Things I Should Know by Now: Finance Edition

If you're anything like me (and I kinda hope that you're not), then "finance" has always seemed like an abstract term that you'll get around to understanding someday — you know, when you're a gainfully employed, "real" grownup. That's all fine and dandy, until one day you realize that you're about to become that grownup and finance still seems like an entirely foreign concept.

I am actively trying to improve on this and, luckily, in the age of the internet and social media finance accounts (slightly joking here), it feels possible. Here are a few resources I've liked. Of note, I am not sponsored by any of these — just a fangirl.

Financial FreedomRx

Like many of you, I have started, then restarted, and subsequently abandoned reading the White Coat Investor. It seemed just a step ahead of where I was mentally in the finance journey. Then Financial FreedomRx came along, and I finally felt like I had a nice foundation to build my financial edifice. A few pearls I picked up:

Live Below Your Means

Sure, we've all heard this adage. Some even advocate living like a resident for another 3-5 years after residency. But it's helpful to actually calculate the number of years you have until you reach financial independence (25 times your annual spending) based on your net worth, your savings rate, and the rate of return.

For example, if you started with around $250,000 of debt and could save around 20% of a salary of about $300,000, it would take about 33 years with a return rate of 4%. If you increase it to a 30% savings rate, it would take about 21 years. It was motivating for me to visualize those numbers.

Disability Insurance Definitions

Own occupation, specialty-specific. This is quite important for proceduralists (ie. surgeons). It covers you if you are unable to perform what is required of your specialty or subspecialty.

Guaranteed insurability or future purchase increase rider. This allows you to increase your policy coverage with increases in income without repeating the medical clearance exam and underwriting process.

Residual disability. This is the ability to receive partial benefits in the setting of partial disability.

Cost-of-living rider. This allows monthly benefit to increase with rises in the cost of living.

Pay Yourself First

Automatic savings and the associated dollar-cost averaging is the key to growing a slow, steady fortune over your career. Maximize your workplace and individual retirement account savings as well as tax-advantaged savings. Invest consistently. Live off what remains after paying yourself first.

Physician Side Gigs

A Facebook group that started with the primary intention of sharing opportunities outside of traditional medicine, Physician Side Gigs has become a great forum for picking people's minds about physician finance and business. It's been really interesting to see people's advice on how to get the most out of potential side gigs that could be available to us (eg, expert witness or consulting). Of note, White Coat Investor also has a Facebook group and a great podcast that's easily accessible.

Other Resources

The ophthalmology community has been quite proactive about providing opportunities for the next generation to get a foundation in learning about financial basics:

VBS School of Finance. The Vit Buckle Society offers Zoom webinars on finance basics. You'll need to be a member to watch these videos on demand.

American Academy of Ophthalmology. The academy's Young Ophthalmologist committee publishes a handful of articles every year on finance basics. Two examples are Financial Health for the Young Ophthalmologist and Top 3 Actions to Safeguard Your Finances During Residency.

Podcasts. Even the podcasters have tapped into finance topics! Eyetube and Bryn Mawr Communications' Survive & Thrive Podcast had a great episode on nonclinical routes to achieving financial freedom.

We've spent all these years committing random factoids to memory (I'm looking at you, Mr. Krebs Cycle). If we can find the ability to do that, then surely we can find the time to learn how to pay ourselves first and to support our financial well-being.

I'm a total newbie to this space and would love to hear your thoughts on how to jumpstart the learning process or what resources you use to stay engaged and up-to-date on personal finance.

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About Dr Cherie Fathy

Cherie A. Fathy, MD, MPH, is a cornea fellow at the Wilmer Eye Institute at The Johns Hopkins Hospital. She completed her undergraduate, master's in public health, and medical degrees at Vanderbilt University School of Medicine and her ophthalmology residency at the Wills Eye Hospital. Cherie is interested in constantly improving how we deliver care to our patients. You can usually find Cherie napping, contemplating whether she should ride her Peloton, or bookmarking recipes she'll probably never make. Opinions expressed are solely Cherie's own and do not express the views or opinions of her employer.

You can connect with Cherie on Twitter: @CherieEyeMD

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