Bonnie Koo

Today I have a guest post for you from my friend Dr. Cory S. Fawcett, the author of The Doctors Guide book series. His blog can be found at DrCorySFawcett.com. At the end of the article, there is a special treat for anyone interested in Locum Tenens. Be sure you check it out.

Many physicians are bemoaning the lack of control in medicine. It seems every year we lose a little more freedom, have a little less autonomy, and experience fewer choices. Locum Tenens can be a great way to counteract those losses. A great deal of freedom can be reclaimed by working in Locums.

Time Freedom

Since Locums does not tie you down to a particular location, practice or hospital, you can have newfound freedom in medicine. You can choose when to work and for how long. Conversely, you are choosing when to vacation and for how long. This is my favorite aspect of Locums work. 

Every assignment varies in length. A small assignment might be to cover a weekend that is left open in a call schedule. A short assignment is covering for a doctor who is on vacation and will be out of town for a week or two. Longer assignments may involve covering for a physician on maternity leave or medical leave while recovering from surgery, which could span six to twelve weeks. Temporary full time is also possible from locations searching for a new doctor who have an ongoing need until the position is filled.

With such variability, there is a great opportunity for a very flexible work schedule. If there are certain times of the week, month or year you want to be off, just don’t accept an assignment during that time period. You can take a break from your Locums work in July and August and play with your kids during their summer break from school. Or always take off December to do your Christmas decorating, partying, and shopping, then you will be free when your kids are off for Christmas break. The sky is the limit in choosing when to work and when not to work. Your only constrains may be your budgetary needs.

Location Freedom

If you are single, or your spouse isn’t tied down to a location-specific job, or your kids are homeschooled or away at college or grown, then Locums can give you and your family the ability to travel to locations you choose. 

Imagine getting paid to take your family on journeys all across the country, or maybe even to other countries. When you take an assignment, they provide you with housing while you are working. There is no reason your family cannot stay in that housing as well.

When I was a Locums Doctor, my kids were off at college and my wife was not working. We wanted to travel to each location together and explore the towns along the way. The accommodations that were provided always had room for her. If that was not the case, then I didn’t take the assignment. 

I made it clear to the recruiters that my wife going with me on every assignment was a requirement. That didn’t deter them from calling me with a great job opportunity in the South Pacific on a beautiful island. After my mouth was drooling at the opportunity for a paid tropical vacation, they let me know that the housing would not support spouses. I did not take that assignment.

If you want to take your entire family, then choosing locations that they will love, and that are close enough to drive to, is a big bonus. Driving gives you the ability to take a lot more stuff for the kids and avoids the purchase of multiple airline tickets that are not covered by your employer.

Driving was a requirement for me. I only took assignments within a twelve hour driving radius. I wanted to take my bike, other exercise equipment, special cooking items like our Foreman Grill, and musical instruments. My wife and I did what we could to make the temporary location feel like home. 

Freedom from difficult patients

With temporary jobs come temporary patients. As a surgeon, I sometimes picked up patients with very difficult chronic problems. Chronic pain, draining wounds, non-healing ulcers, and recurrent esophageal strictures were some of my difficult patients. These patients generated more phone calls from the nurses, and office visits were often unsatisfying because I could not solve the problem. I became a surgeon to fix patient problems and unfixable things frustrated me.

When I worked in my private practice, those difficult patients were latched onto me for life. Since all my Locums assignments came to an end in a very short time, any of these patients I picked up while on an assignment would be passed off to the next doctor when my assignment ended. With every assignment, I started and ended with a clean sleight.

Freedom to live where we want

Another great feature of Locums is the ability to have a home base wherever we want. We are no longer tied to living where we are employed. If a doctor wants to live near their family in Springfield, Missouri, but there is not a job there, that is no longer a barrier. 

You can go ahead and have your home base in Springfield and do Locums work when and where you are needed. Later, if a job opening pops up in Springfield, you can take it without the need to move. 

I ran into one doctor who wanted to live in Portugal but did not want to practice medicine overseas. So, his Locums job was a recurring job in the states, ten consecutive days a month. He would fly in, work his ten days and fly back to Portugal to his home. Locums Doctors can live anywhere they want.

Freedom to work part-time

Locum doctors have the freedom to choose when and how much they want to work. If working halftime is preferred, then take assignments only half of the time. Working Locums gives the ability to create a schedule of your own choosing. It could be two weeks on and two weeks off, or one month on and one month off. Or, if you wanted, you could take full-time work for a while until the position is filled with a permanent physician.

Job flexibility freedom

Every specialty has different procedures and problems they encounter. Locums Doctors have the ability to choose which kinds of patients they want to see. As a surgeon working in small hospitals, endoscopy was a variable for me. Some hospitals require the Locums Doctor to do endoscopy, while others did not. If I didn’t want to do scopes, I just took assignments that did not have scopes as a requirement. If I wanted to do scopes, I needed to look for assignments that met my needs. The choice was mine and I tailored the Locums assignments I took based on my preferences.

Freedom to leave

When doing Locums, all the assignments are temporary. If you get started on an assignment and aren’t enjoying your job or the town, you can give notice and quit with no hard feelings. There is no reason for you to stay at a job you don’t like or with people you don’t want to work with. There is always another Locums assignment out there. Look at the notice requirements in your contract and give proper notice that you are not going to continue on after a specific date. Then find an assignment that better fits your needs.  The ability to change jobs easily is a big benefit that Locum Doctors have over doctors working in a permanent position.

Conclusion

Now you see the incredible freedom one has in doing Locums work. No full-time job can come close to these advantages. Full-time jobs do have other advantages that Locums don’t have, but that’s another story.

If you are considering becoming a Locums Doctor or are interested in a detailed presentation to see if becoming a Locums Doctor is right for you, then sign up for my online video course, The Doctors Guide to Thriving in Locum Tenens.

If you think Locums is something you want to try, or you need some help in making your Locums life better, don’t miss this opportunity to Thrive in Locum Tenens.

Go on any major finance forum or site and the old adage is to stash 3-6 months of expenses towards an “emergency fund” before investing and saving for other purposes. Let's define an emergency fund first.

Well, that's the problem right there. There are different definitions of what an emergency fund is used for, here are a few:

• Unexpected expenses
• Job loss
• Car issues
• Home repairs
• Medical emergencies
• Pandemic

In my opinion, there are actually very few things that are truly unexpected like job loss and medical emergencies.  But even with the latter, one should know their health insurance plan and deductibles and have an idea of what a true medical emergency will cost. If you own a home – home maintenance and occasional repairs are expected and one should have a fund for that. If you have a car, regular maintenance and occasional repairs are also expected and one should have a fund for that. Death, disability and divorce are among the large ticket emergencies but that's what insurance is for.

Dave Ramsey's popular get out of debt plan has saving for a small emergency fund of $1,000 as it's first step before attacking the debt. I think his baby step plan is sound advice in terms of order of attack but doesn't quite fit for high income and stable earners like doctors.

Big Law Investor has a strong argument for why high-income earners don't need a traditional emergency fund, at least right off the bat. And Millennial Money has a nice checklist to help you decide if you need a traditional emergency fund in cash, summarized here with my take on it.

1. Do you have a stable job? The good news is that physicians have incredible job stability.
2. Ability to have additional income opportunities. Most physicians can easily hustle to work extra shifts and moonlight if there is a need for more income.
3. Investments you could sell if you needed. Never a good idea to withdraw from your retirement accounts, but many of us have a taxable account that we can draw upon. I never recommend taking out a loan from your 401(k), but it can be tapped in true emergencies.
4. Quality insurance coverage. I always recommend insuring against financial catastrophes only (life, disability, divorce, liability, auto, home)- doctors can generally self-insure the rest (like, you don't need to buy that insurance for your phone). In addition, most of us (really, all of us should) have disability insurance but most have a 3-6 month waiting period to get benefits. This is definitely a reason to have at least that much saved in expenses to get you through that waiting period.
5. High credit card limits. Most of us can leverage our available credit in true emergencies until we can figure out how to obtain the money (extra shifts, investments, etc). Obviously going into a credit card is never a good idea, but they are available if need be.

So what am I doing?

We are currently debt-free (2019). We have 1-2 months of expenses in our checking account and “the rest” in our taxable brokerage account at Vanguard. We invest aggressively 90/10 stocks/bonds. We just consider it a part of our overall portfolio. We have enough that it'll still be more than sufficient if the market drops and we need to pull some out.

However, our first likely source of “cash” might be a loan against our eQRPs, our self-directed retirement account that we use to invest in real estate.

The beauty of personal finance is the personal part. Guidelines are nice, but one should really examine and question if the advice is right for you.

How much is in your emergency fund? What is it for? 

This is a guest post by Dr. Linda Street. Dr. Linda Street is a Certified Life Coach with a focus on Negotiations, a Board-certified Obstetrician and Maternal Fetal Medicine specialist, blogger, speaker and Founder/admin of NegotiatHER facebook group.

Up until now, your entire medical education has been an uphill climb competing for a few choice spots.  Shifting gears from vying for that coveted position at your ideal program to interviewing for your first job is a complete 180-degree turn.  This is one of the most important financial choices you will make. How much you earn directly correlates to how much you can save/invest/spend etc. AND is the jumping point for all future salary increases.

So now that I’ve convinced you this is important, how do you do it? 

The most crucial step to nailing a negotiation is preparation. Preparation begins with finding the right job (or two if you want more leverage).  Next comes offers. What about your offer do you like? What don’t you like? Look at it from the lens of your needs, then go back and look at it to gain insight on your potential employer’s needs to help frame your negotiation.   Next, follow these 6 steps.

Ace the negotiation before you walk into the door (or bomb it…) 

90% of negotiation is mindset. Managing your mind is essential.  Stick with me. Let’s look at a tale of two docs. 

• Doctor A is terrified of negotiating.  She is convinced she’s bad at it. She thinks they won’t give her any more than the initial offer so why bother.  Doc A isn’t sure she deserves any more money and is glad they’re offering her a job and not seeing her as the imposter she thinks she is.  She is likely to take their first offer and call it a day. 

• Doctor B hasn’t negotiated before either, but she knows she can figure things out.  She knows the value she brings and shows up with confidence. Doc B feels like this is important enough to do her homework and get the best deal possible.  

These two docs have the same skill set.  Who do you think gets the better deal? Who do you want to hire? 

Doctor B comes out ahead for two reasons, 

1. She asks for what she’s worth and she expects she’ll get it.
2. She exudes confidence and that makes her employer WANT her more which makes them more likely to respect her requests.  Wouldn’t you want a confident partner who can stay collected under pressure?

If you need help with this spend some time writing out everything you have to offer and why they would be lucky to have you.  If you need more help, consider hiring a coach. This is not the place to pinch pennies and the return on your investment will be worth it.  Your mindset sets the stage for the entire process.

Don’t accept a Corolla on a Tesla Budget 

Know your worth.  If you walk in with no idea of what you SHOULD be being paid you will have absolutely no idea whether your offer is good or bad.  You don’t want to be offered a 5^th percentile salary and say yes just because it dwarfs your PGY-4 paycheck.  It also may not serve you to walk in fresh out of training asking for a salary in the 99^th percentile.  So due diligence is key.  

Great resources include: 

• Co-residents who recently graduated (the stigma against discussing money has got to stop!) and faculty in your training program. 
• Survey-based data such as 
  • Medscape
  • Doximity
  • MGMA

Having an idea of what you would like to make BEFORE you have a job offer is a great way to look at this objectively before your brain is constrained by an offer in hand. Write this down, aim for no lower than the 50^th percentile for your field (better yet aim for the 75^th!).  Richard Shell, a professor at Wharton Business School and author of “Bargaining for Advantage: Negotiation Strategies for Reasonable People” teaches that JUST by having higher expectations people on average negotiate a higher amount.

The only failure is not asking

We’re brought up to think failure is kryptonite for eery type A medical brain.  But what if it wasn’t? What if failure was just learning one way that didn’t work and then going back and asking a different way? The only failure in negotiation is not asking.  Do NOT be afraid to ask! Odds are your future group EXPECTS you to negotiate. Their first offer is simply a jumping-off point, view it as such. Look at the contract and evaluate it critically, have a trusted mentor/friend/lawyer help (do NOT skip the lawyer!).  

Where is the salary compared to the goal you set in the last step? What is the bonus structure? How does your compensation change over time (i.e. when do you become partner? What is your buy-in? When can you expect a raise? Does the compensation change from guarantee to production?) This segues nicely into the next step.

Understand how you are paid

A little homework in compensation structures will go a long way. Payment for physicians can come from many different buckets, common ones include 

• Salary (aka “guarantee”)- this is money that shows up in equal increments in your paychecks.  This doesn’t vary based on what you do. The advantage of a pure salary position is that it is reliable, the caveat is that you get paid the same no matter how hard you work.
• Production based- this comes in two flavors, collections (impacted by collection rates, payer mix, lag time) or work relative value units or wRVU.  wRVU is a standardized measure assigned by CMS that is based on the encounter or procedure you are billing. Your employer will then assign a certain dollar value to each wRVU which can either be tiered or not and then you’re paid based on how many wRVUs you earn.  There’s a great calculator at https://www.aapc.com/practice-management/rvu-calculator.aspx that lets you calculate how many wRVU’s you get per common CPT codes. If I am speaking Greek here you may need to do some googling, these terms will likely be important in attending life!
• A Hybrid model- Any imaginable mix of the above with a base salary and a bonus structure based on wRVUs or collections (or quality metrics etc.)

But wait, Money isn’t everything

Know the value of non-financial asks. These are things that can have enormous value to you personally but do not always have a dollar amount associated with them.  Non-financial asks are a great way to sweeten the pot when you are close to making a deal but not quite there. These are things like benefits (health insurance, vision, dental, contribution to retirement accounts) vacation time/PTO, administrative time (for charting catch up, participation in hospital committees, teaching) and things that make your life easier (scribes, etc.)

You’re marrying your job, don’t do it without a prenup 

While many of us want our job to be the perfect fit and last forever, that is typically not the case.  While this varies by specialty, a quick google search reveals that up to 70% of doctors leave their first job within 5 years.  This makes it absolutely essential to plan for this in your contract. Two main considerations are 

• Malpractice tail insurance. If you are offered an occurrence-based malpractice policy, congratulations you can stop reading.  However, most policies are claims-made which means that if you leave your employer and get sued afterwards you’ll need some coverage.  This is where tail insurance is important, it covers you until a suit can no longer be filed. Depending on what area of the country you practice in and what specialty you are this could vary from being a nuisance purchase to a 6 figure investment. If you are able to negotiate it into your contract it’s simply taken care of.  Some places will foot the entire bill and others will be willing to incorporate tail insurance as an incremental benefit based on how long you stay in your job (i.e. if you stay 1 year they’ll pay 25% of your tail and increase for each year you stay with complete payment if you stay more than say 3-5 years).  
• Restrictive covenants or “non-competes”.  Enforceability depends on what state you practice in, but the process can be a headache at best and a legal battle at worst. While you’re on the front end it's wise to assume that this will be enforceable and negotiate to either not have one or to limit the distance/time frame.  

This is an exciting time to transition from training into actually doing what you have always wanted to do.  Make sure you can do it with peace of mind by following these 6 simple steps to ensure you’ve negotiated the job of your dreams. 

Giving to charity and to those in need is on most people’s mind this time of year. The new higher standard deductions that came with the recent tax changes have made it more challenging to deduct donations.

I hope no one gives just for the tax break, but paying less taxes is always a good thing. So, what can you do? Consider opening a Donor Advised Fund!

What is a Donor Advised Fund (DAF)?

A donor advised fund is an investment account for charity. You donate cash or investments. You can then donate to charity from the fund and invest it so it can keep growing (and can keep giving).

The year you donate to the DAF counts as a charitable contribution. Then you are free to take your time to give to individual charities. This means you can make larger lump sum donations strategically, say every other year or so, so that you are able to itemize deductions on your taxes.

But the best part, in my opinion, is that you don’t need to keep track of every donation you make for taxes anymore. You got the tax deduction when you donated to the fund. So that is the only transaction you need to keep track of.

Where should I open a DAF?

The 3 DAF custodians I looked at are Vanguard Charitable, Fidelity Charitable and Schwab Charitable. TD Ameritrade currently only allows institutional clients to open one, but at the time of this writing, Charles Schwab bought TD Ameritrade, so that might change soon.

Fidelity & Schwab have initial account minimums of $5,000 and require a minimum donation of $50. Vanguard requires an initial account minimum of $25,000 and requires a minimum donation of $500. All three accept cash and securities, including appreciated securities.

My recommendation is to choose the custodian you already use for your taxable if that’s an option. Most people will probably go with Fidelity or Schwab for the lower initial minimum and lower donation minimum of $50.

Why donating appreciated shares is a win/win

Appreciated shares in a taxable account is subject to either long term or short term capital gains tax. Long term capital gains starts at 15% (up to 20%) + state income tax + 3.8% extra tax for higher-income folks. 

But, if you donate these shares to charity (via a DAF or not), you don’t pay any taxes on it and neither does the charity. They get the fully appreciated shares tax-free if you held the shares for at least a year. And you can write off the amount of the appreciated shares too! So really, it’s a win/win/win in my book.

If you held the appreciated shares for less than a year, you can deduct the original cost (or cost basis) of the shares, not the appreciated value. So it’s best to donate appreciated shares that you’ve owned for more than a year.

Giving via a DAF or via donating appreciated shares is cheaper than “giving cash” due to the tax savings.

Should you give?

Giving is personal. I only started giving relatively recently.

When I was a resident, I said “I'll give when I'm an attending.” That seemed logical – I wasn't making a lot and had student loans accumulating interest every day. Then I became an attending. Then I said “I'll give once I don't have so many loans” or “I'll give once I get some financial footing.”

Somewhere along the way, I discovered Farnoosh Torabi's So Money podcast. I started with her inaugural podcast with guest Tony Robbins. One part really got to me:

People say, ‘When I'm rich, I'll give', they're lying. If you won't give a dime out of a dollar, there's no way you're gonna give a 100 million out of a billion, you're lying to yourself. But if you can do it today, the biggest thing that giving does, is it teaches your brain there's more than enough.

Tony Robbins

Right after I listened to that podcast, I made my first donation – I pledged to give a small amount quarterly to my alma mater Barnard College and specifically earmarked the funds for financial aid. I received generous financial aid in the form of grants and work-study and hope that my small contribution will help someone else attend.

I have since given to:

• Camp Discovery – a summer camp for kids with severe skin diseases
• KACFNY – Korean American Community Foundation of NY
• Village Impact – a foundation that builds sustainable schools in Kenya

My goal for 2020 is to open an account with Vanguard Charitable with at least $25,000. I chose Vanguard since that is where is my taxable brokerage account is, meaning I can easily transfer appreciated shares from my taxable account. One thing I learned this year is that the more money I make, the more impact I can have. Wealthy Mom MD is working on a project where we will donate 50% of the profits to this DAF, I can’t wait to tell you more about it!