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The FinancialMD Show - Ep 029 - Setting Up For Success - Essential Checklist For The New Attending


· Transitioning Into Practice: Focus On The W.I.N. Principle [0:01:23]

· Stephen Covey’s Four Quadrant: Important, Not Important, Urgent, Not Urgent [0:02:32]

· From Taxable To Tax-Free: The Art Of Roth Conversion [0:04:58]

· Plan For The Unexpected: Disability Insurance [0:07:32]

· Healthy Financial Habits: Budgeting And Managing Surplus [0:09:02]

· Financial MD's Resident Roadmap: Securing Your Future [0:10:44]

· We Want To Hear From You! Share Your Two Cents With Us [0:12:22]

Welcome to the Financial MD Show. This is the only podcast designed specifically for residents and young physicians to help you become educated on financial planning for physicians and avoid many of the common financial mistakes doctors make. Your hosts, Jon and Trevor, explore a different topic with each episode. Jon Solitro is a financial planner and certified financial education instructor. He’s been working with young physicians for the better part of the decade and lectures to graduate medical programs around the country. Dr. Trevor Smith is a board-certified ophthalmologist with a full-time practice and he has learned the ins and outs first-hand what it takes to make smart financial decisions as a young physician. And now here are your hosts, Jon and Trevor.

Hey everybody and welcome to today's episode of the Financial MD Show. I, as always, am your host, Jon Solitro, CFP. Today is going to be a solo show but I'm excited because Trevor's not going to interrupt me all the time – I'm kidding. We do a great job chatting together. Dr. Trevor Smith is very busy with opening his practice and if you want to know more about that, listen to our last episode. That will be the best place to get a quick synopsis and rundown of what Dr. Smith is up to and what it takes to open your own practice. At least so far as we know, he's right in the thick of it; not quite launched yet – building, putting stuff together, getting financing – all that stuff; so that part… that was a really great show to do.

But today, top of mind for us right now in the finance world and in the doctor world, if I'm talking to you and you are a younger physician just new into your career, you might be wrapping up your training right now. As we record the show, it's October. You may be a couple of months just into your first attending position and I wanted to put out a show to those of you who are podcast subscribers, and maybe, this is something that you can share with your fellow residents or new attendings to talk about what are some of the things that you should be doing.

Transitioning Into Practice: Focus On The W.I.N. Principle [0:01:23]

If you had to boil it down to just a few things that you should be doing when you first transition into practice, what are those things? Because you can be bombarded with so many different possibilities and options that it is crucial that you weed that out and focus on the most major on the major. You do the important things first. Because if you look at Stephen Covey's book, The 7 Habits of Highly Effective People, there's a lot of great stuff in there. I do suggest that. We'll post a link in the show notes, but when you see that one of the chapters is going to be about focusing your time. You're going to see a lot thrown at you. You've got to make benefits decisions. You've got to figure out your money's going and buying a house and budget and all these kinds of things. One of the things that Covey talks about in the book is "beginning with the end in mind," so that helps you to focus on what things are important now. I talked to my boys about the W.I.N. principle – W.I.N. (What's Important Next) – because they're not great at focusing on what they should be doing right now...when it's getting ready for school in the morning or getting ready for bed at night – all those things is, hey, buddy, what's important next? Oh, okay. And sometimes that helps and sometimes it doesn't.

Stephen Covey’s Four Quadrant: Important, Not Important, Urgent, Not Urgent [0:02:32]

But one of the other things that Covey talks about is he puts together this quadrant and I'll put this on the video screen for those of you that are watching on video, but it is essentially anything that you feel like you need to do or could do or anything you possibly do in a day can fit into one of four quadrants, and up at the top, there's two sections. Think of it like a spreadsheet. There's "What's Important" and "What's Not Important", and along the left side, there's the "Urgent" and Not Urgent." And so every task has some sort of aspect of both of those characteristics. So something may be important, but not urgent. Okay, so maybe you got to do it at some point, not right now. Something may not be important but urgent, and that should give you a clue that maybe it's not something that I really should be spending my time on. If I get a notification on my phone that somebody just commented on my Facebook post, is that urgent? Yeah, I kind of feel like it is. Is it important? No. So, if I'm supposed to be doing something right now, if I'm supposed to be talking with the client, if I'm supposed to be helping, if I'm supposed to be prepping for a lecture I'm going to do, what's important right then? Is it getting that badge notification off my phone – probably not. So everything you do can fit in one of those four quadrants and the first step is knowing what is coming up and what quadrant that should fit in.

And so when I break down for you today a few things, it's going to be focusing on those important things. I'm going to help you cut out the not-important things, necessarily, and maybe even the things that are important but not urgent. So we're going to focus on the Important and Urgent right now.

One of the things and tips that I give – and again, this is not personal financial advice; everybody's situation may be different – but one of the things that we often talk about is trying to minimize taxes; not just now, but for the rest of your life. A CPA, a tax preparer, an enrolled agent (EA) – you might see this in different places; what they are doing is helping you to look back at last year and prep taxes for last year and figure out taxes for how do we report what you did pay or what you need to pay in taxes, and what a tax planner or financial planner is going to do – and maybe a good CPA is going to do this as well – is look ahead and make recommendations – here's what you can do to minimize your taxes in the future. And there are decisions that you're going to make when it comes to your benefits, when it comes to your income, when it comes to insurance – all these kinds of things. Investments – what I can do right now to minimize my tax burden later. It may even hurt a little bit right now, but long term, this is going to be what's best for me.

From Taxable To Tax-Free: The Art Of Roth Conversion [0:04:58]

One of those things is going to be a Roth conversion. Now why do you say Roth conversion? Well, number one, you have to have money to convert. Most residents I come across have a 401(k) or a 403(b) that they put a little bit of money into… maybe 2 to 5,000 dollars that, over the course of their residency, they set some aside. A lot of hospitals will auto-enroll you, so you'll get 1% at least going in every year which, you know, when you're making 50,000 a year, that's 500 bucks a year. You'll have at least 2, maybe 3 or 4000 in there over the course of 3 or 4 years.

So what should you do with that money? Now, that doesn't seem like it'll be a lot now but if we talk about the point of compound interest which we've talked about before and we can go into depth in that into another conversation, compound interest says that that 3 or 4,000 dollars could be 20,000, 30, 40, 50,000 someday with the right kind of compound interest and the right rate of return. So, that being the case right now because it's in your 401(k) or 403(b), you went through residency, you're now transitioned into practice. Okay, let's say, it's October right now of your first fall in practice and you've got this old 401(k) or 403(b_ sitting at your old residency program – your old hospital – it's never been taxed. They took it out of your paycheck pre-tax. It's going to grow. It's not going to be taxed. But then when it will be taxed is when you go to retire and if you're good and you had a good financial planner, you're still going to be in a high-income bracket after you retired because of how much you've saved and invested and planned. That's great, but then you go to pull that money out, you're going to have to pay taxes on it then and you're going to hate it. So how do we fix that now without it hurting too much?

This is where we come up with the Roth conversion. You can take that 401(k) or that 403(b) and roll it over into an IRA, but make sure it goes into a Roth IRA. Now the downside is, yeah, you've got to pay taxes on it now, but this year with a half-year resident or fellow salary and a half-year on attending salary, you're going to make less this year than you'll ever make again in your entire life. So when would be the right time to make that kind of taxable transfer? There are no penalties, no cost, other than just the taxes you're then going to have to pay on your tax returns. But now, that money is in a tax-free investment in a Roth and it will stay that way for the rest of your life – that plus the growth it's going to get. So, I think that's an important one and I would say that's an urgent one because that has to be done before the end of this year.

So, that's number one. That's kind of one quick tip that I'd say, hey, if I had a checklist of things to pass to a new attending to say get this done before the end of the year, that's one of those things.

Plan For The Unexpected: Disability Insurance [0:07:32]

The other thing that I would look at is making sure that your Disability Insurance is up to your new income. That's one of the first checklist items that we do with our attending physicians. As we're going through the financial planning process, we'll typically check in when they get out of residency and into practice, say, let's do an in-practice meeting to talk about your new budget and what needs to be changed on your insurance because they'll have life insurance – maybe they didn't get enough; hopefully, they did – but they might need to get a little bit more. That's a little tougher to do because they're going to have to go through underwriting to get more life insurance. The beauty of it is if you set up your disability insurance as we've taught you, you're going to have a Future Increase Rider already on there so that when you go into practice, that disability insurance policy that you got as a resident allows you to increase your income to keep up with your new attending income – it's probably four or five times what you were making in training – that rider allows you to increase that income, no questions asked, no underwriting which is unlike life insurance, and all you have to do is submit to the insurance company your paystub, your employment contract – anything that's going to verify your income – and boom! Your income is now as covered as it's going to be between that and you're most likely going to have some long-term disability at work as well. You use both, so this is, again, me saying to you take what you get at work, it's free or cheap, it's good, get some additional personal – they work together. One is taxable, one's not. We go into that into our disability episode, so check that out.

So, that's number two: make sure you get your disability insurance increase going as soon as you can.

Healthy Financial Habits: Budgeting And Managing Surplus [0:09:02]

Number three that you want to look at is kind of what I touched on when our clients first go into practice and they're in our financial planning program, we're going to sit down and have a brand new budget conversation. A lot of you that we've talked to before, we've said, hey, let's just take 10 minutes, 15 minutes, and go through your cash flow estimate. We know what's coming in; let's get a quick idea, ballpark, what's going out into about 15 or 20 different categories and I will do that with our attending physicians within a month or two when they go into practice; if not sooner. Maybe the month before so that when they get that first paycheck, they know exactly where that's going. It's like Dave Ramsey says, "where every dollar has a name." I believe that, but what I believe actually works is if you take that and you plan it out and you say, okay, here's what I'm going to be making in a few months on an annual basis; here's what I'm going to be spending every month, I think, and then our tool will give you a surplus number at the bottom. So we'll look at that number that says, okay, income minus expenses gives you a surplus – where does that surplus go? You need to know and you need to plan it and you need to deal with that surplus from day one of each month. So as soon as your paychecks come in or the first day of the month – whatever works for you; before you start spending, do something smart with that. If you're going to be making 250,000 when you go into practice and, yeah, maybe you bought a new house and you got some other things that'll up it, you will still have a surplus if you did it right. If you don't have a surplus when you're an attending, you did something wrong. I'm just going to say it – possibly offend somebody – but I mean, really, are there unique situations where something really happened in your family? Okay, possibly. But, for the most part, you should have a surplus and you need to do something with that right away and it needs to be happening automatically.

Financial MD's Resident Roadmap: Securing Your Future [0:10:44]

Now, that may be step two of our Resident Roadmap – our Physician Roadmap – is the Safety Net. Get it in the safety net. Build your emergency fund. Get your insurance proper – your life and disability and home and auto and health and all those things – get those in the proper alignment. Great. If you've still got surplus left over which you should, step three is Debt. Maybe you have debts you need to pay off. Now, student loans and mortgage – not really a conversation right now, but maybe car loans, maybe credit cards; then you should still have a surplus left over when we start to talk about what can we do with if that's truly going to help us grow into our future goals. So that's step three: sit down with your financial planner or with your spouse or both and figure out what you can see that is going to be coming in, where it's going to go, and how to set that up on some sort of automated basis that you know it's just going to happen like clockwork because you don't have time for this. I'm guessing that you're listening to this or watching this because you want to get some sort of tips that will help you accomplish your goals without really having to think about it and learn and research and do all this other kind of stuff. If you're researching now, great. Here's where you take action: Take some of those steps.

So those are my first, I would say, three steps. There's more for sure, but if I had to pick three just off the top of my head because I didn't prep for this episode, I just thought I would say, what comes off the cuff for me after doing this for 10 years and saying what would I talk to if I had 10 minutes with a new attending physician, they said, hey, what do I do? I'd say, hey, here are at least three things that I think are going to set you up for success long-term. Are there others? For sure. Is this advice right for everybody? I think it usually is, but as our disclosure says, it may not be.

We Want To Hear From You! Share Your Two Cents With Us [0:12:22]

So this is, obviously, some good rule of thumb – not personal advice – talk to your financial planner or other experts about that. But if you want to know more or if you disagree with me, please comment, leave a review, or just message us here. I mean, we've got… our email is always available. is where you're going to get a hold of us. My email –; will get it if you send it to But check us out on Instagram and Twitter and Facebook and reach out to us and just say, hey, here's my situation, what do you think; we love to just help and educate, and all of the time that we put into these things – the podcast, the didactic minute videos – are meant to just give you education.

Now, does it make my job easier when a resident or a young physician sits down with me for the first time to help them? Sure. They know all this stuff. They watched our stuff. That's great. That helps me, but most of the people that are watching and listening to this, obviously are not going to work with us, but we believe that this is going to help you make some good, smart financial decisions along the way; puts you in a good financial position and puts you ahead of others who are not listening to or watching this stuff.

So, again, comment, questions, anywhere in our stuff. We'll get it. We'd love to interact and chat. Leave us a review please for the podcast. Again, this is how – if you think this is good information, this is how it gets out to other physicians who need to hear this and helps to protect physician wealth to leave a legacy to help their community around them and make a difference in their world. Leave us a rating or review. Share this with somebody today that you feel needs to hear and say – check this guy out. He's, obviously, goofy-looking and he says some dumb things but there are some pretty smart things that maybe you can learn from. So, reach out to us. If you are a chief resident and you want to see our lecture programs – we do live virtual lectures, which seems weird but it just means a Zoom lecture live; it's not a prerecording. So, we talk about these topics in a financial education setup where we're going to teach the four different topics that we have on our financial roadmap – about budgeting, about protection, about investing, and about debt. So if that's you, you can reach out to us about that as well or check out – we've got info at

Again, this is Jon from Financial MD, thanks for joining us today. Next time, we'll probably have Trevor back with us or some other guest and if there's someone in particular you want to hear from or some sort of profession or topic, please let us know. We'll see you next time.

Thanks for joining us for another Financial MD Show. Be sure to head over to to get more in-depth resources on financial tips for physicians and don’t forget to join the Financial MD community group on Facebook, where physicians at all stages of their career gather to share tips and get ideas on achieving true financial success. We’ll see you next time.

The Financial MD Show is for informational purposes only and is not an offer to invest. It is not financial, tax, or legal advice. Be sure to seek financial, legal, or tax professionals when making any financial decisions. Before investing, you should make sure that any investment strategy or investment meets your individual investment needs, goals, and objectives. Financial MD makes no claims or guarantees to individual investment performance. All investing involves the risk of loss as well as the potential for gain.

Resources and Links:

· The 7 Habits of Highly Effective People, Stephen Covey –

· W.I.N. – What's Important Now? –

· Roth Conversion: Move Your Money To A Roth Account –

· 401(k) and 403(b) Plans: What's the difference? –

· What is a Roth IRA? –

· Guide To Disability Insurance For Physicians –

· Dave Ramsey: Give every dollar a name when creating a budget –

· Financial MD Website –

· Financial MD YouTube page –

· Financial MD Facebook community –

· Financial MD TikTok –

· Financial MD Instagram –

· Financial MD Twitter –

· Financial MD LinkedIn –

· Financial MD Apple Podcast –

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