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What Can Physicians Learn From Adrian Peterson’s Financial Failure?

What Can Physicians Learn From Adrian Peterson’s Financial Failure?

| October 12, 2019
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A lot of people think that if you earn a lot of money, you have it made. But, as the latest Adrian Peterson headlines show us, a large paycheck does not give you immunity from financial troubles. The secret lies in the decisions you make with your money. You may not be a high-profile athlete with million-dollar contracts and sponsorships, but as a physician, your above-average salary can be an incredible asset…if you use your money properly. Here are some lessons you can learn from Adrian Peterson.

1. Get Your Information From The Right Sources

If you aren’t armed with correct information, bad decisions await just around the corner. Information is power, so you need to be careful to whom you’re listening. Adrian Peterson claims he trusted the wrong people and now he’s paying the consequences. And as a physician, you have a unique situation with unique challenges. What might be good advice for someone else might not be in your best interest. 

For example, many doctors are swimming in student loan debt. Even if you can pay the debt off quickly, it might be wise to pay it off slowly and progressively to avoid focusing all your extra funds on the debt and ignoring your future retirement fund, especially since it’s likely you are getting a later start to your career due to all the educational requirements. 

So what do you do? You don’t have the time or know-how to manage your finances and do all the research yourself, but you should take initiative to educate yourself on basic financial concepts so you aren’t 100% reliant on the advice of others. Then find a financial professional who is independent and follows the fiduciary rule, making sure they have experience working with doctors and take the time to understand your financial needs. 

2. You Still Need A Budget

It’s simple math. No matter how much you make, if you spend more than your income, it’s going to catch up to you. Adrian Peterson made close to $100 million during his NFL career, and even that didn’t save him. (1)

According to a Fidelity Investments report, physicians are on track to replace only 56% of their income in retirement, (2) and a CompHealth survey reveals that over 50% of doctors cannot retire at age 65 and maintain their current lifestyle. (3) Be proactive by creating a realistic budget that allows you to save aggressively and maximize your retirement contributions.

3. Debt Is Not Your Friend

Adrian Peterson did what many people do when they find themselves in dire straights; he borrowed money to pay off other debts. But debt, no matter where it comes from, has to be paid off eventually. 

Yes, physicians face exorbitant student loan debt—an average of $221,500 according to the Association of American Medical Colleges. (4) But just like Americans in other professions, you may carry credit card debt and car loans too. Your first step to destroying debt is to follow Lesson #2 and live below your means. Your second step is to become relentless about reducing your debt and interest costs. 

If you have a loan with a significantly higher interest rate than the others, you may want to work on paying off that one first. Or, if you’re feeling overwhelmed by debt, try paying off the loan with the smallest balance first, no matter the interest rate, to gain some momentum. Find a debt calculator to figure out how long it will take to pay off your debt and build extra payments into your monthly budget so you aren’t tempted to spend that money elsewhere. If you want to reduce your balance further, look into the Public Service Loan Forgiveness federal program or consider refinancing your student loans. 

4. Give Strategically

Since you know you have a financial advantage many will never experience, you might desire to give of your wealth to others, whether that’s donating to charities, helping disadvantaged kids get into medical school, or buying a house for your parents who supported you for so many years. No one will fault you for your generosity, but remember, you don’t have a limitless well to draw from. The key is to be strategic and balance your giving with your saving. 

Be sure to prioritize your financial future. Think of it this way: when you pay off your debt, you will have more room in your budget to give. And if you take care of your retirement, you won’t have to rely on others to take care of you financially later on.

Don’t Be Like AP

Whether you are just starting in the medical profession or have been working for decades, a financial professional who specializes in working with individuals in your position can walk you through each of the challenges you face and help you create a comprehensive plan that will allow you to focus on what you do best. If you want to make smart money decisions so you can enjoy life while also building your wealth, our team at Match Point Financial is here for you. To get started, call 352-207-8014 or schedule a complimentary phone call using our online calendar.

About Chris

Chris Reed is a financial advisor and the founder of Match Point Financial. Since 2002, he has been helping people make informed choices with their money and pursue their financial goals and objectives. He started his career with MetLife and has continued seeking to provide his clients with the best possible service through A.G. Edwards, UBS, and finally through partnering with Cetera Advisors LLC and forming his own independent firm in 2010. Learn more about Chris by connecting with him on LinkedIn or register for his recent webinar “Are Your Old 401(k)s Collecting Dust and Losing You Money?” here.

Financial Advisor: Securities and advisory services offered through Cetera Advisors LLC, member FINRA/ SIPC, a broker/dealer and a Registered Investment Advisor. Cetera is under separate ownership from any other named entity.

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(1) https://www.cnbc.com/2019/07/25/adrian-peterson-faces-debt-woes-how-athletes-can-botch-their-finances.html

(2) http://image.fidelityinvestments.com/lib/fe901570706c0c7b76/m/1/11278_Physician-Paper-Link.pdf

(3) https://comphealth.com/resources/physician-views-on-retirement-survey-report/

(4) https://lendedu.com/blog/average-medical-school-debt/

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