Financial Freedom for Doctors & Medical Professionals

And are you tired of running after financial freedom, struggling to pay your student debt even as an established professional doctor?

Physicians are not the only ones who can issue an Rx (prescription). This will be my financial freedom Rx to them. Whether they are junior professionals or senior professionals it’s never too early or too late to lay down a financial goal. Besides, money is a tool to gain more freedom.

As a doctor, have you ever found yourself in this kind of scenario as well?

Let’s face it!

Doctors are misunderstood when it comes to money or finances. Most people think that you’re high income earners (sad to say it comes with high tax as well) in fact, it’s true but mainly depends on specialization and level of seniority.

It isn’t until after spending years in medical school to earn their degrees, the whole residency system, and finally taking the requisite board exams that many physicians will enter the full-time workforce and start making the “big money”. 

At that point, there is so much delayed gratification and external expectation that “doctors are rich and has huge wealth” to buy a large house or fancy car.

      !!! Attention Doctors !!!
Pay 11% in overall tax rate as paid medical professional.

Here are my tax returns and in 2019, I paid ZERO in taxes.

Let me show you how!

"FYI, I just got my tax returns back. My effective federal tax rate went down from 29 to 15% in spite of the fact that my income doubled in 2020. All thanks to you and FOOM! It's helped me adjust my mindset, learn more about the tax code, and implement effective strategies."

Dr. Lee

Sure doctors make good money (more and more going to insurance companies- like dealing with disability insurance and admin), but most people don’t realize they work long hours. The burden of student loan debt, credit card debt, and payments on new houses and cars cut into their income, facing financial uncertainties, and make it hard for many to grow their wealth.

Additional downsides are malpractice suits. Stemming from negligence claims from misdiagnosis, superfluous patient claims, or untimely release. Side note (I am not a lawyer) I believe all doctors should have an international trust and not mess around with flimsy LLCs which I have seen getting blown up all the time or pressured into a bad settlement amount (average malpractice settlement amount was $350k per The National Practitioner Data Bank.)

 

With those in mind, here are five practical tips to help doctors and medical professionals achieve Financial Freedom.

5 Tips for Physicians to Achieve Financial Freedom

Set up a REALISTIC plan

You entered med school because you planned for it!

In reaching one’s goal whether it be in your career, relationship there must be a plan to set things up for success. The same goes with your finances, there has to be a financial plan (especially if you still have a student loan). Another TIP: Consult a financial advisor who can help you manage your personal finance if you have queries about life insurance, strategies to maximize your Roth IRA for your retirement plan, and all about financial literacy.  You have an option to join our syndicate as well. We talk about real estate investing, rental property, asset protection, estate planning, and how high income individuals like you can gain more cash flow and passive income.

Remember, as Benjamin Franklin once said, “If you fail to plan, you are planning to fail.

 

Stick to your plan NOT on your colleague’s plan

It’s easy to be disheartened when you compare yourself with others’ financial life. For some, this is a struggle, especially with the booming social media. 

I understand, you’ve been deprived for so long! You had a low salary as a trainee or resident, long hours of duty, always on call, no social life, and late-night work. Needless to say, you need to focus on your OWN PLAN towards a better financial future and be able to come up with suitable financial decisions.

It won’t be easy, but it’s achievable, with your determination and disciplined financial practices.

Take note, this won’t be forever!

Once you arranged your financial life, reached financial success, and (if possible) did your retirement planning, you’ll be grateful that you did it!

Invest on ASSETS & live WITHIN your means

Never live way beyond your means especially if you’ll be spending your money on liabilities rather than buying assets (real estate investment). Just because you’re earning more than you are used to, as a resident, doesn’t mean you’ll go all the way.

Think about having a comfortable retirement (perhaps an early retirement), what happens if there are scenarios that are beyond your control (disability, death, environmental disaster), being debt-free (or having good debt instead of bad debt), and reaching financial independence.

Save MORE than enough

This is connected to the previous tip that will benefit not only you (for retirement savings or you can become a business owner) but your family as well. If you still cannot afford a luxurious house, rent for the meantime then save and invest the others. If you’re planning to buy your dream Tesla car, afford a modest Honda/ Toyota and let your other money work for you.

Follow REAL experts advise

Beware of those who are pretending to be financial advisor claiming that they will help you obtain your financial independence, reap more money, and secure fiscal peace.

Don’t waste your money on them!

Check on their credibility, talk to some of their clients and ask them how they can help you.

Remember: Diagnose if you’re watching or talking to a real financial expert.

            Testimonial from Dr. Emmanuel                           (Doctor from Texas)

         Accredited Investor Coaching call                                   with Dr Kim

How Covid- 19 Capsized the Physician Job Market

You see, this pandemic caused a lot of difficulties to so many including doctors and medical professional. They are not spared! Trends you should know

  • Physicians are seeing fewer patients. 41% of physicians saw patient volume decreases of 26% or more.
  • Physicians are making less money.
  • They are making major staff reductions.
  • New physicians entering practice may not be able to get their first or second choice of employment opportunities, which was not the case a year ago.
  • More physicians have reached out to physician recruiting firms over the past six months than they’ve had at any time in recent history.

All in all, financial freedom is attainable for Doctors and Medical Professionals. Same as everyone else, who grow older and face the reality of mortality, physicians that get further into their careers will soon start to face the reality of their preparedness for retirement.

But again as I said it’s never too late to manage your money well, saving and investing it well (real estate investment), and build your wealth that is beneficial to you.

Remember, your time and money are valuable.

 

Video: Doctor Using Short Term Rentals for FI – David Draghinas from DoctorUnbound

Private equity commercial real estate offers cash flow, capital growth, and capital preservation are prime examples of assets consistent with personal and investment objectives.

These include:

  • Assuming responsibility for their timetables. By having the option to take additional downtime without agonizing over salary.
  • Opportunity from stress of how government and insurance agency strategies will influence their training and earnings.
  • Less stress over claims and other lawful consequences of rehearsing medication.
  • Needing to leave an inheritance and give generational riches that will last over different ages.
  • Having additional time and assets to serve others by adding to good cause and worthwhile motivations.
  • To discover fulfillment and satisfaction in building different organizations and associations outside of medication.

Besides immunity to economic downturns (COVID19) and inflation, private investments offer investors higher returns at lower risk than public options.

Tadah! Proof that it works!

Image (below): Hui member’s tax form for 2019. AGI of 429k and 47k taxes paid!

 

Case Study

I am trying to find a way, and need your insights, in becoming a Qualified Real Estate Professional in 2021!
 
Challenge #1: By law, I need to clock in more hours as an ACTIVE, RE Professional than an emergency physician i.e 51% vs. 49%. Right ?
 
Solution #1: I will be cutting back to 144 hrs/month as an EM Doc, starting on Jan 1st, 2021. So, if I “work” an additional 145+ hours/month (4.83 hrs/day) as an active, RE professional, I would qualify that part. Right ?
 
Lane (Not A CPA): You are partially right there you need to have 750 hours at least of active (a lot of exclusions there so I don’t want to just generally throw that word around) participation. Technically 49% or less of you time being a doctor is what you need but I would say as a best practice is for your spouse to be the person qualifying and not yourself if at all possible.
 
Challenge #2: I need to clock in 750+ hours of active RE professional work per year and I know that being an LP in any Nap Cap syndications or and researching any other PASSIVE investment does NOT qualify me. Right ?
 
Correct, you are not a managing member and do not have carried interest (not guaranteeing the loan or much skin on the line)
Solution#2: Do I have to become a state licensed real estate agent, in Texas, and start listing SMF’s to qualify for that active work or can you think of any other activity that may qualify me instead ? 
 
This has nothing to do with Active Participation in your portfolio. This is a common misnomer.
Solution #3: I have a friend who owns and manages his own, 40+ SFH’s, in 3 different states. If I help him manage these homes or help him look for future properties to purchase (and add to his portfolio), will that qualify me as an RE prof. ?
 
This has nothing to do with Active Participation in your portfolio.
 
Solution #4: Does becoming a GP in any future syndications qualify me as a RE Professional ? Will those future dividends/proceeds now become active income vs. passive ?
 
This might be a possibility here. Consult your CPA and coach them through your logic. This is where the Family Office Ohana Mastermind comes in where many people are educating and sharing best practices to set up their family affairs and bring their CPA/Tax professionals on board.

In general, remind me again, why can’t my passive gains in my ER Hospital ownerships can NOT offset, dollar for dollar, the K1 losses from my passive MFH syndications ?

Passive losses (PALs) can offset Passive gains.
Your time and money is valuable – often over $500-1k an hour!

Many of you folks have have some relationship with a financial planner, advisor, insurance agent, accountant, attorney, etc. When we take a holistic view of their planning, however, most are financially imbalanced. They are often exposed to unnecessary risks from embedded taxes, lawsuits, lifestyle factors, inefficient use of assets, etc. Failing to address all of these forces places downward pressure on their ability to build wealth.

Here, we bring together leading professionals in the fields of financial planning, taxation, law, practice management, succession planning, and client retention. This way, we can best assist our clients in addressing these issues and achieving optimal financial balance in their lives.

For a surgery to be successful, you need several team specialists available to address the various circumstances. Why would your unique planning situation be any different?

See how to work with us.

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