In this episode, Dr. Hales and Allen Freeman discuss:

• Financial planning for physicians


• Tax Strategies for high earners


• Retirement income and wealth preservation

Key Takeaways:

“Have a good, strong tax strategy plan, regardless of your career level as a physician. Because it’s not about how much you make—it’s about how much you keep.” – Allen Freeman.

Connect with Allen Freeman:

Website: https://www.golifepathadvisors.com/

LinkedIn: https://www.linkedin.com/in/allenfreemancfp/

Facebook: https://www.facebook.com/allen.freeman1/

Instagram: https://www.instagram.com/allenfreemanjr/p/DFIdJTkJy_H/

Connect with Barbara Hales:

Twitter:   @DrBarbaraHales

Facebook:   facebook.com/theMedicalStrategist

Business website: www.TheMedicalStrategist.com

Show website:   www.MarketingTipsForDoctors.com

Email:   info@TheMedicalStrategist.com

YouTube: TheMedicalStrategist

LinkedIn: www.linkedin.com/in/barbarahales

Books:

Content Copy Made Easy

14 Tactics to Triple Sales

Power to the Patient: The Medical Strategist

TRANSCRIPTION  (201)

Dr. Barbara Hales: Welcome to another episode of Marketing Tips for Doctors. I’m your host, Dr. Barbara Hales, and today we have with us Allen Freeman. He is a certified financial planner and Founder and Managing Partner of LifePath Advisors, a firm built to help physicians and high-income professionals align their wealth with what matters most, family, vision and a purpose driven life.

Allen comes from a medical family. His father was a plastic surgeon, his mother a nurse, and his brother a family physician that background gives him a rare real world understanding of the financial pressures, time constraints and career demands that doctors face. It’s this personal insight that allows Allen to connect deeply with the physicians he serves and why so many choose life path over large, impersonal firms.

Allen leads LifePath Advisors with values, first, client centered approach. His firm acts as a personal CFO for physicians, offering truly comprehensive planning that covers everything from tax strategy and investment design to retirement optimization, legacy planning, risk management and more. Welcome to the show, Allen!

Allen Freeman: Good, thank you, Barbara! I appreciate being here.

Choosing Business Over Family Medicine

Dr. Barbara Hales: Okay, so your mom, your dad and your brother are in medicine. Why did you not follow suit?

Allen Freeman: I get asked that question a lot. People kind of find early in their life of how they want to help people, and they chose medicine as that avenue to express themselves and helping people. For me, it was always about business, how things worked in the in the business setting, and that kind of led me. I started in commercial real estate in Atlanta and then got led into doing financial planning.

Dr. Barbara Hales: And how did you come to decide that money is where you wanted to help people instead of, you know, any facet of, you know, being a health professional?

Allen Freeman: Well, it’s two different paths early on, either so liberal arts, or like my daughter’s in law school now. So it was very much of a liberal arts or reading or writing, and then it was more of, not necessarily the math and the science, but more of how business I was. I was attracted to business books more than I was novels or the kind of reading that I think physicians go down or attorneys go down, as far as just an interest level,

Dr. Barbara Hales: Okay, so you said, you know, medicine is okay, but I’m interested in making money.

Allen Freeman: Well, making money and also helping people, because I also saw the pitfalls, you know, with a lot of my doctors, my dad’s friends that were doctors. And you learn a lot sitting around the dining room table, and some of the mistakes that that he made, that we all had consequences of like buying an apartment building and not realizing that the tenant quality isn’t good, and all of a sudden, you’re having to feed the note until you can sell the property and that hurts lifestyle for the whole family for a while.

So those kinds of bad investments that I’ve seen him do from bad advice, that I would look at it differently and say, gosh, you know, maybe we wouldn’t have done that deal at all. Or, you know, what is the structure of the tenant base that we know you’ve got guaranteed cash flows. So that was that dinner table talk kind of led me in the direction of business.

Financial Habits for Young Doctors

Dr. Barbara Hales: What should early career doctors focus on financially?

Allen Freeman: Well, start early in building good habits and start with building with intention. My daughter’s just finished her second year of law school, and her husband, they just got married, is finishing dental school, so but it’s starting in habits, because once you get out and you start making some money, and you’ve got some prestige, you’ve got some accomplishment, you tend to kind of lose track of what’s important and building a foundation for yourself and for your family.

So it’s starting with that intention. You know, start saving early, start paying attention to taxes early, because taxes will be the largest expense for high-income earners like physicians and start setting dollars aside, getting a good advisor so that you’re doing the right things early on and not playing catch up mid-career.

Mid-Career Doctors’ Financial Pitfalls

Dr. Barbara Hales: What are mid-career doctors most often doing wrong financially?

Allen Freeman: Well, a lot of it is they get caught up in, I guess, what I call lifestyle creep. They’re made they’re making more money, and that’s a double edged sword. Things can get dangerous because they are making a lot of money. They’re extended a lot of credit. They can go out and get things on future income, but their plan typically hasn’t evolved. They’ve been practicing for 10 or 15 years, but they’re but all of their accounts are scattered, all of their accounts and even their insurance is outdated, because they get started early on, they need some insurance, they need some disability, and they take this they tend to stay with that particular person or firm, and just set it and forget it, and start continuing to grow their practice and build. And they get outdated very, very quickly, with their investments scattered all over the place, and they’re in silos with different people not coordinating their entire financial lifestyle that they’re building.

Retirement Tax Strategy for Physicians

Dr. Barbara Hales: What should late career positions be doing differently as they approach retirement?

Allen Freeman: Well, this is when the stakes are the highest. They should be shifting from accumulation to preservation, and many of them still don’t have a tax plan strategy, they could be losing hundreds of 1000s of dollars or more and millions actually over a lifetime by not employing a tax strategy before they are actually required to take RMDs.

So there was one client that had about $3 million close to retirement, 2.8 million was in a 401(k). There’s not a lot of tax planning you can do with that, because it’s all pretax dollars and for them to maintain lifestyle, many of them believe that their tax structure is going to be lower, their marginal tax rates going to be lower.

But for high income earners, it’s not so. Therefore, they have to pull out a larger percent of their retirement savings to maintain that lifestyle. And they don’t really realize that going in, and many of them rely on a CPA that does nothing but just record the past. They go, oh, look what we saved you in taxes this year. And they didn’t really save any taxes. They just deferred them down the road, because eventually they’re going to have to pay taxes later on.

So the idea of having a CPA that’s not forward looking, that says we need to plan, how do we mitigate taxes for your life, as opposed to, how do we save taxes on this last year’s tax return is, is a totally a misnomer, because they’re not saving taxes, they’re just deferring them and have to pay them later on.

Offshore Investments and Doctors Shifting to Other Ventures

Dr. Barbara Hales: What is your feeling about offshore investments, or, you know, bank accounts in other countries where they may have great interest and are not reporting it.

Allen Freeman: I really can’t speak to that. As far as not reporting income and offshore accounts, I don’t think, for the average physician, that anything offshore is going to be that much of an advantage as to just starting early and planning here in the United States under our tax law. And