advantage of refinancing their student loan debt with a private company in their path to debt elimination. Here are the best refinancing deals out there.

www.whitecoatinvestor.com

I just got approved through First Republic at 3.7% fixed. Refinancing will help you attack your student loans faster.

 

[TMP-SMX]

Priorities

 

[Soccer171983]

I read both white coat investor books 1st which help me understand common problems physicians will face. This at least professed my brain in such a way that I could try not to fall into traps and dig a deeper hole than I already would be doing with student loans etc. etc. I then read investing 101 and some investing for dummies to help me better understand the last two books being boggle head and then the intelligent investor. The list prioritizing how to invest is at least a good starting point to think about.

Sent from my iPhone using SDN

 

[The White Coat Investor]

Good way to invest? Whats the best way to do it?

I recently met with a financial advisor through my credit union... he mentioned they offer a mutual fund through his company...all clients are grouped up and they have a panel of people that do the investing, and they kick profits to us. Minimum starting amount is $250. Considering it, but I have no clue where to start with this whole investing thing.

Is that a fair way to get started? Or doing on my own through Etrade and or something is better?

Thanks.

Don't use an "advisor" at a credit union. Open a Roth IRA at Vanguard and buy a target retirement fund.