It is a common misconception that doctors are rich. It is true that attending physicians are amongst the highest earners in the United States, but they often do not accumulate significant wealth because they start their careers later in life, usually with a lot of debt. Further, the concept of delayed gratification can often lead to delayed retirement because of explosive spending as an attending. Physicians are smart, and they should consider allowing their money to work smarter and harder than they are. Many physicians do not receive formal training in financial planning, and thus are forced to learn by trial and error. Financial literacy can help physicians make astute financial decisions, and eventually achieve the peace of mind inherent to financial independence.

Q: Has the landscape of resources always been robust for physicians in terms of financial planning? Has it evolved and grown and if so, how?

A: With reimbursement cuts, rising overhead, and challenges brought forth by COVID-19, it is even more important to be a financially savvy physician. There is a growing number of resources available for physicians interested in continued financial education. Physicians can subscribe to periodic financial pearls from forums such as the White Coat Investor, Physician on FIRE, the Physician Philosopher, and Bogleheads. We encourage you to follow at least one blog, and also read at least one financial book a year.

Q: How can retina specialists access the right resources for financial planning?

A: As with anything, it is important to consider conflict of interest before trusting financial planning advice. Some financial planners might be more interested in selling you expensive products, rather than recommend what is in your best interest. We would argue that physicians are capable of managing most, if not all, or their finances, as long as they have the time and interest in maintaining financial education. The aforementioned blogs are excellent resources, as are numerous available books. Like learning to operate or practice medicine, it is important to learn from a variety of sources and pick the approach that is right for you.

Q: What kind of financial pitfalls do physicians and in particular retina specialists come across in their careers?

A: One of the biggest financial mistakes made by physicians is inaction. Doctors can be consciously or unconsciously intimidated by financial planning, resulting in their ignoring their finances or placing their financial eggs in the wrong basket. Common errors include speculative investing of a “hot tip,” angel investing, and hiring an excessively expensive financial advisor. Also, like many physicians, retina specialists can fall into the trap of instant gratification after so many years of training, owing to overspending before one has an opportunity to grow a portfolio. Starting with a balanced, frugal plan early in one’s career is an important step toward financial independence.

Q: What are some pros and cons of investing for retina specialists?

A: The biggest advantage of investing is growing wealth and harnessing the power of compound interest. Holding cash in a low-interest savings account will not keep up with inflation and the rising cost of living, so physicians are better off letting their hard-earned income work for them. Investing does not need to be complex. A relatively simple two-fund portfolio of a total stock market index fund and bond index fund should allow one to achieve slow steady growth over time, while also allowing one to rebalance their portfolio to become more conservative as retirement nears. Remember, it is time in the market, not timing the market, that matters.

The disadvantage of investing is it must be done thoughtfully and unemotionally. The first key to investing is understanding one’s time horizon. The longer you have to invest before you anticipate needing the money, the more aggressive you can be. In general, this means a larger proportion of your portfolio can be in stocks, as opposed to more conservative investments like bonds or cash. If one has a large upcoming projected expense, such a down payment on a house, there are safer, less volatile options to invest the cash, such as savings account or a high-interest certificate of deposit (CD). Second, the market will inevitably fluctuate. One must be disciplined to invest steadily over time rather than reacting to market changes. This is critical to avoid the classic mistake of buying high and selling low. We recommend automating your investments, so that a certain amount is invested every month or week. This way you purchase more shares when the market is down, and less if the market is soaring. Third, plenty of financial advisors will approach you to help you invest. While the majority of us could use some financial guidance and ongoing financial education, which can be provided by a financial advisor, it is important to work with advisors whose conflicts of interest are aligned with yours. Commission-based advisors might try to upsell you expensive financial products, that are not necessarily in your best interest.

Q: What one tip would you give to retina specialists along the continuum of their career from trainee to mid-career to retirement?

A: It’s never too early or too late to save, learn to invest, and protect your financial future. If you are a trainee, take advantage of your relative youth and allow compound interest to snowball your portfolio. Learn to budget early in your career. If you are a new attending, keep living like a resident for a few more years to aggressively pay off your debt and hone the mindset of saving. We encourage you to save at least 20% of your gross income, which should allow you to become financially independent in 30 years or so. If you are mid-career or later, focus on the big picture and do your continuing financial education with the same gusto as your continuing medical education. Read at least one financial book a year, and make sure your money works for you and your loved ones, rather than vice versa.