IGX

I'll be finished chiro school in a few months and once I start actually making a paycheck again I'd like to get seriously involved with saving and investing and making my future life as comfortable as possible. Where would I start? What should I read? Who should I listen to?

Ben Graham's The Intelligent Investor
Maybe a subscription to something along the lines of Kiplinger
Online reading at Motley Fool

Set up a budget immediately (as in now). Figure out what you need $ for, and what you want $ for and what your priorities are. Goals? Short, mid, long-term? Pay yourself first - by this I mean your allotment of 10% (minimum, if at all possible) that you will initially use to set up a reserve fund of 4-6 months (depending on your job stability) of emergency cash. Read while you do this, and find where you want to start investing things like IRA etc.

With your education, you need to think differently than most. In your case, you might be wise to put all you can into a private practice. That is, IF private chiro practices are saleable. If it becomes worthless the minute you walk away, then you should get your money in the market, and you'll get plenty of replies in this thread helping point you in the right direction. If a private practice could earn you a nice income as you work it, and a retirement chunk or income (depending on how a sale would be structured) upon selling, look into that.

I started investing in mutual funds when I was 25 so most of my money is tied up in those. The mer is at 1.6%.

It seems that every financial blog I read these days pushes ETF's and rips on mutuals because of the fees. I've always liked how easy mutuals made it but now I'm getting worried.

^ Buy as many as you possibly can. You might even consider taking out some cash advances on your credit cards to do so. Suze Orman and Robert Kiyosaki swear by it.

Pro Tip: Keep the gum. It's not edible any more but it does wonders for a wobbly table. No more paying good money for wobbly-table-leg-pads at Lowe's like the mouthbreather 99%. A baseball card mogul knows how to get the most bang for his buck.

Old Mother wrote:I'll be finished chiro school in a few months and once I start actually making a paycheck again I'd like to get seriously involved with saving and investing and making my future life as comfortable as possible. Where would I start? What should I read? Who should I listen to?

Best return on investment is elimination of debt. Be aggressive there if you have chiro school debt. You will be best served with a self directed 401k after that.

While a S+P 500 is not the best idea for a tax sheltered vehicle, it will get you started and learning the market with minimal risk, then transfer the funds within the fund family you choose when you find what you like.

http://www.selfdirectediraaccounts.com/401k.html

Step one is making sure you can survive a minor catastrophe. Pay off all credit card and other high-interest debt, set aside a few thousand dollars so you can absorb some random major expense without going into debt, and then set aside a few months of expenses. Resist any temptation to upwardly adjust your lifestyle until you have an emergency fund in place - that's one way people get boned.

After that: If you have a 401K plan and your employer does any level of matching, contribute enough to get the maximum amount your employer is willing to match (ie, if your employer matches 50% of your contribution until you contribute 6% of your salary, contribute 6% of your salary). The next step is to max out your Roth IRA contributions for the year. Contributing to your Roth this year is probably important because, with the income you're likely to have, this could be the last year you are able to do it. After you have maxed out your Roth IRA contributions for the year, invest as much as you can in your 401K. This is likely to be all of the investing you are going to do (it's over $20,000 per year), but if it isn't, then at this point you need to consider tax-efficient investing strategies for the rest of your money.

What should you invest in? That is quite honestly the thing everybody is going to be least certain about. Frankly, it's more important for an individual investor to save large amounts of money in tax-efficient - taxes are your biggest expense! - ways than to eke out the best possible performance. Not that performance isn't important, but investing 11,000 per year instead of 10,000 per year is going to have a much bigger impact than getting 7% returns instead of 6% returns. If you're too lazy to do a lot of legwork, throw a bunch of your money into some stock index fund and another bunch into some bond index fund. Find one with low transaction fees and you'll probably want to use one run by whatever broker is holding your accounts because they'll give you a deal on the transaction fees or something like that (eg, if you're using Fidelity, look at buying Fidelity funds - an index fund is an index fund).

tzg wrote:Step one is making sure you can survive a minor catastrophe. Pay off all credit card and other high-interest debt, set aside a few thousand dollars so you can absorb some random major expense without going into debt, and then set aside a few months of expenses. Resist any temptation to upwardly adjust your lifestyle until you have an emergency fund in place - that's one way people get boned.

After that: If you have a 401K plan and your employer does any level of matching, contribute enough to get the maximum amount your employer is willing to match (ie, if your employer matches 50% of your contribution until you contribute 6% of your salary, contribute 6% of your salary). The next step is to max out your Roth IRA contributions for the year. Contributing to your Roth this year is probably important because, with the income you're likely to have, this could be the last year you are able to do it. After you have maxed out your Roth IRA contributions for the year, invest as much as you can in your 401K. This is likely to be all of the investing you are going to do (it's over $20,000 per year), but if it isn't, then at this point you need to consider tax-efficient investing strategies for the rest of your money.

What should you invest in? That is quite honestly the thing everybody is going to be least certain about. Frankly, it's more important for an individual investor to save large amounts of money in tax-efficient - taxes are your biggest expense! - ways than to eke out the best possible performance. Not that performance isn't important, but investing 11,000 per year instead of 10,000 per year is going to have a much bigger impact than getting 7% returns instead of 6% returns. If you're too lazy to do a lot of legwork, throw a bunch of your money into some stock index fund and another bunch into some bond index fund. Find one with low transaction fees and you'll probably want to use one run by whatever broker is holding your accounts because they'll give you a deal on the transaction fees or something like that (eg, if you're using Fidelity, look at buying Fidelity funds - an index fund is an index fund).

Good solid advice. swap out Roth IRA for TFSA and 401k for RRSP and it's good to go for Canadians as well.

You can buy the S&P500 via SPY for 10bps in management costs, mutual funds tend to be much more expensive. Even developed and emerging market ETFs are still well under 100 bps. ETFs are great tools for broad market index exposure and you can trade them free with certain online brokerages (I think Fidelity lets you trade Vanguard ETFs).

Make sure you have a solid grasp of your level of risk aversion and time horizon. Then commit yourself to either semi-yearly or quarterly portfolio rebalancing. Don't watch your value fluctuate daily, it will drive you nuts and you'll keep wanting to trade, probably at the worst possible time.

Do not try to follow any of the TV/book/internet gurus. If you're really interested in learning start with Security Analysis (Graham and Dodd).

Assuming that you're relatively young, unless your livelihood is tied to equity market returns you should be almost entirely (if not 100%) invested in equities. 60/40 prevalence is retarded, IMO. You've got plenty of time to deal with increased volatility from equity markets. Over time you will be compensated for increased risk from equity.

I would avoid actively managed funds, they are expensive and your ability to beat the market (cheaply attained with ETFs) by using them is a function not only of a manager being able to consistently outperform the market (very arguable) but your ability to choose that manager on a consistent basis (you most likely cannot unless).

I'd also avoid individual stocks unless you have a passion for building valuation models, sifting through accounting statements, and constantly researching and reading news. Remember, if your chiropracting ass has heard about a "good buy" then it's a sure bet that it's too late. Plus, unless you've got a boatload of cash you'll have all your eggs in one basket so to speak. You never know when some asshole at coca cola is going to reveal that they've been cooking the books for the last 10 years.

4 ETFs would be a good start... There are tons of providers but you could start with SSgA (Spider), BGI (iShares), and Vanguard. Do some research on who provides the best value for index exposure (tracking error vs. cost) or who you can get deals on by setting up a brokerage account.
Large Cap US equity - S&P500
Small Cap US equity - Russell 2000
Developed International - MSCI EAFE
Emerging Market - MSCI Emerging

*Agreed on the contribute to 401k to get the maximum employer match. If this is a retirement plan then you most certainly should be using a tax deferred account. If not, you'll be paying cap gains and income taxes on your profits but only when you sell. It's not like you're gonna get stuck with a huge tax bill for unrealized P/L in your ETRADE account.

Also:

Buy a shitfit box and charge those mofo's $250 a month. Then fuckem up real good with Kipping pull ups and power cleans for time. After that, open up your chiro practice next door.

fuck the markets, start buying gold and silver

Old Mother wrote:I'll be finished chiro school in a few months and once I start actually making a paycheck again I'd like to get seriously involved with saving and investing and making my future life as comfortable as possible. Where would I start? What should I read? Who should I listen to?

Depends. A lot of the advice given might not apply to you. If you are looking at going into business for yourself get a $5k savings account and a good accountant you will actually listen to. You might have options not available or appropriate for most.

Old Mother wrote:I'll be finished chiro school in a few months and once I start actually making a paycheck again I'd like to get seriously involved with saving and investing and making my future life as comfortable as possible. Where would I start? What should I read? Who should I listen to?

How old are you?

Grandpa's Spells wrote:

Old Mother wrote:I'll be finished chiro school in a few months and once I start actually making a paycheck again I'd like to get seriously involved with saving and investing and making my future life as comfortable as possible. Where would I start? What should I read? Who should I listen to?

How old are you?

49. Late bloomer.

ROI on simple investments applicable to novices with low barriers to entry is shit right now. The best investment you can make is in yourself and enhancing your ability to make the skrilla. The advice to build an emergency fund as soon as you have a positive cash flow is good. I also like minimizing debt. Its hard to find investments that can outpace typical credit card APRs.

Grandpa's Spells wrote:

Old Mother wrote:I'll be finished chiro school in a few months and once I start actually making a paycheck again I'd like to get seriously involved with saving and investing and making my future life as comfortable as possible. Where would I start? What should I read? Who should I listen to?

How old are you?

33.

bigpeach wrote:With your education, you need to think differently than most. In your case, you might be wise to put all you can into a private practice. That is, IF private chiro practices are saleable. If it becomes worthless the minute you walk away, then you should get your money in the market, and you'll get plenty of replies in this thread helping point you in the right direction. If a private practice could earn you a nice income as you work it, and a retirement chunk or income (depending on how a sale would be structured) upon selling, look into that.

The plan is to associate at another office for a few years until I pay off my credit card bills and start to make a dent in my student loans. I also want to save up at least $25k before I go and start my own practice.

Also, I don't see myself retiring unless something happens where I can't practice anymore, like an accident or disease. I'd consider semi-retirement, but I'll probably work until the day I die.

There's a lot of good information in this thread. Thank you.

Old Mother wrote:

Grandpa's Spells wrote:

Old Mother wrote:I'll be finished chiro school in a few months and once I start actually making a paycheck again I'd like to get seriously involved with saving and investing and making my future life as comfortable as possible. Where would I start? What should I read? Who should I listen to?

How old are you?

33.

I think this is the go-to book for people under 35:
http://www.amazon.com/Will-Teach-You-Be ... 634&sr=8-1

Focuses on automating saving and investing so it happens without you actively having to be involved. Is also good for doing this for sub-savings accounts for things you are likely to want. Actively avoids any talk of saving $3/day by not going to Starbucks.

Grandpa's Spells wrote:
33.

I think this is the go-to book for people under 35:
http://www.amazon.com/Will-Teach-You-Be ... 634&sr=8-1

Focuses on automating saving and investing so it happens without you actively having to be involved. Is also good for doing this for sub-savings accounts for things you are likely to want. Actively avoids any talk of saving $3/day by not going to Starbucks.[/quote]

LOL @ the Latte Factor

Old Mother wrote:

bigpeach wrote:With your education, you need to think differently than most. In your case, you might be wise to put all you can into a private practice. That is, IF private chiro practices are saleable. If it becomes worthless the minute you walk away, then you should get your money in the market, and you'll get plenty of replies in this thread helping point you in the right direction. If a private practice could earn you a nice income as you work it, and a retirement chunk or income (depending on how a sale would be structured) upon selling, look into that.

The plan is to associate at another office for a few years until I pay off my credit card bills and start to make a dent in my student loans. I also want to save up at least $25k before I go and start my own practice.

Also, I don't see myself retiring unless something happens where I can't practice anymore, like an accident or disease. I'd consider semi-retirement, but I'll probably work until the day I die.

If you go into practice for yourself, and if it's profitable-- you will have a lot of options are either unavailable or don't make sense for most other people.

Depending on your financial situation, and how much time you actually want to dedicate towards the investment side of your portfolio-- there's nothing wrong with going to an investment adviser that charges a flat fee for some investment advice on what options to consider.

Turdacious wrote:If you go into practice for yourself, and if it's profitable-- you will have a lot of options are either unavailable or don't make sense for most other people.

Like what? Some secret chiropractor fund that's only available to spine jockeys?

Just tell the guy to invest in baseball cards. It's a sure thing. You can't be jewed out of a Wade Boggs rookie card like you can out of a 401k.

I'll help you allocate your investments.

Kraj 2.0 wrote:

Turdacious wrote:If you go into practice for yourself, and if it's profitable-- you will have a lot of options are either unavailable or don't make sense for most other people.

Like what? Some secret chiropractor fund that's only available to spine jockeys?

Just tell the guy to invest in baseball cards. It's a sure thing. You can't be jewed out of a Wade Boggs rookie card like you can out of a 401k.

The basics: Simple and SEP IRAs (bigger contribution limits than regular IRAs)
For someone who wants to make really big contributions: life insurance (expensive, but tax free when you take the money out).
Other options require more pieces, and usually a very good accountant.

'Employing' (either legit or on paper) a spouse gives additional options.