I’m “Fred” as mentioned in the article- many thanks to Trent for posting my question so quickly and for his thoughts. Equal heartfelt thanks to everyone in the Simple Dollar community for sharing your time, wisdom and experiences. Going forward, I have a much better idea of what holes I need to fill in. I hope to be able to contribute equally in the future!

Best wishes,

“Fred”

Regarding loans — although you said you don’t have any now, I recommend keeping it that way (except for a house). I was in my doctor’s office once and saw the bill for his BMW sitting at his “station.” I didn’t look at the amount, or anything like that — it wasn’t my business. But I thought it was a bit tacky.

Anyway, my wife is a physician and we are working our way out of student loans and a loan for her buy-in to the practice. Because the buy-in immediately increases your income and possibly adds some profit sharing, that would be the other loan that I would recommend. But I certainly can’t wait to get ours paid off!

Whether or not you reinvest the dividends, they are still taxable. Capital gains tax, which you referred to, only kicks in when you sell an investment. This also occurs when you own mutual funds and the fund manager sells stocks within the mutual fund.

In this case, getting an insurance broker is probably worthwhile.

However, if your projections are correct, it seems you are in a very good position to do some serious wealth building, simply by saving and paying for things with cash. Instead of getting a mortgage like the rest of us, you could bank a considerable amount of that $150-200K and pay cash for a house in a few years. Ditto for other things. If you want a Mercedes, go for it — but go for the one that’s two years old and off lease. And pay CASH for it for additional bargaining power.

Also, just like people will come to see you for your medical expertise, you might want to employ a financial professional of some type to help you out navigating the weird advantages and disadvantages of tax law. I’m betting you (as a doctor) don’t like it when people diagnose themselves off of the Internet, so why rely on blogs and bits of information to plan your financial future?

See link for more info: (I do not write the blog)

http://moneygirl.quickanddirtytips.com/solo-401k.aspx

I would guess that physicians are under accumulators would involve “need” to give off aura of success (cars, houses, bling). I think Stanley and Danko also discuss how physicians tend to work more (for huge “hourly” wage) and respond too readily to cold calls from sales people rather than handling their own finances.

Always have a back-up!

They have gone down now, but that will not be the case in the future, 100%. You cannot borrow trillions of dollars without raising taxes, its just the way it goes, sure we could borrow money to pay off our current debt, but the tab will come due eventually; either way my generation is stuck with that bill. My suggestion to the writer would be to put some money in some index funds, or even keep some of it as investing ‘play’ money.

Make sure you’ve got sufficient disability insurance, which should be “own occupation” not “any occupation.”

I’d also recommend a good umbrella policy added onto the homeowner’s or renter’s & auto insurance, because if the OP gets in a car accident, the other party may see “doctor” as “meal ticket” and sue for ridiculous $.

Does Fred have a mortgage? If so, maybe he can start paying that down – if he doesn’t, then maybe he might consider buying a home of some kind.

Get the biggest bang out of compounding interest while time is still on your side. You’ll eventually need some of that cash to pay for a wedding, house, children and some unexpected disasters and expenses that will undoubtedly crop up over your lifetime.

So, keep saving as much money as possible and learn how to manage this money yourself. Become your own financial planner, you know your goals and aspirations better than anyone. No one is as interested in safeguarding and growing your money as you are. You evidently have some smart money managers in the family, take advantage of their knowledge.