Given the tax bracket most doctors are in, reducing their tax burden is a key factor in their investment success and long-term retirement plan. At this time of year, many doctors may not have maximized all of their retirement tax-deferred options. Here is a summary of different options to consider.

Traditional 401(k) plans

Benefits

Tax deductions. Contributions to a Traditional 401(k) are tax-deductible, reducing an individual’s taxable income for the year in which …

Read more…

Early in your career as a physician, with a good income, but often significant debt, physicians can make critical financial planning mistakes that follow them their whole career.

Avoid them!

Early career physicians face unique financial challenges, from student loan debt to the need for investment and insurance planning. In this article, we will provide a comprehensive guide to financial strategies tailored for physicians in the early stages of their careers, with …

Read more…

Tax-efficient investing is about preserving your capital by optimizing investment decisions to minimize the tax consequences. This strategy becomes especially crucial when you’re investing for the long term. With their professional management and diversification, mutual funds offer several avenues for tax-efficient investing.

1. Capital gains efficiency. When you buy and sell individual stocks, you’re responsible for capital gains taxes on any profits you realize. In contrast, mutual funds pool money from multiple …

Read more…

What is disability insurance?

Disability insurance, sometimes referred to as income protection or disability income insurance, is a financial safety net designed to replace a portion of your income if you become unable to work due to illness or injury. It ensures that you can continue to meet your financial obligations, even when your medical practice is put on hold.

Why do doctors need disability insurance?

Doctors, like any other professionals, are susceptible …

Read more…

Doctors, like all professionals, are not immune to accidents, illnesses, or injuries. While you dedicate your life to improving the health of others, it’s equally important to safeguard your own financial well-being. Disability insurance acts as a financial lifeline, offering income replacement when you can’t work due to a disability.

1. Protecting your income. Your income is a significant asset; it supports your lifestyle, family, and financial commitments. Disability insurance ensures that …

Read more…

For those of us in the field of medicine, the differential diagnosis method is second nature. It involves considering a list of potential causes (differential diagnoses) for a patient’s symptoms and systematically narrowing down the possibilities through evaluation, testing, and clinical judgment. This method helps us arrive at the most likely diagnosis and, subsequently, the most appropriate treatment plan.

Now, let’s apply this concept to investing.

Symptom recognition in investing

In medicine, patients …

Read more…

Let me share a story about Dr. Sarah Mitchell.

Dr. Mitchell, like many of us, started her career with a resident’s salary, which was around $40,000 per year. After completing her residency, she received an enticing offer as an oncologist with an annual salary of $350,000.

However, instead of succumbing to lifestyle inflation, Dr. Mitchell made a financially savvy decision.

She committed to living on an annual budget of $60,000 for the first …

Read more…

For most doctors, hiring a financial advisor who understands their needs is important when making investment decisions. We are all busy, and most don’t have the knowledge to make good investment decisions.

However, some have the time, and get educated about investing, and prefer to be more involved in making their investments.

A self-directed brokerage account may be one good option for you if you wish to get more involved in your …

Read more…

Many of us own our practices and the buildings in which we work. Well, this is one way to understand investing in REITs.

Real estate investment trusts (REITs) are investment vehicles that cover many sectors, including health care and many other industries, such as storage facilities, commercial real estate, and many others. For doctors seeking investments that provide income, REITS may offer one alternative.

Of course, with all investments, discussing this option …

Read more…

I can’t believe it is the last quarter of 2023 already.

As the end of the year approaches, many doctors are busy with patients trying to get in for procedures as deductibles get met. It’s also a crucial time to consider what’s going to happen when you file your taxes in 2024.

Making strategic investments before the year’s end can significantly reduce your tax liability and potentially increase your wealth in the …

Read more…

Meet the doctors: Dr. Emily Carter and Dr. Carlos Martinez.

Dr. Carter is a primary care doctor, and Dr. Martinez is an allergist. Both doctors are committed to their medical careers. Dr. Carter earns about $180,000 a year, while Dr. Martinez earns about $400,000 a year. However, Dr. Carter is taking a proactive approach to her financial security, thinking early on about taxes, investing, and time. Dr. Martinez is enjoying his …

Read more…

When it comes to personal finance and wealth-building, the phrase “time in the market beats timing the market” is often touted as an unshakable truth. The concept suggests that consistently staying invested in the stock market, regardless of market fluctuations, is the surest path to long-term financial success. However, as with any financial advice, it’s essential to critically examine its validity and consider the nuances involved. Let’s delve into the …

Read more…