Building a Financial Routine: Yearly, Monthly & Daily Habits that Optimize Financial Wellness

Welcome & Acknowledgements

Hey, everyone. I'm Paul Roscoe, and I'm the director of business development at OntarioMD. It is my pleasure to welcome you to our vendor spotlight webinar on building a financial routine: yearly, monthly, and daily habits that optimize financial wellness.

I would like to begin this webinar with the land acknowledgment.

We acknowledge the land we are meeting on is the traditional territory of many nations, including the Mississaugas of the Credit, the Anishinaabe, the Chippewa, the Haudenosaunee, and the Wendat peoples, and is now home to many diverse First Nations, Inuit, and Metis people. We also acknowledge that Toronto is covered by treaty thirteen with the Mississaugas of the Credit.

I'll now turn it over to Chris Hanscomb, senior medical consultant from Dr.Bill.

Thanks, Paul. I appreciate the introduction and thrilled to be here today to represent Dr.Bill. We're a medical billing platform founded in 2014 in Vancouver.

Our mission is to streamline medical billing, help physicians get paid efficiently, and free up time for patient care. Since our inception, we've expanded to serve physicians in Ontario, British Columbia, and Alberta, processing nearly $10B in gross billings by 2025. With over 15,000 physicians and a 125 group practices using our platform, we're committed to becoming the most connected medical billing solution in Canada. And in 2022, we acquired MDBilling.ca, combining over twenty five years of experience within our team.

My name is Chris. I lead our enterprise sales here at Dr.Bill, working directly with hospitals, clinics, and groups of physicians. With fifteen years in Canadian finance and technology, I really focus on the intersection of financial services and health care technology.

And joining me today, we have a a few people, but our our guest presenter, Dr. Steph Zhao. Thank you very much for being here. Dr. Steph practices addiction medicine at Sunnybrook Hospital and family medicine at Don Mills family health team while also serving as an assistant professor at the University of Toronto, Faculty of Medicine and on the board of directors for Toronto Public Health. Certainly passionate about finance, she offers webinars and lectures on medical billing, personal finance, and shares her expertise on social channels, which you can find at @breakingbaddebt. And given your very busy schedule, we do very much appreciate you being here today.

So as you all know, the title of today's webinar is Building a Financial Routine: Yearly, Monthly, and Daily Habits that Optimize Financial Wellness, a topic that is certainly relevant for all of us. The lecture is approximately forty five minutes. We have fifteen minutes allotted for Q&A at the end of the session. And also joining us today, we have Jennifer Collard, private banker with RBC Wealth Management, and Guillermo Nafarrate, with OMA Insurance. Jennifer and Guillermo are here to help answer questions related to finances, banking, incorporation, and and insurance that will you can post in the chat. So please, as we go through today's lecture, post your questions in the chat, and we'll have, people there to answer those questions as well as get to some of the more, bigger themes that we notice in the Q&A afterwards.

Dr. Zhao will be further introducing Jennifer and Guillermo within the lecture, but thank you both for being here and sharing your expertise.

Now without further ado, I'll pass it over to you, Dr. Steph

Great. Thank you, Chris.

Are you able to put the slides up? There we go.

Alright. Thanks everyone for spending your lunch hour with us. And we're going to be talking a bit about, you know, how to optimize your finances, make it more of a habit than of a chore.

Okay. Let me move on to the next slide. So we're going to talk a bit about, in the first forty five minutes, you know, the importance of understanding how finances are linked to your wellness and what habits to develop on on a yearly, monthly, and daily basis that are simple to incorporate into your regular day, especially since we're all busy when it comes to the right routine. I'll touch a little bit about financial mistakes doctors make when there's time. Please post in the chat. Feel free to write where are you coming from, what's your name, introduce yourself. And if you have any questions, please post in the chat as well.

This lecture was developed with unrestricted educational funds with support from RBC and Dr.Bill. However, the content of the presentation is developed by myself only.

Learning Objectives & The 'Why' of Financial Education

So these are just the learning objectives. So I just wanted to give a little bit of introduction onto on why I'm so passionate about teaching financial education. Some of you might have heard of me from @breakingbaddebt, the YouTube channel or on Instagram, or maybe I gave a talk to some of you if you're in medical school and residency and so on. But just to briefly introduce myself.

So myself, in 2017, I wrote an article called "Underprivelage as Privelage". And in this article, I talk about how my parents and I came to Canada with three suitcases and a thousand dollars. And at the time, like, parents never went to university. So I was the first in my family to go to university and become a doctor.

So this is me in the neighbourhood that I grew up in, in Toronto.

And so coming from a background where I didn't really have a lot of money, you know, I felt that when I was learning about finances, it was more of a necessity rather than for interest. Right? And sometimes people might think that way as well. Like, oh, it's something we have to do. It's not something we're interested in doing. But the purpose I wanna make in this talk is how can we make learning about finances something that doesn't feel like a chore, but it feels like something interesting and productive to your life.

During medical school, I had gone to business school. And this was actually the first time in my life when I learned about money as a powerful tool and how it's so impactful, especially in, you know, making charitable donations and buying back your time and things like that.

And so when I started working as a resident on charitable campaigns for the university I'm at, which is U of T, this was actually the first time in my life I had ever met anyone who was considered high net worth. And these are people who made, like, five million dollars and up in donations. Previous to that, I had never met these people before. And the first thing I actually learned from them a lot was that we were fundraising for needs based scholarships.

So these are scholarships for people who had financial need. But I thought, you know, give a man a fish, you feed him for a day, teach a man a fish, you feed him for a lifetime. And that was actually the prompt for the financial literacy curriculum that I developed at U of T. And now it's been spread at, like, McGill, Queens, and so on other schools as well.

And the point I wanted to get with this is that in medical school, a lot of people have the biggest source of finances either through their line of credit or through grants. But eventually, those grants will run out. And soon, you're gonna have to be self sufficient financially. You have to be able to know how to earn income, invest your income, optimize your income, reduce debt all on your own.

And the people that I met who are super high net worth, unfortunately, none of them were doctors or that there was one doctor there, but they were the spouse of the donor.

And the common thread between all of them is they were extremely financially savvy business owners and engineers who started businesses, actually.

So because the chat can get kinda busy sometimes, and if you ever have any questions in the chat that I may miss about, you know, incorporation, about disability insurance, life insurance, all term life insurance, all sorts of questions people might have, you can always post them in the chat. And we have chat moderators, Jennifer from RBC Wealth Management. She does private banking for physicians who can help answer questions related to, like, incorporation, taxation, and things like that. And then Guillermo from OMA Insurance who can help with answering questions around insurance. And we'll try to provide as neutral of information as possible because we wanna make sure to reduce any conflicts of interest in this presentation.

So I now wanna learn about you. Personal finance is personal. So let's talk about about you. And I'm gonna ask a poll here.

So the poll will pop up on your screen. How would you rate where you are financially? I know that we try to advertise this talk for a lot of early career for residents, but I I'm kinda curious. Where are people's knowledge around their personal finances?

And I'll let people give give people some time to submit their answers.

So I'm seeing the the numbers moving here, and it looks like the vast majority of people have investments in a TFSA RSP or unregistered account. And this is managed either by financial advisers, by if it's a student, parents, or accountants in here as well.

And then we have, like, ten percent who do have some prior degree in finance. And so, like, you know, these might also be colleagues that we can have an interactive discussion in the chat with sharing what they are doing as well.

Okay. Let me close the poll here.

Okay. The second poll is how much time do you spend on managing your finances? Is it none to very little time? Do you review your finances?

Then you can check multiple. Right? You can review your finances monthly. Do you check your finances on a daily basis?

Okay. So it looks like I'm seeing the vast majority of people are voting for yearly and monthly. Most people review their finances yearly and monthly.

So and then also a pretty large proportion of people say none to very little. Like, they don't really know what's going on with their finances. And sometimes when I do these talks, I have heard about situations like this where people don't necessarily review their finances and their either their spouse does it or a financial planner does it for them. Okay.

Next slide. And then what is on people's minds when they're entering practice, when they're transitioning to practice?

So I'm seeing the numbers start coming in, and it looks like the vast majority of people are voting for building wealth.

So, yes, we do have a bit of a younger crowd building wealth, investing in corporation, and then paying off their debt as well. So twenty two percent.

Why Should Doctors care about their Financial Wellness?

So why is it so important to really care about financial wellness early on? Right? We often talk to our patients about, you know, we have patients who check their vitals, their blood pressure, and everything. They track it on an Excel sheet.

And then we also have patients who just say, oh, I don't know what my blood pressure is. Why don't why don't you check it for me, doc? And obviously, the first type of patient, it's so much easier to counsel them and give them advice on their blood pressure, on their diabetes, when we actually know what those numbers are. And so I do see that there was like twenty something percent of people in the crowd who just don't touch their finances all.

Someone else does everything for them. And this is where, you know, I really wanna speak to you because your financial wellness are basically like asking a patient to keep track of some of their vital signs, some of their blood pressure, and their blood glucose and things like that. You know, whenever you're meeting with an accountant or a financial planner, you know, at a time, maybe at a time when you're doing estate planning, that might be more down the road to some of you.

You might not be able to know what's going on. And it might put you at risk of things like fraud, or it might put you at risk of, you know, you completely not knowing about an account or what's going on with your finances. And that could also cause you to lose a lot of money as well.

I wanted to start with a story because when we when we were all in residency, you know, we were often taught how to be doctors. We try to structure our practice the way that we see our preceptors structure of practice. And before I continue the story, I also just wanted to mention that this story will have some triggers around suicide and mental illness. So if those might be topics that might trigger be triggering for some of you, you know, feel free to turn off the sound for this particular slide, and you can turn the sound back on for the next slide.

And so I wanted to bring up this story because when I graduated right out of residency, it was kind of around the start of the pandemic. And I started working immediately because you couldn't travel. Right? You couldn't take a break.

And also they needed a lot of young doctors to be redeployed to do vaccinations. And there was just this huge demand for young family doctors to take on rosters from retiring physicians. So, you know, coming into this from the perspective of what I learned in residency, was taught put patients first, to be stoic, which means to endure hardship without complaint, And to be very thorough with people. And sometimes taking time off going on pregnancy leave, those might be things that means more call or work for everyone else.

And these were what I was ingrained with in my residency training. And so taking this mindset into becoming a staff physician, I jumped right into work. I didn't take a break, and I was actually working nine to nine, seven days a week. Because on the weekends, I was also working nine to nine doing vaccinations and redeployment on the wards and things like that.

And part of the reason my hours were so bad was because there was such a huge learning curve. There was a lot of time spent after clinic learning billing, learning how to use the EMR, doing paperwork. And the other thing is that at that stage in my life, I didn't have kids. I also didn't really have any elderly to take care of, right?

So I often agreed to colleagues who did have kids or who did have elderly to cover their after hours clinic or things like that or to cover their COVID clinic and and so on because I had less risk of transmitting COVID to other people in my life. And I was working like this nine to nine hours, nine to nine from nine am to nine pm, seven days a week for the first year of my family practice. And as I was growing my practice, I heard from a lot of the patients during my meet and greet that the doctor that I took the roster from, they they just stopped working all of a sudden. Like, they just suddenly stopped working, and it was very unusual.

No warning or nothing like that. And I just I just thought, oh, okay. You know, maybe they just retired. They burned out.

And one year into working like this, I actually found out from my clinic manager that that doctor had actually taken their life. It wasn't because they just left all of a sudden. They retired all of a sudden. It's because they took their life in the office that I was working in.

And then that's when I came in to the picture and I took over the roster. And that was something that was super shocking to me because it just felt so close. It felt like I was gonna go down that path. And naturally, like me being curious, I looked up that physician, the previous one on on the Internet, and I found their rate rateMDs.

And they had amazing rateMD scores. Like, so many patients would mention comments like, oh, doctor so and so would you know, even though they were running two hours behind, they still spent all the time in the world for me. Whenever I had an emergency, I needed to make a quick phone call. They would pick up the phone, they would answer.

And they were actually, like, an extremely good doctor. A lot of people had said that online. And so it really made me question, you know, the path I was going down because I was being burned out. I was trying to do everything that doctor was doing to being a good good doctor.

That doctor apparently also had been working late into the evenings as well. And the other thing is they also had a huge roster because they used to work in a group, but other doctors started retiring. And they took in the other doctor's patients too because they were worried that the patients would be left without a family doctor. But it turns out that I think it just the the commitment to doing excellent medicine just burned them out.

And that's what kind of caused that outcome. Or contributed to it. So it it it really made me re-evaluate what I was doing.

And it also made me really re-think, you know, what does it mean to be the best doctor? Because in residency, we're trained to say like, you know, we want to try to strive to be the best doctor. And at the time we were looking in the news, like what was happening to top doctors around the country. BC's top doctor was receiving death threats.

Medscape poll at the time were saying that so many doctors were being burned out because of, you know, working long hours, dealing with difficult patients, going through all these rules and regulations, which sometimes we feel like we see when it comes to billing code changes and how to practice changes. We suddenly get that and everyone has to change their practice or onboard more patients, for instance.

And so it really made me reevaluate my career and whether I still wanted to be the best doctor, if that was still my goal.

And at at the time, you know, I also asked myself the question, was I financially well? Because I was making a lot of income. Like, I was making a lot, and my income was piling up in my bank account because I just worked so much. I didn't really even have time to spend it, nor that were there areas you could spend it because you couldn't go out. Everyone was quarantined.

And I showed the Maslow's hierarchy of needs because when you're looking only at the numbers at my income by itself, yes, it looks like I was financially well. But I actually was not financially well because I did not maybe I didn't even necessarily have some of these basic needs met because I was working so much. I didn't even eat lunch. So because I was so late with seeing my patients that I wasn't really eating properly.

Right? I wasn't really seeing a lot of friends because I was working on weekends. And so I wasn't really necessarily meeting some of these lower aspects of the of the Maslow's hierarchy of needs. And, obviously, because I wasn't doing that, I was also not meeting the top part, the self actualization part.

You know? Because I was questioning my career and thinking, is this actually something I wanna do? I was actually considering thinking, you know, am I gonna end up quitting medicine? Or or is something gonna happen to me mental health wise that will cause me to quit medicine?

And so, you know, this was when I started thinking a lot about the content of this lecture and developing ways to be more financially well so that I can leverage my finances to reduce the amount of burnout that I was facing in my workplace.

And maybe even diversify my career a bit more so that I don't have to be always in the office seven days a week.

Yearly Financial Habits

So I started developing yearly financial habits, and I'll just kind of highlight some of them on the screen here. And this is kind of like a checklist that I do every year similar to how you might do an annual physical with your patients. And I list this year, and some of the key ones I wanna highlight is in January of every year, I think about filling up my TFSA, FHSA. And if you have kids, the RESP as well.

And if you have an RRSP, which I know some of you do, I always take it into consideration the deadline. But I try to do all of these big investing things in January. And the reason why is because in January is when I during my annual physical for my finances, I really want to think about what big expenses I might be anticipating. Like, will I be anticipating a parental leave coming up in this coming year? Am I going to be anticipating a home purchase? Things like that.

And knowing that in the beginning of the year and knowing how you can set up your finances for that is really helpful. Because let's say if the home purchase was something I want to happen in the coming year, then I might actually prioritize my FHSA as the first account I wanted to fill up if I have I I if I only have a limited amount of finances for certain accounts.

I also check my credit score once a year. And in my next slide, I'm gonna talk a bit more about that.

And then I also think about all of the different subscriptions that I have signed up and think about, is there a way that I can sort of reduce some of these Internet subscriptions? I spend the time to call these companies and say, oh, by the way, I'm looking to renew my Internet, but I'm also shopping around. Can you give me some discounts or any deals that you know of, either Boxing Day deals or New Year's deals? And they often do.

And so this can often help reduce my Internet bills either by half or by a significant chunk, saving me actually pretty substantial, like six hundred dollars a year at times. So I just wanted to highlight this is my checklist for my first for the beginning of the year. And people will say, oh, I don't have time for that. How long does it take?

Well, actually, doesn't take very long. It takes only a weekend. Right? And some things that I might do during that one weekend is, you know, this is from Credit Karma, which is an app that tracks your credit score.

I also double check that I my credit reports from TransUnion or Equifax, and Credit Karma actually pulls from both of these credit unions. And the value of that is that sometimes if you're ever experiencing fraud, someone's trying to open an account in your name, they will run a credit check. And if and there are times I've actually discovered credit checks on my files where I did not initiate that credit check. And so I'm able to contact the company directly and say, by the way, I never opened a Bell mobile account.

Can you please double check this or cancel it? Because it might be fraudulent. And it'll actually save you a lot of headache down the line just having like a passive monitoring software like this. Plus you can sign up for fraud alerts with TransUnion and Equifax, and this is free.

They'll give you free fraud alert so that it prevents you from future emergencies where you just suddenly, you know, find out that someone bought bought a car in your name and which has actually happened to me, but it got canceled right before the credit check because you have fraud alert. Right? So you you wanna cancel those headaches before they actually turn into real life headaches. And so I've had a lot of close calls, but because I have a lot of these fraud alerts and TransUnion and the Credit Karma set up, it it prevented those from actually happening from any money from leaving my account.

The other resource I wanna provide to you is the Canadian Physicians Deals Discounts and Rewards Facebook group.

It's a great platform where a lot of other physicians are on there talking about phone deals and Internet deals and things like that. Or, oh, I wanna buy a MacBook. How do I get a get a education discount on them or something like that? So, you know, even though you might think these discounts are small, they actually do add up. And I usually try to do these subscription things in the beginning of the year so that the subscription is at a good price for me for the rest of the year. And then you can also find some of these deals on red flag deals as well.

So, you know, why is it important to check investments yearly? Well, some of you so this is a screenshot from a software called Passive, and it kinda shows you your finances on, like, a big overview bird's eye level. And the reason why is because sometimes I I've seen a lot of physicians who are actually already financially independent. They might already have, like, two million dollars in their corporation, but they're asking questions like, oh, I like, I'm so burned out from doing call.

Like, can I can I afford to do less call? Well, the answer is yes, but they just didn't know it because they don't know their financial vitals. So I wanted to give a concrete example for my own account. So when I was planning my mat leave, some like I knew that I was going to be trying for pregnancy.

I might have already been pregnant at the time. And I was trying to plan how long should I take off for mat leave. For most physicians, they only take off maybe like four months. But I wanted to take off a year and I wanted to know could I afford this.

So I went on my software called passive. And for some of you, it might actually look like this on your bank account where you might see your annual or monthly P and L. What is the profit or the growth of your investments over time? Does not include dividends.

I'm also able to see what my monthly dividends are through some of these bird's eye view software as well. And then I also saw how much I was paying in commission. So I knew that for that year, let's say I had three hundred thousand in capital gains growth. It kind of tells me, okay, if I realize those capital gains, it actually is basically almost the equivalent of my salary as a family physician.

And so that that means I actually might be able to afford taking that one year off without huge impact to my overall financial situation.

For some of you who might actually be more interested in investing in dividends, you know, seeing how much dividends you made is also important too. Right? Because this might be a more concrete example where let's say I saw that this month I made six hundred and eighty five dollars in dividends.

Well, what does that tell me? Well, in a half day working in clinic, I may make about five hundred dollars to six hundred dollars per half day doing family medicine. If I'm really burned out from doing family medicine and I just don't wanna work a half day and I wanna use that half day to exercise or to cook a healthy meal, I can afford to do that without huge impact to my financial situation because I'm taking that in the dividends as well. So this is what I'm saying.

By looking at your your finances and knowing your financial vitals, it allows you to determine how much time you can actually take off. Can I afford that mat leave? Can I afford that sabbatical? Can I actually afford to take a half day off every every month from for my own personal wellness?

So in addition to knowing how much is coming in by ways of your investments, it's also important to know about your fees as well. Because sometimes fees can eat up a big portion of your gains, and people don't necessarily know that. It's very it's very insidious. So if some of you are investing through a robo advisor, the fees are point five to one percent.

If people are doing it DIY like myself, point zero three to point five percent. Or if you have a mutual fund, it's one to two percent. And in my next slide, I'll kind of talk about more about why these fees are important to know. But for myself, you'll see like the fees that I pay, it's not very high.

Monthly Financial Habits

Okay. So let's also touch a bit about monthly financial habits. Because some of you are probably, you know, checking your bank accounts on a monthly basis, but some of you might not be.

And it is quite important to know what's going on every month and just verify your credit card, your bill statements to make sure there obviously, there's no fraudulent charges. But the other thing that's important to make this more passive for you is the pre authorized debit. Particularly, if you were to ever end up in a situation such as a health scare or in my case, you know, high risk pregnancy where, you may not necessarily have your finances at the top of mind, having pre authorized debit can be helpful because it ensures some of your recurring bills do get paid. And then when you do have the time, you can just double check those bills are charged correctly.

Paying down debt is another big monthly financial habit that's really important to establish as well. And particularly for those who might be residents in the audience, it might be important to determine your monthly maximum spend.

Because sometimes, you know, you might think a lot of money is coming in and suddenly, oh, taxes are due. Well, okay. Do I have enough to cover those taxes?

And I put this as optional because it can be very time consuming for people, but I actually do encourage it if you have an expense tracker. And I'll show you in a later slide what that might be, especially when you end up getting an accountant. Because your accountant will charge you by the hour if they're putting a lot of a lot of time into organizing your finances and identifying what are tax deductible for you and what is what are certain tax credits you have, they're gonna charge you more. Right? And so when you're looking for an accountant, sometimes accountants will give you, like, a spreadsheet. So my accountant gave me a spreadsheet that they wanted me to use and to give to them so that they can use that spreadsheet to see what all my expenses are.

But some accountants don't. Right? And so for myself, this is kind of what I built for my own personal taxes. And so I have a link to the YouTube channel where I explain it in more detail and how I enter things in.

But generally speaking, I organize it by how much income is coming in because your accountant needs to know this for tax purposes. Right? And your accountant also needs to know what your expenses are. So if you tell your accountant, oh, I spent this much on the utilities or this much on overhead of my practice, it makes their life so much easier so that they don't have to sort through all these different papers or these different receipts.

The other important thing, you know, it's important to track is sometimes you go to conferences. Sometimes you travel for for work. Right? And you have to go from one site to another doing call.

There are aspects of that that could be tax deductible that is important for your accountant to know. So it's important to organize the receipts in some way, and I do that on a monthly basis. And it does not take very long. It takes maybe one to two hours just to just to check the stuff in my bank account and on my credit card receipts and input them and organize them on a budget tracker or a spreadsheet.

Right now, if everything's on your credit card, you don't know what are personal things, what are business things, are things tax deductible on there. And so I spend some time over every month, one hour, just looking through my credit card statement and organizing those into the which tax deduction category.

And it makes my life so much easier come tax time.

And, again, so this is why it's important.

And, you know, the other thing I wanted to highlight is if you're paying your bills on a regular basis, it helps you build a good credit score. Some people might ask about what are good budget apps and things like that. And how I decided on what are good credit cards, what are good budget apps, is I actually searched up on Google, like, top rated budgeting apps or top rated credit cards in Canada. And there are often these lists that come up, like, for example, best cash back cards, best credit cards. And and they get reviewed by people who've used them.

And sometimes I also recommend you can sign up for several of them, do the free trial, or just to see if you like the user interface or not and decide is this the best budgeting app for me.

Why it's important to pay off your bills? Well, this is like a vacation that I took business class fights and everything, and this was all paid for by credit card points. I only paid $64 for this trip to Asia because of, like, taxes and surcharges and things like that. But everything else other than the $64 was covered by points.

And I wanted to highlight this because sometimes I hear comments on forums like, oh, why are doctors wasting their time collecting collecting vacation points or aeroplan miles or things like that? Right? But, you know, as physicians, we actually do spend quite a lot using our credit cards. Every time we have a CPSO fees that are due and then the CMPA fees that are due, it's a lot of money just to drop down on those.

And so you might as well get something out of it. Right? And so sometimes, you know, having a good credit score, being able to pay off your credit card bills on a regular basis opens up the opportunities for some of these programs as well.

Daily Financial Habits

And finally, I also wanna touch a bit on daily financial habits. Right? On a day to day basis, a lot of you maybe don't think about your finances on a day to day basis. Right?

But I think it is important to. And these are just some quick questions to ask yourself when you're making a day to day purchase. You know? There's two ways of thinking about it.

It's how many hours do I have to work to buy this? And some of you who might be who actually might know how much you earn per hour, you know, you you might understand this better than a resident who has a salary. Right? Is you actually know, like, your hour, your per your time has an has an hourly value to it.

Some other ways of thinking about it is what is the cost per use? So I wanna give you kind of an example of that in the later slides.

There are also some small ways that you can save and earn as well. And, you know, there might be, like, coupon apps. The credit card points are one of them as well. And these are often very passive.

Right? There are also some surveys for physicians that can pay, like, a hundred to a hundred and fifty bucks per survey you complete just based on your expertise. Sometimes they might ask you, oh, like, do you prescribe these medications or for what cases you do? And so there are a lot of them out there.

And if you, like, just look on Google physician surveys, they're just a quick thing to complete when you have downtime. Like, you're taking the bus or you're stuck on a subway. Sometimes I knock a bunch of those down, and it pays me about, like, a hundred or two hundred dollars just during my downtime doing nothing.

And then billings are also an extremely important daily habit. A lot of people underestimate this, and they just procrastinate their billings. Then after three months, it becomes stale dated. So it's extremely important, especially this as a financial habit to establish on a daily basis.

Spending & Lifestyle Inflation

So I talked about two different ways to think about your daily spending. Right? The first is looking at your cost of the item that you wanna buy divided by how many hours of work you have to buy this and think about, okay. Is that actually worth it to trade this many hours of my life for that item? The other way to think about things is the cost of the items divided by how many hours of use you think you can get out of this item, how many days, how many years you can get, and that's your hourly cost of use. And these are just two ways of thinking about your purchasing power, your your spending with more intention.

Right? And and seeing how much value can what we buy add to our lives. And so an example is like, I see I go to weddings and I see a lot of ladies wear these type of shoes with the red bottoms. And so I looked it up and and they were quite expensive, a thousand and fifty dollars.

And so I think about, okay. I'm probably gonna get three hours of use out of wearing these shoes because they look really painful. And usually at the wedding, on the dance floor, no one is wearing these by the end of that time. They're just going barefoot.

Right? So it's not like they're wearing them for that long. So it's like, think, okay. Well, do I really wanna pay three hundred fifty dollars an hour for for this, or is it just is it not worth it for me?

Is it just better to buy something cheaper?

The other thing is that a lot of people say, well, does that mean you can't buy nice things at all or expensive things at all? Not necessarily. Right? Like for myself, my laptop is probably an extremely expensive purchase. I have a gaming laptop.

And it's fast. It's a very fast processing speed. I've used it like almost seven hours a day for almost eight years and it's still working. And to me, that costs about eleven cents an hour of use.

Very worth it in my opinion. So this is just how I kind of think about expensive purchases. And is that expensive purchase worth it or not? And for you, maybe you might have a different hourly cost of use number.

But for me, right, it's a certain it's it's a much lower number. And after like, you know, if it's like I have to pay this much per day just to use this item, it's not necessarily that worth it for me.

The other way to think about your spending and your lifestyle inflation is that hourly cost of use or the hourly, how many hours I have to work for something. And so when you look at the average gross income of physicians, about two hundred and forty thousand per year, you divide that by fifty two weeks per year, that's your daily work income, minus your taxes.

And the hourly tax value of your time is around $76 per hour after tax, which is not that much. Right? And then maybe that's why the full plus, it was, like, the $80 per hour thing.

Optimizing Billing

And so, you know, you also wanna take into consideration all the time that's free that you don't really get to bill for. Now you could bill for, like, some admin stuff, but some of the time you spend charting, the time you actually spend figuring out your billings, those are not necessarily things that you can actually bill for. Even if you have the full plus billing, you can't necessarily bill for those. And that might actually further reduce the number of hours after tax.

And so that's why I really wanted to emphasize, you know oh, and also these don't include a lot of the overhead we have to pay. So that's why I think it's super important to really emphasize optimizing your billings and knowing how to properly bill. Because if you're spending a lot of time on it, like I did, working until 9pm, trying to figure out what to bill after seeing 30 patients in a day, you know, it's not a good use of my time and does not contribute to my happiness. And so if you're an early career physician or a resident, it's important to understand billing early.

So that way bill after every single patient you see instead of waiting until after thirty patients a day because it'll just lighten the load so much more cognitively, but also administratively as well.

These are some other resources. This one I quite like from Dr.Bill, which is the billing error codes. And this is my own personal opinion. I was not forced to put that on the slide because fixing billing rejections can also be something that's kind of a pain as well and very time consuming. And plus, you can't bill for the time you spend fixing billing rejections. And so sometimes when you get your error claims error report, this is just easy way of searching for why the error code got rejected or why the billing got rejected and fixing them. Or if you're delegating that to a billing manager in your clinic, this is a way a resource they can use to to search it much more easily.

And then sometimes there's also this article that I wanted to highlight about billing rejections. Because again, not a lot of people have experience in residency on how to fix billing rejections. A lot of times we just talk about how to bill.

Common Financial Mistakes

And then finally, I just wanted to touch briefly on some financial mistakes that I see a lot of early career physicians making. The first is some people in the poll said that they're they wanted to learn more about incorporation and about investing. Right?

And often investing, I wanted to highlight, it's more long term. It's buy and hold, and it's a less risky investment. It's a less risky strategy because you're not buying and selling based on market fluctuations.

And you can see this is like the S&P500. You do see a lot of ups and downs, but over many, many decades, it has trended upwards. And so this is what I mean by some people diversify their investments and not go all in on certain stocks and so on. And trading is what I've seen a lot of people tend to do.

They see the news. They see things going on that might drop this the value of their investments, and then they wanna sell. And often, if you're doing day trading or if you're doing something that's more active, you know, it's very time consuming as well. And you have to think about, is this something I do wanna spend that time doing?

Does it bring me happiness? Because if not, more often than not, it's higher risk. It will lead you to lose certain lead you to lose money, especially if you don't time the things correctly. And often, you might not be able to.

Right? If you don't have the right information, the pricing might already be baked into the investment, and you're already buying it at a premium if you're trying to buy with the news. So that's just just something I I see a lot of new grads make as a as the mistake when they start getting their staff income.

And sometimes people will buy it, like I said, based on the news. This was GameStop. You know, people see, oh, look look at the gains of a thousand four hundred percent gains. Right? But when you compare it to something that's more broadly diversified like the S&P500, you know, over the same over time, the gains are actually higher.

So I wanted to highlight this. Everyone talks about their wins, but they don't always talk about their losses as well.

Fees is another thing I wanted to highlight as well. I touched on it a little bit in my previous first slide about knowing your financial vitals and knowing how much you're paying in fees. I took this screenshot from an investment that my parents had been invested in, a mutual fund, and the fees look pretty low. Right? Two two percent doesn't seem like a high number.

However, you know, this number is the commission that your fund manager gets for managing your mutual fund regardless if it goes up or down. And so it might seem like a small amount, but it can add up. And it's also higher relative to some of the other options out there. And so this is what I mean by, you know, things can add up.

This is from a book called Beat the Bank by Larry Bates. And I like this diagram because if you invested a hundred thousand in something with 2.2% fees over 25 years, the difference, the gap is $371,000 is what you make, but what you keep is $179,000. And you have to kind of decide, is that worth it to pay $191,000 for someone to manage your money? Or, you know, robo advisor 0.5% annual fees, you know, doing something a bit more passive, you know, over 25 years, the gap in between is much smaller.

The other big mistake people make is loaning money to family and friends. And I will touch on this too much, but I wanted to really highlight this because often when you borrow from a bank, you have to sign a contract. Right? But when you're lending to friends or family, there is no contract.

And so a lot of the times, you have to assume you're not getting that money back. You have to be very careful when you do this. And often people like family members will say, oh, you have this huge line of credit. Why don't you let me use it?

At the end of the day, it's on you and it will affect your credit score if you can't pay it back and your family can't help you pay it back either.

Number four, choosing the wrong partner is also a big mistake I see. A lot of times when I do a longer version of this presentation, I'll poll the audience and ask them, oh, how many of you talk about finances with your partner? 40% say no. And also a lot of people don't have a prenup either, which is some some which is one way that you can actually talk about and be very open about your finances with the lawyer there asking you for certain financial statements, investment accounts, and things like that. Right? And divorce is one of the biggest ways to lose money. So that's why I have this slide here that shows, you know, contested divorce, $10,000 and maybe even up.

Whereas the cost of a of a prenup is maybe, like, $2,000-3,000. For more info, I have two videos about this where I interview a lawyer about the components of a prenup. What do prenups protect? Like, can it protect your corporation, or what part of your corporation can it protect? If you're coming into the marriage with a preexisting investments or real estate or whatever, how do you protect that? And so I asked them a lot of questions. So I suggest, you know, if prenup is something you're thinking about and, you know, and you want to get a lawyer involved, we can you can always watch this just to educate yourself before you actually speak to the lawyer because they will charge you by the hour for teaching you some of this stuff that's already covered in these videos.

So that's why I wanted to provide this as a resource for you.

And then finally, you know, not negotiating your income. So some of you are coming in and looking for new jobs and things like that, and often we volunteer a lot of our time. And so it's and people often do things without asking if there's a stipend. There is no downside to you other than just maybe your initial anxiety of asking if there's a stipend. And also the important things of asking to be paid for your time is that whoever takes over your spot after you will it will open the path for them after you to getting paid for their time.

My tip for you is also check out OMA's contract review service. If you're a member and you're a resident with a with a offer letter in hand or a contract in hand, this is free for OMA members.

So I just wanted to highlight two of these video resources for those of you junior in your careers on some of the negotiation books you can read, career mistakes to avoid as well.

And then finally, incorporating too early. Right? We often see a lot of new grads being asked to incorporate very early on. And I just wanted to touch on why do people incorporate.

So let's say you've maxed out and filled up your tax advantage accounts, like your TFSA, your RRSP, your FHSA, and you have extra income left over where that might be an a a time to start thinking about a corporation. Because the biggest reason for incorporation is tax deferral. When you put money into a corporation so let's say you do your billings for OHIP and those billings get paid into your corporation, You will pay out to yourself what you need for your lifestyle expenses. If your lifestyle expenses are gonna be high, then I do not recommend incorporating because there are a lot of costs that are ongoing with a corporation.

Once you incorporate, your corporation is gonna be a separate entity from you, yourself, as a person. So there's gonna be accounting costs and legal costs just for the corporation in addition to your own personal tax returns as well. Plus there's an annual cost you pay to CPSO to maintain the corporation that you do not necessarily pay if you're not incorporated.

So the tax deferral is a big thing. And the reason why there is a tax deferral within a with a corp is because money earned in a corp gets taxed at a at the small business tax rate. If you're earning less than $500,000, it gets taxed at this 12.2% in Ontario. And so if you're able to not have a high lifestyle expense, you're able to retain money in that corporation, the tax on that money earned in your corporation is a bit less.

Obviously, when you take it out, the money that you take out gets taxed at your personal tax rate, which might actually be higher depending on how much you choose to take out. Right? So by keeping it in the corp, it allows you to sort of build up more in the corporation instead of paying it all out to taxes such that when you're in a lower tax bracket when you're retired and you start taking out the money in a corporation, then it gets withdrawn at a lower personal tax rate in retirement. Maybe your expenses expenses are just smaller.

Your income that you choose to pay yourself is smaller as well.

That's the biggest reason why some people incorporate. There are also other reasons as well, but I would suggest that you check out this video, should I incorporate for physicians? I think it's on YouTube, and it's a quick video that highlights some of the other reasons such as income splitting, such as income smoothing so that you can be informed on incorporation.

And likely, like I said, you know, it's only worth it when you can keep actual money in the corporation.

Final Thoughts & Resources

So final final thoughts. You know, why is it important to know the impact of financial vitals? Well, for me, it's buying back my time. This is the poll from one thousand one hundred votes of physicians on a forum asking them how long they took for their for their pregnancy leave.

And they said parental leave, four four to six months was was how much they took because they couldn't afford, or maybe they didn't know they can afford to take longer. Right? So for myself, I took thirteen months. And even now, I'm practicing only three half days a week of of clinic so that because I know that I can buy back my time doing other stuff.

Knowing your finances is also really important because it also knows how much extra you have to give away through philanthropy as well. And so that is also something I've started exploring a lot more now that I'm much more attuned to my financial vitals.

And, also, it buys me more time to do things that I might not get paid very much for. Right? Like giving talks to students. Obviously, this pays less than clinical income, but because I know how much I'm making through my investments, because I know that my finances are running efficiently and buying back my own time to do things that bring me joy. And so bringing myself back to this hierarchy of needs, I have attained that self actualization level where I'm achieving one's full potential, including creative activities.

And this does have health benefits to you as well. Right? Volunteering instead of being voluntold to do something. Volunteering in areas that bring you joy and are helping other people.

Doing charity work or giving back through charitable donations does actually lower the risk of depression and anxiety. It decreases blood pressure and strengthens your immune system as well.

So I just wanted to end by giving some resources and seeing if we have some extra time at the end to take up some of the questions. I talked about YouTube as a resource as well. You can find a lot of my recorded lectures on my YouTube channel, @breakingbaddebt. Breaking Bad, like the show about addictions, debt as in your debt.

I also if you are a more active learner and you wanna sit down and read something, I reviewed five personal finance books ranging from just general personal finance to investing to real estate to retirement in this video. So you can always check this out for more info.

And finally, conferences. If you also wanna do more group learning with a group of people, the Physicians Financial Wellness Conference is something I've been organizing for the past five years, and we donate the ticket sale proceeds to charity as well. So we've so in this picture, we've supported Habitat for Humanity and also supported a scholarship at U of T as well.

This is the QR code to sign up.

And finally, I'm just gonna leave this slide up on the screen just for more information and see if there are any big questions to take up.

Q&A

Thanks very much, Dr. Zhao. There are there are a couple in here that I think you could address, but also possibly Jennifer Collard. I'll read it out.

So as a new staff for the big LOC, I've been trying to prioritize putting money into my RRSP to reduce taxes as I'm not yet incorporated, but therefore have not been putting money into RESPs for my three children. Should I now be prioritizing this, or can I contribute later? Children are two, six, and eight years old.

Yeah. And that is fine. Like, the reason for so prioritizing your RRSP allows that RRSP to grow over time. It's also a tax deferral mechanism.

Right? Similar to your RESP in a way. But the one difference where the RESP can potentially have some value is of the grants. There's a CESG grant that, you know, if you put in a certain amount let's say let's say you put in twenty five hundred that year, and the government will give you a twenty percent up to five hundred dollars grant on top of that.

And they'll do that every year you meet that twenty five hundred dollar minimum. And so in a way, it's kind of like getting free money from the government just by simply putting money into your kid's RESP, and that money can also further grow. Now that doesn't happen with your RRSP. So in order to get that grant, you have to actually put money in, and that money can contribute to growing over time.

And it'll be five hundred dollars per year of your contribution up to a maximum of seven thousand dollars, which is quite significant as well. Right? So, you know, obviously, I'm not your financial planner, but it kinda depends. Maybe you don't have enough money to put into your RSP and your RESP.

But I do think there is some value of maybe either splitting, like, half half or something like that just so that you can actually take advantage of early compounding on that free money from the government. Right? The the CESG grant as well. And so this is what I usually think of how I think about it.

It's like, you only have a limited amount of to put into certain areas and you're not sure, should I pay that? Should I invest? You know, maybe you can split it and do both just so that you have the advantages of both as well if you're undecided. I know that I also have Jennifer on this call as well who can also provide some advice there too.

And I'm happy to for her to share her thoughts on the RESP versus RRSP debate.

Jennifer, you're on mute.

Can you hear me now?

Yes. We can.

Sorry about that.

How many years into technology, and here we are. The only thing I would add when it comes to the RESP is that you are able to catch up on your contributions. So say, for example, you haven't been able to contribute for a few years.

Each year, the maximum contribution is twenty five hundred, you can contribute, say, for twenty twenty six and twenty twenty five at the same time. So you can essentially put the five thousand dollars in one year and get the full one thousand dollar grant in that same year. So there is some room to catch up, but I agree with Dr. Steph. A little bit each year, if you can spread that out, it goes a long way.

As we all know how expensive school is, imagine when your kids are older, the expense that's gonna come around to that as well. But definitely talk talking to your adviser to see doing a little budgeting, seeing where you can free up some cash flow. Every little bit adds up over time. Even twenty five dollars a month makes a huge difference in the long run.

Great. Thanks, Jennifer. So the next question we'll look at is if you have any frameworks or resources around, physician debt repayment strategies, especially approaches that are both financially sound, but also sustainable and burnout conscious.

Yeah. And there are two ways about it. It's like the investment snowball or the sorry. The debt snowball or the debt avalanche. Those are two ways to think about it. So let me just kinda briefly summarize each of the ways.

First of all, you there's one school of thought where you can tackle all of your debt, the highest interest ones first. So for example, let's say you have OSAP debt. That is usually prime plus one percent, which is higher interest. Right? That might be something some people might wanna tackle first because the interest is much higher.

However, there's also debt like the federal loans where the interest is, like, at zero. Right? So you might not necessarily wanna touch those, but of course, eventually, you should still pay down the debt. Then you also have your line of credit debt.

And then maybe you might have other debt like credit card debt. Obviously, you can look at the ones with the highest interest and tackling down those first. Or some people might use debt consolidation where they'll take your line of credit where the debt is a little bit lower. The because it's prime minus 2.5% and then use that to pay down some of the higher interest debt and then pay down that line of credit debt over time.

So debt snowball is basically just looking at some of the lower, smaller debts and paying getting those out first to build motivation before tackling the bigger debts. Debt Avalanche is looking at some of the big debts and trying to tackle those and ignoring the smaller debts. So it kinda depends on how you feel about it. I can tell you what I did.

And when I graduated, I, like, wasn't sure what to invest in, really, because I just didn't have time to look at investments. Right? And I and I felt like I was gonna get analysis paralysis. But what I did know was I had over a $100,000 or $150,000 of debt.

And so in a way, just tackling those debts, like putting everything into the debt, can actually be advantageous because it's it's kind of mindless. Right? You don't really have to think about it. You don't have to think about, oh, what should I invest in? I just threw it all at the debt.

And I paid off all that debt in five months because I was just working so much and had nowhere to spend it.

And then eventually, I everything I had was just free cash flow. Right? Because I had no debt to pay. So I just increased my cash flow after that, and then I used that cash flow to invest.

And I didn't really miss out on anything. Right? Like, five months in the missing out on five months in the market. It's not like it's not like missing out on on years in the market or something like that.

Right? It's not like it's a it's a very small amount of time in the grand scheme of things. So it's not like I missed out on returns had I invested that money instead. Right?

So that was my personal approach to it. And it also kind of from a psychological perspective, it also felt nice just to have one less thing on my mind. And in and also paying debt indirectly, it's it's it's kinda nice because it just means, you know, more money available by way of cash flow for you to invest as well. Also, like I said before, if you're not sure, you can always just split it.

Right? A certain amount of income coming in. You could put half towards your setting up your TFSA and put half towards your your debt. And that way, you kind of hit two birds in one stone as well.

Yeah. Jennifer, do you have anything else you wanted to add to that comment?

Oh, I think I got myself off mute this time.

Yeah. I wouldn't say anything. You you covered everything really, really well. I think it's important to think about what keeps you awake at night. You know, the numbers are important, but, also, you wanna come up with a plan that helps you sleep at night. And tackling both saving and paying off debt is important because if all you do is pay off debt and you have another large expense coming up, all of a sudden, you're gonna be back into that debt again. So always recommending doing both things at once, probably the best advice to help you sleep better at night.

Thanks, Jennifer. And this brings us to the top of the hour.

So thank you very much, everyone. That hour certainly went quickly, and thanks again, Dr. Steph, for taking the time to share this lecture with us and answering questions. As a reminder for everyone, the recording for this will be shared with registered attendees and will be available through Dr.Bill and on the OMD Vendor Spotlight's website. An evaluation link was posted in the chat. We certainly value all the feedback, so thank you for taking the time to complete that.

Dr. Steph, on behalf of Dr.Bill and all of today's attendees, I wanna say thank you again for being here, and sharing today's valuable information and guidance on optimized financial wellness. And as, again, a special thank you to Jennifer and Guillermo for being here and sharing your expertise as well. I hope everyone has a wonderful day.

Great. Thank you, everyone. Take care.

Thank you.