Articles by Setu Mazumdar, MD
Recap from last month: Dr. Smith, a 45 year old emergency physician with
a $500,000 investment portfolio, didn’t have time to manage his
investments and hired Frank, a financial advisor at a big brokerage
firm. To continue the story, upon transferring his portfolio to Frank’s
firm, Frank tells Dr. Smith that after thorough research he uses only
the best money managers.
Meet Dr. Smith.
Dr. Smith is a 45-year-old emergency physician, married, with two
children. He’s been practicing emergency medicine for 12 years. He’s
paid down most of his student loans and has been saving some money in
his SEP IRA over the years.
Unfortunately we have to assume that taxes are going up for
everyone--not just “rich” doctors--in 2011. So before
you buy all those Christmas presents, you’d be wise to consider some
ways to keep more money in your pocket:
Just got a year-end bonus? First, spend some of it. Go to Vegas, buy an
iPad, whatever it takes to take your mind off Press Ganey scores and the
grueling night shifts. (I bet you haven’t heard that from a financial
advisor before.) Once you’ve taken care of that piece, here are a few
options for spending what remains.
It’s one thing to understand the major types of risk, and to know which to carry and which to avoid. But none of that information will help you if you don’t know how to measure risk.
Most people think emergency medicine is a “safe” career. I disagree. In
our specialty we can control some risks (to some extent) such as the
number of shifts we work, the group we join, and the hospital we work
in. But there are other risks we have no control over, such as the
number of patients we see in a shift, frivolous lawsuits and EMTALA.
As physicians we face many different types of risk every day, from the
risk that a patient will sue to the risk of the government changing
laws, or even the risk that our relief won’t show up at the end of our
night shift. Risk is also inherent in how we manage our finances.
So, you are a new graduate who followed my advice and took the month of
July to get your finances in order. Now you’re wondering where to start
investing. Here are five easy rules of thumb to get you started.
First, congratulations on your upcoming graduation. I’m sure you are
excited (and a little nervous) to finally be an attending and make your
own medical decisions without someone else watching over your shoulder.
You’re probably also itching to get your first five figure monthly
paycheck and spend it. But before you buy that shiny new Bimmer, let’s
go through the steps to get your finances on track:
If I asked you to list the biggest risks to your assets, I’m sure
malpractice lawsuits would appear near the top. But lawsuits are only
one of the many catastrophes that put your assets at risk. Whether
you’re preparing for a natural disaster, a potential disability, or
even death, you should seriously consider asset protection. Step one?
Establish an emergency fund.
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