Real Life Financial Planning for the New Physician

[Deebs]

In addition, there are years where most people would be building an emergency fund, putting away for retirement and college, and generally building wealth. During those years, physicians are in training and taking our loans or barely making it. There's just so much to make up.

[corn poffi]

Oh yeah, I totally realize that training is economic hell for most people. We don't have to worry about loans though, so right now, we are in really good shape compared to many of our peers. We have a combined debt of less than $25,000, and that's on two unbelievably low-interest car loans that will be paid off in a few years. No house, no kids, two incomes...we can basically live like normal people!

Since we have 4-9 more years of training, I haven't been paying attention to what will happen when he's finally finished. I assume we should probably wait until his last couple years to see where he'll be then...or is that shortsighted of me? I just get paranoid since right now we have the same spending saving habits as our friends that are teachers, accountants, etc. Obviously that will change when we finally go from zero to sixty when he's finally done.

[niener]

So I finished the book yesterday and as I mentioned, I think it's really good for people in the later stages of residency or early stages of post-training. It's short, so by default nothing is covered in extreme detail but I think it does a good job giving overviews of the different types of typical financial considerations (insurance, investments, savings, taxes, estate planning, etc.) and outlining strategies for catching up in those areas. I like the way the book divides the information into "stages" as he calls them, from the "security and confidence stage" to "capital accumulation stage" to "tax-advantaged stage" and so on. We are definitely in the first stage, being fresh into residency and having very little financial security or confidence at the moment, so it was easy to find the section that was most applicable to where we are financially. There is also a chapter on contracts, agreements, etc. and a few short case studies at the end. I say it's best for people late in residency/early in post-training because there's such a big jump in finances between those two stages so there's a lot more to consider, but since this was the first financial planning book I've read front to back I got a good bit out of it as well. I've already come up with some strategies I'd like to implement this coming year and it's definitely something I"ll hang on to for future reference.

Someone mentioned being hesitant to buy the book because of the pricetag, and I will say the only reason I got it with little reviews is because I had an amazon giftcard to use up. But I'm glad I have it now and will probably use it as my go-to resource for an overview of different financial considerations and every stage in training. If you already have a good financial planning overview book though I probably wouldn't spend the $28 getting this one too. While it might be organized differently and have a few topics more geared towards physicians, the financial information is probably similar to many other overview-type books.

[Finding Equanimity]

great info! Thanks.

[ms.conception]

I wholeheartedly agree with you. We're leaving the program with 250k on our LOC, a 350k mortgage, 50k in student loan debt. My husband has signed on for 2 more years of fellowship training at 78k/yr. I am a SAHM. We have 3 children we're supporting. He' 40yrs old, this is his second career and we have 0$ in any sort of saving or retirement fund. My husbands entire salary goes to monthly debt repayment. While he earns a "decent" salary, when faced with the crippling debt we have, it covers nothing.

My husband is exceptionally practical with spending. Most of our fellow, Fellows, have had to up their LOC to 300 or 400k and don't have children. We budget strictly. We have not travelled. Our house is nothing exciting.

What I've see, from many other residents - is the entitlement. They've "sacrificed" for so long, that they now spend wildly. The difference between us and them? We had children while in the program, we know that we're getting a late start on things. We know that we need to save for retirement and emergency planning. Much of the younger crew have lived at home, had their parents supporting them for many years or paid for their education and have had to do little in terms of fiscal management. When I see a PGY1 driving a 100k sports car and renting a luxury condo, I think "geez, you're living well for 60k/yr... slow down".

We're not ostentatious people. We will build a new house eventually, but we pretty much have to - we have 3 children at home and plan on having more and it's next to impossible to find a 5br house in our city. We each have our own vehicles, but we're not driving porsches or Merc's and neither of us have a desire to either. Neither of us feel so self important or feel the need to keep up appearances. We want to live well in retirement. Invest in our kids education by providing them with great opportunities in school and with experiences.

Keeping humble is a large piece of the pie. Knowing that you could get sick/lose your job for a variety of reasons after so much investment is paramount to staying that way.

[Liisi]

Thanks for this thread and all the info... seems like a great book. I've put it on my wishlist; I think it could really help us.