Young doctor, taking over my own investments...

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Topic Author
FRx
Posts: 119
Joined: Fri Apr 11, 2014 9:02 pm

Young doctor, taking over my own investments...

Post by FRx »

Hello. I would like to get some advice for taking over my investment portfolio. Previously managed by a financial adviser who has had me in loaded managed mutual funds with high expense ratios. I want to make this entire portfolio much, much simpler. The financial adviser has been relieved of his duties.

Emergency funds: $24,000
Debt #1: $110,000 student loan (2.75%), paying minimum of $600/mo
Debt #2: $13,000 credit card, 1% for another 16 months, paying $1000/mo
Tax Filing Status: Single
Tax Rate: 33% Federal, 9% State
State of Residence: CA
Age: 35
Desired Asset allocation: 70% stocks / 10% bonds
Desired International allocation: 20% of stocks
Income After taxes: $200,000-210,000


Current retirement assets:

Taxable (held at Vanguard) $10,000
3% Vanguard Total Stock index fund (VTSMX) (0.17% ER)
2% Vanguard REIT index (VGSIX) (0.24% ER)
1% Vanguard Target retirement fund 2020 (VTWNX) (0.16% ER)

Tax-Free Municipal Bonds $17,900
2% California Tax -free Fund A (LCFIX) (0.81%)
2% High Yield Municipal Bond A (HYMAX) (0.83%)

401K (held at Charles Schwab) $92,300
38% Vanguard Total Stock Market Index institution (VITNX) (0.04%)
9% Vanguard Small Cap Index (VSCIX) (0.08%)
1% Vanguard Total bond index market fund institution (VBMPX) (0.05%)
No company match

Keogh Plan (another tax deferred account allowing $34,000 annual contribution) $73,600
9% Lord Abbett Fundamental Equity (LDFVX) (1.06% ER)
8 % Lord Abbett Value Opportunity Equity (LVOAX) (1.28%)
7% Lord Abbett Calibrated Dividend Growth Equity (LAMAX) (0.85%)
3% Lord Abbett High Yield Fund Fixed Income (LHYAX) (0.95%)
3% Lord Abbett Diversified Income Strategy Blend (ISFAX) (1.16%)
3% Lord Abbett LA Short Duration Fixed Income (LALDX) (0.58%)
3% 4815 Lord Abbett Floating Rate Fund Fixed Income (LFRAX) (0.80%)
2% Lord Abbett Brokerage Money Market


Converted Roth IRA $7,175
1% Lord Abbett Fundamental Equity (LDFVX) (1.06%)
1% Lord Abbett Value Opportunity Equity (LVOAX) (1.28%)
1% Lord Abbett Calibrated Dividend Growth Equity (LAMAX) (0.85%)
1% Lord Abbett Diversified Income Strategy Blend (ISFAX) (1.16%)


Contributions:

New annual Contributions
$34,000 towards Keogh
$17,500 towards 401k
$5,500 towards IRA
$120,000 taxable/Municipals

Available funds:

Funds available in his 401(k)
Vanguard Total Bond Market Index Fund Institutional Plus Shares (VBMPX) (0.05%)
Vanguard Target Retirement Income Trust I (no symbol) (0.083%)
  • 40% Vanguard Total Bond Market II Index Fund
    21% Vanguard Total Stock Market Index Fund
    17% Vanguard Short-Term Inflation Protected Securities Index Fund
    14% Vanguard Total International Bond Index Fund
    9% Vanguard Total International Stock Index Fund
Vanguard Target Retirement 2015 Trust I (no symbol) (0.083%)
  • 37% Vanguard Total Stock Market Index Fund
    32% Vanguard Total Bond Market II Index Fund
    16% Vanguard Total International Stock Index Fund
    9% Vanguard Total International Bond Index Fund
    6% Vanguard Short-Term Inflation Protected Securities Index Fund
Vanguard Target Retirement 2020 Trust I (no symbol) (0.083%)
Vanguard Target Retirement 2025 Trust I (no symbol) (0.083%)
Vanguard Target Retirement 2030 Trust I (no symbol) (0.083%)
Vanguard Target Retirement 2035 Trust I (no symbol) (0.083%)
Vanguard Target Retirement 2040 Trust I (no symbol) (0.083%)
  • 64% Vanguard Total Stock Market Index Fund
    26% Vanguard Total International Stock Index Fund
    8% Vanguard Total Bond Market II Index Fund
    2% Vanguard Total International Bond Index Fund
Vanguard Target Retirement 2045 Trust I (no symbol) (0.083%)
Vanguard Target Retirement 2050 Trust I (no symbol) (0.083%)
Vanguard Target Retirement 2055 Trust I (no symbol) (0.083%)
Vanguard Target Retirement 2060 Trust I (no symbol) (0.083%)
Vanguard Wellington Fund Admiral Shares (VWENX) (0.18%)
Vanguard Value Index Fund Institutional Shares (VIVIX) (0.08%)
Vanguard Institutional Total Stock Market Index Fund (VITNX) (0.04%)
Vanguard FTSE Social Index Fund Institutional Shares (VFTNX) (0.16%)
Vanguard Morgan Growth Fund Admiral Shares (VMRAX) (0.25%)
Vanguard PRIMECAP Fund Admiral Shares (VPMAX) (0.36%)
Hotchkis and Wiley Mid-Cap Value (no symbol) (unknown ER)
Vanguard Small-Cap Index Fund Institutional Shares (VSCIX) (0.08%)
American Funds Capital World Growth/Income Fund R-6 (RWIGX) (0.45%)
Vanguard International Growth Fund Admiral Shares (VWILX) (0.35%)
T. Rowe Price International Discovery Fund (PRIDX) (1.23%)

Funds available in his Keogh
All the funds listed above along with the following...
BTC US Equity Market Index Fund (no symbol) (0.01%)
Janus Forty Fund Class N (JFRNX) (0.47%)
Vanguard Capital Opportunity Fund Admiral Shares (VHCAX) (0.41%)
Robeco Boston Partners Small/Mid Cap Value Equity (no symbol) (unknown ER)
DFA U.S. Core Equity II Portfolio Institutional Class (DFQTX) (0.22%)
Cambiar Small Cap Value (no symbol) (unknown ER)
Dodge & Cox International Stock Fund (DODFX) (0.64%)
Columbia Acorn International Fund Class Y Shares (CCYIX) (0.87%)


Questions:
1. My goal is to keep working aggressively for the next 5-10 years to build the most aggressive portfolio. I will continue to work after that of course but much less hours. So I’m very ok being uber aggressive and I am very risk tolerant. Once I get to age 45 I’ll probably convert things into less risky funds and just add to the stash slowly.

2. My biggest concern in the taxable accounts is my high effective tax rate. I would like to be able to minimize the tax burden as much as possible but I understand there is only so little I can do.

3. Would like to simplify and go with just 4-5 funds maximum if that's possible. I definitely want to get rid of the actively managed mutual funds.
Last edited by FRx on Sun Apr 13, 2014 2:02 pm, edited 2 times in total.
mhalley
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Re: young doctor, taking over my own investments...

Post by mhalley »

The main taxable improvement is to get rid of the REIT and the TR fund in taxable. Either put them into the total stock market or the munis, depending on your aa.
Can you rollover the ROth into a Vanguard Roth?
You probably want to go to the BTC use equity market for the large cap, dodfx for international. A lot of people like DGA, so it would be reasonable to go with that instead for the large cap.
Mike
Topic Author
FRx
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Re: young doctor, taking over my own investments...

Post by FRx »

thank you for the info, I should be able to roll the IRA over to VG.
bargainhuntingking
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Re: young doctor, taking over my own investments...

Post by bargainhuntingking »

Your desired AA needs to be corrected. You listed 70% stocks and 10% bonds.

Cash out of those high expense Muni funds and buy the the Vanguard CA Muni, or forget about Muni's in taxable and buy a bond index in your 401k or Keogh.

Edit: Also agree with mhalley in terms of getting rid of REIT and the Target Fund in taxable.

Pick a Vanguard target retirement for the 401k or keep what you have, those ERs are great.

Change the IRA and Keogh to lower cost funds to fit your AA as best as possible, those Lord Abbot fund ERs are ridiculous. If you can convert the IRA to Vanguard and pick better funds. For your future (backdoor Roth?) IRA, open it at Vanguard and fill in what your need (e.g. a bond fund and more equity indexes).

Keep it simple. Simplify. You only need a few funds plus anything that you want to tilt to. Let the lowest available ERs in the best funds guide your placement.
Last edited by bargainhuntingking on Sun Apr 13, 2014 8:42 pm, edited 2 times in total.
llessac15
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Re: young doctor, taking over my own investments...

Post by llessac15 »

You're saying that your net income is ~$200,000 and you are investing $170,000 per year?! That's unreal if that's true. Bravo to you for your discipline!
slippingsloth
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Re: young doctor, taking over my own investments...

Post by slippingsloth »

llessac15 wrote:You're saying that your net income is ~$200,000 and you are investing $170,000 per year?! That's unreal if that's true. Bravo to you for your discipline!
First-- to my young attending friend, go to Whitecoatinvestor.com Its a great resource for 'us' MDs for getting the basics.


I am a resident MD.. I make ~55k per year and invest over 35k/yr in California(403/457 are awesome, not as awesome as roth IRA but tax defer is better than no tax defer). I am basically hoping to replicate the OP for at least the first few years out of residency. It would be tough if I were in San Francisco or West Los Angeles but I am not so its not that bad. 5 year old honda, 2b apartment, 2 miles to the hospital and trivially doable on 20k. Sometimes I wish I were in the midwest able to have even less rent but I could do things like have roommates or what not. I choose not to and figure if I am saving 2/3rds my income i am doing ok. Aggressive savings for the first 10years after becoming an attending will solve most problems.


(Thankfully I went to state schools + have to remember to thank my grandmother and mother in heaven for the assets that paid for most of medschool) I have residents in my year who are 300k in debt. I will reiterate getting my acceptance to UCLA for medical school saved me almost a hundred grand compared to the next cheapest option.
jimkinny
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Re: young doctor, taking over my own investments...

Post by jimkinny »

You might be interested in the linked site. The White coat Investor is a doc who goes by emergdoc (or close) on this site and started his own blog and recently has had a book published.

http://whitecoatinvestor.com/

jim
llessac15
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Re: young doctor, taking over my own investments...

Post by llessac15 »

slippingsloth wrote: I am a resident MD.. I make ~55k per year and invest over 35k/yr in California(403/457 are awesome, not as awesome as roth IRA but tax defer is better than no tax defer).
Both of you are well on your way to financial success. I'm a 34 y/o private practice doctor in MS and am a partner in a very lucrative practice. But, my savings rate as a percentage of income in embarrassing compared to you. MS medical school is about as cheap as it gets, so my student loans are less than $100k and will be paid off in a few months. My biggest hurdle is the mortgage I took on. However, I have obcessively read numerous financial books and website articles over the past year to completely revolutionize my mentality on finances. Just 12 months ago, I couldn't even tell you what ROI stood for. Now, I am managing my own 401k and have openned 2 Roth IRA's (backdoor for wife and myself) along with a taxable investment account.

While I don't fully agree with living like a resident out of training, I also don't strive to 'keep up with the Joneses'. Hopefully I can improve my savings rate over the next year to been closer to the percentages that you two are at.
zyx
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Re: young doctor, taking over my own investments...

Post by zyx »

FRx:

Welcome to the forum.
A caveat: Please be careful of all online financial advices including mine.

Overall, you have many choices in different parts of your portfolio. Thus my suggestion is to simplify it now and "sprinkle" it in the future as you feel more comfortable. In addition, your plan to contribute approximately $180K a year will give you more choices to decide.

Here is one of many ways to change your current portfolio
a. Taxable account, currently $10k, future $60k a year
I assume you will contribute $60k (half of 120K) a year here. You can consolidate all three funds into Total Stock Market fund. You may have to pay income tax on the capital gains. In the future, assuming you have all Vanguard funds available, so you can slide and dice to other Tax-Managed funds, e.g., Tax-Managed International or Tax-Managed Small Cap with Total Stock Market fund as the main one.
b. Tax-Free Municipal Bonds, currently 18k. future another $60k a year
You can select 2 California Municipal Bond funds in Vanguard. Their fee is much lower than what you have now.
c. 401k plan, currently $92k. future $17.5k a year
Again, Vanguard Institutional Total Stock Market Index Fund will serve you well with its low fee (0.04%). You can also select the Vanguard Small-Cap Index Fund Institutional Shares in place of the Tax-Managed Small Cap fund, mentioned above.
d. Keogh fund, currently $74k, future $34k a year
Same as above. I didn't choose BTC US Equity Market fund because it doesn't have a symbol. It is difficult to track it. You can select it if you want.
e. Roth IRA, currently $8k, future $5.5k a year
After moving to Vanguard, you can choose REIT fund as another option.

In conclusion, your future contribution will dictate how your portfolio will turn out. I would simplify by selecting one fund for each pot now and contribute to different funds as you go forward and re-balance it. Good luck!
Topic Author
FRx
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Re: young doctor, taking over my own investments...

Post by FRx »

llessac15 wrote:You're saying that your net income is ~$200,000 and you are investing $170,000 per year?! That's unreal if that's true. Bravo to you for your discipline!
My take home after taxes is about $200,000. I have about $50,000 that I put into my Keogh and 401k which don't get taxed. My living expenses are in the $50,000 range and I'm left with about $120,000 that I can invest in taxable accounts.
Topic Author
FRx
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Re: young doctor, taking over my own investments...

Post by FRx »

jimkinny wrote:You might be interested in the linked site. The White coat Investor is a doc who goes by emergdoc (or close) on this site and started his own blog and recently has had a book published.

http://whitecoatinvestor.com/

jim
thank you, it's a fantastic website. I've spent a lot of time on there and I'll continue to read through it.
Kidneydoc
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Re: young doctor, taking over my own investments...

Post by Kidneydoc »

Some comments:

1. Too many mutual funds. This is coming from someone who is equally guilty of this. Many people who are much smarter than me advocate as little as three mutual funds/ETFs.
2. Keep the actively manage mutual funds (if you believe in actively managed mutual funds) in your tax deferred and tax free accounts. You have an excellent choice of low cost mutual funds including Vanguard Wellington, PRIMECAP (closed to individual accounts) and Dodge & Cox International. I am not sure how good the DFA index fund is but I am sure it's a better than an average actively managed fund: you won't get this fund outside your retirement account without an financial advisor.
3. Agree with moving REIT to tax deferred account.
4. Lord Abbott funds look expensive too me; I suspect their returns are not exceptional compared to index funds and lower expense actively managed mutual funds.
5. Transfer your California muni funds to Vanguard: consolidate to California Long Term Tax Exempt muni fund and get admiral shares when balance > $50,000 for lower expense.

Just my $0.02.
Kidneydoc
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Re: young doctor, taking over my own investments...

Post by Kidneydoc »

Also: Max out your IRA, 401k and Keough contributions, fund your emergency stash and pay off your student loans and credit cards ASAP for guaranteed superior 1-2 % return compared to money market account.
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William4u
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Re: young doctor, taking over my own investments...

Post by William4u »

A good rule of thumb is to avoid all mutual funds that have an ER (Expense Ratio) of more than 0.20%. Others have mentioned that the Lord Abbett Funds are ridiculous (and they are) due to needlessly high ERs. Definitely get rid of all the Lord Abbett Funds!

If I were you, I'd put 100% of my Keogh into ONE FUND: "BTC US Equity Market Index Fund (no symbol) (0.01%)," which is simply an S&P 500 Index Fund. I'd then use my other accounts to balance out my AA (Asset Allocation) to be as much like the "Three Fund portfolio" as possible.

Your mantra should be "Keep it simple, diversified, and keep the ER low."

For more on the Three Fund portfolio, and how to balance risks with asset allocation, see...

http://www.bogleheads.org/wiki/Three-fund_portfolio

Also, if I were you, I'd have one Mutual Fund in each account (maybe two, but no more than two). You have way to many Mutual Funds that needlessly add up to something much like having one Total Index Fund. Why not just have the one Index Fund instead of all those random actively managed funds?

If you keep ONE FUND (or no more than two) in each account, it will be just as diversified, easier to manage, and cheaper with a much lower ER.
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William4u
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Re: young doctor, taking over my own investments...

Post by William4u »

Also, an extra 1% annual ER over 40 years can easily take 1/3rd of your retirement money. So, instead of $3 million, you would have only $2 million for no good reason. See this data from Vanguard...
CUMULATIVE IMPACT OF FEES:

.................................Annual Fee
.............0.10%.......0.25%.....0.50%.....1.00%.....2.00%.....3.00%

3 years.....–0.3%......–0.7%......–1.5%.....–2.9%......–5.8%.....–8.5%
5 years.....–0.5%......–1.2%......–2.5%.....–4.9%......–9.4%....–13.7%
10 years...–1.0%.......–2.5%.....–4.9%.....–9.5%.....–18.0%....–25.6%
20 years...–2.0%.......–4.9%.....–9.5%....–18.0%.....–32.7%....–44.6%
30 years...–3.0%.......–7.2%....–13.9%....–25.8%.....–44.8%....–58.8%
40 years...–3.9%.......–9.5%....–18.1%....–32.8%.....–54.7%....–69.3%
"If there is anything in the whole world of mutual funds that you can take to the bank, it's that expense ratios help you make a better decision. In every single time period and data point tested, low-cost funds beat high-cost funds." -- Russell Kinnell, Morningstar's director of mutual fund research.
http://vanguardblog.com/2011/10/28/stop ... f-returns/
Topic Author
FRx
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Re: young doctor, taking over my own investments...

Post by FRx »

I made a bad decision using this financial adviser. I knew very little August of last year when I started getting involved in my own investments. I have since sent him a polite letter telling him that I will taking over my own investments.

As for my AA, what do you guys think about 70% in equity, 20% in bonds and 10% in REITs. I suppose that would be more of a 4 fund way of doing it instead of 3.
Snow Boarder
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Re: young doctor, taking over my own investments...

Post by Snow Boarder »

jimkinny wrote:You might be interested in the linked site. The White coat Investor is a doc who goes by emergdoc (or close) on this site and started his own blog and recently has had a book published.

http://whitecoatinvestor.com/
+1
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White Coat Investor
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Re: Young doctor, taking over my own investments...

Post by White Coat Investor »

Welcome to the forum. The good news is.....
FRx wrote:Hello. I would like to get some advice for taking over my investment portfolio. Previously managed by a financial adviser who has had me in loaded managed mutual funds with high expense ratios. I want to make this entire portfolio much, much simpler. The financial adviser has been relieved of his duties.
You're going to have to really screw up to do worse than you would have without this "advisor."

I would be careful thinking this:
FRx wrote:So I’m very ok being uber aggressive and I am very risk tolerant.
Maybe you are, maybe you aren't. I have no idea. But I would ask yourself NOW, after a 5 year bull market, what evidence you have that you are "very risk tolerant." A year ago you were investing with a salesman. You have never invested in a bear market, certainly not by yourself and guessing by your income and account balances, not even with an "advisor" to help. It is FAR BETTER to slightly underestimate your risk tolerance than to slightly overestimate it. You are also still struggling with putting together a simple 4-5 fund portfolio invested across just four accounts. To me, this is evidence that perhaps your risk tolerance and experience isn't quite what you estimate it to be. I could be wrong, but that doesn't matter. What matters is that you're NOT wrong.

Benjamin Graham suggested never having more than 75% stock, and I try to follow that advice. I recommend you do so as well lest you find in the next bear market (which will come, we just don't know when) that you have overestimated your risk tolerance. I also suggest you read a bit on financial history. History doesn't repeat itself, but it does rhyme. If nothing else, read the history section in Bernstein's Four Pillars. It is far easier to stay the course when you know what the course is likely (but not guaranteed) to be.

If you choose an asset allocation that is a little less aggressive than you can handle, what's the harm? You can bump it up a bit after you invest through your first bear market by yourself. It will probably happen in the next 5 years or so, and truthfully for the next 5 years your savings rate matters far more than your investment return. If you want to "be aggressive now while you're young", do it by paring lifestyle aggressively and saving like a madman. It'll do a lot more good.
FRx wrote:2. My biggest concern in the taxable accounts is my high effective tax rate. I would like to be able to minimize the tax burden as much as possible but I understand there is only so little I can do.
The best thing you can do for your taxes is to leave California. It will help with your savings rate too! But if that's not an option, then at least invest in a tax efficient way. That means maxing out your retirement accounts, and only holding things like broadly diversified stock index funds and municipal bond funds in your taxable account. Tax loss harvesting, charitable donations, and taking advantage of step-ups in basis can also help. There isn't much else you can do. I would caution you against making this "your biggest concern." Your biggest concern should be whether you're going to meet your financial goals. A slightly less important one is your risk-adjusted, after-tax rate of return. The actual amount you pay in investment-related taxes, although related, shouldn't be your "biggest concern."
FRx wrote:3. Would like to simplify and go with just 4-5 funds maximum if that's possible. I definitely want to get rid of the actively managed mutual funds.
Might not be possible with 4 accounts. If your only asset allocation desire is 70% US stocks, 20% international stocks, and 10% US bonds we could probably pull it off though. I would spend a little more time thinking about and developing that asset allocation if I were you though. Once you do that, the rest of the process is relatively easy.

But truly, if that's all you care about, you could do this:


Total: $201K 100%

Taxable: $28K (14%)
Ca Muni Bond Fund 10%
TSM 4%

401(k): $92K (46%)
TISM 20%
TSM 26%

Keogh: $74K (37%)
TSM 37%

Roth IRA: $7K (3%)
TSM 3%

Voila, you're done with just 3 funds (which is what your desired asset allocation specifies). If you want to add a 4th, I'd buy some Vanguard Small Cap Value Index of REIT Index in that Roth, or perhaps the Vanguard Small Index in the 401K or Keogh or perhaps some Total Bond Market in the 401K or Keogh.

I'd just roll the Roth to Vanguard and eat any taxes due on the REIT index and target retirement holdings in your taxable account. It won't be much.

P.S. I didn't read anything in this thread except your OP.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
llessac15
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Re: Young doctor, taking over my own investments...

Post by llessac15 »

FRx, the post above from EmergDoc is the same guy who manages whitecoatinvestor.com.

Just in case you weren't aware.
obgraham
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Re: Young doctor, taking over my own investments...

Post by obgraham »

I think EmergDoc has a great plan. There are 2 things I've found that do in docs in establishing a solid financial foundation:
1. Unreasonable spending. One fancy car is perhaps an affordable luxury. A series of them is just lunacy. (Likewise for spouses.)
2. Expectation of making a financial killing somewhere -- flipping houses, oil depletion funds, buying a mini-mall somewhere, whatever. For every success there are dozens of failures.

Congratulations on being able to resist both of these so far. You have a great future ahead of you.
Topic Author
FRx
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Re: Young doctor, taking over my own investments...

Post by FRx »

Thanks to everyone for your time and effort in your replies, I have paid much more for far less in the past. I have already started making some changes and going to slowly make the rest of the transitions by transferring IRA's over. I'm going to have to keep reading through everyone's post, it's a lot of great information. I hope in a couple of weeks I'll have things consolidated better and I can either post an update to this thread or post a whole new one.

I will rethink my fear of taxes and my lack of fear of taking risk. I think I just don't know enough of either yet but I'm learning.
Bmac
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Re: Young doctor, taking over my own investments...

Post by Bmac »

I realize it has an interest rate of only 1%, but why not at least just pay off the CC debt quickly. You clearly have the cash flow. It might also be reasonable to accelerate the student loan pay off. Imagine the satisfaction and relief of getting those debts off the books.
kommisarrex
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Re: Young doctor, taking over my own investments...

Post by kommisarrex »

Here is a possible 80/20 portfolio based on the info you provided ($200k total, so $160k stocks, $40k bonds)

Taxable - $10,000
5% Vanguard Total Stock Market .05

Muni-Bonds in Taxable Account - $17,900
9% Keep these if you want, but get a cheaper fund. vanguard's int. tax-exempt fund is .20

401k - $92,300
11% Vanguard Total Bond .05
35% Vanguard Total Stock .04

Keough - $73,600
37% Dodge & Cox International 0.64

Roth IRA - $7,175
3% Vanguard REIT .24

This is tax efficient, simple, and includes a small REIT allocation you can grow (if you want). It gives you 40% us stock, 37% intl, 3% reit, 11% total bond, and 9% muni bond.

The only issue I see is a lack of good international options. You could adjust your US/Intl split, but the market split is about 50/50. You could sell your muni bonds and then use your Roth and taxable accounts for international only (and abandon REIT). That way you could use a low-cost total intl index. Just a thought.

You are a high earner, so you have the ability to take risk. Sounds like the desire as well. I question, however, the need to take risk. Every time I read a post from people making a large amount of money, I hear a voice in my head saying "you already won." With that in mind, I think I'd go 60/40 if I were you and leave it that way for the next 20 years.

I also agree on getting the CC debst off the books. It is more psychological than anything. Same thing with the student debt. It is a great feeling to be done with those.
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FRx
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Re: Young doctor, taking over my own investments...

Post by FRx »

60/40 sounds less stressful so I will adapt that. As for the credit card I'll be paying that down very quickly.
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Re: Young doctor, taking over my own investments...

Post by abuss368 »

1) Cash - cash is king. Never a bad idea to hold a fair amount of cash as an emergency fund and peace of mind to sleep at night.

2) Roth IRA - is this with Vanguard? If not, consider a direct transfer to Vanguard as they are the only client owned firm offering the lowest fees to the individual investor.

3) Tax Exempt / Muni Bond Funds - I prefer the nationally diversified Vanguard Intermediate Term Tax Exempt Bond Fund over any state specific (i.e. California, New Jersey, etc.) fund. I would rather pay a little higher tax for the additional diversification. However, you are located in California which is a very high tax state. Perhaps if you are so inclined, you could split the taxable bonds between both the Vanguard Intermediate Term Tax Exempt Bond Fund and the Vanguard California Tax Exempt Bond Fund.

4) Credit Cards - agreed. Pay that balance off as soon as financially possible.
John C. Bogle: “Simplicity is the master key to financial success."
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