Over the course of your career as a physician, your income will change quite a bit. Compared to your days in residency, your income as a practicing physician can be double, triple or even more of what you used to make.
In general, earning potential for physicians is high, but it also comes with some risk. Here are some ways you can protect yourself throughout your career, and make sure you’re making the most of your income:
Physician Finances: Work with a Contract Attorney
Physician contracts can be tricky, even for experienced doctors. You should always work with a contract attorney when you’re thinking about accepting a new position.
Here are some items to pay attention to in your contract:
- Salary – Typically, your contract will state a starting salary and a bonus provision. That bonus might depend on the health of the practice, so be aware of that. Additionally, some contracts state that if you leave that position too soon, the sign on bonus might have to be repaid.
- Non-compete clause – This clause could be within a city, state or specific mile radius, and the time frame can vary, so pay attention to those details. Some clauses also state that you can’t also work for a telehealth company.
- Termination provision – This goes over how the employer terminates, and how a physician leaves the position.
- Negotiable provisions – Know which parts of your contract can be negotiated. Some common negotiable terms include time off, a signing bonus and student loan repayment.
When you’re looking for someone to review your contract, you should seek out lawyers who specialize in working with doctors. The American Health Lawyers Association is a good place to start.
(Note: Physicians who will benefit the most from working with an attorney would be anyone working for a hospital or facility, or who works as a contractor. However, if you work for the VA or a teaching hospital on a set salary schedule, you may not need additional help with your contract because it’s mostly pre-determined.)
Be Wary of Investment Offers
Many physicians are offered investments like ownership in a practice or real estate private partnerships. There can be a lot of temptation to take up these offers, especially if you hear about other doctors doing so with amazing returns.
But there can be a lot of pitfalls with these investments. To protect yourself and your finances, you can have a contract attorney review them, and work with a financial advisor to make sure you’re not getting in over your head.
Be wary of fraud and predatory practices
Anyone can be vulnerable to fraud, but because doctors are licensed, anyone can look them up. That’s why, as a physician, you should be particularly guarded about any fraud or predatory practices.
Some general fraud prevention steps include:
- Checking your credit report annually for any suspicious activity
- Checking your accounts regularly for fraudulent transactions
- Create more secure passwords, and activate two-factor authentication on your most important accounts
- Have all contracts and private investment opportunities reviewed by a lawyer before you sign
Physician Finances: Monitor Your Lifestyle
One of the biggest risks to a physician’s wealth is often their own habits. After years of school and residency and possibly scrimping to get by, it can be difficult to adjust to a much higher income. Managing a $50k income can be different than managing a $250k income, so reaching out to a financial planner or other financial professional can be really helpful as you adjust.
Lifestyle creep is a very real problem for many physicians, so check out my post about how to avoid it here: How to Avoid Lifestyle Inflation
About Your Richest Life
At Your Richest Life, physician-focused financial planner Katie Brewer, CFP®, wants to help you build a successful financial future. For more information on the services offered, contact Katie today.