By Kenneth Hooker
Boston Globe Columnist

I'm a 30-year-old physician and just starting a real job, which pays $125,000 a year. I'm new to investing, so I would like advice on what to do regarding growth and retirement. My tentative plan includes buying a house and getting married.

My liabilities consist of a $33,000 student loan at a 3.875 percent fixed rate, another student loan at a 5 percent fixed rate, and a private loan of $53,600 at a floating rate, now 6 percent. On the asset side, I have $30,000 in a savings account, $4,500 invested in Fidelity Aggressive Growth and Fidelity Disciplined Equity funds, and $2,000 in an IRA.

I've been told to aggressively pay down my student loans and to contribute to the unmatched 403(b) plan offered by my current employer. I don't know how long I will be with the current employer; my two-year contract will run out in September 2005. After that, Im hoping to have my own practice.

K.N., Milton

The two fixed-rate student loans at 3.875 percent and 5 percent should be paid off as slowly as possible. You should be able to get a better return over the long haul from investing your money than you would by paying off those loans quickly.

The floating rate loan is quite another story. You should pay that one off as soon as possible. That's not to say that you should cash out your $30,000 savings for that purpose but whatever you can save from your current income should go to pay off that loan.

For the balance of your savings, I agree with the idea of joining the 403(b) plan. Although there's no employer match, it will provide long-term tax deferral and will become the foundation of your retirement savings.

You don't mention what investment options are available with the 403(b) plan, but I suggest you seek out something resembling Fidelity Disciplined Equity fund -- an investment with a large-cap portfolio representing a blend of growth and value stocks. Such a fund -- perhaps one that simply tracks the results of the Standard and Poor's 500 Index -- is frequently called a "core" position, and such positions should dominate your retirement portfolio.

At the outset you should avoid funds such as Fidelity Aggressive Growth fund, which has a poor long-term record (6.32 percent average annual returns over the past decade, compared to 10.13 percent for Fidelity Disciplined Equity) and a poor risk-to-return profile.

Rethink the idea of buying a home right away. If your target is to establish a private practice when your current contract ends next year, it seems likely that you would be relocating at that time. Even in a healthy real estate market, less than two years isn't long enough to own a home -- just the costs of making a purchase and then a sale would probably put you in the red. With mortgage rates rising, you could lose a lot more money than the various closing costs.

Establishing your own practice would likely entail significant up-front costs. If that is the case, you should be saving a certain percentage of your available cash to meet those costs.

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