Becoming an oncologist requires a substantial investment of both time and money. It’s no wonder why a highly compensated profession comes with financial stress when you consider the educational loans, mortgages, personal debt, and loans associated with buying into a private practice. That dynamic is further complicated by the fact that with big career earning goals, many lose sight of the discipline and decision-making required to maximize financial success—both today and in the long run.

So, what’s the answer? What do oncologists need to do to make sure they are taking care of their immediate and future financial security while chasing professional dreams they’ve worked so hard to achieve? What follows are some tips and best practices for physicians looking to set themselves up for short-term financial success, along with some insights on how to implement smart investment and savings strategies that will position you for long-term financial stability.

Resist the temptation
The student loan burden on a young doctor can be massive. Because interest on student loans is capitalized (added to the principal) while the borrower is still in school, a reasonable amount of debt can become seemingly hopeless in short order. The average medical school student owes US$ 241,600 in total student loan debt when they graduate. [1] During college, medical school, residency, and potentially a fellowship, few oncologists can address that debt in a meaningful way. Many have friends in other industries that have been earning, saving, and spending for a decade, so it isn’t surprising that the last thing young doctors want to deal with is paying off their student loan debt.

For someone who is hundreds of thousands of dollars in debt, lavish spending is a huge mistake. A newly-practicing oncologist needs to be thoughtful and strategic, carefully monitoring their spending and addressing their debt. Monthly student loan payments are typically well into the thousands of dollars range for a 10-year repayment plan—but can be significantly higher. Treating yourself and your family to a vacation or nights out is fine but, watch the habits you’re forming very closely.

Train yourself to stick to a savings budget because it’s much easier to budget for savings than it is to track and budget each expense line item on credit cards. It’s best to set a percentage-of-gross-income-saved goal and be sure to hit it every year. For example, a strong budget would include saving 30% of your gross income. So, if total pay for the year is projected to be US$ 300,000, the physician should save US$ 90,000 through retirement plans, IRAs, and taxable investment accounts…exclusive of the monthly student loan payments. Discipline today pays tons of dividends tomorrow!

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Be strategic
A mountain of debt can be intimidating—and tackling that debt can feel like an insurmountable task at first. The definition of stress is the inability to control the situation around you. So, the best thing an oncologist can do to reduce stress is to make a plan and chart a course for debt repayment and savings. A financial professional can help design a payment plan that works for the individual doctor, being careful to balance spending, debt repayment, and savings. One of the most helpful exercises is a net worth analysis and projection. The net worth of most young doctors will almost certainly be negative at first; that said, it is reassuring to see that they will break even shortly and grow quickly from there on out. Remember, your net worth trajectory as a physician is much higher than many professions, though it may not seem that way with a large debt load in the present. The key is to start today, especially if you want to keep your retirement options open. Don’t wait until you’re 50 to start planning and saving. The doctors with the biggest portfolios are those who were always disciplined about putting a sizeable percentage of their annual income away.

Run the numbers
When it comes to planning your financial future, don’t guess—run the numbers and be specific. Figure out how quickly you’ll be paying down your debt (we suggest less than ten years), how much you’ll be earning, and how much you’ll be saving (30%). The median salary for an oncologist is a little over US$ 300,000 a year. [2] That’s a very strong income stream, but after taxes, expenses, and debt payment obligations, that impressive number will look much smaller. And if you want to save responsibly for retirement, you must commit to putting a sizable percentage of your salary toward your retirement and taxable investment accounts. Think of your savings as a payment you can’t miss!

Personalize your planning
Because no two doctors are the same, smart financial decision-making is heavily and necessarily informed by individual circumstances. Your spouse’s salary and professional situation, personal and professional goals, home-buying plans, etc., all play a role in shaping your financial future. Be sure to account for those personal variables in customizing your plan and calibrating your spending and saving accordingly. Think carefully about your lifestyle, priorities, and retirement goals. Those aren’t always easy questions to answer for younger oncologists, but the reality is that someone finishing their fellowship in their early 30s is likely thinking about children, homebuying, and other major life goals. With more doctors looking to retire early, strategic planning at the start of your career is essential to keeping your options open down the road.

Take precautions
Finally, make sure you are always protecting yourself and your loved ones. Consider your appetite for financial risk and minimize your exposure. That starts with basic precautions like investing in high quality disability and life insurance policies—they are always a good idea for high earners, and especially so for doctors in specialized fields like oncology or surgery, whose ability to practice could be limited by injury or illness. Be careful about making financial decisions with unintended consequences. For example, refinancing your student loan debt could save tens of thousands of dollars—but that might not be worth it to you given the fact that refinancing may remove some protections of federal debt, including absolution upon death. Finally, follow the most basic of all financial advice: SAVE FIRST, SPEND SECOND.

If you have a debt repayment and savings plan in place and you stay within those guardrails, you will be able to enjoy a lucrative career regardless of the financial and professional circumstances in which you find yourself.

[1] Average Medical School Debt. Education Data Initiative. Online. Last accesses on May 17, 2022.
[2] Physician – Hematology/Oncology Salary in the United States. Online. Last on May 17, 2022.

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