Now that the end of medical school is near, you might want to delve in other important aspects of your career more than just those thick medical books, late night cram sessions, and clinical rotations. After med school, you need to seriously consider your financial status moving forward.
Being a medical doctor is a great and rewarding career. It is personally rewarding because you get to help people with their ailments. It should be a financially rewarding career because the average pay is around $250,000 annually. But according to a survey conducted by the American Medical Association, around 56% of physicians have an underwhelming savings of around $100,000 upon retirement. Only 69% of physicians feel knowledgeable about financial planning and literacy.
This financial problem is mainly due to the lack of financial plans that should have been started at the very beginning of their medical career. Investments come in many forms and here are some things that an up and coming medical doctor should be investing.
5 Things to Invest in After Med School
1. Life Insurance
No one gets to better see and understand the uncertainty of life than medical doctors. Life and death scenarios are probably always in your face as a third person perspective. Being aware of the kind of devastation a loss of life can inflict on a family is very much familiar to you. Life insurance is something no one actually wants to use, but is a solid financial decision that will help your family stay afloat amidst all the commotion that can arise when you get to meet the creator.
There are usually two types of life insurance, whole and term policies. Term life insurance policy means you are insured for a certain period of time, while the whole life insurance guarantees financial backup for all your life.
2. Disability Insurance
Being a doctor means you rely on your skills, knowledge, and expertise for a living. But what happens when something made you unable to do your job. Something that results in you being disabled? According to statistics, one in three doctors will undergo some form of disability that will render them unable to do their job over the course of their career, whether it is short term or long term.
This means you lost not only your ability to help people but also lost your very income. Disability insurance is a concrete way to protect you from loss of income and other financial problems due to disability that will hinder you to perform your practice. When you have this kind of investment, you have less worry about what the future may hold for you as this ensure financial stability all throughout.
At the end of the day, you won’t still be practicing when you are old. What you should do around those times is to enjoy life and the fruit of your labor. Retirement plans are something you need to consider early on. 401K is a retirement plan sponsored by employers and it is something you definitely start with.
Discuss the plans and security covered by the hospital or clinic you are working with. Funding it early is a great idea to start earning interest on it. Let your money work for you.
Owning a real estate property is an investment that offers benefits to everyone, even doctors. Not only does it secure that you have a place to live, but it can also be used as another form of additional income like a home rental. Apart from these, it can as well be used for tax benefits listed as a form of depreciation.
5. Money Market Savings
Money market accounts are something to be explored by medical professions as it has the benefits of both savings and checking accounts, only it accumulates more interest that both forms of accounts. These are considered low risk and even no risk investments.