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Investing 101 for Residents

RJ Nemeyer MD
Why should you listen to me at all?

TL;DR

Debt

Asset types
•Stocks

Table of •Bonds
•Cash
Mutual funds and ETFs

Contents Account types


•Personal investment account
•Individual retirement account (IRA)
•Employer-sponsored plan (401k, 403b, 457)
What’s available to us?

What you might consider doing

Useful resources
Yes!... and no.
• Professionals are overrated
• Personal interest with a lot of reading
• But you really should consider learning more about this at some

Should point

Why it’s urgent

you listen • It’s dangerous to invest without some basic knowledge and self-
reflection
• But not investing is detrimental, too.

to me at • Retirement accounts are easy to change later


• So start something reasonable now, and tweak it later if you if you
decide to get more involved and educated
all? Caveat 1: Debt

Caveat 2: Investing goals

Caveat 3: Danger of giving direct advice


Too long; don’t read
GOALS Be clear on your goals (long term investing)

DEBT Address any debt

Contribute to tax-advantaged retirement accounts


TAX
• 1st: IRA (Roth, Vanguard, up to 6k in 2019)
ADVANTAGE • 2nd: 403b/457 (Roth, TIAA, up to 19k per account for 2019)

TAXABLE Contribute to taxable personal account (Vanguard)

INVEST Invest everything in “Vanguard Total Stock Market Index Fund”


Paying off debt is a sort of
investing

Debt strategies, especially


Debt medical education debt, is
outside scope of this talk

Except in very rare and specific


cases, you should not invest in
other assets (stocks, bonds, etc.)
until you have paid off your debt
Asset Types
● Stocks
○ Equity i.e. ownership
○ Highest return (7-12%)
○ Highest volatility
● Bonds
○ Debt (owed to you)
○ Medium return (3-5%)
○ Medium volatility
● Cash
○ Pure currency
○ Low or no return (0-2%)
○ No (nominal) volatility
● Real estate, precious metals, etc.
● Asset allocation
Both are companies that own stuff (stocks, bonds,
gold etc.)

You buy shares in the fund, and therefore indirectly


own a portion of the underlying assets
Mutual Allows diversification even with small investments
Funds and Comes with a fee, for the work they do in assembling
ETFs the basket of assets

Clarify

• Parent company
• Funds
• Retirement plan administrators
Account Types
• Personal investment account
• Individual retirement account (IRA)
• Employer-sponsored account
• 401k (for-profit)
• 403b (non-profit)
• 457 (government)
• Taxable
• Taxed now
• Taxed earnings
• Traditional
• Taxed later
• Taxed earnings
• Roth
• Taxed now
• Not taxed earnings
What’s available to us?
• Personal investment accounts (to anyone, always)
• IRA (to anyone who has earned income)
• 403b and 457 plans (through U of U)
• No employer matching
• TIAA or Fidelity
• Roth and traditional options
• TIAA has great Vanguard funds available
• Be clear on your goals (long term
Be investing)

What you Address • Address any debt

might
• Contribute to tax-advantaged
retirement accounts
• 1st: IRA (Roth, Vanguard, up to 6k in
Contribute 2019)

consider • 2nd: 403b/457 (Roth, TIAA, up to 19k


per account for 2019)

doing Contribute • Contribute to taxable personal account


(Vanguard)

• Invest everything in “Vanguard Total


Invest Stock Market Index Fund”
Vocabulary
& • Investopedia
Concepts

General •Steve Ramsey “Total Money Makeover”

Resources Personal
Finance
•Ramit Sethi “I Will Teach You To Be Rich”
•JL Collins “The Simple Path to Wealth”

•Mad Fientist
Financial •Mr. Money Mustache
•JLCOLLINSNH/Simple Path to Wealth
Independence •Get Rich Slowly
Financial • Mint
• Personal Capital
Utilities • TurboTax

Medicine
Resources Specific
• White Coat Investor (book and blog)
• Physician on FIRE

• Vanguard (great white papers on


Investing investing topics)
Strategies • Bogleheads.org (horrible formatting,
great wisdom)