Finishing residency is a milestone. 7-10 years of medical education and post graduate training are now complete and you, as a resident, are now ready for private practice. It feels like a long journey has come to an end. In reality, your professional life is just beginning.
As a medical educator, I see this cycle each year. Residents rejoice in finishing their residencies and fellowships– they look forward to professional life and robust salaries that will allow them to enjoy their lives after years of suffering.
I would like to help you change this mindset. While years of training have come to an end, your new beginning is actually the most important time of your professional life. Consider it like being a newborn and now your habits have to be shaped so that you can truly enjoy the fruits of your labor. You need to immediately start thinking about the future while enjoying the present.
Here are some tips to help:
1. 2 x 3 Rule
Enjoy your new salary– just not too much. Most newly practicing physicians will likely be earning at least 4 times what they earned as a resident. Live on 2x what you used to make and save the rest. Do this for 3 years.
Example: If your salary goes from $50k to $200K, try to live on $100k and save the other $100k. At the end of 3 years you will have $300k+ (plus its growth) in the bank and have the cushion you need to invest in opportunities to further build your wealth.
The first 10% of your new salary should go into retirement accounts. These investment of $1500/month for 3 years will be $54,000 (plus its growth). The remaining part of your 10% can go into an IRA. This money will have time to help you build the nest egg you want for the future.
3. Take pride in savings- it is very empowering to save.
You will feel better about yourself and your future. Saving will take the stress out of your life so you can enjoy it more.
Most physicians do exactly the opposite of this. They quickly overextend themselves and buy a new house, new car, and go on exotic vacations. They immediately cash strap themselves and lose control of their financial future.
Keep in mind that most physicians will not stay with the first job they take. It makes sense to be wise and give yourself the financial flexibility in the event you change jobs or decide to go out on your own.
Take it from me– Hurricane Katrina changed everything over night. Along with hundreds to thousands of other physicians, I found myself without a job. If you learn nothing else from me, learn to rely on yourself and take this opportunity to become a Savvy Doc so you can survive the BUSINESS of medicine.
Dr. Shaminder Gupta is a practicing nephrologist in New Orleans, Louisiana. He serves as the President of the National Kidney Foundation of Louisiana and the Nephrology Section Chief at Leonard J Chabert Medical Center. He has started multiple ventures in health care varying from dialysis to concierge medicine. Dr. Gupta also serves as an educator at the Internal Medicine Residency Program at LJCMC and is able to share his passion for education with students, residents, and patients. Hurricane Katrina changed the face of his and many other careers over night. As a result, he has learned how to survive in the business of medicine. With his experiences in various business ventures and with education, he has an interest in helping others learn from his experience and learn to rely on themselves to support their families and future goals.