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3 Things to Know When Working with Physicians

3 Things to Know When Working with Physicians

| February 27, 2019

1) The Stakes Are High. When we see a physician making mid to high six figures, we think they have made it! This may seem so, but like a NFL football player, the physician’s career earning years are shorter than the typical professional due to the longer education requirements.

Do physicians often earn what most consider healthy incomes during their working years? Yes, of course they do, but those years are compressed into a shortened term resulting in less time to iron out early (or any) financial problems.

As a financial professional, consider the impact of diversification. Even diversification into assets that are non-correlating to one another. Also, it’s often quite important to insure against potential interruptions or complete loss of earned income.

2) Physicians Are Just Highly Skilled and Highly Compensated Laborers. This is true, but don’t tell them this in so many words! In my experience of working with physician business-owners, many believe that they own a valuable business asset which in fact is often not the case and simply just a false sense of security.

What happens if a physician small business-owner cannot show up to personally take care of their patients?

How does a physician owner impact the revenue of the business?

In reality, if a physician cannot show up to care for the patients, the business itself has little value.

3) Student Loans Must be Managed. The typical physician exiting residency or fellowship has tremendous student loans which can become a burden as they enter their first few years of practice. Ideally a young physician professional should learn good budgeting habits early and properly manage their student loans to set a good trajectory for future financial success.

Potential Action Steps for a Financial Professional Working with a Physician

  • Discuss the importance of their income and what they want to do with their income.
  • Review or have a Disability Income Specialists help you review existing protection strategies or proposed protection strategies.
  • Plan to address large student loans with most physician clients and prospects.
  • Re-evaluate plans regularly.