Disclaimer: This is not financial advice. We are a newsletter, not a fiduciary. Do your own due diligence.
If you are like the majority of our readers, "Investing" and “Retirement” are currently your #1 financial interests.
But here’s the problem: You’re tired, slightly confused or questioning how it all works. After a day of fighting insurance denials and managing patient loads, the last thing you want to do is analyze price-to-earnings ratios or pick individual stocks.
The good news is that you don’t have to. In fact, the "lazy" way is often the best.
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The State of Investing
2026 has been a roller coaster.
We've seen continued uncertainty driven by new technology, persistent price pressures across the economy, and questions about whether the US market's high valuations are sustainable.
Some investors are asking: Does it make sense to invest more abroad? What about high-growth sectors like metals, robotics, or biotech?
Here's the short answer: Nobody can reliably predict what sector or country will outperform next. That's why broad diversification remains the smartest default strategy.
Before You Invest
Investing is not the first step to get your finances in order. Here's a rough priority order before you start investing aggressively:
Emergency fund: 3-6 months of expenses in a high-yield savings account
Employer match: Contribute at least enough to get your full employer match (that's free money)
High-interest debt: Pay off anything above ~5-6% interest (credit cards, private loans)
Max out tax-advantaged accounts: 401(k), Backdoor Roth, HSA
Taxable brokerage: After all tax-advantaged space is used
Take a look at this chart to see where you sit.
The Core Strategy: The 3-Fund Portfolio
The simplest, most effective strategy for high-income professionals is the "Three-Fund Portfolio." The goal is to own the “haystack” rather than looking for the needle.
Total US Stock Market Index Fund (e.g., VTI or VTSAX)
Total International Stock Market Index Fund (e.g., VXUS or VTIAX)
Total Bond Market Fund (e.g., BND or VBTLX)
As you get closer to retirement, you gradually shift more into bonds. A common starting allocation for a physician in their 30s or 40s might look like:
60% US stocks
30% International stocks
10% Bonds
Why this works for MDs:
Low Fees: You avoid the 1% "Assets Under Management" (AUM) fee that many financial advisors charge. On a $2M portfolio, that is $20,000/year staying in your pocket.
Simplicity: You only need to look at it once a year to rebalance.
Performance: Over a 15-year period, this simple passive strategy beats ~90% of active fund managers. (S&P SPIVA Scorecard)
For a deeper dive, the Bogleheads Three-Fund Portfolio Guide is the gold standard.
An Idea for Physician Debt Payoff: Rounds
We're constantly messaged about managing student loans and understanding the merits of paying down debt. So we’re building an app to help.
The tool would allow you to:
Connect your liabilities (student loans, high-interest debt)
Play out scenarios for paying it down (avalanche vs. snowball vs. custom)
Project how long to pay it off under different strategies
Track PSLF progress if you're pursuing Public Service Loan Forgiveness
More interestingly: if you've heard of Acorns, we'd have a feature you can turn on that rounds up transactions to the nearest dollar and lets you pay down debt without really noticing it.
We're calling it Rounds.
The 2026 Action Plan
If you’re setting up your automated contributions, here are the numbers you need to hit to max out tax-advantaged space.
1. The 401(k) / 403(b) Limit
2026 Limit: $24,500 (up from $23,500 in 2025)
The Move: Log into your payroll portal and adjust your per-paycheck contribution. If you are paid bi-weekly (26 pay periods), you need to contribute roughly $942/paycheck to max this out.
Catch-Up (Age 50+): $8,000 (up from $7,500), for a total of $32,500.
Source: IRS Announcement IR-2025-111
2. The "Backdoor" Roth IRA
2026 Limit: $7,500 (up from $7,000 in 2025)
The Move: As a high-income earner, you likely cannot contribute directly to a Roth IRA (the income phase-out starts at $153K single / $242K married filing jointly in 2026). Instead:
Contribute $7,500 to a Traditional IRA (non-deductible)
Immediately convert it to a Roth IRA
For a step-by-step walkthrough: White Coat Investor: Backdoor Roth IRA Tutorial
3. The HSA (Health Savings Account)
2026 Family Limit: $8,750 (up from $8,550)
2026 Self-Only Limit: $4,400 (up from $4,300)
55+ Catch-Up: Additional $1,000
The Move: Treat the HSA as a "Stealth IRA."
Pay current medical expenses out of pocket (keep receipts)
Invest your HSA balance in index funds
Let it grow tax-free for decades
Reimburse yourself in retirement (or anytime) with tax-free withdrawals
The HSA is the only account in the tax code that is triple tax-advantaged: tax-deductible going in, tax-free growth, and tax-free withdrawals for qualified medical expenses. No other account does all three.
Why "Lazy" Wins
Let's say you're an Attending, age 35. You invest the new 2026 max ($24,500) into a 401(k) every year for 25 years at a 7% average annual return.
Result: ~$1.7 Million.
Effort: ~15 minutes of setup time.
Now add the Backdoor Roth ($7,500/yr) and HSA ($4,400/yr) on top of that and you're looking at an additional ~$550K. All from accounts you set up once and automate.
If you try to day-trade or time the market, data shows you will likely underperform the market average. So let’s get lazy!
Quick Links
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A physician recently told us: “Tracking procedures has always been very daunting for me. Tracking my wRVUs with the app has made the task feasible.
The first month after tracking my wRVUs, I caught a coding error within my institution. This error could potentially cost me $15-20,000/month. If I wasn't tracking, I would have never been the wiser.”
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Feedback Corner
Anything you liked this week? Want to hear more about a specific topic?
Reply to the email.
Meme of the Week
How it feels to round as a med student
Disclaimer: The M.D. Newsletter provides general financial education for physicians. Nothing here constitutes personalized financial, tax, or legal advice, and no fiduciary relationship is created by reading this content. The authors are not licensed financial advisors, CPAs, or attorneys. All investing involves risk, including loss of principal. Past performance and hypothetical projections do not guarantee future results. Always consult a qualified professional regarding your specific situation before making financial decisions.
Best,
M&H
