Money Minutes for Doctors #20 - Investment Pearls
We are back with the 20th edition of Money Minutes for Doctors. As we head into the Thanksgiving Week it is a great time to reflect back on the year and review some of the bits of wisdom that have assisted us in navigating through 2019 and keep at the forefront points that will serve us into the next decade and beyond. Helping us uncover these rare treasures is our intrepid guide, Ms. Katherine Vessnes.
About Ms. Vessenes:
Ms. Vessenes works with over 300 physicians and dentists from Hawaii to Cape Cod. Her firm uses a team of experts to provide comprehensive financial planning to help doctors build their wealth and protect their wealth while reducing taxes now and in the future. Katherine is a longtime advocate for ethics in the financial services industry; and has written three books on the subject of investment strategies. She has received many honors and awards including: numerous tributes from Medical Economics as a top advisor for doctors, multiple 5-Star Advisor Awards, honored as a Top Woman in Finance, in addition to being selected to be on the CFP® Board of Ethics. Katherine can be reached at: Katherine@mdfinancialadvisors.com or 952-388-6317. Her website: www.mdfinancialadvisors.com.
Quick Summary:
1. Have an emergency fund – funds in bank/credit union that are safe and easily accessed
· How much? Rough rule of thumb is 3-5 months of fixed living expenses as doctors in high demand and can easily find alternate employment
· Refer to podcast #9 - Catastrophic Planning
2. Maximize 401k or 403b at work or at least up to employers’ match.
· In 2019 can invest up to $19,000. After 50 can add additional $5k.
· Most need to use this “catch up” or additional contribution after age 50 as they haven’t saved enough
· Borrowing against your retirement account (you can borrow up to 50% of 401k up to $50,000) is generally not recommended unless there is a crisis and money is needed beyond savings on an emergent basis and this is the least costly way access money
3. Nonqualified Investments
· Liquid accounts, no penalty of surrender charges if need withdraw funds
· A mutual fund investment, select one with low internal fees
· Your advisor can help you determine the amount to invest each month
· Be sure you are watching your advisor’s fees as well
4. Back Door Roth IRA contributions
· Refer to podcast episode # 7
· Tax efficient investing is key to a successful financial plan
Money does not buy happiness but allows you to buy things that bring you happiness