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What to do with current investments going into med school

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  • Avatar ParachuteAdams 
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    I’m an incoming MS1 and I have almost 100k saved up which is currently invested mostly in VTSAX but also in a few individual stocks. I’m hoping to stretch this money as much as possible to cover living expenses through all four years of med school.

     

    My thoughts: I feel like my current portfolio has way too much risk for what I’m about to use it for. Would it make sense to move it all into something like bonds? Or even something less risky? Would I be missing out on too much opportunity for growth if I did something like that? Alternatively, if we have another 2008 level financial meltdown, I’d be pretty much screwed no matter where I put the money, right? But stuffing it all under a mattress seems a bit drastic.

     

    Do I just keep it all in VTSAX and pray the stock market doesn’t shit the bed?

     

    Where would you put it to make sure it grows a little during school, but won’t evaporate when you need to pay the rent?

    #206022 Reply
    Avatar SLC OB 
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    Vanguards Money Market Account? I think it is getting 2+% interest

     

    #206046 Reply
    Avatar Peds 
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    mostly in VTSAX but also in a few individual stocks. I’m hoping to stretch this money as much as possible to cover living expenses through all four years of med school.

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    being 100% stocks, let alone individual stocks, is not recommended for a known set of money you will need over 4 years.

    Would it make sense to move it all into something like bonds?

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    yes. anything fixed income would be better.

    Would I be missing out on too much opportunity for growth if I did something like that?

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    yes, that is the point. safety right now > growth. this is a 4 year timeline. not 40.

    if we have another 2008 level financial meltdown, I’d be pretty much screwed no matter where I put the money, right?

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    no. cash would lose 0% (quiet inflation!)

    Do I just keep it all in VTSAX and pray the stock market doesn’t shit the bed?

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    sigh, no.

    Where would you put it to make sure it grows a little during school,

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    i think some VMMXX, some total bond would be fine. or all VMMXX. or all ally. heck, leave 10-20% in stocks if you want.

    many alternatives. none of them involve 100% stocks.

    #206049 Reply
    Avatar jz 
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    Joined: 01/09/2016

    Any asset you intend to use within 3-5 years should not be invested in the stock markets. Currently short-term bonds, short-term bond funds, short CDs and money markets are all yielding ~ 2% .  Don’t be greedy.

    #206066 Reply
    Lordosis Lordosis 
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    Hopefully you can sell these without tax consequences.  If you are a student and do not have much or any income and the basis is high enough you could mover it all at once.  If you do not know what I am talking about you might need some help so you do not get taxed.

    I agree I would move everything you plan to spend in the next 5 years to a MMF.  If you want to get cute and mix in some bonds and leave a little in stock you can but it is a risk.   Having that kind of money going into med school is a huge blessing.  Do not screw it up.

    “Never let your sense of morals prevent you from doing what is right.”

    #206073 Reply
    Avatar Echo 
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    You say you are going to use the money for living expenses, so you plan to spread the use out over 4 years.  Are you taking loans for tuition?  Wouldn’t it make more sense to use more of your saved up money in the first 1-2 years for tuition + expenses, so that you can take smaller loans those years?  Then take larger loans out years 3-4.  That way you aren’t paying interest as long on the loans from the first two years.  I would hold back some money (maybe 5-10,000) for an emergency fund.

    #206084 Reply
    Liked by Tim, jz
    Avatar SLC OB 
    Participant
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    Disability Insurance
    Are you taking loans for tuition?  Wouldn’t it make more sense to use more of your saved up money in the first 1-2 years for tuition + expenses, so that you can take smaller loans those years?  Then take larger loans out years 3-4.

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    Unless OP can get subsidized loans for all 4 years (due to lower amount needed) and would have to take out unsubsidized loans or private loans in years 3-4…

    #206086 Reply
    Liked by Lordosis
    Avatar ParachuteAdams 
    Participant
    Status: Student
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    Joined: 04/12/2019

    I appreciate the responses. After looking up some things on my own, a MMF is seeming like the most attractive option. Regarding what I’m doing for tuition, I had the great fortune of receiving a full tuition merit scholarship, so my goal now is to graduate debt free.

     

     

    #206099 Reply
    Liked by SLC OB, jz, Echo, Lordosis
    Avatar pierre 
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    Are you taking loans for tuition?  Wouldn’t it make more sense to use more of your saved up money in the first 1-2 years for tuition + expenses, so that you can take smaller loans those years?  Then take larger loans out years 3-4. 

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    Unless OP can get subsidized loans for all 4 years (due to lower amount needed) and would have to take out unsubsidized loans or private loans in years 3-4…

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    I may be wrong, but I don’t think subsidized loans exist anymore. The last one I was able to get was in 2011, for a whopping 2% of my total loan burden.

    #206118 Reply
    Dreamgiver Dreamgiver 
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    Take 40/50k and move it to a safer vehicle, keep the rest in VTSAX or such for your future. If you have enough earned income for 2019, consider doing a Roth Ira contribution (even if it means selling VTSAX for that) and same thing for the year you start residency. Congrats on getting a merit scholarship!

    #206136 Reply
    Avatar ParachuteAdams 
    Participant
    Status: Student
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    Joined: 04/12/2019

    Take 40/50k and move it to a safer vehicle, keep the rest in VTSAX or such for your future. If you have enough earned income for 2019, consider doing a Roth Ira contribution (even if it means selling VTSAX for that) and same thing for the year you start residency. Congrats on getting a merit scholarship!

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    Is the 40/50k supposed to cover living expenses? Because I’m moving to a very high cost of living area. Thank you!

    #206140 Reply
    Dreamgiver Dreamgiver 
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    Yes

    #206145 Reply
    Lordosis Lordosis 
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    When you are a student you can live cheaper almost anywhere. People expect you to be scrounging by on borrowed money. No one has to know that you actually have the means to live better.

    “Never let your sense of morals prevent you from doing what is right.”

    #206146 Reply
    Liked by SLC OB
    Avatar SLC OB 
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    I may be wrong, but I don’t think subsidized loans exist anymore.

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    My bad… I’m older!

    #206247 Reply
    Liked by Lordosis

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