A few months ago I submitted a requested article to the American Academy of Emergency Medicine Resident/Student Association. It is a good summary of what students and residents of any specialty need to know about their finances.
I’m occasionally asked to give very young physicians, i.e. students and residents, some financial advice. Typically these doctors have a low income, a dramatically negative net worth, little financial education and plenty of naiveté. In fact, I was recently questioned by a student how anyone could possibly spend more than $10,000 per month (to which I replied that I spent more than that on taxes alone.) The truth is that many of these physicians will find themselves spending more than $10,000 a month long before their net worth even reaches zero.
The most important advice I can give any student or resident is to LIVE LIKE A RESIDENT. That means not taking out additional loans during residency (you might be surprised how many of your peers cannot live on a resident’s income) as well as living a lifestyle similar to that of a resident for two to five years after residency. The slower you can grow into your attending physician income, the better off you will be financially. It is entirely possible to pay off your student loans, save up a big down payment for your dream house and be closing in on millionaire status within five years of residency completion. But most docs won’t be in that situation, and some docs will never get there, all because they grew into their peak income entirely too quickly. Make plans now to avoid being in this situation.
Read the rest of the article here, then come back and tell me what you thought.
If you had a time machine, what advice would you give to your younger self in med school or residency? Would it be about spending, investing, or insurance? Comment below!