Medical residents are universally lauded for their mastery of “delayed gratification,” and no one can fault them for wanting to play catch-up once the money starts rolling in.  But, the transition from medical student to MD is laden with some unique financial challenges that, without the tools to confront them, could postpone life’s ultimate gratification (retirement) well into the future.  Beginning a career ten or twelve years late with six figures of debt can place an enormous burden on new physicians who aren’t prepared to manage their finances with their future in mind.

Caught between the temptations to step up their lifestyles and to quickly pay down their debt, new physicians can find themselves running out of money without any consideration for savings. But then, they’re only at the beginning of their income potential and there will always be time for savings, right? Wrong.  The most powerful resource we all have for building wealth is time.  You really don’t have control over how much money you will make, but you do have control over how much time you have to save what you do make. The more time you have, the more opportunity you have to build wealth.

The “cost of waiting” is best illustrated with an example of two young physicians who choose two different timeframes for their savings program.

Linda invests $20,000 per year from age 25 to 45, and then stops contributing to her investments.

George doesn’t invest from age 25 to 45, but then invests $20,000 per year from age 45 to 65. 

Assuming an investment return of 6%, by age 65, Linda would have $2,500,000, whereas George would only have $790,000!


To accumulate the same amount of capital as Linda, George would have to invest $60,000 a year. His cost of waiting is  that he will have to invest an extra $800,000  in earnings to make up for lost time, and that doesn’t factor in the added cost of inflation and taxation over that period of time.

The takeaway from this is that new physicians already have to make up for lost time, so there is much less time to waste. Even in residency, physicians can begin saving. It is, therefore, vitally important to save early and save often.  To continue reading Section 1-Managing Your Personal Finances click here.


Though the views expressed above are solely the writer’s, Guthrie supports “The Dose with Dr. Goodhook” and is partnering with Adventures in Medicine to create an open, inspiring and insightful community for residents and physicians. Click here to learn more about ways that Guthrie is making practice purposeful.

 About the Author:  OmniMed Financial & Insurance works with physicians in all 50 states to plan for a secure future.  Common topics that physicians approach us about include own occupation disability insurance (with specialty wording), life insurance, college savings planning strategies, and other financial planning topics.  We also assist physicians with startup or existing practices to implement professional liability (medical malpractice), health insurance programs, retirement plans, and other financial strategies.  Joe Capone is the owner and founder of OmniMed and Rick Warren is a Partner.  Visit us at to learn more.

” Registered Representative and a Financial Advisor of Park Avenue Securities LLC (PAS) and a Financial Representative of The Guardian Life Insurance Company of America, New York, NY. Securities products/services and advisory services offered through PAS, a registered broker-dealer and investment advisor. OmniMed Financial & Insurance is not an affiliate or subsidiary of PAS. Life/Disability/Long Term Care insurance offered through OmniMed Financial & Insurance. OmniMed Financial is not licensed to sell insurance. Neither Guardian, nor its subsidiaries, agents or employees provide tax or legal advice. You should consult your tax or legal advisor regarding your individual situation.

PAS is a member FINRA, SIPC.
The Living Balance Sheet® and the Living Balance Sheet® Logo are registered service marks of The Guardian Life Insurance Company of America (Guardian), New York, NY.”