Money
I love attending conferences! And not just CME conferences for dermatology (love those too.) They foster personal development and growth and I get to meet like-minded people and make new friends.
Earlier this year I attended two conferences:
Maui Derm – January 26-30, 2019
Grand Wailea, Maui, Hawaii
If I’m going to get some CME I may as well do it in Hawaii! This was a great excuse to get some old derm girlfriends together without our spouses and kids! I’ve now officially attended all three Hawaii Dermatology conferences (the others are Winter Clinical and Hawaii Derm).
Of course, any CME trip is tax-deductible or eligible for reimbursement from your employer (if they do that). I like combining these trips with vacation to minimize my vacation spending. After Maui, I went to Honolulu for a few days to see some friends. I used Chase Sapphire Reserve points for my flights to Hawaii. And most of the rest of the trip (besides Honolulu) is a business expense.
Impact Summit by Kajabi – April 5-7, 2019
Irvine, California
Impact Summit is a conference for online entrepreneurs. This was the inaugural conference by Kajabi and to say it was FUN is an understatement. I think sometimes as physicians, we forget what else, and who else is out there – we are often in a bubble of other physicians. Here I met a few hundred online entrepreneurs and got to see some of the top online entrepreneurs speak such as Amy Porterfield, Rachel Hollis, Jasmine Star, James Wedmore and Brendon Bouchard.
In case you’re not familiar, Kajabi is an “all-in-one” online platform where you can host and create your website, email list, run your online course, membership sites and more. What I love about Kajabi is that they continually update and improve their product and provide excellent customer support. I use Kajabi for my opt-ins, sales pages, online course, future membership site and email list.
And here are the conferences I will be attending or speaking at through Spring 2020. I love meeting new people, so let me know if you’ll be there too!
FinCon – September 4-7, 2019
Washington, D.C.
FinCon is a conference for financial bloggers, financial advisors and industry to connect and exchange ideas. There’s been a growing group of physician finance bloggers and we tend to meet at FinCon. Although there are numerous sessions on how to improve your outreach as a blogger, most of us attend to network and meet others in the industry. Like I said earlier, I love meeting people and it’s pretty awesome to meet others who love the topic of money as much as I do!
Like last year there will be a dinner for physician finance bloggers, so get in touch if you’d like to attend!
Brave Enough Conference – September 12-15, 2019
Scottsdale, Arizona
BE19 is the third annual conference by woman physician Sasha Shilcutt, MD. Many women physicians find themselves isolated, especially after they become mothers. It’s all too easy to lose connection let alone make time for ourselves. BE is all about reconnecting with ourselves and empowering women physicians.
Here, you can show up whoever and however, you are. Come and meet your fellow women physicians from all specialties! I am thrilled to be a speaker at BE19 where I will discuss “The Keys to Wealth.”
The Entrepreneur Experience – October 17-19, 2019
Coronado, San Diego, California
Have I mentioned how much I love Amy Porterfield? She’s an online entrepreneur who teaches other online entrepreneurs how to create and sell their online courses. I’ve learned a lot from her and she was a huge part in helping me launch my first online course earlier this year.
She hosts an annual conference for her course takers and I can’t wait to hopefully meet her and get inspired by meeting other online entrepreneurs. Matt will be attending with me.
Passive Income MD Real Estate Conference – October 26, 2019
Los Angeles, California
You heard it here first! Get ready for the first real estate conference geared towards physicians with Peter Kim, MD aka Passive Income MD. I’m excited to learn more about real estate from Dr. Kim and the duo behind SemiRetiredMD.com.
Empowering Women Physicians Retreat – December 2-7, 2019
How about some CME, life coaching AND amazing bucket list destination? Yup, a CME retreat for women physicians in Bora Bora!
Four Seasons, Bora Bora, French Polynesia
Dr. Sunny Smith is a life coach and physician who coaches women physicians. She’s also my coach. I’ve had my best year yet so far and a large part is due to having her as my coach. For those of you that are not familiar with what a life coach does – in short – their job is to help you get yourself out of the way so that you can get the results you want. They help you become the best version of yourself!
Women Physicians Wellness Conference – February 25-27, 2020
Grand Cayman, Cayman Islands
Dr. Erica Howe created this conference out of a love for helping and educating women physicians and the Cayman Islands. I’m honored to be a speaker at her conference along with some amazing women physician leaders of our time… in Grand Cayman. Not too shabby! We plan to take the whole family with us to this one!
I can get used to these beach destinations that also offer CME!
Physician Wellness and Financial Literacy Conference – March 12-14, 2020
Paris Hotel, Las Vegas, Nevada
Aka WCICON20 this is the second White Coat Investor conference. The first one in 2018 sold out very quickly and was in Park City, Utah during ski season. In order to accommodate a larger group, the conference is now in Las Vegas! I’ll admit Vegas is not my favorite conference destination.
Like the first one there will be a wide range of speakers and panels including one for Women Physicians that I will be moderating. I’ll be hosting a reception for women attendees as well. Date and location TBD.
Registration opened earlier this week so be sure to register if you want to attend!
Will you be attending any amazing conferences this coming year? Drop me a line!
This is a guest post by fellow physician blogger known as Crispy Doc. He is a financially independent emergency physician, married with kids, and lives in coastal California. He blogs about financial literacy and burnout at www.crispydoc.com. He tweets, too: @crispydocblog.
A recent conversation with a financially brilliant friend led to the revelation that in addition to the usual suspects (health insurance before Medicare kicks in, Sequence Of Returns Risk), inflation remains a very real worry for those considering early retirement.
Inflation is the erosion of purchasing power over time. It's averaged 2-3% per year in recent history, although there have been notable years (1974 and 1980) where it exceeded 12%.
While the risk that inflation poses is far less than that posed by Sequence of Returns Risk (SORR). SORR is the risk that investment returns from your portfolio in the early years will be so low you run out of money before you have died. More about that later on…
Mattresses possess two major risks: conception and inflation
Conceiving an unplanned child on a mattress can undermine one's retirement plans as surely as inflation, but I'll conveniently exclude that topic from today's discussion to focus on the second mattress risk.
Keep a dollar in your wallet to spend later that evening, and your dollar does the job nicely. Keep that same dollar under your mattress for years and when you take it out, it buys less.
In a highly recommended series written by bloggers Big ERN and Actuary on FIRE, they describe how $1 million that remains un-invested (under the mattress) subjected to 2% annual inflation for 25 years will have the purchasing power of $600k at the end of that period.
This is understandably scary for an early retiree counting on that stash but equally fearful of market volatility.
Cash under your mattress will not suffice. You need to invest your dollar where it can keep pace with inflation or beat it. [Editor’s note: I like to call this – make your money work for you! Don’t let your green employees be lazy!]
Take home point: Cash is great in the short-term, lousy over the long run.
Cash is great in the short-term, lousy over the long run. @crispydocblog Share on XSh*t's about to get real: a note on terminology
When considering portfolio returns, it's important to understand the difference between real and nominal returns.
The amount your portfolio earns above and beyond inflation is termed your real return.
In contrast, nominal returns do not subtract inflation.
This is a critically important difference. During the great recession of 2007, investors seeking safety purchased government treasury bonds with nominal returns below inflation. These treasuries had negative real returns – investors actually lost money on these investments!
What investment tools can we deploy in our inflation-fighting toolkit?
Our investment toolkit includes equity (stocks) and fixed income (bonds, treasuries).
Stocks represent an ownership stake in a company, with the potential to gain or lose value as the company grows or fails.
Bonds are loans to a company repaid at a fixed interest rate.
Treasuries are loans to the government.
Equity
Stocks are higher risk, higher reward. Bonds are lower risk, lower reward.
Stocks historically beat inflation in the long term, but at the risk of greater volatility in the short term. Throw a dollar in stocks for 30 years and you are extremely likely to come out ahead of inflation at the end of the time period.
Throw a dollar in stocks for 30 months and it's anyone's guess if you'll win or lose. The loss could be half the value your dollar.
Take home point: Only dollars that you can ignore for decades ought to go in stocks, but the expected growth should exceed inflation over the long haul.
Fixed Income
Fixed income investments like bonds offer a slow and steady return on investment that keeps pace with or just beats inflation. Money you'll need in the next several years belongs in fixed income.
In fact, many investors create bond ladders – for example, they may invest in bonds that mature sequentially one year apart staggered over a decade. This keeps their investments liquid to ensure the money becomes available just in time to meet their spending needs, or alternately, can ensure they don't tie up all their money in a less remunerative bond if rates rise over that decade.
Fixed income investments are not, however, risk-free. The credit risk of a bond is that the issuer will go bankrupt before you are paid.
Interest rate risk is the risk that when interest rates go up, the bond you own will decrease in value because investors can obtain a higher rate of return elsewhere.
Take home point: Bonds tend to beat inflation, with lower risk than stocks. They not only reduce the volatility of your investment portfolio, but are a safer place to park money you are counting on in the coming decade.
Treasuries
The United States has created a solution to credit risk by issuing Treasuries (government-issued bonds). Since the government can always print money, it is felt not to be at risk of bankruptcy (This works well in the U.S.; not so much in Zimbabwe and other unstable countries where no one assumes the government will survive the year).
Take home point: Treasuries are considered to be completely free of credit risk but remain subject to interest rate risk.
Feeling TIPSy?
Uncle Sam has deep pockets, and you are his favorite niece. For this reason, the government has created a flavor of treasuries called Treasury Inflation-Protected Securities (TIPS), whose value increase is proportional to inflation.
Returning to the example from Big ERN and Actuary on FIRE, if you were to invest $1 million in TIPS subjected to 2% annual inflation for 25 years, you will withdraw an amount that preserves the full purchasing power of your $1 million at the end of that period.
But Uncle Sam is also a tough love uncle. If deflation occurs, the value of your investment drops proportionally.
Take home point: Invest in TIPS to protect against a jump in the inflation rate, so a dollar invested will retain full purchasing power at the time of withdrawal. The flip side is they can lose value in times of deflation.
How You Can Use These Tools To Protect Yourself At Retirement
In retirement, you are dealing with a new reality. Earned income from work has ceased, and you are living on a fixed income going forward that comes from your investment portfolio. Your goals are:
- Guarantee we have enough to cover the initial years of retirement in a worst-case scenario such as poor sequence of returns.
- Reduce the risk we take by increasing our bond allocation and reducing our stock allocation at the time of retirement.
- Minimize the risk inflation poses to our portfolio.
- Maintain a safe withdrawal rate low enough to last you until death.
One reasonable plan that incorporates these goals might be:
Maintain cash equivalents for the first 3 years of retirement. Year one should be cash in a money market account that gets transferred monthly into your checking account, years two and three can be invested in short-term CDs until you need to tap them for expenses.
Gradually shift asset allocation at retirement to increase fixed income since you can no longer risk the volatility of stocks. Let's say you are currently 70/30 stocks to bonds – a great recession striking the year after you retire could result in a loss of 35% of your portfolio, exactly when you lack the long time horizon to patiently wait for it to recover since you'll be living off of that portfolio. This is the dreaded SORR.
At retirement, you might go 50/50 (limiting your potential stock losses to 25%). Once past that critical first decade after retirement, you can consider upping your stock allocation gradually because you've made it beyond the most potentially devastating period when a sequence of returns risk could sink your retirement ship.
Another response to SORR is to remain flexible. If you can reduce your expenses when annual returns are low, you remain in a position of power.
Consider splitting your fixed-income investments evenly between bonds and TIPS, as TIPS will help you hedge against inflation risk. (The Vanguard Target Retirement Funds tend to split fixed income roughly 1/3 TIPS, 2/3 bonds at the time of retirement, for comparison.)
Finally, despite the FIRE community's general adoption of the 4% safe withdrawal rate, a more conservative 3-3.5% withdrawal rate will inevitably provide a buffer of safety that lets you sleep more soundly at night. This is doubly important for the early retiree, since the 4% safe withdrawal rate in the original Trinity Study was designed to survive a 30 year time horizon and many seeking FIRE will need their portfolios to last decades longer.
As Dr. William Bernstein has so eloquently put it, “The purpose of investing is not to simply optimize returns and make yourself rich. The purpose is not to die poor.”
With a better understanding of the investing tools in your tool belt, you will be less likely to need to tighten that belt in retirement!
After months of being busy, I was finally able to catch up with my friend and collaborator Carrie Reynolds on her podcast, Hippocratic Hustle! I got to share my upcoming life changes–moving, quitting my job, all that crazy stuff! As of now, I have about 1 more week of work, and then we pack up everything and move back to the NYC area. I talk about what I’m planning to do with the rest of this year, including my decision to do Locums!
Also, I was able to talk about my website’s rebrand from Miss Bonnie MD to Wealthy Mom MD–why I rebranded, how I chose the name, and how I went about redesigning the website. Since it’s been live for a while, I’m sure most of you are now familiar with the new design, and I hope you like it as much as I do!
We also had a chance to talk about charities–Hippocratic Hustle’s foundation and my own plans to set up a Wealthy Mom MD foundation someday soon. I’m still in the process of doing research, but I’m excited to find a cause and start giving back!
Listen to all this and more by following this link!
Wealthy Mom MD is all about empowering women physicians. In today’s society, women are entering the workplace more and more, building their own careers, and becoming the breadwinners of their households. But have we reached gender equity in our financial and professional lives?
This is a big question, and one I had the privilege of discussing on What's Up Next, a financial freedom podcast hosted by Paul Thompson and Doc G. Joining me in the guest panel were fellow women physicians and financial experts Erin Lowry, author of Broke Millennial and brokemillenial.com, and Carrie Reynolds, host of the Hippocratic Hustle podcast.
Many women in the professional world also double as wives and mothers. Some of us make more money than our spouses or partners. In the podcast, we talk about what this is like and whether or not there’s a power dynamic at play. We also discuss how to balance our professional lives with our personal lives, which includes redefining gender roles and/or outsourcing help.
"I think the professional woman of today sometimes feels like she has to be superwoman and mommy-guilt is a big part of it." Share on XWomen shouldn’t feel the need to do everything – it’s all about finding balance!
In the end, the question that begins the podcast still remains: have we reached gender equity between men and women? The consensus seems to be “not really,” but it doesn’t mean there haven’t been improvements. If anything, as long as we keep having these discussions and as long as women continue to feel empowered to reach their goals and redefine the gender norms of the home and the workplace, things will only continue to get better!
Loving what you do is essential to having a successful career, but what happens when your goals and priorities start to shift as you age and grow? At that moment you may realize “working until you die” isn't on your radar anymore. As a woman physician, this is where taking control of your finances now will have an everlasting impact on your happiness in the future.
Whether you’re just entering the field or you’ve been practicing medicine for years as a woman physician, you need to take control of your finances. This isn’t just about paying off debt or understanding bank account balances. Women physicians should pursue the path to financial independence from the start of their careers.
Read all the major reasons why women physicians need to start taking control of their finances on KevinMD.
Have you ever considered that your mindset affects how you experience life?
For those of us that are mothers, we all gave birth to a baby. But speak to 10 mothers and you’ll get 10 different stories about how their first year went.
Do you have a wealthy or growth mindset or a poor or fixed mindset when it comes to money?
You may have a poor mindset if you have thoughts like:
“I’ll never have enough money”
“I can’t afford it”
“I can’t do [ insert vacation or other want here ] because I don’t have money”
“I chose the wrong [ lower paying ] specialty and now I will never be able to retire”
“I can’t afford to take a risk and lose all of my money”
You are deeply afraid of change. You may be so frugal to the point of deprivation despite having a very high income (and perhaps driving your partner a bit crazy …)
You may have a wealthy mindset if you have thoughts like:
“There is more than enough”
“I’m responsible for creating money”
“I love money”
You know that taking risks is necessary in order to grow. You embrace change and adapt to it.
You’re generous with your knowledge and time. You don’t worry about “competition” because there is enough for everyone and more.
Now, most of us have had thoughts in both mindsets at any given time, but I bet you spend most of your thoughts in one of those mindsets. Our path to becoming physicians often meant being competitive and being more in that poor mindset. After all, not everyone who applied to medical school got in. There are only so many residency spots per program per specialty.
What worked to get you from college student to physician may not work for your path to financial freedom.
So here’s how to cultivate a wealthy or growth mindset:
Practice gratitude.
Yes, that thing that everyone says you should do. But are you actually doing it? If you have a journal or paper planner, start with writing down 1 thing you are grateful for every day. Don’t get stuck and think it has to be something big. I’m grateful for my hot cup of coffee every morning for example.
Do some continuing life education.
Push yourself to grow (who else will?). There are many ways to do this – books, podcasts, and live events. Two of my favourite growth mindset podcasts are Brooke Castillo’s The Life Coach School and Brendon Bouchard’s The Brendon Show. Consider working one-on-one with a trained life coach. Think of a life coach as a personal trainer for your mind. I currently work with one from Empowering Women Physicians.
Spend time with like-minded folks.
You may need to actively seek these folks if they are not a part of your circle yet. Wealthy minded people hang out with other wealthy minded people. In business, we often participate in “masterminds” which are small groups of like-minded people committed to growing their businesses (and themselves).
Notice your thoughts.
Notice the neverending commentary that is always going on in your head. What voice? YES that voice! Those are all thoughts that may or may not serve you! And guess what? YOU can create new thoughts that actually serve you. Try it!
Change your relationship to failure.
Failure is only failure if you don’t learn from it. In fact, we learn the most from our “failures.” This is SO important when it comes to your journey to financial freedom. Your student loan debt is not a failure. The fact that you haven’t taken the reigns of your finances at age XX is not a failure. Start now.
In case you haven’t heard, Miss Bonnie MD is rebranding to Wealthy Mom MD!
In about a week, Miss Bonnie MD as you know it will no longer exist and you’ll be redirected to our new website. I am super excited about the new look and feel, here’s a sneak peek.
You may be wondering – why “Wealthy Mom MD?” When I started this blog two years ago, I didn’t wake up one day thinking “I’m going to start this blog…” Initially, it was a way for me to write thoughtful posts in response to questions I saw being asked over and over again in a Facebook group. I picked Miss Bonnie MD because, well, it’s my email address! How’s that for thoughtful branding? As my blog grew and evolved, so did I.
Over the past two years, I learned a lot along with you all. I got engaged, became a stepmom to Wren and mom to Jack. I went from being over 6 figures in negative net worth to well on my way to 7 figures net worth.
I experienced some of life’s best and some of life’s worst experiences. One thing that has really stuck with me – life is short. Our time is short.
For physician moms, time seems to slip away from our fingers as we juggle doctor, mother, wife or partner, and friend. On the surface, the word wealthy is about money. The more I've learned about money, the more I've learned about the kind of freedom it can ultimately give you. Being wealthy is a way of thinking, a mindset — not a number.
That's what Wealthy Mom MD is all about. It's not just about money, it's about cultivating an approach to life. As Henry David Thoreau said, “Wealth is the ability to fully experience life.”
Wealthy Mom MD’s mission is to empower physician moms to build wealth and create the ultimate work balance. Your ideal life will look different than someone else’s. I am here to guide you on your journey. Thank you for being here week after week making this community what it is.
And if you haven't joined yet, be sure to find the Wealthy Mom Physicians Facebook group.
Editor's note: This is a guest post from a fellow Wealthy Mom MD, Dr. Saya Nagori. She is an ophthalmologist and the CMO/Co-Founder of the telemedicine companies SimpleContacts & SimpleHealth. She enjoys teaching women physicians about the power of choice when it comes to choosing how to practice medicine in the modern world. Both of her companies resemble her tenacity in sharing knowledge about healthcare and also taking care of the needs of women in general. Enjoy!
I love talking to female doctors about telemedicine. I love talking to anyone really about telemedicine, but especially women physicians. We have different needs and face challenges that sometimes men do not. I gave a talk at the Women in Ophthalmology National Conference last year about how telemedicine for women specifically is so powerful. I want to share a few highlights that I'm sure you'll benefit learning about.
1) Telemedicine Gives You Freedom
There are so many ways to practice telemedicine. Physicians do not necessarily need to practice it 100% of the time. You can work as a 1099 contractor for an outside company and use it to supplement your income outside your “day job.” You can obtain multiple licenses and start to practice telemedicine with limited services across the country. Or the most practical and lucrative way is to practice telemedicine on your own, and use it as an extension of your already existing practice. Imagine not having to take the day off of work when school is canceled because of a snow day. Think about the freedom you would have to continue to practice medicine virtually months after your scheduled maternity leave has ended, so you can spend more time with your new baby. What about being able to work from literally anywhere to give you the freedom to travel with your family or spend time with loved ones, and not have to sacrifice income doing it? Freedom is a great reason to practice telemedicine, isn't it?
2) You’re Probably Already Doing It
When doctors tell me they are wary of telemedicine, I remind them that when we take call or cover another physician’s patients, it is, in fact, telemedicine. Now, however, we have video in many cases so the visit can be more thorough and more accurate. The reality is, physicians are already taking patient phone calls and discussing patient problems over the phone. There are now codes in existence that allow for the billing of telemedicine. It does not have to be 100% of your practice, but perhaps changing one or two days a week from in person to telemedicine, would be very easy to integrate into your career.
3) Improved Quality of Life and Less Physician Burnout
There are so many factors surrounding telemedicine that contribute to an improved quality of life and, thus, will help in decreasing physician burnout. In addition to more freedom, you will also have more time. Think about the couple, or in some cases, several, extra hours in your day that you will have (if you don’t have to spend that time commuting to work). A female physician friend of mine used to have to strap on her breast pump during her commute (it was just over 1 hour each way) because she literally just could not find any other time to do it. She actually got pulled over by a cop once during this time, and it was quite an ordeal, to say the least. In addition to a stressful commute, the hospital and a busy clinic can be a tense environment to be in all day. Even if you are not directly engaging with all the noise in the background, it has an impact on you. The peace and quiet of your home or an environment that you can control can greatly help in sustaining your love of medicine for many years. If you could have all the positives and none of the negatives of being a physician, you may never burnout!
4) Growth Is Inevitable
Data shows that millennials (the population that we will be treating as they age for the next 40 years) want telehealth options. In fact, if their issue could be resolved with a telemedicine visit, they would actually prefer it. I think that as time progresses, and reimbursement becomes more widespread, physicians will prefer it as well. With technology improving, and more states adopting pro-telemedicine legislation, the time is ripe to get started in telemedicine. Set yourself up now so you are ahead of the game, and start enjoying the freedom of telemedicine. I agree with Bonnie when she says that “wealthy” is a state of mind. For me, practicing telemedicine has reduced my stress level and has been rewarding for me leaps and bounds beyond the paycheck I get from it. I saw myself on the path to burning out before I started practicing telemedicine, and now my quality of life has improved drastically. Not having to commute, making a healthy lunch every day, squeezing in a workout when a patient cancels, and being an overall happier person for my husband has added so much wealth to my Wealthy MD life. Now I just need to get the Mom part figured out. 🙂 Editor's note: Wow – great insight from one of the better-known women in telemedicine, don't you think? What's stopping you from following a similar path? I bet it's something like – “this sounds awesome, but how do I even get started?” Well, we got you :). Dr. Nagori has created a course for physicians on how to get started in telemedicine. Not only will she walk you through all the steps — you'll also get support from her through a private Facebook group. “How to Get Started in Telemedicine: Masterclass for US Physicians” is the only comprehensive introductory course on telemedicine and health technology in the United States. Join physicians from all over the country who are learning how to incorporate telemedicine into their practice. In addition to the basics, the course teaches the different types of telemedicine you can use in your practice, it teaches navigating reimbursement for telemedicine, it helps you to understand the regulatory environment in digital app development, and it helps you to understand the legality of telemedicine in different states. Upon completion, you will have the knowledge and framework to get started in telemedicine right away. Use code: WEALTHYMOMMD for $50 off the course! If you've taken the course, we'd love to hear your thoughts!
Here are the 5 things every stay at home spouse needs to do to protect themselves financially:
1. Save for Retirement
Most retirement accounts are tied to a job. The only tax-advantaged retirement account available to stay at home spouses is the spousal Roth IRA. This is simply the stay at home spouse opening up a Roth IRA without needing to prove earned income. For this to work, the working spouse needs to have enough income to fund both Roth IRAs. Of course, many stay at home spouses often have part-time jobs or a side hustles. This opens up other opportunities for them. Whether they make a significant income from it or not, this will give them the ability to open and fund a solo 401(k).
2. Get Life Insurance
You may have read that life insurance is only necessary for income replacement. Therefore, conventional wisdom sometimes states that someone who does not bring in an income does not need life insurance. This could not be farther from the truth for a stay at home spouse. The stay at home spouse may not get a paycheck to stay home, but they are performing a job. In fact, they are performing many jobs. Consider this: In the event of their death, the working spouse, now widowed, will need to pay for high-quality childcare, maintain the household responsibilities, and perform the additional mental load of maintaining all logistics. And let’s be honest. I doubt the working spouse will want to return to work immediately after a tragedy. The surviving family may also require support in the form of therapy as well. Obviously, when you consider this perspective, life insurance is a no brainer. The stay at home spouse needs enough term life insurance to cover the cost of the above situation. Additionally, life insurance can also give the surviving spouse more choice. For instance, the spouse who worked full time outside the home might want the ability to go part-time since now there is one less spouse to help with the family. A.L, a physician and mother, said:
My late husband got term life insurance early as a resident. We got an amount that was supposed to get me through the rest of med school and residency. Now, it will be college funds for my 3 kids. I feel SO lucky we had it in place when he was diagnosed (and ultimately passed) with his brain tumor.
3. Get It In Writing
The biggest financial risk of being a stay at home parent is divorce. As a result, the decision to have one partner become a stay at home parent must be a mutual decision. Often, couples are already married when they come to this decision. It is important for the stay at home spouse to have protection against divorce. Being out of the workforce for years poses a real financial risk. For some fields, leaving is career suicide. He or she is sacrificing peak earnings potential and forgoing career advancement. They are also giving up building up Social Security savings and retirement contributions. A postnuptial agreement is a must for couples who choose to have a stay at home spouse to protect that spouse. And yes, that will probably mean an alimony provision. To better understand what exactly a working partner is sacrificing by staying home, the Center for American Progress put together this calculator that can help these conversations focus on numbers, rather than emotions.
4. Understand Disability Insurance
Most people have disability insurance tied to their employer. Additionally, most doctors should have private own occupation disability insurance. Stay at home spouses cannot purchase disability insurance unless they have earned income such as a home business. (Note: A quick google search finds one company offering such a policy, but it seems rare otherwise). But, if they had a private policy before staying at home, they can keep it. Also, once a spouse is out of the workforce for 10 years, he or she may not be eligible for Social Security disability insurance. This is another reason why a postnuptial agreement is a must for stay at home spouses.
5. Hone Skills & Consider Part-Time Work
Another important thing to remember with the finances of stay at home spouses is that the situation can change over time. As the kids get older and spend more time in school and activities, the stay at home parent will have more time to pursue outside interests. Those interests might be a hobby, a part-time job, or a side hustle. This is a great way for the stay at home parent to flex their brain in new ways and maybe even bring home some income. Remember if your stay at home partner does decide to monetize their side hustle, they have the option of opening that solo 401(k).
Final Thoughts on Finances of Stay at Home Spouses
We often talk about financial protection in terms of paychecks. But what do you do when your job doesn't come with a paycheck? Stay at home spouses perform vital roles for their families, which is why it is so important to give special consideration to their finances. Making these five considerations will keep your stay at home spouse protected financially. Do you have tips to share about stay at home spouses?
Physician moms are often the higher earner in their relationships. As the breadwinner, it can sometimes be a challenge managing our money with our partner without feeding resentment. How does a breadwinning woman bring home the bacon and have a thriving family and personal life? How does she strike this balance when she makes more? Is that even possible?
“Female breadwinners are on the rise, society still expects men to take the financial lead as breadwinners in their households.”
Agree? Thankfully, Farnoosh Torabi was brave enough to start tackling this subject that needs to be talked about in her book When She Makes More. Women are now making lots of money, but traditional gender roles still permeate our culture. I am a firm believer in looking at all the money as our money vs. mine and yours. However, it’s clear that when one person contributes more than the other, this money disparity often brews resentment. When Matt and I first started merging our finances, we started working with a flat fee financial advisor. This is a great use of a financial advisor, who serves as a third party money expert. The advisor can help iron out any differences and make suggestions that the other party won’t take personally.
About the Author
Farnoosh is a leading expert on finance with roots in journalism. After her first book release in 2008, she also found herself coaching Americans through money issues on shows like REAL SIMPLE, REAL LIFE. As she created more career wins for herself, she also grew her family. By the time Farnoosh was in her 30s, she realized that she was the breadwinner…and so are so many other women. That's the impetus for this book. I first discovered Farnoosh through her acclaimed podcast So Money. I felt like “I made it” when she featured me on her podcast to discuss women physicians and personal finance. 
Summary of When She Makes More
Farnoosh conducted social research with Dr. Brad Klontz, a financial psychologist and certified financial planner. They developed a survey and interviewed over 1,000 heterosexual women in committed relationships. There was an even split between women who make more than their partners and women who make less. 80% of the women interviewed held a college degree or higher. In the book, she walks readers through the 10 rules breadwinning women need to live by to make relationships and life work based on her research.
A Culture That Isn't Ready for Breadwinning Women
Farnoosh initially tackles what we already know. She also says that ignoring the fact that there are cultural and societal “norms” can be at your peril. The social culture still favors traditional gender roles. Friends and family might not say it, but they will still question when the perceived finances of a couple buck those trends. Society at large just isn’t comfortable with a breadwinning woman. I can hear my Korean mother disapproving of my choices when I was dating. She would use her preconception of their earning power and make comparisons to that of her soon-to-be doctor daughter (me!). Farnoosh recommends working with your partner to “Rewrite the Fairytale.” This allows you to define your rules as a couple.
Managing Finances
When a woman makes more, that woman is more likely to be the primary decision-maker on all things money, like paying bills, budgeting, saving, and planning for retirement. Many of the surveyed women wished that their partner would participate more in handling the finances. Even if you earn less as a woman, Farnoosh says women need to stay involved in the finances and know where their money is going. Farnoosh recommends three buckets of money: his, hers and ours. In the book, she candidly discusses how she and her husband manage their finances.
Quality of Relationships
When She Makes More also reveals some tension in the relationships of female breadwinners. Couples often report less satisfaction in their relationship. Breadwinning women are more likely to get divorced as well. The reasons are multifaceted, but one of the reasons is due to an often lopsided division of the household chores and logistics. Can I get an AMEN? Us physician moms know all too well that we are often a physician, primary parent, cleaning lady, vacation planner, and at-home chef all at once. Farnoosh's tip? Hire a wife! I couldn't agree more. She also warns that the thought Am I better off without you? is a deadly missile and may begin the demise of your relationship.
Career Expectations
When a woman earns more, she often feels a lot more pressure about being the main breadwinner. She feels the stress of having to maintain her income. She might also feel guilty about not having more time with her family. Of course, my tip is to take charge of your finances and set yourself and your family up to work towards financial independence and true wealth.
What I Loved
My favorite tips and insights from Faroosh's book are: The concept of instituting yours, mine and ours accounts. This is how Matt and I handle our “pots” of money. Overall, we look at it as “one pot.” I also love her tip about allocating his money to specific tasks such as funding your children's education. I am a huge fan of the idea of buying yourself a wife. Outsource as many household tasks as possible to bring more peace and happiness to the relationship. She also discusses prenups, which are an essential part of any marriage. Of course, if you don't have a prenup, it's not too late. Post-nups can also be very helpful to keep couples on the same page. Lastly, she points out something I think many couples overlook when they decide to have one of them stay home: The numbers may work out to have a stay at home spouse in the short term, but it may not be the best financial decision long-term since a long break from work is essentially committing career suicide in certain fields.
Who This Book is for
This book isn't just for breadwinning ladies! It's actually an important read for families of any financial makeup. Why? Because you never know when the breadwinner status might shift. From temporary disabilities and career changes to reducing hours or taking a leave to help with family, you never know when your role might shift and when your partner's role might shift. That means you also can't always predict if and when you might take on the breadwinner role.
Plus, the more perspectives you hear about how couples share their money and deal with financial conflict, the stronger your relationship becomes. Whether you're the primary breadwinner or not, you can use When She Makes More to reflect on the money dynamics in your current relationship.
Get started on your journey to wealth by getting my FREE book- Defining Wealth for Women.
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