Congratulations! You've finally finished medical school, and it's time to start earning the big bucks (Okay, maybe not yet, but some money, right? 💰). It's a milestone day that you thought would never come, but here you are. Let's get into the nitty-gritty of managing your new financial reality.

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✖ Physician Cents

🎥 Physician Cents

✖ Chad Chubb

✖ Tyler Olson

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Core Topics for This Episode

This episode covers essential financial topics that every new intern and early-career physician should navigate:

1. Personal finance for new interns
2. Managing moonlighting income and tax liabilities
3. Emergency fund strategy
4. Disability insurance decisions

Emergency Fund Strategy

Importance of an Emergency Fund

Having an emergency fund is crucial for financial security. It offers mental peace, knowing you're covered if unexpected expenses arise.

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General Guidance on Amounts

There's no one-size-fits-all. The amount can range widely, from $1,000 to 6+ months of expenses. Here’s a breakdown based on career stage:

• Medical Students: Start with a small buffer, around $1,000.
• Residents/Fellow: Aim for 1-3 months of expenses.
• Attendings: Target 3-6 (Possibly more) months of expenses.

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Detailed Amounts & Questions Consideration

Different Scenarios & Situations

Your emergency fund needs depend on your circumstances. Here are some considerations:

• High Debt Situations: If you have high-interest debt like credit cards, focus on this before building a large emergency fund.
• Financial Support from Family: If you have strong financial backing, you may not need a huge emergency fund right away.

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Prioritizing Debt Repayment vs. Saving

• High-Interest Debt: Prioritize paying off high-interest debt over building a large emergency fund. The interest you save will exceed the returns from a savings account.

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Steps to Building an Emergency Fund

Starting Small

Begin with a modest goal. Consistently save what you can each month. Here’s how:

• Monthly Contribution Examples: Aim to save $100-$300 monthly.

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Automating Contributions

Set up automatic transfers to make saving easier. Use direct deposit from your paycheck or set up scheduled transfers from your checking to your savings account.

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Account Types and Options

Types of Savings Accounts

• High-Yield Savings Accounts: These offer better interest rates than regular savings accounts.
• Money Market Funds: Often provide higher returns while still being relatively safe.

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Separate Buckets for Different Financial Goals

Keep your emergency fund in a separate account from other savings. This prevents you from dipping into it for non-emergencies.

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Recommended Savings Institutions

High-Yield Savings Accounts

• Laurel Road (On our "Best of the Best" list 🎉)
• Ally Bank
• Marcus by Goldman Sachs

Money Market Funds

• Fidelity: Their government money market fund can be a solid option, currently offering yields north of 5% (As of 8/2024).
  • PRO-TIP: If you are in a high tax bracket, you can look at the municipal money market funds to help your tax-equivalent yield

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Evaluating and Adjusting Your Emergency Fund

• Review Financial Goals Regularly: Periodically revisit your emergency fund targets.
• Adjust Contributions as Income Changes: Increase your savings rate as your earnings grow.
• Rebuild Emergency Fund After Usage: If you dip into your fund, prioritize rebuilding it.

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Disability Insurance Overview

Importance of Disability Insurance

Disability insurance is vital for financial protection. It safeguards your income if you can’t work due to illness or injury.

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Types of Disability Insurance

• Group Coverage: Often provided by your employer.
• Individual Policies: These offer more comprehensive coverage.
• Guaranteed Standard Issue (GSI): No medical underwriting, making it critical, especially during training years.

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Understanding GSI Policies

Benefits of GSI

• No Medical Underwriting: Makes it accessible even if you have health issues.
• Cost Advantages: Often includes unisex rates, particularly beneficial for female physicians.

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Who Should Consider GSI Policies?

• All Physicians: Particularly crucial for female doctors due to cost benefits.
• Eligibility and Enrollment: Check with your HR department or an independent agent for state-specific policies.

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Steps to Obtain Disability Insurance

Evaluating Your Program's Offerings

• Contact HR: Find out if your program offers GSI policies.
• Review Policy Documents: Understand what’s covered and any exclusions.

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Consulting with an Independent Agent

• Finding an Agent: Look for agents who offer policies from multiple carriers.
  • We made it easy for you, use one of them ➡ Best of the Best list
• Health History Evaluation: Ensure they take a thorough health history to avoid future claim issues.

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Selecting the Right Disability Insurance Policy

Key Features to Look For

• True Own-Occupation Coverage: Ensures you receive benefits if you can’t perform your specific job duties.

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Top Disability Insurance Providers

• Ameritas
• Guardian
• MassMutual
• Principal
• The Standard

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Reviewing Policy Terms and Conditions

Examine policy terms carefully, understanding the conditions and exclusions.

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Cost Considerations

Pricing Factors

• Gender-Based Pricing: Disability insurance is often more expensive for women.
• Age and Health: Younger, healthier individuals usually get better rates.

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Graded Premiums vs. Level Premiums

• Graded Premiums: Start lower but     increase over time. Useful if funds are tight.
• Level Premiums: Stay constant     throughout the policy term. Usually more cost-effective long-term.

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Practical Tips for Managing Disability Insurance

Regular Reviews of Coverage

Regularly review your policy to ensure it still meets your needs.

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Verifying Policy Accuracy

Check your policy details for accuracy and completeness.

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Monitoring for Updates in Provider Policies

Stay informed about changes in provider policies that may affect your coverage.

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Planning for Growth and Career Changes

Increasing Coverage as Income Rises

As your earnings grow, you may need to increase your coverage. Look for policies that offer future purchase options without additional medical exams.

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Switching from Resident to Attending Coverage

Review and adjust your coverage as you transition from residency to attending to ensure it aligns with your new income and circumstances.

🤕Need help with disability insurance? Check out our “Best of the Best” list for three excellent disability insurance pros. Let them know you go their contact information from our podcast to support the community.

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Closing Guidance

Summary Points to Remember

• An emergency fund is critical for financial stability.
• Disability insurance is essential to protect your income and ensure financial security.

By following these steps and taking advantage of available resources, you'll be well-prepared for a secure financial future as a new physician. For more detailed discussions on these topics, be sure to listen to The Physician Cents Podcast.

Continuing your journey with strong financial habits will help you not only survive but thrive in your medical career. You’ve got this! 💪

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_{The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don’t expect!) about a sponsor, please let us know. We call it the “best of the best” for a reason, and we will maintain that standard for our listeners & viewers.}

_{This information is for general purposes only. This information is not intended to be a substitute for specific professional financial, tax, or legal advice, as individual circumstances vary. Please see a financial professional, CPA, and/or an attorney in regards to your own individual situation.}

_{Wealthkeel’s Advisory Services and Financial Planning offered through Vicus Capital, Inc., a Federally Registered Investment Advisor. WealthKeel LLC, 615 Channelside Drive, Suite 207, Tampa, FL 33602 -- 267.590.9533.}

_{Olson Consulting LLC, Offering Advisory Services and Financial Planning, is a State-Registered Investment Advisor.}