2 Responses to “Personal Finance for Medical Residents”

Comments

Read below or add a comment...

  1. Great post. Another thing for residents to think about is home ownership. There are a lot of different programs out there that offer great rates on mortgages just for physicians. The sad thing is, many residents & physicians have never heard of physician loans!

  2. Most of this is great advice. The 3-6 months worth of living expenses should be kept liquid, in a bank account or money market fund. It does *not* belong in a 401k since it may be needed quickly, and would not be considered “long term” money.
    The 401k (or 403b if you’re at a non-profit provider) is a great idea, and contributing enough to garner matching contributions from your employer is even better.

    I see young docs regularly make three mistakes, and I hope you can avoid them:
    1. Buy a reasonably priced home. That is, make sure that your house payments don’t keep you from saving money for retirement and your kids college (you may not have kids now, but you probably will in the future).
    2. Review your disabilty policy the moment you accept a new job. When your income goes up, so should your coverage. I see docs 10+ years into their practice that never looked over their coverage after they began to practice, and sometimes medical issues make them uninsurable. Your ability to earn an income is your greatest financial asset, so protect it.
    3. DON’T play with stocks. And I promise I won’t play with surgery or meds. There’s a difference between gambling and investing. If you want to build a firm foundation in this, read The Four Pillars of Investing by William Bernstein MD (http://www.amazon.com/Four-Pillars-Investing-Building-Portfolio/dp/0071385290).

    And one last piece of advice: Invest some money in a financial advisor. Look for someone who’s “fee-only” (not selling products) with a Certified Financial Planner designation. Like many things in medicine, personal finance is an area unto itself, and taking care of your money is almost as important as taking care of your health.
    Don’t make these three mistakes that I see young physicians mak

Leave A Comment...

Powered by Yahoo! Answers