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Hello all and thank you in advance for any advice/input. Although I've learned a lot over the past 2+ years from forums and voices like the WCI, MMM, and similar venues on the internet, I am somewhat apprehensive about sharing my financial details on the internet. Consequently, I'm going to be as vague as possible while still expressing the relevant details of my situation. I hope you'll excuse me for this.
I have the good fortune of experiencing a "windfall," although I shudder to call it that since it involves the death of a loved one. I have inherited a little bit less than 100k in an investment account at merril. The family member was conservatively invested and relied on active investment advice, so it is mostly in fixed income of some kind - I do not understand the details since I have mostly read up on the boggle heads, MMM, and WCI for my learning, which generally discourages both paying for advice and fixed income type assets over the long term. Currently it is just hanging out in the asset allocation that was recommended prior to my family members passing although no longer paying for active management.
About me: I am a 3d year at a US allopathic school, very middle of the road student, debating between several middle of the road to bottom of the road (compensation wise) specialties. I'd really like to achieve financial independence relatively early in my career, and plan to do that by living frugally and investing the excess money. I don't want to necessarily retire, but I'd like to be choosy about the kind of jobs I take, spend more time with family, spend more time doing charity work either here or abroad.
Financials: I am lucky in that I have a full ride due to an academic scholarship to medical school, and take out loans for living expenses. I expect to graduate with around 60k in student loans. Before coming to medical school I started a Roth IRA at vanguard with a small amount of money (3.3k), mostly to get started and also with the thinking that I want to learn early on, so its nice to have some skin in the game. I’ve been happy to see this grow over the course of school, really makes me realize the value of investing over time!
I need to figure out what to do with this windfall. All of my learning has been at the “basic” level and I don’t know what to do with this kind of money. It isn’t in any kind of tax advantaged account (not that I pay much in taxes now). Is there anything I can do to change that? I’d like to keep some portion of it (say 30-50k) accessible for the next couple of years as I enter residency for living expenses and random things that might come up. But what to do with the rest? And what to do with this 30 k that I keep accessible?
Ideally I’d like to have the vast majority of it in some kind of index investing that mixes equities and bonds. Also with a tilt towards small cap or emerging markets since I am comfortable with volatility over the long term investing horizon. What is the ideal mix for someone in my position (young, no income, but presumed high income in the future)? I know it doesn’t work in the long term, but I’d like to keep some amount of it (~5k) for individual stock picking, on some level to make money and then on another level to continue to educate myself about the stock market as I enjoy learning about it.
Regarding debt, my thinking was to leave the loans alone for now as they are federal loans at a relatively good rate. This way, if PSLF is still around I can take advantage of it. Otherwise, I know that sometimes private groups will offer some kind of loan repayment and it would be nice to take advantage of it. If this is misguided please redirect me.
Where to keep the money? I know vanguard is popular here and I get the advantage of minimizing costs over the long term. But should I transfer it all from merril edge or just buy vanguard ETFs using the merril edge services. They seem to have really good customer support and I don’t know the tax consequences of moving the money over. Over the phone they described their “Merril Edge Guided investing” program with a management fee of .45 +.15 fee for something else. Also have a self directed platform with no management fee but I think still the .15 something else fee. If you buy ETFs within one of these platforms, do you pay for the management fee of the ETF on top of it? Seems like a nice hidden cost that I won’t get at vanguard if that’s the case. But, it seems like it would be easier to buy individual stocks over at merril edge than vanguard but maybe I’m mistaken.
What about the tax situation? Do I pay taxes on this money if it increases in value, or only if cash out? How does this all work?
Finally, what about the crazy ****************** state of the world? I know its unwise to try and time the market, but things do seem a little batsh$$ right now. Should I just hold off and wait for the correction that is to come at SOME point? Or is that naïve?
I have the good fortune of experiencing a "windfall," although I shudder to call it that since it involves the death of a loved one. I have inherited a little bit less than 100k in an investment account at merril. The family member was conservatively invested and relied on active investment advice, so it is mostly in fixed income of some kind - I do not understand the details since I have mostly read up on the boggle heads, MMM, and WCI for my learning, which generally discourages both paying for advice and fixed income type assets over the long term. Currently it is just hanging out in the asset allocation that was recommended prior to my family members passing although no longer paying for active management.
About me: I am a 3d year at a US allopathic school, very middle of the road student, debating between several middle of the road to bottom of the road (compensation wise) specialties. I'd really like to achieve financial independence relatively early in my career, and plan to do that by living frugally and investing the excess money. I don't want to necessarily retire, but I'd like to be choosy about the kind of jobs I take, spend more time with family, spend more time doing charity work either here or abroad.
Financials: I am lucky in that I have a full ride due to an academic scholarship to medical school, and take out loans for living expenses. I expect to graduate with around 60k in student loans. Before coming to medical school I started a Roth IRA at vanguard with a small amount of money (3.3k), mostly to get started and also with the thinking that I want to learn early on, so its nice to have some skin in the game. I’ve been happy to see this grow over the course of school, really makes me realize the value of investing over time!
I need to figure out what to do with this windfall. All of my learning has been at the “basic” level and I don’t know what to do with this kind of money. It isn’t in any kind of tax advantaged account (not that I pay much in taxes now). Is there anything I can do to change that? I’d like to keep some portion of it (say 30-50k) accessible for the next couple of years as I enter residency for living expenses and random things that might come up. But what to do with the rest? And what to do with this 30 k that I keep accessible?
Ideally I’d like to have the vast majority of it in some kind of index investing that mixes equities and bonds. Also with a tilt towards small cap or emerging markets since I am comfortable with volatility over the long term investing horizon. What is the ideal mix for someone in my position (young, no income, but presumed high income in the future)? I know it doesn’t work in the long term, but I’d like to keep some amount of it (~5k) for individual stock picking, on some level to make money and then on another level to continue to educate myself about the stock market as I enjoy learning about it.
Regarding debt, my thinking was to leave the loans alone for now as they are federal loans at a relatively good rate. This way, if PSLF is still around I can take advantage of it. Otherwise, I know that sometimes private groups will offer some kind of loan repayment and it would be nice to take advantage of it. If this is misguided please redirect me.
Where to keep the money? I know vanguard is popular here and I get the advantage of minimizing costs over the long term. But should I transfer it all from merril edge or just buy vanguard ETFs using the merril edge services. They seem to have really good customer support and I don’t know the tax consequences of moving the money over. Over the phone they described their “Merril Edge Guided investing” program with a management fee of .45 +.15 fee for something else. Also have a self directed platform with no management fee but I think still the .15 something else fee. If you buy ETFs within one of these platforms, do you pay for the management fee of the ETF on top of it? Seems like a nice hidden cost that I won’t get at vanguard if that’s the case. But, it seems like it would be easier to buy individual stocks over at merril edge than vanguard but maybe I’m mistaken.
What about the tax situation? Do I pay taxes on this money if it increases in value, or only if cash out? How does this all work?
Finally, what about the crazy ****************** state of the world? I know its unwise to try and time the market, but things do seem a little batsh$$ right now. Should I just hold off and wait for the correction that is to come at SOME point? Or is that naïve?
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