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Investments vs. Savings- A Resident’s Guide- Part 2

As a reminder, last week we went through the difference between savings and investments and talked about why the difference is so important with examples of using savings as an investment and investments as savings as a resident. We also discussed many different ways to put money away for savings. This is all encompassed in the first part of the this series called Investments vs. Savings- A Resident’s Guide- Part 1. Please refer back to this article if you want to review these important concepts. Today, we are going to discuss what many residents are more excited about- what are the common options available for investing money as a resident? In particular, we will emphasize the usual individual types of investments available (stocks, bonds, mutual funds, and ETFs). This post is not going to include other sorts of alternative investments such as peer-peer lending, real estate, MLPs, etc.  Also, I am not going to discuss the  different overarching account types (IRAs, brokerage accounts, 401k, etc.). Both of these latter topics are grounds for another discussion as a full blown article at a later point!!!

To make it easier to follow, I will divide the investment types into the following categories: stocks and bonds. I will give examples of each and examine which places are good places to park your money as a radiology resident. Let’s start with the best place to put your money for most residents: stocks.

Continue reading Investments vs. Savings- A Resident’s Guide- Part 2

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Investments vs. Savings- A Resident Guide- Part 1

The distinction between investing and savings is not trivial. It can lead to the loss of thousands of dollars if the two ideas are misused or confused. Since most residents do not have business backgrounds, I’m pretty sure there is a high percentage of radiology residents that do not understand the difference between investments and savings. So, I am going to simply define each, show why it is so important to understand the distinction, and then go into more detail about what constitutes savings. Due to time constraints, I will leave a full investigation of types of investments and how to invest in another blog. (Let’s make it part 2!!!)

 

Savings vs. Investment Definition

First off, the definitions. Savings are short-term instruments for keeping/holding onto money, usually for less than 5  years. Investments are long-term instruments for creating wealth.

Why is this the distinction so important? If you are putting investment money into savings, you are losing out on the opportunity cost of making high interest/capital appreciation on your money. Likewise, if you are putting savings money into investments, you are substantially increasing your risk on money that you need, or risking the need for capital preservation.

What can happen if you treat an investment as savings?

Let’s start with a thought experiment: putting investment money into savings. Imagine you have 1,000 dollars that you can afford to put away for a long period of time. Logically, what is the safest way to utilize this money? Many would say put it in an FDIC insured bank account, possibly a certificate of deposit. Wrong, wrong, wrong!!! In fact, the risks to this money become substantial.

What can you get on a 5 year CD? Maybe 2 percent, if lucky.  Now, what is the current inflation rate? It is about 1.86%. (There is handy calculator called the CPI calculator that you can use to calculate the yearly inflation rate). So, you decide to put the 1000 dollars into a 5 year CD. At the end of 5 years, you collect the interest which is 1000 * (1.02^5-1) or about 104 dollars. But wait. The government has to take its fair share of the interest with taxes. Taxes on interest are pretty much the same as your regular income taxes. So, let’s say you are in the 25% tax bracket and you have a 3% state tax on interest, you are now left with 104*(1-(0.25+0.03) or around 75 dollars. So, you have 1000+75 or 1075 dollars after taxes and interest. However, what is 1075 really worth 5 years later? Here, we need to take the prevailing cpi number (for simplicity sake we will assume it is 1.86% each year, the current cpi rate). So we take the 1075 dollars and divide that by the following number- 1.0186^5,  or 1.097, the total effect of inflation over 5 years. So how much is the 1075 dollars in 5 years be worth in present dollars- that would 1075/1.097 or 980 dollars. Think about it. The 1000 dollars that you put into the 5-year cd is really worth only 980 dollars when you take it out. That’s a really raw deal. Your money will be guaranteed to be eaten up by taxes and inflation in this low-interest environment over a long period of time. Don’t put your investment money into savings!

What can happen if you treat savings as an investment?

Alright, let’s take the opposite situation. You have a 12-year-old car that is on it’s last 10-20 thousand miles. You decide to take that 1000 dollars and put it into an S & P index fund. And, you intend to save for a car over the next three years when you think you will need one. It happens to be the year 2006. What happened to the S & P index fund between Jan 1, 2006 and Jan 1, 2009? It fell by 35%. And, you need that money to afford to buy a car in 2009. So, now you only have 1000*(1 -0.35) or 650 dollars in 2009. You may now not be able to afford to buy the car you wanted. Even worse, you may have to take that 650 dollars and use it to buy your car. Think about it. Subsequently, in the period of time afterward from 2009-2016, the stock market went up about 158 percent. That same original 1000 dollars you would have put into the index fund would have been worth over 68% more in 2016 or (1.68*1000) 1680 dollars if you kept it invested. Or that 650 dollars that you used in 2009 would have been worth 1680 dollars in 2016. Hmmm… 650 dollars vs. 1680 dollars only 7 years later, a striking difference.

The problem is you need to use your savings when you need to use your savings. You have little control over timing. Often times, you will wind up selling your investment at a low point, meaning that you will lose the potential capital appreciation of your initial investment. Any money that you need over the short term should not be placed in an instrument with significant risk. Never put your short-term savings into an investment!

Types of Savings

So now you understand why it is important not to take too many risks with your money for short-term needs. But, there are many options. For the uninitiated, this can seem daunting. I think of it as a multilayered approach. Let’s put the type of savings into two different types of buckets: money you may need for something immediately (100 percent liquid savings) and money you don’t need immediately but you will need in the short term future (up to 5 years later).

Liquid Savings Accounts

Which savings instruments are 100 percent liquid? Checking accounts, money market accounts, FDIC insured savings accounts, and money market funds,

I will begin with checking accounts, probably the most familiar. You can establish a checking account at almost any bank or credit union, online or in person. And, you probably have one already. It usually issues almost no interest but allows instant access anytime. I personally have a checking account with a local branch, but an online checking account is likely ok for most people.

Money market funds are safe heavily diversified accounts that invest in large numbers of short-term notes that usually return a nominal amount of interest. They are common at brokerage houses. Some allow you to write checks on the account. They are a good place to park cash temporarily, often as an instrument to buy investments at some point. But, it is safe enough to be considered 100 percent liquid and a savings instrument.

Money market accounts are available at banks and usually also allow instant access to your money, but for a limited number of times per month. You can typically write checks on the account. The advantage of this account: they usually provide a higher interest rate than a checking account and it is also FDIC insured. I would tend to put money in this account for less frequent and larger expenses. Also, if someone steals your checking account information, it provides an additional level of security. Not all of your money will be at the most readily accessible checking account.

And, there are FDIC insured savings accounts. They are very similar to money market accounts but usually don’t allow direct checks against them. You can move money instantaneously in and out of them electronically. Similar to money market accounts, they provide a higher level of interest. I personally recommend looking into online savings accounts because they tend to issue a higher interest rate because these online banks don’t have the fixed costs of local branches. This sort of account can be used to save for short-term larger purchases.

Less Liquid Savings Options

Let’s say you don’t need instant access to your money, but you do need it sometime in the near future. These options provide a slightly higher interest rate with the main intention of capital preservation and not capital appreciation. Remember, these savings instruments should not be seen as means to make tons of money, but rather a means to be able to pay for important/necessary expenses. Many residents have not had much experience with these options. Nonetheless, they are really important to understand. What are some of these options? The main ones are bank CDs, brokerage CDs, short-term Treasuries, “investment grade” short-term municipal bonds, and “investment grade” short-term corporate bonds.

So let’s talk about bank CDs first. The type of bank CDs I am talking about are FDIC insured bank CDs only. These CDs guarantee a fixed interest yearly interest rate for the duration of the time of the CD. You can use the principal and interest without penalty when the bank CD comes due. If you decide to cash in the CD prior to the due date, there is an often an interest penalty that can vary with the bank offering the CD. Bank CDs often range from 3 months to 10 years and beyond. I would recommend using bank CDs in the range of 1 to 5 years. Why? Simply because very short-term bank CDs less than 1 year tend to offer lower interest rates than savings accounts and money market accounts with less liquidity. Bank CDs greater than 5 years break the golden rule of using a savings account as an investment account. Why? Because a CD tends to provide a much lower interest rate than what you can make in an investment.

Bank CDs are very useful for saving for items or events that you will definitely not need until a specified date since they offer a slightly higher interest rate than the standard savings account. You can also use them as a back up to an emergency account. It can be a place where you can save additional money with minimal penalty, if needed, with a higher interest rate.

I would also like to mention brokerage CDs as a similar sort of savings instrument. These CDs operate in a very similar fashion to a bank CD. The big difference is that you can buy these CDs at a brokerage and collect many different CDs from many different banks in one place. These CDs are very good for people that need a large amount of liquid money and don’t want to have to worry about FDIC insurance limits for their money (250000 dollars- Not something for a typical resident to worry about!!!) You can also buy and sell the CDs prior to the due date at a loss or gain depending upon the changes in prevailing interest rates, something that you can’t do easily with a bank CD.

Short term treasury notes are also another option as a safe short-term savings mechanism. The going interest rate at the present time is 1.31 percent for a five-year treasury as of the date that the article is written. This interest rate tends to be somewhat lower than what you can get in an FDIC insured CD. So, I tend not to recommend them. But, it is also backed by the full faith of United States government and is unlikely to default. It is surely a safe means of capital preservation.

The final two less liquid savings options are closer to a hybrid between savings and investments since there is a slightly higher risk of default (meaning there is a theoretical risk that you won’t get all your money back). These include investment grade short-term municipal bonds and corporate bonds.

For the typical radiology resident, municipal bonds are not the greatest deal because they tend to issue a lower interest rate than the other savings interest rates. Moreover,  you do not get the big benefit of the municipal bond, the ability of the instrument to be free from federal taxes. Most residents are in either the 15 or 25 percent federal tax bracket, so the advantage of buying these instruments is typically not there. You really need to be in higher tax brackets (above 35 percent) to take advantage of this instrument. At the current time, the median yield on a 5-year municipal bond ranges from 1.1-1.4 percent depending on the investment quality. If you figure, that the true interest rate including the tax benefit is somewhere around (1.1/0.85 to 1.4/0.75) or 1.29 to 1.86 percent, depending on the bond and your tax rate, there is not much benefit to this sort of bond and it has a very low but real risk of default.

Investment grade corporate bonds can be another interesting way to save money for a fixed period of time. The interest rates at the current time may be a touch higher than the typical high-interest bank CD. However, again there is a real but remote risk of a short-term high-quality company default. I would not recommend it at the current time.

Finally, I would briefly like to mention that there is also the option of short-term bond funds. The reason I don’t like this option for savings is that there is a real risk of loss of principal (albeit not by that much typically), breaking the rule of using savings as an investment.

The Bottom Line

The biggest take-home point is to remember savings are not investments and investments are not savings. Severe damage to your financial life can occur if you break this cardinal rule, even as a resident.

Also, there are multiple ways that you can put money into savings. For most residents, a checking account, money market account, and/or saving account make a lot of sense for the most liquid needs. In addition, I would recommend bank or brokerage CDs to those residents that don’t need their savings for a slightly longer period of time (between 1-5 years) and want to accumulate a slightly higher interest rate.

Well, that’s about it for a summary of pitfalls of savings vs. investments, and the basics of savings instrument. See you back here in a little while for part 2- Investments!!!

 

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The Difficult Radiology Attending

difficult attending

Fortunately, most individuals in the radiology profession have stable, friendly personalities. But, in any room of 100 people, you will have psychopaths(1 out of 100), narcissists, borderline personalities (6 out of 100), in addition to other difficult personality types. And radiology is likely no different. During your radiology residency, you magnify these issues because you have to sit for a concentrated amount of time with this person. It could be for hours at a time. (Although that can be different now with the Covid pandemic!) So, you need to learn coping mechanisms to deal with these difficult people.

Why Difficult Radiology Attendings Are Not All Bad

Ironically, I found that some of these most difficult attending personalities gave me my best and most intense learning experiences. It’s where I learned to develop a thick skin, become more of an independent radiologist, tighten my dictation style, and listen. These were the formative years for me. If you think of this tough individual as another link in the chain of learning experiences, most of these days, weeks, or months you sit with this problematic attending will seem to have more relevance to your overall education. Your time spent will indeed not be perfect but will be much improved.

Personality Types

This segment will go through 12 different difficult personality types that you may encounter during your residency program. We will also teach you how you can use each problematic personality type to add to your body of experience and build you into a thriving radiologist.

The Narcissist

Everyone knows this individual. I personally always think of that main character from Dragon’s Lair(Dirk the Daring), with the perfect hair, the expensive clothes, and showing off their skills (or lack thereof!!!) to the world. As they say, “God’s Gift to Humanity.” These problematic individuals will often appear overconfident, and some will make fools of themselves. It’s going to be the attending that never uses liver windows because he says he can always easily detect all liver lesions in soft tissue windows. He’s just too good to make that extra effort.

What’s great about working with these sorts during your residency training? When you complete a rotation with this individual, you will learn how to avoid being overconfident and look more carefully in places that the narcissist will miss. Most important, it is a great time to learn how to be humble, an essential feature of a good radiologist. Radiologists cannot always be right!!!

The Know It All

If you were in school, this would be the talkative kid that is always raising his hand. Or think of Hermione from the Harry Potter series. This person can be incredibly annoying but smart and well versed. The know-it-all gives the resident a distinct learning experience but usually takes the thunder away from something that another attending or you may have discovered. As a resident, you have a lot to learn from this person. He or she will teach you all sorts of radiology information that others will not and give you a sense of humility.

The Absent Attending

You know this type of individual, always leaving the department at the drop of a hat. He/she expects you to do all the work for them during the day. And, the person is rarely available when you have pressing questions. I have found that this experience is probably one of the best learning experiences you can have as a resident. It allows you to take charge of a rotation that you usually would be merely following. You will need to look up lots of information on google and ask other residents/attendings what to do. When you finish with the rotation with this sort of difficult attending, you will be able to run the department because you will handle most of the day-to-day issues on your own, related to your experience of having the unavailable attending!

The Smitten Attending (With Someone Else!)

So, you are working in your interventional rotation, and your co-resident or a medical student is very handsome or pretty. Your attending does not seem to want to listen to anything you have to say. The “boss” always goes to the other resident to teach them and ask them questions and forgets about you. What do you do? Well, the answer is simple. You work twice as hard to get their attention. Working hard on this rotation may not pay off concerning getting a recommendation from this individual. Still, it will allow you to put your heart and soul into your work and make the rotation an intense work experience. You will live and breathe the subspecialty rotation. When you go into practice, you will be thankful for the extra time and expertise you may not have otherwise!!!

The Obsessively Detail Oriented Attending

When you come back from dictating a case, this is the sort of difficult attending that will mince every word and tell you why each word and phrase should have been different. Don’t take offense at this sort of mentor. Most of the time, they mean well. But, the experience of having to write the same dictation over and over; overcorrecting every statement until you make it the way he/she wants, can be painful. But, dictation is one of the more difficult elements in radiology to master. So, this experience can be invaluable for honing your reports and making them much more robust and exacting. Believe it or not, consider this person a resource to make them that much better!

The Sociopath

Watch your back! He/she will typically seem to be the friendliest radiologist in the whole department. This problematic attending often will tell you precisely what you want to hear. Until wham! At the end of the month, you find out that your evaluation from the program director is not what it initially seemed. The sociopath will not tell you about what he/she thought of you at the time of your rotation and takes pride in stealthily making the lives of the radiology resident miserable.

The good news is the rotation will seem to be just fine when you are there. It is only the afterglow that causes misery. But your experience with this attending will teach you something invaluable, never assume that everything is ok. Always ask and find out what you can improve and how you can do things better. This experience is a wake-up call for the naive resident!

Bizarro

Out of all the radiology personality types, believe it or not, you will find this one to be one of the most interesting. I can remember one of my former attendings telling me about a mentor who was continually drooling when he spoke and whose eyes were incessantly tearing. He stood at the short height of 4 foot 3. But, when you talked to this person, the passion for teaching and his profession shone through everything. These attendings tend to have some of the most diverse backgrounds and interests.

When you treat these folks as mentors/teachers, you find that they have unique ideas and behaviors that you would not learn from the more typical personality/appearance. I have incorporated their lessons into my daily practice. Also, I have found that their teachings tend to stick because of the unusual delivery and presentation. Typically, you will remember the days fondly that you work with these people and have good stories to tell as well!

The Dictator

You will find this problematic attending demanding and harsh. The dictator treats all his staff with an iron fist. This radiologist will appear unreasonable at times and expects everyone- nurses, technologists, residents- to bow toward every whim. Unfortunately, you will need to do the same or wait for his wrath. The environment may, at times, be unpleasant, and you will need thick skin. Still, I have found that these attendings make the residents more rigorous in their approach to running a department, adopting search patterns, and learning radiology. Use this opportunity to incorporate the dictator’s demands into your routine, and I can assure you, you will become a much better radiologist!

The Gossiper/Talker

You will have some of the best conversations with this attending and will learn about every character in the department. This person talks a lot and can prevent staff from getting their work done, And some of the information you may or may not have wanted to know. However, listen to this person very carefully because they can be an excellent source of information about what is going on in the department, a precious commodity. My advice is to reveal only what you want to expose to this attending, or else your story may become publicized as well!

The Inappropriate Attending

Most people know about this type of personality. He/she may yell at the patients, make off-color jokes with the wrong sorts of people, or maybe a little too touchy/feely. To this day, I use these uncomfortable situations to be instructive of what not to do as an attending radiologist. I use these experiences to remember to model good behaviors to my residents by the allegories/stories that have occurred!!!

The Loner

Many residents feel the need to get instantaneous feedback from their attendings. This problematic attending will not only give you refrain from any feedback, but he/she also may not even talk to you during your shared time. You may be “pulling teeth” to get this attending to teach and speak to you. You may feel like you are always being observed and assessed, but with no response. Remember that the world of radiology is not a specialty of instantaneous feedback. You may find out what you have done right or wrong months or maybe years afterward. This attending personality type truly prepares you for the real world!

The Unintelligible Radiologist

Most residents know this type. It’s the attending with tons of typos in their reports. And, clinicians are continually calling this attending to figure out what he reported in his radiology impressions. So what is the significant advantage of having an attending like this? You will need to learn how to field the clinician’s questions about his cases in a thoughtful, intelligent manner without incriminating its author. It’s a great way to solidify your radiology impressions and learn to communicate with the clinicians!!!

Bottom Line About The Difficult Attending

There are all sorts of personalities that radiology residents will encounter during their four years of training. I have probably just scratched the surface. Problematic characters can lead to trying times on a daily, weekly, or monthly basis. However, the experiences that you will have can be invaluable in your development as a radiology resident. Use these personalities to enhance your reputation and skills as a radiologist. Don’t let these difficult attendings get the best of you!!!

 

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I’m Just A Resident- Should I Really Start Saving For Retirement?

retirement

You’ve just started collecting your first few paychecks or are a more seasoned 3rd or 4th-year resident. Either way, you may think, I only have 50 dollars left over at the end of the month after paying off student loan interest, putting money into an emergency account, and paying off all my expenses. It’s only 50 dollars- Does it matter if I save it or spend it on dinner, drinks, or movies? If you have that thought process month after month, you will seriously damage your future retirement net worth. Let’s run through some calculations.

The Basics of Compounding at Different Ages

Compounding at 26 years old

So let’s assume you are beginning residency and you are 26 years old. And let’s say you will also be working until you are 70. That gives you somewhere around 45 years of working life. Let’s estimate that you can average 8 percent per year in your investments (the stock market has given back close to 10 percent returns over the past century!) So based on the 8% yearly return, your 50 dollars would be worth (50*1.08^45) or 1596 dollars at retirement. Of course, some of that money would erode due to inflation.

Now let’s assume inflation is going to run at 2.5%. That means that the 1596 dollars would erode from inflation and be worth (1596/1.025^45) or the equivalent of 525 dollars in today’s dollars after inflation. So, think about it… For every 50 dollars you spend, you use 525 dollars in “future money” when you are 70 years old. Do you believe that a meal with drinks is worth 525 dollars?

Let’s think about these calculations a little bit deeper. Say you put away those 50 dollars each month for your entire first year of work. That would be 50 x 12 or 600 dollars saved for this year when you are 26. Or, approximately 6,300 “future 70-year-old you” dollars saved (525 dollars x 12) after inflation.

Compounding at 50 years old

How long would it take to save the same amount of money at 50 years old (peak earnings age) at 50 dollars per month? It would be the following calculation for seven years of savings:

600+ (600*1.08/1.025)+ (600*1.08^2/1.025^2)+(600*1.08^3/1.025^3)+ (600*1.08^4/1.025^4) + (600*1.08^5/1.025^5) +(600*1.08^6/1.025^6) +(600*1.08^7/1.025^7) or 5823 dollars after 7 years.

If you add another year of saving at 50 dollars per month, you come up with an additional (600*1.08^8/1.025^8) for a total of 6734 dollars at eight years.

In other words, you would need to save for 7-8 years at 50 dollars per month when you are 50 to come up with an approximate total of 6,300 dollars of future money. This total compares to the spry age of 26 when you only need to save 50 dollars for one year to come up with the same amount at 70.

What does this all mean for you?

So, the bottom line is that even though you will be making a lot more in the future, your future dollars are nowhere near as powerful as today’s dollars. You may be making ten times as many dollars, but each dollar earned will be 7-8 times less potent. This power of compounding is a good reason alone to start investing today.

Another Reason Why Investing is So Important Now- Moderate Prevailing Interest Rates

It turns out that interest rates have significantly improved in the year 2023. But, there is no guarantee that interest rates will return to 8,9 percent or higher for a very long time. So in retirement, you need a significantly larger nest egg than you would have required 30 or more years ago when interest rates were at that level. Today, you can get a maximum “safe” interest rate of 4.5-5% on instruments such as municipal bonds. And the 30-year treasury bond, another safe investment, yields close to 4%. So, if you want a guaranteed income when you get older, you may need to save twice or three times as many years ago when the same interest rates would have been 8,9 percent or more.

Think of it this way- today, you have a million dollars, and you only collect 40 thousand dollars annually. Thirty years ago, with that same million dollars collecting interest at 10 percent, you would have had a hundred thousand dollars yearly. That’s a significant difference in the potential quality of retirement. It behooves all of us in 2023 to become conscientious savers/investors.

The Importance of Basic Investing Habits for Retirement

I would also argue that, as human beings, we tend to do many things habitually. We brush our teeth, go to work, shower, etc. If you don’t develop those habits early, they may never become part of your routine. I would say the same idea goes for putting away monthly investment money.

Those radiology residents who don’t start investing every month early in their career are much less likely to do the same when they are further on. You are likely to want to spend without thinking about the possibility of your future if it is not a habit. Also, you need to develop a comfort level with how to invest. If you don’t start, you will not know the basics and be less likely to contribute. And most importantly, believe it or not. We can’t work forever!!! Who knows how much the Social Security trust fund will leave you when you retire?

What’s the Upshot?

So, the crucial factors of compounding and low prevailing interest rates are important reasons to start saving that extra 50 dollars or whatever you have at the end of the month in an investment account. Start making a concerted effort to plug away at your retirement account. Eventually, investing monthly for the rest of your life will become a habit, and you will feel comfortable doing so. It’s not just 50 dollars per month or 600 dollars per year. It’s a lovely gift of 6300 dollars yearly for your 70-year-old birthday, not just chump change. For your sake and for your retirement’s sake, start putting away money for investment, no matter how small, right now!!!

If you have any comments or questions, please reply below.

 

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Radiology Resident- Get Up and Move It!!!

Sitting can be hazardous to your health. Just take a look at some of the article headlines and links from major news organizations- CNN, CBS, Huffington Post. And, the list goes on…

What do we picture radiologists doing all day? Unfortunately, the stereotype is that radiologists are sitters; we are on a comfy chair near a diagnostic workstation, powering through loads of studies. There’s some truth to that. In fact, I can almost guarantee that you will gain that freshman fifteen pounds during your first year of residency if you follow the typical work schedule without modifying your behavior. That’s the bad news.  The good news is that there are ways to circumvent the habit of sitting down for long periods of time, even as a radiologist.

And, since residents are early in their career, it is easier to start forming habits that will potentially last a lifetime. So, here are some suggestions to conquer the ills of long-term sitting, whether you are a radiology resident at work or at home.

1. Stand Up

Many desks these days allow you to complete your work while standing. In fact, we have several workstations dedicated to the standing radiologist in our own department, although unfortunately not enough.

But, let’s say that this option is not available. What can you do to remind yourself to get up? I recommend either a watch timer or an Apple Watch. Regularly, I get messages on my watch to tell me to stand up. It can be occasionally annoying, but it usually does the trick even though there are times I am unable to get out of my seat.

Additionally, little things help. Instead of texting your colleagues, consider getting up and having a conversation with someone. Instead of calling the technologist to complete a study, get up and tell them. These are ways you establish connections with people and lessen the amount of time you are sitting during the day.

2. Get the most calorie burn out of your workspace

Whenever I am at work, I always think about ways to maximize my body’s workload. Think about calorie-burning activities like banning the word elevator from your vocabulary. In fact, the only time I take the elevator is when there is a “wet paint” sign on the stairs. Using the stairs is a great way to burn those extra calories

Take a long way around to get to your next meeting or conference, whether it means going outside or visiting your colleagues. Just remember to leave your workstation a little bit earlier!

3. Get that heart rate up- find a new activity you can stick with!

Any activity that doesn’t interest or excite me, I find difficult to stick with. And, I think it is easy to extrapolate the same to others. So, find something that increases your heart rate, but most importantly find an exercise routine that you enjoy. And, it is crucial to do so. Remember, radiologists sit down more than most other professions and you certainly don’t want to add home sitting time to your total.

For instance, I started running several years ago and have continued diligently only because I look forward to the run. Why? It’s very simple. I have my iPad set up to watch Netflix and HBOGO shows that I find hard to watch without interruptions by just sitting down. Some of the series that I have gone through include Game of Thrones, The Sopranos, House of Cards, and Mad Men, among many others. So, I really look forward to my time on the treadmill.

Also, you may want to find activities that intrinsically interest you because you are learning something new, whether it be physical, mental, or practical. I have recently taken up Tae Kwon Do and have found it to be a great way to build up my stamina, flexibility, and coordination. Each lesson I take, I find that I am learning new things and want to come back for the next time. Some of that enjoyment certainly stems from the great instruction I receive locally from Ko’s Tae Kwon Do with Grand Master Ko.

Get Up And Move It!

Getting out there and moving is especially important as a radiologist because of the increased sedentary lifestyle and the years that you can potentially lose due it’s health consequences. So, make a concerted effort to get up and move!!!

 


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Paying back student loans vs increasing savings- a dilemma!

Congratulations!! You’ve finished medical school and you’ve collected your first few paychecks or perhaps you finally have a few extra dollars to spare. Feels good, huh.

But, you look at your monthly student loan statement, and you have debt ticking higher month after month. Perhaps it’s not much, less than 100,000 dollars, or maybe it is 200,000, or even up to 500,000 dollars. Scheduled repayments may range anywhere from a few hundred dollars per month to multiple thousands of dollars with interest, of course. You feel a little queasy all of a sudden as you realize your predicament. What do you do?

Well, I’ve hiked up this mountain of debt and have been fortunate enough to climb off of this mountain. The good news is that someday you will too. The question is how and what is the best way to do it.

So, you finally may have your first job as a radiology resident and maybe you have an extra 100 or 200 dollars after your expenses for the first time. What do you do with the money? Do you pay down student loan debt or put it into a savings account/investments? That’s an interesting question without a one size fits all answer. I will go through a rational method of making these decisions.

Paying Back Loans Or Increasing Savings?

First off, we are assuming you have no high-interest credit card debt or other high-interest debt. That needs to be paid off first because you can never catch up your debts with interest rates over 10 percent. So, let’s say that is the case, now some of what to do next depends upon the amount of student debt, your student loan interest rate, and your shorter term goals.

As a thought experiment, let’s begin with what you may get back when you begin to pay off your student loans when you have taken out a large amount of debt. At a resident salary level, you do get a student interest tax deduction at the end of the year of up to 2,500 dollars on the interest serviced on the debt. So, if you have the money to pay off the student debt of 2500 dollars and most or all of that goes back to interest (due to a large student loan), you will get back 15 percent assuming a salary of up to 65000-80000 dollars in 2016 for a single person (deduction phases out between 65000 and 80000 dollars) and assuming a salary of up to 130000-160000 dollars for a married couple (deduction phase out between 130000 and 160000). Where can you make 15 percent interest on your money as a guarantee? Not many investments in this world will guarantee you that sort of return.

On the other hand, let’s say you have a relatively low amount of student loans at a fairly low-interest rate. Most of the money that you pay back is going to go back to the principal and not the interest. Your return on investment is not going to be close to the 15 percent interest rate that you get back from the student interest tax deduction. It will be closer to the true interest rate of the loan.

If you are fortunate enough to have a low-interest rate of up to 2,3, or 4 percent either by consolidating or refinancing your debt and you have small amounts of student debt, it makes sense to concern yourself more with the savings part of the equation. However, anyone with interest rates of over 4 percent, in today’s low-interest rate environment, should really make loans their first priority. But in either case, low or high-interest student debt and small or large student loans, I always say diversify. What does that mean? Never put all your eggs in one basket. Put some towards savings and some toward student debt. Everybody needs some savings. Interest rates and amount of debt make it a matter of priority and amount dedicate to each bucket.

How To Figure Out How Much To Add To Savings And Student Loans

OK. Let’s say now you are interested in saving for a larger emergency fund or maybe you need a down payment on a car or house. These may be necessities for your situation. Well, then you would want to take a fixed percentage of what you have left over at the end of the month and divide the total left over into two buckets. If your student loan interest rate is low and you have low amounts of debt, it would make sense to put a higher percentage of your leftover funds into the savings bucket (say 80 percent). And, if your interest rate and debt are higher, then you should probably consider putting less into saving (say up to 20-30 percent). This will allow you to build up your savings and begin to tackle your student loan debt.

This method will allow you get control over your student loans over time while maximizing the amount of money saved for you and/or your family. And then, when the day comes that you get your first real job as an attending, you will appreciate the more manageable debt load and the savings that you have built up during your residency!