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Careers in Medicine

Personal Finance

Personal finance can be a daunting topic for anyone, but especially for medical students and physicians. Many students accrue large amounts of debt, and sometimes turn to maladaptive strategies when considering their future finances. For example, some are “laissez-faire,” assuming that an attending salary will take care of large sums of debt. Another mechanism is paralysis and denial of the magnitude of debt. The final common pathway of both mechanisms is a refusal to take seriously the importance of personal finance.

Years of these strategies can be harmful in the long term, even once one finishes residency. Some young attendings, after decades of delayed gratification, come into their first “real” paychecks with no financial plan in place. Without a concrete plan to curtail spending, pay down loans, and save for retirement, some physicians live lavishly right up to (and beyond) the point of bankruptcy. Many physicians feel that they are “too busy” to deal with their money and will hire financial advisors to take care of everything, which can yield suboptimal and sometimes disastrous outcomes.

However, this does not need to be the case. Anyone can learn about personal finance. It isn’t an arcane art and it doesn’t take an inordinate amount of time. There is so much great information out there that the biggest obstacle is deciding where to begin. Here, we have listed a few common introductory resources which we hope you may find helpful.

However, this advice comes with a few caveats. We ourselves have no formal educational background in finance or business. The resources listed here represent our opinions of what we think is good; these do not guarantee future financial success. Vanderbilt does not endorse these resources in any way. Some of the blogs feature advertisements for financial services for which the writers earn advertising revenue, though the writers are open about this; we believe that their writings are generally impartial.

 

  1. The White Coat Investor https://www.whitecoatinvestor.com/ 
    Jim Dahle, MD, is a practicing emergency medicine physician who runs a very active blog about all things personal finance from the perspective of a practicing physician. The blog is a great source of information and direction, but is updated so frequently that it can be a bit overwhelming! Dr. Dahle also has a book by the same name that happens to be a great introduction to all the topics of personal finance with which physicians should be familiar. His book serves as a great introduction to personal finance for physicians, and also teaches the importance of continual self-education in personal finance. Previous readers of Dr. Dahle’s book strongly recommend it, especially considering it is only about 100 pages long. His blog, Twitter, and podcast can supplement the book.
  2. “Live Like a Resident” on The Physician Philosopher https://thephysicianphilosopher.com/ 
    The concept of living like a resident (maintaining the lifestyle you had during residency even for several years after earning an attending-level salary) is popular in Dahle’s posts and in the physician personal finance community. It is an instrumental way to begin building wealth at the beginning of one’s career in medicine. This blog post from the Physician Philosopher, another personal finance-themed blog, does an excellent job laying out a visual representation of just why this concept is so important. A must-read.
  3. “A Tale of 4 Physicians” on Physician on FIRE (PoF) https://www.physicianonfire.com/a-tale-of-4-physicians-the-importance-of-lifestyle/
    PoF is another popular blog in the vein of WCI, with an additional focus on the goal of FIRE: Financial Independence, Retire Early. Some physicians will certainly decide to move away from medicine before the typical age of retirement, and financial independence is a crucial factor in making that a possibility. There are some really interesting posts on this website, though not all of them will be actionable at this stage of your career. However, some of the concepts of financial independence are things that residents can put into play early on: minimizing additional debt, protecting assets (of which future earning potential is the biggest… get occupational disability insurance!), and avoiding lifestyle creep. It is never too early to begin thinking about financial independence as a goal.
  4. The Richest Man in Babylon
    While this is an older book, and is not specifically addressed at physicians, it’s a quick read, and provides a philosophical, rather than technical, approach to personal finance.

 

It’s never too early to start thinking about personal finance. As you read more, you will learn more, and maybe even become excited by the topic. As you continue to develop this interest, here are a few other books in this domain which are well-regarded:

  • Your Money or Your Life
  • The Intelligent Investor
  • A Random Walk Down Wall Street
  • The Millionaire Next Door
  • The Business Side of Medicine (more related to the topic implied by the title than personal finance in general, but a very good and eye-opening read)