From Graduation to Practising: A Checklist
The most notable thing between graduating and practising is perhaps the pay difference, as you well know. This has implications for both taxes and the way you should be approaching your outstanding loans.
Below you’ll find a short list of specific items worth sorting out between your graduation and the start of your practice.
☑ Disability Insurance
I recommend disability insurance for two reasons. One, the income you’ll be making is worth insuring. And two, you’re going to be your own boss, so you don’t get any of the safety-net you would if you worked for a firm (i.e. employment insurance, worker’s comp, etc.).
As you come close to your graduation, it is worth getting the early-bird discounts available. Ask your financial advisor about these before you graduate.
☑ National Student Loans
If you’re going to be working in an eligible postal code (i.e. where you file your taxes), now is around the time to apply for student loan forgiveness. These programs are specifically geared to attract doctors to underserved communities.
You can find out if your area is eligible by clicking here.
☑ Line of Credit
Given your rate of pay and the current monetary environment, it might make sense to move any student loans you have to a professional line of credit.
In the event of such a change, you can keep your rates the same as well as any limits. The upside, compared to a student loan, is that you will have better access to cheap debt/capital that can then be used to buy into a practise or purchase a house.
☑ Debt Repayment vs. Investments
This one depends heavily on the investing (and interest-rate) environment you find yourself stepping into. In the spring of 2022, for example (when this is being written), rates look like they could go up a long ways still. This will have a profound impact on how you’ll want to balance debt repayment versus investing in something like the stock market. While a lot is quite fuzzy when it comes to investing (if it weren’t, we’d all be rich!), there are some smart and basic things you can do to line yourself up for success. Get in touch to find out more.
☑ Tax Planning
The single biggest shock to most new doctors, even though they know it’s coming, is the size of their tax bill in the first full year. Getting ahead of the curve here pays huge dividends, quite literally. Things that will probably make a difference for you are incorporation and being strategic with your RRSP/TFSA contributions.
Secure Your Financial Future
It only takes 30 minutes, but will save you thousands down the road.
Book your FREE virtual meeting now and set things in order for going forward.