Money Meets Medicine Podcast
MMM 76: The Top Financial Rules for Residents and Fellows
What are the top financial rules a resident should follow while in training?
What if you had to write down a list of the most important financial tasks to tackle for physicians in training, what would be on it?
Ryan and I recently received an email from a listener of the Money Meets Medicine podcast who is a physician in training asking what the top things financially residents need to take care of before graduating from training.
So here is the official list from us here at Money Meets Medicine for The Top Financial Rules for Residents and Fellows.
Rule #1: Get a Financial Education
In order to do this you need to establish a base education on finances and they continue your education.
There are two tasks you need to check off when you are starting out. First, start reading or enroll in a course that is available to you where you are. Reading introductory books on finances is where to start. Then don’t stop. Keep reading, listen to podcasts (like Money Meets Medicine), and blogs like this one to stay up to date.
Rule #2: Create a Budget or a Cash Flow Plan
When you are still in residency, start your budget. We often talk about living like a resident once you become a physician and your budget will help you make these types of sound financial decisions. Don’t skip the budget!
Rule #3: Get Disability Insurance when you have a Current & Future Income to Protect (i.e. during residency)
Believe me, I have a personal story about why this is so important. I have lived through why it is important to have disability insurance to protect your income.
If you currently do not have medical problems, then recommend getting your own occupation specialty specific disability insurance from Ameritas, Guardian, Mass Mutual, Ohio National, Principal, or Standard.
If you currently are experiencing some problems, see if your employer has a Guaranteed Standard Issue (GSI) policy.
Rule #4: Get life insurance when someone is dependent on your income (spouse, children)
If it is not just you that you need to take care of in the future, life insurance is really key. Get it while you can.
Rule #5: Make a plan for your student loans
This is a big one!
Those student loans aren’t going to pay themselves and will keep you held back from financial freedom for a long time if you don’t make a plan. Make a plan and make it a priority.
Rule #6: Save 10% (conveniently the size of an IRA)
When you budget, make a plan to save 10%. Actually, start saving 10% of your income while you are still a resident. Make it a habit. Because when you can save 10% making about $64,000 a year, you can save 10% as your salary increases. Conveniently increasing your livelihood for the future.
Rule #7: When finishing, have someone review your contract!
Remember that everything is negotiable, including whether you sign that contract. Too many people get into a thought pattern that they are lucky to have a job and don’t have options. In reality, the job needs you and you have choices!
We also recommend really reviewing any non-competes in the contract and potential buyouts before becoming partner.
Rule #8: Don’t buy a house in training…
We know it is tempting, but when you are in training you need to focus on rules 1-7 to put yourself in the best financial position. Trust us, one day you will have the house, but training is not the time.
There you have it. The Top Financial Rules for Residents and Fellows so you can understand exactly what you should be doing and taking care of BEFORE graduating from training.
You don’t have to wait until you become an attending physician to get your financial house in order. There are key items you should be taking care of while in training to ensure your financial success and working on these important foundational items will set you up for early financial success as a practicing physician.
Physician freedom to choose to practice medicine because you want to and not because you have to come from the three pillars. One of those pillars is money. Learn how reaching financial freedom actually makes you a happier, better doctor inside the Alpha Coaching Experience. Join the interest list at https://thephysicianphilosopher.com/waitlist.
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What are the top financial rules a resident should follow while in training. What if you had to write down a list of the most important financial tasks to tackle for physicians in training, what would be on your list? Keep thinking about it, right? And as you do that, keep listening to find out what made our list here on money meets medicine.
Welcome to money meets medicine podcast, where we talk all about the personal finance topics. You'd wished you had learned in medical school. I'm your host, Ryan Inman. And here's your cohost and founder, the physician philosopher who isn't retired, but it has a new found love for something called Ryan Inman. I mean, pickleball Dr. Jimmy Turner. I
Will never admit my love for Ryan, him and publicly.
I love your eyes. Yeah. Have you played pickleball? No. In fact, I kind of want to know what pickleball is. I feel like it was the one where you liked people on the beach here. Like they put down a little trampoline thing and he likes smack the ball again. I don't actually know what that's called, but it looks fun.
Yeah. Yeah. It's almost like ping pong and tennis. Like a mixture of two things. It's like half a tennis court. Like you actually played on tennis court service and he had a wiffle ball. It feels a little bit more like ping pong. You have a wiffle ball. I mean, it's a little denser than the wicked ball. It's a pickleball, but it looks like a wiffle ball. It's got the holes in it and stuff. And it's just a ton of fun. And I think historically this has been known as like a retirement sport, but I've had a ton of fun planet recently. So it's actually one of the fastest growing sports in the country, which is fun.
Is this one of those like golf where you could play it into your like eighties?
Yeah. You really can. The best players in the world, they get to the net and they start popping the ball over. And it's a lot more strategy and agile hands than it is running around. But there's some of that too. So it's a ton of fun.
So you're two for two for old people's sports.
You know, I just liked playing sports that can endure into my retirement. Since this is a show where we talk about money and personal finance and saving for retirement, it just seems appropriate to pay for retirement.
I love it. No, actually my dad's been playing his whole life. My dad taught me early how to play golf and I love it. I just don't play it that often. But my dad is like a scratch golfer into his late sixties now. And I'm like, how did that happen? It's impressive. He's getting older and he's getting better. And he still works. So it's golf for you. There you go. So
This show enough about pickleball because I could talk pickleball the entire hour, by the way. And people would probably just, okay. I would
Tune out after 10 more seconds.
All right. So we recently did an episode where we talked about Ryan stopped financial rules, and then we did another one on mine.
The lesser quality show about Jimmy's, but no one's county.
No, I think the downloads were a little higher actually for that one. What go look, are you sure? Both of those turned out to be like some of our most popular episodes, interestingly. And so after that, we got a few emails from listeners who were physicians in training, medical students and residents and said, Hey, like these are really great and they seem super helpful, but do you have something that you could apply for our situation? And so that's really what the show is about. So whether these rules apply to you now, or to the doctors that you teach, if you're an attending an academics, or they're a reminder of some principles that you ought to continue when you become an attending physician, we thought it'd be a good idea to tackle some top financial rules for residents and fellows. And so that's exactly what we're going to do today, but before we get there on who's sponsoring this episode, yeah. I want to
Say thank you to today's sponsor. And if you've ever considered a different way of practicing medicine, whether you're burned out or you need to change a pace, or you're looking to supplement your income, locum tenens may be a solution for you. And if you're not sure where to start locum story.com is today's sponsor. And they're a place where you can get real unbiased answers to your questions. And they're going to answer basic questions, like what is locum tenens to way more complex questions about pay ranges and taxes and various specialties, and really just how locum tenens can work for you. So check them [email protected] or you go to a doctor podcast, network.com/ [inaudible] all one word to get those answers. So thank you to locum story for sponsoring today's show. Well, Ryan,
We got this question and I think that the first thing off the bat that we have to talk about, which I think fortunately is covered because pretty much anybody listening to the show is probably already doing this is pickleball is playing pickleball. You got a complete pickleball. It's great money meets pickleball.
There's like five people that actually know what pickleball is. Actually. I'm probably the one that's like with my head in the sand. I have no idea what it is. Everyone's like, Ryan's such an idiot, some
Videos, it's good. It's a fun sport. But the number one thing that I think people in residency you need to do is to get a financial education. And so I think that you can do this in a variety of ways, but I think there really are two things that you have to tackle. One is you got to get up to speed. And so that's like your base financial education. And the second thing is to continue to be involved enough that you continue that education to some extent, and to stay in the loop and stay in the know about what's going on. And so for the base, I really recommend to people is reading a really good book. You know, obviously you've written a book I've written a book on personal finance. Yours is about tackling a financial plan and mine actually fits the show, interestingly, because it's chronological book.
And so if you pick my book up in medical school for the medical students listening, that's actually probably the best time to get it, because then it walks you through chronologically what to do in medical school, what to do in residency, what to do when you become an attending the most important aspects, it's not everything, but it's a good starter. And I know that Ryan's book is a fantastic way to start your financial plan and the comprehensive nature of that. And so I think the books work really well in compliment to each other, but wherever you get your start, I think that just having the base is important. And then after you have the base, I think reading blogs, listening to podcasts, whatever your medium is. Presumably if you're listening to this it's podcasts. So listen to this, some podcasts, it might be money meets medicine.
It might be financial residency might be another podcast that's on money. But the idea there is to continue your financial education, just to stay in the loop and to be thinking about the things that are important that might come up. And really, if I told residents where to start, like this would be the biggest like umbrella concept I would teach to them. And I do teach to my residents. And I think it's important to never forget that the main thing that you're learning in residency is how to be a really good doctor. And so this is just going to be something that is a part of your education. And I think getting that base and then the continued financial after that is super important.
Yeah. I love everything you're saying here. And obviously we did the shameless plug for our books because we literally created for all of you out there. You're the audience makeup for the books. Jimmy is a physician writing it for physicians. And obviously I'm, I'm not a physician I'm married to one, but my wife helped me. Co-write that book. And as she puts it, I wrote all the boring stuff. She wrote all the fun stuff. That's true, probably pretty true, but the idea is those are good places to start, but we give away all this info on financial residency and the TPP podcast to really help you guys increase your financial acumen and feel more comfortable around your finances. And this is a start, right? There's a lot of other books out there. There's a lot of other podcasts out there. The only word of caution I want to give you all is that just know who's giving you the information and what those conflicts might be of those people, giving you information.
If you're going on a blog and it's written by an insurance agent, you're probably going to see that all roads are going to end up leading down to some sort of product. If it's coming through and someone only has internet business, that's revolving around selling products or take myself for an example, if you somehow get onto our blogs and you go through, I don't pitch that we have a feeling financial planning practice, but at the end of the road, there is one. And if you need help, we'd love to obviously work with you, but just understand where that person is writing this info or saying this info on a podcast or going through something on a YouTube. There's usually some sort of conflict there with any type of content, right? We're saying, Hey, look at our books. Guess what? Those costs like $15. Is that a huge amount? No, you're probably going to get thousands of dollars worth of value out of it, but it's still a conflict. Okay.
Yeah. And I will echo that for the new listeners out there because I know every week we're having listeners share the show with other people and getting emails from new people, which is fun to see. But to the very first shows that we ever made on this podcast, talked about how bloggers and podcasters make money and how financial planners make money and if, and how they should add value to you if they're working in your life. And the reason that Ryan and I did that is because you and I feel like we want our conflicts to be out there to be clear for people to know where they are. And while we want to help every single one of you guys, we also have businesses that we run and in order to reach more people, we have to grow those businesses. And so it's important to exactly have that lens from where you're getting that financial education. And one of the most common things that come up for me, Ryan, when I'm talking to residents is budgeting. And I hate to say that. Yes, because I hate budgeting. Yes.
It was a happy, you said it.
I know that's like your favorite topic. I'm just gonna let you take it away.
It is becoming more and more of my favorite because you refuse to admit publicly that you do one. So I love talking about it only when the microphone is on mute. Yeah. Jimmy's muting himself saying I love budgeting. It's so great. And then he'll come back on to like, I don't do a budget. How dare you? But yes. I think budgeting, cashflow planning, and I call it the dreaded B word for a reason. Cause I feel like as soon as I say, all of you are like F that I'm turning this off. I don't want to deal with it. And it's because the concept and the thought of budgeting is painful and maybe brings up anxiety or maybe you've tried it and you weren't successful at it. Therefore we want to hide that pain and misery deep down. And so the word just triggers all these emotions.
And really the act of budgeting is today looking backwards, what did I spend? Whereas I like to take everyone on the journey of what are we going to do going forward. We've talked a ton about thinking of your personal finances, like a business and treating them like a business would now Jimmy and I run businesses, several of them. And we have to know what has been spent. We need to know what are we going to pay our contractors or what are our costs to have hosting or if our websites or just editing this podcast. Thank you, Nathan Wright, who is our editor of the podcast, right? Those are costs that have happened before and we need to know, okay, today going forward, what do we expect to spend money meets medicine happens every single week. It costs us about a hundred dollars to edit the show and make it sound really good for you guys. Mainly just cutting out all the Jimmy's ums and AHS takes six hours,
Have a beautiful podcasting presence and voice. I don't know. I have to hate on it. Yeah, we have to
Just to get it a little deeper and get a little more radiant. The idea is that we need to know what we've spent in the past to project. What could we expect going on in the future? And most of you out there have no idea. You may be, have a general direction of like think no, my rent is this amount. And I think, or my mortgage is this. That's an easy one, but like no one can actually tell me, Hey, how much did you spend in food last month? I think I spent $500. You're a family of four. You probably didn't spend under $500. I hate to break it to you. And so most of the time when we go through this, some of you maybe, but most of you not, but we need to go back, look at historical reference and then use that to project going forward.
And when you're in training, you're not Scrooge McDuck rolling around and gold coins. Like you're super underpaid honestly. And so where that money goes and how far or whatever that dollar is spent on is actually really critical. But it's not just in training. The concept extends out and you're teaching yourself really good financial behaviors. So when the money is flowing, you actually know, okay, I've done this. I know what's coming. I know where this money needs to go. Yes, let's inflate the lifestyle a bit. And we always talk about a 50% raise. Jimmy talks about his 10% thing, no offense, but it's some wacky, crazy idea of 10%. It's
Awesome. It's amazing. People love it.
I'm sure Jimmy probably put it on this list for today's show. Cause that's how Jimmy is. But the idea is that you have a firm understanding and you've built a really healthy relationship with money early on, and you do this by understanding what is coming in and what is going. So I'm a huge proponent. I don't care if you make a million dollars a year, I'm a huge proponent of knowing where your cash is going at all times. So you know that it's going to things that either positively improve your net worth or things that just make you happy.
Yeah. And I'll go out there and say that two things. One, I was not financially literate during residency and really into part of my fellowship. My fellowship was when I started diving into all this stuff. Now it's been like, gosh, five, six years. And I rewrite and talk about it every day. But back then during residency, I didn't know. And so there were months where it was tough making ends meet because we didn't budget. And I will say that while budgeting is good for anybody, if that's something that you're interested in, it is I think probably more important, the less money you make, the tighter, the ship that you need to run. And it is a powerful tool to use and it can provide some limiting beliefs that come around it in terms of feeling like it's strapping you in and you don't really like that.
But it's really more about future projections like Ryan's talking about. And I am a big fan of cashflow planning. And so I can't tell you what we spent on food last month. So like in terms of tracking every dollar, I definitely do not do that. But Kristen and I now, because we took care of things early, we always every month spend a lot less than we earn. And if that ever changed and we go back to budgeting, I'll be honest and get a fine tooth comb out to do that. But in residency, I wish I'd known that tool. I'd learned that tool and really harnessed that opportunity better back then, because I didn't, and I'll say something else that comes along this lines of building those financial muscles while you're in training. It's not just budgeting but saving. And I think it's really important that the concept of Ryan's throwing out here, which is that what you learned during training and what you're doing when you're making 50 or $60,000 a year, maybe $70,000 a year.
You're training yourself for when you go and you make two, three, $400,000 a year. And so those muscles that you're building and that muscle memory that you're building financially is going to carry through to the future. So if you have a hard time not spending money and keeping up with other people right now that problem's gonna get worse. When you get to become an attending, if you are already saving 10% right now, it's going to be easier for you to save 10% or more when you become an attending. And so I often talk to residents about this. We have this limiting belief, this idea, this concept, and I coach people on this all the time. They're like, oh, when I get to X, Y, or Z, that's when I'll change, that's when I'll save more money, that's what I'll pay down my debt. That's when I'll give the charity, if you're not doing these things in your residency income, you're probably not going to do them sufficiently.
When you become an attending that doesn't just magically change because you make more money. But that is a story that I hear residents say and tell themselves all of the time. And for me, this idea of saving, being another muscle, I always tell residents like, look, when you become an attending and Ryan and I talk about it all the time. You're 25 to 30% savings rate, whether it's based on your monthly or your gross, somewhere in that range is a good goal for an attending physician. But for me, I think it's more about building that financial muscle that you're alluding to. And what I tell residents, look, if you've never saved before, just start with 10%. And what happens to conveniently be 10% of your income when you make 60 grand a year, it's $6,000, which is what you can into an IRA. You know, if you get matching where you work, obviously you want to get matched in the 401k or the four, three B you have, if you have that there, but if you don't get matching or you're not going to be vested, cause you're not there long enough or whatever your situation is, 10% of a resident salary happens to be exactly what you can put into an IRA.
And I think that's a great goal to have from a saving standpoint for residents. Now it's not right for everybody, but it's something that I would say, Hey, if you're a resident it's worth considering.
Yeah, I think it is a really important muscle to flex early and often. And one of the things that will go into your cashflow is hopefully some disability insurance and Jimmy, I know you've talked about this on air before, but maybe give like the cliff notes version of your experience with disability insurance.
Yeah. Cliff notes version is that when I was a fourth year student, we had our first kid and went to get term life insurance. Fortunately, I knew that much, at least back then. And when I did that, Chris and I are both can get term life insurance. The guy we talked to is the brother of one of my medical school classmates. And so I knew nothing about money, but I was like, oh, Hey, if I can trust somebody, surely it's this guy, right? And he's a brother of a friend of mine. Well, I didn't know anything about money back then. So that ended up biting me because I have an essential tremor. I take propranolol, I ended up getting denied. That's the short version of the story. And for those of you that are listening that are in residency or medical students about to become residents, what you may not know is that many residency programs have something called the guaranteed standard issue policy, which doesn't require any medical underwriting, any medical exam history taking, they will not know about any of your medical problems from your past.
It costs a little bit more because of that. They're taking a little bit more risk by providing that opportunity for you. But if you've got medical diseases like diabetes, or you have an essential tremor and you're going into a procedural specialty, or you have anxiety and depression written on your chart somewhere, this is a policy that you can get. That is an own occupation, specialty specific policy, which is what you want. That's the kind that you want for your disability insurance. For some of those, like the one that I had when I was in training, there's only one stipulation, which is that you can't have been denied before. And so since I got denied as a fourth year medical student, I to this day cannot get personal disability insurance because that policy that existed when I was in training awake, that was the only stipulation.
And I got denied because an insurance agent was trying to make a commission off of me. And so I'll just be very clear. And if you do not have a policy from one of these six companies and Brian correct me, if it's five now, I think it's historically been six companies that offer own occupation, specialty specific. But if you don't have a policy from one of these six people that I'm about to mention, that means that your definition is not own occupation, specialty specific, which means that if you practice a very specific kind of medicine, they basically asked the question of like, Hey, what were you doing right before you got disabled? And if you can't do that specific thing, like a surgeon operating and you cut down and you're like, oh, I'm disabled. I can't operate anymore. You want the protection from exactly what you do.
And there's only six companies that offer that definition. It's Ameritas, guardian, mass mutual, Ohio, national principal, or standard. There's a very big one that I'm not mentioning on that list that offers medical own occupation definition. And it's not the same thing. They basically, Hey, if you can work as a doctor in any way, like, Hey, I don't care. If you made a bunch of money being a surgeon, if you can go work in the clinic without an arm, do it. And that's not the kind that you want. And so all that to say, if you have an income as a resident, one of the rules has to be to get disability insurance. If you have no medical problems, you can look at one of those six companies. I just mentioned. If you do have medical problems, please check to see if your residency has a guaranteed standard issue policy. That is where you are offered by one of those six companies, because protecting your future ability to earn income may be the most important financial tasks that we talk about on the show today. And this is just vitally important. And I see people screw this up all the time by getting a bad policy from the wrong place or getting denied like I did. And I went into this entire space because of trying to protect people from this happening. Cause it happened to me so huge, huge thing
Here. So there's a few things I'll add to this one is Jimmy can't actually get disability coverage. My wife, who was a type one diabetic, didn't actually have a GSI plan attached to her residency. There's no way that she can get coverage. We've tried a thousand different ways. There's no way she can get covered. And even Lloyd's of London, wouldn't actually take it on and she's super fit. She's meticulous with her diabetes stuff. Great day once he can't get it. So you're talking to two, right? I'll be by proxy, my wife to physicians that when we're sitting here saying, please go get this. We are coming from the fact that we can't get this and we would pay a lot of money to have this. So if you are in training and you actually have the ability to get a GSI plan, and that is really important for female physicians, because it will be lower than the actual female rate.
They rated basically in the middle, almost in the middle between male and female females. I apologize. There's nothing we can do, but statistically, you're more likely to go off on disability. Claim insurance companies know that and they charge more money males. Unfortunately we die earlier. So when we talk about term insurance, ours is going to be double the cost. If not more than a female, even if you're in good health and can run a marathon, it's still going to be really expensive. So both sides of the point here, end up paying more money for different products that you need. And we'll talk about term in a second, but disability insurance is critical. And even if you're married to another physician or another super high pain specialty, or just someone that's in tech or whatever, and they make good money, they are not your disability policy.
You happen to get divorced, which I hope no one goes through, but let's be real. Like half the people get divorced. There goes your disability policy. You might be 10, 12, 15 years older, and now you can't go get coverage. Or now it's obscenely expensive. What if something happens to both of you and it's, let's say a car accident, that income goes away. And so does yours, what do you do? You need disability coverage? I don't care how much or how little you make. It's really, really important. I know as a resident, it is really hard to pay any money to anything that is basically not fun. You already don't know with your student debt come October 1st will be, but this is something that is really important. And you can roll the dice and wait, it's up to you. I personally wouldn't but you could. But before you leave, training is really important to get this stuff.
Because if you go into a private practice or you start your own practice or you go somewhere where they haven't negotiated large discounts based on volume, you will be paying more money every single year that it's active. So please go to an independent insurance. There's several out there. I love to have them. You can go to financial residency.com/insurance and talk to those two guys that we have vetted with hundreds of policies to each one of them. They're great guys. They've sponsored the show, you know their names. But the idea is that disability insurance is absolutely critical to have, and you're not immune. Yes. And
Ryan, I'm all about helping people. So I'll go ahead and say, so Ryan's alluding to Larry Keller and Michael Elvis who are two excellent independent insurance agents that we would both recommend. And so if you need help in this, go talk to them. They love to educate people and help doctors get the help they need. And Ryan and I have worked with enough people and send enough people to them to know that they're actually super trustworthy, but one through one of the thing out here on this topic, because it's so important is that I cannot tell you the number of residency. Like these people work with me. Like they know me, those poor people. Yeah. I know. I feel so bad for them, but they'll come and be like, I know like I need to get disability insurance. I'm finishing up residency. I know, I know.
I know I should've gotten it two years ago, but you know, I just haven't. And unfortunately for them, oftentimes it works out. But I just want to point out that you work in medicine and you see tragic things happen all the time to people at very young ages. And there's nothing that's going to potentially be this crystal ball. That's going to tell you, Hey, by the way, tomorrow, you're going to get diagnosed with X, Y, or Z. This is one of the reasons that the GSI policy is great because it doesn't include any of that. But if you decide to take the risk and then finish training and you don't have disability insurance and the GSI policy is no longer available because you're not in training anymore. And then you get diagnosed with something like Ms or graves' disease or cancer or whatever. When you become diabetic, you all of a sudden can't get disability insurance. This is not something to delay. Like your health history will change. That also applies to term life insurance, which is what we'll talk about right now. So disability insurance, when to get it, when you have an income, that's just about as good as it gets, right? When you have an income now, and one to protect in the future,
It sucks to like spend money on insurance. Like I don't like paying taxes. Obviously. I know that we have to right Pam, uncle Sam, no more than a penny than we have to, but that's a painful bill. Insurance is a painful bill. Anytime you're paying interest on something is a painful bill to me. Cause that means I can't go put it to stuff that we love and want to do and enjoy. And it brings me happiness. But also what brings me peace of mind would be, if something happens, then I know that Len insurance premium is worth it because if I pass away and there's a million dollar policy Taylor and the kids are taken care of, yep. Instincts paying that bill. I hate it every time, but it's worth it.
If you have someone that's dependent on your income term, life insurance is also something that you need to tick off. Check the box, just check the pay the premium every month. And honestly, term life insurance doesn't cost that much. It's the disability insurance that costs a lot more, but totally something to get. And we can't do a show on this without mentioning the need for either of those things. Ryan, one other that I just want to mention is because I can't tell you how often I see this. I was sitting next to somebody their day pre-op were, you know, I was doing anesthesia. I wish I do. Occasionally these days. I'm just surprised. And so I love practicing medicine for those you're listening, just so
That you're not confused. He loves it one day a month.
It's like two or three days a week. So I'm sitting next to this surgery, resinates a chief and he's Hey, I read your book. I think I told you this the other day, Ryan actually, and he's, it's a great book. I wish I'd read it five years ago. And I was like, why is that? It's because I'm in the wrong repayment program. And it would have saved me $40,000 in interest. And so he wasn't in revised pay. As you earn, he was a single resident. It just kills me when that happens, but it happens all the time. And the reason that it happens is because people, the phrase that you use, you like to use Ryan, they become an ostrich. They put their head in their head in the sand and they don't make a plan on their student loans. And this was me. And so I'm the pot calling the kettle black here.
So learn from my mistakes. Don't repeat my mistakes. I forbear it on my debt for five years during training, just because I knew if I signed the piece of paper, it would make it go away. And I didn't want to have to focus on that stuff right now. I wanted to learn how to be a good doctor. And my loans went up by 150% when I was in training. So please, please, please, please, please make a plan. When it comes to student loans and assume that public service loan forgiveness is what you're going to do until you don't know. That's what you're going to do. Like until you're certain that you're not going to be doing, PSLF check off the box, submit the employment certification form once a year. It only takes five seconds to fill that form out and send it in and make sure that you're in the right plan.
It's likely going to be revised pay as you earn or pay. As you earn for a few of you, it might be IBR income based repayment. And so it is vitally important to not ignore this because while you don't care about it right now, six years later, when you're an attending and your debt is 50 or a hundred thousand dollars larger, cause you weren't in the right program, you're going to care a lot about it. So don't ignore this one. And I can't tell you how many times I have to have this conversation with people. And one of the things I'll throw out there, just for those of you that are listening, that this applies to, if you're a married to a high income earner or you're married to someone else that also has student loans and Ryan I'll get your opinion on this, but it is almost always worth it.
In my opinion, to have somebody look into your situation and to run the numbers on taxes and filing separately versus jointly. And depending on which state you live in, there's eight or 10 states where the common law is different and how they view your income in the situations. And so like that one particular situation gets so complicated. So fast, very rarely do I see someone who is married to someone else that also has student loans or as a high income earner when they're not that doesn't benefit from having that conversation with somebody that does this every day, but please just make a plan with your student loans. Don't ignore it. That's the big
Picture. I mean, I'd love for everyone to make a plan. And in part of that plan is a student loan plan. It's a debt repayment plan for maybe credit cards or personal loans. It's a plan for how you're going to and how money comes in. It's a plan for your investments, right? We like planning over here. The idea is that the more we think about it, the more we know, the more we educate ourselves, the more control we feel, the better. You're probably going to sleep at night. Knowing even if it's bad, right? You can't change the past. Some may want to add in from before. Like it doesn't matter what you've done in the past. You can change today going forward. So if you don't have a plan who cares start one. Now don't wait another week. Don't wait two more months. Don't wait a whole nother year until you figured out, oh, I've now got quote unquote time.
Make some time putting your calendar. I know your schedules are busy. I remember Taylor every fourth night sleeping at the hospital. And then the next day sucked because she slept all day. I felt like a third of the time I was single because I had no one to hang out with. I get it. But there's still time built into your schedules. You just have to actually make it. And it stinks. It's not the most fun. I'd rather go to the beach. Yes, but this is important stuff that is going to cost you a lot of money. If you become an ostrich and say, I'll get to it someday, we don't want to see that happen. It happens
In so many different ways, Ryan, like one of the other ones I want to touch on in the show is contracts. I can't tell you. I think doctors just in general, they're like, you know what? I'm just going to ignore this. That has to do with finances and tough conversations and negotiations. And so I'm just not going to do it because it's uncomfortable. And this one kills me because you'll see Facebook posts like, Hey, so I signed this contract that has a non-compete for me, practicing medicine on earth. What do I do about that?
Elon Musk and start practicing on
Mars. The doctors signed the most restrictive, ridiculous contracts and it blows my mind. I see. Did you ever have anybody look at this for you and tell you how restrictive this thing was? Like your non-compete extends for an entire state or 150 miles or forever? There's no time-based to it. It's just, mind-blowing where they don't look at the MGMA data and they just see, Hey, this is a much larger number than what I made during residency. And they don't realize that their partner is going to be making 100, $200,000 more because they don't know the data for their specialty in their region. And they just accept the first thing that they're given. You do not have to accept a contract when it's put in front of you. What a lot of doctors do is say, oh well, it's the contract is the contract. And I just want to just squash this right now and tell you that everything is negotiable when it comes to contracts, including whether you sign it or not just because it's in a good city near your family does not mean you need to take like the worst job in the world.
And I can't tell you how many times I see this happen. Get the data, have a contract lawyer, please look at your contract and tell you, Hey, these are some concerns that I have. Would you like me to negotiate on your part? Or do you want to negotiate for yourself? Because an anesthesia is a great example, right? So like right now we have a ton of private equity firms coming in and buying out practices. And I know that happens in other medical specialties too. I have residents and this happens all the time awake. They'll come up and be like, Hey Jimmy, I got this awesome job. Like, oh, tell me about it. I'm like, yeah, it's a three-year partnership track and the noncompete not too bad. And this is what they're offering yada so forth. And I'm like, what do you think about? So getting some language added in there saying that you're protected.
If they have a buyout before you become a partner and they're like, what do you mean? I was like, you're going to be a partner, not until three years. What happens if they buy out in two years and nine, you get anything. And they've been making a lot of money off of your services before that. Are you going to get any part of that buy in that you don't realize that you're making, you're buying into the partnership. They're like, oh, I think about that. They said that there's no way that could happen. When I went back and asked him about, I said, well, then all you need to say is, Hey, if there's no way that this is going to happen, then you shouldn't mind putting this language into the contract. It's not going to happen. Right. And you know what, they get it put in every time because they learned how to negotiate. So please just the, so much of this as like, Hey, here's your sign, please. Don't ignore all of this stuff, but it's so vitally important for your financial future. And honestly, Ryan, a lot of the stuff that we talk about today or the reason we're talking about, because we see it all the time, right?
Yeah. Truly everything is negotiable. And I'm going to say this coming from a physician family, who's married to a female physician, female physicians listening, please know this, you need to absolutely negotiate. It sucks. And you know why? And it's terrible. And I can't believe it actually still exists in 2021, but you absolutely need to negotiate and hard because you're probably not getting the strongest offer. I've experienced it with my wife. I'd say almost 80% of our clients are female physicians. And we see it with our clients. And it makes me disgusted having to even mention this, but please negotiate because you're probably not getting the strongest offer that you deserve. And it really, really sucks still saying that, but it's true. And I want you guys to be protected. Everything is negotiable. Just like Jimmy said, even signing the dang thing, because if it doesn't work for you, then don't sign it.
Yeah. Everything else might line up. But you need to make sure that you are a hundred percent confident that you understand what you're signing. One word can change the way an entire sentence in its meaning. Say instead of of, or if it's crazy legal jargon, like it is going to be riddled with it. It is written by their attorneys. It's not your peer. That's over on the other end writing this up because Jimmy wants to come work with us. And I want to make sure no, it's an entire legal team that's going through and writing it on behalf of the employer. And you need a legal team to support you. That is on your side. It doesn't mean that you all are hating each other and going to Sue each other. The idea is that you just understand what you're signing and the best way I can put this is a sports analogy.
And I apologize for those that don't care about sports. But I look at this truly, as you are signing, basically like you're an NBA player or an NFL player. If you're going to make $300,000 and your career is let's say just 20 years, most of your careers are going to be longer than that. But that's a $6 million contract without any increases, without any bonuses, anything $6 million. So please don't just be like, oh, that's a decent offer. I'll just sign it. I won't get it reviewed for less than a thousand dollars. $6 million is what you're signing at a minimum. If you stay there. Now, most of you, we know this won't stay maybe a few years in you move, but some of you will stay just like when someone buys a house important part,
Right? And like, this is what I think people don't understand about contracts. The entire point of a contract is to define the breakup. So if you already know exactly what you just said, which is that most doctors aren't going to stay, then that makes your review of your contract. That much more important because it's going to outline how the breakup goes. If you go different ways, where can you work? How can you work? Where can you make your money? Do you owe them money? Do they provide tail insurance? Like all of that stuff goes into contract. You know, I think it's so important. Like you're saying to really know your worth and to negotiate for it.
And the signup bonuses. We've seen it so many times where someone will start working with us because they signed this great contract. And there was a signup bonus that said, Hey, we're going to give you $30,000. But if you leave within two or three years, you pay that back. There could've easily been some negotiation on that and said, how about you prorate it? So if I'm here 12 months, then I pay back only 24 months that are remaining on the contract. I pay you back 24 30th of this. So you don't pay back the whole amount because you did work or, Hey, I'm going to sign this and I'm not paying any of it back. This is mine. If I come instead, most people sign it. Don't read through it and then go, oh, Hey Ryan, Casey, I need to work with you. I need to figure out how to pay back $30,000.
And I don't know where it's going to come from. That's a big moment, right? Don't get into those. And that's just one little instance of a contract. So just be really careful. Get things reviewed by an attorney. Guess what? An advisor is not an attorney. I look at it from a finance standpoint, Hey, this is what your benefits are. This is how this works. This is what we expect to pay. So this is how take-home works. This is what we expect savings to be. Now we got to look at cost of living in the area. We look at the numbers, but you need someone to really look at the actual legal jargon that's inside there. So you understand everything that you're signing really, really, really important. Yep. Totally
Agree. And Ryan, I'll let you rail on this last one, because I know you wanted to mention it about not buying homes.
Oh yeah. Please. Don't buy a home in training. And I know maybe you are doing training and maybe some rural or maybe in the Midwest and the homes are cheaper, which is great, but you're likely going to move banks know how they price their loans. All the interest is basically front-loaded, they're an amortization schedule. If you don't know what that is, go look it up on Google. They'll teach you in three minutes. What it actually is, but they front load all the interest. So the payment you're making is very little principle. Most of it is interest and you're going to have fees to get in and out. There's going to be costs, maybe a roof leaks or maybe something pipe bursts or anything can happen that the resident or fellow salary like is going to be devastating to you. So please don't buy one in training unless your spouse is making several hundred thousand dollars a year and you've got excess cashflow, but you're not the norm.
The norm is basically either a single resident or fellow or it's someone that's maybe a stay-at-home spouse or just not a real high pain specialty or field that your spouse is in and buying a home can be catastrophic. And when you're a new attending and you're moving to an area that you don't have family, and you didn't grow up in, you don't know everyone that you're going to be working with. Like most of the people that's maybe one or 2% of you listening, right? The other 98% of your moving to a new area or working in a new system that you don't know, anyone, maybe you did a zoom interview. Maybe we're starting actual live interviews at this point. But the idea is that there's so much uncertainty and most physicians are going to leave their first job within two to three years, you need to own a home for about five years for it to make sense, to just probably break even.
And now we're at the top of the market or maybe not the top, but we are definitely inflated from a pricing standpoint in the market. Anyone who's ever looked at a home in the last six months knows the market's going nuts. This is probably not the best time to buy a house. And so if you're thinking, well, I'm moving, I'm doing this. Like all these big changes are happening. We want to buy a house and you may think I'm crazy. I've bought and sold like 20 homes. My whole family's in real estate. I do lots of analysis in the real estate markets. The markets are hot right now and I know how your finances are going to look. And I know you're about to get a whole bunch of money and it's going to be really hard because you want to put down roots somewhere, but please make sure you are going to stay there for at least five years, because you will likely lose money on that home.
And it probably would have been easier just to rent for a year just to know. Yes, I like the hospital system. Yes. I like my coworkers. Yes. My spouse is happy or the kids' school is great. And yes, we are going to stay here for at least a few years and then decide to buy a house. But if you're moving across the country or doing something that we typically see physicians bouncing all around and you've never lived there, you don't have any ties there. You don't have any family there, which is probably most of you please don't buy a house. I
Don't have a whole lot to add to that. I do know that I live in a part of the country where it's weird. Cause it's such a low cost of living. It's just where cause you live there. Well, yeah, I mean, I make it weird, but other than that, is there anything else that you want to add to this show, man? I think we covered so much for our residents can
Only backpack so much here, dude. Hey, is your back sore from carrying us? It's always so, or it's always sorry. We love all of you. Hopefully this is helpful, right? We come out with tons of content for you guys to just army with enough financial knowledge. I think this is a pretty good list to get started, but the keyword is started. This isn't exhaustive, this isn't everything. So please make sure that you're educating yourself back to number one. And as you get more comfortable and more educated in your financial documents going to increase, you're going to come up with better questions. That'll cause you to dig a little deeper. And a lot of you are going to realize that you don't really like personal finance that's okay, but you need to know the basics of it because no one should care more about your money than you do say it a thousand times.
And I still feel like even a lot of our clients, we care more than they do. And we're like, no, no, no. Here's how we're going to work together. Here's how we're going to raise that knowledge. So you feel more comfortable and confident and that's literally what all of these shows everything Jimmy and I do is really to help you guys get that knowledge to protect yourself. Because my industry, the financial industry is not your friend. It sucks. We have a fiduciary duty, right? Very, very few. I mean, probably less than 2% are actually going to put it in writing and sign it. I means that the majority of people you're going to talk to, they could tell you orally, Hey yeah, I've got a fiduciary duty, but if they don't put it in writing, they don't have it. There's nothing like the Hippocratic oath where all of us have to abide by something. So just please be careful realize that you will have a target on your back from our industry, the people coming and pitching you stuff or talking to you for free or Hey, I'll do your financial plan for free. Nothing in life is free. Learn that now, nothing. There's always something behind it. So just be careful, learn, keep learning. And when you fail, you learn enough, keep learning more
And we're here when you need us. That's what that is today.
All right, everyone want to say thank you one time to our sponsor locum story. And so if you've ever wanted to understand more about locums and how that could be part of your maybe financial journey or in your career, I highly recommend you check them out locum story.com or you can find them at Dr. Podcast network.com/locum story. We really appreciate all of you being here. And of course, just like everything we've always said, this is not actually specific advice, financial insurance investment. Any other advice you can really think of? It is not. That is for entertainment purposes only just me making fun of Jimmy. And hopefully you guys learning a few things here and there, but we've got a very cute voice that will tell you all about this and our disclaimer. So have a good week everyone, and we'll catch you next Wednesday. Take care.
It's so good to see you and make sure to share the show with another physician or physician family that you're aware of or friends with. And we appreciate you listening and as always, we'll see you next week. Cheers.
Hi dad, Dr. Jimmy Turner is a practicing anesthesiologist. Mr. Eyman is a fee only financial planner. You should know that this show is not personalized financial advice. You, in fact, the show is only for your general education and entertainment purposes. So keep listening to learn how to become a threat yourself angel girl, or go find a great fee only financial planner like Mr. And then to create a personalized financial plan. [inaudible].
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