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Personal Financial Stress Management for Physicians
Dr. David E. Marcinko; MBA, CMP™
[Publisher in Chief]
The physician who remains in practice long enough is sure to undergo some adverse situation that may negatively affect his financial life. When it occurs, you must have a crisis management plan in place to deal successfully with the matter. In fact, the following three scenarios typically occur somewhere along life’s journey for the average doctor:
· Office Crisis Management
· Employment Crisis Management
· Financial Windfall Crisis Management.
1. Office Crisis Management
Crisis management is a matter of perception versus reality. For example, a high profile patient may die under your watch inducing a PR fiasco. But, then again, such a celebrity had confidence in you in the first place, so all is not lost. Therefore, honest spin control is needed when tragedy strikes:
· Stay calm and relaxed; but act immediately
· Release detrimental but accurate information and stay neutral
· Educate your staff and local community
· Fix the problem, or minimize recurrence
· Continually release information
· Monitor and report your strategy to all affected parties.
2. Employment Crisis Management
Sooner or later the employed doctor will be terminated or reduced. Or, a partnership will dissolve; a major local employer will relocate or your hospital will close. If you become aware of impending job loss, the following may help:
· Decrease retirement contributions to the minimum company match
· Place retirement contribution differences in an after-tax emergency fund
· Eliminate unnecessary payroll deductions and deposit the difference to cash
· Replace group term life insurance with personal term or universal life
·Take your old group term life insurance policy with you, if possible
· Establish a home equity line of credit to verify employment
· Borrow against your pension plan as a last resort.
After you loose your job, negotiate your departure and execute the following:
· Prioritize fixed monthly bills: rent or mortgage; car payments, utility bills; minimum credit card payments; and restructured long-term debt.
· Consider liquidating assets: emergency fund, checking accounts, investments, or assets held in a child’s name
· Review coverage and increase deductibles on homeowner’s and automobile insurance
· Sell stocks or mutual funds; personal valuables like furnishings, jewelry or real estate; and assets not in pensions or annuities
· Keep or rollover any lump-sum pension or savings plan distribution to your new practice. Pay taxes and penalties as a last resort
· Apply for unemployment insurance and review COBRA coverage
· Consider a high-deductible health plan using tax-deferred dollars.
3. Financial Windfalls
Although ironic, a financial windfall may be more problematic than short-term financial disadvantage. Consider these suggestions:
· Be discrete; don’t quit practice or disrupt your life materially
· Deposit cash into a money market account and limit access
· Title securities correctly
· Redefine your financial plans, and continue to save and invest
· Pay down non-deductible debt
· Review insurance policies, will, estate plan or trusts
· As an executor, be aware of estate tax freeze benefits using the alternate valuation method
· Consider charitable gifting carefully.
Hire an Expert
If any of the above occurs, get tax advice immediately, retain an attorney and hire a financial professional. And, unlike stock-brokers and most financial designees, the Certified Medical Planner© is an emerging new financial-advisor subspecialist and fiduciary with focused medical specificity.
Conclusion
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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:
DICTIONARIES: http://www.springerpub.com/Search/marcinko
PHYSICIANS: www.MedicalBusinessAdvisors.com
PRACTICES: www.BusinessofMedicalPractice.com
HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
CLINICS: http://www.crcpress.com/product/isbn/9781439879900
BLOG: www.MedicalExecutivePost.com
FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
[PHYSICIAN FOCUSED FINANCIAL PLANNING AND RISK MANAGEMENT COMPANION TEXTBOOK SET]
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