Where to put the first $5000

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Topic Author
drummerx139
Posts: 4
Joined: Sun Aug 19, 2018 12:26 pm

Where to put the first $5000

Post by drummerx139 » Sun Aug 19, 2018 12:31 pm

Finally at the stage where I've saved my first $5000, getting ready to open a Vanguard Roth IRA.

Ideally, I plan to rollover to VTSAX next year once I meet the $10,000 minimum.

It's probably of small importance, but given my scenario, which fund would you choose for this first year? I'm currently deciding between VTSMX or VTI but open to other input.

Thanks!

___________________________________________________

Financial Info:

Income: $80,000
Emergency funds: $2000, working to increase
Debt:
- Student Loans: $400,000 at 6.75%, enrolled in REPAYE going for PSLF
- Credit Cards: $3,000 at 0% APR. Will have this paid off by end of 2018.
Tax Filing Status: Married Filing Jointly
Tax Rate: 15.0% Federal, 5.0% State
State of Residence: Utah
Age: 27
Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 25% of stocks

Portfolio Info: Currently do not have any has I am just starting my medical residency. Planning to try and max out personal and spousal Roth IRA, and put any remaining savings in my 403(b) offered by the university (unfortunately no match). Will definitely max out these accounts + taxable accounts etc when I am an attending physician in 4 years.

Current retirement assets: None

Available funds:

Funds available in University 403(b) - short list of the ones I am considering
FSTVX - 0.015%
FTIPX - 0.06%
FSSVX - 0.025%
FXSIX - 0.015%
FSCKX - 0.025%
FSGDX - 0.06%
VMRAX - 0.28%
VSMAX - 0.05%
VBTLX - 0.05%
VGSLX - 0.12%
Last edited by drummerx139 on Sun Aug 19, 2018 9:20 pm, edited 3 times in total.

PFInterest
Posts: 2684
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Re: Where to put the first $5000

Post by PFInterest » Sun Aug 19, 2018 3:06 pm

the limit is 5.5K, just in case.
VTI or VTSMX are fine.
do you want ETFs or MF?
you can go from MF to ETF but not the other way around.
at the end of the day, it doesnt matter. the cost difference is $5. you spent more than that on coffee this week.

MotoTrojan
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Joined: Wed Feb 01, 2017 8:39 pm

Re: Where to put the first $5000

Post by MotoTrojan » Sun Aug 19, 2018 3:11 pm

PFInterest wrote:
Sun Aug 19, 2018 3:06 pm
the limit is 5.5K, just in case.
VTI or VTSMX are fine.
do you want ETFs or MF?
you can go from MF to ETF but not the other way around.
at the end of the day, it doesnt matter. the cost difference is $5. you spent more than that on coffee this week.
VTSMX, unless a target retirement or Lifestrategy fund is of interest. Why aren’t you doing that route?

mighty72
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Location: Somewhere in the West

Re: Where to put the first $5000

Post by mighty72 » Sun Aug 19, 2018 3:17 pm

drummerx139 wrote:
Sun Aug 19, 2018 12:31 pm
Finally at the stage where I've saved my first $5000, getting ready to open a Vanguard Roth IRA.

Ideally, I plan to rollover to VTSAX next year once I meet the $10,000 minimum.

It's probably of small importance, but given my scenario, which fund would you choose for this first year? I'm currently deciding between VTSMX or VTI but open to other input.

Thanks!
Why not just do 3 fund portfolio with ETF? After all, many ETF can be traded free at vanguard. Also, as this is Roth, I don't think you will be putting small sums of money every month. It probably be 5.5k lump sum once a year.

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DanMahowny
Posts: 831
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Re: Where to put the first $5000

Post by DanMahowny » Sun Aug 19, 2018 3:20 pm

Low cost S&P 500 Index fund or etf. Leave it there.
Funding secured

PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: Where to put the first $5000

Post by PFInterest » Sun Aug 19, 2018 3:28 pm

MotoTrojan wrote:
Sun Aug 19, 2018 3:11 pm
VTSMX, unless a target retirement or Lifestrategy fund is of interest. Why aren’t you doing that route?
those are also fine. the OP didnt ask about those.

PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: Where to put the first $5000

Post by PFInterest » Sun Aug 19, 2018 3:28 pm

DanMahowny wrote:
Sun Aug 19, 2018 3:20 pm
Low cost S&P 500 Index fund or etf. Leave it there.
no, there is no reason to use s&p these days. this is old advice.

MotoTrojan
Posts: 4498
Joined: Wed Feb 01, 2017 8:39 pm

Re: Where to put the first $5000

Post by MotoTrojan » Sun Aug 19, 2018 3:38 pm

PFInterest wrote:
Sun Aug 19, 2018 3:28 pm
MotoTrojan wrote:
Sun Aug 19, 2018 3:11 pm
VTSMX, unless a target retirement or Lifestrategy fund is of interest. Why aren’t you doing that route?
those are also fine. the OP didnt ask about those.
If this is their first $5K to invest I wager they don’t know about all the available options. Just probing to see what made them think Total US was the move. If they’ve done their hw, great.

ThriftyPhD
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Re: Where to put the first $5000

Post by ThriftyPhD » Sun Aug 19, 2018 3:39 pm

drummerx139 wrote:
Sun Aug 19, 2018 12:31 pm
Finally at the stage where I've saved my first $5000, getting ready to open a Vanguard Roth IRA.

Ideally, I plan to rollover to VTSAX next year once I meet the $10,000 minimum.

It's probably of small importance, but given my scenario, which fund would you choose for this first year? I'm currently deciding between VTSMX or VTI but open to other input.

Thanks!
If your goal is to end up in VTSAX, then choosing VTSMX would be the closest equivalent. They're both shares of the same mutual fund, but with different expense ratios (ERs). At $5000 for one year, the difference in ER is somewhat trivial. VTI is also a class of the same fund, but since it is an exchange traded fund there will be some difference in how it is bought and sold. It gets you the ER of VTSAX, but a different type of purchase and redemption process. There's nothing wrong with ETFs, many here prefer them, but if you desire to hold VTSAX the easiest path is VTSMX -> VTSAX.

Topic Author
drummerx139
Posts: 4
Joined: Sun Aug 19, 2018 12:26 pm

Re: Where to put the first $5000

Post by drummerx139 » Sun Aug 19, 2018 5:43 pm

Thanks for the responses, a little bit about me...

I've been reading a lot of investment forums/personal finance books through medical school, but never had any chips to play with until now. I've gone through JL Collins' stock series recently and really agree with his approach to investing. I'm just starting my career as a physician and plan to save aggressively and grind it out through the ups and downs. I'm open to life strategy funds but feel that I have the wherewithal to be more aggressive at this stage in my career and commit to VTSAX for the next 15 years or so before thinking about scaling back.

I just don't know anything about how it actually works to transfer/rollover funds and was wondering if there was an ideal way to do it if I can't contribute directly to VTSAX in this first year. Sounding like starting with maxing out $5.5K this year in VTSMX is best suited for me.

Really appreciate the advice!

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ruralavalon
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Location: Illinois

Re: Where to put the first $5000

Post by ruralavalon » Sun Aug 19, 2018 5:58 pm

:x Welcome to the forum :) .

Congratulations on starting your career as a physician. It is great to see that you plan to save aggressively.

drummerx139 wrote:
Sun Aug 19, 2018 12:31 pm
Finally at the stage where I've saved my first $5000, getting ready to open a Vanguard Roth IRA.

Ideally, I plan to rollover to VTSAX next year once I meet the $10,000 minimum.

It's probably of small importance, but given my scenario, which fund would you choose for this first year? I'm currently deciding between VTSMX or VTI but open to other input.

Thanks!
drummerx139 wrote:
Sun Aug 19, 2018 5:43 pm
Thanks for the responses, a little bit about me...

I've been reading a lot of investment forums/personal finance books through medical school, but never had any chips to play with until now. I've gone through JL Collins' stock series recently and really agree with his approach to investing. I'm just starting my career as a physician and plan to save aggressively and grind it out through the ups and downs. I'm open to life strategy funds but feel that I have the wherewithal to be more aggressive at this stage in my career and commit to VTSAX for the next 15 years or so before thinking about scaling back.

I just don't know anything about how it actually works to transfer/rollover funds and was wondering if there was an ideal way to do it if I can't contribute directly to VTSAX in this first year. Sounding like starting with maxing out $5.5K this year in VTSMX is best suited for me.

Really appreciate the advice!
Is there a work-based plan (like a 401k, 403b, 457, TSP) offered at your employer? If so is there an employer match offered un that plan? If so you should probably be contributing to that.

Additional information is necessary. There is more involved here than choosing between Vanguard Total Stock Market ETF (VTI) and Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) in a Roth IRA.

Could you also please list the funds offered in any work-based available to you, giving fund names, tickers and expense ratios? Please see this for format and other information needed: "Asking Portfolio Questions". You can simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

MotoTrojan
Posts: 4498
Joined: Wed Feb 01, 2017 8:39 pm

Re: Where to put the first $5000

Post by MotoTrojan » Sun Aug 19, 2018 6:11 pm

drummerx139 wrote:
Sun Aug 19, 2018 5:43 pm
Thanks for the responses, a little bit about me...

I've been reading a lot of investment forums/personal finance books through medical school, but never had any chips to play with until now. I've gone through JL Collins' stock series recently and really agree with his approach to investing. I'm just starting my career as a physician and plan to save aggressively and grind it out through the ups and downs. I'm open to life strategy funds but feel that I have the wherewithal to be more aggressive at this stage in my career and commit to VTSAX for the next 15 years or so before thinking about scaling back.

I just don't know anything about how it actually works to transfer/rollover funds and was wondering if there was an ideal way to do it if I can't contribute directly to VTSAX in this first year. Sounding like starting with maxing out $5.5K this year in VTSMX is best suited for me.

Really appreciate the advice!
Makes sense. I’d recommend you consider a 25-50% allocation to total international. More diverse, less risky, could boost return, and it’ll get you in the habit of rebalancing prior to adding bonds.

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mikeyzito22
Posts: 153
Joined: Sat Dec 02, 2017 5:42 pm

Re: Where to put the first $5000

Post by mikeyzito22 » Sun Aug 19, 2018 6:25 pm

MotoTrojan wrote:
Sun Aug 19, 2018 6:11 pm
drummerx139 wrote:
Sun Aug 19, 2018 5:43 pm
Thanks for the responses, a little bit about me...

I've been reading a lot of investment forums/personal finance books through medical school, but never had any chips to play with until now. I've gone through JL Collins' stock series recently and really agree with his approach to investing. I'm just starting my career as a physician and plan to save aggressively and grind it out through the ups and downs. I'm open to life strategy funds but feel that I have the wherewithal to be more aggressive at this stage in my career and commit to VTSAX for the next 15 years or so before thinking about scaling back.

I just don't know anything about how it actually works to transfer/rollover funds and was wondering if there was an ideal way to do it if I can't contribute directly to VTSAX in this first year. Sounding like starting with maxing out $5.5K this year in VTSMX is best suited for me.

Really appreciate the advice!
Makes sense. I’d recommend you consider a 25-50% allocation to total international. More diverse, less risky, could boost return, and it’ll get you in the habit of rebalancing prior to adding bonds.
+1 on this. Maybe Target date 2060 would fit the bill. Some people like to break it up once they hit a certain amount of money, like me. Then, go all 3 fund to your liking.

MotoTrojan
Posts: 4498
Joined: Wed Feb 01, 2017 8:39 pm

Re: Where to put the first $5000

Post by MotoTrojan » Sun Aug 19, 2018 6:30 pm

mikeyzito22 wrote:
Sun Aug 19, 2018 6:25 pm
MotoTrojan wrote:
Sun Aug 19, 2018 6:11 pm
drummerx139 wrote:
Sun Aug 19, 2018 5:43 pm
Thanks for the responses, a little bit about me...

I've been reading a lot of investment forums/personal finance books through medical school, but never had any chips to play with until now. I've gone through JL Collins' stock series recently and really agree with his approach to investing. I'm just starting my career as a physician and plan to save aggressively and grind it out through the ups and downs. I'm open to life strategy funds but feel that I have the wherewithal to be more aggressive at this stage in my career and commit to VTSAX for the next 15 years or so before thinking about scaling back.

I just don't know anything about how it actually works to transfer/rollover funds and was wondering if there was an ideal way to do it if I can't contribute directly to VTSAX in this first year. Sounding like starting with maxing out $5.5K this year in VTSMX is best suited for me.

Really appreciate the advice!
Makes sense. I’d recommend you consider a 25-50% allocation to total international. More diverse, less risky, could boost return, and it’ll get you in the habit of rebalancing prior to adding bonds.
+1 on this. Maybe Target date 2060 would fit the bill. Some people like to break it up once they hit a certain amount of money, like me. Then, go all 3 fund to your liking.
Yup, breaking it up makes sense once you start to add to taxable so you can implement a tax-efficient fund placement. But if OP wants to avoid bonds then I think a 2-fund portfolio of Total US & Total Int would be a good option, and allow them to decide on International AA. Just try to decide once, for good reason, and hold that your entire life.

H-Town
Posts: 1692
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Re: Where to put the first $5000

Post by H-Town » Sun Aug 19, 2018 6:33 pm

drummerx139 wrote:
Sun Aug 19, 2018 12:31 pm
Finally at the stage where I've saved my first $5000, getting ready to open a Vanguard Roth IRA.

Ideally, I plan to rollover to VTSAX next year once I meet the $10,000 minimum.

It's probably of small importance, but given my scenario, which fund would you choose for this first year? I'm currently deciding between VTSMX or VTI but open to other input.

Thanks!
Congrats on the first step of investing. Couple of advice:
1) Set up goals and measure it frequently
2) Save early and attack your goals
3) Sometimes, you just have to do the math... Really? VTI and VTSMX? Let me pull out a calculator for you:

0.0014 expense ratio of VTI or VTASX
0.0004 - expense ratio of VTSMX
--------------------------
0.001 = the difference

5,000 × your investment
--------------------------
5 = $5 fee difference for the whole year

12 ÷
5 ÷ Aug - Dec 2018
--------------------------
0.08 = 8 cents!

So should you lose sleep over 8 cents?

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mikeyzito22
Posts: 153
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Re: Where to put the first $5000

Post by mikeyzito22 » Sun Aug 19, 2018 6:39 pm

MotoTrojan wrote:
Sun Aug 19, 2018 6:30 pm
mikeyzito22 wrote:
Sun Aug 19, 2018 6:25 pm
MotoTrojan wrote:
Sun Aug 19, 2018 6:11 pm
drummerx139 wrote:
Sun Aug 19, 2018 5:43 pm
Thanks for the responses, a little bit about me...

I've been reading a lot of investment forums/personal finance books through medical school, but never had any chips to play with until now. I've gone through JL Collins' stock series recently and really agree with his approach to investing. I'm just starting my career as a physician and plan to save aggressively and grind it out through the ups and downs. I'm open to life strategy funds but feel that I have the wherewithal to be more aggressive at this stage in my career and commit to VTSAX for the next 15 years or so before thinking about scaling back.

I just don't know anything about how it actually works to transfer/rollover funds and was wondering if there was an ideal way to do it if I can't contribute directly to VTSAX in this first year. Sounding like starting with maxing out $5.5K this year in VTSMX is best suited for me.

Really appreciate the advice!
Makes sense. I’d recommend you consider a 25-50% allocation to total international. More diverse, less risky, could boost return, and it’ll get you in the habit of rebalancing prior to adding bonds.
+1 on this. Maybe Target date 2060 would fit the bill. Some people like to break it up once they hit a certain amount of money, like me. Then, go all 3 fund to your liking.
Yup, breaking it up makes sense once you start to add to taxable so you can implement a tax-efficient fund placement. But if OP wants to avoid bonds then I think a 2-fund portfolio of Total US & Total Int would be a good option, and allow them to decide on International AA. Just try to decide once, for good reason, and hold that your entire life.
Yep, sounds about right. I'm 40 so bonds are actually something I'd like to hold at 10%, but if this kid is young go full equity.

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badbreath
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Re: Where to put the first $5000

Post by badbreath » Sun Aug 19, 2018 6:45 pm

just do VTI or VTSMX and keep reading about investing.
“While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho Marx

flyingaway
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Re: Where to put the first $5000

Post by flyingaway » Sun Aug 19, 2018 7:59 pm

badbreath wrote:
Sun Aug 19, 2018 6:45 pm
just do VTI or VTSMX and keep reading about investing.
Is VTI better than VTSMX better, in terms of the current U.S. market valuation?

PFInterest
Posts: 2684
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Re: Where to put the first $5000

Post by PFInterest » Sun Aug 19, 2018 8:32 pm

flyingaway wrote:
Sun Aug 19, 2018 7:59 pm
badbreath wrote:
Sun Aug 19, 2018 6:45 pm
just do VTI or VTSMX and keep reading about investing.
Is VTI better than VTSMX better, in terms of the current U.S. market valuation?
they are exactly the same thing.

Topic Author
drummerx139
Posts: 4
Joined: Sun Aug 19, 2018 12:26 pm

Re: Where to put the first $5000

Post by drummerx139 » Sun Aug 19, 2018 9:08 pm

ruralavalon wrote:
Sun Aug 19, 2018 5:58 pm
:x Welcome to the forum :) .

Congratulations on starting your career as a physician. It is great to see that you plan to save aggressively.

drummerx139 wrote:
Sun Aug 19, 2018 12:31 pm
Finally at the stage where I've saved my first $5000, getting ready to open a Vanguard Roth IRA.

Ideally, I plan to rollover to VTSAX next year once I meet the $10,000 minimum.

It's probably of small importance, but given my scenario, which fund would you choose for this first year? I'm currently deciding between VTSMX or VTI but open to other input.

Thanks!
drummerx139 wrote:
Sun Aug 19, 2018 5:43 pm
Thanks for the responses, a little bit about me...

I've been reading a lot of investment forums/personal finance books through medical school, but never had any chips to play with until now. I've gone through JL Collins' stock series recently and really agree with his approach to investing. I'm just starting my career as a physician and plan to save aggressively and grind it out through the ups and downs. I'm open to life strategy funds but feel that I have the wherewithal to be more aggressive at this stage in my career and commit to VTSAX for the next 15 years or so before thinking about scaling back.

I just don't know anything about how it actually works to transfer/rollover funds and was wondering if there was an ideal way to do it if I can't contribute directly to VTSAX in this first year. Sounding like starting with maxing out $5.5K this year in VTSMX is best suited for me.

Really appreciate the advice!
Is there a work-based plan (like a 401k, 403b, 457, TSP) offered at your employer? If so is there an employer match offered un that plan? If so you should probably be contributing to that.

Additional information is necessary. There is more involved here than choosing between Vanguard Total Stock Market ETF (VTI) and Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) in a Roth IRA.

Could you also please list the funds offered in any work-based available to you, giving fund names, tickers and expense ratios? Please see this for format and other information needed: "Asking Portfolio Questions". You can simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.
Thanks, I edited my original post with some more info. Given my current situation, over the next 4 years I'll likely only be able to max out my Roth IRA and my spouses, with some extra going in my Roth 403(b) (no match unfortunately).

I understand that we are talking about a small amount of money and that it likely won't make much difference in which of these funds I choose. The main reason I'm asking these questions is more for learning/conceptual purposes in order to hit the ground running in 4 years when I'm making enough to max out my 403(b) + other taxable accounts with a higher salary. I like the idea of mixing in some international right now, if only just to start learning to rebalance.

Again, really appreciate all the input, this is very enlightening.

flyingaway
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Joined: Fri Jan 17, 2014 10:19 am

Re: Where to put the first $5000

Post by flyingaway » Sun Aug 19, 2018 9:25 pm

PFInterest wrote:
Sun Aug 19, 2018 8:32 pm
flyingaway wrote:
Sun Aug 19, 2018 7:59 pm
badbreath wrote:
Sun Aug 19, 2018 6:45 pm
just do VTI or VTSMX and keep reading about investing.
Is VTI better than VTSMX better, in terms of the current U.S. market valuation?
they are exactly the same thing.
OK. I thought VTI is Vanguard total international.

e5116
Posts: 435
Joined: Mon Oct 05, 2009 11:22 am

Re: Where to put the first $5000

Post by e5116 » Sun Aug 19, 2018 10:00 pm

flyingaway wrote:
Sun Aug 19, 2018 9:25 pm
PFInterest wrote:
Sun Aug 19, 2018 8:32 pm
flyingaway wrote:
Sun Aug 19, 2018 7:59 pm
badbreath wrote:
Sun Aug 19, 2018 6:45 pm
just do VTI or VTSMX and keep reading about investing.
Is VTI better than VTSMX better, in terms of the current U.S. market valuation?
they are exactly the same thing.
OK. I thought VTI is Vanguard total international.
Ha, I could see how somebody new to the game sees "VTI" and thinks it's an acronym for "Vanguard Total international." But it's not. It's the ticker symbol that often don't mean much. https://investor.vanguard.com/etf/profile/VTI

VTI is the ETF that is total US Stock while VTSMX is the mutual fund that is total US Stock. They will perform exactly the same basically as they follow the exact same index. They're considered different share classes of the same fund. The only difference is how you purchase them. Personally, I like the simplicity and ease of mutual funds as I can place an order for $500 at any time of the day and will get a fair price. You can also turn on "auto-investing" with mutual funds. ETFs, on the other hand, trade like stocks. You'll need to place a limit order during the day while the market is open (looking at the bid and ask prices) and in whole share amounts. It's not too difficult of course, but mutual funds are even easier....

I'd probably put 20-30% in international equities, but at this small dollar amount, I wouldn't sweat it much. New investors often get caught up way too much on tiny differences. Your savings rate and fact that you're investing at all right now is what's going to make the difference. Not choosing a 0.0015% expense fund over a 0.0018% one. I think Bogleheads is somewhat to "blame" on losing the big picture as we all DO emphasize the importance of fees. But that's when it's like 1% actively managed funds vs. index funds over the course of several years. If you stick with index funds/ETFs from Vanguard, Schwab, Fidelity, then you'll be fine, particularly when starting out. They're all low fees.

Nissanzx1
Posts: 569
Joined: Wed Jul 18, 2018 11:13 pm

Re: Where to put the first $5000

Post by Nissanzx1 » Sun Aug 19, 2018 10:17 pm

VTI would be adequate.

I don't want to be a Debbie Downer, but I have to say I would pay off the credit card before I invested. I get that you want to get started. I understand compound interest and time value of money. There is plenty of time left for you and you will no doubt have millions at the end of your journeys in life.

To be frank, your student loans scare the living hell out of me. I understand in your field you will make great money, but today you are in a position such that I couldn't sleep at night. Please put a plan in place to aggressively set money aside in case something happens to the student loan forgiveness plan. 400K, I'm having trouble breathing, seriously. Please make sure there is a plan in place to address the 4000 pound Elephant in the room.

The other thing I'll say is avoid Docitis. I have a brother in law who is an MD that is nearly broke. His physician friends have helped to convince him that the more complicated personal finances are, the more successful he can be. Simple financial principles are for broke people, etc.... Absolutely a lie.... he's almost 60 and everything is financed. Nearly nothing available to invest after all the payments...

Topic Author
drummerx139
Posts: 4
Joined: Sun Aug 19, 2018 12:26 pm

Re: Where to put the first $5000

Post by drummerx139 » Sun Aug 19, 2018 11:05 pm

Nissanzx1 wrote:
Sun Aug 19, 2018 10:17 pm
VTI would be adequate.

I don't want to be a Debbie Downer, but I have to say I would pay off the credit card before I invested. I get that you want to get started. I understand compound interest and time value of money. There is plenty of time left for you and you will no doubt have millions at the end of your journeys in life.

To be frank, your student loans scare the living hell out of me. I understand in your field you will make great money, but today you are in a position such that I couldn't sleep at night. Please put a plan in place to aggressively set money aside in case something happens to the student loan forgiveness plan. 400K, I'm having trouble breathing, seriously. Please make sure there is a plan in place to address the 4000 pound Elephant in the room.

The other thing I'll say is avoid Docitis. I have a brother in law who is an MD that is nearly broke. His physician friends have helped to convince him that the more complicated personal finances are, the more successful he can be. Simple financial principles are for broke people, etc.... Absolutely a lie.... he's almost 60 and everything is financed. Nearly nothing available to invest after all the payments...
Yeah you are right about the credit card. I can definitely get that down first.

I'm aware that the student loans are the biggest hurdle, but I do have a pretty detailed written financial plan for the next 20-30 years. Very determined not to get "Docitis", but you're right it is a huge issue that's getting even worse with tuition spikes. Over half of my graduating class (private school) has as much or more debt than me.

General plan for the student loans - I'll continue following PSLF through residency (4 years). When I'm an attending, start putting about $75K/yr for the next 6 years in a taxable account. When the 10-year mark on my PSLF hits (June 2028) I should qualify for loan forgiveness. If for some reason the program falls apart by that point, I'll liquidate my taxable account and throw it at the loans and continue attacking it from then on until it's gone. If PSLF works out, then I'll just keep contributing to the taxable account.

PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: Where to put the first $5000

Post by PFInterest » Mon Aug 20, 2018 6:54 am

drummerx139 wrote:
Sun Aug 19, 2018 12:31 pm
Financial Info:

Income: $80,000
Emergency funds: $2000, working to increase
Debt:
- Student Loans: $400,000 at 6.75%, enrolled in REPAYE going for PSLF
- Credit Cards: $3,000 at 0% APR. Will have this paid off by end of 2018.
Tax Filing Status: Married Filing Jointly
Tax Rate: 15.0% Federal, 5.0% State
State of Residence: Utah
Age: 27
Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 25% of stocks

Current retirement assets: None

Available funds:

Funds available in University 403(b) - short list of the ones I am considering
FSTVX - 0.015%
FTIPX - 0.06%
FSSVX - 0.025%
FXSIX - 0.015%
FSCKX - 0.025%
FSGDX - 0.06%
VMRAX - 0.28%
VSMAX - 0.05%
VBTLX - 0.05%
VGSLX - 0.12%
- a few updates: does your spouse work? im assuming they make 50K?
- i think that means yes you can stick with rIRA x2 (11K) given your lower tax bracket. if however you find your loan payments go down significantly with pretax contributions then maybe you can consider the 403b first.
- the CC needs to be gone.
- your 403b is excellent. if you find extra money you can easily add it there. dont forget you need to save for an EF, car, vacation, fellowship/job interviews, etc.
- your PSLF plan sounds perfect (10 year plan with a side taxable account in case).

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