Real Doctors. Real Conversations.
Feeling overwhelmed by student loans, unsure how to invest, or wondering when you'll finally achieve financial freedom? You're not alone. Here, we explore the real-life financial journeys of physicians at every stage of their careers. Each story case study dives into their challenges, strategies, and ultimately, their path to financial well-being. By learning from each others triumphs and missteps, you’ll gain insights and practical tools to navigate your own financial journey.
4 IMPORTANT FACTORS THAT DETERMINE FINANCIAL SUCCESS
Achieving financial success is not just about luck or a high-paying job. Building a secure financial future requires a solid foundation. Below I have explored four key factors that can significantly increase your chances of financial success. Whether you're just starting your financial journey or looking to refine your approach, these tips will help you to make informed decisions and control your finances with confidence.
ARE HEALTHCARE COSTS SPIRALLING OUT OF CONTROL IN CANADA?
This is a common refrain I have heard regularly for several decades. The facts are obscured by a flood of numbers which can confuse even the few individuals who are both financially literate and familiar with the complexities of Canadian healthcare economics. An oversimplification which still captures the essence is something like this:
Shane was Advised to Set up a Corporation
Three years into his practice as a nephrologist, Shane’s accountant pointed out that most of his other physician clients were incorporated and he should do so as well. The explanation was a blur of figures and jargon which this brilliant kidney specialist was embarrassed to admit did not make much sense to him. He asked if we could review the proposal.
Jennifer Wants to Ensure Her Children’s Education
As is true of many professional couples, Jennifer and her partner delayed having children and now approaching 40, they have two daughters under the age of three. Her husband is obsessively interested in finances and pontificates endlessly about “risk adjusted rates of returns” and other arcane jargon that mean nothing to her. However, she is determined to provide for her daughter’s education and wants an intuitively simple plan.
Ralph Really Likes Real Estate
This mid-career physician moved from Vancouver to a smaller city in BC after residency arguing that only someone of his father’s generation could sensibly afford real estate in that city back in the seventies. His generation were better off in somewhere like Vernon in the 90s and he predicted that his children might be advised to pick a different province if they hoped to one day be homeowners. He was now close to paying off his mortgage and wanted to purchase more real estate as many believe it can be an easy road to financial success. I do not share this opinion as I did not experience constantly rising real estate values in small town eastern Canada. Even when living in the west, I always considered my home to be a place to live and raise a family and not as an investment. Finally, real estate is not highly liquid and can be sometimes very difficult to sell and thus frustrating and emotionally draining if you are in a hurry for some reason.
The Wealth Cascade: Insurance can be more than meets the eye
An Investor Takes a Position
Marnie is a highly successful and disciplined investor with a diversified portfolio of twenty stocks she has carefully chosen over many years. When considering exiting one of her positions and acquiring a new one, her approach is to make a list of companies that interest her and carefully analyze them based on standard metrics like market capitalization, dividend yield, profit margin, five-year growth rate, etc, etc and then chose one or two of the most promising for more detailed study.
Physician Nearing Retirement Wonders Which Assets to Spend First?
Cristina has always lived well within her means and has a considerable RSP balance as well as a fully funded TFSA. She also has a small investment account as well as significant assets in her corporation, and a partner with similar assets. They intend to continue their quiet lives in retirement perhaps sprinkling some of their good fortune on their six grandchildren.
Physician in Mid-Career Worried that he will not have enough to Retire
Jeff has been in practice for fifteen years and is generally considered the best local doctor in his field. He has entrusted all his investments to a wealth management team who have been very clear that he is not close to achieving financial independence despite solid returns on his portfolio. He contacted me to ask about taking a more aggressive approach including hedge funds, options, and shorting selected businesses and market sectors to “juice his returns”.
Fortunate Resident with Gift from Grandparents but no Time/Interest to Invest
Kabir comes from a family that has done well and highly values education so is one of the less than 10% who was able to complete undergraduate and medical school with zero debt. In addition, his doting grandparents gave him 120K to invest with the sole recommendation that he “speak with a banker”. Although relatively well off, Kabir has no personal experience with financial management so simply put the funds in the bank and asked an advisor in the branch to open a TFSA and “do something with the money”. The advisor told him that the maximum he was eligible to put in a TFSA was 90K and suggested that he start an RSP with the remaining funds.
Fourth Year Resident with Small TFSA and RSP and Wants a DIY Model
Maria had a well-paying job before Medical School and thus has investments managed at her old company and now only modest debts in her fourth year of residency. She is not impressed with the returns on her investments and wishes to manage them herself. We discussed her goals which included more direct control over all her finances.
Young Resident with Large Debt and No Assets - Case Study
Aleandro is a proud young man who declined any financial assistance from his parents beyond the small RESP they purchased for him as a child but never fully funded as they were well intentioned, but not financially adept. In his family, it was considered uncouth to speak about money matters and hence he was even a bit embarrassed to admit he was struggling, let alone ask for advice.
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