Passive income and multiple income streams were completely foreign concepts to me as a trainee. I made my resident salary and that was it. Expanded beyond training, I didn’t even really understand that passive income or additional streams were options. But they are realities and great options for physicians. They can even work for trainees. So, what are the best physician side gigs for residents?
Why passive income and additional income streams?
Well, what we have all seen is that a physician’s salary is not as secure as we thought that it was. Innumerable doctors without sufficient savings or alternative sources of income are now confronting unexpected pay decreases.
There are two ways that this should be addressed:
- Increase your savings (also known as decreasing your expenses)
- Increase your earnings (AKA passive income and additional income streams, baby!)
Well, setting your financial foundation definitely comes first. And there are easy things you can do as a trainee to set yourself up for financial success.
In fact, here are 11 Finance Steps for a Resident That Will Make You Over $1 Million!
But, if you have a good financial foundation in place and are looking for more, passive income and additional income streams through side gigs may be a good option…
Should you pursue side gigs (and financial freedom) as a resident?
The answer is yes.
Passive income and additional income streams via side gigs are something that we all can and should pursue. If we pursue it, we WILL achieve it. It will help us attain financial well-being. Financial well-being will enhance our personal well-being.
And I even know a resident who achieved financial freedom while still in residency! She did this through real estate investing. You can hear her story here.
But I will start with a big disclaimer…
The main focus of residency and fellowship is and should be to learn to be the best doctor possible. The majority of your time will be spent on this and it makes sense.
Residency seems long while you are in it. But, it is a finite time period during which you need to learn enough to support your career. And your career will be the major contributor to your financial success for the large majority of physicians.
But, that does not have to be the sole focus.
That was my mistake. I neglected family, friends, self-care, and, yes, financial well-being to varying degrees.
So, with that said…
The 3 best physician side gigs for residents
1. Invest in the stock market (the smart way)
Is stock market investing a side gig? I’m going to say yes! And it can be really passive when you do it the right way. So let’s get into it…
Stock market investing can be a scary proposition for a lot of people, let alone residents.
You hear people always talking about this trend or that hot tip. It seems terribly confusing and risky. You don’t make much money to begin with and you’re not inclined to lose it in a risky market.
But there is a reliable and (relatively) safe way to invest in the stock market. A way that will yield you passive dividends and gains in the long term.
This strategy is called index fund investing
An index funds is a collection of stocks put together to approximate an index, like the S&P 500. This manner of investing is a whole post on its own so I will limit the discussion here.
However, index funds are tax efficient, minimize fees, and over the long run are quite safe since they follow the overall stock market. The overall stock market has always increased over the long run (any ten year period in its history). Thus, if you take money that you don’t need for at least 20 years and stick it in an index fund, you will reliably make passive income.
As a side note, as a resident you are able to open and invest in index funds through a Roth Individual Retirement Account (IRA). This type of account will tax your contributions now and then let your money grow tax free. You can then withdraw it when you are 59 ½ years old with no penalty and no taxes.
Your current tax bracket as a trainee is much lower than it will be when you retire. So, this option will minimize your taxes and maximize your gains. Once you start making more money as an attending, you will phase out of the tax benefits of a Roth IRA so contribute now when you can. I talk more about this in my post about 10 finance moves you need to make as a resident.
(Note that you can contribute to a backdoor Roth IRA as an attending, but this is a bit more complicated.)
2. Paid medical surveys
Paid medical surveys work because healthcare organizations need relevant information from medical experts (i.e. you) so badly that they are willing to pay you for it.
Medical survey companies act as intermediaries between you and these information seeking companies.
The healthcare organizations contract with the medical survey companies and the medical survey companies find you. You complete the survey and get paid. Your information helps shape the future of healthcare. Everyone wins!
And there are two main reasons to participate in paid medical surveys as I see it:
- To influence and help inform the future of healthcare and your field in medicine
- To make money from the medical surveys as a side gig
And here’s the nice thing about paid medical surveys for residents
You can do them when you have some down time that you otherwise would not be using for anything productive…including relaxation (which is very productive when used correctly!)
What I mean is that if you find yourself with a medical survey sent to you and you’re just zoning out or something, then you can take the 15-30 minutes to fill it out and get paid.
If that same survey is sent to you and you’re doing some other more important work or spending time with my family, just pass on it.
Its a la carte…
If you are looking for the opportunity to participate in some paid medical surveys, I have a few opportunities available to you right now! You can find them here.
3. Real estate investing
I put this as the last of my 3 physician side gigs for residents so I didn’t lose you early on. Because I know a bunch of you will read this and think I am crazy. How can a resident invest in real estate?!
Well, there are a lot of options.
I’ve already shared about a friend of mine who achieved financial freedom during her residency through direct real estate investing. She did this will no prior experience. (This is her full story.)
But you can do it in other, more passive ways.
Let me show you…I’ll progress from most to least passive…
- Real Estate Investment Trusts are basically investing in a mutual fund of real estate investments. These are available in nearly every brokerage. Real estate doesn’t correlate with stocks/bonds so this is a good, passive way to diversify. No traditional tax benefits with this type of REI though.
- This type of investing is basically where a lot of people pool together money to buy properties. A good example of a company specializing in this is Yieldstreet. The buy-in is usually much lower than with syndications or funds but so is the return. But, this feature makes is usually more accessible for residents.
- Private Funds
- Funds are investments made in a company or group that specializes in real estate investments. They may specialize in different types of REI such as fix and flip vs. buy and hold. You are giving them your money and trusting they will get returns on your money that will be shared with you. There is no guarantee however. Buy-ins for these funds are usually high but CityVest offers the ability to access these funds with a lower buy-in. You can learn about more opportunities here.
- Syndications are real estate deals involving a smaller number of investors buying usually single properties. Buy-ins are usually bigger but so are the potential returns.
- Direct investing
- This is my preferred kind of real estate investing. Sure, it’s more active in the beginning but offers huge returns and advantages when done right. Here’s my free Physician’s Guide to Real Estate Investing for more information.
A particularly relevant direct real estate investing option for residents is house hacking
In this strategy, you buy a single or multifamily residence. You live in one unit or one room of the house. You then rent out the remaining units or rooms.
The rent you charge pays your mortgage, taxes, insurance, maintenance, and the like. You live for free. Then when you are ready to move, you buy another property and rent out the room or unit that you lived in to make a profit in addition to your mortgage being paid off.
The best part, because you are living in the property at first, it is not considered an investment property. The down payment needed can be as low as 3.5% using an FHA loan. That is certainly within reach for many trainees.
In medical school, I paid rent for one room in a duplex property in a neighborhood that was popular for many medical students. I should have saved up to buy a similar property, live in one room and rent the other room and unit out to other medical students. Then I would have lived for free and would still have a cash flowing asset putting passive money in my pocket each month.
The key to this strategy is that you have to choose your property wisely. You have to evaluate it as an investment. It has to be unemotional, well-analyzed, and based on the numbers. Otherwise, it will not work. If you are considering this, seek out a mentor who has done it before or find some resources online. Or, here is a great guide to analyzing properties the right way.
Is it right for you?
That’s the question.
Like I said earlier, your focus in training needs to be on becoming the best doctor that you can be. But it doesn’t need to be your sole focus. Working on your overall and financial well-being is necessary as well. And I truly believe that physician side gigs can be an important and viable part of this for many residents.
So, get started today!
- Check out more physician side gigs here
- Study the 11 financial moves you need to make as a resident
- Sign up for my free masterclass webinar on the 12 Steps to Financial Freedom for Physicians!
What do you think? Are physician side gigs worth it for residents? What physician side gigs are best for residents? Let me know in the comments below!