APMA News - May 2012 - (Page S1)

your APMA SUPPLEMENT TO APMA NEWS Trusted News and Information for Young Physicians MAY 2012 / ISSUE 3 TAKE THIS TO THE BANK: FINANCIAL ADVICE FOR YOUNG PHYSICIANS Many young podiatrists are entering the workforce with $200,000 or more in debt. Paying off those student loans may seem like an insurmountable challenge. So Your APMA spoke to Russell M. LaGreca, CFP, CRPS, a financial advisor with the Global Wealth Management Division of Morgan Stanley Smith Barney in Baltimore. Your APMA: What is your best advice to young podiatrists for grappling with their student loan debt? LaGreca: The best advice I can offer is arguably the most fundamental to developing a long-term financial plan: Create a budget. The National Foundation for Credit Counseling found in a 2011 Financial Literacy Survey that just over two in five US adults have a budget and keep close track of expenses.1 Generally speaking, people don’t like budgets because they can’t spend money on elective things that they enjoy. But a budget will help a recent grad from podiatry school to pay down debt while balancing all the other expenses competing for his or her earned income. A $200,000 loan at 4.5 percent under the standard federal consolidation plan (30 years) translates into a monthly payment of $1,013.37. That needs to be in the budget, and if it’s not manageable, there are graduated or income-contingent plans that can help to keep costs lower earlier but will increase total interest charges over the life of the repayment schedule. Looking at it from a different perspective, if you can eke out another $98.29 per month, it reduces the payment period from 30 to 25 years and can save $31,314 in interest expenses. Your APMA: Many young physicians are deferring student loans or asking lenders for forbearance. What is your best advice for deferment and forbearance? LaGreca: These programs are in place for a reason—for people who simply can’t afford to make student loan payments. If it’s not a matter of “can’t” but “would prefer not to,” you need to evaluate what you are spending the money on because using these programs will increase your interest expenses. If the alternative is an investment in your practice or something that has a return expected to outpace the cost of your student loans, then there may be some merit [to deferring payments]. Decisions around debt generally involve an investment, just like the decision to take student loans. It’s an investment in oneself, and because of the education and experience earned during school, podiatrists are positioned to earn a higher rate of income than they would have if they had not become a DPM. Your APMA: You spoke at our 2011 Annual Scientific Meeting (and you’re on the faculty for the 2012 meeting, as well). In 2011, you advised young practitioners to try as much as possible to continue to “live like residents” to help pay down their debt. Can you elaborate? LaGreca: When you factor in living expenses, energy, costs associated with starting out as a new podiatrist, funding retirement and education expenses for children, and paying 1 APMA IS SOCIAL: ARE YOU? TWITTER. Catch up in 140 characters or fewer. @APMATweets FACEBOOK. Be our friend. www.facebook.com/TheAPMA APMA gratefully acknowledges the support of Upsher-Smith, sponsor of Your APMA, and PICA, founding sponsor of the Young Physicians’ Program. YOUTUBE. Watch what we do next. www.youtube.com/user/TheAPMA http://financialeducation.nfcc.org/2011/06/21/ the-importance-of-creating-a-budget/ Continued on Page 2 http://www.facebook.com/TheAPMA http://www.youtube.com/user/TheAPMA http://financialeducation.nfcc.org/2011/06/21/the-importance-of-creating-a-budget/

Table of Contents for the Digital Edition of APMA News - May 2012

APMA News - May 2012
President’s Message
Contents
92nd House of Delegates: Advancing Education and the Profession
Special Section: APMA Educational Foundation
Being a Residency Director: What’s in it for You?
DPM versus MD: Letters to the Editor
JCRSB Update: May 2012
ACO Update: Are Commercial ACOs Getting a Leg Up on their Medicare Brethren?
APMA By the Decade: 1952–1961
Profiles in Progress: Medical Staff Leadership
2011 Podiatric Practice Survey: Determination of Income/Salary for Employed Professionals
Master Your Practice at the National
Annual Scientific Meeting Preliminary Program
Annual Scientific Meeting Registration Form
Annual Scientific Meeting Sponsors
Reimbursement
Federal Advocacy Forum
APMAPAC Chair Report
IT Consultant
Website Wisdom
Technofile
Small Business 101
Awards Nominations
APMA All Stars
In Short
Worthy of Note
Affiliates Corner
New Members
Death Notices
List of Affiliated Organizations
Insurance Advisor
APMAPAC Update
Development Update
Classified Advertising
Dates to Remember
Advertising Index
10 Questions
Your APMA

APMA News - May 2012