Stop Letting Your Cash Sit Idle: A Physician’s Guide to Smarter Cash Management
When physicians think about investment success, the focus is usually on asset allocation, retirement accounts, or fee management. But one of the biggest—and easiest—opportunities to improve results comes from something far simpler: how you manage your cash.
Too often, I see high-income physicians with six figures in cash across multiple accounts, earning little to no interest. In today’s environment, that can mean leaving thousands of dollars on the table every single year.
Why Your Cash Rate Matters
Cash plays an important role in a financial plan. It provides stability, liquidity, and peace of mind. But if it’s not working efficiently, it becomes a drag on your portfolio.
Right now, physicians should expect to earn at least 3.5% on cash holdings (as of September, before the most recent Fed meeting). Anything less means your money isn’t keeping pace with what’s readily available.
Here’s the reality:
- Banks aren’t motivated to give you the highest yield. They profit by paying you less while reinvesting your cash elsewhere.
- Advisors can overlook cash management. I’ve seen accounts where cash is sitting in low-paying sweep funds simply because no one made the effort to move it.
A Real Example: $4,000 More Per Year
Recently, I reviewed a physician’s portfolio. With one quick recommendation—moving their cash from a low-yield fund into a higher-paying option—they stood to earn an extra $4,000 per year.
No new investments. No added risk. Just a better choice on where to hold cash.
For busy physicians, this is exactly the kind of “easy win” that can make a meaningful difference over time.
Where to Check Your Cash Rates
If you’re a physician in your peak earning years, make sure to review:
- Bank Accounts: Don’t assume your everyday checking or savings account is paying a competitive rate.
- Retirement Plans (401k, 403b, 457): Even small balances in cash can add up across multiple accounts.
- Brokerage Accounts: Custodians may default to sweep funds that pay very little interest.
Why Small Balances Add Up
Many physicians dismiss cash in individual accounts because the balances look small. But across all your accounts, the total often exceeds $100,000. At that level, moving from 0.1% to 3.5% isn’t trivial—it’s real money that could be invested, saved, or spent with purpose.
Cash Management as Part of Physician Financial Planning
Effective cash management is more than chasing the best interest rate. It’s about aligning your financial resources with your overall goals:
- Liquidity for emergencies and lifestyle needs
- Tax efficiency in where cash is held
- Maximizing return without adding risk
For physicians balancing demanding careers with family and personal goals, it’s often overlooked. Yet it’s one of the simplest ways to strengthen your financial foundation.
Next Steps for Physicians
If you haven’t reviewed your cash holdings recently, take 15 minutes this week to confirm your rates. It’s a small step with potentially large rewards.
And if you’re unsure whether your cash is positioned properly—or if you want a quick, independent check—reach out. I work exclusively with physicians in their 40s and 50s, helping them align wealth, taxes, and time so they can enjoy life at its peak.
Bottom line: Don’t let your cash sit idle. With a little attention, you can avoid the trap of leaving money on the table and instead make every dollar work harder for you.