Your income is your most valuable asset. It’s time to treat it as such. In the words of a surgeon I follow on Twitter/X @surgfi, treat your career as a business. “Being a doctor is your business, not your identity.”

Being your business, it needs money.

If you want to get from feeling behind to feeling ahead, the change needs to start with the order of money operations.

Earn–Spend–Save won’t work.

Earn–Save-Spend is the change needed.

401(k)s and 403(b)s work so well because the money is saved before it ever can be spent. We spend what hits the checking account. Myself included. The problem that doctors face, maxing out a retirement plan at work and spending the rest is likely to result in an underfunded retirement. An RN who maxes out their 403(b) for their whole career is probably on pace for an early retirement, but that’s because they’d be at north of a 20% savings rate, with an earlier start. Whereas a physician earning $500,000 maxing out their retirement account could be at a 5-10% savings rate, combining that with a later start to savings and early retirement is unlikely.

What this means for physicians:

Retirement plan savings need to be accompanied by additional savings. This is where things can go wrong. Paychecks hit the checking account, the bills add up and there isn’t much left over. Weeks turn into years, kids, career and aging parents keep your mind occupied.

I don’t think it's a spending problem, rather a human problem. The solution is incredibly simple.

Automation.

Get paid on Thursday, schedule a transfer to your investment account on Friday. 

Hit your 20% savings target and spend the rest without worry.

Repeat for any savings goal. Car, college, lake house.

The optimal time to start is when you go from resident to attending. It’s the easiest time emotionally and financially. But, this can start at any age. I have found most people are really good at spending what’s in the checking account, meaning  the adjustment to saving more and spending less isn’t really that difficult.

The same goes for those of you who are buying into your practices, getting quarterly payouts etc. When they come, save and invest first, and make it a rule. If I get paid X, I invest this %.

Working with new attendings this is by far the biggest wealth building advice I have given. Smart tax efficient investing is the cherry on top, but the needle mover is the automated savings to investment.

If you want options and freedom, this is the clearest path.

You don’t need me, you don’t need complex investments, privates etc., none of these things are requirements of financial freedom, and in some cases they have the opposite of the intended effect.

I help people get clarity on how much to save to where, how to invest and how to protect what they have. That’s what I offer, not over complicated for the sake of seeming sophisticated.

*Your actual savings rate needed to reach your goals will vary, past performance is no guarantee of future results.

The information in this blog is the opinion of Nathan Tomkiewicz and does not reflect the views of any other person or entity unless specified. The information provided is believed to be  reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational purposes and should not be construed as advice. Advisory services offered through Tomkiewicz Wealth Management, LLC, an investment adviser registered with the State of New York and Massachusetts.