Why does it feel like we don't make great money?

Physician Family Financial Advisors Podcast; Personal Finance for Doctors with Children

In this new episode, we dive deep into financial strategies that can help secure your family's future, especially for high-earning physicians. Discover how a $50,000 inheritance can be a game-changer for your child’s education when invested in a 529 plan. We also explore how to efficiently manage large cash reserves in business accounts to optimize returns.

High-income physicians often feel the pinch despite their significant earnings. We break down the paradox of why a $500,000 salary may not feel like a financial windfall, shedding light on the substantial expenses of childcare, taxes, and student loans. Compare your financial journey with that of upper-middle-class families and understand how your preparedness for future expenses stands out.

Get insights into measuring investment performance, especially when saving for your child's education. We decode the intricacies of target date funds within 529 plans, explain different asset allocations, and discuss how to accurately gauge your investment returns. Whether you’re a physician parent or just curious about optimizing your investments, this episode is packed with valuable tips and strategies. Tune in to start paving the way to a financially secure future for your family!

Key Takeaways:

1. 529 Plan Benefits:

- Investing a $50,000 inheritance in a 529 plan for a young child can significantly reduce future savings needs and offer favorable returns.

- Flexibility of 529 plans includes the potential to roll over funds into a Roth IRA under certain conditions.

2. Managing Large Cash Reserves:

- Avoid letting large sums sit idle in business accounts; project tax liabilities with a CPA and move excess funds into high-interest savings accounts for better returns.

3. Understanding the Financial Paradox for High-Earning Physicians:

- Despite a $500,000 salary, hefty expenses such as childcare, taxes, and student loans can make financial security feel elusive.

- The financial pressures faced by younger physicians are normal and tend to ease as student loans and childcare expenses diminish over time.

- Upper-middle-class families may appear to live similarly to high-earning physicians, but physicians are generally better prepared for future expenses like college and retirement.

4.Investment Performance Measurement:

- Comparing target date funds in 529 plans reveals distinct differences in asset allocations and management styles that impact performance.

- Understanding dollar-weighted versus time-weighted returns is crucial for accurately measuring portfolio performance.

- Common pitfalls in performance measurement include not accounting for risk tolerance and the timing of contributions and withdrawals.

5. Professional Financial Planning for Physicians:

- Tailored financial planning services are available exclusively for actively practicing physicians, both MDs and DOs, who are parents. Dentists are excluded for specific reasons.

- Visit the podcast website to schedule a consultation or send in questions via email or phone.

ARE YOU GETTING ALL THE TAX BREAKS YOU REALLY DESERVE?

To find out, get your copy of The Overtaxed Doctor's Retirement Investing Checklist at https://physicianfamily.com/go

GOT A QUESTION?

Write to us at [e-mail].

NOTICE

Physician Family Financial Advisors Inc., a registered investment advisor, has reasonable belief that the information and content as a whole does not include any false or materially misleading statements or omissions of facts regarding services, investments, or client experience. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Information expressed does not take into account the specific situation or objectives of individuals and is not intended as recommendations appropriate for all individuals. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.