Forum Mailbag: Disability Insurance For Interns, Exit Strategies, Fidelity vs. Citi Credit Card, And More!

There is so much great information on personal finance forums. I regularly participate on several message boards, including Bogleheads, White Coat Investor, and Rockstar Finance. This is a roundup of my favorite discussions happening around the internet.

1. White Coat Investor: Disability Insurance For Interns

Question: Dallant is an internal medicine intern who is looking to buy disability insurance. The quotes he was receiving was about $100/month, which is high enough to give him pause about purchasing disability insurance. He knows that if he delays purchasing disability insurance, there is a chance that his rates will rise as he gets older and if he were to have a health scare, he could become uninsurable. On the other hand, he feels that $100/month is a big hit on his monthly budget.

WSP’s Take: I personally bought disability insurance as an intern. Disability insurance is an important part of a physician’s financial plan, and I would not take a risk of becoming uninsurable during residency because of a health condition. I think disability insurance is a high-enough priority that sacrifices in other areas of the budget should be made in order to ensure that you have disability insurance during residency.

Using a graded insurance policy (premiums slowly rise with age) would be a way to reduce the premium, as well as lowering your policy benefit (standard is $5,000 a month during residency). Of course, you should be sure to retain the future increase option rider in your policy to ensure that you can buy more disability insurance without an additional medical examination once you make an attending salary.

2. White Coat Investor: Exit Strategies

Question: Lithium has been working at an inpatient psychiatrist for the three years since finishing residency, and he is burned out. He feels overworked and doesn’t have the passion to work this job full-time. Financially, he is doing well, having no student loans, and a decent-sized portfolio ($1.4 million at age 34).

WSP’s Take: It’s clear that continuing to work full-time at his current position is unsustainable. Since he is doing so well financially, he can afford to make changes to his work environment, whether it be seeing fewer patients, working part-time, or potentially, leaving medicine entirely.

At a minimum, he should explore his options at other hospitals. It doesn’t hurt to kick the tires at other hospitals, and he would gain more leverage to improve the situation at his current hospital if he has an offer at a competing hospital. Even if other hospitals tell his current employer that he is looking for other jobs and it “poisons the well,” continuing at his current position is not a viable option anyway.

3. Bogleheads: Fidelity Visa vs. Citi Double Cash Card

Question: Zadie asks whether the Bogleheads community prefers the Fidelity 2% Visa card or the Citi Double Cash credit card for everyday purchases. He already owns the American Express Blue Cash Preferred card, which he uses to get 6% cashback on groceries.

WSP’s Take: I personally have had the Fidelity 2% Visa card (and previously the 2% Fidelity Amex card) for many years. It was my go-to card for everyday purchases for many years (although it has been subsequently replaced by a combination of the Chase Sapphire Reserve, Chase Freedom, and Chase Freedom Unlimited cards).

For people who want to have just a single cashback card, these are the two cards I recommend. One of the downsides of the Fidelity card is that it requires you to have a Fidelity account where the cashback will be deposited. If you have a Fidelity account for your investments, then I would recommend the Fidelity 2% Visa Card, as it allows your investments and credit card to stay under one log-in.

On the other hand, if you use Vanguard, Schwab, or some other brokerage firm, then I would get the Citi Double Cash. It eliminates the need to have a separate Fidelity account just for credit card rewards, and the cashback rate is equivalent between the two cards.

4. Bogleheads: Which International Stock Index Fund?

Question: Benign_user asks which international stock index fund is best for his portfolio. He is in his mid-30s, and would also like to know how much money he should put in the international stock fund versus a U.S. stock fund.

WSP’s Take: In terms of how much money to put in international stocks versus domestic stocks, that is a matter of personal opinion. Smart people have advocated for zero international stocks, market-weight international stocks, overweight international stocks, and anywhere in between. I personally have an allocation of 2/3 domestic and 1/3 international, and the target-date funds of Vanguard and Fidelity have similar allocations.

Which international stock fund you use is also more about personal preference than finding the “best” international stock fund.

Vanguard’s Total International Stock Index Fund gives exposure to both developed international markets and emerging markets, and has exposure to small-cap and large-cap international stocks. Its expense ratio is currently 0.11%.

Fidelity has three international index fund options:

1. Fidelity International Index Fund (FSIVX, ER = 0.06%) — developed international markets only, no small-cap or emerging markets exposure.
2. Fidelity Global Ex-US Index Fund (FSGDX, ER = 0.10%) — developed and emerging markets, but no small-cap exposure.
3. Fidelity Total International Index Fund (FTIPX, ER = 0.10%) — developed and emerging markets, includes small-cap exposure.

All of these options are reasonable, as you are splitting hairs between minuscule expense ratios, and exposure to emerging markets and international small-caps is not necessary for a diversified portfolio.

Wall Street Shares: 5 Articles I Enjoyed Reading This Week

1. White Coat Investor: How Am I Stacking Up? — I’ve written about why you shouldn’t compare your returns to the S&P 500, but I think seeing a report on whether you beat your peers in investing would be interesting. Don’t try to be 99th percentile, though — it probably means you’re taking too much risk.
2. High Income Parents: Melissa Read Scholarship Essays – HIP is running a scholarship essay contest for high school seniors and college students, and I encourage everyone to read the five candidate essays. Here are the links to Essay #1, Essay #2, Essay #3, Essay #4, and Essay #5. Many kudos to HIP and the scholarship sponsors for making this happen!
3. Mama Fish Saves: The Three-Fund Investment Portfolio: The Beauty of Simplicity — As all of you know, I love the three index-fund portfolio, so I enjoyed Chelsea extolling the many benefits of this portfolio.
4. Miss Bonnie MD: Ultimate Financial Planning Guide for the Physician Mom To Be: Part 1 — Dr. Bonnie is expecting her first child, and this is the first of a two-part series on the financial considerations for expecting doctor moms.
5. Future Proof MD: PSLF – Facts vs. Alternative Facts — I read every article about student loans from Dr. Liu, so this is a nice fact or fiction (or “alternative facts”) piece on the Public Service Loan Forgiveness program.

What do you think? Do you agree or disagree with any of my responses? What’s your take on the topics in this week’s forum mailbag?