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The story of Dr. Michelle Bisutti is one that all healthcare students should be required to read. Like a disclaimer, we should make it mandatory for all students to read before signing any educational loan. Her story can be read here.
Condensed version: Dr. Bisutti is a Family practitioner that graduated with a debt load of $250,000 in 2003 and has since ballooned to $555,000 as a result of interest. The article notes that at that time (2003) those debt loads were unusual, however today that is not the case. $250,000 for Medical Students is the norm. Dont believe me? Heres a quick table by the AAMC for U.S. Medical School Tuition and Student Fees for 2012-2013 (MS 1)[1]
Tutiion 2012-2013
Dr. Bisutti knew that her loans were extensive but rationalized that she would be earning a lot to justify the debt load levels. Sound familiar?
Dr. Bisutti will be 70 years old when she pays off her federal loans. Her damaged credit prevents her from purchasing a home or new car. It has also affected her personal life putting marriage off between her and her boyfriend because of debt.
BOTTOM LINE: DONT BE LIKE DR. BISUTTI. Educate yourself!
An old video from 2009 from Suze Orman. Love her or hate her, she nailed this pending crisis and this was back in 2009:
http://www.youtube.com/watch?v=pj5CcYSAjq8
BUT, ONCE IM EARNING I WILL BE MAKING PLENTY OF MONEY
Now this maybe true, but you need to learn personal finance. Case in point, a buddy of mine, an Administrator of Orthopaedics, the first week on the job he botched Payroll. The Staff and Doctors would miss their first paycheck by two days after the beginning of the week. On day two he received calls not from the Staff, but rather from the significant others of the doctors yelling on the phone. One in particular asked How are we supposed to make our boat payment? After hearing this story, it then dawned on me, just because they were physicians (hell, orthopods at that) did not mean they knew how to be financially fit. These physicians were living paycheck to paycheck! But theyre Doctors, right? Making $200,000+ .how can that be?
THE WORLD IS NOT FAIR. LETS LEVEL THE PLAYING FIELD
Look at your peers outside of healthcare. Most of them are long done with their education. Some have started their careers and are well on their way to financial freedom by paying off their student loans (if they even have them!). As a student of healthcare you have an additional burden of debt, a shaky horizon with the frontier of medicine changing drastically, most of your youth consumed towards education to this craft, it is only reasonable that you are compensated fairly for this. However, in order to become wealthy and set yourself up for financial successful, it requires time on your part and education to learn the building blocks of personal finance.
THE PLAN
We must take a scientific approach to this, measuring and testing. We will do the same for personal finance.
First were going to focus on how critical it is to focus on your objective and trying to develop a financial plan. This will be broken down into three sections:
I.) Creating your Objective
II.) A Financial Plan (next article)
III.) Financial Plans in action (following article after next). This is my gift to you the readers. It will be well worth the wait. Lets just say access to actual budgets of Residents, Neurosurgeons, PAs and RNs, etc
THE OBJECTIVE
This is your financial goal. This can be short-term or long-term, it should depict what your household status is. That is, if you are married, it should consider all moneys within the household. Be specific and include time frames (You can include as many goals as you have). Be sure to write it down in a document file on your desktop or somewhere where it is easily accessible and not lost.
Examples:
BAD: I want to pay off my student loans as soon as possible.
GOOD: I have $100,000 in student loans currently earning interest at 6.8% for 30 years. I want to cut that time in half, l would like to pay them off in 15 years.
BAD: I want about $2 million dollars total for retirement
GOOD: I want to have $2 Million dollars in retirement funds in the next 30 years.
BAD: I want to pay for my wedding
GOOD: I want to have $25,000 for a wedding in 4 years.
BAD: I want to make a down payment for a house
GOOD: I want to make a 20% down payment or $50,000 in 5 years.
WHATS YOUR OBJECTIVE(S)?
Again, remember the more specific and accurate the values and times, the better you can monitor your progress and make the journey more seamless. Hold on to this and we will review this in the next post. Feel free to ask questions or throw your own objectives on here.
Condensed version: Dr. Bisutti is a Family practitioner that graduated with a debt load of $250,000 in 2003 and has since ballooned to $555,000 as a result of interest. The article notes that at that time (2003) those debt loads were unusual, however today that is not the case. $250,000 for Medical Students is the norm. Dont believe me? Heres a quick table by the AAMC for U.S. Medical School Tuition and Student Fees for 2012-2013 (MS 1)[1]
Tutiion 2012-2013
Dr. Bisutti knew that her loans were extensive but rationalized that she would be earning a lot to justify the debt load levels. Sound familiar?
Dr. Bisutti will be 70 years old when she pays off her federal loans. Her damaged credit prevents her from purchasing a home or new car. It has also affected her personal life putting marriage off between her and her boyfriend because of debt.
BOTTOM LINE: DONT BE LIKE DR. BISUTTI. Educate yourself!
An old video from 2009 from Suze Orman. Love her or hate her, she nailed this pending crisis and this was back in 2009:
http://www.youtube.com/watch?v=pj5CcYSAjq8
BUT, ONCE IM EARNING I WILL BE MAKING PLENTY OF MONEY
Now this maybe true, but you need to learn personal finance. Case in point, a buddy of mine, an Administrator of Orthopaedics, the first week on the job he botched Payroll. The Staff and Doctors would miss their first paycheck by two days after the beginning of the week. On day two he received calls not from the Staff, but rather from the significant others of the doctors yelling on the phone. One in particular asked How are we supposed to make our boat payment? After hearing this story, it then dawned on me, just because they were physicians (hell, orthopods at that) did not mean they knew how to be financially fit. These physicians were living paycheck to paycheck! But theyre Doctors, right? Making $200,000+ .how can that be?
THE WORLD IS NOT FAIR. LETS LEVEL THE PLAYING FIELD
Look at your peers outside of healthcare. Most of them are long done with their education. Some have started their careers and are well on their way to financial freedom by paying off their student loans (if they even have them!). As a student of healthcare you have an additional burden of debt, a shaky horizon with the frontier of medicine changing drastically, most of your youth consumed towards education to this craft, it is only reasonable that you are compensated fairly for this. However, in order to become wealthy and set yourself up for financial successful, it requires time on your part and education to learn the building blocks of personal finance.
THE PLAN
We must take a scientific approach to this, measuring and testing. We will do the same for personal finance.
First were going to focus on how critical it is to focus on your objective and trying to develop a financial plan. This will be broken down into three sections:
I.) Creating your Objective
II.) A Financial Plan (next article)
III.) Financial Plans in action (following article after next). This is my gift to you the readers. It will be well worth the wait. Lets just say access to actual budgets of Residents, Neurosurgeons, PAs and RNs, etc
THE OBJECTIVE
This is your financial goal. This can be short-term or long-term, it should depict what your household status is. That is, if you are married, it should consider all moneys within the household. Be specific and include time frames (You can include as many goals as you have). Be sure to write it down in a document file on your desktop or somewhere where it is easily accessible and not lost.
Examples:
BAD: I want to pay off my student loans as soon as possible.
GOOD: I have $100,000 in student loans currently earning interest at 6.8% for 30 years. I want to cut that time in half, l would like to pay them off in 15 years.
BAD: I want about $2 million dollars total for retirement
GOOD: I want to have $2 Million dollars in retirement funds in the next 30 years.
BAD: I want to pay for my wedding
GOOD: I want to have $25,000 for a wedding in 4 years.
BAD: I want to make a down payment for a house
GOOD: I want to make a 20% down payment or $50,000 in 5 years.
WHATS YOUR OBJECTIVE(S)?
Again, remember the more specific and accurate the values and times, the better you can monitor your progress and make the journey more seamless. Hold on to this and we will review this in the next post. Feel free to ask questions or throw your own objectives on here.
