Tag: money

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What To Do With A Large Windfall During Residency

windfall

You may think it is just a pipe dream, getting an unforeseen large windfall. (and I’ve spoken about small windfalls before). Nevertheless, throughout my years of stewardship in the residency program, I have encountered a few residents who have had a significant life-changing amount of money fall into their hands. Some with cryptocurrency, others with family inheritance, and others with a stock pick that rose much more than expected. So, what is the best way to deal with a substantial windfall like this? OK. It might not happen to you. But it still occurs more often than you might think. And, if it doesn’t happen to you, it is still fun to mull over. So, let’s talk about some general advice about what to do with a windfall.

Give The Large Windfall A Little Bit Of Time To Sink In

In general, when you receive a windfall of a significant amount, your first thought is to do something immediately with the cash hoard. But your brain needs to catch up a bit with the reality of the situation. Typically, it would help if you waited a bit until the initial circumstances of the windfall had settled out. When it comes to money, emotion can interfere with the best and most rational choices that we need to make. So, give it some time. Waiting a bit won’t cause that much harm (just a little bit of a loss to inflation). But the opportunity cost of doing something rash with the money is much worse!

It’s Not All Or Nothing!

Just like you don’t want to put all your money on 00 on a roulette wheel (you will lose much more often than you will win!), don’t put all your money into one financial basket. Diversification is the name of the game. And you may want to consider not putting it all into one debt repayment or investment. Consider spreading out your newfound fortune on a host of different opportunities. It’s tough to predict the future. So, you are generally better off spreading your money into multiple options.

Consider Repayment Of Debt/Student Loans

Although many of your student loans are at low interest (or 0 interest rate currently), you should consider putting a large chunk of your fortune into your student loans. Why even at these interest rates? Well, there is always a risk that you may not be able to complete a residency, or an unforeseen event can happen that can prevent you from paying them back when the interest returns to normal. And student loans are generally not dischargeable in bankruptcy. So, taking these risks off the table is enormous. Furthermore, the peace of mind of knowing that your student loans are significantly smaller or even gone is priceless.

Savings/Investments

In addition to student loans, also consider putting some money away for a rainy day. Some good options you might want to consider as a low-paid resident will be an emergency fund for savings, a Roth IRA, or a hospital 401k if there is a match. And try not to buy individual stocks or bonds. That situation can lead you to a very undiversified state that can lose all your hard-earned money.

Other Depreciating Assets

Finally, if you still have some money left over, there is nothing wrong with a bit of enjoyment in your life. Just beware of taking too much to buy things like cars, boats, planes, or whatever else floats your boat. You may regret it later on. I recommend using no more than 10 percent for personal enjoyment related to these items. Otherwise, there is a good chance that you will regret any rash decisions you make for your future self!

Let A Large Windfall Be A Blessing!

Whatever the reason for the windfall, it is your opportunity to make it into a blessing instead of a curse. It’s an opportunity to make your life better and your future self happier. So, give it some time to sink in; don’t spend it all on one thing; consider repayment of debt/student loans, and enjoy a bit of it. Following these rules will make that obscene sum of money into something more than just a number. Grandma would be proud!

 

 

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External Moonlighting In Private Practice: Tread Carefully!

external moonlighting

It’s exciting to collect that first paycheck which can be an order of magnitude higher than your residency salary when you first start as a fully trained radiologist. But, many of you may want to make even more at the beginning. It’s not uncommon to have debt loads that would make regular folks cringe. Nevertheless, some private practices discourage external moonlighting to make that extra money when starting. Why do some businesses work this way? And, what do you do if you want to continue working at your first practice but are not happy about this policy? Let us muddle through some of the issues that you may face when you want to make some extra dough when starting.

Why Do Some Practices Discourage External Moonlighting?

External Allegiances

Moonlighting outside the realm of your main job could create loyalties external to the practice. Let’s say you sign a contract to work during a vacation at an external site, but the primary imaging business also could use your help. This dichotomy of purpose can create a conflict of interest since you will support another practice instead of your primary allegiance. Furthermore, perhaps that other job can be more enticing than the one that does not allow moonlighting. Radiology practices fear having employees change jobs. It is very costly and causes the other practice members to have to take up the slack.

Practices Want To Encourage Their Own Internal Moonlighting

Sometimes the work can get busy. Maybe, it’s a new MRI that opened up. Or, perhaps a senior partner recently retired. In either case, there are many times that practices need all hands on deck to cover the rotations with the extra work. Why would a business allow external moonlighting when it may have many opportunities of its own? The practice needs to cover this extra work!

Exhaustion/Burnout/Vacation

Some practices are more lifestyle-oriented and encourage their radiologists to take their vacations. Burnout is an actual entity. And, we all need a break once in a while. Working all the time on your vacation time can be a recipe for burnout. The exhaustion of the partners and employees is a very costly situation. Why not go to the extra lengths to discourage burnout by forbidding doing external work outside the practice?

I Like The Practice But How Can I Deal With Strong Policies Discouraging External Moonlighting?

Ask For Internal Moonlighting Gigs

Some practices don’t advertise moonlighting opportunities that they have available. So, instead of assuming that your primary radiology practice has nothing available, just ask around. Sometimes senior partners would rather have time off rather than the extra money. Other times, work needs to get done that is making the days longer and more stressful. Both situations often occur. And although not advertised many times, they are potential extra ways to earn some extra dough. Sometimes all you need to do is ask!

Have Them Make An Exception

Sometimes rules are made to be broken. Practice by-laws are in place for the average situation for the average employee or partner. But, who is to say that you are average? If you provide a compelling reason for the business to make an exception to the external moonlighting policy, sometimes they will. Some practices may be more liberal for non-partners or partners. If need be, check with the chair and find out if it is possible.

Work Only During Vacations Or Out Of State

Suppose the practice is concerned that you won’t be dedicating your full attention to your primary job as an external moonlighter. Or, your main radiology job is worried that you will be competing locally with your primary radiology practice. Then let the radiology practice know that your external work will not interfere with either. Guaranteeing that you will only work out-of-state or on vacations may convince the partnership to allow a bit of extra work to make some more cash.

External Moonlighting: The Unwritten Rules

When you look at external moonlighting policies from a birds-eye view, it can make a lot of sense for a practice. It can protect the business from losing their employees and partners, ensuring that work does not go uncovered, and preventing burnout and exhaustion. But there are ways to deal with these issues and get the extra work that you want. So, instead of folding your hand, ask around and make sure to let your practice know that you are interested in moonlighting from the get-go. You may get the extra work you want without destroying your primary job!