While you might be spending time reading this article, I’m sure you’re extremely busy managing medical school and the countless hours that it entails with barely any time for other things, particularly for focusing on your money and how it is invested. That perspective needs to change as you begin your career and start generating income; after all, the old saying still stands, it is not what you make, but what you keep. What you keep, to a large extent, is up to you. And if you are graduating with school debt, financial planning becomes even more important, because now you will begin to have the means to more comfortably address and maintain it.
Now I’m not going to use this piece to tell you how to spend your money because we all have different habits and tastes, but I will emphasize the need for savings. Not everyone can save to the same extent and each of you will have different income levels in the years to come but treat savings as hugely important. Savings, for example, provides financial security and the ability to buy things such as a home or a 529 college plan for a child. It provides the opportunity for you to travel and enjoy things without guilt. It also allows more confidence if you need to still service personal debt and provides a cushion for a rainy day. As for debt that you may incur outside of school debt, view it as something that just allows you to consume today what you could have saved for tomorrow. I prefer having as little debt and as much savings as possible; I recommend the same for you. Lastly, developing a habit of savings will facilitate discipline in your financial behavior.
This then begs the question of how best to save. What I recommend here is utilizing a financial advisor whom you trust and fully understands your financial situation and stage in life. There are certainly many do it yourself approaches that people take; however, investing and planning is not easy and should not be treated as a hobby. Just as I’m not going to treat or operate on someone because I lack any medical training and didn’t go to medical school, I advise you to get the outside help of a financial professional.
You might, however, have particular insight into medical product companies and biotechnology breakthroughs that you are interested in investing in, if able. Use that knowledge and work with an advisor on how best to implement your ideas. There are always investing ideas all around us every day, but I recommend sticking to your area of expertise.
Your life has been hectic over the past few years, but will only get busier as you balance a career, a family and a social life. Having the right financial advisor and, most importantly, a financial plan that best suits you and your risk tolerance, along with your time horizon, will allow you to better focus on daily life. I do want to emphasize here the importance of ‘time horizon’ because it is your secret weapon in the investing world. While your are young, you have many years of time to earn, save and invest. Work to watch that combination grow. Do it smart, get help, play it safe and watch the wonders of compounding do its thing.
