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.
History shows that when managing your portfolio, taking the long view is the smartest strategy.
You know that confidence that makes you cool during chaos? Well that asset can become a liability when managing your portfolio.
Have you ever counted the number of distractions we encounter during a typical ED shift? Here are just a few: pharmacy phone calls, work excuses, signatures, blanket and water requests, more signatures, pronouncing dead patients on the floor STAT. I bet we’re distracted about once a minute. No wonder I feel battered after most shifts.
Normally, we expect higher-priced products to perform better. Not so with expensive portfolio management, which drives down returns.
We’ve discussed visible fees and expenses that affect your investment returns, including commissions, account fees, and advisor fees, but what about the other fees, the ones you don’t actually see? We’ll look at a few big ones.
Now that your portfolio has an “airway” via asset allocation and can “breathe” via diversification, it’s time to make your investment returns “circulate.”