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POSTED: September 20th, 2023
POSTED IN: 2023 Quarter 3, EM Pulse - The Official Newsletter of MOCEP,

Written by Jared Lammert, MD, University of Missouri – Columbia

Making Sure Your Financial House is in Order

So before we know it, another year will be coming to an end. I often use this time to check my finances and do a annual check-in. I think it’s a great time for everyone at all stages of their medical career to do the same. Here are a few points I check to ensure my financial house is in order.

Disability insurance.

● The greatest threat to our financial success is losing our income. The best way to protect this is disability insurance.

● When shopping for disability insurance, spend the extra money for specialty-specific, own occupation disability insurance through a trustworthy independent agent.

● If this was purchased in residency, make sure to increase your coverage to support your current spending levels.

● Residents and physicians with pre-existing medical conditions should work with their hospitals to obtain Guaranteed Standard Issue (GSI) disability insurance before trying to apply for the above insurance.

● Generally, this is not recommended for medical students until you have started your residency training.

Life insurance.

● If people are starting to rely on your income, it is important to protect their future as well.

● Generally, Term Life Insurance is recommended as it is considerably cheaper than Whole Life Insurance.

● As Jim Dale, fellow EM physician and White Coat Investor, says, ” Do not mix investing with insurance,” which is what Whole Life Insurance tries to do.

● As more people rely on the income, you can add more Term Life Insurance as needed. After my second child arrived, I added a new policy.

Check your savings rate.

● Net worth is assets minus liabilities.

● On January 1st each year, I calculate our net worth and savings rate.

● If my wife and I reach a financial milestone, we plan a celebratory dinner.

● My goal each year is to hit a 20-25% savings rate.

● The savings rate can come with some controversy. However, in my view, it is the one thing about my financial future I can control the most. I cannot control market ups and downs, but I can control how much I put in each year. The more we save, the faster we can reach financial independence.

Recommended reads.

● The White Coat Investor – Jim Dahle, MD

● The Simple Path to Wealth – J.L. Collins

● The Psychology of Money – Morgan Housel

I am a board-certified Emergency Medicine physician, not a financial planner. Like all physician finance blogs say, this is not formal financial advice. The goal with this article is to start getting you to think about your finances each year. If you have any specific questions about the above topics, I’d be happy to connect you with more information. Feel free to reach out at [email protected]

What is your greatest piece of financial advice you have ever received? Email me, and I’ll create a list for an upcoming EPIC article.