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Maximizing Your Earnings: Smart Investment Strategies for Physicians

While most people pursue a career in medicine because they’re passionate about healthcare, some physicians get into the field simply for the earning potential. No matter what inspired you to become a doctor, it’s likely that you want to maximize your earnings and make as much money as you can.

With a high annual income, physicians have unique financial opportunities and investment vehicles that they can take advantage of to make more money each year and continue to watch that money grow.

Ready to learn what they are?

Here are five smart investment strategies for physicians that can help you maximize your earnings.

Open Your Own Practice

According to the Medscape Physician Compensation Report 2023, self-employed physicians earn $30k more per year than physicians with employers.

Opening a practice of your own requires you to make an initial investment, but it’s an investment in yourself. If you don’t have enough money saved or don’t want to take loans to open your own practice, consider buying into an existing practice or partnering with other physicians to start a group practice.

Working in your own practice can net you hundreds of thousands of dollars or more throughout the entirety of your career. The more you make, the more you’ll have to invest, and smart investments can net you additional gains year after year.

Invest in Real Estate

One way to maximize your earnings is to make good use of every dollar you make, and one way to do that is to buy a home. While some physicians like the flexibility of renting, especially young doctors who aren’t sure where they want to settle yet, buying a home is the better option.

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Many young physicians worry that it will take years to save enough money for a down payment, but a down payment isn’t always necessary.

Physicians can take advantage of the “doctor loan,” a mortgage option that requires zero or low down payments and no PMI fees. Unlike conventional mortgages, which require you to pay private mortgage insurance if you put down less than 20%, doctor loans do not.

Physician mortgages aren’t just for MDs either. This site provides a list of lenders where veterinarians, nurse practitioners, pharmacists, dentists, and other medical professionals can apply for a doctor’s loan.

In addition to buying a home of your own, consider buying investment properties, such as multi-family homes, commercial buildings, or vacation homes that you can rent out. If you don’t like the thought of being a landlord, look into investing in real estate debt funds or real estate investment trusts (REITs).

Diversify Your Investment Portfolio

There’s so much more to investing than trading stocks. As a physician with a high salary and a significant amount of income to invest, it’s best to consult a financial advisor to help you make smart, diversified investments.

A diversified portfolio may include a combination of investments in:

  • Stocks
  • Bonds
  • CDs
  • Index funds
  • Mutual funds
  • Real estate
  • ETFs

Most investments have some level of risk, but an intentionally diversified portfolio that includes multiple investment vehicles can help to reduce that risk. Stocks are considered some of the riskiest investments, while bonds and CDs are considered some of the safest.

High Yield Savings Accounts

Investing can net big gains, but it’s also important to have some liquidity — and where you put your cash can make a big difference.

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Rather than stashing your earnings in a traditional checking or savings account, consider putting some of it into a high yield savings account. High yield savings accounts pay considerably higher interest rates than traditional accounts, sometimes more than ten times the national average interest rate. 

Open a Medically Adjacent Business

If opening your own practice or becoming a partner in a practice isn’t the right choice for you, consider opening a medically adjacent business. Depending on your specialty, you might be well-suited to own or operate a:

  • Dialysis center
  • Imaging center
  • Medical spa
  • Medical equipment business
  • Dental lab
  • In-home healthcare service

You might even want to open your medical-adjacent business with a partner or hire someone else to run the day-to-day business operations. Doing so allows you to continue to practice and enjoy passive income from the business at the same time.

In Conclusion

There are multiple ways that physicians can maximize their earnings throughout their career. By buying property, going into business for yourself, and knowing where and how to invest your income, you can significantly increase your net worth and set yourself up for a financial stable and secure retirement.  

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