This new department on personal finances will appear in every issue. The challenge every physician faces is to accumulate a nest egg that's large enough to fund a comfortable retirement. There are many paths to that utopia — and all of them are challenging. Given the stress of private practice, many doctors hope to retire earlier than previous generations. Coupled with the fact that we're living longer, it means savings set aside for the golden years need to start bigger and to grow faster than ever. Personal Finance will take a critical look at many of the instruments physicians use to achieve financial independence. We'll also profile physicians (and their portfolios) who have succeeded as well those who have struggled. To begin, here's a quick quiz to assess you financial acumen.

The answers:

1) Start that RRSP. What you put in is tax deductible, as are the earnings. Plan to use up to $20,000 of it as a down payment on your first home. You can take it out tax-free as long as you pay it back in within 15 years. Your spouse can do the same thing, which means you could raise a $40,000 down payment tax-free. Better yet, your principle residence is exempt from capital gains tax if and when you sell it. RRSP money is taxable at your marginal rate in the year you take funds out.

2) The rule of thumb these days is a maximum of 25%. Reducing your mortgage is a form of saving — and a good one when house prices are rising and interest rates are as low as they are now. Put in as much as you can afford and feel virtuous.

3) "Selling short" is the act of selling shares you don't own in the hope of buying them at a lower price. The tactic is used when the price of a stock is expected to fall. For example, a trader sells the stock at a stated price, say $10, and then, as prices fall, is able to purchase shares at nine dollars to cover the sale thus making a dollar per share in a falling market. Selling short is considered risky because of the possibility that the stock in question will go up. You must then cover the sale by buying high and selling low, never a good way to make money. Talk to your broker before you play.

4) No point selling stocks inside your RRSP to offset gains, RRSPs aren't taxable until you withdraw the funds. You're not permitted to prepay practice expenses. Cheques are considered to have been paid in the year in which they're dated. Buy that RRSP and get a full deduction, a call to the tax people will let you know your maximum allowable contribution.

5) Many funds proved to be poorly managed, loading up on stocks like Nortel that have since sunk to tiny fractions of their highs. Trading and other discounts were often not passed on to investors. Executive compensation grew excessive. Things like hedge funds have become more popular but are even less regulated than mutual funds, don't go there unless you're very savvy.

6) Though investors have good cause to doubt it, stock indices such as the TSE, Dow-Jones and Standards & Poors have shown gains of more than 8% over, say the last 75 years. The S&P has actually risen at an annual rate of 11% since 1930. No other paper investment has done better. Real estate can be good but as always it's a matter of location, location, location.