Financial Considerations for the Student Doctor

By James M. Dahle, MD, FACEP
Editor of The White Coat Investor

I first started reading SDN as a medical student, more than a decade ago. In medical education, some of the best advice seems to come from those who are one year ahead of you in the medical education pipeline. SDN allowed me access to more people ahead of me in their training (and the very useful information they would provide) than I could find playing foosball in the lounge at school. As I progressed through the pipeline, I found myself receiving less and less information and dispensing more and more. As residency becomes a more distant memory each year, I can assure you there is light at the end of the tunnel. Residency is survivable. You will eventually feel competent in your specialty. You will make great friends and actually save some lives. Those five-figure paychecks will eventually start rolling in, and if you manage them well, will provide you a comfortable life and retirement.

Get A Financial Education Too

One thing I realized shortly after graduating from medical school was that despite my best efforts, I knew little to nothing about business, personal finance, or investing. These subjects tend to be taught in the school of hard knocks, rather than medical school, and in many ways doctors in the pipeline are completely insulated from the situations that teach this information. Doctors have to actively seek out this information, or like most, stumble through life without it. Resolve now to take just as good of care of your finances as you do of your patients. It will help you to have a happier life, and be a better doctor. I started a free website called The White Coat Investor ( a couple of years ago that will help you to become financially literate.

The Situation Seems Bleak

Many older physicians grumble about their financial situation. They complain about the effects of PPACA, EMTALA, and RAC audits on their income. In many specialties, inflation-adjusted income is down dramatically over the last few years and is projected to continue to fall. To make matters worse, medical school tuition has continued to skyrocket. In-state tuition at my medical school was under $10,000 when I started, but just 15 years later is nearly three times that high. To make matters worse, despite our low-interest rate environment, up until recently it was impossible to get medical school loans for less than 7-8%, and they couldn’’t be refinanced at lower rates after graduation. Subsidized loans have also disappeared for medical students, and deferral of loans in residency is no longer possible. $300,000 in student loan burden is no longer unusual, and two-physician couples may now start their careers with debt burdens approaching three-quarters of a million dollars. Tax rates on high earners have also increased in the last few years, leaving you less net income to pay down those non-deductible loans.

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