This is my first post on this Forum. I am looking for some guidance. What would you do if you were currently a dental student who was just awarded about $5,000 (not related to school) to do what you want with? I just bought the WCI book, but school is starting in a couple days and I am not sure if I’ll have time to finish and comprehend. I have read 1 personal finance book so far, but I figured I would ask here since this Forum is geared towards people like me. I know time is important when you want your dollar to work for you, so I am trying to allocate this money ASAP so it will pay off in the future.
Stage of Life: D2
Social Situation: Single, no dependants
Annual Income: 0
Net Worth: expected to graduate with around -$210k from loans
I do have an Acorns account that I have set to do the automatic $5 deposit feature. I also have a little cryptocurrency I had as an experiment
Any input would be appreciated!August 22, 2019 at 3:30 pm MST #240764DCdocParticipantStatus: PhysicianPosts: 562Joined: 06/14/2016
210k in net worth or loans? Truthfully (likely regardless of the answer) I would likely use the money for a nice vacation. I’m not sure that’s what you were hoping to hear but it’s the truth.
haha you would do that even with knowing what you know now??August 22, 2019 at 4:09 pm MST #240778GhettoParticipantStatus: PhysicianPosts: 126Joined: 08/13/2017Larry RagmanParticipantStatus: Other ProfessionalPosts: 617Joined: 08/30/2018
The advice so far is light hearted and probably well intended. But put this question in a slightly broader perspective. If you don’t develop good instincts and a plan now for what you will do with income, when will you develop it? So what should you do with income both now and over the next few years? First, do you have an emergency fund? If not, put it all in a Vanguard money market fund (some here use high yield savings at Ally or other online banks). If you do have a bit by for emergencies then drop this windfall into the Vanguard Total Stock Market Index fund. Rinse & repeat for future income.
Two related thoughts. First, Don’t let school stop you from digesting WCI’s book. There are some near term lessons on managing your loans, insurance, etc. Also, you will understand how to answer your own question. Second, sell the cryptocurrency and stop that! Good luck!jhwkr542ParticipantStatus: PhysicianPosts: 1316Joined: 02/15/2016
I’d just put it in the bank.SerrateAndDominateParticipantStatus: PhysicianPosts: 487Joined: 02/01/2018
Maybe treat yourself to something like a nice dinner or small weekend getaway then keep rest in savings.
Take breaks and still read WCI and anything non-dental every now and then.
Focus on your schoolin’
Earn everything.PedsModeratorStatus: PhysicianPosts: 4452Joined: 01/08/2016
Save it.nephronParticipantStatus: PhysicianPosts: 227Joined: 05/09/2019
Another way to ask this question would be “what would you do if you were graduating with 205K in debt vs 210K in debt”. Congratulations on your windfall, it’s probably not going to change your financial needle that much.AntaresParticipantStatus: PhysicianPosts: 507Joined: 01/20/2016
Yeah, it’s not enough to do much more than do something nice for yourself and put the rest away. But that’s not nothing. Larry’s advice is quite sound.
http://www.YouTube.com/c/shoutingfromtherooftops for my Youtube channelGamma KnivesParticipantStatus: PhysicianPosts: 169Joined: 06/25/2017
My usual approach with extra money is to allow myself to spend 10-20% (of the amount after taxes) and save the rest. You want to find a balance between living life now and paying your future self.
If you want to follow that maybe allow yourself to spend $500-$1000 on something fun and save the rest (emergency fund in high yield savings or money market if needed).
Thanks a lot for everyone’s advice. It seems most people are saying treat myself a little and put it away. Must be because I still have a while to go. I forgot to add I do have like $2k for emergency in a money market account with an online bank. I believe the APY is 1.26%. I will look into Larry’s advice and check out Vanguard Total Stock Market Index funds. Anyone have any advice not said before?August 23, 2019 at 9:52 am MST #241049CraigyParticipantStatus: SpousePosts: 2059Joined: 09/16/2016
Yeah this feels like a lot of money right now, but compared to what you should make during your career (hopefully), it’s peanuts.
LEVEL 1 WCI FORUM MEMBER.LordosisParticipantStatus: PhysicianPosts: 1863Joined: 02/11/2019
If you need money for Efund then it should stay there. If you do not need the money you could use it to cover living expenses and take out a little less loans vs start a taxable account and invest it. To bad you do not have any earned income or a Roth would have been a good choice.
“Never let your sense of morals prevent you from doing what is right.”White.Beard.DocParticipantStatus: PhysicianPosts: 937Joined: 02/06/2016
I would recommend saving the money in a high yield online savings account.
You might put $500 towards something fun, but only if it is worth it to you.
And you could consider putting $1000 in a vanguard stock mutual fund to learn about how it feels to stay the course in both up and down markets.
Most of all, cautious spending and saving is best at this point. When I was your age, I lived in a small apartment in a marginal neighborhood for $200/month when typical rents were so much higher. And those were some happy times. I didn’t need much money to find fun things to do.