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Strange Things in the Precious Metals
Issue #531, July 17, 2018

Buying Years of Retirement
Issue #530, July 09, 2018

Rent-A-Kid for Retirement
Issue #529, July 02, 2018

The Dark Side of Student Loans
Issue #528, June 25, 2018

The Cost of Out-sourcing Convenience
Issue #527, June 18, 2018

Social Security: 66 or 70?
Issue #526, June 11, 2018

Student Loans: There’s (Unfortunately) a Lot More!
Issue #525, June 04, 2018

Co-signing a Note
Issue #524A, May 31, 2018

The Knight Frank Luxury Index and Collectables
Issue #524, May 28, 2018

The Importance of Diversification: The Myth of Diversification
Issue #523, May 21, 2018

How to Save Thousands on Your Food Bill
Issue #522, May 14, 2018

MoviePass and Other Things
Issue #521A, May 10, 2018

Degree Inflation, Long Training Periods, and “Certification”  Part III
Issue #521, May 07, 2018

Degree Inflation, Long Training Periods, and Certification” Part II of III
Issue #520, April 30, 2018

Follow-up on Several Things
Issue #519A, April 25, 2018

Degree Inflation, Long Training Periods, and “Certification”: Part I of II
Issue #519, April 23, 2018

The Kids Birthday Party Hustle
Issue #518A, April 18, 2018

A Pension Question: Part II of II
Issue #518, April 16, 2018

A Physician is an Executive
Issue #517A, April 11, 2018

A Pension Question: Part I of II
Issue #517, April 09, 2018

Is the Correction Over?
Issue #516A, April 05, 2018

Used Car Dealers, Student Loans, the Chinese, and Uncle George’s Rule
Issue #516, April 02, 2018

Starter Homes
Issue #515, March 26, 2018

Redecorating: Beware!
Issue #514, March 19, 2018

NASDAQ Closes at Record High
Issue #513, March 12, 2018

A 40% Chance
Issue #512, March 05, 2018

Several Things
Issue #511, February 27, 2018

Human Capital, Education and Wealth
Issue #510, February 19, 2018

Another Stock Market Update
Issue #509A, February 18, 2018

Some Thoughts on Savings
Issue #509, February 12, 2018

A Stock Market Upfate
Issue #508S, February 10, 2018

Who Can You Trust? Part II of II
Issue #508, February 05, 2018

The Christmas Decoration Pre-worn Jeans Hustle
Issue #Interim Bulletin #507A, February 03, 2018

2018 Outlook for Financial Markets
Issue #507, January 29, 2018

Who Can You Trust? Part I of II
Issue #506, January 22, 2018

Life Insurance Settlements
Issue #505, January 15, 2018

Commodities and Buying the Breakout
Issue #504, January 08, 2018

Buffett Wins His Bet
Issue #503A, January 04, 2018

Practice Real Estate and Free Agency
Issue #503, January 01, 2018

Outlook for 2018: Part III: Stocks and Bonds
Issue #502, December 25, 2017

My Outlook for 2018: Part Ii: Precious Metals
Issue #501A, December 21, 2017

Outlook for 2018: Hard Assets: Part I of III
Issue #501, December 18, 2017

More Thoughts on Bitcoin
Issue #500A, December 14, 2017

Fees and Good Relations with Bankers
Issue #500, December 11, 2017

Salvator Mundi
Issue #499A, December 07, 2017

Should You Rent or Own a Home?
Issue #499, December 04, 2017

A Gift Subscription
Issue #Interim Bulletin #498A, December 02, 2017

Stocks vs Real Estate: Asset Allocation: Part II of II
Issue #498, November 27, 2017

When Good Enough is Fine
Issue #497A, November 22, 2017

Stocks vs Real Estate: Asset Allocation. Part I of II
Issue #497, November 20, 2017

The Saudi Arrests and the Perils of Foreign Investing
Issue #496, November 13, 2017

Gambling and Las Vegas
Issue #495, November 06, 2017

Some Tips on Auto Insurance
Issue #494, October 31, 2017

Bitcoin and the Digital (Crypto) Currencies
Issue #493, October 23, 2017

The Coming Bear Market: Part II How to Prepare
Issue #492, October 16, 2017

Some Observations on Cemeteries
Issue #Interim Bulletin #491A, October 12, 2017

The Coming Bear Market: Part I: The Myth of Buy and Hold Forever
Issue #491, October 09, 2017

The Market makes New Highs
Issue #490, October 02, 2017

The Importance of a New High
Issue #489, September 25, 2017

A Little Insurance: Wealth, War and Wisdom
Issue #488, September 18, 2017

Some Observations
Issue #487, September 11, 2017

How to be Successful in Your Career
Issue #486A, September 07, 2017

How NOT to Buy a Home
Issue #486, September 04, 2017

This Week in the Market
Issue #485, August 28, 2017

Is the “Trump Bump” Running Out of Gas?
Issue #484, August 21, 2017

Gold is on the Move
Issue #483, August 14, 2017

The Importance of Estimation
Issue #482, August 07, 2017

Buying Art and Collecting: Part II of II
Issue #481, July 31, 2017

Buying Art and Collecting in General, Part I of II
Issue #480, July 24, 2017

Physicians need to be More Forceful: Follow-up
Issue #479, July 17, 2017

Physicians need to be More Forceful
Issue #478, July 10, 2017

Your First “Real” Investment
Issue #477, July 03, 2017

Leasing a Watch: Don’t
Issue #476, June 26, 2017

The Importance of Your Children having a Job
Issue #475, June 16, 2017

The Problem with Medical Student Debt is—the Med Schools
Issue #474, June 12, 2017

Critters and Varmints in your Home and Yard
Issue #473A, June 07, 2017

Leveraged ETFs
Issue #472, May 29, 2017

Leasing a Vehicle: Don’t!
Issue #471, May 22, 2017

Issue #470, May 15, 2017

More on Buying Jewelry
Issue #469, May 08, 2017

Buying Jewelry: Gold, Diamonds and Pearls
Issue #468, April 30, 2017

Thomas Sowell: Part III of III
Issue #467, April 24, 2017

Thomas Sowell: Pat II of III
Issue #466, April 17, 2017

Live Close to Where You Work
Issue #465, April 10, 2017

Medtronic in Hospital Management
Issue #Interim Bulletin #464A, April 07, 2017

Thomas Sowell: Part I of II
Issue #464, April 03, 2017

A Political Contribution a an Investment: Part II of II
Issue #463, March 27, 2017

A Political Contribution as an Investment: Part I of II
Issue #462, March 20, 2017

Buffett Selling Vacation Home
Issue #461, March 13, 2017

Advanced Placement (AP) ourses
Issue #460, March 06, 2017

The Importance of a Credit History
Issue #459A, March 02, 2017

A Credit Card Scam
Issue #459, February 27, 2017

The Electronic Health Reord
Issue #458, February 20, 2017

Issue #457, February 13, 2017

Platinum and Palladium
Issue #456, February 06, 2017

Economic Outlook for 2017: Part II of II
Issue #455A, February 02, 2017

Economic Outlook for 2017: Part I of II
Issue #455, January 30, 2017

A Story From Vegas
Issue #454A, January 25, 2017

Land Donation Deals and the IRS
Issue #454, January 23, 2017

The Theory of Gambler’s Ruin
Issue #453, January 16, 2017


By Robert M. Doroghazi, M.D., F.A.C.C.

Your First “Real” Investment

Issue #477, July 03, 2017

    When I spoke in Youngstown, OH in May, a young man asked what should be his first investment after covering the basics, such as adequate cash reserves and the down payment for a home. I’ll discuss this from the point of view as a physician goes through training. The general points, of course, also apply to non-physicians.
    The average med school grad has about $190K in student loans. By definition, they will have minimal savings, say $5K in their check/money market account, and no other real investments, such as stocks. Say they make $50-60K per year during their 5 years of training.
    During this period, the first goal is to discharge any debt besides student loans, and not take on any more debt. I pray you don’t have credit card debt (these folks are not the kind who read this newsletter anyway), but if you do, that needs to be paid off first. You may or may not have a car note. If you don’t, you must resist buying a new vehicle. Drive what you have until it dies. 
    Your next goal is to accumulate cash reserves. After you get a sufficient amount in the check account, open a money market, or buy short-term CDs. Continue to accumulate cash so that you have a 20% down payment for a home when you enter practice.
    Here’s what’s critical. You are used to living on a med student’s budget. Continue that mindset. I married after my Intern year. My wife taught at the Peter Bent Brigham School of Nursing. We lived off her salary of $21K, and saved my entire salary of $16K. When we moved to St. Louis in 1980 for my Cardiology Fellowship, we had saved enough for the down payment on a home.
    All of the above should be obvious. This is my insight: during this period, you want to get some money into the stock market, so you can take advantage of compound interest, your greatest investment friend. $1,000 invested in the stock market at age 30, compounded at 7% per year, is about $11,000 at age 65. At this time in your life, the best place to make this investment is in a retirement account. For those in training, see if you can open a Roth IRA or participate in a retirement plan. Same thing for your spouse.
    Don’t try to be a stock-picker. At this time of your life, you are investing for the very long term. Income average, say $250 per month, into and S&P 500 Index fund.
    Do not put the funds intended for the down payment on a home into the stock market, because, over the short term of several years, you need to avoid volatility. You could get lucky and the market goes up. You can just as easily be unlucky. The market could drop, maybe even enough that you don’t have enough for the down payment. When you are investing for a goal, like a down payment on a home, stop, and put that money in 100% safe cash investments, like CDs or money market.
    The key to everything is being thrifty. The best investors are the best savers. 
    Gold is +7% for the year, but has twice been stopped at the $1,290 level.
    RMD comment: Gold is priced in US Dollars, and the dollar has been noticeably weak, falling to its lowest level since last October. The two big resistance levels for gold are $1,290, and $1,390, the high of last summer. If (when) gold breaks $1,400, things will get very interesting. More later if this comes about.

    The state of Illinois’ bonds are on the verge of being downgraded to junk status.
    RMD comment: What if Illinois is forced into bankruptcy?
    1) It will be the best possible way to show that politicians can’t be Santa Claus. Buying people’s votes with entitlements and giving the public employee unions everything they want works only so long.
    2) Illinois isn’t paying their bills now. Physicians, hospitals, and many other vendors are getting stiffed. Lottery winners aren’t getting paid, yet the state continues to sell tickets, and people continue to buy them, a sorry comment on the state and those who continue to buy tickets.
    3) 6 or 7 years ago a close friend retired from a county job in Illinois. They could take some of their retirement in a lump sum up front, or payments over many years. I saw this coming, and strongly recommended the up-front payment. They took my advice, and are quite happy. Their co-workers run the very real chance of getting stiffed. To quote that sage J. Wellington Wimpy from Popeye “I’ll gladly pay you Tuesday for a hamburger today”. In Illinois, take the hamburger.
    4) It will teach creditors a lesson: that they have to be careful when loaning their money to a government entity (or anyone). It will help restore a little discipline.

    I was chosen Rotarian of the Year for Columbia Northwest Rotary. Along with Dr. James Ritter, retired Supt. of the Columbia Public Schools, we have done the programs for the last 3 years.
    RMD comment: I say this not to brag, but because it allows me to make some points.
    1) When you want something from people, all you have to do is ask. You’ll be surprised how often you get what you want.
    2) Like everything in life, you get out of it what you put in. A personal benefit of doing the programs is that I get to meet a lot of people, and I arrange programs that interest me. Fortunately, they seem to interest the other members too.
    3) I have a rule: the more someone wants to speak to our group, the less I want them to speak, because they invariably have an axe to grind. Think of it as a cold call: Have you ever profited from a cold call? Of course not.

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