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.