There are hundreds of books, newsletters, blogs, web pages, and textbooks all saying the same thing:
● Save for the future.
● Make sure you have an emergency fund.
● Set aside money for a rainy day.
There are many more of these savings clichés, and undoubtedly, you've heard them before.
Clichés aside, it's generally great advice. For physicians who've listened, this advice has saved them from financial hardship when faced with an unexpected disaster. Unfortunately, some fail to follow this advice and wind up in a challenging spot financially. This can lead to bankruptcy, delayed retirement, increasing caseload, and more.
The current global pandemic has hit many physician families with unstable work conditions and layoffs. Some physicians were laid off or furloughed as the rate of patient visits dropped severely while people were kept at home by the coronavirus.
According to a survey done by bankrate.com, 35% of families have less emergency savings than before the pandemic. The survey also states that just 16% of Americans say they are very comfortable with their emergency savings, and 21% of Americans say they have no emergency savings at all.
When families don't have an emergency fund set aside, they can quickly lose control of their lives, practice, and family affairs.
Simply put, failing to save limits a family's options and freedom. It creates a situation where they're vulnerable and helpless to the ups and downs of life.
Having savings is about freedom.
In his book, "The Psychology of Money," Morgan Housel points out that people who save for emergencies, vacations, and retirement do so to be in control of their destiny.
Savings gives you the ability to say yes when you want to and no when you don't. It prevents you from being caught off guard when life happens. And it gives you the freedom to do what you want, when you want, with the people you want.
Housel explains that savvy savers know it's less about stuff you accumulate and more about your ability to be free. He writes, "More than your salary. More than the size of your house. More than the prestige of your job. Control over doing what you want, when you want to, with the people you want to, is the broadest lifestyle variable that makes people happy."
Housel emphasizes that wealth and savings give people the ability to control their lives.
A small amount of wealth can give a physician the ability to take a few days off.
A little more allows them not to be forced into taking the first job they're offered after a layoff and to keep looking for something that better suits their needs and interests.
An emergency fund of six months allows them to take time to do what they need to in the case of a pandemic or other natural or economic disaster without having to rely on the government.
And a comfortable retirement savings allows someone to stop working when they want or consider shifting to a part-time practice—making it possible to enjoy their retirement and control their time.
If you're one of TrueNorth Wealth's physician clients, you've likely started building wealth and saving for the future. That said, those who do not have an emergency fund for their family or practice need one.
Once they have that in place, the rest of their freedom plan is ready to be designed by one of TrueNorth Wealth's CFP's.
Physicians can consider the following:
● Where do they want to be in five, ten, or twenty years?
● How much time and freedom do they want or need?
● Do they plan to build a practice, take on a partner and then sell, or possibly stay part-time in their practice?
The beauty of savings and wealth is that you get to create and design a plan that fits your desired life; you're free to call the shots.
TrueNorth Wealth is here to help.
If you're a physician interested in working with a trusted financial advisor that can help guide you through the world of saving, investing, and lifestyle design, then we're here to help.
At TrueNorth Wealth, one of Salt Lake City's leading wealth management firms, we focus on helping our physician clients build long-term wealth while maximizing the enjoyment they receive from their money. We do this by pairing our clients with a dedicated CFP® professional, backed by an incredible team. We understand that it can be challenging to focus on the big picture, so we establish clear and straightforward milestones for each client.
For our team at TrueNorth, it's about so much more than money. It's about serving families all across Utah and helping them achieve freedom and flexibility in their lives. To learn more or schedule a no-cost consultation, visit our website at TrueNorth Wealth or call (801) 316-1875.