Our lives have many seasons. As children, we depend on others for all our care and support. Soon, we learn to do a bit for ourselves and then step out independently.
In medicine, the educational journey represents a large portion of our time and growth. Many years are spent in learning and student mode between undergrad, medical school, and residency.
But one day, that day may be now, you will be shocked to discover YOU are the one caring for others. Not just in the hospital and operating room but also at home. Your family and kids depend on you for love and financial support. When did this sneak up on us?
Our financial lives have a similar arc. Many of us will borrow to pay for college, and most of us borrow money to pay for medical school. At the time, the money almost feels “fake.” You fill out some paperwork, and money magically appears in your checking account. It doesn’t help that you defer making loan payments for almost a decade.
You are successfully matched into your residency program at the end of med school and are even paid a salary. If you’re extra lucky, they’ll contribute to a retirement account. Despite all of this, you are still deeply in debt. For most of us, we have a negative net worth!
This was the stage I dug myself into a deeper hole by spending recklessly on my credit cards for… I’m not exactly sure what I spent that money on, to be honest. I ignored my student loan statements. Even worse, I didn’t save anything for retirement.
Eventually, you graduate residency and… finally, earn “doctor money!” Now you chip away at your student loan debt, and save a bit toward retirement. But you also learn the progressive nature of our tax system. Most of you are paying six figures to the tax man every year! Which makes it more difficult to pay off debt and save.
During those early years after residency, you reach a psychologically powerful milestone. Your net worth is $0! Congratulations! You’ve worked hard to get to this point. And you are well on your way to building wealth.
By now, you are on the third phase of your journey, wealth accumulation. You won’t be shocked to discover this phase is marked by increased savings and learning more about investing. With consistency, you’ll quickly approach a seven-figure net worth. Now is when your money starts to do even heavier lifting.
If you save $100k each year, and your investments earn another $100K yearly (a big assumption, I know), you’ll see your savings turbocharge. Eventually, you reach the point where your investments earn more than you are saving.
This period is a massive inflection point. It’s a time to celebrate and to reflect. You’ve worked hard, and now you are rewarded with better choices. Do you want to continue at this pace for another ten to twenty years? Or would you like to slow down at work? Maybe drop some overnight call or burdensome administrative duties?
You can choose to coast a bit here. Personally, I think this is the solution for most physicians. Most docs I talk with don’t want to retire incredibly early, they simply want to work less and live more of their lives. This pace is a more sustainable path to your entire life.
Yes, there are added benefits that your taxes and tax rate will decrease. You can even choose to lower your savings rate. As I said, you have better choices.
Ultimately, all of our work together at Greeley Wealth is to give you and your families better choices. Choosing our health. Choosing to travel. Choosing to spend time with our families. Choosing an encore career.
We let your values guide these decisions. You are no longer bound by an OR schedule because you need the money. Financial independence means you are in control!
At Greeley Wealth, I am your guide on the journey. I sweat the details so you can focus on what matters most to you. We’ve discussed these steps before – watching your savings rate, tax-loss harvesting, account rebalancing, etc. Perhaps the biggest contribution we make is working on behavior. Making saving and investing automatic.
Working together, you will reach your financial goals. But the bigger payoff is living a life aligned with your values. Let’s get started!
Reach out here if you want to chat about your current situation.
