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  • Account advice

    First time posting here. Thanks in advance for the help. Have learnt a lot spending time reading the content on this website. so here's my question.

    I am looking for some advice on what kind of additional account I should open. Wife and I are both physicians. Our 401 K is maxed out and we both have a decent employer match. Our backdoor Roth is maxed out as well. We have college 529 plans going for both our kids. I also have a 457 through my work which is maxed. Also have a retiree medical account funded solely by employer dollars which is essentially like an HSA. Question I have is after doing all this and having a 6 month emergency cash reserve, there is some money left which I don’t want to commit to college fund and nor do I want to tie it up in any retirement account where I cant access it in an emergency. I already have enough cash reserves and don’t want to add more to that. My plan is to invest it in vanguard ETF’s and let it grow. Hopefully I never have an emergency need to sell and use it but I want to have that option if I want to. Other than simply opening a brokerage account at vanguard, is there any other account option that exists which gives me the flexibility of buying few ETF shares at a time and able to get the money at extremely short notice without any restrictions.

    Thank you

  • #2
    none that you’d want. taxable sounds like just what the doctor ordered.

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    • #3
      Open a taxable account.  It will eventually become your largest account since you can invest with no limits.

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      • #4
        Taxable investing is the way to go.  Kudos for reaching this point.  I balance taxable investing into a total stock market etf with mortgage pay-down instead of muni-bonds. YMMV.

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        • #5
          Thank you so much for the responses and advice. Very reassuring.

          I do plan to focus predominantly on VTI and somewhat on VXUS with this account for now. Not talking big dollars but something of a start and learn more as I go along. Thanks again

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          • #6
            You literally are describing a brokerage account.

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            • #7
              As others mention, the best option to meet your stated objectives of growth and liquidity is a brokerage account. A few additional considerations:

              Titling of the Account

              You’ll want to make sure the manner in which the account is titled ties into your existing estate plan. You’ll have choices in titling the account… e.g. in your name individually, jointly with your wife or in the name of a trust. While not technically a form of titling, adding a “Transfer on Death (TOD)” feature can be helpful in cases where a trust does not exist (or has not been updated to reflect your current wishes).

              There may also be creditor/liability protection considerations. Unlike retirement accounts (state laws very), taxable investment accounts do not offer protection from creditors and/or liability. While there’s no perfect answer, you can often take small steps to reduce this exposure…e.g. titling the account solely in the name of one spouse (or their trust) or creating a holding company.

              Account Usage

              Taxable investment accounts are often opened, as in your case, simply because there’s nowhere else to stash excess earnings. It’s important to consider when/how these funds might be called upon for use…e.g. emergency cash reserve exhaustion, capping off the last little bit of education funding when children begin attending school (because we don’t want to over-fund tax-friendly education accounts) and lastly as a tax-efficient means to effect charitable giving.

              Investment Allocation

              Given the possible uses above, some allocation to equity might make sense (charitable gifting of appreciated securities), but an overall balanced approach could feed multiple needs, depending on time horizon.

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