LIFEHACKING PHYSICIAN FINANCES Navigating the Financial Transition from Medical School into Residency COLIN WIENS, MBA, CFP REGIONAL DIRECTOR & SENIOR FINANCIAL ADVISOR LARSON FINANCIAL GROUP ADVISORY SERVICES OFFERED THROUGH LARSON FINANCIAL GROUP, LLC, A REGISTERED INVESTMENT ADVISOR. SECURITIES OFFERED THROUGH LARSON FINANCIAL SECURITIES, LLC, MEMBER FINRA/SIPC
Lifehacking Roadmap to Wealth 1. You’re making money! Now what?! 1. Key Financial Habits 2. Developing a Spending Plan 2. Investment Basics 1. Investing during Residency 2. Investing in yourself 3. The Financial Services Industry ADVISORY SERVICES OFFERED THROUGH LARSON FINANCIAL GROUP, LLC, A REGISTERED INVESTMENT ADVISOR. SECURITIES OFFERED THROUGH LARSON FINANCIAL SECURITIES, LLC, MEMBER FINRA/SIPC
Spending Plan • 5 Main Categories: 1. Giving 2. Saving 3. Living 4. Debt Reduction 5. Taxes ADVISORY SERVICES OFFERED THROUGH LARSON FINANCIAL GROUP, LLC, A REGISTERED INVESTMENT ADVISOR. SECURITIES OFFERED THROUGH LARSON FINANCIAL SECURITIES, LLC, MEMBER FINRA/SIPC
Spending Plan • Prioritize Savings: • Cash reserves (3-6 x monthly expenses) • Debt repayment plan • Bad debt • Student loans • Long term savings ADVISORY SERVICES OFFERED THROUGH LARSON FINANCIAL GROUP, LLC, A REGISTERED INVESTMENT ADVISOR. SECURITIES OFFERED THROUGH LARSON FINANCIAL SECURITIES, LLC, MEMBER FINRA/SIPC
Financing a Home Purchase • Consider renting during residency (minimum 5 year period) • $165,000 mortgage – 30 year fixed interest @ 4.5% = $836/month (+H/O ins +Taxes) • After 3 years = $8,850 in principal paid down • After 5 years = $15,135 in principal paid down • Estimated transaction costs = 10% = $16,500 - $15,135 equity = $1,365 loss • Consider how a home purchase will impact long term planning ADVISORY SERVICES OFFERED THROUGH LARSON FINANCIAL GROUP, LLC, A REGISTERED INVESTMENT ADVISOR. SECURITIES OFFERED THROUGH LARSON FINANCIAL SECURITIES, LLC, MEMBER FINRA/SIPC
Investing During Residency • Don't be bothered by not being able to invest during this season. • If you are able to do ANY long-term investing, maximize: • Matched employer retirement plans (403(b), 401(k), etc) = 50% or 100% rate of return • Tax-efficient investment accounts, especially tax-free accounts. • Roth IRA contributions • Max contribution - $5,500 per person. • Able to contribute to prior year, up to tax filing deadline. • Roth IRA conversions ADVISORY SERVICES OFFERED THROUGH LARSON FINANCIAL GROUP, LLC, A REGISTERED INVESTMENT ADVISOR. SECURITIES OFFERED THROUGH LARSON FINANCIAL SECURITIES, LLC, MEMBER FINRA/SIPC
Wait for Disability Insurance? $250,000 $227,896 Disability Insurance Strategy $200,000 You’ll likely spend 7 -12 years of training (plus the cost of student Increase @ 35 to $12,500 for loans) to go into practice: $130,845 family, kids, $150,000 etc Purchase Purchase • Physician Specific (specialty specific) Disability Insurance $5,000 as $5,000 post PGY I Graduation • Pays out a portion of your future income ($25,000/month of income may $100,000 pay out $15,000 - $17,000/month of tax-free income ) • Price is based on age/health when you purchased the policy $50,000 $0 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 Age 26 Age 33 ADVISORY SERVICES OFFERED THROUGH LARSON FINANCIAL GROUP, LLC, A REGISTERED INVESTMENT ADVISOR. SECURITIES OFFERED THROUGH LARSON FINANCIAL SECURITIES, LLC, MEMBER FINRA/SIPC
Disability Insurance – Own Occupation Double Dip 3 Principal, Guardian, MetLife Ameritas, Standard Not working 2 UNUM, Northwestern Mutual 1 Two Year AETNA, Hartford, etc ADVISORY SERVICES OFFERED THROUGH LARSON FINANCIAL GROUP, LLC, A REGISTERED INVESTMENT ADVISOR. SECURITIES OFFERED THROUGH LARSON FINANCIAL SECURITIES, LLC, MEMBER FINRA/SIPC
Financial Services Industry INSURANCE BANK/WIREHOUSE CONSULTANT Northwestern Mutual Edward Jones Independent Guardian Merrill Lynch (BOA) Advisor Principal Wells Fargo MetLife SunTrust FEES PAID BY YOU MassMutual NO KICKBACKS FROM COMMISSIONED INVESTMENTS COMMISSIONED INVESTMENTS INSURANCE
Thank you for attending … Colin Wiens Regional Director / Senior Financial Advisor (m) 407-760-3323 (o) 863-940-2820 Colin.Wiens@larsonfinancial.com
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