5 small-time financial strategies

Earn maximum gains with a minimalistic investment strategy

It's no secret that most veterinary medical students are cash poor. Still, a handful might have a few extra dollars to spare, perhaps from a tax refund. Christopher J. Allen, DVM, JD, a consultant and president of Associates in Veterinary Law P.C., offers five ways to make smart investments with a small amount of money for future gains.

#1. Open a Roth IRA — NOW. "Any student who has a little money available while still studying and, therefore, is in a low-income tax bracket should immediately open a Roth IRA," Allen says. "Tax rules do not allow deduction of this money at deposit, but when one is in a low or non-existent tax bracket, that does not matter. After the account is open for five years and the student is in a much higher bracket, the money can be withdrawn either for retirement or for some other uses completely tax-free, including interest and dividends, which have accumulated. Opening now lets the five-year clock begin to run."

#2. Invest in one of the mindless but terrific Target Retirement Funds offered by Vanguard, Fidelity and Schwab. "You pick a retirement date, such as 2045, and the fund picks the most appropriate mix of stocks and bonds to beat inflation with good safety."

#3. Use a Schwab or Fidelity brokerage account for checking. "All unspent funds earn interest all the time. This works like a bank and you get a debit card. Plus, if the funds are over a small minimum, they can be invested in mutual funds, which are ultra-safe and you still get the checking privilege."

#4. Start saving immediately for a home. "Don't wait for marriage, children or anything else. Just start. Rent is the delayer of all dreams."

#5. Never buy a new car. "Don't buy a wreck, either," Allen says. "The best value is the late-model, low-mileage car from a no-haggle dealer. These dealers specialize in low profit and high volume. This is the best long-term investment in a car because the depreciation is already gone yet a good long-term warranty is available. Even when no extended warranty is offered, there is still a ton of good miles left in the car, and a low-interest loan is probably available.

I always used to buy new cars and have learned never to do this anymore. Nobody can tell my 2-year-old car from a new one since they all look like giant kidney beans anyway."

Dr. Allen is president of the Associates in Veterinary Law P.C., which provides legal and consulting services exclusively to veterinarians. He may be contacted at (607) 754-1510 or