When You are a Resident Physician, Don’t Live Like an Attending Physician-
This adage applies to everyone but specifically to newly minted physicians “live within your means”, not your extremes. Building good habits around spending often dictates the projection of your wealth accumulation as you age. When you are making $40-$60K try to minimize additional student loan debt. If you live in a major city like Chicago where living expense are astronomical, this becomes more difficult but not impossible to work around. This is also a great time to Fund a Roth IRA with $5500 per year.
When You Finish Residency, Don’t Fall into the Traditional Spending Trap-
The typical story goes like this: I did all the wrong things financially from day 1 of medical school. Went to an out of state, more expensive medical school, borrowed the max amount each year to live off. Bought a house during medical school. Did not start saving during residency. Did not refinance my high interest rate student loans in residency. Bought 2 new cars during residency. As soon as I got a job as an attending, we bought a big old house that needed full restoration and took on the project mostly ourselves.
The trouble is convincing a 27-30 year olds to seek financial help. For most, it takes years before you realize the financial mistakes and one day it will be a wakeup call, usually around the age of 35-40.
Doctors Should Save More Than All Other Professions-
Remember, you spent 4-8 years longer in school than most other professional careers. Which means, some of your now higher salary is meant to help you catch up on those 4-8 years of missing income. This fact alone, directly relates to your investment/retirement accounts. For most of White Coat Wealth Management Clients we like to see savings rates in excess of 25%.
I love the quote, “Financial Success is living years of your life like most people won’t, so that you can spend the rest of your life like most people can’t.”