Money Talk with Malik | Financial Planning for Builders

You just finished residency. You're exhausted. You're finally earning real money. And everyone is telling you to invest.

But you're also looking at six figures of student loans, maybe a car payment, maybe you want to buy a house eventually. So you tell yourself: I'll start investing next year. When I'm making the big attending salary.

I get it. I work with a lot of residents and attendings. That thinking makes complete sense on the surface.

Here's the problem. That delay costs physicians $300,000 or more over their career. I've seen it happen with my own clients.

The Math Nobody Shows You

Let's say you're a resident making $65,000. You decide to save $300 a month. That sounds small. It feels almost pointless when you're looking at $250,000 in student loans.

But $300 a month for 5 years, during and right after residency. Invested in a simple index fund. At a conservative 8% annual return.

That's roughly $22,000 you put in. But it's worth about $38,000 by year five.

Now let's say you wait. You finish residency, start attending, and now you're making $300,000. You tell yourself you'll save $2,000 a month now that you can afford it.

You start investing seriously at age 33 instead of age 28. That seems fine, right? Five years.

Those five years? At 8% returns, $2,000 a month for 30 years gives you about $2.9 million.

But starting at age 28, $300 a month for 35 years? You hit roughly $3.4 million.

You saved less money overall. But you ended up with more. Because compound growth rewards time more than it rewards dollars.

This is what I call the physician lost decade. Those years you didn't invest because you were waiting until you could do it right. You're actually making it harder on yourself.

The Employer Match Problem

Here's another piece most residents miss. Many hospital systems and academic medical centers offer a 403(b) match.

Let's say they match 3% of your salary. If you're making $65,000, that's roughly $2,000 a year in free money.

That's not chump change. That's a 100% return on your contribution the moment you put it in.

The average resident leaves that money on the table. They think they can't afford to contribute. They tell themselves they'll do it when the salary goes up.

When you're leaving free money on the table, you're not saving. You're spending money you haven't earned yet.

Right? Capture the match first. Always.

But What About My Loans?

This is the part where people get stuck. They see their student loan balance and they think: I can't invest while I owe $250,000.

Here's the honest answer. It depends on your interest rate.

If your loans are above 6% or 7%, paying them down faster makes sense. Every dollar you throw at 7% debt is like earning 7% guaranteed.

But if your interest rate is lower, especially if you have a federal loan with a reasonable rate, the math shifts. Especially if you're eligible for PSLF.

Also, student loan payments during residency are typically low. You're not paying them down fast anyway. So the money you invest now has more time to grow than the money you'd use to pay down loans.

The point isn't to ignore your loans. The point is don't let perfect be the enemy of good. You can do both.

The Realistic Plan

Here's what I'd tell a resident in my office. Keep it simple.

Step one. If your employer matches your 403(b), contribute enough to get the full match. Even if that's 3% or 4% of your salary. That's the first move.

Step two. Open a backdoor Roth IRA. You probably earn too much for a regular Roth IRA. The backdoor route is available to you. $500 a month, $6,500 a year. Invest it in a total market index fund.

Step three. If you have leftover money after your emergency fund, make extra student loan payments only if your rate is high. Otherwise, keep building that emergency fund.

That's it. Three steps. You don't need a complicated financial plan. You need to start and then automate it so you don't have to think about it.

The Bigger Picture

I've been doing this for a while. The residents who end up in the best financial position aren't necessarily the ones who make the most money. They're the ones who started early and stayed consistent.

Your income will go up. Your expenses will go up. Your life will get more complicated.

But if you build the habit now, when your lifestyle is still relatively simple, it becomes automatic. You're paying yourself first before the lifestyle inflation kicks in.

Waiting until the attending salary to start investing is like waiting until you're 40 to start exercising. The workouts still work. But you missed out on years of compounding health benefits.

The question isn't whether you can afford to invest. It's whether you can afford not to.

Ready to build a physician financial plan that actually works? Schedule a conversation and let's talk about your specific situation.