Ask yourself: "If I have ZERO income, how long would I last?" The longer you can go without income, the more options you have in your life and the sooner you can walk away from it all.
It's amazing how burned out many physicians are. Every year, a greater number of doctors express to me their discontent with the state of medicine today.
Too much work; lower pay; uncertainty about their future; and so on. Most state that if they could walk away right now they would...
IF they had the financial means to do so.
Which leads to the question: "How do you know if you have the financial means to walk away?"
Or if you can’t walk away how do you know if you can either cut down on your workload or “semi-retire”?
I've been thinking a lot about that question. As a financial planner and physician who helps other doctors take control of their personal financial lives and move toward financial independence, numbers come into play.
Financial planners use software that can run through thousands of calculations so you can see the effect that changing one little variable can have on your portfolio value. While those calculations can be useful for developing a retirement plan and can help you understand your situation, the numbers don’t really get to the psychology of retirement. In other words, they don’t address how you feel.
Here’s a much simpler way for you to determine whether you’re headed in the right direction without using spreadsheets and fancy graphs. Now I realize this is more like a rule of thumb and you have to adjust this based on your particular situation and some of you will disagree with me, but hear me out.
Ask yourself, "If I have ZERO income, how long would I last?"
In other words, how long can you go on without working and having no paycheck?
If you answered less than one month, then, quite frankly, you've done a lousy job of managing your money. I'm not sure how you take care of patients if you're that irresponsible with your own matters. You should probably hire Suze Orman — I can just imagine what she would say to a doctor who calls in to her TV show.
If you answered six months or less, then it’s likely you will be working until your second foot is in the grave. And
also out of
the question. You will continue to sacrifice your life for the government, lawyers and
everyone else who has their hands in your pocket and who make the practice of medicine so difficult today.
If you answered one year or less, then, at least, you're just starting to get somewhere. My physician friend, I might have a teensy bit of hope for you.
If you answered five years or more, then you're headed to the driver's seat! Start thinking about kissing those nightshifts and weekend shifts goodbye. Give the finger to all the medical bureaucrats who control the strings that dangle you like a puppet. Then tell them, "I'm not putting up with your nonsense, because you can't touch me anymore!"
Oh, and whisper to your physician colleagues who continue to slave away while being miserable, "Psst. I'm done! See ya!”
The point is — the longer you can go without income, the better your financial position is. And I’m not just talking about doctors entering retirement. It also applies to you in the middle of your career and even after you just get out of residency.
The longer you can go without income, the more options you have in your life.
So there you go — a simple way to determine whether or not you're financially secure as a physician.
Figure out where you fall on this spectrum and get your financial life in order so you can move yourself from being a one-month tadpole to a five-year financial beast.