From the editors – We are excited to bring you this piece on managing your finances, something that can be overwhelming and intimidating to many physicians.  It is meant to be for general advice and is not a specific endorsement of any particular product or service.

Physicians are often at a disadvantage when it comes to managing their finances. Despite years of advanced education and training, little if any time is spent on financial literacy while in medical school or residency. This educational deficit, coupled with the challenge inherent to managing the transition from a modest income as a resident to a much more substantial income as a practicing physician, means that physicians face unique financial issues that should be taken into account when crafting a financial strategy. Although their relationship with finances may be estranged, I believe doctors are not at as big a disadvantage as they think. Some of the same rules that apply for general health and wellness of a patient have valuable parallels in financial wellness and can be sensibly applied without too many hours away from one’s chosen work.

The Problems

Doctors are in a unique position of having extremely high earning potential, however the costs (usually in the form of student debt and years spent on education) often leave a newly minted doctor at a loss for how to efficiently manage newfound income. Looking for advice on how to manage this unique situation, many physicians turn to the internet, which, at best may be a remedy similar to WebMD. While some financial advice on the internet is sound, it is almost always meant for the masses and does not take into account the unique challenges and opportunities of managing the finances of a practicing physician. With the average family income in the U.S. currently hovering around $50,0001, following the herd and the prevailing trend of consensus-based advice found on the internet may work against the medical professional whose finances are radically different than those of the average person.

Another major source of advice for new physicians is other physicians. There is often a kinship in medicine around the sharing of ideas, which is a good thing. This drives collaboration and helps to promote the best possible patient care, but not necessarily the best financial wisdom. While in training, residents often share thoughts on what student loan providers to use or what disability insurance carrier to work with. From an early stage physicians seek advice from other physicians. While often a great place to start. I would compare this to seeking medical advice from an older sibling. As doctors, you can appreciate the importance of consulting a professional and I believe the same principle applies in financial decision making.

The Parallels

Know The Whole Patient

The first step in patient care is to assess the big picture. This is the same in finance. When a patient comes in bloodied from a car accident, the first step is evaluating the entirety of his or her condition. This should be a guiding principal in any financial decision as well. How does this idea affect the other areas of my personal economy? Does it work in concert with other products and strategies that I have in place, or does it work counter to those items? Am I picking up ancillary benefits from a financial decision or incurring additional costs? Does it further the goals I have for my finances and life? As is the case with the human body, decisions in one area of your finances will have ripple effects across all other areas. Recognizing this is an important first step in evaluating the overall utility of any financial strategy.

Start with The Priorities

This is an obvious parallel, which goes a bit deeper. The first step in patient care is to stabilize the patient. Assess the major risks, and address those risks first. In finance there are less obvious risks to one’s personal economy, but they are equally as lethal and should be addressed by their order of magnitude or degree to which they could negatively impact a physician’s balance sheet.

These risks generally fall into four categories:

Liability – Lawsuits are a leading cause of damage to a physician’s economy. Physicians generally believe that their professional liability insurance eliminates this threat; it does not. The vast majority of lawsuits in the United States originate as a result of an incident outside of work, either at home or behind the wheel. For this reason personal liability needs to be equally prioritized. As a high earner, you are now an easy target in the event of a law suit.

Disability – This is one area that most physicians reflexively understand. As a byproduct of putting a considerable amount of time and energy into being able to practice such an esoteric craft, the protection of that skill set against injuries or accidents is critical. Disruptions in one’s ability to practice (such as a hand or eye injury) without proper fail-safes in place is a death sentence for a physician’s economy.

Pre-Mature Death –  This is another less-obvious exposure, but merits attention. A 30-year-old surgeon poised to start a 30-year career will very likely generate over $10,000,000 in earnings by age 60 for his/her family. This is something known as their human life value, a cold calculation of one’s earnings over a lifetime. But what happens if that surgeon passes away prematurely and that wealth goes unrealized? A strong personal economy has provisions in-place to weather even this type of storm.

Debt – Physicians are usually no stranger to debt. Debt can in many ways be likened to nicotine use in patients. If managed and removed overtime, the patient can avoid any significant damage. If left to fester, there can be a long lasting impact with profoundly negative implications on the persons’ economy as a whole. Much like the target audience of the cigarette companies, debt and loan products are marketed aggressively to doctors. While not as mortal a threat as those listed above, debt can be a slow and silent killer of an otherwise healthy balance sheet.

Work With A Great Team

Physicians understand the team approach. The primary brings in a surgeon. The surgeon brings in the anesthesiologist and perhaps a vascular specialist, or perhaps an orthopedist or really anyone else whose specialization may play a role in the overall plan of care. This principle is the same with your finances. Find and surround yourself with a team of experts and be sure you have a trusted quarterback on your team. In the case of finances, the quarterback is someone who will be responsible for both the offense and the defense, evaluating your entire financial picture and making sure your financial decisions are coordinated, integrated, efficient and working towards your goals.

To be sure, physicians are at a disadvantage with respect to raw financial literacy and the availability of good information, but they also have some great advantages as well. Physicians have tremendous income potential and consequently a great capacity to fuel their economy. Strong income in concert with smart decisions can lead to great wealth and the ability to use that for good. While perhaps a daunting task, following the parallels of good medicine can and will put you in a position to build a strong personal economy and reach your goals.


  1. United States Census Bureau. Income and Poverty in the United States: 2015. Accessed May 2017.

Peter Heckman, Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY.  He can be contacted at [email protected]

Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice. #2017-40230 (exp. 5/19)