You have completed residency and have gained so much medical knowledge and experience that will be vital to your success. Unfortunately, financial education is absent from residency education. These first few years after residency are pivotal in your financial success and your steps toward financial freedom.

You have gained a significant salary increase, but you should not forget that you have substantial student debt, and your net worth is negative in your 30s. Despite these truths, people increase their lifestyle because they see money coming in and think that debt is a problem for the future. Do not fall into this trap. It is much easier to continue living like you were when you were a resident than to decrease your spending later in life. Also, by increasing the amount of money you have available to invest and pay off debt, you are taking more significant advantage of compounding interest.

Once you have started working, one of the first things to do is consolidate your private and government loans and refinance any loans for a meager interest rate. Private companies are currently offering about a 3% interest rate on student loans which is far better than the interest rate on your government loans. The only caveat to this is the public service loan forgiveness (PSLF) program. You can work for a qualifying institution, pay income-based repayment for ten years, and have all federal loans forgiven. With the recent changes in legislation to improve this program, I am optimistic that this might be the answer for some physicians. However, before committing to this program, it would be best to weigh how large your loans are, how much you are paying per month given your current salary, and the opportunity cost lost by needing to stay in these qualified companies. More information regarding this program and if it is right for you can be found at studentaid.gov.

One of the most common questions about physician finances is whether to pay off your loans versus investing. The decision is a personal one, but I will provide some guidance. Start with contributing towards your companies or your solo 401k because that money invested will grow over time, and now more than ever, decreasing your taxable income will be paramount. After doing this and paying all your bills, the excess money can pay off debt AND be invested. Some will say that you shouldn't pay off your student loans because, after loan consolidation, your loan interest rate is lower than the stock market's historic gains. Although this is correct, I would say to them that there is no guarantee to any investment. There is value in escaping the burden of student debt and a guaranteed 3 percent gain by not allowing your loans to continue to grow. Paying student debt could also allow you more flexibility to change jobs, decrease hours worked, or take the occasional sabbatical. Remember, there is no wrong answer here, and the ratio of debt/investment is a personal choice.

If you are moving to a new city for your job, I would consider renting at least for a year for many reasons. For starters, it gives you time to see if the job is right for you and if you could see yourself in the position for at least 5 to 7 years. Also, if you see yourself as a good fit for the job, it gives you time to understand the areas you would like to live in and the traffic flow to and from work. Another reason is that it could save you money to rent versus buy in some places in the US. Buying a house is a considerable investment that will be one of the most significant single purchases that you will make, and it is not to be taken lightly. Purchasing a home in a nonideal situation could place you further into debt and put you further from financial independence.

Make sure to find mentors in your new job and ask as many questions as possible. Improving workflow and understanding how you get paid is essential to your success. Each specialty and career is very different, and these intricacies are not taught in residency or medical school.

I have discussed the basics of financial tips during late high school/early college to early career. I will continue to update "The Journey" with both broad and specific topics to help you on your path.