Wednesday, May 7, 2008

Building wealth part 3: got some money saved,now what?

My savings started to accumulate bit by bit. But without some more powerful money growth solution financial independence was nowhere in sight. I did some "investing" in 2000-01( I use parentheses here because it was far from real investing-investing as I understand now) during the Internet stocks' boom(and bust!), and , sure enough, lost money . Back then, I was still in the fellowship, so by virtue of being a "subspecialty resident" I didn't have enough money to lose. However, stock market returns are about 8-10% annually( that is, obviously, over long stretches of time), so I saw it as a main vehicle to get to my financial independence, regardless of my prior painful experience.
Back then I was enrolled in the Master's of Science program in biostatistics. So as I was learning all these bivariate, multivariate and survival analyses , I was getting better at my recognition of quality from junk research papers and articles. But I needed financial education 101, too! Little by little I started using my new statistical knowledge to help me distinguish what I call a "financial propaganda" (the bulk of financial info unloaded into our ears/eyes every day) from the statements based on some real scientific financial studies.

1 comment:

Matt said...

A surefire way to beat the market is to take on greater risk. Of course, it's also a surefire way to lose your ass if you aren't careful. But the point is that pretty much every doctor's portfolio should have some percentage of higher-risk investments so that they can build wealth and not just keep up with inflation. One intriguing option is medical device investment through a venture capital firm open exclusively to physician investors. There are plenty of other choices. Point being, you have to be willing to gamble a bit (and do it very smartly) if you want bigger payouts.