The Frugal Physician’s Financial Advice for Women in Medicine


September 28, 2021

4 minutes to read

Source / Disclosures


Spath D. Financial health of women. Presented at: Women in Medicine Summit; 24-25 Sept. 2021 (virtual meeting).

Disclosures: Spath reports having affiliate relationships with Amazon, Credible and Personal Capital, and having received advertising compensation on Contract Diagnostics and Set for Life’s The Frugal Physician website.

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Male physicians have, on average, higher net worth than female physicians, according to a speaker at the Women in Medicine Summit.

Indeed, 37% of female physicians are worth less than $ 500,000 versus 23% of men, while 13% of male physicians have a net worth over $ 5 million versus 5% of women, flat Spar, MD, an internal medicine doctor at Dartmouth-Hitchcock Putnam Physicians in New York City and founder of The Frugal Physician, said during his presentation.

According to the Medscape 2021 Physician Debt and Net Worth Report.

Doctors, men and women, must make financial decisions and calculated investments early in their careers to maintain their lifestyle and retire at a reasonable age, according to Spath. Women in particular should take steps to ensure their financial health since they often bear the greatest financial burden.

“Student loans are a huge burden on women, especially because we have taken on the costs of procreation and there is a gender pay gap,” Spath said. “So, unsurprisingly, women hold two-thirds of America’s student debt, which is now a crisis. So, we have to be wise about it. “

Women hold about $ 929 billion of the more than $ 1.73 trillion in student debt in the United States, she added. By taking control of their financial health, physicians can pay off debt, maintain an emergency fund, and invest wisely to build passive income.

“Money allows us to gain this flexibility and this freedom to design our ideal lives,” said Spath.

During the presentation, she discussed three basic principles of financial planning: protecting, reducing debt and investing.


Spath encouraged doctors to prepare an emergency fund and a nest egg to protect themselves and their families.

“Unfortunately, most Americans cannot afford a $ 1,000 emergency,” she said. “I would say most doctors have a hard time affording a $ 10,000 emergency.”

She advised against relying on credit cards for emergencies as it can lead to big credit card debt.

Doctors must keep at least 3 months of spending in cash or place funds in certificates of deposit or brokerage accounts. More importantly, that money should be readily available in an emergency, according to Spath.

In terms of life insurance, Spath said an ideal plan “should provide an instant retirement nest egg for your spouse,” pay off a mortgage and some other debt, and cover college expenses. This equates to about 25 times the annual expenses of a physician, or $ 1 million to $ 5 million for most physicians.

Term life insurance is preferred over whole life insurance, according to Spath. Temporary plans can be staggered in order of 30 year, 20 year and 10 year coverage. These plans are generally more profitable and less necessary as the doctor ages and their passive investments and net worth grows.

Spath also recommended that doctors write a will, designate beneficiaries, and form a trust with assets to avoid estates court, which can be costly.

When it comes to disability, physicians should analyze their short-term and long-term disability insurance coverage before they need it.

“The thing you need to know about long term disability insurance is that while employer sponsored insurance policies are great and great to have, individual disability insurance policies are so good. better because they are portable and have better definitions of disability. Said Spath.

She encouraged physicians to review their employer’s disability policy to determine the definition of disability. Ideally, physicians want a “own occupation” insurance policy to receive a full disability benefit. Disability coverage should be acquired as early as possible when physicians are younger and have fewer pre-existing conditions.

“Unfortunately, the cost of disability insurance for women is much higher than for men. [insurance]”Spath said.

Reduce debt

Speaking from personal experience, Spath described how taking control of debt can reduce a considerable amount of stress.

On student loans, for people currently in medical school, she advised against PLUS loans because they are more expensive than other options. Meanwhile, automatic payment can reduce interest rates by 0.25%.

“Anything that can lower your interest rate can have a huge impact,” Spath said.

People who can afford standard reimbursement options benefit from federal protections. During the pandemic, the government was able to immediately stop interest rates on loans, which the private sector could not do right away.

Doctors working in the non-profit sector have access to what Spath has called “the holy grail”, referring to the civil service loan forgiveness program. Those who meet the specific conditions for the program may have their remaining student loans canceled after 10 years of qualifying payments and the timely submission of annual forms.

For doctors in the for-profit sector, there are many income-oriented plans available, including income-based reimbursement, pay as you earn, revised pay as you earn and repayment based on income.


Wise investments are key to developing passive income that could one day build enough capital to cover a doctor’s annual expenses, Spath said.

Basic types of investments include stocks, bonds, mutual funds, index funds, and exchange traded funds. Spath said a doctor’s investment portfolio should have a percentage of bonds equal to their age, with the remaining percentage put into stocks. This ratio ensures that more risk is taken early in one’s career, while more cautious investments occur closer to retirement, according to Spath.

While the mix can be detrimental to financial health when applied to loans, it does the opposite when applied to investing, Spath said.

“Your actual account balances are growing exponentially, and it will continue to do so if you give it enough time,” she said. “This is why it is so important to start investing now because time spent in the market will show you the exponential nature of investing. ”

Choosing the right retirement account for your income is another essential part of achieving financial independence. Spath pointed out that an individual can have multiple retirement accounts.

“For example, a person under the age of 50 working at a non-profit institution with a sole proprietorship next door may have access to a 403 (b), 401 (a) (Money Purchase Pension Plan), 457, a solo 401 (k), a Roth IRA backdoor, a HAS and maybe even a Roth mega backdoor, ”Spath said.

Before making any investment decision, doctors should take a moment to imagine their ideal life. This goal will guide all future decisions.

“What would your ideal day, month and year look like? Would you like to have a few months to travel? What would be your ideal schedule at work? What else would you like to do with your life? “Says Spath.” Financial planning is the key to making your ideal life a reality. “


More in debt: women and student loans. Published in 2020. Accessed September 28, 2021.

Medscape 2021 Physician Compensation Report: The recovery begins. Posted April 16, 2021. Accessed September 28, 2021.

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