Quick disclaimer: This is based on my own experience and what has worked for me. Be sure to consult a professional for personalized advice.
Hey! Let’s get straight to the point—nobody taught us about money in med school, and that’s a big gap. After making my fair share of financial mistakes (and seeing others do the same), and reading a lot of books, here’s what I think you really need to know:
1. Know Your Net Worth
Before jumping into any financial strategies, it’s crucial to know where you stand. If you're an IMG like me, you might have a positive net worth, but if you’ve got student loans, it’s possible you’re facing some big negative numbers. Don’t worry—the important thing is knowing your starting point.
Your net worth is simply everything you own minus everything you owe. I personally use Empower to track mine (and if you use my link, we both get $20: Empower link).
2. Financial Literacy Basics
Just like medicine has its own language, so does finance. You don’t need to become a finance expert, but having a basic understanding is key to protecting yourself. Most doctors can be millionaires by 40, but only if they avoid bad financial advice or shady insurance products.
Here are some resources that helped me:
- "If You Can" - A great starting point. Get your free copy here.
- White Coat Investor Book Series - This has been super helpful for me. There are multiple books: White Coat Investor.
- I started with the more detailed WCI book—high yield but a bit dry if you try to read it all in one go.
- What worked better for me: WCI Boot Camp book.
- Get weekly financial tips: WCI Personal Finance for Doctors.
- Check out all Boot Camp emails: WCI Boot Camp Emails.
- Buy the book: Financial Boot Camp Book.
Note: I’m not affiliated with WCI, but I found these resources really useful.
- The Physician Philosopher - Get your free finance book here.
- More free finance books: Paul Merriman’s Free Books.
3. Student Loans
I don’t have student loans myself, so I won’t claim to be an expert here. But for great advice, check out White Coat Investor’s resources.
4. Protect Your Income
One thing many people don’t think about is what happens if you become disabled. I used to overlook this too, so I totally understand. But consider the scenario: if you can’t work, what’s your plan?
A lot of residents assume their employer's disability insurance will cover them. However, under most group policies, if you can work in any capacity, even in a lower-paying role, you likely won’t receive benefits.
Here’s a simple example:
Let’s say you’re earning $50/hour as a resident, but after an injury, you’re only able to find work paying $10/hour. With many group disability policies, you wouldn’t be considered “disabled” since you’re still working, so you wouldn’t get any payout. However, with a True Own Occupation (TOO) disability policy, you could either get the difference—$40/hour—or even the full amount, depending on the policy.
I’m not a disability insurance expert, but I want to make sure you’re aware of how this works so you’re not caught off guard.
To get a sense of costs, you can check out approximate rates here: DI Quote Tool. Also, the White Coat Investor has helpful resources for finding professionals: WCI Insurance Contacts. Some residents mention AMA or AAP policies, but here’s why they may not offer what you expect: AMA Disability Insurance.
5. Life Insurance: Keep It Simple
If someone depends on your income, get term life insurance—period. Skip whole life insurance; it’s usually a poor investment. Most doctors need $2-5 million in coverage, and it’s cheap while you’re young, so don’t wait.
6. Saving for Retirement in the U.S.
There are two main ways to save for retirement: through tax-advantaged accounts and taxable accounts. Check out the image below, which sums it up nicely.
As a resident in a low tax bracket, now’s the time to take advantage of Roth accounts. Your future attending-self will thank you.
I’ll cover investing in more detail in another post, but this is part 1 of my series.
7. The Game Plan
Want to build wealth? It’s actually pretty simple:
- Make good money (you’ve got this covered).
- Don’t spend it all (this is where many people stumble).
- Invest wisely.
- Protect what you’ve built.
It’s all summarized in this post: Financial Waterfalls for New Residents and Attendings. The image in the post really says it all.
Why I’m Sharing This
I’m sharing this because I’ve seen too many doctors struggle with money when they shouldn’t have to. Getting these basics right early in your career makes a massive difference.
Acknowledgments: Special thanks to The White Coat Investor and Kevin Kuo for their valuable resources
