A while back, I got to cross an item off of my personal finance bucket list. To be fair, I just got into this game recently but this definitely was a bucket list item. I was a guest on the Docs Outside The Box podcast with Dr. Nii Darko. This is an awesome podcast that I always listen to so to be a guest was really cool and surreal. Anyway, this is what Nii asked me at some point, “Is there such a thing as a poor plastic surgeon?” Put another way, “Is there such a thing as a poor physician?”
That’s a very valid question!
And honestly, this was something that I struggled with before I began my financial education and journey to financial well-being.
My Comeback Story…
I was about to graduate from training and start making an attending salary. However, I had >$500,000 in debt, had no concept of a savings rate, was too intimidated, nervous, and clueless to invest my money, and was burned out.
I felt like a poor physician; a poor plastic surgeon to boot!
Unfortunately, there is such a thing as a poor physician
This is the cold and unfortunate truth.
Income has nothing to do with how poor or rich/wealthy you are. In fact, your income is not even a factor in calculating your net worth. This is such a common misconception for physicians. We often realize the difference when it is too late.
The formula to build wealth is simple as a doctor.
- Save at least 20% of your income
- Set your asset allocation
- Invest in low cost, broadly diversified index funds
- Rebalance your asset allocation once a year
- Retire on your terms in 20-30 years
10 Steps to Financial Freedom for Young Attending Physicians
The 7 Step Basic Formula for Wealth as a Physician
7 Financial Habits of Highly Successful Physicians
What Do You Need to Include in Your Savings Rate?
How to Make and Save Money as a Resident Physician
What You Need to Know About Assets and Liabilities
How to Have Success Becoming an Attending Physician
Finance Flash Go! Episode #6: Active vs. Passive Stock Investing
That’s really it. And those steps aren’t hard. You can even use this free calculator to determine your own path to financial freedom!
And yes, this goes for plastic surgeons too!
Physicians are high income earners.
Plastic surgeons though are high income earners among physicians.
So, I often am asked in one way or another if this advice really applies to high income physicians. And the answer is s simple yes.
I unfortunately know many plastic surgeon and other very high income physicians working because they have to, not because they want to any more. They live pay check to pay check. In turn, many lower income physicians are much happier and financial well than them despite the negative income gap.
How did they end up like this? Because they didn’t follow the simple rules!
That’s why I wanted to highlight this podcast episode!
This was one of my favorite guest podcast spots so far. Nii is incredibly real in his delivery and content which I appreciate and try to emulate.
We discuss all the challenges inherent in being a physician and trying to build wealth.
We also talk about how you can take the simple steps necessary to do this very successfully.
And, as a bonus, we also talk about what it has been like to be the newcomer to the physician finance space, including all the positives and negatives!
Here is how Nii described our episode:
“A newcomer to the Doctor personal finance world joins me on the show today. Dr. Jordan Frey, a.k.a. The Prudent Plastic Surgeon, is trying to break the stereotype of the typical plastic surgeon. When he finished all of his training, he found himself in over $400k of student loan debt. His blog chronicles his journey from knowing nothing to actively paying off his debt, investing in the stock market and real estate. Dr. Jordan is pretty open about his experience, he even shares his net worth statements with readers.
On today’s show, Dr. Jordan will share with us the basics of investing and how you can start investing today!”
So, check out the full episode of Docs Outside The Box here!
What do you think? Can a physician be poor? How can physicians as a group get better at personal finance? What challenges do you see?
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