Your six figure physician salary can set you up with financial security for life — if you know how to spend it, save it, and invest it. Unfortunately, many medical professionals don’t focus on their finances enough to get there.
The good news is that you don’t have to. There are all sorts of financial professionals that you can hire to do it for you.
Whether you’re looking for new ways to save, new investment opportunities to help you grow your wealth, or ways to reduce your existing debt, here’s how physicians can benefit by hiring a professional to handle their financial planning.
Create a Comprehensive Financial Plan
The first step in financial planning involves creating an actual plan with actionable steps you can take to reach your goals. A financial planner can help you do that and more.
It may seem easy enough to create a basic budget where you know how much to spend and save, but there’s a lot more to it than that.
Financial advisors know all sorts of details about finance that you probably don’t even realize you don’t know.
Professional advisors look at your finances from all angles, and they stay abreast of changing rules and regulations regarding taxes, healthcare, and investments. They can guide you in ways that can help you reduce your taxable income, increase ROI, and grow your retirement savings.
Advise on Investments
An investment advisor can help you identify your long-term goals, and then put a plan in place to help you reach them. That includes guiding you into which investments are best for you and telling you which ones you should steer away from.
They can instruct you as to what percentage of your salary to invest in stocks, bonds, or index funds. They can guide you as to how much of your earnings you might want to put into real estate. They can also help you decide whether it’s better to invest or pay down debt.
Investment advisors can instruct you on the downsides and upsides of different types of investment vehicles. If you’re afraid to invest for fear that you’ll lose all of your money, an advisor can set you up with a plan that minimizes your risk.
Plan for Retirement
Whether you plan to retire at 70 or are hoping for an early retirement at age 55, every physician needs a sound retirement plan. This is a key component of every financial plan, and a professional can help you get started.
From setting up a traditional IRA to learning how to withdraw tax-free money through a backdoor Roth IRA, a finance pro can show you which retirement savings accounts are best for you.
Find the Right Mortgage Lender
Financial planners and advisors aren’t the only professionals that can help you reach your long-term goals. When it’s time to purchase a new home or an additional piece of property, you’ll want the specific expertise of a mortgage specialist or a mortgage broker.
A mortgage broker can save you lots of time and lots of money by helping you obtain and compare interest rate quotes and loan terms from multiple lenders. They can also help you navigate the somewhat complicated waters of getting a physician mortgage.
With flexible DTI requirements, no PMI, and zero to low down payments available, physician mortgages are an attractive option for new, young physicians just starting out in their career.
Checkout this article to learn more about mortgage loan programs for physicians and other medical professionals.
Get the Best Insurance Rates
Like mortgage brokers, insurance brokers can be an invaluable source of information and guidance when it’s time to purchase an insurance policy. Whether you need to increase your life insurance policy, purchase disability insurance, or protect yourself with malpractice insurance, insurance professionals can help you customize the best policies with the right insurance carriers.
Insurance is a key component to every physician’s overarching financial plan, and disability insurance is perhaps the most important one of all.
With disability insurance you can continue to collect a portion of your salary if you become too ill or injured to work. Plus, you can spend the benefits in any way that you wish, so you can continue to fund retirement accounts and continue to invest, even when you’re not earning your regular salary.
When your patients have medical health concerns, they see you for your expertise. So if you’re concerned about your financial health, it’s time you trust a professional that’s an expert in that field.
Can you create your own financial plan and stick to it?
Some physicians can and do. But it’s always better to have a pro on your side to walk you through it, to stay abreast of the new and best ways to increase your net worth, and to create the financial stability that you and your loved ones deserve.