By Katherine Vessenes, JD, CFP®

What are two money tips that successful doctors have for younger doctors?

Two of our clients, Dr. Andrew Caraganis and Dr. Emily Van Kirk sat down with Katherine Vessenes, CEO and Founder of MD Financial Advisors, to answer this question. Drs. Caraganis and Van Kirk have been working with MD Financial since their residency days in 2012. They have learned a lot throughout their financial journey and wanted to share some tips to help the next generation of doctors. Read the transcript below.

The following transcript has been edited for clarity and grammar.

Katherine: Today we're going to be doing a very special segment called Quick Financial Tips from Your Colleagues. I have two fabulous guests here who are very precious to me, Doctor Andrew Caraganis and Doctor Emily Van Kirk. Welcome!

Dr. Caraganis & Dr. Van Kirk: Thank you!

K: I'm very thrilled to have them. Welcome back to More Money Minutes for Doctors as you know I'm your host Katherine Vessenes. I'm the CEO and founder of MD Financial Advisors.

K: Let's get started! Andrew, tell us about your specialty and how many years you've been in the practice.

Dr. C: I’m a pulmonary critical care physician working here in the Twin Cities. I have been out of fellowship now for close to seven years. I do both pulmonary and critical care at a large trauma one center. We've been working together going all the way back to when we were in residency in Providence, Rhode Island.

K: Since 2012 to be exact.

Dr. C: 13 years!

K: Can you imagine? Before kids! It’s been a really, really long time.

K: Emily tell us about you.

Dr. V: I'm internal medicine. I have done hospital medicine here in the Twin Cities for over 10 years.

K: Now where did you guys meet?

Dr. C & Dr. V: Medical school

K: I have never told you this, but there's something very special about that first day that we met. You had just come off your summer vacation, and you had done all sorts of research into public service loan forgiveness, and you laid out all the research for me. I was completely flummoxed that that's how you would spend your summer and at the level of detail and research that you had done. But, the big thing that you did was you let me know how badly doctors needed this help, how much they needed debt relief from having medical school loans. I've never said this to you before, but thank you, because that's one of the services that we now offer. I really owe it to you for spurring us on to be able to do that for other doctors.

K: Alright, let's talk about our first question. Do you have two money tips that you would give to younger doctors?

Dr. C: Something that Emily and I both think is a big focus on a month-to-month basis is having an idea of what your budget is. Obviously that budget changes based on what money is coming in, whether you're in residency or as an attending. Having an idea exactly what your budget is so that you know where finances can go is an important thing

Dr. C: Secondly, if you're able to get into public service loan forgiveness- get into it. It's a huge savings. Although it's a 10-year process working in a not-for-profit organization, we both just got our loans forgiven here in the last six months. Find out more about that, see whether you qualify, and get enrolled.

K: That was a painful process for you guys. I can remember the day you were in my office in Rhode Island telling me that Roger Williams was no longer a not-for-profit.

Dr. C & Dr. V: Yeah, we lost a few years. We did. Yes.

K: That meant some extra years, and we just had to work around it. That was an ugly day. I remember we went through the options, but you didn't want to switch residency programs.

Dr V: It's very hard. It's almost impossible to do that.

K: Right, so we just had to tough it out.

K: Emily, what about you? What are your two money tips for younger doctors?

Dr. V: The two things that I think of are pace yourself and everything in moderation. I think a lot of times when you come out of residency, you feel like you have to catch up. You have friends who are not physicians who have been making money for a while and so you feel like you need to get up to speed and that is a recipe for burnout. You will get there. You will catch up, but do not put the pressure on yourself right up front to try and get there.

Dr. V: Also, everything in moderation. When we were in residency, we were still able to save for a down payment on a house, but we still did things that we wanted to do and enjoyed living in Providence. We still made an effort to go out to eat once a week and you know enjoy the local cuisine. We still did vacations. You are able to still live your life and enjoy things, but you can save at the same time.

K: That’s so huge. You can still have a great life and save at the same time. I see some doctors getting into trouble because they think very sequentially. I have to do this first and then I can start saving and somehow that savings never ever happens.

K: The other piece that you kind of hit upon is “act your wage”. Yes, I've got neurologists or emergency medicine doctors that are making $400,000 or so a year, which, let's face it, is a lovely income compared to a lot of America, but it is not the income of an orthodontist who's making $1,500,000 per year. So those doctors are usually not able to put their kids through private school and still do polo and still join the country club and whatever else because they just don't have enough revenue to do that. I love your approach.

K: Emily I'm going to start with you. What are two things that you're doing that make your financial life easier, simpler, and less stressful?

Dr. V: Well, first and foremost we work with you so that helps us. I think it's always good to have a sounding board and someone you can ask questions to. Even if it's something simple that comes up, shooting off an e-mail and getting a question answered. A big thing came up recently with Fidelity and not being able to have direct management of their accounts anymore. On my own, that would have been very problematic, but I was able to have a video conference with Josh and get it done quick and easy. I think that that’s super helpful.

Dr. V: I think a little bit back to what Andrew said for money tips is having a budget and having an idea of where your money is going- knowing what bills you have and making sure you do have the concept of it.

K: Yeah, that's another thing that we started doing fairly early on. We’d be recommending to clients that they do an inexpensive disability policy or life insurance policy and then I noticed the doctors would kind of blink at me and go, ‘Well I don't know if I could afford $100 per month’. It showed me that they really had no idea where their money was going. We've added as part of our onboarding process we actually have a meeting with clients now to go through their budget. They know where everything is going now. We often never circle back to it but at least it gives them a framework once for what they're doing and so they can see how much they can afford for vacations or the new car or what have you.

K: Alright Andrew, your turn to chime in.

Dr. C: We did not coordinate answers, but obviously having a financial advisor, working with you for the past 13 years, is one of the things. I have very little knowledge in this field and so being able to have somebody who can take away all the stress of having to sift through where money is going in terms of brokerage accounts or retirement accounts. Not having to worry about that obviously makes life much less stressful.

Dr. C: The other thing, specifically for us, is having one person in the house, in this case Emily, that has an idea of exactly where the money is going. We will communicate back and forth where there are pressure points but having somebody to know exactly where your money is going can avoid surprises at the wrong time.

K: Yeah, I agree. Every household needs at least one person, if you can't give both of you. At least one person that knows where everything is going.

K: I'm so grateful that you guys would say those kind things about us. I didn't ask you to say that as you well know, but it really means a lot to me.

Dr. V: I think I said this to Andrew before, you hire an accountant because they majored in accounting and they know how to do that. We did not major in accounting, but people come to see us in the office because they don't know how to manage their COPD or their diabetes and that's what we learned how to do. You seek the people with areas of expertise.

K: Thank you and that’s very kind of you. I totally agree with that.

K: My last question, is there anything you wish you had done differently? Andrew, you said there was actually something you wish you had done differently.

Dr. C: Yeah, this goes back to medical school. Emily and I both went to medical school in the Caribbean and cost was significantly more in some respects. We ended up taking out loans to cover housing, tuition, books, and whatever. I was in my young 20s, not having any idea that taking out the max amount of loans was the wrong idea. You want to make sure you have enough money to cover all expenses but, if you're very frugal up front, say take out just enough to cover the basic means, you'll be left with far less student loans down the road. Certainly, if I had been a little bit more thoughtful, that's probably something I would have done differently. We've talked about there should be some sort of class in medical school about finances and how to manage this stuff when you've never had to do that before. Regardless that the loans were eventually wiped away, there was a considerable amount of capital that went into paying down those months.

K: And a fair amount of stress!

Dr. C & Dr. V: Right! 100%!

K: I could feel your stress as we were trying to work through, and part of my goal was to make it less stressful. At least we had a plan. I really fault medical schools with this because I think those young doctors come in with the idea they’d be making so much money later that these debts are going to be really easy to pay off and they haven't actually crunched the numbers to realize what a huge portion of their salaries could be going to pay these debts.

Dr. C: For sure

K: I mean I've had clients that are paying $4,000 or $5,000 a month to pay off medical school.

Dr. V: Oh at least, yeah.

K: And maybe you've got colleagues paying even more.

Dr. V: I would say there's even more, yeah.

K: That doesn't leave a lot leftover, even when you're earning a higher salary.

Dr. C: Right

K: I agree with your point so much Andrew. If you could live a little more frugally early on, it saves a lot later and particularly when the student debts are at such a high interest rate.

K: Well, thank you so much for being candid and honest and helping out our audience with your own personal stories. I really appreciate that.

K: Takeaways today- look for budgets, yes you can be more frugal, plan ahead, have somebody in your household that manages finances, work with a trusted advisor because they can help pull all of this together for you. Did I miss anything in the summary?

Dr. C & Dr. V: I don't think so

K: Awesome! I forgot to mention early on something that our friends at the SEC want me to tell you. First of all, this is just an educational program, our podcast. I have not paid Andrew and Emily anything to get them to do this today. I didn't offer any bribes or give them anything of significance. I did take them out to lunch, but they were being the frugal people that they are, they asked me to go to a noodle place, so it was a very cost-effective lunch. Other than that, is it fair to say that I have not given you anything to be on this podcast?

Dr. V: Correct

Dr. C: Not to my knowledge

K: They're just doing this out of the goodness of their hearts, and they just have such a passion, like I do, for helping doctors with their finances.

K: In closing once again remember to follow us on social media and if you have any questions at all you can reach out to us at info@mdfinancialadvisors.com. Remember take care of yourself; plan, protect, and prosper.

Listen on Apple Podcast, Amazon Music, or Spotify.

1-888-256-6855

Remember that you can send us any questions at: Info@MDFinancialAdvisors.com

Katherine Vessenes, JD, CFP®, is the founder and CEO of MD Financial Advisors who serve 600 doctors from Hawaii to New York. An experienced 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.

This presentation is not an offer or a solicitation to buy or sell securities. The information contained in this presentation has been compiled from third-party sources and is believed to be reliable; however, its accuracy is not guaranteed and should not be relied upon in any way whatsoever. This presentation may not be construed as investment, tax or legal advice and does not give investment recommendations. Any opinion included in this report constitutes our judgment as of the date of this report and is subject to change without notice.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website, here. Past performance is not a guarantee of future results.