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  • #16
    Welcome to the forum. Ask all the dumb questions you want. I love answering dumb questions because I already know the answers to them and don't have to do any research.

    1) what kind of investments should I be thinking of other than retirement accounts. I maximize my 403/b but not 457/b . should I do that as well or should I be thinking of putting it in another investment.

    If you've maxed out your tax-protected accounts and want/need to invest more, than do it in a taxable account. You can buy stocks, bonds, and real estate in there just fine. Since you haven't maxed out your tax-protected accounts, you probably want to do that first. But with a 457, there's a few unique aspects you can learn more about here:

    https://www.whitecoatinvestor.com/should-you-use-your-457b/

    2) Is it beneficial to do a back door roth investment. we will be in high tax bracket once my husband starts working. I read that roth is beneficial if you anticipate that your retirement tax is going to be higher that what your current tax situation is . is that the case?

    Yes, it is beneficial. You're mistakenly comparing a tax-deferred account to a tax-free one. With a backdoor Roth IRA, you're actually comparing a taxable account to a tax-free one, and in that case, tax-free pretty much always wins.

    3) This might be a really stupid question,  but how do I go about opening backdoor roth? do I open a IRA and immediately transfer out money from there to roth. I have no other retirement account currently other that 403b . should I be buying some funds in the new IRA and then sell them and then transfer the money into Roth IRA or can adjust put the money into a new traditional IRA and immediately move it over to roth.

    https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/

    Basically, go to Vanguard.com, open traditional IRA. Put $5500 into it. Open Roth IRA. Move $5500 from traditional IRA to Roth IRA. Make sure you have no money in any other traditional, rollover, SEP, or SIMPLE IRAs on Dec 31st. Make sure your accountant doesn't screw up your form 8606. That's it.

    4) is it advisable to do trading  on my own through 1 of the treading web sites like E trade.

    Don't trade at all. Develop a written investing plan and follow it. I'm a multi-millionaire and I never traded at all. Weird huh. You're a doc. You don't need to trade to become very, very wealthy. And most people who trade do worse than if they just bought and held their investments anyway. Nothing wrong with having your investments at eTrade, but there's no need to actually trade them.

    https://www.whitecoatinvestor.com/how-to-write-an-investing-personal-statement/

    5) with 2 income family, how to set up expenses, payments and investments. is it advisable to have a joint account and individual accounts.

    We combined everything when we married. It's all "our" money, so any account that can be joint pretty much is. That's not entirely true. She actually owns the boat. I've got a few investments that are in my name only just for simplicity. That sort of thing. But pretty much joint.
    Helping those who wear the white coat get a fair shake on Wall Street since 2011

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    • #17
      karturi, lots of good advice here. I just wanted to clarify something about the comments on the house purchase as it seemed you may have misinterpreted some of them.

      The price you are looking at 500-600k is fine. It's less than your annual gross income, which is excellent. You don't need to look for cheaper homes or squash your dreams, etc.

      Folks here are telling you to just wait a while before you buy a house because if your husband's job doesn't work out and he wants to get a job somewhere else and move then you could get stuck trying to sell the house hurriedly and lose money or have to rent it out as landlords living somewhere else. The usual decree from WCI is to feel out a Jon for a year or so before committing to buying a house and tying yourself down to that area.

      Your husbands bonus sounds like it is really a loan. They give you the money up front tax free. It accumulates interest from the time they disburse it to you. When he starts working, they start forgiving the loan over a set time period. As they forgive the loan, they list it as income and he pays taxes on it. Usually if you leave your job early you have to pay the prorated remaining amount with interest in a lump sum. Therefore, I would not use this money towards a down payment until you learn more about the terms of the loan and know the money is fully yours and not at risk of having to be paid back if he leaves before the loan is forgiven.

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      • #18
        Sorry typo: "The usual decree from WCI is to feel out a JOB for a year or so before committing to buying a house and tying yourself down to that area."

        Please do not feel out any Jons!

        (Can't edit posts on my phone)

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        • #19


          it is cause I am a novice when it comes to earning , saving and investing
          Click to expand...


          Welcome - and you know more today than yesterday. Keep it up!

          I'd agree with others here -  I'd add a couple of things:

          1. You seem to be spending a lot, without really knowing it, or knowing why. The monthly spending, the car payments, loans, the buying a house with borrowed money and husbands inclination to go buy a nice car are all red flags to me.


          we will be in high tax bracket once my husband starts working.
          Click to expand...


          2. You're already in a high tax bracket.

          3. How many more kids? When?

          4. Are you sure you aren't going to move soon?! Really Sure? Really?

          5. I agree, you need an IPS.


          overall, I think the most important thing is to read a little more, decide what your overall investing goals are, make a clear plan, and most importantly, get your husband on the same page.
          Click to expand...


           

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          • #20
            @White coat investor-  thank you for all the detailed answers.  I have opened of Vanguard traditional IRA.   Will plan on rolling over to Roth in the next few days. I have read up on 457B and it is a little scary after reading about the whole thing, but I have decided to trust that mayo wont bankrupt itself in the next 30 years. will proceed with maximizing this account as well.

            @moderator- my husbands bonus is worded exactly like how you described. it is a loan and will be forgiven over the coarse of 6 years. we both did our residency in that hospital and he did his fellowship there. so we thought that we will be sticking around for a long time. and I like my current job very much . so we thought that we will be staying here for a long time to come. but one can never always be sure of unforeseen circumstances.

            Now what should I do with the bonus , since it is a loan . should I not use that for the down payment?

            @adventure- you are very right in that my expenses are high. I always felt that until my husband starts earning , I don't have to get serious about investing. I was happy about buying one house in India and paying for it without a loan over the last 2 years. I basically spent the rest of my money . Now after reading the responses, I realize that I could have been more aggressive about saving and investing. and I plan to start right away.

            we are planning to have one more kid . but after atleast 3 yrs . I have a 1.5yr old now.  and yes we are already in the high tax bracket. as far as moving goes, we are as sure as we can be for now. but then again you can never anticipate every variable. worst case scenario, immigration policies can change and we can loose our visa and have to go back to India. that was why buying a house in India was so important to me. it is my safety net.

             

             

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            • #21


              4) is it advisable to do trading on my own through 1 of the treading web sites like E trade. 5) with 2 income family, how to set up expenses, payments and investments. is it advisable to have a joint account and individual accounts.
              Click to expand...


              If you set up a proper plan and sort of automate it you may not need a financial advisor. Certainly not one who uses AUM fee structure.

              Why not approach savings from the top down. You expect to get 650K per year from next year. Try to save 30% of that. That will be 200K. Maximize all pre tax retirement plans and then backdoor Roth and then the rest in taxable savings. Instead of trading ( bad idea) just open an account in Vanguard and put 55% US stock, 40+ % international stock and 5-10 % bonds ( if you are looking at 20+ year time frame, skip bonds for now). Just let it grow through bull and bear markets.

              After paying taxes you can create a budget for the rest of the money. Avoid taking a car loan if you can and do not buy an expensive "doctor car". Buy a boring Honda or Toyota mid size for now.

              I am surprised you bough a home in India as investment, unless it was for your parents to live in it. After the new reforms by Modi the houses there are now much less valuable. My relative got one as an investment in Gurgaon a few years back when the hype was all the rage and now it is under water and he is hoping to sell it when it appreciates to its buying price.

              With kids growing up here settling in India when you are retired is a pipe dream and never occurs. Managing property long term from 9000 miles away is a pain. In fact I have given away my inherited portion of my parents house to my sibling in India as the thought of converting it to flats and owning it and renting it out was a hassle I could without.

               

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              • #22
                @kamban- the decision to buy a house was for security. we both are still on h1b visa. in the process for green card. but it takes for ever for Indians. immigration policies are changing. so if I have to go back to india for whatever reason , then I have a house.

                if not,  well and good, my parents will use it or rent it out . either way I will keep the house for many years to come as I have ppl to manage it for me there.

                yes I will create a budget for after tax money once I figure our exactly how much we both will get together after he starts working. when you open a account in vanguard, do you have their financial planners manage this for you or do you decide on the investments yourself.

                 

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                • #23




                  the decision to buy a house was for security. we both are still on h1b visa. in the process for green card. but it takes for ever for Indians. immigration policies are changing. so if I have to go back to india for whatever reason , then I have a house.
                  Click to expand...


                  That now makes sense. Things have now become so complicated in India that the thought of owning property there and managing it becomes burdensome after some time. As long as you have people there, it is well and good. As they get old or are no more the problems arise, as it happened in my case. So I gave away my property in India to my sibling, who has benefited from it more than me.

                   




                  when you open a account in vanguard, do you have their financial planners manage this for you or do you decide on the investments yourself.
                  Click to expand...


                  I manage it on my own. No sense in paying fees to any advisor when all you need is asset allocation for index funds. If you buy the Admiral shares the annual management fee for the index fee goes even lower. once you do it and acquire confidence, it is simple. Make sure that you can accept downturns as well as up swings.

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                  • #24
                    My wife is at Mayo so I'm pretty familiar with their plan.  I feel good about the 457 plan being around in 40 years and think its worth putting $18,000 away and reducing your tax bill.  Their disability plan is very good and they also have a pension plan.  I'm not sure if the the pension plan will be there in 40 years but you should be in a position to where it doesn't matter.  Make sure your husband is contributing to his 401k, take advantage of the Backdoor Roth and establish an emergency fund with at least 3 months of savings.   After that you can contribute anything else to a brokerage account.  Your custodian or broker should be able to help you through the Backdoor Roth process.  Vanguard's is very simple and can all be done online.

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