As a physician, you're trading time for money.
Most physicians are no doubt very adept when it comes time to academics and being “book smart”. We all had to get great MCAT scores and high grades to get into medical school. However when it comes down to financial planning or building wealth, it’s not overstating the case that our preparation was a bit lacking. Medical school didn’t prepare me very well for finances,entrepreneurship, let alone running my own practice.
As physicians, when it comes down to it, we are exchanging time for money. The amount of money a physician can make is generally in proportion to how much patients we see or procedures we do. This is no different then the majority of the population who earn wages for a living.
The unfortunate aspect is that for us to double income, we generally have to see double the amount of patients. And as reimbursement continues to dwindle, we are now having to see more and more patients to get the same amount of income, in comparison to five to ten years ago.
So what are our options? For physicians who want to maintain their current nest egg, they need to start building passive or residual income to work for them. Indeed, many physicians have resorted to passive income (in the form of investing, real estates, buying bonds, etc), or started “side careers” or investments (In fact, many of my ER doc friends have run anything from owning their own tavern, to daytrading, even starting your own winery! There’s a reason why Business Pitch section of the AMA news, a series that highlights physician side careers, seems to be one of the most popular columns.
One great way to build residual income, is entering the domain of online health consulting and medical publishing. No matter what you decided to do, building residual income to work for you will be more imperative for physicians in the near future. Starting early is the key.