Doctor in Managerial/Ownership Role

Regardless of whether you’re in private practice or a senior physician in a hospital setting, the main difference compared to your first full-time job is that you now have managerial and or executive responsibilities. Along with these responsibilities you’re enjoying a higher salary. Managing others, and especially owning your own business, introduces a new set of challenges and requires new skills. For many, this is not an easy adjustment.

Likely priorities are:

1. Build your human capital as a manager. Learn how to run a business or hospital division, and how to deal constructively with junior staff members
2. Finish paying off paying student loans
3. Accumulate diverse assets, across all asset classes (stocks, bonds, cash, real estate)
4. Increase the size of your rainy-day or emergency fund to 3-6 months of earnings. Excess cash can be invested opportunistically in the event financial markets experience significant declines
5. Consider decreasing disability insurance coverage if your net worth is sufficiently high 
6. Consider decreasing life insurance coverage if your net worth is sufficiently high  
7. Make sure you have appropriate property and casualty insurance for your home and auto, including umbrella insurance with sufficient limits to protect your assets
8. Work with a competent and properly licensed accountant to minimize taxes
9. Asset protection looms large now that you have some significant holdings and are aiming to generate even more. As you accumulate more assets, consider estate planning and asset protections
10. Save. Save. Save. Accumulate appreciating assets. Make the most of your prime earning years!
11. Stay the course with your passive investments. Don’t be swayed by market fads or bubbles
12. Don’t over-extend or over-consume—budget properly and live within your means. The more excess cash your household generates, the sooner you can pay back debt, fully fund retirement plans, contribute to children’s college savings plans, and approach financial independence. Understand the relationship between your budget and your net worth (your nest egg)
13. Don’t leave a lot of cash in an unproductive checking account when it could be directed to a higher yielding savings account, certificate of deposit, real estate, or stock investment
14. Make financial decisions collaboratively with your partner/spouse. Open communication is crucial to the financial well-being and unity of your family
15. Understand the roles of various advisors/brokers/agents and decide whether you wish to manage your own investments (DIY) or whether you prefer to find an advisor to whom you can outsource some or all financial decisions. My recommendation is that you pursue as much self-sufficiency as possible as that gives you more control over your assets, reduces reliance on inept or dishonest advisors, and allows you to avoid paying some fees. If you opt to use an advisor, take a look at the Advisor Evaluation Template.