Physicians have a unique career trajectory that is accompanied by an earning trajectory very different from other careers. In medical school, future doctors focus on learning how to diagnose and treat. There’s typically not a money management course built into physician training. So, many physicians learn by trial and error, and time is the biggest obstacle. Without dedicating the right about of time to money management, things can quickly get out of sync.

1. Staying Up to Date Managing Risks

As a physician, it can be easy to overlook the challenges and risks that come with the territory. In the face of an uncertain future, it is essential to have a plan in place to safeguard against potential harm.

Just like some physicians may create treatment plans for their patients, it would be wise for you to develop an emergency manual that specifically addresses your unique circumstances. This should include securing the proper insurance coverage, such as malpractice, disability, and life insurance, and having a contingency plan in case of an economic downturn or stock market decline.

We understand there are many factors to consider and the consequences of the unexpected can be overwhelming. That's why we highly recommend working with an advisory team who can assist you in identifying potential scenarios and creating a comprehensive plan of action to prepare for them.

2. Negotiating Your Employment Contract

Have you ever found yourself regretting not negotiating better terms in a contract? You’re not alone. It's easy to make mistakes in the complex process of managing your career.

It's important to proactively address your needs and wants for the future, especially when a contract is approaching its end. Take a step back at least a couple of months before the end of your contract to start the evaluation process and explore your options.

To make the most of this opportunity, be sure to document your contributions and achievements in a clear and persuasive manner. Engaging an attorney to review the contract draft can also provide added peace of mind. It can also ensure more favorable terms for you.

If you need support and guidance in contract negotiations, don't hesitate to reach out to an advisor. They are always ready to help and provide valuable insights.

3. Understanding Long Term Goals and Creating a Clear Plan 

The field of personal and business finance requires a proactive and tailored approach, especially for physicians. There is no universal formula that applies to everyone, as the world we live in is constantly changing and unpredictable. Just like diagnosing a patient, it's important to perform a thorough evaluation of your financial options, consider your unique needs and desires, and create a customized treatment plan that suits you best.

Having a clear understanding of your long-term goals is also crucial for financial success. It's essential to have a clear picture of where you want to be in the future, and what your motivations and aspirations are.

When working with a financial advisor, be clear about your vision for the future and make sure they understand what is important to you. It's like having a trusted medical consultant who is well-versed in your individual case. This person can provide you with expert advice and guidance along the way.

4. Coordinating Financial Decisions Across Domains Like Tax Planning, Insurance, Investments, etc.

As physicians, you are renowned for your exceptional problem-solving skills and vast knowledge accumulated throughout your careers. However, it can be easy to compartmentalize the challenges you face and neglect to see how all aspects of your life are interconnected.

At Earned, we understand the importance of considering the seven crucial elements of physician wealth: Career, Cash Management, Debt Management, Investments, Proactive Tax Planning, Risk Management and Insurance, and Estate Planning.

We believe that by evaluating the interplay between the various elements of your professional and personal life, you can achieve greater financial stability.

For instance, a decision to invest in real estate for additional income streams could also impact other aspects of your financial life, such as taxes, debt, insurance, and estate planning.

Without a comprehensive understanding of how these elements are interconnected, a financial decision taken in isolation may not yield the desired results for your overall financial well-being.

5. Considering Taxes When Making Investment Decisions

A common oversight among physicians is to neglect the tax consequences of their investment choices until the time of filing returns. This often results in limited opportunities to lower their tax bill through tax-efficient investment strategies.

Investors must acknowledge that the ultimate goal is not simply to maximize returns, but to maximize returns after considering taxes and fees. The impact of taxes and high-cost investment products on returns cannot be understated, with even modest amounts leading to substantial opportunity loss over time.

Fortunately, it is possible to retain a greater portion of returns through the prudent management of tax-efficient investment strategies, such as tax loss harvesting, avoiding short-term capital gains, and tax-smart asset location. Furthermore, you can mitigate the negative impact of high product fees on investment returns by investing in lower-cost alternatives, such as ETFs and direct indexes.

Money Management for Doctors

It’s clear that the unique financial trajectory of a physician’s career can present challenges. However, by being aware of these financial opportunities, such as preparing for the unexpected or having a clear financial plan, you can proactively work to take advantage of them. By seeking out financial education and advisory services offered by professionals like Earned, you can receive the guidance and support you need to make informed financial decisions and achieve your financial goals.