Can Physicians Achieve their Financial Independence [Day] Without Budgeting?

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A New Twist on an old Holiday Tradition

[By Rick Kahler CFP® MS ChFC CCIM]

Doctor – Here’s a new twist on an old Resolution: If you want to give yourself the security of financial independence, try budgeting the way many wealth accumulators do.

The secret? They don’t budget!

Your first reaction might be, “Of course these people don’t budget! They have so much money, they don’t need to.”

That may be true for some of those who have money today, but I’m referring to people who want to remain wealthy or those who are “wealth accumulators.” These are people who don’t start out with money, but who build up significant wealth over time.

Live on Less

Many successful wealth accumulators, and too few medical professionals, don’t follow a detailed budget in the traditional sense. Instead, they develop the habit of living on less than they make. They do this by setting clear priorities. Here is how it works:

The List

1. Out of every dollar earned, take taxes out first. If you receive a paycheck from an employer, this is done for you. On any earnings where taxes aren’t withheld, estimate the amount of tax you’ll owe and stick it into savings.

2. Take out 15% to 30% to invest for your future. When you’re just starting out, you may have to begin with a much lower percentage, but begin and be consistent. Research tells us if you have 30 years until retirement and you plan to live for 30 years after retirement, you need to save 17% of your salary to maintain the same standard of living upon retirement. When you get a raise, contribute two-thirds of it to your investments and use one-third for increasing your lifestyle. If you want to become financially independent, this step is essential.

3. Save another 10% to 20% for emergencies and short-term needs like vacations, Christmas, and replacing vehicles. Again, you may have to start with a lower percentage, but begin with whatever you can, and be consistent.

4. Take out 5% to 10% for giving.

5. Live on the rest. Pay the bills as they come in, and use what’s left over for discretionary lifestyle spending.

Sounds simple, right? Of course, “simple” isn’t necessarily the same as “easy.” By now, if you’ve done the math, you can see that following this plan means living on as little as one-half to even one-third of your gross earnings.


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If you’re living from paycheck to paycheck, just barely managing to pay the bills, the idea of living on half of what you make goes beyond absurd. It probably seems impossible. It may, in the short term, be impossible.

Yet there are ways to live on less than you earn, even if to begin with it’s only a little less. Share a cheap apartment with a roommate. Drive an old car that you don’t have to make payments on. Eat at home. Buy used furniture and second-hand clothes. Get a temporary second job solely for the purpose of building up some savings.

What is most important is developing the pattern of living on less than you make. Fostering a frugal mindset is absolutely essential if you want to achieve financial independence. When you commit to saving first—even if you can only save a small amount—you have made one of the wisest financial decisions you can ever make.

This non-budgeting spending style takes away much of the pressure of trying to follow a rigid budget. There’s no need to keep track of envelopes or categories. You’ve made the hard decisions first, and you get to spend everything in the checkbook.

Budgeting without a budget can turn you into a wealth accumulator. It works because you take your future off the top.

The Author

Rick Kahler, Certified Financial Planner®, MS, ChFC, CCIM, is the founder and president of Kahler Financial Group in Rapid City, South Dakota. In 2009 his firm was named by Wealth Manager as the largest financial planning firm in a seven-state area. A pioneer in the evolution of integrating financial psychology with traditional financial planning profession, Rick is a co-founder of the five-day intensive Healing Money Issues Workshop offered by Onsite Workshops of Nashville, Tennessee. He is one of only a handful of planners nationwide who partner with professional coaches and financial therapists to deliver financial coaching and therapy to his clients. Learn more at


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   From the Publisher

“One needs to have the right words, and to use seemingly everyday terms in a way that economists and healthcare financial experts speak. Simply put, my suggestion is to refer to the Dictionary of Healthcare Economics and Finance frequently, and ‘reap'”.

Thomas E. Getzen, PhD Executive Director, International Health Economics Association (iHEA) Professor of Risk, Insurance and Healthcare Management The Fox School of Business-Temple University Philadelphia, Pennsylvania

Product Details

Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners(TM)


2 Responses

  1. Eight Steps to Simplify Your Finances

    If time is a precious commodity for you as a doctor, nurse or other medical professional, here are eight ideas to save time and reduce the stress and anxiety of managing your personal financial affairs.

    1. Enroll for direct deposit. It eliminates trips to the bank and keeps you, and your money, working longer.
    2. Sign up for overdraft protection. By linking your checking account to a line of credit you avoid the cost, hassle and embarrassment of a bounced check. But, beware fees and charges.
    3. Eschew debit cards. Don’t give up the interest rate float arbitrage or fraud/theft protections of CCs
    4. Establish an automatic savings plan. Regular, automatic transfers to a savings account will add up.
    5. Use electronic bill paying. Eliminate the dreaded task of writing checks, but beware security breaches.
    6. Consolidate your financial relationships. Yet, know that although dealing with one institution makes everything easier, it may lock you into an incestuous banking/brokerage relationship.
    7. Consider personal finance software. Many programs make handling your finances easier and quicker.
    8. Build a safety cushion of 6-18 months cash. Be ready for unexpected investments, expenses or use some extra for a special vacation.
    9. Review your investments. Make sure your asset allocation matches your time horizon and risk tolerance.
    10. Become financially literate by using our free website, or premium textbooks, handbooks, dictionaries, white-papers or journal.

    Dr. David Edward Marcinko MBA CMP™


  2. Physicians in Financial Independence

    This article is excellent information to assist physicians in financial independence, but first they need to make the profits in order to gain personal financial independence.

    To do this, it makes sense to benchmark their practice P&Ls with statistics to compare revenue, line item expenses and profits with statistics that are representative of actual practices that are quantified to tax returns.

    These type of statistics are available as the Statistics Report of the National Society of Certified Healthcare Business Consultants at

    I suggest comparing financial information to more than one source given that no practice or center is created equal. This will lead to more profit for physicians to provide to their financial planners to solidify their financial future.

    Best regards,
    David J. Zetter
    Zetter HealthCare


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