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.

Who Needs A Roth IRA?

“You have to get a Roth IRA, it’s absolutely essential.”

Let’s face it, there is a pretty good chance you’ve been told something like this before. Roth IRA’s can be really good investment tools, but before you go and set one up for yourself, make sure it’s the best tool for you right now.  As residents, fellows, or studentsapple there is another option that may be better suited to your needs. A 529 plan may address more pressing issues, namely your child’s, your’s or your spouse’s education. Undoubtedly, these obligations are nearer than your retirement, and pending on your location a 529 plan may offer additional tax benefits such as a credit or deduction.

The majority of these plans will offer tax benefits relative to the amount that is deposited in them. Like a Roth IRA the investment grows tax free, upon withdrawal there is no tax contingent on the money being used to pay for qualified higher education at an accredited institution. Let’s be honest, even with loans education expenses have to eventually be paid. Why not take advantage of the 529 option and reduce some of your school debt, or your tax burden?

Authors: Kyle Musleh

Retirement Savings Week

Who knew therecoins-912719_1280 (2) was such a thing as retirement savings week? Funny enough we didn’t but now that we do I just want to take a moment to say this might be a good time to review  your currently plan and determine whether it is still suitable for your life & future goals. Many think of retirement plans as a straight line to follow. However, I must say that is entirely inaccurate and frankly a dangerous view of retirement. As humans we grow and change with the curve-balls life throws our way so to should our plan.

Typically when you review your plan contacting your independent advisor to set up a review of your current plan should be the first step . To prepare for this you need to ask yourself have your goals changed at all since the establishment of the plan. If so note why and how. Another key question to ask yourself is has my personal balance sheet changed, i.e have you taken on more expenses or found a new source of income or increased your current take home. Promotions, children and marriage have a tendency of being the biggest of these changes. Just as with the goals write down each and the impact they have had financially on your life. These answers should give your advisor some much needed insight as he adapts your plan to your current state life. Once readjusted I implore you to make a habit of at least meeting on an annual basis with your advisor to determine if changes are needed. Just remember a retirement plan is something that must be flexible and adaptable as you grow and change through the stages of life. If you have not started this process yet not to worry, there is no better time then the present to start planning for your future.

“No one ever plans to fail, they just fail to plan.” – Winston Churchill


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


529 College Savings Account -Not Just for Kids

As 2014 begins drawing to a close and we begin planning for the new year, let’s consider the opportunities to save on our taxes that are still available to us for this year.  I am speaking specifically of the 529 College savings plans.

Around this time of year, we spend a great deal of time with our clients helping them to identify ways in which they can reduce their tax burden.  A common concept we share with them is the 529 plan, which if you are not aware happens to be a college education savings account. I’m sure many of you just asked yourselves “what does planning for college have to do with tax planning?” Most states give you and incentive to participate in these programs by way of giving tax deductions or tax credits for investing in your or your loved ones future. Your money grows tax free in these accounts and has no taxes or penalties when withdrawals are used on qualified university costs such as, tuition, room and board, books and miscellaneous expenses that accompany attendance at a qualified institution for higher learning.

What if my child does not attend college or doesn’t need all of the money?  Well you can always change the beneficiary to another child, your spouse or even yourself.  So, it is a win-win scenario.  There is no income limit and caps on contributions are quite high.  Over half of the States offer some type of tax deduction or credit on contributions made, making it an attractive way to save for college.

I would strongly suggest investigating your options or consulting with your financial planner to evaluation the best course of action for you and your family.

It’s nice to know that there are opportunities to save and benefit at the same time.

Stacia Musleh V.P.



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.