One of the hardest things for Physicians to discuss is finances. You spent your young adult years studying Medicine with a focus on patient care. Countless hours were spent in the library studying Microbiology, Pathology, Epidemiology, Anatomy and Physiology. After library time you would go to the cadaver lab to complete your anatomy studies.
Once you completed your core sciences you moved on to clinical Medicine, then Residency and so on.
There were no courses on financial education. No lessons on contract negotiations, Incorporation or how to set up a business…. You were focused on your “one thing” at the time, which was completing Medical school; becoming Dr. “insert specialty” and reaching your lifetime goal.
However, when the Medical training is over and you enter the post training world of Medicine you run into many unknown variables
How do I negotiate my salary?
What is the normal pay for my field?
Should I work as an independent contractor, a W-2 employee or buy into an established partnership?
Is an S corporation the best option?
Should I buy a house?
Is it better to invest in real estate, the stock market, both?
I have a ton of student loans, should I pay them off or let them ride? I say let them ride…
401k vs SEP vs post-tax accounts?
Do I need Disability/Life Insurance? Yes and Yes
These topics are not covered in Medical School because the focus is on Medicine. With that said, it would be nice if the Medical community made teaching young Physicians in training about finances a priority. (The White Coat Investor, Passive Income MD and The Prudent Plastic Surgeon have been leading the way in this field).
Financial education and Medicine can co-exist
You can be both a caring Physician and an educated investor. Learning about investing should not be viewed as taking away from your focus as a Physician. In fact, it should be considered crucial for Physician wellness. Decreasing your debt, increasing your assets and improving your financial standing will improve your lifestyle and decrease your potential for burn out.
You are a Physician, a high-income earner, and by definition a Business
Evaluate your personal finances using excel or other available programs to track your monthly income.
Approach your monthly expenses the same way a Business would. Look for ways to decrease your expenses, increase your profits and research how to invest your monthly savings. Your goal should be to grow your personal wealth like a company does by expanding. Facebook buys Instagram, google purchases You tube. You purchase Stocks, Short Term Rentals, Long Term Rental Properties, Multifamily and the list goes on. To learn more about Short Term Rental Investing, (click here)
If you are married then you should view your union as a Business. I understand it is not “sexy” to consider Marriage as a “business” but it can be helpful. Viewing your expenses in this manner allows you to evaluate your combined expenses objectively. Share your financial goals with each other and set big goals. (Check out this post about monthly Budgets)