As a practicing physician, you’re going to need a little help from some friends—so here’s a who’s who guide to who they are and what they can do
After years of med school and residency, you may have figured out that being a doctor is pretty complicated. And, sure, you may have learned everything there is to know about pharynxes, subclavial veins, and the symptoms of lymphangioleiomyomatosis, but when it comes to the legal and financial ins-and-outs of practicing as a physician, odds are you’re a bit green. And that’s exactly why assembling an all-star team of professional advisors is such an important part of your transition into practice. Their expertise will guide you towards smart decisions and help you set a solid foundation for the rest of your medical career.
So, who are you going to need to round out your squad?
Your Financial Advisor (aka. The Quarterback)
Your financial advisor is perhaps the most important member of your advisory team. Why? Because they’re the resource who will help you manage all the others. Of all the people on your practice management team, they’re the ones you’ll have the deepest connection with. You’ll be with them the longest (hopefully), and, if they’re any good, they’ll get to know you better than you know yourself. The most effective financial advisor is the one who get a holistic view of your personal and professional life, comes to understand your goals, ambitions, and values, and uses that knowledge to help you act in your own best interest. Finding “The One” is about more than just solid finance skills. It’s about fit, too. As in all relationships, communication is key—which is why it’s important to find an advisor that you can really connect with, someone who just gets you (and who you just get in return).
A financial advisor should be the first person you reach out to as you’re preparing to finish your residency—because they’re never more valuable to you than when you’re in debt. From there, they’ll work with you to address some of the most pressing financial matters a new physician like you might face. Like, for example, figuring out your cash flow so that you can develop a working budget, and creating a net worth statement that allows you to track and measure your progress. They’ll also help you negotiate new personal and professional lines of credit with the bank so that you’re getting the best possible interest rates. They can also help you figure out your requirements for life insurance. And because they have developed such a holistic view of your life while guiding you through all that, they’ll be able to help you build an overarching financial plan and investment strategy that will help you tackle your debt while still meeting your short-, mid-, and long-term goals.
Your Accountant (aka. The Math Whiz)
You might be asking: don’t I already have a financial advisor? Sure—but your accountant is going to serve a much different role. They’re the brainiacs who are going to provide you with all the practical advice you need about taxes, credits, and deductions. And why is that important? Because when it comes to executing your tax plan, there are special circumstances for medical students, residents, and practicing physicians, and you’re going to want someone who knows those circumstances inside and out. For example, you probably have some expenses from med school and residency that you can carry forward and deduct now that you’ve entered your practice—it’d be pretty cool to know what those expenses are, right? Your accountant can also walk you through the pros and cons of incorporation so that you can make an informed decision about whether or not it’s the right path for you.
Your Insurance Advisor (aka. The Muscle)
Like any movie star or foreign dignitary, you’re going to need to some reliable protection as you transition your way down the red carpet of medical practice. In this case, however, it won’t be a beefy bald dude in a black T-shirt and shades, but rather a solid insurance plan.
It’s a little-known fact that med students and residents often underinsure themselves, perhaps believing that they can boost their coverage once they start making a little more cash. But that shouldn’t be your approach; the truth is, you need insurance the minute you’re accepted into medical school, then modifying it once you become a resident. In many ways, insurance is the foundation of your financial plan—especially when you’re still balancing debt with your other obligations. You’ll work with an insurance advisor to conduct a detailed, objective review of your insurance needs – both today and in the future – and they’ll help you build a personalized insurance package that covers everything from disability, health, property, automobile, to life insurance.
Your Lawyer (aka. The Fixer)
Lawyers aren’t just for malpractice—they can provide support and guidance in all sorts of important areas of your new life as a physician, whether it's drafting a will, purchasing a home, protecting yourself from creditors, or helping you navigate the process of incorporation. If you’re planning to join an existing practice or go locum'ing across the country, it’s vital that you have your own legal expert review your contracts or agreements before you sign them—the last thing you want, after finally picking your practice, is to end up irrevocably tied to a bad contract. You might be reluctant to pay for a lawyer’s advice, but just remember: a lawyer’s hourly fees are always cheaper than getting stuck in a deal you don’t like.
Your Banker (aka. The Other Math-Whiz)
A financial advisor, an accountant, and now…a banker? How many money-nerds does this team need? While a banker might not become a permanent part of your entourage, having one in your corner – someone you trust, who has your best interests (and the best interest rates) at heart – can pay great dividends when it comes to negotiating the consolidation of your debt, a line of credit, or a home loan.
While your financial advisor is helping run the show, and your accountant is paying close attention to the tiniest details, a banker with decision-making powers can ensure that you’re getting the best possible rates. And remember: from a banker’s perspective, physicians like you are solid bets—you may not have a lot of money now, but, odds are, with the right financial guidance from your crack-team, you soon will.
What should I do next?
Start building your team by getting to know some financial advisors! Browse our team of MD experts and find what they can do for you (and what kind of weird hobbies they have).
You can also check out our Transition Timeline Tool to get a comprehensive view of everything you’ll have to do as you transition into practice.
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