Building financial flexibility alongside a medical career

Physicians often finish training with a high income, substantial debt and very little time. Many then discover that the hardest part of building financial flexibility is not earning more, it is deciding what to do with what they earn, in what order.

There is no single correct sequence. What follows is a way of thinking, not a recommendation for any individual.

Start with the foundation

• A cash reserve you can reach quickly, sized to your own obligations and income stability
• A deliberate plan for student loans and other debt
• Insurance that protects your ability to earn, such as disability coverage
• Regular contributions to tax-advantaged retirement accounts you have access to
• A diversified core of liquid investments

Private real estate typically comes after these, not instead of them. It is illiquid, so it makes the most sense with money you will not need for years.

Think about concentration

Your career is already a large, concentrated bet on one profession, one specialty and often one health system or region. Some physicians look to diversify across asset types, and across sources of income, for exactly that reason. Real estate is one way people do that. It is not the only way, and it brings its own risks.

Liquidity is a feature, not a flaw

Physicians have real, lumpy cash needs: practice buy-ins, tail coverage, a move between health systems, a sabbatical, a family change. Money that is locked up in a private investment cannot help with those. Before committing capital, ask which of those needs could arise during the holding period.

Write down your guardrails

A few decisions made in advance can protect you from enthusiasm in the moment.

• The maximum share of your net worth you are willing to hold in illiquid investments
• The maximum amount you would place in any one deal or with any one sponsor
• The questions you will always ask, and the documents you will always read
• The professional you will consult before you sign anything

Time is part of the budget

Be realistic about the attention you can give. If reading an update each quarter feels like a burden, a complicated portfolio of private investments may not suit you right now, and that is a perfectly good answer.