Financial planning for physicians.

October 14, 2024 | Michael Poterala

Financial planning is just what the doctor ordered.

If you are a physician at the beginning of your career, you are more familiar than most people with the concept of delayed gratification. When most of your college friends went to work and started earning an income, you went to medical school and likely borrowed heavily to fund your tuition and living expenses. After graduating you moved to a new city, away from family and friends, to do your residency where you were paid a minimal salary while working long hours, and perhaps continued further as a fellow.

When you finish your training and finally start making a substantial income, it is natural to want to reward yourself after all those years of sacrifice and investment. No one close to you would begrudge you some indulgences. From a financial planning standpoint, however, the wise move might be to maintain modest spending habits for a bit longer, especially so you can pay off debt and start saving for retirement. One experienced physician cited by the American Medical Association even advises to “Live like a resident for the first three years of your practice.”

The AMA encourages all physicians to be proactive in managing their personal finances. Multiple articles on the AMA’s website offer solid guidance:

• Work with a trusted financial adviser.
• Pay yourself first by saving from Day 1.
• Do not skimp on disability insurance.
• Understand the financial aspects of your employment contract.
• Maintain an updated will and medical and end-of-life directives.

The AMA notes that physicians who do not work with a financial adviser say that is because they haven’t been able to find someone they trust. Unfortunately, there are many financial professionals who are not fiduciaries and who do not have to act in your best interest. If you want to work with a fee only fiduciary financial advisor required to act in your best interest, please contact us.

AMA sources: