5 Key Tips to Building Long-Term Wealth as a Healthcare Professional

Don't hate the game. Learn how to play the game.

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Medicine is a rewarding career. As a physician, nurse practitioner, or other healthcare professional, you’ve dedicated years to training. You’ve sacrificed SO MUCH to reach this point. I thought that as soon as I finished medical school, money worries would be a thing of the past. But financial well-being in healthcare isn’t always a foregone conclusion—especially after years of delayed income in medical school, lower income in residency, and student debt. Looking back, now sixteen years after completing medical school, these are my top financial tips for healthcare professionals. Or titled another way, “Things Lauren wishes she had done differently with money:” J

1. Pay Off Student Loans AS SOON AS POSSIBLE

Over the past two decades, the cost of medical and graduate education skyrocketed, and with it, so have interest rates on student loans. In the mid 2000s, my medical school tuition increased over the course of four years from $20k per year in 2005 to a whopping $150k per year by 2009. Long term student loan debt is like a mouse infestation in your house: easy to ignore in the short term but devastating to your home foundation in the long term. If you’re carrying a large student loan debt, the first step toward financial freedom is to call the exterminator and eliminate it as soon as possible. Interest rates of 6–8% (or higher) make student loans one of the worst kinds of debt to hold long term.

Consider these options:

• Aggressively paying off your loans early, especially if they’re private or high interest

A high interest loan rate is generally considered to be any annual interest rate that exceeds three to five percent of the principal balance. I knew a physician colleague who paid off all his medical school loans in his first two years as an attending by working extra shifts and putting $10,000 per month towards the student loan debt. His starting student loan debt was $240,000, set at a 10 percent annual interest rate. If he had just made the minimum payments spread out over twenty years instead of aggressive payment over two years, he would have paid an additional $432,000 just in interest alone. Ouch!

• Refinancing (if you’re not pursuing loan forgiveness) and can secure a lower rate

If your student loan interest rate exceeds five percent and you don’t think it will be feasible to pay off the loan altogether in the next few years, consider shopping around to refinance and lower the rate with another lender. With a growing number of millennials taking on college and post-graduate student loan debt, a variety of low-interest rate lenders have sprung up over the past decade. You’ll have plenty to choose from. Splash Financial is a great website that lets you compare multiple lender refinancing options, and they specialize in healthcare student loans. You should aim to find an interest rate that is around two to three percent.

2. Live Below Your Means – Even as an Attending

It’s sooooo tempting to upgrade your lifestyle once you finally start earning a real paycheck-which is probably a solid five to ten years AFTER your non-healthcare career peers. But financial success, like academic success, comes from discipline. That means being smart about your biggest recurring expenses: housing and transportation.

• Housing: With rising home prices, renting often makes more financial sense than buying, especially if you’re early in your career or unsure about long-term plans. Buying a home comes with many hidden costs—closing costs, property taxes, maintenance, homeowners insurance, interest on the mortgage, and sometimes HOA (homeowners’ association) fees. If not planned carefully, these fees can substantially slow your long-term wealth-building potential. Another compelling reason not to buy now is that housing interest rates are at a ten-year high. Waiting until these rates drop back down below three to four percent will allow you to buy much more home for less money.

• Cars: Buy used or pay in cash instead of financing an expensive new car. Your dream car can wait—your financial future shouldn’t.

3. Max Out Your 401(k) or Solo 401(k)

One of the best tax-advantaged ways to build wealth is through retirement accounts. If you’re a W-2 employee, max out your 401(k) contributions ($23,000 in 2024, plus an extra $7,500 if you’re 50+). If your employer offers a match, that’s free money—take it!

If you’re a 1099 contractor or self-employed, a Solo 401(k) allows you to contribute as both the employer and employee, maximizing your tax-deferred savings. This is an incredible tool for physicians and NPs who do locums, consulting, or run their own practices. If you are a 1099 worker who already has a Solo 401k, investigate creating a Cash Based Pension Plan, which will allow you to put even more money away per year completely tax free.

4. Invest Wisely with Dollar-Cost Averaging

The key to long-term wealth isn’t chasing individual stocks (as fun as that can be) or trying to time the market—it’s consistency. The best approach? Dollar-cost averaging (DCA). This means investing a fixed amount every month that you can afford, no matter what the market is doing.

The best way to do this? Invest in broad-based, low-cost ETFs or index funds with zero expense ratios. My favorite is FZROX (Fidelity ZERO Total Market Index Fund), but similar zero cost options exist through Vanguard (VTI) and Schwab (SWTSX). These funds provide instant diversification and outperform most actively managed portfolios over time.

5. Use credit cards wisely

Everybody thinks that credit cards are bad. On the contrary, my friend! They only hurt you if you dont know how to play the game. The key to this game is to NEVER carry a balance over to the next month-which is where the credit card company makes their money by charging INSANELY high interest rates on the carried balance. If you pick a credit card that gives good cash back options, and set it to auto-pay the entire amount every month, credit cards can offer you lots of extra money back on expenditures you would make either way. Again, the key here is to always pay the full balance off each month to avoid highway robbery interest rates. The credit card companies are counting that you won’t. The joke is on them. You will. And you will make their benefits work for you. If you’re like me and you use Amazon alot, the Chase VISA Amazon Prime card is a great option that gives you 5% back on each Amazon purchase. Another popular cash back card is the Citi Double Cash Card, which gives you 1% back on all purchases made, and then another 1% back when you pay the balance back (which, after reading this article, you will pay the full balance off each month on auto-pay). It’s free cash. Don’t hate the credit card game. Learn how to play the game to your advantage.

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Medicine & Wealth—You Can Have Both

A career in healthcare is fulfilling, but financial stability makes it even better. You don’t have to choose between loving medicine and building wealth—they can go hand in hand. By eliminating debt, living below your means, maximizing retirement contributions, and investing consistently, you can create a future where money is no longer a source of stress. And you choose who you work with and when you work because it makes you happy and gives you meaning, not because you need it to maintain your lifestyle.

Your years of hard work should lead to both personal fulfillment and financial freedom. Stick to the plan, stay disciplined, and watch your wealth grow. Medicine is a gift. Financial independence is the ultimate gift that keeps on giving.

-Lauren