How do physician’s finances differ from everyone else’s?
Today, we live in a world where there’s an overabundance of information; the internet, excessive amounts of business and finance TV shows, tons of financial magazines, radio shows, and more white papers than there may be actual trees left. Many successful physicians may be listening to financial advice the media recommends to the masses.
This is a major problem. These TV and radio shows usually give out cookie-cutter advice and information without any context for what the physician’s own personal situation may be.
Most of the information and advice is aimed at the 99% of US households, and much of that may or may not be relevant to the successful physician making $500,000, $1 million or $2 million per year.
The business of medicine
The business of medicine has become almost as important as medicine itself.
The modern day physician is bogged down with new administrative procedures and systems. In addition, medical reimbursements from insurance companies and Medicare payments are always changing.
Because of this, the successful physician needs more help with their finances and financial management including billing companies, practice managers, and the government. Physicians today may also need to hire more staff to handle some of these new administrative procedures that have become mandatory to collect money.
As more and more hoops to jump through appear in order to get paid, physicians need to take tight control over their finances.
But, with a physician’s busy schedule, they usually have no time to deal with their financial life.
Quite honestly, they may not even have the desire, skill set, or technology to check everything out properly to be sure their financial strategies are effectively working together and in line with their vision of success.
Here are the top three financial pieces of advice physicians should look further into in order to reap financial gains and freedom.
1. Savings and Tax Planning
Most physicians should be saving 20 – 25% of their gross income.
So for example, in times when they are cash rich, they should really harvest that income and put it away toward their life goals, such as retirement funds or college expense for their children. Tax planning is key for physicians, as the successful physician is most likely paying a lot of taxes and is desperately seeking relief.
So while that’s critical today, they also need to consider later. They need to balance all three pools of money.
Next- Financial Advice Practices #2 and #3