Whether you’re a medical resident hoping to make millions out of residency or a computer programmer in a stagnant company, it’s still probably wise to stay atuned to the economy. As a physician in training, I’ve noticed a wide range of economic sense in my peers. Some of us anticipate a fat six-figure salary out of training, and live as if we did (The average hourly rate of a medical resident is equivalent to that of an In-n-Out burger boy). That’s perfectly fine if you’re independently wealthy or have a spouse supplementing your income. The rest of us live somewhere in the middle. Those of us in this medium range will probably have a couple hundred bucks lying around every month leftover from our paychecks. How can we maximize these unspent dollars?

While you can invest this excess green in the stock market, bonds, mutual funds, or any other venture that might promise huge returns, I find that this is impractical for the majority of us for a number of reasons:

1. Unless you had a career prior to medical school, the amount you’d be able to invest off of a resident’s salary is not sufficient to offset any transaction fees, no matter how little your broker charges. Scottrade used to charge $8 per trade. If you’re putting green into the market monthly, you’re incurring a minimum of $96 a year in commission. Try to make that back in this bear market.
2. If you’re working 80 hours a week, you have no time to research your investments. If you’re already economically savvy, go for it. Most of us need to sleep or study for our job.
3. You might actually need the extra cash sometime. You can’t pull out your money in a pinch if it’s invested in the market.

The alternative to investing it is a no-brainer: stash it in the bank. Which bank? The short answer is an online bank. Current interest rates are a pittance, and most banks with a physical branch offer <0.50% rates on their savings accounts. Online banks offer slightly better rates, and are nearly as convenient if you can coordinate them appropriately. There are dozens to choose from, and most of them are generally reliable. Etrade and INGDirect are two institutions that offer online banking.  Stay tuned for my upcoming review of my experiences with various online banks.

economy economy, life, money