Investing While In Residency
My journey to investing was not the easiest. At the beginning, I had no idea what I was doing. As an intern, I decided I should finally be an adult and put some money into stocks. I had no idea what I was doing. My first mistake: I certainly did not have a solid emergency fund at that time and so shouldn’t have been investing yet to begin with. My second mistake: buying individual stocks (I don’t know why I thought Disney would be a solid first buy but I did). My third mistake: selling that stock as soon as they dropped and losing money 🫠🫠. I was defeated and it took me a while to try the whole thing again. Let me validate your fears: the stock market can be scary!
It’s taken me years in which I read many, many books and had even more conversations with my non-medical friends to finally feel comfortable with my investing strategy. I want every resident, fellow and attending to be able to do the same. You won’t be able to save yourself to wealth, but you just might be able to invest yourself into wealth. And unfortunately these aren’t skills we learn in medical school.
This will be Investing 101 per se where I go over the basics of starting to invest. We’ll go over retirement accounts and more advanced investing strategies at different times, don’t you worry.
Let’s be very clear though, investing is for the long-term. Time in the market will beat timing the market in the long run. I hate day trading for two reasons - for one, it’s gambling your hard-earned money. Secondly, it takes time and energy to do and let me tell you we are all about lazy money making here.
Before you get started here, make sure you read through our budgeting and financial wellness blog posts. Once you have that shit figured out aka you have you emergency fund set up, are contributing to your 401k/403b to get your employer match, and maxing out your ROTH IRA, congratulations you are ready to open up an individual brokerage account! Other options include Robo-Advisors just as Betterment and Robinhood (a PSA to do your research if you plan to use one of these) or via a Financial Advisor. I’ll focus here on accounts you manage yourself. There’s a bunch of different platforms - Charles Schwab, Vanguard, and Fidelity are some of my faves. I recommend sticking with a big-name when it comes to handling your investments. I personally have accounts with Charles Schwab and Fidelity. I have been loving two features of Fidelity in particular for my trainee lifestyle- their recurring investments and the ability to buy split shares (i.e. part of a share depending on how much money I’m looking to invest at a certain time).
Okay huge, you have an individual brokerage account! But what next? Time to actually start putting money into your account. In whatever portal you are in, go into the “transfer” money section and connect your bank account. I highly recommend having a separate saving account dedicated to your investment portfolio. Once that money has been transferred, you are ready to start trading! Go into the “trade” section, type in the ticker or symbol of the stock you want to buy, select order type of market or limit and you’re good to go!
But what stock should I be buying you might ask? Will go into so many more details in coming posts but the number one purchase I recommend all beginners is to start with an S&P 500 ETF such as VOO, SPDR, IVV. In doing so, you’re putting your money into the top 500 companies in the United States. The S&P has historically earned an average interest of 8-10% per year.
Phew, this was a long one. We’ll be back soon with a breakdown of stocks, bonds, mutual funds, ETFs, all the things. If you want a more focused financial education, consider joining us for a one on one session!
