Michael Kamali, Fiduciary Financial Advisor for California Doctors & Dentists | Helping You Cut Taxes, Grow Wealth, and Protect Everything You’ve Worked So Hard to Build Without the Stress, Confusion, or Sales Pitch. MBA, ChFC, ChE
Picture this:
It’s 10 PM. You’re sitting at your kitchen table with a stack of student loan statements, a credit score app open on your phone (that says “No Score Available”), and a calculator you haven’t touched since undergrad.
You’ve worked your tail off through dental or medical school. You’ve spent a decade studying, sacrificing weekends, pulling all-nighters, and grinding through rotations or clinic hours. Now, you finally have your degree—and probably a starting salary that makes your family proud.
But along with that degree? $200,000 to $400,000 of student loans, and a credit profile thinner than a dental floss string.
If this feels familiar, you’re not alone. Every year, thousands of new dentists and doctors in California start their careers in the same spot. And here’s the truth: it’s overwhelming, but it’s not hopeless. With the right moves in your first few years, you can go from buried in debt to building real wealth.
Here’s exactly how.
1. Student Loans vs. Investing: Which Comes First?
This is the first question every new graduate asks:
“Do I throw every extra dollar at my loans, or start investing early?”
Here’s the honest answer: it depends.
✅ Focus on Loans First If…
Your loan rates are high (6–7%+). Paying off a loan at 7% is the same as earning a guaranteed 7% return, tax-free. No investment can promise to be risk-free.
✅ Invest While Paying Minimums If…
Your loans are low-rate (4–5%), or you qualify for income-driven repayment (IDR) or Public Service Loan Forgiveness (PSLF).
Here’s why: time in the market beats timing the market. Even $300/month invested early can grow to hundreds of thousands later thanks to compounding.
Rule of Thumb:
- High rates? Attack loans.
- Low rates or PSLF eligibility? Invest early while paying minimums.
2. Retirement Accounts: Start Small, Start Now
Retirement may feel like a lifetime away, but this is when your dollars are most powerful. Here’s where to start:
A. Roth IRA (or Backdoor Roth) – Your Best Early Option
- While you’re in residency or early career (lower tax bracket), Roth is a no-brainer.
- Pay tax now while it’s low, and enjoy tax-free growth for life.
👉 Later, when you’re earning $200K+? Use a Backdoor Roth IRA to keep funneling money into tax-free growth legally.
B. Traditional IRA
If you’re looking for a short-term tax deduction, a Traditional IRA works—but Roth is better early if you expect income jumps soon.
C. SEP IRA (When You Own Your Practice)
Once you run your own practice or work as an independent contractor:
- Contribute up to 25% of your income (max $69K in 2025).
- Big tax savings and aggressive retirement funding at once.
3. Where to Invest Without Getting Overwhelmed
You don’t need CNBC on in the background or an MBA in finance. Keep it simple:
- Index Funds & ETFs: S&P 500 (like Schwab S&P 500). Historically, 8–10% annual returns, minimal effort.
- Target-Date Funds: One-stop retirement funds that adjust risk automatically.
- 401(k)/403(b): Always grab your employer’s match—it’s free money.
- High-Yield Savings: For your emergency fund (3–6 months’ living expenses).
4. Reducing Taxes in California’s High-Tax Reality
California taxes can eat you alive if you don’t plan. Here’s what works:
- Deduct Student Loan Interest: Up to $2,500/year (income limits apply).
- Max Out Pre-Tax Accounts: 401(k), Traditional IRA, or HSA (if eligible).
- Write Off Professional Expenses: CE courses, malpractice insurance, licensing fees.
- Backdoor Roth IRA: A must-do once you earn too much for standard Roth contributions.
Two Real-Life Examples:
👩⚕️ Dr. Sarah – The Dental Resident
- Income: $70K
- Debt: $300K @ 6.8%
- Plan: ✅ Enroll in PSLF & IDR. ✅ Contribute $5K/year to Roth IRA. ✅ Invest in S&P 500 ETF. ✅ Build a $10K emergency fund.
Result: After residency, Sarah’s loans are PSLF-eligible, she’s got $15K tax-free invested, and financial stress is off her shoulders.
🦷 Dr. James – New Dentist in Private Practice
- Income: $200K
- Debt: $250K @ 4.5%
- Plan: ✅ Pay $3,500/month toward loans. ✅ Use Backdoor Roth IRA ($7K/year). ✅ Open SEP IRA (contribute $25K). ✅ Deduct CE, insurance, and licensing fees.
Result: 5 years later, James cut $125K of debt, built $150K in retirement accounts, and slashed his taxes.
Day-in-the-Life Hook: The Moment It Clicks
I’ll never forget a Zoom call with a new dentist in Orange County.
He stared at me and said, “Michael, I make $200K a year… why do I feel broke?”
His loans were on autopay. He was maxing out his credit card to pay for CE. His retirement accounts? Empty.
We built a plan:
- Consolidated loans into IDR.
- Started his first Roth IRA.
- Cut his tax bill by $18K using deductions.
Six months later, he emailed: “I can finally breathe. I even took my first vacation in 5 years.”
Bottom Line: Your First 5 Years Decide Your Future
The early years after graduation set the tone for decades. Focus on: 1️⃣ Building an emergency fund. 2️⃣ Starting a Roth IRA—even $200/month matters. 3️⃣ Having a clear loan payoff or forgiveness plan.
You don’t need perfection—you just need progress. Small, smart moves now create financial freedom later.
If you’re a new California dentist or doctor, your future isn’t defined by your loans. It’s defined by the plan you start today.
Disclosure Statement
The information provided in these materials is intended solely for educational and informational purposes and does not constitute financial, investment, tax, legal, or accounting advice. Nothing contained herein should be construed as a recommendation to buy, sell, or hold any security or investment product, nor as a guarantee of any financial outcome.
Readers are strongly advised to consult with their own qualified financial advisors, tax professionals, and legal counsel before making any investment or financial decisions. Every individual’s financial situation is unique, and professional guidance is essential to ensure that decisions are made based on personal circumstances and regulatory considerations.
The authors and publishers of these materials disclaim any liability for loss or damage resulting from the use of or reliance on the information contained herein.