Topics discussed in this episode include student loans, the SAVE program, HSAs as retirement accounts, having a written financial plan, the inability to time the market, and defined benefit plans.
Having a written financial plan provides clarity and guidance for investment decisions, setting goals and ensuring long-term financial success.
Automating investments into a diversified portfolio over time, preferably through lump sum investing, maximizes potential returns and minimizes fear of market volatility.
Refinancing private loans, even if interest rates are not as low as before, is still beneficial and worth the time and effort.
Deep dives
The Benefits of Having a Financial Plan
Having a written financial plan provides clarity and guidance when making investment decisions. It helps set goals, allocate funds, and ensure long-term financial success. While a perfect plan is not necessary, having a process in place is crucial.
Investing Extra Cash
If you have $200,000 in cash, consider automating your investments into a diversified portfolio over a specified period, such as 12 months. This helps mitigate the fear of market volatility and allows for consistent, long-term investing. Lump sum investing is preferred, as it maximizes potential returns over time.
Overcoming Fear and Paralysis
It's important to acknowledge the fear of market fluctuations, but it's equally important to recognize that investing for the long-term minimizes the impact of short-term market changes. Emphasize the long-term nature of your investments and focus on the benefits of being invested over time.
Refinancing private loans is still beneficial
If you have private loans and can obtain a lower interest rate, it is still recommended to refinance them. Although the interest rates may not be as low as before, it is still worth the time and effort to refinance.
Considerations for using HSA funds
When it comes to using HSA funds, it is important to carefully consider your options. While keeping the money in the account offers tax advantages, it is also crucial to prioritize your healthcare expenses. Setting up a separate savings account for healthcare costs and automating monthly contributions can help ensure you have funds available when needed.
Today, SC Gutierrez, long time friend of WCI and the podcast is joining Dr. Dahle to help answer your questions. Together they answer questions about student loans and the SAVE program, about how HSAs should be viewed as retirement accounts, the importance of a written financial plan and a friendly reminder that no one can time the market, and finally get into what a defined benefit plan is.
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The White Coat Investor has been helping doctors with their money since 2011. Our free financial planning resource covers a variety of topics from doctor mortgage loans and refinancing medical school loans to physician disability insurance and malpractice insurance. Learn about loan refinancing or consolidation, explore new investment strategies, and discover loan programs specifically aimed at helping doctors. If you're a high-income professional and ready to get a "fair shake" on Wall Street, The White Coat Investor is for you!