Your Credit Means Everything

Why is credit scoring important?

 Many banking institutions around the country have implemented lending programs specially designed to help medical residents  obtain an affordable mortgage.  Physician Mortgage Programs as they are called, have some nice perks like no down payment or requirement for mortgage insurance. Sound too good to be true perhaps but only if your credit score is less than 700.  This is the optimal number lenders want to see.  If your score isn’t quite there you might try to find ways of improving it.  Remember renting or buying is a personal choice but making sure your credit score is desire-able now will only ease your options for making larger purchases later.

 How they come up with your score

A credit score is a rate that credit bureaus use to evaluate your credit history. The system rates you as a borrower on a scale 300 the worst possible score, to 800 the best score. The calculation is made up of the following elements:

  1. Payment History – Late/ Missed Payments
  2. Current Balances – How much you owe now
  3. Age of Credit- How long you take to pay off your balance
  4. New Credit Balances- Any recent accounts opened
  5. Types of Credit- Number and type of credit

How to increase your credit score?

  1. Pay your bills on time
  2. Try to carry a zero balance on any credit cards
  3. Don’t kip payments, if you have bring them up to date
  4. Try to use less than 30% of available credit
  5. Pay off your debt don’t move it from one card to another
  6. Apply for new accounts only as a last resort (its only going to compound your financial burden)

It’s so easy to find out what your credit score it. There is no reason you shouldn’t know it Simply log onto CreditKarma and enter your information.  They are a free credit reporting agency.   As Sir. Francis Bacon said, “Knowledge is power”


Take Control of Your Life

Right now we are being are in the midst of one of the greatest national disasters our country has ever known. At this point the only news coverage other than local that is relevant is surrounding the Hurricane and its aftermath in Texas. It is at times like these that always gets me thinking about the people in our lives and how very fortunate we are to have protected them and ourselves from the financial disasters that happen from just such an incident due to the lack of planning. This also gives me pause to consider those that we have chosen to represent us, such as bankers, attorneys, accountants or our financial advisors. When was the last time you sat down and talked with them about your particular situation? Chances are it has been a while and perhaps you are waiting for them to call.

Let’s look at this for a moment. We all think that our personal issues are the most important because they are ours don’t we? However, the sad truth is that unless we make them just as important to our advisors then chances are we will not be front and center in their minds. It’s not that they are irresponsible or don’t care, the reality is that just like the patient you are currently caring for is at this moment the most important, so is the client who is actively involved in his/her personal situation. This means that you must take the bull by the horns and sit down at least once a year to review and plan ahead. Once you have an established relationship with the people you’ve chosen make sure you schedule your annual check-up. This way you can look at your accounts and make sure they are still healthy and on track with your goals. If not then make the necessary changes. That is not to say that if you get a new position, move, add a family member or delete one that you should wait for your scheduled meeting. Your advisors are not mind readers so give them a shout out and let them know so they can adjust your accounts accordingly.

I know it seems like a lot of work with everything else you have to do, but remember just like it is your advisor’s job is to keep your best interests in mind, it is your job to make sure your interests are on their mind so you can work together toward achieving your personal financial goals.

You may not be aware but we are not only specialists in providing you with the most comprehensive disability policies available. We are also specialist in assisting you with all aspects of your financial plan. As a resident it may seem like a far off need but you might find professionals extremely useful and may I suggest that you begin to develop a personal relationship with them as soon as you can and if you are in need of some expert advice look no further.

Interest Rates Going UP UP UP

June is quickly approaching and so is the next chance for the Fed to raise interest rates. Considering that she has already increased the rates twice in the last 12 months and the economic effects were negligible my bet is on another increase. Probably similar to that of the previous two which were one quarter of a point. Doesn’t seem like much but it can have a significant impact on your wallet? As a specialist in Emergency Medicine it is important to understand how these increases will affect your bottom line and what you can do about it.
Most of you are not old enough to remember what the interest rates where in the 1980’s and but get ready for a shocker. The average home loan was 18.5% for a fixed 30 year mortgage. No one really wanted adjustable rates because the market was increasing and that would have spelled disaster for most. Looking ahead to the present, rates have been at historical lows. This has made it attractive to buyers and those looking to refinance. The home they never thought they could afford has become affordable and the home they already own has become less expensive to live in. Now that are increasing and look to do so at least twice more this year we have a little problem. What’s that you say well lets take a look at the math. When the Federal Reserve raises the interest rate by 1% over a year do you know how this affects your adjustable rate? Let’s assume you have a monthly payment of $1000 on a 3% ARM. When that 1% increase kicks in your monthly payment will go up by 33% or approx. $330 per month. Which is to say that 1% = 33%). How is that possible you ask? The increase was only 1%. Yes, but if we add 1% to the current interest rate of 3% we have actually added 33.33 % to your monthly expenses. Because 1% is actually 33.33%. I am no mathematician but that is a significant increase and can affect your financial situation and add stress to your wallet if you can’t cover it. Remember historically interest rates are approximately 7%.
I know we preach this a lot but it is so very true and appropriate to this topic. Living today is fine but always be prepared for tomorrow, it does come. In short if your bank approves a loan for more than what you dreamed of just remember if it’s on an ARM you better be able to pay for it when the increase comes. We work with clients daily to help them make financial decisions that will have positive affect on their financial security today and in the future. Give us a call and let us help you do the same.

Now That You’ve Got Some Money?

Medical school is behind you and now you can focus on your residency in Emergency Medicine.  You are finally going to have some positive cash flow but knowing what to do with it can be tricky.  Seems like the answer should be easy but when you break it down the choices you make can mean the difference between financially secure now and in the future or being broke again.

The first thing you want to do is get a complete understanding of your current expenses. The best way to do this is break them down into categories.  Start with your fixed necessary expenses such as: Rent, Student debt, Disability Income Protection, Auto Loan etc. Then your non fixed necessary like groceries, medical expenses, gas, clothing etc.  Now add in your wants category items like dining out, morning starbucks, impulse purchases, event tickets (you get the idea). Keep in mind this is the category that typically gets everyone in trouble.

Once you’ve got all that then take that number and deduct it from your current salary what if any is left over.  Hopefully you have something to spare for a rainy day.  If not don’t worry just start analyzing what you can do without.  The key here is to be real with yourself.  No one else is looking and you are trying to paint a realistic picture of what you spend now while your and Emergency Medicine Resident and on a limited budget. If changes need to be made then make them.  Building a solid foundation for spending and saving now will go a long way toward creating that financial security you will want in the years to come.

In addition to being the top Disability Income Protection Specialist in the country, is also fully licensed and able to assist you with your financial plans now and going forward.  Should you have any questions please do not hesitate to contact us.




IRS Tax Traps to AVOID!

Foreign Owned Property and Financial Accountsfinancial advisor

The 2016 tax deadline quickly approaching and I thought it would be appropriate to discuss a couple of lesser known tax traps that clients have been caught in by the IRS. They involve foreign owned bank accounts and foreign owned property. Even though you may not have not opened the account or purchased the property personally, you must disclose it on your taxes to avoid huge penalties from the IRS. Given that we are a country of immigrants, this most often occurs when a relative leaves you money or property abroad in the form of an inheritance. No matter how big or small, any instance of ownership requires disclosure to the IRS to be safe. The two forms below are for your reference:
• Report of Foreign Bank and Financial Accounts (FBAR)
Form 8938 – Statement of Specified Foreign Financial Assets (Property)
Penalties for non-disclosure typically start at $10,000 per year per incident. This means that any oversites in the past need to be corrected with an amended tax return to include any missing forms to be in compliance.
Some try to avoid direct ownership of property outside the US by establishing a corporation in the country in which that the property is located so that the corporation owns the property and not the US citizen. But here is the catch. If you purchased the real estate and placed the title and ownership inside a corporation (i.e. foreign corporation) then you typically will have a CFC – a controlled foreign corporation. This would then require you complete a Form 5471 and include it in your tax filing. The penalties for failure to do so begin at $10,000 for each year you did not file the form.
In short, there are a number of advantages of ownership of asset outside of the United States. However you should do it with full disclosure to the IRS to avoid hefty penalties. If you find yourself in this situation you should immediately consult your tax professional.

To Buy or Not To Buy That is the Question

For many young professionals there is nothing more exciting than the prospect of buying your first home, but should you?   Well let’s take a look at it.

When you enter into your residency chances are that you are not in the same city where you studied medicine.  If that is the case you will need to find new housing.  Before you decide on whether to rent or buy I want you to  ask yourself  some questions.

  • Am I planning on putting down roots and building my practice in this location?
  • Am I ready to invest my money (now that I have some) into a hard asset?

Depending on how you answer these questions will help in determining whether buying or renting is a good choice for you.  Now like all things there are no clear cut answers.  Of course other factors that come into play but we will not address those here.  I want to keep it simple.

If your answer was yes to both than you may want to take the leap and find a suitable home.  However if your answer was no or unclear then perhaps renting is the best option for you.  The reason being is that you don’t want to be tied down to a location, in which you may have to worry about selling, when the time comes to move.   Remember that renting may be a good option for savings especially at this time.   You can always invest in property at a later time when you have a more solid plan of action.  So its really up to you.

Hopefully, this will help you begin asking yourself the questions about housing that need to be asked and whatever your decision is make it an informed one.

Stacia Musleh


Medical Practices: Where to Set up Shop

Have you ever stopped to think that after taxes (State and Federal) and land costs that there maybe some states that are less expensive places to live in, purchase goods and set up shop then others? If so, which states would those be? The Bureau Economic Analysis recently conducted a study on how far after tax dollars stretch on a state by state basis. Essentially the researchers at the foundation compared what the real purchasing power of $100 is per state.  The study gets into some finer details but I really would like to take a look at the illustration below created by the National Tax Foundation based on the study’s data, as it relates to determining where the most economical places to live and practice are.

If we take a look at the Map we can see that states such as California and New York have significantly less buying power then many of the other states.  The salary bases might be higher in these areas but what this study is showing is that the people who appear to be earning more might actually have less to show for it.

This study was conducted for consumer goods, it does not take into account increased taxes, quality of education, or housing which are vitally important to consider when you are trying to find a location to practice or  to start your business. From our experience states such as California and Colorado tend to be very popular for medical and non medical professionals alike.  Although these places might be attractive because of climate, natural resources, convenience and other factors the study shows how living in them definately puts a strain on your wallet. If you are considering these it might be beneficial to take a look at some other parts of the country just for comparison. Please keep in mind this blogpost is not to harp on the states we have listed! We in fact love visiting them and have many clients who reside in them, we are simply suggesting that in deciding to live in one of these attractive locations you must be prepared and budget accordingly for the price hikes in consumer goods. Doing this along with strict adherence to a financial plan wherever you are will provide good results and the financial indepence you are striving for.

Stacia Musleh



1.) Cole, Alan. “Price Parity.” Web log post. Real Value of $100 in Each State. N.p., 14 Aug. 2014. Web.

Insurance and Medical Marijuana

They day has arrived when the use of marijuana for medical purposes needs to be addressed with regard to Insurance Planning.  Currently, there are 18 states, and Washington D.C. who have legalized the use of medicinal marijuana. The Patients suffering from pain illnesses such as fibromyalgia and life altering diseases like cancer have been able to use this as a treatment method for pain management.

We already know the insurance Industry is persnickety about any pre-existing conditions and medications for applicants.  So what does this drug add to the mix?  Well, let’s look at it like this way smoking has never been high on the list of acceptable health practices for Insurance companies.  In fact recently a client who declared prescription use of marijuana had their life insurance premium go from $250 per year to $1000.  The fact that this is a prescribed drug does not make it ok in their underwriter’s minds.  There are really no studies that allow the insurers to look at this in a positive light and they are always cognizant of that when making a choice to insure or not.

If you have a prescription for medical marijuana that is already strike one.  If you have used it well that is strike two.  It can take at least two years of being free of the use of marijuana before you may then be able to acquire preferred rates . Change will come but at this point in time it is best to avoid the issue altogether by abstaining when it comes to insurance related matters.

written by: Stacia Musleh

V.P. Income Protection Specialists


Does Your Advisor Put You First?

There is no doubt we are living in turbulent times.  Our own Government cannot seem agree on much, causing disruptions in our economy, and sense of trust and security.   When it comes to your financial security you want to know that the people you entrust with your money have your best interest at heart.  This can be anyone from your banker, attorney or your Financial Advisor.

I am speaking of Fiduciary Responsibility.   By definition: A fiduciary is a legal or ethical relationship of trust between two or more parties. Typically, a fiduciary prudently takes care of money for another person.

At some point in our professional lives most of us begin planning for our future.  Whether it be higher education for our children or ourselves, a dream home, or our retirement we generally need some assistance.  Not everyone will seek out a professional advisor but for those that do it is crucial that you choose someone that you can communicate with and trust.  Keep in mind that you will be working together for a long time and you will be sharing personal financial information, so make certain you do your own due diligence when choosing who you want to help you build a sound financial plan.

If you have already made this choice but are uncertain whether it was the right decision,  perhaps you should reevaluate where your advice is coming from.  There is no harm in getting a second opinion. Sometimes it shows us that we are right on track, and other times we find out that we are heading in the wrong direction and need to find alternatives.

Remember your advisor’s job is to keep your best interests in mind and to work with you toward achieving your personal financial goals.


Written by: Stacia Musleh, Vice President

Income Protection Specialist



Now or Later- The Money Trap

The first years out of residency are the most challenging by far.  For the first time in your life you have money to spend which can be intoxicating and change a person.  Compare it to the young sports rookies.  They are now in a league with large contracts and more money than they have ever had.  The media shows them spending on outlandish parties, cars and living in luxurious homes.   But are they considering their savings or future needs?   The reality is that by the time most of these players are out of the game they won’t have much at all to their names. Tragically we see the same occur far too often with medical residents. They too fall into the mental trap of living on the brink, spending 100% of what is earned.  Beginning a habit of impulsive spending right out of residency is the perfect storm for a long drawn out career, with the inability to retire.  So if you have been thinking to yourself about the large purchases you will make once you are out of your residency, stop!

Now is the time to live modestly, and within your means, in other words like a resident.  A certain percentage of your income is already spoken for in terms of taxes. In addition to your basic needs (food, clothing, shelter), there are potential business expenses, your children’s education (if you have them) and your retirement plans. When you look at the pie as a whole how much does that leave you for excessive spending on wants? If you are able to proverbially “stretch the buck” in the beginning of your practice you can look ahead to a future that will be much more comfortable than if you live the high life now.  This is probably the best financial advice you will ever receive.  Depending upon your specialty you have already been living on a modest budget for the last 3-7 years, what’s another few years?  Live today but plan for tomorrow. Here are some additional points to remember.

  •  With your new income placing you in the top 5% of wage earners you will now be  paying close to a 39% federal tax rate with varying state income taxes. This means  that the salary or guarantees in your contract are not even close to your take home  and may decrease in the future due to changing tax rates.
  •  A child born today will face college expenses upwards of $200,000 for an undergraduate degree
  • With the affordable Care act now a reality there is no telling how your income as a medical professional will be affected

The future is uncertain, living below your means and budgeting now while you are young is more important than ever.  If you want to have control over your destiny and take advantage of everything life has to offer dig in now, work hard and save. We all have dues to pay, but it’s up to you to decide if you want to pay them now or late into your old age. Remember, life is a marathon and not a sprint.

By: Kyle E. Musleh 
Vice President of Operations
Income Protection