What is a Financial Plan? [Podcast]

Today’s podcast is all about financial plans. As you well know, every doctor needs a plan when going into surgery. Well, doctors need a plan when meeting with their advisor as well. We will cover what should be included in a financial plan and what you need to know when you sit down with an advisor.

As you know, every doctor needs a plan when going into surgery, but it’s equally true that doctors need a plan when meeting with their financial advisor. Today’s podcast is all about financial plans; we will cover what should be included in a financial plan and what you need to know when you sit down with an advisor.

Here at MD Financial, we have an awesome team that puts together financial plans every single day. These change from doctor to doctor, based on their own personal finances, but generally the main topics are:

Budget/Cashflow Statement

A budget is one of the first items we tackle, as many clients have no idea what they are spending

This includes everything from housing costs, to savings, and fun money

We create a budget with our clients so that it feels maintainable

This budget gives clients a sense a peace about what we are doing

Caring for money is like caring for children; they need to be monitored and occasionally disciplined

A budget makes this process easy by emphasizing investing first—spending later

Insurance

We’ve already covered the options in previous episodes, but the next step in a financial plan is to look at life insurance and disability insurance—the two biggest risks

MD Financial looks into getting cheaper/group rates, but will ultimately find the best option for our clients

Debt Plans

Becoming a doctor requires a lot of school and training

Individualized plans to pay back debt

Loan consolidation

Loan payback plans (PAYE, REPAYE, etc.)– we’ll go more into detail on the different plan types in a future episode

For some doctors, debt plans can be created to get out of credit card debt

Retirement

What will it take to save to meet the client’s goal?

Our goal is to make sure our clients do not run out of money in retirement

Sometimes MD Financial will roll over old retirement plans into an IRA to manage all accounts in one place

Tax-Efficient Investing

What the right vehicles are - this can shave YEARS off of a retirement goal

Go through investment options, as many doctors will be in a higher tax bucket, EVEN AFTER retirement

MD Financial wants to help our clients save taxes today, and in the future

Planning Big Purchases/Costs

Some examples include: Children’s education, homes, cars, travel, long-term care of aging parents, etc.

Estate Planning

Federal estate tax rules/laws are going to expire soon, so we look at current plans

We work with Messerli & Kramer to create new plans, if needed

We want to make sure there is a good trustee, taking care of the funds

In most cases, kids should not be getting the entirety of the estate at age 18; there are several different trust distribution schedule formats to choose from

When clients have tried debt planning in the past, we have noticed a few common mistakes. To help those who maybe are considering getting a second opinion, here are a few of the top mistakes doctors make when considering their financial plan:

Haven’t taken taxes into consideration

Haven’t saved enough

Haven’t taken inflation into consideration

Haven’t considered tax rates

Haven’t thought about ups and downs of markets

In the near future, we are launching our new Financial Freedom Blueprint. This blueprint will help you compare where you are with where you want to be, on your path to becoming a financially successful doctor. Often we hear clients say things like “I’m saving so much more than my colleagues” and we are here to say “YES! That’s exactly what you should be doing!” We will go through the red flags that keep you from reaching your financial goals, and much more!

Our goal, at MD Financial, is to give our clients more time, less stress, less taxes, and more wealth. Sounds like a lot? We build each of our clients their own personal financial website to help keep track of all of this and see their money across all accounts in real time. There is a lot that goes into doctors’ finances, but our goal is to take that off our clients’ minds so that they can rest a little easier at night. We recommend giving your finances a welfare check-up if you haven’t lately. Remember that you can always reach out to us for a complimentary consultation.

Remember to follow us on social media. If you found this topic helpful, please forward it to colleagues. If you ever have questions or topic ideas for future episodes, feel free to email us at [email protected]. Finally, you can reach out to us directly for a second opinion on your financial health, by emailing us at [email protected].

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CONTACT US

1-888-256-6855

[email protected]

Katherine Vessenes, JD, CFP®, is the founder and CEO of MD Financial Advisors who serve 500 doctors from Hawaii to Cape Cod. An award-winning Financial Advisor, Attorney, Certified Financial Planner®, author and speaker, she is devoted to bringing ethical advice to physicians and dentists. She can be reached at [email protected].

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