The Tools We Trust

Reaching your financial goals should not be complicated as a physician. Your days are jam-packed with decisions. Your financial decisions should not be difficult as long as you are well-equipped with the right tools. Simple tools can simplify your financial life. In my opinion, you don’t need complex Excel worksheets and formulas to figure out where your money is going and how much is coming in. Grade 3 math should be enough to help most of us reach our goals.

Tracking your dollars

To figure out where you need to go. You first need to figure out where you are. Creating a simple financial budget can really help you see where every one of your dollars go. You can write it out on a scrap piece of paper or go all out and create a spreadsheet. Either way, the end goal is the same. Once you get a baseline of monthly spending, you can figure out which levers to pull to either increase or decrease your spending in any given category. This is the first step in building out a strong structure for your finances.

A strong foundation

A high yield savings account is one of my favorite ways to stack away cash while still earning some income. It can serve as the basis of your security blanket. You know your capital is preserved while earning 3-4% APY. Its not much but its better than keeping your cash in a traditional savings account that your bank may offer. I think this is an excellent account to store your emergency fund, rainy day fund or even your savings. You have access to the cash relatively quickly without needing to pay monthly fee’s. I prefer to use “online” savings accounts because they tend to pay out higher yearly interest rates compared to typical brick-and-mortar banks. As a bonus, knowing that you have a nice lump sum of cash sitting will also let you be a little more aggressive as an investor to allocate more cash to stocks or any other investment vehicle that you prefer. My favorite online high-yield savings account is from American Express. They offer a no BS savings account with fees or minimum balances. The current APY is 3.5% !

Your brokerage account

The most common way to amass large sums of wealth over time is typically through real-estate or through the stock markets. In this post I will solely focus on your stock accounts. I won’t discuss strategy here but more about where to start. First you’ll need a brokerage account. This is the platform that will allow you to actually purchase the stocks or ETF’s you want to buy. You can do this through your banks but I find their platforms to look boring and actually hard to navigate. I prefer the aesthetic of platforms like Robinhood. It’s easy to use and very user friendly. Your brokerage account will be the powerhouse of your investing journey. Choose one that you like and preferably one without any trading fee’s.

In Conclusion,

Your financial tool kit needs to be simple. It has to work for you and make sense. If it doesn’t you wont use it. I personally like to review my finances at the end of the month. I can look at what came in, what went out and what the value of my investments are. The right toolkit is different for everyone, don’t get stuck if you realize you aren’t enjoying something. Pivot and make changes.