By Christina Cellini, MD, FACS, FASCRS
Financial planning is something that gets
overlooked during medical school and residency (likely because you probably
don’t have much of it!). Before you know it you are an attending and making a
real salary for the first time and its imperative to learn how to spend and
invest wisely. I reached out to my
personal accountant Paul Visca, CPA in Rochester NY, as to what is advice he
would give to young professionals. Here
are his pearls of wisdom:
- Save for retirement. Begin as early as possible. Take full advantage of a company’s retirement plans. The earlier you start the more time will be available to take advantage of compounding. Money doubles every 7 years at 10%.
- Take control of your finances through self-education. Read investing literature as much as possible. Learn the basics. The biggest hurdle I've seen is a complete lack of knowing investment "jargon." Even if you hire a financial planner, knowing the terminology is powerful.
- Start saving for kids college early. Again the power of compounding comes into play here. 529 plans are great vehicles for this.
- Live below your means!! Especially if debt is involved. Save monthly.
- Books to read to help achieve these goals - I particularly like books by John Bogle (founder of Vanguard Funds).
I would also add to hire an accountant to
help you with your tax returns if you don’t already do so. These get
significantly more complicated to do once you are in a higher tax bracket and
things like houses, cars, spouses and kids are involved. The small price tag of
doing so significantly pays off in terms of what you end up paying the
government otherwise. Finally, below are two articles that are found on the web
that detail some of these points.
Financial Planning for Young Physicians (PartOne) by Dave Denniston, CFA
Financial Planning for Young Physicians (PartTwo) by Dave Denniston, CFA
Both can be accessed for free online, but
registration to the site is required.
Dr. Christina Cellini is an Assistant
Professor of Surgery and Oncology at the University of Rochester Medical Center
in the Division of Colorectal Surgery.
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