One of the biggest challenges facing doctors as they transition from internships and residencies to joining or starting their own practices is dealing with money. A resident’s salary is significantly smaller than that of an attending doctor or an independent practitioner, and many physicians do not give much thought to how they will budget their additional income once it arrives.
Most should address student loans, other debts and planning for retirement before increasing their spending. Seeking out advice from a financial planner will help keep you from living paycheck to paycheck—even as that paycheck increases.
This New York Times article pointed out why physicians sometimes struggle with managing their assets. According to the authors, three aspects make it more challenging for doctors:
- Impatience: Due to years of sacrifices, physicians can be tempted to spend, spend, spend when their paychecks increase. They also tend to start retirement savings, college savings and other investments later than other professionals.
- Faith: Many physicians trust those who pitch ideas and investments to them and unfortunately can be convinced to make investments in areas that are not in their best interest.
- Confidence: As intelligent people, many physicians are overconfident and try to make a splash with a risky investment instead of focusing on more conservative investments that are likely to have a better return.
By taking a few steps, however, you can help ensure your financial success for today and the future. Check out PracticeLink Magazine’s financial planning articles — which cover topics like protecting the value of your future earnings, making “asset-protected” investments and planning your estate — to make sure you manage your money wisely.
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