Forum Mailbag: MD/MBA to Law at Age 60, Switching to VTSAX, Fidelity Tech Sector Funds, And More!

There is so much great information on personal finance forums. I participate on several message boards, including the Bogleheads and White Coat Investor forums. Here are some of the discussions happening around the internet.

1. Bogleheads: 60yo MD/MBA To Start Law School?

Question: TheNightsToCome is a 59-year-old MD/MBA/CFA who previously worked as a healthcare equity analyst, but is currently winding down his career as a cardiologist. He went to a top medical school and business school, and is now considering going to law school, with the eventual goal of becoming a law school professor. He believes he has the credentials (e.g. GPA, LSAT) to attend a top-tier law school, but he had many questions regarding the jump, primarily related to whether his age would be a limiting factor for him to achieve his goal of becoming a law professor (with or without Big Law experience in between).

WSP’s Take: Not surprisingly, this topic elicited a lot of responses, with over 250 posts so far. Since I have no actual law experience (and don’t plan to!), I can’t directly address the question of whether elite law school admissions committees would accept a 60-year-old student as a 1L, Big Law firms would hire a 63-year-old associate to work hours similar to a surgical resident, or whether law schools would hire an adjunct professor when most law professors at that age are considering retirement.

I remember in college seeing many retired townspeople audit classes or just sit in on a few lectures. Clearly, they enjoyed spending their retirement learning a new subject sitting besides students younger than their children. If the entire process of law school is only about becoming a law professor or working at a big law firm, then based on the responses in that thread, his chances for success are slim. However, if he doesn’t make it to Big Law but would still be happy with the intellectual satisfaction from studying the law for three years, then I’d say go for it. 

2. Reader Question: Exchanging Funds into VTSAX

Question: A WSP reader sent a question to my e-mail regarding his taxable account allocation. He currently holds the total U.S. stock market in his taxable account using Vanguard funds, but rather that using the usual VTSAX, it is split between large-cap, mid-cap, and small-cap index funds (VFIAX, VIMAX, and VSMAX). He believes that the combined expense ratio on these index funds is 0.14%. He was wondering whether it would be better to just convert these funds into VTSAX (total U.S. stock market). 

WSP’s Take: It turns out that the expense ratios of the three index funds sum up to 0.14%, but the individual expense ratios of the large-cap, mid-cap, and small-cap Vanguard index funds are 0.04%, 0.05%, and 0.05%, respectively. I don’t know exactly his distribution of the three funds, but he is paying somewhere between 0.04% and 0.05% in his taxable account right now. Since VTSAX has an expense ratio of 0.04%, he would not be saving much in fees by switching to VTSAX. He could use VTSAX for future purchases, but I would not switch his current taxable account portfolio to VTSAX because of the negative tax consequences.

3. Bogleheads: Fidelity Tech Sector Funds

Question: Reader WentzWagon was considering diversifying his index fund portfolio with Fidelity technology sector funds. Specifically, he was looking at the three following Fidelity funds:

1. Fidelity Select Technology Portfolio (FSPTX)
2. Fidelity MSCI Information Technology Index (FTEC)
3. Fidelity Select Semiconductors Portfolio (FSELX)

WSP’s Take: FSPTX and FSELX are both actively managed technology mutual funds — each has an expense ratio of 0.75%. I would not use these actively managed funds to tilt a portfolio towards technology stocks. FTEC would be a much better option, as it is an index ETF with a low expense ratio of 0.084%. It’s top holdings currently include all of the tech favorites, including Apple, Facebook, Microsoft, Google, and Nvidia.

4. Physicians On FIRE Facebook Group: Life Insurance For Non-Working Spouse

Question: A doctor on the Physician on FIRE Facebook group asks whether it is worthwhile to purchase life insurance for a non-working spouse.

WSP’s Take: The goal of life insurance is to cover any additional expenses or loss of income should the insured pass away unexpectedly. For most physicians with a family, the loss of income should they pass away would significantly affect the finances of their surviving spouse/children. While there would be no loss of income should a non-working spouse pass away suddenly, there would be an increase in expenses should you outsource the many unpaid tasks your spouse performs. The decision to purchase life insurance would be based on your ability to pay for these additional expenses from your regular income. If you would not be able to cover these expenses, then you should consider life insurance for your non-working spouse.

Wall Street Shares: 5 Articles To Read This Week

1. Diverse FI: The Once I Have Syndrome — Medical students and residents can potentially be prone to this syndrome.
2. Dads Making Cents: Parenting Your Portfolio — Dr. Linus compares investing to raising a young child.
3. Chief Mom Officer: The Regrets Of the Old, Ill, and Dying – And How To Avoid Them — I think most people have come across this type of article, but even if you have, we all need a reminder every once in a while.
4. The Physician Philosopher: Paying Off Your Debt is Better Than Investing Your Money — We know where TPP stands on the pay student loans vs. investing debate.
5. Physician on FIRE: Investing Basics for Physicians With Little Time or Experience, Part I — a TL;DR (too long; didn’t read) version of investing for physicians.

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?