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Doctors, What is a Financial Plan? [Podcast]

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As you know, every doctor needs a plan when going into surgery, but it’s equally true that doctors need a plan when meeting with their financial advisor. Today’s podcast is all about financial plans; we will cover what should be included in a financial plan and what you need to know when you sit down with an advisor.

Here at MD Financial, we have an awesome team that puts together financial plans every single day. These change from doctor to doctor, based on their own personal finances, but generally the main topics are:

  • Budget/Cashflow Statement

    • A budget is one of the first items we tackle, as many clients have no idea what they are spending

    • This includes everything from housing costs, to savings, and fun money

    • We create a budget with our clients so that it feels maintainable

    • This budget gives clients a sense a peace about what we are doing

    • Caring for money is like caring for children; they need to be monitored and occasionally disciplined

      • A budget makes this process easy by emphasizing investing first—spending later

  • Insurance

    • We’ve already covered the options in previous episodes, but the next step in a financial plan is to look at life insurance and disability insurance—the two biggest risks

    • MD Financial looks into getting cheaper/group rates, but will ultimately find the best option for our clients

  • Debt Plans

    • Becoming a doctor requires a lot of school and training

    • Individualized plans to pay back debt

    • Loan consolidation

    • Loan payback plans (PAYE, REPAYE, etc.)– we’ll go more into detail on the different plan types in a future episode

    • For some doctors, debt plans can be created to get out of credit card debt

  • Retirement

    • What will it take to save to meet the client’s goal?

    • Our goal is to make sure our clients do not run out of money in retirement

    • Sometimes MD Financial will roll over old retirement plans into an IRA to manage all accounts in one place

  • Tax-Efficient Investing

    • What the right vehicles are - this can shave YEARS off of a retirement goal

    • Go through investment options, as many doctors will be in a higher tax bucket, EVEN AFTER retirement

    • MD Financial wants to help our clients save taxes today, and in the future

  • Planning Big Purchases/Costs

    • Some examples include: Children’s education, homes, cars, travel, long-term care of aging parents, etc.

  • Estate Planning

    • Federal estate tax rules/laws are going to expire soon, so we look at current plans

    • We work with Messerli & Kramer to create new plans, if needed

      • We want to make sure there is a good trustee, taking care of the funds

      • In most cases, kids should not be getting the entirety of the estate at age 18; there are several different trust distribution schedule formats to choose from

When clients have tried debt planning in the past, we have noticed a few common mistakes. To help those who maybe are considering getting a second opinion, here are a few of the top mistakes doctors make when considering their financial plan:

  1. Haven’t taken taxes into consideration

  2. Haven’t saved enough

  3. Haven’t taken inflation into consideration

  4. Haven’t considered tax rates

  5. Haven’t thought about ups and downs of markets

SOME GOOD NEWS!

In the near future, we are launching our new Financial Freedom Blueprint. This blueprint will help you compare where you are with where you want to be, on your path to becoming a financially successful doctor. Often we hear clients say things like “I’m saving so much more than my colleagues” and we are here to say “YES! That’s exactly what you should be doing!” We will go through the red flags that keep you from reaching your financial goals, and much more!

TAKEAWAYS

Our goal, at MD Financial, is to give our clients more time, less stress, less taxes, and more wealth. Sounds like a lot? We build each of our clients their own personal financial website to help keep track of all of this and see their money across all accounts in real time. There is a lot that goes into doctors’ finances, but our goal is to take that off our clients’ minds so that they can rest a little easier at night. We recommend giving your finances a welfare check-up if you haven’t lately. Remember that you can always reach out to us for a complimentary consultation.

Remember to follow us on social media. If you found this topic helpful, please forward it to colleagues. If you ever have questions or topic ideas for future episodes, feel free to email us at info@mdfinancialadvisors.com. Finally, you can reach out to us directly for a second opinion on your financial health, by emailing us at info@mdfinancialadvisors.com.

Listen on Apple Podcast or Google Podcast


CONTACT US

1-888-256-6855

Info@MDFinancialAdvisors.com

Katherine Vessenes, JD, CFP®, is the founder and CEO of MD Financial Advisors who serve 500 doctors from Hawaii to Cape Cod. An award-winning Financial Advisor, Attorney, Certified Financial Planner®, author and speaker, she is devoted to bringing ethical advice to physicians and dentists. She can be reached at Katherine@mdfinancialadvisors.com.


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