Personal Finance And Medicine

I’m excited that there are an increasing number of sites and blogs out there merging the topics of personal finance and medicine.

Writers publish on how and why personal finances affect our medical careers. It’s only going to get better as more of these docs start taking advantage of their financial independence.

Personal finance decreases their work hours as a way of achieving financial security. Others will find interesting side jobs and take more calculated risks with investments because of a solid financial base.

The Standard Advice is Misleading and Harmful

Top Google searches result in inaccuracies or misleading information. Or the facts provided are so vague that it’s not helpful.

The main sites I see are Bloomberg, Forbes, USNews Money, CNN Money, and Fool. These aren’t the kind of sources where I want to obtain my financial education.

They are decent sites for referencing knowledge but not for financial education. The bias is quite clear.

It’s much more effective to learn from a fellow physician who is in the trenches, writing about their mistakes and personal experience with investing and a career in medicine.

The Relationship between Personal Finance and Medicine

We earn a much higher salary than the average person in society, at least in the US. We also tend to be highly specialized, with very little free time on our hands to make sense of the complicated world of personal finance.

We are also targeted by many greedy mofos who want to sell us their personal finance products, so many of us tend to have wrong information during the first decade or so of our attending careers.

Personal finance is an umbrella term that includes:

• budgeting
• saving
• investing
• cutting expenses
• building an emergency fund
• making a financial plan
• retirement planning
• adjusting to changing economic times
• being adequately insured
• having a career exit strategy
• minimizing tax burdens
• making sounds real estate decisions

The Healthcare Industry and Our Allegiance

We went into medicine to help others, sacrificing our youth and sanity to become healers. Unfortunately, medicine is a highly regulated and financialized industry.

It is driven by pharmaceutical companies and bracketed by lawsuits. We came in optimistically and naively, hoping for a romantic, stable career, and instead, we were handed a ton of money to look the other way.

No doubt that we’re doing some good in these confines as well but let’s face it, as physicians, we have gotten majorly crippled by these external forces.

Our residencies nor healthcare cares to teach us financial skills and maybe it’s not their job. But it certainly would hurt them if personal finance and medicine were discussed in the same sentence from a place of education.

Retaliating Against the System and Hurting Ourselves

The negative outlook on this situation would be to say, “well damn it, lemme get the most income out of this career for as long as I can.”

The positive outlook would be, “let me maximize my savings/investments early on so that I can have more options down the road with this career.”

Working long enough and hard in medicine means that you will likely end up with close to $10 million by the time you retire at a traditional retirement age.

The majority of us will do OK to live the lives we want, focusing most of our time on our jobs and enjoying glimpses of free time between work days. Because we have been raised in a society where work comes first, it’s not hard for us to continue this well into our 60s.

If no significant economic disasters occur, then most of us will do great financially, perhaps with a bit of an imbalance in the work-life sector yet successful by modern societal standards, nevertheless.

But I see a bit of fragility in this kind of lifestyle. If we are mostly invested in one kind of asset, depending on a specialized field such as medicine for our income, and have few other skills outside of medicine, then we might suffer quite a bit in a potential economic disaster.

Personal Finance in Medicine is All About Diversification

The best first step is to learn about income, investments and diversification. Having most of our assets in real estate that’s not income-generating is just as dangerous as having all our eggs in the medicine basket.

This is common for doctors who have $1 million homes. And if we’re investing, what’s our end goal? To preserve the value of our assets (conservative investment strategy)? Or to greatly increase our net worth? These are the topics that I see strewn across the internet on these blogs.

What I’m learning from these websites written by fellow doctors is the various side-skills these docs are developing. They may not even be focusing on it, sometimes it’s a passing comment they will make about it, perhaps not realizing that it’s yet another skill they are mastering.

Some are teaching, some are brewing beer, some are learning about personal finances, some are becoming excellent marketers. Others are developing products, and most are becoming great writers.

I would love to see every physician start their own blog, one of the easiest things to do these days. Sure, it’s a little prying to share one’s thoughts online, but it’s not hard to stay anonymous if that makes you feel more comfortable.

Putting your thoughts down on a screen and getting feedback is amazingly helpful, giving you a whole different perspective.

There is More to Live Than Medicine

One concept that keeps repeating on these websites is that the authors are creating something outside of their specialized field of medicine. Something they want to pursue once they are completely out of medicine. Encore careers, perhaps. Or passion projects?

They are developing their passions. It doesn’t mean that they want to get out of medicine completely; it’s more about having options and about practicing medicine because they want to and not because they have to.

I have a bit of a pessimistic outlook on the global economy. I get the feeling that in our lifetimes, these extravagant lifestyles we are living will be challenged by the limited resources that countries are masking.

This tightening of resources will reflect in the healthcare field as well. Many specialists will be borderline jobless or have to work for far less income because of the lack of demand for their specialty.

My intention isn’t to be a downer, instead, I am stating something more obvious. There are thousands of doctors in the US living a high-quality lifestyle, accustomed to making around $200k/yr, on average. Their work is demanding and the time to learn things outside of their specialty is limited. It’s imperative that we all learn as much as possible about finance, about the economy, that we advance our skills in making money and keeping its value, as well as build a sustainable life that can withstand tough economic times.

Essentially, learning economic and financial skills outside of just earning a wage.

I have learned interesting things from the websites and blogs I visit regularly. I realize that due to information pollution on the internet, I can no longer rely on a google search for the correct information.

Instead, I am relying on those doctors who have gone before me to pave the way for me, share with me their mistakes and warn me of the road ahead. In return, I’ll do the same for those youngsters following me.