Financial Wellness for Physicians: Dr. Sridhar & Dr. Dahle (WCI)

I’ve always been intimidated by the big world of finance. This year as I start residency, my goal is to educate myself on personal finance and become at least a little bit more comfortable navigating this space. I came across this Expert InSight podcast episode in the AAO newsletter in which Dr. Sridhar (one of my heroes) interviews Dr. Dahle of White Coast Investor. It’s a short episode and here are my major takeaways.

Key takeaways:

1. Things to do right away when you start residency:

   1. buy disability insurance and lock in your low rate

   2. make a plan for your student loans, particularly an income-driven repayment plan to minimize monthly payments during residency (and if you go with REPAYE, you can cut your interest rate); consider public service loan forgiveness.

   3. invest a little bit to build those habits

2. #1 thing you can do early is to make a financial plan for your first year out of residency. Avoid lifestyle creep. Build good habits.

   1. live like a resident for 2-5 yrs out of residency (more like a principle rather than actual practice)

   2. make the extra money as big as you can and put it towards wealth-building priorities, all of which are specific to each person: investing, pay off student loans, down payment, paying off auto loans, maxing out retirement accounts, saving for emergency fund

3. What do good investing habits look like?

   1. come up with a simple investing plan and fund it adequately

   2. buy 1-3 stock index funds

   3. buy 1-3 bond index funds

   4. set up a % of your money to go into this mix each month

   5. do this every month and benefit from compound interest

4. Why a retirement accounts so advantageous?

   1. first of all, you can avoid the 10% penalty for accessing money before 59.5 years old, including early retirement, disability, death, etc

   2. Advantages of retirement account:

      1. estate planning advantage: this money goes straight to your beneficiary in the account and they can leave it in account for 10 more years

      2. asset protection advantage: this money is protected from creditors and you can't lose this money if you apply for bankruptcy

      3. tax advantage: dramatically lowers your taxable income and the money grows tax protected, allowing it to grow faster

5. INVEST YOUR MONEY PASSIVELY AND INVEST YOUR TIME ACTIVELY

   1. If you’re interested in learning about finance, you can dig in and learn so much and you don’t necessarily need a financial advisor

Take care,

emxu