Have you ever wondered, am I ready to transition to practice?
Maybe you’re sitting there thinking, I can’t wait to do it… but I’m scared of making a mistake. I’m about to be making a whole bunch of money and I don’t want to screw it up.
There’s no doubt that transitioning to practice is incredibly rewarding… and stressful.
The key is putting yourself in the best possible position.
In this podcast you will learn…
– My Proprietary Formula for Financial Success
– What LinkCapital Got Wrong in Their Recent Article
– Where I’ve Personally Stumbled and What You Can Learn From It
(Note: I outsource transcription efforts, please forgive in advance any grammatical errors. I just simply don’t have time to review it all)
Hey everyone this is Dave Denniston and welcome back to the Freedom Formula for Physicians Podcast. Is a 44, the most powerful hand gun in the world and would blow your head clean off you’ve got to ask yourself one question; do I feel lucky well do you bonk?
Welcome to the freedom formula for physicians podcast with all about slashing your debt and taxes and creating a liberated lifestyle. And now, your host, with the love of fantasy books and funk and the hatred of running more than three miles; Dave Denniston.
Love it. Alright everyone, well, welcome back to the freedom formula for physicians podcast this is Dave Denniston and as we hear transition to practice time, so many physicians there are inking their contracts, they are transitioning their practice, I thought there was really good article on link capital. I want to put here on the show note how to create a personal budget for physicians and the talk here about finishing medical training if ?? salary, you’ve been living on horizon salary for so long.
It may seem like you have a lot of extra money and they see as quiet so important to budget. Now, the first things they as about which I just love these kinds of things which I think more and more physicians should take the time, take an hour , take a night, take a weekend take that time off to really consider a few questions here. So these are some of the questions they ask; how do you want to spend your time? who do you want to spend your time with? What are you passionate about?
Do you want to buy your dream home, do you want to start your own practice, do you want to travel around the world, take time to consider life goals and write them down. So that’s what they said. I will like to reframe this you guys, those are wonderful questions to ask but the conversation I often have with clients that I like it to start with as a ground rule.
I want you to sit down and I want you to get a piece of paper and I want you to start at the bottom of the piece of paper and I want you to think about this question; what’s important about money to you. Common answers here might be security, peace of mind, having money in the bank those kinds of things and I want you to think about next what’s so important about having that security or peace of mind to you.
Take some time to reflect, think about that and keep on going or what’s important to me about having the ability to do fun stuff why will I want do that? Have you noticed introspection really reveals the core of us, the core of who we are and sometimes it helps as someone goes through this exercise with you, so you like me to do it with you, would be more happy to firstname.lastname@example.org is my email so definitely email me if you want us to go through it together.
Now the next part of the conversation is about goals. So I want you to write down on the same sheet of paper what’s the tangible goal that you have that requires money and planning to achieve. And in my book the freedom formula for physicians we have a whole template you guys of how you will go through this process and then how you prioritize and determine debts you pay often and some of the basis kind of budgeting.
Now in this article from link capital, they continue on here beyond some of the questions that they had asked which now I made some amendments too, they say make a list of all of your monthly expenses and you know I kind of disagree with this, I think expenses are just kind of are what they are.
My bigger question you guys which I talked about in the previous podcast of the eleven things everyone should know about finances from a financial planner is really what is your monthly flow, so if you add everything up what is your total flow and what is that for the last four or five months. So rather than just writing down every single thing I find it much more helpful just to see what are you actually doing?
What does that look like and some of the big questions that you have to think about is your transition to practice. Do you refinance your debt or not, do you see yourself working for a public entity and going for the PSLF or some other debt forgiveness program or do you refinance ??. now of course the thing that you should factor in that, that really should change.
Now, many many residents when they have their 41k and 42b in residency and in most cases there’s some exceptions. The employer sponsor plan does not match. However, in order to take advantage of that things have changed for 99% of physicians once they transition practice now practically every single plan will have a ?? so if you want to take that free money guys absolutely and I will encourage you that after you take some of that free money next try and suck away in a cash cushion account so you have some reserves.
Once you have about 15, 20k there you can think about investing. Then as you are investing and sucking away more money in an easily accessible spot, then you can think about doing like a rough diary for a more in your 401k 403b and doing all that kind of fancy stuff. So that will kind of be the priority levels in my opinion. Now the other thing that I talk about here which I do think is a good point is to think about some of the fees which you have to take on.
So I love this point, your conferences, your board exams that you’ve been having to take, if you have more to take still, you owe your professional association fees, publication subscriptions. What is your employer going to take on for you if anything? So definitely have a look at a handle on that because that can change drastically from residency so I do think that’s a good thing to take stock of and think about how that might change so I definitely encourage you to think about those expenses.
They talk about household, they talk about entertainment and I told you guys for me and my wife entertainment is something that we do cash on and I would encourage you as you start transition to practice for eating out, for having fun, going on date, that kind of stuff. Take out monthly cash, a certain amount every single month because this stuff can get out of control super quick.
So when you have this article, from a link capital is a good one especially as we see many residents and fellows’ transition to practice make sure to check it out. I would love to hear from you what are you doing for your budgeting, are you doing light item stuff, are you booking at anything at all, do you plan on changing that in the next few months. So send me an email, make comments email@example.com is my email or can check out the podcast website at doctorfreedompodcast.com. For the Freedom Formula for Physicians Podcast this is Dave Denniston looking forward to hearing from you soon. Have a good one.