Expert investing, decade by decade - We give you the best investment strategies — and specific suggestions — for doctors in their 30s, 40s, 50s, and beyond. - Medical Economics

Expert investing, decade by decade - We give you the best investment strategies — and specific suggestions — for doctors in their 30s, 40s, 50s, and beyond. - Medical Economics | Practice

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Expert investing, decade by decade

We give you the best investment strategies — and specific suggestions — for doctors in their 30s, 40s, 50s, and beyond.

Jul 21, 2006
By: Kathleen McKee
Medical Economics

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Power Points

Are you concerned that you're not where you should be financially? Plotting out a systematic investment strategy is a daunting task for busy physicians, especially when your financial goals keep shifting. In your 30s, saving money may take a back seat to just keeping your head above water. Whereas in your 60s, you may feel panicked over a paltry retirement nest egg.

But getting your financial house in order needn't be mystifying—or difficult. No matter what your financial goals or your level of income, there are common benchmarks that tell you how much to save and what to invest in at different ages. We went to the experts for their specific recommendations.

Your 30s: just starting out

Investments for your 30s Moderate risk

This is an exhilarating time for you—you've finished residency and are establishing your medical career. You may be purchasing your first home, starting a family, and trying to figure out how you'll pay off your education loans. The constant in your life is that money is tight.

Investments for your 30s Aggressive portfolio

Now that you're earning a living, your next challenge is to establish a positive cash flow. Admittedly, it's easier said than done, but you have to make building your savings a priority. "Defer the expensive car and McMansion for a few years, so you can focus on paying down student loans and give yourself a solid financial foundation," says CPA and financial planner J. Brian Preston of McDonough, GA.

How much should you put away during your 30s? By the end of the decade, your goal should be to amass about $250,000, according to CPA and financial planner Giles K. Almond of Matrix Wealth Advisors in Charlotte, NC. (This and other calculations in this article are ballpark figures calculated for a hypothetical doctor. Among the assumptions Almond made about this doctor: an annual salary of $150,000, a nonworking spouse and two children, maximum contributions to a 401(k), and an 8 percent investment return. Your own savings goal will likely be different, but this gives you a rough idea.)

Investments for your 30s Conservative portfolio

You also need life insurance. Assuming you have small children and your spouse doesn't have your same earning potential, buy a term policy equal to nine or 10 times your annual income, advises Preston. You should also purchase between $300,000 and $500,000 of term coverage for a stay-at-home spouse to help pay for a nanny or daycare.

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Comments from our readers

HOWARD PERER / FORT LAUDERDALE, FL, UNITED STATES
Posted Aug 07 2006 03:59PM
These are the most outrageous list of funds I've seen in a long time. No stock index funds are present. The specialty fund percentage is way too high. What about the tax consequences of these funds? What goes into and IRA et al and what does not? What about the high costs of several of your funds? How do your 10 year results compare to low cost index funds offered by Fidelity and Vanguard? This is bad advice from someone who should know better. Howard Perer

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