New Year, New Approach to Finances
With the new year comes new year's resolutions. My recommendation for all FITs is to make one of this year's resolutions to take a more active role in your finances. There are a lot of ways to do this, with a lot of recommendations out there. Many physicians have taken it upon themselves to give these recommendations whether with books, podcasts or on social media. I think before you take advice on what to do with your money you should take an active role in knowing what is already happening with your money.
If you haven't been thinking about your finances, now is the time. When it comes to anything new, the easiest thing to do is start simple. When I started residency, I did not have any financial knowledge. I had, like many residents, significant debt from medical school tuition. I had signed my contract to begin residency and started to concentrate on board exams and making sure I was an adequate physician. This certainly took all my energy, but like everyone else, money was being taken out of my paychecks and subsequently invested into some retirement account. I had no idea what company that account was with, what funds my money was being invested in or how much my employer was contributing. One day when speaking with my now wife about money, it dawned on us we had no clue what we were doing, and it was time I took a more active role.
I have a long drive to work so my approach was to get financial books on Audible. This set me on a path to listening to numerous financial audio books. I know I still have a lot to learn but I feel much more optimistic about what to do with my money and how I am going to approach this in the future when I am an attending physician. Now listening to many audio books is not starting simple. My initial recommendation when starting simple is to consider what is already happening with your money.
When speaking with residents and fellows at my hospital, most are not aware of what type of retirement fund their money is in and are not familiar with how it is being invested. A nice simple introduction to finances is to just take a look at your retirement fund. Browse what company your money is invested with and what type of fund the money is in. You don't need to know anything about finances to do this, but it will allow you to get a glimpse of some of the vernacular used in the financial world.
Why is this a good starting point? When I first started my dive into financial literacy by considering where my retirement money was going it made me curious enough to learn about different retirement accounts, different types of contributions, and different types of investment funds. It also gave me just enough information to recognize terms being used in the books I would listen to. From here I have taken on a much larger role in what is happening with my finances and have set myself up to plan for the future and allow myself not to be taken advantage of after training. This is my hope for you.
- Explore your retirement account, noting the type of retirement account, the company managing the money, and the funds the money is being invested in.
- Consider introductory financial books. Here are some recommendations:
- Common Sense on Mutual Funds by John C Bogle
- The Bogleheads' Guide to Investing by Taylor Larimore
- The White Coat Investor by James M Dahle MD
- A Random Walk Down Wall Street by Burton G. Malkiel
- The Investors Manifesto by William Bernstein
- The Intelligent Investor by Benjamin Graham
This article was authored by Colby Salerno, DO, an FIT at UMass Chan - Baystate Medical Center. Twitter: @drcsalerno
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