Finances And Medicine – What A Great Mix
I’m really excited that there are an increasing number of sites and blogs out there merging these 2 topics together. There is some great content being published on how and why personal finances relates to the career of medicine. It’s only gonna get better as more of these docs start to actually take advantage of their financial independence. I figure some will decrease their hours, others will find interesting side-jobs and yet others will be able to expand their investments because they have a strong base from which to kick off.
I generally find the top Google websites which come up on a search to be filled with inaccuracies or misleading information. Or the facts which are provided are so vague that it’s not even helpful. The main sites I see are Bloomberg, Forbes, USNews Money, CNN Money, Fool etc. On occasion there are well-written articles and one can learn something worthwhile. But I find that 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 the career of medicine.
Why personal finance and medicine?
We make 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 really figure this whole personal finance thing out for ourselves. We also are targeted by a lot of greedy mofo’s who want to sell us their personal finance products so many of us tend to have wrong information the first decade or so of our attending careers.
Personal finance is an umbrella term that includes budgeting, saving, investing, curbing expenses, having an emergency fund, having a backup plan, retirement planning, adjusting to changing economic times, being adequately insured, having an exit strategy, minimizing tax burdens and making sure that we make the right decision in our home purchase.
We went into medicine to help others, sacrificing our youth and sanity to become healers. Unfortunately, whether we want to admit it or not, medicine is all about money now. Driven by pharmaceutical companies and bracketed by law suits. So we came in 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.
The negative outlook on this situation would be to say “well fuck 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“. Working long enough and hard enough 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 fine to live the lives we want, focusing most of our times 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 60’s. If no major 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, depend 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 an economic disaster.
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 a lot from these websites 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 a lot about personal finances, some are becoming amazing 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 sharing 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 on it is amazingly helpful, giving you a whole different perspective, in my opinion.
One concept that keeps repeating on these websites is that the authors are creating something outside of their specialized field of medicine which they want to continue with even once they are completely out of medicine. They are developing their passions. It doesn’t mean that they want to completely get out of medicine; 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 which countries are masking. This will reflect in the healthcare field as well. There are many specialists who will be borderline jobless or will 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 economy, that we advance our skills in making money and keeping its value as well as build a sustainable life which can withstand tough economic times.
I have learned really 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 right information. I am relying on those doctors who have gone before me to pave the way for me, share withe me their mistakes and warn me of the road ahead. In return I’ll do the same for those youngsters following me.