Disclaimer: I am not an accountant, lawyer, or a financial advisor. You should consult with your own team of professionals as everyone’s situation is unique.
One thing that I’m passionate about is financial education. It is difficult for me to advise urologists on jobs without throwing financial strategies in there as well.
One concept that I think is fundamental is understanding the answer to this question:
What is the difference between an asset and a liability? This is a question I have drilled into my kids and my 7 year old can answer it without missing a beat.
Asset – something that puts money in your pocket
Liability – something that takes money out of your pocket
I can’t take credit for the elegance of these definitions; I must give that credit to Robert Kiyosaki.
The motivation for this post came after a recent conversation with a physician who reached out to chat about different employment options as they were considering giving notice to their current employer.
In our conversation, it became apparent that some of the options, even temporary, I proposed would be less attractive given their large mortgage payment. Most people are taught growing up that their home is their greatest asset, but when you look at it from the perspective of the definitions above your home is simply a liability.
If you have not yet started your first real job as a urologist, I would recommend that when you do you continue to live small as long as you can. Learn the time value of money. If you can live like a resident for even a couple of years and jump start your investing, it will help you out tremendously in the long term.
I will follow up on some of these themes in another post about Personal Financial Statements.
