Money Minutes for Doctors #24 - The Side Gig, Part 3 ~ Underway
We are back with the third installment of our discussion of side gigs. The planning is over, the course is plotted, and you have finally pointed your vessel toward the horizon ~ adventure is finally yours! This is where sound tactical and strategic decisions will determine where and how far this journey to financial wellness will go. This month we revisit the side gig and and important points to consider once you have thrown off your mooring lines and are finally underway! Once again, we are pleased to welcome back our trusty tactician Ms. Katherine Vessenes, JD, CFP®, RFC, Founder and President of MD Financial Advisors. Enjoy…
About Ms. Vessenes:
Ms. Vessenes works with over 300 physicians and dentists from Hawaii to Cape Cod. Her firm uses a team of experts to provide comprehensive financial planning to help doctors build their wealth and protect their wealth while reducing taxes now and in the future. Katherine is a longtime advocate for ethics in the financial services industry; and has written three books on the subject of investment strategies. She has received many honors and awards including: numerous tributes from Medical Economics as a top advisor for doctors, multiple 5-Star Advisor Awards, honored as a Top Woman in Finance, in addition to being selected to be on the CFP® Board of Ethics. Katherine can be reached at: Katherine@mdfinancialadvisors.com or 952-388-6317. Her website: www.mdfinancialadvisors.com.
QUICK SUMMARY: The Side Gig, Part 3 ~ Underway
When considering a side gig there are many options. Create your own avenue, talk w colleagues or obtain additional training. One company that features options for nonclinical careers for physicians is SEAK.com. They offer training seminars at a reasonable price and can help you identify your strengths and develop a side gig idea if you are new to the process.
Important to track revenue and expenses separate of your personal assets, both for tax purposes and for liability.
Entity choices include Sole proprietor, LLC, S corp or C corp. Your business attorney and/or your accountant can help you identify the corporate structure that best fits your new venture.
Example 1:
Working at additional 10 hours per month at $1000/hr. for just 15 years can yield nearly $2 million in additional income
Dr. B Side Gig Income
Expert Witness
$1000/hr. x 10 hrs./month
Gross income $10,000 month
Assume 35% tax rate
Net Income $6500month
Start age 50 – 65
Investment income at 65
$2,117,865
Capital Gains Taxes
$189,573
Total After Tax
$1,928,292
If assume withdrawal of 5%
Allows additional $6,724/month
Money will last until age 94 assuming 6% rate of return
With the additional funds can do brokerage accounts, solo 401k, solo 401K profit sharing, Cash balance plan, 401h and many other special retirement vehicles
These choices are based on Tax advantaged solutions, tax deductions, personal goals, debt and market performance. Choices best made between you and your financial advisor
Various tax deductions include rent, repairs, phone, internet, utilities and other services which can help to limit your current tax exposure
Consider startup expenses, need for additional education & Training, business insurance, security systems, software purchases as well as business interest and bank fees, professional services fees, salaries and benefits to your employees.