The healthcare and medical finance realm has exploded in recent years. As you may know from previous posts, my introduction to physician finance was the White Coat Investor (WCI). More recently, Dr. Dahle has branched out with other physician finance blogs and podcasts to form the WCI Network, which includes: Physician on FIRE, and Passive Income MD.
I’m glad to have begun exploring these resources in my third year: giving me plenty of time to figure out the basics and make a preliminary plan. Of course, things change frequently. There is no way to know what my financial future holds at this point, or what path I will choose. However, there are some really useful resources out there that have been vetted for you. There’s also a great podcast episode by Docs Outside the Box on the subject.
If you are like me, podcasts are the preferred method for a launching-off point on new material. Besides the WCI podcast, you may want to try the Financial Residency podcast or the Doctor Money Matters podcast. For a more complete list of recommended medical podcasts, visit our Resources page. Here is my financial advice for medical students and healthcare professionals.
I feel your pain. And for many, this may be too soon for you to begin planning the rest of your financial life. However, I would recommend at a minimum taking a cursory glance at some of the material out there, such as the WCI book. It’s a short read and very simplified: perfect for busy medical students and professionals. From here, you will at least know what to expect and not be caught off-guard when entering residency. There is even some basic advice for pre-medical students in choosing a medical school (basically, the cheaper the better for most of us). At the very least, after passing USMLE Step 2 you should begin planning for these eventualities: Homeownership v. renting, types of insurance, paying off student debt, and how not to be screwed over by a “financial adviser.” I use that term in quotes because there are 10,000 types of occupations with some form of “financial adviser” or “financial planner” in the name that may trick you into using their service. There’s only one word that matters: fiduciary. Make sure you know if they have a fiduciary responsibility to you, or to their company. Read about or listen to more on that from the above resources.
Granted, physicians make a decent salary. Even on the lower end of the spectrum, $150,000 per year is not a bad living. When you get up to specialties and sub-specialties it is not uncommon to hear of $4-600k a year! Even with that, the majority of physicians have a net worth of less than $1M. Despite being highly trained, highly educated, and highly motivated individuals in general, physicians are no better at saving than anyone else.
If you become a physician for dreams of big homes and fancy cars, you may be able to pull it off. But if you would rather live a debt-free life planning early is the best action that can be taken. Dr. Dahle of the WCI recommends that you read AT LEAST one financial book a year. How many textbooks did you read through basic sciences? This should be cake. And finding lists of recommended books are easy enough to find on any of the finance blogs mentioned above. For those that need a little extra help, he also offers a course.
As someone that hates cleaning, hates clutter, and REALLY HATES debt, I took on an obligatory minimalist lifestyle years ago. The degree of minimalism fluctuates with every new city, but even when a steady paycheck is to be expected I can’t see myself going back to a consumerist mentality. I’d usually rather get something second-hand off LetGo or OfferUp than contribute to waste buildup. But if you are not a fan of used cars (or furniture, electronics, clothes, everything) then at least do yourself one favor. Do your research.
It’s easy to see the first paycheck come in and think “it’s alright to treat myself.” And you probably DO deserve it. But quantify your debts, make a payment plan, and resist the temptations to be a physician financial statistic!
So What’s Your Plan?
There are many more suggestions out there that may better fit your personal needs. Just remember to have a plan and realize you may need to change it frequently. For some, it is worth a little time doing handyman jobs a few hours a week to be able to eat a little nicer the following week or enjoy a day out with their friends. It’s also a bit easier to study when finances aren’t weighing as strongly on your subconscious.
One other resource you may find comforting in the stressful medical school period is from an anesthesiologist’s guide to freedom and happiness, TheHappyPhilosopher blog.
Please leave any tips and tricks you know of that can help other students! And remember, this stressful point in life is a phase. It is temporary. Good things are on the horizon.