Investing, physician, Physician Training, retirement, Uncategorized

Why Physicians Make Big Financial Mistakes….and Should They be “Firing Their Financial Advisor”?

I am not a financial advisor, so please do not make any financial decisions based on anything I write. However, I am a physician who retired early after achieving financial independence and many readers have reached out to know more about this.  In the latter half of this article I also review a popular new online financial literacy course geared for physicians from the “White Coat Investor”  “Fire Your Financial Advisor”

Probably like you, I remember having an investment firm invited to speak at our residency program. They discussed the benefits of own occupation disability and offered a discount to residents wanting to sign up with their firm. I also remember them talking about managing portfolios. I opted to sign up for the disability coverage and continued with this for a few years until I had adequate coverage through my attending job. At this time, I canceled the plan. I never did use them to manage my money.

I since found out that this same group speaks to many residency programs/hospitals in the surrounding area. Makes me wonder, how did they get this monopoly of a captive audience of fledgling physicians?  Is there some incentive to the programs for allowing them to speak to their residents?  I don’t know the answer to that.  Regardless, it makes me nervous that many physicians aren’t getting good/fair advice relating to finance.

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Why are we talking about finances again? Its important to everyone, and it doesn’t get enough attention with physicians who are more focused on patient care and family time with little left for anything else. With medical student loans, yet also high income potential, every physician should care about finance.

My goal in discussing these topics is NOT to have physicians leave medicine early by retiring early. However, a benefit of financial success is the ability to have control over your time- and I have found time to be the most precious commodity after a health scare read more here

You may be hearing about the massive rally going on in the stock market and wondering if you are missing out. You may have worries about student loans and whether you should agree to a “doctor loan” when buying your first home.

There are so many financial topics that are specific to physicians but, yet as a group, we do not have the training or interest in managing our own finances to allow us to pay off our loans, fund our kid’s college education, or book the vacation that provides the life experience with our families that we value so much.

Most of us don’t have time to learn in depth analysis of stocks or to research different real estate investment opportunities. Unless you have a specific interest in this, I wouldn’t recommend it.

However, as high income earners,  we make big mistakes by leaving an enormous amount of money on the table by not having a basic understanding of retirement savings plans, and the importance of a financial plan for your family.  It is dry, and sometimes painful, to get a better understanding of these things but I promise its worth it.

You may be investing in CME conferences for your career, reading new journal articles, and paying for an “Uptodate” subscription every year. These are all good things to continue advance knowledge in your medical career. Just don’t forget to invest in yourself and family too.

I wish I could say I was able to retire based on my physician income alone. Its just not true. Unless I had completely maxed out all retirement vehicles early (including while a resident), minimized loans (both student and mortgage), lived modestly, and invested in the stock market, it just wouldn’t be possible. However, your income as a physician puts you in a place where you should absolutely be able to retire when you want to if you make prudent financial decisions.

Take the time to make a financial plan. Read a few books or take a course. It will be worth so much to you over the years and well worth your time investment. Its not fun, but crucial. And no one in medicine will tell you to do this.
End of rant.

In full and complete disclosure, I was approached by the creator of the “White Coat Investor” to give feedback and take his new online course to see if this was something I thought would appeal to my readers. If you end up buying the course through my link, I will get a small portion of the cost for the course (without any additional cost to you- the price is the same regardless).  You can take as long as 7 days to determine if you find it worthwhile, refund is available if not.  WCI “Fire Your Financial Advisor” Course

 

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I am definitely not running this website as a principle means to make money. This is a hobby for me, but it does have administrative costs. So, if you are going to buy the course for the same price anyway and my review/link helped you decide to do it, I feel it is a win for us both.

All that being said, I did the course. Here is my honest feedback:

1. It is boring, and dry. (Perhaps mostly just a function of the material itself, but some variation in how the information is presented would be nice).

2. It is incredibly useful for physicians.

It deals specifically with topics that are unique and pertinent to physicians. If you have tried to read about finance and found books incredibly boring, or if you don’t know where to find all the important information for physicians in one place, it is likely a good fit. Its all done on videos that you can start and stop when you want. I don’t recommend doing more than a few hours at a time as you will start to lose focus.

Some topics (many more available) with their own video segments that I found to have very good coverage that you might also be interested in:

  • What an advisor can do for you
  • What to look for in an advisor
  • Disability Insurance
  • Physician Mortgage Loans
  • Refinancing During Residency
  • Paying off Debt Quickly
  • How Much You Need to Retire
  • Investing in a Taxable Account
  • 529 Plans
  • The Backdoor Roth IRA
  • Stocks, Bonds, and Mutual Funds
  • Why You Need a Will

This course is perfect for people who don’t have time or desire to hang out on investing sites/forums or read tons of books on investing. Can you find all of the information somewhere else (perhaps even free) or other websites/books/lectures? Yes, but you would have to spend an enormous amount of time to track all the information down and compile it. If you want the information highly geared to physicians and spoon fed through videos, this may be a great tool to help you build wealth. The impact over many years can be incredible vs. staying in a static situation where you are doing nothing for your finances.

In the end, my recommendation is to do something. Buy a finance book, hire a financial advisor (after at least understanding the basics of how their fees are collected), write up a financial plan, or lastly buy this course if it fits your learning style. You need to at least know what you don’t know.

This course is expensive at $499. However, if you think about the yearly amount you would pay to an advisor or the amount over the years that you could accumulate by having a better understanding of personal finance, the cost is pretty nominal. In addition, if you are like me, you may be more likely to actually do (and finish the course) since you invested some real money into it. It gives you motivation to complete it as you don’t want to waste that money! Lastly, you can get a refund within 7 days if you don’t find it useful.  I would suggest doing 2 hours every weekend for a month.  If you commit to that you will have a huge improvement over where you are today.

If you are interested here is the link to check it out:

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White Coat Investor: “Fire Your Financial Advisor” Online Course

By the way, I think financial advisors are generally good people. I even have a close family member who is one, and their expertise cannot be replaced with a single course. The title is a little provocative and misleading because you very well may still benefit from using a financial advisor, but you should know how to pick one and determine how they can best help you. You will get advice on this in the course too, and it may save you a lot in the long run. Ultimately, even if you use an advisor you should have a basic understanding of how things work so that you aren’t taken advantage of by a small minority of bad ones (especially those trying to sell you whole life insurance policies)!

I hope you don’t mind me telling you about this course, but I truly do feel it could be very beneficial to many physicians- especially those in medical school, residency, or 5-10 years into their career. And to answer whether you should be getting into the stock market, the answer is yes! But don’t do it blindly. Whether that is through a 401K, taxable brokerage account, 529 for your kids, etc. depends on your financial situation but you should be making your money work for you instead of relying solely on your paycheck.

If anyone else has tried the course, help our other readers out and let us know what you thought in comments below!

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OB GYN, Physician Training, retirement

Is it Ethical to Retire Early from a Career in Medicine?

Eight weeks after I delivered my 3rd child, I was diagnosed with a 4 cm lung mass.  Yes, you heard that right. For those in medicine, this is terrifying to hear as the first thing that comes to mind is lung cancer.  Lung cancer is notoriously hard to treat, typically fatal with a short life expectancy after diagnosis, and extremely unfair to a lifelong nonsmoker who has spent 12 years in the prime of her life dedicated to training to become a physician.

Luckily, I soon found out my situation was not as grave as first expected.  A PET scan leaned toward benign diagnosis (or at least consolidated disease).  I could temporarily push aside the paralyzing fear of leaving my 3 young children with no mother and focus on getting rid of this mass that was causing pneumonia, difficulty breathing, coughing for 2+ years, and go ahead with scheduling the thoracotomy.  After resection of the mass which was densely adherent to my pericardial sac and phrenic nerve, I lost about a 1/3 of my left lung.  To my amazement, after my ICU stay I left breathing better than I had been in years.  Benign diagnosis was confirmed.

This experience made me reevaluate my life and it stopped my “hamster wheel” of life I had been running on at a dizzying speed.  I viewed this health scare as a second chance at life.  I didn’t take this lightly as it almost seemed unfair that I got this chance to live while others who have a lung mass often have it turn out to be one of the most fatal of cancers.  Having to face the prospect of this potentially devastating diagnosis changed the course of my life. I was able to view my career for what it was and had become.

 

I had planned to work in my medical career as a physician indefinitely, or at least well into my 60’s.  It had always been my passion to work in obstetrics and I love my patients and the bonds I build with their families. It was never my intention to leave early, and it didn’t factor into choices along the way for my career.  But here I was, ready to retire in my late 30’s after several years of increasing disillusionment with the health care environment.  Apparently, I just needed this wake-up call for a chance to realign my priorities.

Loss of physician autonomy, pressure to increase productivity as opposed to quality care, and placing cost effectiveness ahead of best medical practice were weighing heavy on me.  In addition, the litigious environment in the US has become out of control and encourages frivolous lawsuits without any repercussions for those seeking damages without merit or basis for the claim.

I could no longer honestly tell myself that I was working so hard for the good of my patients, and I became cynical that my efforts were to the benefit of the financial bottom line of a health care system with its priorities out of sync with my own.  This is not specific to any health care employer, physician group, or hospital.  It is emblematic of the US healthcare system in general.  It is the reason I left medicine entirely and did not merely seek to work elsewhere. The problem is pervasive.

The decision to leave became a question of “why am I doing this, and for whom”?  I decided to retire early.

I have since learned that many feel this is not an appropriate thing to do in your late 30’s.  There is the argument that I owe a debt to society now that I have the skills acquired from all of those years of training. Or that the government paid for my residency salary and that I am indebted due to that.  Or that it is selfish to stop working to spend more time with my family.  There is the argument that it is not fair to leave my patients that I have been caring for over the years.
My response to the ethics of my decision to retire early: If you pay for the privilege of a medical degree and work hard to pay off this debt, should it be your decision if you want to continue to practice?  The government did pay my salary as a resident, which amounted to a little more than minimum wage for 4 years of 80 hour work weeks.  Do I owe something because of this?

As for leaving my patients, I actually do feel a little guilty about his one.  I love my patients.  I also struggle with no longer using my degree for clinical practice, something I worked so hard for.  We are already feeling the strain of physician shortages and this another thing that gives me pause.

In the end, the burden of practicing medicine in today’s environment no longer outweighed the positives for me.

Ironically, it’s my patients who hugged me and told me how happy they were for me to live the life I felt I needed to.  It’s my patients that spoke up (without me saying a word) about how the medical field has changed and that we are losing good doctors as the control of medicine is being handed to hospital administrators and politicians who are making choices about health care without a medical degree. It’s my patients that brought presents on my last days and thanked me for the care I did provide throughout my career instead of lament about what I “could” have done if I stayed longer.

It was a very personal and difficult decision for me to leave medicine and luckily, my colleagues who know me have been incredibly supportive.  On the other hand, one thing that has surprised me is the number of physicians contacting me who want out of healthcare but don’t know how, or can’t, get out.

How do we retain physicians? It is not by increasing salaries. Doctors aren’t in it for the money, we chose this profession to help people and save lives.  We do it by reforming the current health care environment and making this a profession that is sustainable.

Give medical decision making back to physicians.  Decrease the cost of health care by cutting out costly administrators and through tort reform.  This is the way to keep our best physicians and improve health care in our country for our patients.

Ultimately, is it ethical to retire early from a career in medicine? Or is it a bigger picture issue of how do physicians take back control of medicine so that we aren’t leaving at a time of shortage? This is a major concern for our country moving forward.