Physicians are notorious for their ability to burn through a fat paycheck. The recent Great Recession was a reminder to many of our colleagues who overextended themselves with McMansions, credit card debt, vacation homes, his-and-her sports cars, and multiple ex-spouses. Even if the economy stays on course, it is prudent to prepare for a change of fortune. The risk of losing your contract, losing your group’s hospital contract, or dealing with an unexpected medical problem are persuasive reasons to live within your means even when the money is flowing in. When you are in the midst of “ the good times” is when you should save for a rainy day and for your retirement.

An achievable goal is to save 25 percent of your gross (pretax) income. Set aside as much of this money as you can in those retirement accounts for which you and your partner qualify. There will usually be tax benefits and asset-protection benefits for putting this away, but more important, once the money is in a formal retirement account, you are less likely to spend it.

4 Build Your Team

To be successful in the realm of financial planning, it helps to have a good team in your corner. Finding ethical advisors who charge reasonable fees can be a challenge. A good way to find these valuable advisors is to ask senior colleagues in the community for the names of experts who they have worked with for decades.

At the minimum, have a certified public accountant (CPA) on your team. There are few gifts received from the federal government, but the smorgasbord of IRA and other retirement plans available should be fully utilized. A CPA will help you do this.

A lawyer will help you write your will, assist with real estate transactions, and explain the various options in your state for estate planning and trusts.

An insurance agent who will educate you about the nuances of various policies without pressuring you to buy a particular product is a great asset to help you navigate this critically important marketplace.

There are pros and cons to having a financial planner/advisor. If you don’t have the time or temperament to manage your own investments, it may give you peace of mind to have someone else take care of this, but the costs can be substantial. If you want an advisor without conflicts of interest, consider an independent advisor who charges a straight hourly fee and does not directly benefit financially from any particular purchases.

Even if the economy stays on course, it is prudent to prepare for a change of fortune. The risk of losing your contract, losing your group’s hospital contract, or dealing with an unexpected medical problem are persuasive reasons to live within your means even when the money is flowing in.

5 Protect Thyself (Insurance)

In addition to medical malpractice insurance, most physicians will need auto and homeowner’s (or renter’s) insurance. An umbrella policy that supplements these polices provides a great deal of additional personal liability coverage at little cost and should be strongly considered.