Personal Finance for Physicians
Reimbursements are falling and expenses continue to rise. Physicians, as a result face, an endless set of questions concerning the future – Will there be enough money to cover the children’s education? Can we afford the new house we wanted? How long will I have to work at this capacity? What type of lifestyle can I lead now and after retirement?
Financial planning can help you make an investment in your future. Without it, you’re just a rudderless ship meandering into your financial future.
The first step is to make a personal financial assessment of where you are today. This includes analyzing your total financial position, including all assets, investments, retirement plan accounts, liabilities, income, and expenses. Assessing your financial situation also involves identifying your current and future financial plans and evaluating whether you need to make changes in order to reach your goals. Your assessment should take into account your current and projected income and compare that to your present and expected costs.
You also should take stock of your risk-management policies, which could include policies for disability, life, long-term care, and health insurance, among other policies. How much does your current employer provide? If you were to leave your current employer, what would it cost to replace your benefits?
Next step is to set priorities and goals. Finding the right answers has to start with an introspective process as well as the establishment of priorities. What is important to you? What falls into the must-have category, and what are the nice-to-haves? This process applies to current expenses as well as future big-ticket items.
Typical financial goals might include saving or paying for college, graduate school, weddings, and retirement. The critical aspect of determining the goals, however, is assigning not only a dollar amount but also a specific target date to each one. Whether the goal is to be achieved in 1 year or 40 years, a specific date must be set (for instance, December 20, 2020). Said another way, a goal without a date is just a dream.
Finally, create a written plan of action. This step is where it all comes together. You have to take the data you collected about your goals and current situation and create a plan of action.
Remember this: “People don’t plan to fail, they just fail to plan.”
My personal finance services for physicians and their families include the following:
- Facilitate goal setting
- Assist with Practice Transition
- Cash Management and Budgeting
- Risk Management and Insurance Analysis
- Education Planning
- Retirement and Financial Independence Planning
- Estate Planning
- Investment Review
- Wealth Management
- Integrating Tax and Financial Planning
- Develop Asset Protection Strategies