I Graduated Fellowship. Now what?

This past weekend I officially graduated from pulmonary and critical care fellowship.  It was a tremendous achievement I was able to share with my friends and family.  After all the blood, sweat, and tears I am finally…finally finished with training.  A decade after completing college, I am able to start my practice as a specialist and achieve a ‘real doctor’s salary’.  At the time of writing this article, the novel of graduation has faded.  I am left deciding how I will use my time and income as an attending.  I graduated fellowship.  Now what?

Update the budget

I have decided to take a few weeks off before I return to campus as faculty.  During this ‘staycation’ I plan to prepare for my next stage of life.  Starting my attending career feels daunting.  I am fortunate to be surrounded by clinician educators I now get to call colleagues.  Unfortunately, this has not mitigated the ‘imposter syndrome’ I have developed.

With my vacation time, I want to review my budget and update it to reflect my new income.  It will be exciting to have a salary to match my wife’s (emergency medicine attending).  With our dual physician income, we will now be more energized than ever to tackle our financial goals!  Naturally, the first step in that process is to update our family budget to reflect my new income. 

I have created a FREE Microsoft Excel budgeting tool that I currently use for our family budgeting.  This is the exact same tool that I offer to anyone who subscribes to our site.  My goal is to avoid lifestyle creep.  As such, I hope there will not be many expenses to update, but only through an accurate and transparent budget can I grasp the reality of our new financial footing.

Evaluate my emergency fund

Another important aspect of preparing myself for life after fellowship is evaluating my emergency fund. Even though I work diligently to prevent significant lifestyle creep, my lifestyle will inevitably increase as my family size does.  With a baby at home and another on the way, our family will double in size within 15 months.  Our grocery expenses, gasoline expenses, and childcare costs have grown proportionally.  

An emergency fund is meant to be a readily accessible amount of money poised to help prevent financial ruin should unforeseen expenses arise.  With inflation reaching record highs, budgeted expenses are increasing.  It is a great time to reflect on the amount of money I have in my emergency fund, and if it continues to meet my needs. 

I have always advocated for an emergency fund to maintain 3 to 6 months’ worth of living expenses.  Currently, I have roughly $30,000, or 3-months living expenses in my emergency fund.  However, with the current economic uncertainty I have given more thought to increasing my emergency fund to $60,000 (6-months living expenses). 

One reason I wish to increase my emergency fund is to feel more financially secure against disaster now that I have two children reliant on our income stability.  Secondly, it will be nice to match inflation for the time being.  As inflation abates and a potential recession ensues, it will be nice to have a portion of my emergency fund ready to either pay off debt or be utilized as an opportunity fund.

If you want more information about emergency funds, click here.

Review my financial plan

My wife and I wrote a comprehensive financial plan while we were in residency.  Since that time her salary has increased and I have moonlighted extensively.  We have been able to execute our financial plan.  As we begin to reach our combined income potential, we will need to review our financial plan and discuss what tasks are completed and which ones take priority. 

Having a comprehensive financial plan is incredibly important.  A financial plan acts as a road map for your financial goals, both long and short term.  A well written financial plan can keep you from deviating too far from financial prosperity.  Part of maintaining your financial health is continuing to review this document. 

I have previously written a post called How to Write a Financial Plan.  This article exposes my family’s personal financial plan.  This plan reveals how we prioritize our spending, what goals take priority and why.  During my vacation time I plan to have a financial dinner date with my wife.  We can review our plan and tailor it where appropriate.  This will keep us both invested and supportive as we continue to put more and more money towards achieving financial freedom. 

Make sure I have enough insurance coverage

Insurance coverage as you exit training is critical.  If you were smart, you would not have waited until residency/fellowship graduation to get disability or life insurance.  However, if you find yourself in this predicament, do not fret.  The best time to get life and disability insurance is at peak health during residency.  The second-best time is now!

I was able to find competitive pricing for long-term disability insurance while completing residency.  I chose ‘own-occupation’ long-term disability insurance.  Now that I have an attending employment contract and a documented salary, it is important that my insurance policy reflects this.  I was also fortunate enough to ensure I had riders in place that allow me to increase my reimbursement to be reflective of my anticipated salary.  There are certain riders that are absolutely necessary (in my opinion) for your long-term disability insurance policy to remain relevant.  The White Coat Investor wrote an extensive article on this exact topic.  I suggest you check it out here.

Life insurance is also critical.  I generally recommend avoiding whole life insurance policies.  I have elected to purchase a term life insurance policy.  We currently have a $2,000,000 policy in the event of my death.  However, at this transition point in my life, it would be wise to review that policy. 

Lastly, an umbrella insurance policy is important as well.  Umbrella insurance policies cover pretty much everything else.  These are relatively cheap too.  Your malpractice insurance will likely be through your employer (unless you are self-employed).  Obviously, malpractice insurance is important.  Tail coverage is often covered by employers as well, but it is important to confirm these policies are in place.    

Avoid lifestyle creep

Lifestyle creep can take a significant bite out of your attending salary.  Many recommend limiting your lifestyle inflation to 10% of your net pay increase.  Meaning if you get a $100,000 pay raise, limit increased annual spending to $10,000.  This leaves $90,000 for increasing retirement contributions, investing, and debt elimination. 

I will be transitioning from a fellow salary of approximately $62,000 to an attending salary of $275,000.  This is an increase of $213,000!  A 10% lifestyle expansion would allow roughly $21,300 annually, or an extra $1,775 a month.  That could make a significant difference in my budget.  This can afford an extra date night.  This money could mean more activities for my children.  It could even go towards further debt elimination. 

There is a tendency for physicians to expand their lifestyle to meet their income.  This is how physicians make six-figure incomes and still live paycheck to paycheck.  I will work hard to make sure I am not blinded by dollar signs and remain focused on my financial plan.

Eliminate debt as fast as possible

As many of my readers know, I am incredibly debt averse.  I was able to negotiate for my employer to pay for my student loans.  This was a huge relief and will likely alter my financial plan to an extent.  Having my employer pay my educational debt also affects the rate I start to build wealth.  Currently, my wife does not receive loan reimbursement, therefore her loans will now take priority. 

Previously our plan had been to eliminate my wife’s debt then focus on elimination of mine.  However, now that I will have my debt paid for over a 5-year period, it opens up the ability to focus on wealth accumulation and savings earlier than expected.  Eliminate my wife’s debt as fast as possible then invest the rest.  Check.

Save, save, save

Another important financial goal is to save.  As I have written about previously, this should be automated.  You should be ‘paying yourself first!’  The aspects of our finances that remain automated include our retirement contributions, our monthly investments, our holiday savings, and our student loans. 

In life, there are commonly a few large purchases on the horizon.  Maybe you are planning to upgrade your home?  Maybe it’s time to purchase a new vehicle.  Whatever it is, these are never purchases to make on a whim.  You should plan ahead, have a realistic idea of the purchase cost, then save with regularity until you can make that purchase in cash. 

For our family, we would love to own electric vehicles in approximately 5 years’ time.  When will we start to save for this?  The moment we eliminate my wife’s debt.  We will likely start a small, short-term investing fund that will house the money we plan to use to purchase these vehicles.  We will automate this process as well.  Seeing as we are not rushing this purchase, we can automate the process and make it stress free!  Worst case scenario, we need a car emergently…well that is why you have an emergency fund my friend!

Make a splurge purchase

Everyone keeps asking me, ‘what are you going to buy now that your making ‘real money?’’  This question always makes me laugh.  You can tell in their expressions they are expecting my answer to involve some ‘big ticket item.’  A brand-new Tesla Model 3?  Remodeling the home?  Taking a lavish vacation? 

Unfortunately, my answer is more conservative.  I might buy a new TV.  I might. 

I am very content with where my life is currently.  I have a roof over my head.  I live in a nice 3000 square foot home.  It has a garage, a second story, and enough room for everyone.  We honestly don’t need much more right now.

Sure, there are things I would fix.  The interior of the home needs a new coat of paint.  I would love to turn the garage into a gym space, with room for my grill equipment and tools.  Yes, the bathroom could use a remodel and so could the landscaping.  Yet, all of these things are wants, not needs.  We will get around to making these upgrades eventually, but I do not want anything to stand in the way of our primary goal; debt elimination.  Doubling our household income offers a ‘turbo charged’ option for that goal… I plan to use it. 

Fall back in love with medicine

The past three years in fellowship have been taxing.  No one who started training in 2019 would have imagined the following three years would include a global pandemic, a healthcare staffing shortage, drastic swings in national opinion of healthcare workers, and a volatile financial market. 

The last three years have not ‘blown by’ as expected.  Yes, the reality of time is fleeting, but in the healthcare field, on the front lines, it has felt like an eternity.  The final three years of my subspecialty training have been challenging and stressful.  The repercussions of this stress on my professional life have slowly creeped into other aspects of my life.  Aspects that I work tirelessly to protect.

I want to use these next few years to re-discover my love for medicine and the critically ill.  Choosing a career in academic medicine, I have a team of medical house staff working alongside me, allowing me the opportunity to take a more hands-off approach.  I can educate the next generation while still honing my personal practice.  I have missed this.  Over the past few years, I feel like I have been banging my head against a wall just to make this moment of reprieve feel all the more enjoyable.   I’m ready to fall in love with medicine again. 

Protect my time

Last, but certainly not least, I want to learn to say ‘no’ again.  I have spent the past decade ‘playing the game.’  Always saying ‘yes’ to any offer.  I have piled more and more on my plate in the name of academia.  ‘Of course, I will work on that research paper with you.’  ‘I would be happy to give another lecture to the medical students.’  ‘Oh, you need more night coverage, I can help!’

Being a team player is critical and I wish to continue to fulfill my role as a member of an academic division.  But gone are the days where I default to ‘yes.’  My time is too precious.  I have a wife who works just as hard as I do.  I have a baby at home and another on the way.  We have two energetic dogs and a lifetime of memories to make as a family.  A career in medicine has jaded my outlook on life.  I need to continue to say ‘no’ to more so I can say ‘yes’ to what matters. 

Happiness studies continue to reach the conclusion that social interactions (time with loved ones, and family) bring the most joy in life.  By necessity, I have had to be selfish with my time so I could achieve the accolades I have in my training.  It is time to focus on others.  Giving my time, my attention, my love, and even my money!  I want to put my children to bed.  I want to see my family in the morning.  I want to take them to swim, music class.  I want to surprise my wife with date nights and concerts!  It is time I give back to the loved ones who supported me, patiently and consistently for the past 30 years!

Take home points

I have been fantasizing about the end of my medical education for years.  The money, the power, the prestige!  Now, in my mid-thirties, surrounded by a growing family, with a heart overflowing with love…all of my fantasies seem petty and insignificant. 

The most important things in my life are now relationships, time with family, friends, and making memories.  Yes, money plays an important role in how I achieve many of these ‘import things.’  I even wrote an article for my children on how I plan to educate them about money!  Clearly personal finance is important to me.  As important as money is, it is strictly a means to an end.  I will continue to self-educate, write, and collaborate on all thing’s ‘physician finance.’  That’s because this brings me joy!  I want to use my family’s financial superpower to eliminate debt and build a nest egg so I can free up more time for what matters.  As always…

Stay Motivated!

The Motivated M.D.

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