Physician Finance

Physicians writing on KevinMD about their own money and the business of practice: student loans and forgiveness, disability and life insurance, index funds and retirement accounts, whether to hire an advisor, financial independence and retiring early, side income and real estate, contracts and negotiation, selling a practice to private equity, and leaving insurance for direct primary care. Three maintained records draw on this archive: Physician personal finance: what physicians say about their own money, in their own words, Private equity and corporate medicine: what physicians say, in their own words, and Direct primary care: what physicians say, in their own words.

How the Tax Cuts and Jobs Act affects this two-physician couple

Passive Income, MD

Physician Finance

January 10, 2018

The recently passed Tax Cuts and Jobs Act is controversial, to say the least. However you feel about it though, the fact is it’s here to stay, affecting everyone by 2018.

However, in looking at our own situation as a two physician couple (purely from the medical income standpoint), at first glance, it seems as though our taxes would actually go up. In addition, if it’s going up for us, it surely …

A physician’s love-hate relationship with dividends. And what he does about it.

Physician on FIRE, MD

Physician Finance

January 9, 2018

When I described my drawdown strategy in early retirement, I stated we will “sell from the taxable account first.” I also plan to collect quarterly dividends from my index funds, but if Vanguard were Burger King and I could have it my way, I’d hold the dividends and take bites out of my account only as needed.

When I discuss the downsides of dividends, note that I …

Why published trading strategies rarely work

Wall Street Physician, MD

Physician Finance

January 8, 2018

When you browse finance-related websites, it doesn’t take long for you to see ads that claim that they can help you make money, fast.

“I’VE BEEN ABLE TO WIN ON 90% OF MY TRADES WITH THIS PROVEN STRATEGY.” – TYPICAL AD #1

“LET ME SHOW YOU HOW TO EARN 25% RETURNS, GUARANTEED.” – TYPICAL AD #2

“SIGN UP FOR MY NEWSLETTER AND I’LL SHARE WITH YOU THREE STOCKS THAT ARE READY TO EXPLODE.” …

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Why published trading strategies rarely work

6 keys to financial freedom

Live Free MD

Physician Finance

January 7, 2018

Personal finance isn’t complicated. In fact, if you do just six things right, you will become financially successful. Let’s keep it simple and get started.

1. Earn a decent income. If you don’t make any money, you will never get ahead financially. Forget about winning the lottery, getting an inheritance, or expecting the government to subsidize your lifestyle. The only way to build wealth is to work.

Jobs with a decent income include computer …

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6 keys to financial freedom

How much will an expensive watch really cost you in the future?

Dads Dollars Debts, MD

Physician Finance

January 6, 2018

I walked in the other day, and my colleagues were shooting the breeze. They were both staring at the computer and were online looking at watches. Seemed harmless enough. So I sat down and asked them how much the watch cost?

They said $7,000! I almost spit out my coffee. $7K! Seven grand! That’s an expensive watch. That’s how much my 2011 Nissan Altima is worth.

“That much for a watch?” I asked. …

What the new tax plan means for physicians

Cory Fawcett, MD

Physician Finance

January 5, 2018

Congress has passed the new tax bill. This was certainly not tax reform as has been discussed, but simply a rearrangement of how they calculate our taxes. This new plan lowers tax rates but eliminates many of the items that were previously deductible. Sort of like rearranging the deck chairs of the Titanic as it slowly sinks. Real tax reform might have made things so much simpler that the IRS …

What physicians should know about Bitcoin but were afraid to ask

Passive Income, MD

Physician Finance

January 4, 2018

2017 has been the year of the cryptocurrency. Of course, the most famous is Bitcoin. It’s been all over the news recently, largely because its value has skyrocketed in a very short time. Since the focus of this blog has a lot to do with investing, particularly in alternative investments, I’d be remiss if I didn’t at least touch on the subject.

Now, making money from currency exchanges is nothing new. …

Why are so many doctors doing multi-level marketing?

Passive Income, MD

Physician Finance

January 3, 2018

My goal with this post is to try to answer some of the more popular questions that we get asked about multi-level marketing (MLM). Why write about it? Besides the fact that my wife and I are involved in one, and it’s made a significant impact on our income, the number of physicians getting involved these days is huge.

My goal is not for everyone to go out and …

A physician helps a retired couple rebalance their portfolio. Here’s what he did.

Physician on FIRE, MD

Physician Finance

January 2, 2018

In January of this year, I wrote one of my favorite posts after helping a retired couple free themselves from their financial advisor, greatly simplify their portfolio, and saving them more than $20,000 per year in the process.

For details, please read “From 28 Funds to 3,” then return here for a follow-up. In summary, the couple previously owned 28 funds (with 48 positions between three accounts). The …

Should you give up your Starbucks latte?

Wall Street Physician, MD

Physician Finance

January 1, 2018

You’ve probably heard of the Starbucks latte effect.

As the theory goes, small changes, multiplied and compounded over time, can end up becoming big savings.

For example, if you drink 1 Starbucks latte for $3.50 every day for 250 work days a year, then over 10 years, you’ll have spent tens of thousands of dollars on Starbucks coffee. Cut the Starbucks coffee from your life, and you could buy a nice car …

What would you do if you won the lottery? Here’s one physician’s plan.

Dads Dollars Debts, MD

Physician Finance

January 1, 2018

Yup, I won the lottery! $785 million dollars. Pinch me because I must be dreaming. I am a physician finance blogger; I would not recommend buying a lottery ticket. But I did. So screw all the people who said it was a waste of $2.

So here I am, the big time winner: What to do now? Well, that is what this post is about.

(In reality, I did not win the …

How to choose between a traditional and Roth 401(k)

Live Free MD

Physician Finance

December 31, 2017

In my post, “Use it Or Lose It,” I talked about the awesome benefits of the Roth IRA. You do have to pay taxes on the money now, but it grows tax-free, and you can withdraw the money after age 59.5 without owing any taxes. It’s the only way to win the tax game. It is 100% your money, forever!

In comparison, money in a traditional IRA, traditional 401k, …

This retired physician is truly free

Cory Fawcett, MD

Physician Finance

December 29, 2017

An unusual thing happened to me today; I was awakened by my phone alarm. Ever since I stopped practicing medicine ten months ago, I have rarely needed to set an alarm to get up. Today when my alarm sounded, Carolyn commented that when she woke up, she thought we were in Spain.

Last Spring, we were traveling through Spain on a two-week bus tour. Each day we had to have our …

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This retired physician is truly free

How to make your taxable accounts a winning situation

Another Second Opinion, MD

Physician Finance

December 28, 2017

Hopefully, you’ve realized when all of your accounts are taxed; if not, here is a quick refresher.

On the surface, the taxable account looks like a bad deal compared to the others:

You use after-tax money to contribute to these accounts
You pay taxes on any dividends you receive each year
You pay taxes on any capital gains when you take money out

So basically it’s a lose-lose-lose scenario when it comes …

For some happy doctors, medicine is a hobby

Passive Income, MD

Physician Finance

December 27, 2017

“A hobby is an activity, interest, enthusiasm, or pastime that is undertaken for pleasure or relaxation, typically done during one’s own time.”
– Wikipedia

“A job is often defined as a regular activity pastime performed in exchange for payment.”
– Wikipedia

If you search “hobby” on Wikipedia, you’ll be presented with a lengthy list of the most common ones: everything from magic to beekeeping to vehicle restoration. But if you look at these “hobbies” …

Can a bear market take away your financial independence?

Physician on FIRE, MD

Physician Finance

December 26, 2017

You did it! You worked, you saved, you conquered.

Your investments add up to 25 times your expenses, or 30 times, or whatever your magic number is. You have achieved financial independence (FI), however you have chosen to define it.

What’s that low rumbling sound I hear?

Is that a bear coming out of hibernation?

I won’t pretend to know when it’s coming, but I promise you I haven’t seen my last bear market. It could start …

What to do if you have high expense ratio mutual funds

Wall Street Physician, MD

Physician Finance

December 25, 2017

A common question from readers is what to do about an account that contains a bunch of high expense ratio mutual funds or individual stocks.

The reason for having such an account varies from person to person. Maybe it was the only funds available to them in their 401(k) portfolios. Perhaps they collected a bunch of individual stocks and actively-managed mutual funds over the years based on tips from magazines or …

How to create a household budget: a physician’s simple approach

Live Free MD

Physician Finance

December 24, 2017

Learning to budget is scary. After all, it means you have to say NO to unnecessary purchases and keep your eye on long-term goals at the expense of short-term pleasure. There are a variety of ways to budget, ranging from the restrictive and somewhat impractical “envelope system” to the more vague and potentially ineffective “wing it” system. I’d like to present a balanced approach to budgeting that …

Debt is like poorly fitting shoes on numb feet

Cory Fawcett, MD

Physician Finance

December 22, 2017

With a society living on credit, a government deep in debt, eight years of desensitization during training (something unique to doctors), rising tuition, and falling pay — it’s no wonder doctors are having a major problem with debt. Where will it end? Debt has become the norm. Will Rogers summed up this pattern of high consumption on borrowed money nicely: “Too many people spend money they haven’t earned to buy …

Pop quiz: Do you know the tax implications of your retirement accounts?

Another Second Opinion, MD

Physician Finance

December 21, 2017

Pop quiz: Fill out the chart above.

If this was too easy for you, move along, this isn’t the post you’re looking for. If you’re slightly unsure, either follow along or skip to the end. I’m going in order.

Retirement accounts

There are so many to “choose” from it seems slightly overwhelming at first. You really don’t get that many choices: If you’re self-employed, you …