I hope you enjoyed the money lecture.
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Step #1: Live Below Your Means – Don’t Spend All Your Money
If you have a spending problem (it’s rarely an income problem … ) then you’ll need to start tracking where the money is going.
My favorite budgeting program is YNAB (vs. Mint).
Step #2: Save & Invest Wisely
You probably have (boatloads) of student loans. If you’re not pursuing Public Service Loan Forgiveness, then you’ll want to refinance them once you finish residency.
- Student Loan Refinancing Resources
- If you’re looking for professional advice on what to do with your student loans, I recommend Travis Hornsby of Student Loan Planner.
Learning about money seems difficult. It is nowhere near as hard as what you’ve had to learn to become a physician, nurse or PA.
If you’d like to learn as efficiently as possible, I recommend the White Coat Investor’s “Fire Your Financial Advisor” course. There are periodic sales for this.
If you’re thinking, “This sounds like a lot of work” and you’d prefer to hire professional help – no problem!
My current recommended list of fee-only Financial Advisors are here. And whoever you choose, make sure you’re informed:
- Everything you wanted to know about Financial Advisors
- What the F? – Fee-only vs. Fee-based and the Fiduciary agreement
- What’s the Difference Between a Financial Advisor and a Financial Planner?
- How To Find And Vet A Financial Advisor
Step #3: Protect Yourself – Don’t Lose Your Money!
Insure against financial catastrophes until you’re financially independent.
Life Insurance: Insure Against Death
- The vast majority of physicians only need term life insurance. If someone is trying to sell you whole life insurance, run!
- Read here to learn the nuts & bolts of term life insurance or if you prefer audio, check out this podcast with Stephanie Pearson!
Disability Insurance: Insure against disability
- Your ability to make a physician income is one of your greatest assets! A partial (more common) or total disability can wipe that out.
- Read all about disability insurance here or listen to this podcast.
- Don’t buy the policy your specialty society is trying to sell you.
My list of recommended insurance brokers are here.
Insure against Liability
- You need malpractice insurance. Always try to get occurrence based vs. claims based. Otherwise you’ll have to purchase tail insurance when you change jobs.
- You need auto, home (or renter’s) insurance + umbrella insurance.
Prenuptial Agreement: Insure against divorce
Choose your spouse wisely. Not doing so can cost you hundreds of thousands of dollars if not more.
Marriage is a legal contract. Make sure you understand what you’re signing up for.
Everyone should sign a prenuptial agreement prior to marriage. If you don’t, you actually have one anyway! It’s just that it is the state’s one size fits all prenup that penalizes you.
Will your family know what to do if you pass?
- Anyone with dependents (spouse, children) needs a Will.
- Consider a password management program like LastPass to manage your family’s passwords
- Consider creating a legacy binder (here is a great templated one) so that your loved aren’t scrambling to take care of your affairs.
Bonus Step #1: Give Back
Giving is personal. But if you’re someone who always wanted to give but haven’t, I challenge you to start giving. Start small.
People say, “When I’m rich, I’ll give, they’re lying. If you won’t give a dime out of a dollar, there’s no way you’re gonna give a 100 million out of a billion, you’re lying to yourself. But if you can do it today, the biggest thing that giving does, is it teaches your brain there’s more than enough.
Bonus Step #2: Financial Independence
Physician on FIRE is a FI anesthesiologist. ChooseFI is an awesome podcast on the mindset of FI.
There are a bunch of amazing physician finance bloggers and podcasters. Check them out!
Physician Moms! Join the Wealthy Mom MDs Facebook group!
ALL physicians can join the Physicians on FIRE facebook group.