4 Reasons Our Training Decade is Critical to Physician Wealth

Many of us have our minds set on starting to build wealth when we finish training. Some say, “I’ll be making so much more money that what I save now will not matter in comparison.” Others say, “I just can’t squeeze out anything, we are maxed out on our current income. There’s nowhere to cut.”

The truth is, if we set our mind to it, there are always more solutions than problems. If most people have pre-determined that they will not set any financial goals while in training, then there will not be creative ways to accomplish those goals.

I hope the reasons I listed will encourage us med students and residents to take action today to build our net worth. Your older, more tired, more taxed self would thank you tremendously if you start saving in training.

1. Develop and practice good habits.

One of my finance heroes Robert Kiyosaki (author of Rich Dad Poor Dad), said that people with money trouble on little income, will only have more money trouble on high income. A larger paycheck is not the solution money problems, more money only accentuate one’s bad money habits.

A bit counterintuitive, but there are way too many sad live examples. 60 year olds with 500k saved after 30 years of making ½ million per year. Then you have a janitor who left one million behind for the school he cleaned and served for three to four decades.

Be faithful and multiple what you consider little income today (50k to 70k) in MS/PGY’s, you will find the same principles you live by compound your wealth exponentially when you get that three to four pay raise.

2. Invest in your greatest asset: your mind.

If you are going to read one money book in your entire lifetime, do it today. The sooner you read it, the more dividends it will pay you over your lifetime.

Learn about money, it’s so much easier than medicine. If you ever pick up a 2^nd money book, you will see repeating themes. One good investment book where the basics are covered is all you need to successfully DIY your personal finances. Look here, this money guru who read 250+ great investment books and live and breathe money matters, have a three- fund investment portfolio I could come up with while still on the ½ of my first investment book.

3. Dollars invested today works longer for you. One to two more doubling time.

A dollar invested as MS1 has one to two more doubling time compared to that more-than-a-decade-later-invested dollar in your first few attending years.

4. Lowest tax bracket going forward. Buy investment on sale.

If you invest this MS1 dollar in post-tax vehicles such as Roth IRA, the tax savings is incredible since you will be paying the cheapest taxes as a MS1 (I made less than 15k as a MS1) as opposed higher tax brackets as attending physicians or retired physicians.