Financial Planning for Physicians in Michigan
Many physicians struggle during residency and during the early years of their careers as they pay off student loans and establish their medical practice. However, most physicians eventually become what is considered high-wage-earners. Being a high-wage-earner does not mean that doctors are immune from making financial mistakes. Below are five financial planning mistakes that can be costly for physicians.
Five Financial Planning Mistakes Made by Physicians
Physicians are medical experts, but most physicians are not also financial experts. Therefore, it is easy to make costly financial mistakes if you do not have experience in financial planning. Five common mistakes physicians make with their finances include:
- Handling Their Own Investments
You would never suggest that a financial planner performs surgery on himself or a client. Playing around with investments can be risky, especially when it is more of a hobby or a part-time job. If you want to dabble in investments, set up a small account for that purpose, but leave the bulk of your investments with an expert.
- Failing to Combine All Accounts with One Financial Planner
Some physicians work with several different professionals regarding financial matters, such as retirement accounts, investments, insurance, and benefits. Working with multiple professionals can make it very difficult for you to keep up with what you need to do to keep everything in sync. Having one financial advisor who can manage all your financial matters can help you identify issues before they become problems and help you make overall financial decisions that benefit you in the long-term.
- Failing to Involve Spouse’s in Decisions
Many physicians keep the operations of their practice and their home life separate. They do not involve their spouses in the day-to-day operations of the medical practice. Unfortunately, this habit can spill over into personal finances. Some physicians use the same financial advisor for their business and personal financial decisions. It can become easier and quicker to make decisions about both matters without taking time to discuss the personal side of the finances with a spouse.
However, spouses need to be aware of the family’s finances for several reasons, including in the event that something should happen to you and your spouse needs to take over the family finances. Involving your spouse in personal financial matters can help you identify shared goals and devise strategies to reach those goals.
- Inadequate Insurance
A physician needs to have maximum insurance coverage in all areas of his or her personal and business life. Most physicians focus on medical malpractice insurance. While it is crucial that you have an extensive malpractice insurance coverage, you also need to have other types of insurance coverage to protect you and your family in case of emergencies or catastrophes.
In addition to medical malpractice insurance, you should discuss other insurance coverage with your financial advisor, including insurance coverage for death, disability, personal liability, personal property, business income coverage, health, and injury.
- Making Risky Investments
Because doctors have higher incomes, many people seek them out for certain investment options. While pursuing some risky investment options might result in high returns on the investment, each potential investment needs to be evaluated carefully by a financial advisor. Cautious due diligence is required to ensure that you are not going to be burned by something that sounded too good to be true.
Michigan Financial Planning Services for Physicians
Physicians who want to improve their financial wellbeing need to find a trusted, experienced financial advisor. Financial planning for physicians has unique challenges.
For example, financial planning for residents often involves developing strategies for paying off student loans, reducing overall debt, beginning a retirement account, and building an emergency fund. However, as a physician proceeds into the first few years of practice, financial planning may expand to saving money for a home and beginning an investment account. Doctors in the middle of their careers need to begin planning for retirement, manage expenses effectively, set up college savings plans, and finalize estate plans.
Working with a financial advisor means that you gain the knowledge you need to make financial decisions that will grow your income, protect your assets, and build for retirement during every phase of your medical career.
Take Advantage of the Holistic Financial Planning Services Offered by Our Firm
The Castle Wealth Group offers classes and individual counseling for tax planning, retirement planning, estate planning, Social Security, Medicare, and long-term care planning.
By combining these services under one firm, we are able to approach financial planning on a holistic level. We coordinate all aspects of financial planning so that you receive the full benefits of comprehensive financial planning. Click here for The Physician’s Guide to Optimizing the 5 Critical Elements of Your Financial Strategy.
If you have questions, call (844) 885-4200 to speak with a knowledgeable representative.
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