Question: What financial advice would you give to a young emergency doctor today?

Answer: By the time you read this, I will have been practicing as an attending emergency physician for 20 years. Military members, police officers, and paramedics are usually eligible for retirement after 20 years in their profession, and those professions usually don’t include anything like four years in college, four years in medical school, and three or four years in residency training (plus optional fellowship training that an emergency physician might have undergone). If you include all that, I’ve been doing this wonderful, but challenging, profession for the last 31 years.

After a financial awakening midway through residency, I have been teaching personal finance and investing principles to doctors for more than two decades. I might not be as good with AI or the ultrasound probe as some of my younger partners, but I have learned a thing or two over those years about the financial life of an emergency physician that are worth passing on. Here are four of them.

# 1: Get Rid of Your Loans Early

Seventy-three percent of graduating medical students borrowed to pay for part or all of their education. I have yet to meet one who regretted getting rid of their student loans in the first few years of their career. Aim to have them paid off (or forgiven) within three to seven years of completion of training. If your job qualifies for it, Public Service Loan Forgiveness should occur six to seven years out of training. If your job does not qualify, the proven technique of “living like a resident” should allow you to have them paid off within three years.

The average emergency physician earns approximately $375,000 per year. If you will live on $75,000, pay $100,000 in taxes, and send the rest to your lender, you can pay off $200,000 in loans in just over a year and $400,000 in loans in just over two years. You can even give yourself a significant raise in lifestyle and be done within three years. Such a feat will require far less discipline than it took to get through a decade of challenging school and training.

# 2: You, Inc.: Operate as a Business

Most principles of business are very simple and can easily be applied to your personal life. You have an income statement (all your income minus your expenses total up to show you your “savings rate”) and you have a balance sheet (your assets minus your liabilities total up to give you a “net worth”). Pay attention to them.

Although I’m a fan of doctors owning their jobs and have spent most of my career in a small democratic group, ownership in emergency medicine isn’t all that different from being an employee when “the business” only has one client who can fire you with 90 days notice. Whether an employee, a partner, or an independent contractor, negotiate to make sure you’re being paid fairly and don’t be afraid to change jobs or do a little locums work. Your skill set and knowledge base are highly portable. Take advantage of that fact.

# 3: You Are Probably Already At or Past Peak Earnings

Unlike many jobs and even medical specialties, emergency physicians reach peak earnings very quickly and then usually see their earnings gradually decline over the course of their career, at least on an inflation-adjusted basis. Most emergency physicians will work fewer shifts and fewer highly paid shifts like nights as their career progresses. There are family demands, personal interests, and health challenges, along with the highest burnout rates in the medical profession.

Our job is hard, even in an ideal environment, and we rarely work in ideal environments. Assume you’ll be wanting to work no more than half to three-quarters time by your 50s, because almost every emergency physician I have ever met is in that boat. Plan your life financially so that you can do so. Pay off student loans early. Front-load your retirement savings to give compound interest more time to work. Get shorter, smaller mortgages even if that means a less expensive house.

# 4: Don’t Expect to Be Able to Work Until 70

After 16 years with my group, at age 51 I am already one of the oldest docs in the group. Out of 22 docs, there are two in their 60s and two others in their 50s. Only one of those is working full-time and three of the four are paying others to work their share of the night shifts. All of the other doctors who were in the group when I joined have retired, pretty much all between 51 and 60. Why do you think you’re going to be any different?

Whether due to family demands, outside interests, or more likely, burnout or your own health problems, there’s a very good chance you won’t be able to work until 60 even if you want to. You’ll need to be able to retire within 20 to 25 years, not 30, much less 40, and spend at least a few years living off your investments before taking Social Security.

What will it take to do that? If you earn $375,000, pay $100,000 in taxes, and save $75,000 (20 percent of your gross income) for retirement for 25 years, that will allow you to spend $200,000 per year during your career. In order to replace that $200,000 in spending, you will need $5 million in retirement. If you invest that $75,000 per year for 25 years and earn 5 percent after inflation on it, it will grow to about $3.6 million in today’s dollars, far short of the $5 million you need to replace your in-career spending.

The only ways to make up the difference are to save more, spend less in retirement, or give your money more time to grow. But if you can’t give it any more time, you need a combination of the other two. Perhaps you should save 25 percent of your gross income ($94,000), which would grow to $4.5 million, and then could safely spend something more like $180,000 per year plus eventually some Social Security money. That’s still a nice retirement, especially with the mortgage paid off and the kids out of the house. Or perhaps you have a working spouse who will help save for retirement. However you solve this problem, the math has to math. You don’t get a pass on it.

Count your blessings if you can continue to work, at least part time, until 60 or even 65 because those extra years of compound interest on your investments will help this all to work out much better. My point with all these calculations is that you must get serious about retirement savings at the beginning of your career. If you wait until you’re feeling crispy at age 45 to get started, you may find you don’t have enough time left to build the comfortable retirement you’ve always dreamt of.

Emergency medicine is a unique career and emergency physicians have unique financial challenges. Slay debt early, implement a disciplined career-long investing plan, and live intentionally so you can meet it.

Dr. Dahle blogs at https://www.whitecoatinvestor.com and is a best-selling author and podcaster. He is not a licensed financial adviser, accountant, or attorney and recommends you consult with your own advisers prior to acting on any information you read here.