MDNews - Greater Boston

"T HE KEY IS fi nding the desire early on to not only be successful in practicing medicine, but in manag- ing money," says James M. Dahle, MD, FACEP, Editor of The White Coat Investor. "Physicians need to realize they have a second job as their own pension manager, whether they like it or not. Many physicians never had anyone teach them how to manage money, but these skills are critical to building and maintaining wealth. If you don't learn them on your own, physicians end up doing the same thing as everybody else — having a high income for decades but ending up with little to nothing in the end." The problem starts early: A 2014 Fidelity analysis found the total savings rate for physicians ages 30–39 averaged 13.1 percent. The recommended fi gure is 15 percent. 'Live Like a Resident' Physicians may fall into the trap of seeking a standard of living that does not take into account their savings and retirement needs. "After residents and fellows go from being broke for so long to earning a good living as an attending physician, they feel a perfectly normal desire to reward themselves," says Josh Lantz, CRPC, Operating Offi cer for MD Financial. "Problems happen when the standard of living increases so much that there's no money left to save — not even an emergency fund, much less for retirement. The best fi nancial advice I've seen is to live like a resident after you fi nish your training. It's a fantastic time to start saving and helps you get out of debt sooner." Staying Smart about Debt Physicians may also be hazy about the burden of student loan repayment, says Katherine Vessenes, JD, Certifi ed Financial Planner and President of MD Financial. "One thing [fi nancial consultants] like to do is put together a debt plan — we can make an enormous impact on wealth just based on the order [in] which loans are paid back," Vessenes says. "For a young physician in training, there are also several loan forgiveness programs, including income-based repayment and public service loan forgiveness after 10 years. Many states have programs that will pay off student loan debt due to a shortage of physicians in the area." Seek Wise Counsel Having thorough information matters, experts say. "Physicians are targets for the fi nancial services industry — even new physicians without much built-up wealth," Dr. Dahle says. "The fact that many have no fi nancial training but still have a high income makes them ripe to be taken advantage of." Says Vessenes: "Just like it pays to get a second medical opinion, look for fi nancial advisers who are independent and have a fi duciary duty to give you a second opinion. Many physicians are not getting unbiased advice about their wealth." ■ By Melissa Moore Starting Smart : EFFECTIVE BUDGETING CAN BE THE MOST IMPORTANT SALARY MANAGEMENT TOOL AT A NEW PHYSICIAN'S DISPOSAL. +++++++++++++++ +++ + +++ + +++++++++++++++ FINANCE M D N E W S . CO M ■ MD NEWS Greater Boston | 5

• Cover