Financial Planning for Doctors

I met Dr. Cory Fawcett at FinCon2018 in Orlando.  Truly, he is as genuine as his books are good.  In today’s Saturday Selection from the WCI network, Physician on FIRE shares his review of Dr. Fawcett’s book – The Doctor’s Guide to Getting Your Practice Started Right. 

I’ve read two of the three books myself (you can find my review of Dr. Fawcett’s book on eliminating debt here).  The following post first appeared on Physician on FIRE. Take it away, POF!

Book Report: The Doctors Guide to Starting Your Practice Right

It’s the second week in July, and that means there are thousands of freshly minted physicians beginning their first career job.Launching a career is an exciting but potentially overwhelming project. There are so many considerations when it comes to the practice, housing, lifestyle, debt management, etc… Wouldn’t it be nice if there were a textbook to guide you through this jungle?

Thanks to Dr. Cory S. Fawcett, there now is. While he titled the book “Starting Your Practice Right,” a better phrasing might have been “Starting your Medical Career Right,” because the book focuses on far more than starting a practice. Perhaps my personal definition of “starting a practice” is too narrow, but this book applies equally well to employed physicians and those joining an established practice. [note: following the publication of my review, the title was changed on the cover]

This is the second book of Dr. Fawcett’s that I’ve reviewed. A couple months ago, we discussed The Doctors Guide to Eliminating Debt, a text that not only discussed avoiding and paying down debts, but was also chock full of valuable lifestyle tips and life lessons.

Having retired from his clinical practice as a general surgeon, Dr. Fawcett now focuses on educating others via his books, website, public speaking, and one-on-one counseling. He was kind enough to send me a copy of his books, and I will be gifting my copy to one lucky commenter (see page end for details).

The Doctors Guide to Starting Your Practice Right

With 10 chapters in 200 pages, this book can be taken in over the course of a couple of evenings, or in about a week reading a chapter or two per day. As I mentioned earlier, this is not a comprehensive guide to opening a medical practice; it’s a much broader book of advice the new physician. From the dedication:

“I dedicate this book to the hardworking medical students and resident, their families, and the schools that support them. My hope is you will start your practice right and build the wonderful life you deserve.”

The book is not intended strictly for private practice or independent contractors. Those are discussed, as are academic medicine and employed physicians.

In the introduction, Dr. Fawcett mentions a physician earning $450,000 who needed moonlighting income on top of that to make ends meet. She may have formed the basis for Dr. Rolex, a fictional doctor whose career and life path is compared and contrasted to Dr. Timex throughout the book.

Location Considerations in Your First Job

Before you begin your job search, Dr. Fawcett recommends taking a number of factors into account. He knew roughly where he wanted to be, and the recruiter he was working with couldn’t find him work there.

Taking matters into his own hands, Dr. Fawcett personally contacted all of the hospitals in his desired geographic location. That led to six interviews, and he was able to land his dream job. That’s a great lesson — many of the best jobs are not posted publicly; networking can do wonders for you, particularly if you have a specific spot on the map in mind.

What other considerations are there?

  • Housing: Consider renting and don’t buy all the house the bank will allow.
  • City versus Rural: He discusses the pros and cons of each. You probably know which you prefer. Geographic arbitrage can come into play here.
  • Friends and Family: Proximity to a support structure can be extremely valuable.
  • The cost of moving: Your first job will probably not be your last. He recounts a physician who added up $175,000 in total costs of moving for a job change!

Lifestyle Considerations in Your Career

fawcett starting your practice right

fawcett starting your practice right

This is an area that I focus on quite a bit. We make a lot of value choices in life, and if you are like Dr. Rolex (or my Dr. D), and prefer leasing new cars, frequent fine dining, extravagant vacations and an oversized home, you’re going to have a tougher time working towards a comfortable retirement, or any retirement for that matter.

If, on the other hand, you model my Dr. Timex (or my Dr. A or Dr. B), the physician who paid cash for her vehicle, lives close to a great public school, and takes family friendly vacations from their quality but not overstated home, you will have a much better opportunity to build real wealth over the course of your career.

You won’t be surprised to hear that Dr. Timex becomes a multimillionaire with the ability to retire early, and Dr. Rolex struggles to become a millionaire by the time she reaches retirement age. It’s obvious, yet lifestyle inflation remains a major roadblock between physicians and financial independence.

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Finding the Right Job

In addition to outlining the pros and cons of the various types of jobs available to physicians, Dr. Fawcett gives you ideas on how find the best job. He found his by cold calling, but there are a number of other ways.

There are online job searches that aggregate the results from numerous physician and other job search sites. I happen to host what’s probably the best one for docs right here on my Jobs page — it even defaults to your location – check out what’s available in your specialty.

Your residency program may keep an alumni directory. National journals often advertise positions (usually academic) and national meetings offer great networking opportunities. Working as a locum tenens physician led to numerous job offers for me.

Dr. Fawcett has a number of good interview tips — you want to be on your best behavior, of course, but the interview is usually more of an effort to recruit you, and you need to get as much information as possible on the practice and the area if you’re not familiar.

The right job can turn out to be the wrong job if the contract is not written in a fair manner. It’s important to get what you were promised in writing, and although I haven’t personally had a contract reviewed, I would recommend a professional contract review, as the good Dr. Fawcett does. Contract Diagnostics is a national firm that works with attorneys to review physician contracts exclusively (and is a paid advertiser on this site). A local attorney with physician contract experience may be another good option.

Before You Start Your First Job

There are practical considerations. Dr. Fawcett outlines what should be obvious (but delays have postponed numerous physician’s starts in my experience). Get your state license. Get your hospital credentials, and give the administration ample time to get you licensed with the appropriate insurers.

If your start does become delayed by a snafu, the author might not think that’s such a bad thing. He actually took three months off in between residency and his first job. Of course, he finished in the days of q2 call and was feeling a bit burned out.

starting your practice right

When I finished my residency, which was rather arduous but I imagine relatively benign compared to his surgical residency, I was ready to work from day one. I had locums lined up starting Monday, July 3rd. Whichever option you choose, just realize that the opportunity to take a month or three off might not exist again for decades.

Additional considerations he highlights are getting yourself and your family properly insured, which is not to be confused with overly insured, but remember, as a doctor, you have a target on your back.

He goes into additional advice that touched on earlier — the expected doctor lifestyle can easily stand in the way between you and accumulating any real wealth. Remember that when you’re interviewing and the assigned realtor takes you around to all the high-commission homes. If you’ve already got massive student loan debt, you might want to wander the middle-class neighborhoods. To borrow a quote from the book:

“You gotta make it a priority to make your priorities a priority.” – Richie Norton

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Establishing Yourself in Your First Job

Dr. Fawcett stresses finding work life balance early on, being sure to find adequate time for family, exercise, sleep, vacation, and more.

I agree that these non-job aspects of life are vitally important, but I think the author makes it sound all too easy to make these choices. As a young doc trying to make partner, or as a new employee in an established health system, you probably won’t have the autonomy you might wish for or the ability to say “No” as much as you prefer.

For example, Dr. Fawcett says “Plan your life and fit work into it, instead of focusing on your work and fitting your life around it.” And “You run your practice. Don’t let it run you.”

I like the advice, but for most of us, it may not be the most practical. Nevertheless, he’s right about getting your priorities established; you may have to wait until you’re a little better established in order to throw your weight around, though.

In the closing chapters, we learn some personal finance tips on managing a budget, managing debt, and of course we revisit Drs. Timex and Rolex. Which one do you suppose does a better job with her budget and debts?

Planning for a Physician Retirement

In what I imagine is largely a teaser for his third book in the series, Dr. Fawcett touches on retirement planning and future considerations. While many young docs are focused on the present and the job they just landed, the fact is the best time to plan for a comfortable and perhaps early retirement (like his and mine) is in the beginning of your career.

He touches on finding an accountant, competent financial advisor (not a commissioned salesman! — and remember, you can DIY), funding your retirement accounts, and planning for your childrens’ education.

All are important, and I imagine will be expounded upon in an upcoming volume. I think this is a great book for a medical student or resident, and will help them get their career started on the right.

4 thoughts on “Book Report: The Doctors Guide to Starting Your Practice Right”

  1. POF, there is a 9 hour time difference from home. We are done for day 3. Time to relax and put the feet up. I catch up on email and posts then. I only have my phone. I did meet another blogger on the trail and she brought her laptop to write about her journey. She has a heavy pack. My knees are already suffering from my pack. I’m posting about the trip on my Facebook page. Back to resting now.
    Cory

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