It all comes down to having the right instruments and architectural plan in place.
Knock out uncertainty and stress
Most physicians lack the time needed to fully understand their financial picture (including cash flow, expenses, debt, savings and investments) and establish the tailored strategies they need to smoothly achieve their desired personal milestones. Many times, they simply watch a large portion of their income disappear as taxes, spend and save the rest of their money as desired, and hope for the best.
But one of the great stressors in life is not being confident that you are making the right financial decisions and are on track to achieve all those important milestones you look forward to (such as moving into your dream home, buying a vacation property, hosting your child’s wedding or retiring to the lifestyle you’ve always imagined).
The truth is that even with their sizeable med school debt, delayed entry into the paid workforce, and layers of insurance needs and other physician-specific expenses, physicians generally have the income they need to achieve their personal goals. Their primary barrier is a lack of expert planning.
Understandably, physicians are eager to settle into their lives as practicing physicians as soon as they finish their training. For many, as soon as they sign their first employment contract, that means purchasing a house worthy of the physician salary, purchasing a new car, and growing both their practice and their family. At the same time, many of these physicians are already saddled with hundreds of thousands of dollars in debt, little (if anything) in emergency and other savings, and numerous unavoidable expenses.
Without a blueprint for how they will be managing their finances, many of these physicians experience a rude awakening years down the road when they realize they aren’t where they wanted to be in relation to their long-term goals. Even worse is when that realization occurs late in life, and drastic changes have to be made in order to make ends meet after retirement.
Give your plans a strong foundation
The decisions you make now are of the utmost importance for your future.
Wherever you are in your career, now is the time to ensure you have constructed expert plans that detail what your long- and short-term goals are and how you will reach them. Points that should be addressed in the plan include:
- Understanding your debt and identifying sound repayment strategies
- Taking care of comprehensive insurance planning that fits with your family needs
- Ensuring you have sufficient liquid assets in the event of an emergency, disability or any other unexpected turn of events
- Creating a tax management strategy that minimizes what you owe and maximizes what you can invest
- Saving for retirement through a diverse portfolio that extends well beyond your 403(b), 401(k) or 457(b)
- Ensuring your will and other estate planning affairs are in order—even if you are young (this is especially important if you have children)
Having all these elements in place and working in concert with one another is like drawing out exactly how you will build that castle. You’ll be able to live each day confidently, knowing how everything will come together. You won’t be stressed, wondering how you might accomplish your goals or whether you’ll be left with empty hands and nothing to show for it.