Steps For Young Physicians New to Managing Money

A quick Disclaimer before continuing: Obviously as physicians we do not enter into the field of medicine with the sole purpose of making money and buying stuff. If this were the case, I would have gone into investment banking, sales, or marketing where I would not have spent the last 8 years of my life taking out huge student loans to pay for the torture of getting through undergraduate and medical school. 

Protect the things that you have already worked hard for. You just graduated medical school and matched to the residency of your choice. Like many medical students you have received little if any training on managing your money or protecting your assets. At this point you may not feel like you have much to protect, but if you are like many medical students you just spent several hundred thousand dollars on your education and that is certainly something to protect. If you have a family, or children and a great deal of educational debt it’s equally important to protect them in the event of your death. The first two steps in this process will likely not bring you any wealth at all. They are simply there to protect you from misfortune which could potentially strike anyone at any time. The first recommendation is to obtain own occupation disability insurance from a quality provider such as Guardian. Basically, if there is any reason you become disabled and cannot do the job you were trained to do this policy is here to protect you. Most of the policies allow to increase the payout as you advance in your career. If you lock into a policy at a younger age you may be able to avoid the medical evaluation that often is required for these policies. The other insurance policy you want to have at the start of residency is term life insurance. In the unfortunate situation where you pass away before you make your fortune you will protect the people you love the most from financial hardship. I would suggest somewhere in the range of $500,000 to $1,000,000 depending on your debt burden. I will provide one additional tip here because I believe it’s important. If you have car insurance at the state minimum it’s a good idea to increase the rates. Again, this protects you from any potential issues in the event of a serious car accident. If people know you are a doctor they may assume you have a lot of money increasing the chances of a law suit. Bottom line make sure you are protected. 

My next point which may or may not be popular with some people is do not do a fellowship in psychiatry. A fellowship is not required to work in most areas of psychiatry, and residents often wish they did not do one after having the experience. Unless the fellowship provides you with skills no one else possess, it provides very little value. Maybe doing a child/adolescent fellowship is valuable but doing a consultation-liaison fellowship is not. It’s hard to see how doing one year of additional consult psychiatry would make you any better since most residency programs have multiple rotations on consult service, and additional time can be spent in consult 4^th year. Consult work, emergency psychiatry, addiction, and forensic work can all be done without a fellowship and board certification. The financial aspect is equally important, another year making approximately $60,000-$70,000 is difficult to justify. As a fellow you are still a student, and you do not have full ownership and responsibility for your patients. You are still not learning what it is like to be an attending.  

There will be more to come in the next several posts.