By Dr. Jim Dahle, WCI FounderI've been a Boglehead for a long time, although to be fair, I was a Bernsteinhead before I was ever a Boglehead. But I was on the Bogleheads forum before there was a Bogleheads forum, back when it existed as the largest forum at Morningstar.com called the Vanguard Diehards. I was once the 8th most prolific poster on the forum and still rank in the top 20 despite putting 99% of my online efforts over the last decade here at The White Coat Investor. I've attended a couple of national Bogleheads meetings, spoken at local Bogleheads meetings, been on the Bogleheads podcast, been censored, moderated and banned on the forum, written a chapter in a Bogleheads book, and read all three books. In a lot of ways, the origin of The White Coat Investor was simply the adapting of the “Boglehead Message” to physicians and other high-income professionals.
So let me be very clear when I criticize my fellow Bogleheads that the amount of good being done on the forum is several orders of magnitude larger than the amount of harm. But if you can't step back and chuckle at yourself every now and then, you're probably wound a little bit too tight. So today, let's step back and look at some of the silly things that happen among Bogleheads, have a little fun, and maybe even learn something in the process.
10 Boglehead Errors
Maybe there are more, but in relatively short order I was able to come up with ten areas where I think many Bogleheads are missing the mark.
#1 There Is “Boglehead Consensus” on Every Topic
This is one of my personal favorites. Sometimes it shows up as a poster asking “What do Bogleheads think of……” or “What is the Bogleheads Doctrine on….?” But more often it shows up in the answers from someone who feels like they speak for all Bogleheads. Well, there are over 91,000 Bogleheads and if the ratio of posters to lurkers is the same as on the WCI Forum, there are likely over a million people using the forum regularly. Needless to say, there is nobody who can actually speak for the entire community and there is actually very little that the vast majority of the community agrees on. Those principles are best summarized on the wiki:
- Develop a workable plan
- Invest early and often
- Never bear too much or too little risk
- Diversify
- Never try to time the market
- Use index funds when possible
- Keep costs low
- Minimize taxes
- Invest with simplicity
- Stay the course
It's pretty hard to argue with much of that, but you'll occasionally see someone arguing against numbers 5 and 6, but that is about it. Otherwise, people pretty much agree. But beyond that? There is very little consensus about anything.
#2 The Three-Fund Portfolio Is Special
This is the classic dogma that isn't doctrine. It has been prevalent for years and seems to only be getting worse since Taylor published his book. As I wrote in my post “150 Portfolios Better Than Yours“, there is nothing special about the three-fund portfolio (US Total Stock Market, Total International Stock Market, and Total Bond Market.) It isn't objectively better than a two fund portfolio or a four fund portfolio. Total Bond Market Index Fund is not necessarily better than the Intermediate-Term Bond Index Fund.
Now, the three-fund portfolio is fine. It's reasonably simple and quite diversified, unless you're into factor investing. But an investor who doesn't follow its prescription is hardly a Boglehead heretic. In fact, I suspect the vast majority of Bogleheads do NOT use the three-fund portfolio, but you would never know it due to the vocal minority chanting in unison….”Three Fund….Three Fund….Three Fund…”
#3 Optimizing Investments Is The Key to Wealth
The Bogleheads are very good at optimizing investments. They'll help you pick the best funds out of your 401(k) line-up, do some tax-loss harvesting, get your average expense ratio down, and save some tax dollars. But they sometimes miss the forest for the trees. When it comes to reaching your financial goals, optimizing your investments is generally not at the top of the list, at least until the distribution phase.
When someone comes to the forum with an income of $25,000 a year and a $1,200 portfolio they need to be told that they need to increase their income, not swap their Target Retirement 2040 for a Life Strategy Moderate Fund. When someone comes to the forum making $100,000 and saving $5,000 a year, they need to be told that they should spend less and save more, not tax loss harvest. Boosting income and increasing your savings rate are dramatically more important steps, but are ignored far too often.
#4 Risk Tolerance Is Really Important and Static
Larry Swedroe is fond of saying that your portfolio needs to recognize your own individual need, ability, and desire to take risk. Bogleheads have adopted that statement wholeheartedly and repeat it frequently with long discussions about risk tolerance. There are two issues with risk tolerance that are far more nuanced than many Bogleheads recognize:
- It is essentially impossible to measure accurately until it matters most
- It is not static
First, the best test of risk tolerance is what you actually did in a bear market when you lost a substantial amount of money. But all bear markets are not created equal. What you really want to know is what you will do in the worst bear market you will ever see in your life. Unfortunately, by the time you get there, it is too late to adjust your asset allocation to your risk tolerance. All those “risk tolerance” surveys professionals and laymen alike use probably aren't worth the paper they are printed on as far as predicting actual behavior in market downturns.
Second, risk tolerance is not static. It has been clearly shown that our estimated risk tolerance is higher in bull markets than in bear markets. Plus, what really matters is your behavior, not your risk tolerance. As Phil Demuth said,
Even if risk tolerance existed and could be measured accurately, why would it be an important factor to consult when considering how to invest? You should invest in the way that has the greatest prospect to fulfill your investment goals. That might mean taking more or less risk than you would prefer. If you are a sensitive soul who can brook no paper losses, the solution is to get a grip, not to invest “safely” if that locks in running out of money when you are old.
A lot of people need to be told to “get a grip” instead of having a long discussion about risk tolerance. I'm just amazed to see people who have decided they could tolerate a 65/35 portfolio but not a 70/30 portfolio. Don't kid yourself. Those portfolios will perform almost exactly the same. If you can't tolerate one, you almost surely won't be able to tolerate the other.
#5 Expense Ratios Always Matter
I find it hilarious to watch people try to reduce their overall mutual fund expense ratio by a basis point or two. It was particularly interesting to watch those same people get flustered when Fidelity came out with index funds with a 0% expense ratio. As discussed under #1, cost matters, and it matters a lot. But little costs don't matter a lot. When costs get down to a certain level, other things matter more. For instance, with an index fund three things matter:
- What index
- How well the fund tracks it
- At what cost?
Once you get down below 10-20 basis points, #1 and #2 matter a whole lot more than #3.
#6 Investing in Real Estate Means 3 AM Toilet Calls
One of the most bizarre things I've run into over the years is the battle between mutual fund investors and real estate investors. Each is convinced that the other school of thought is composed entirely of fools. The mutual fund investors are derided for their “paper assets” and the real estate investors are told their investments are really “a second job.” However, I've simply run into too many real estate investors who know nothing about the importance of portfolio construction, risk management, minimizing costs, and diversification. I've also run into too many mutual fund investors who don't know there are real estate investments outside of managing single-family homes, think depreciation is always a bad thing, and can't believe that a real estate investment with an expected return of 15-30% could possibly exist.
Wise investors take advantage of the benefits of both schools of thought. Publicly traded REIT index funds are not the only viable real estate investment. You can invest in real estate without getting 3 am toilet calls. Index funds are real investments in real companies with real profits, not “paper assets.”
#7 Entrepreneurship Is a Bad Idea
Along with real estate investing, any type of entrepreneurship is also frequently poo-pooed on the forum. It may be that the forum attracts conservative investors who tend to have stable jobs in engineering firms, corporate America, or medicine. They are correct that most small businesses fail in short order. However, there are plenty of examples right on the forum of very successful entrepreneurs who end up with portfolios of $5M, $10M, or even $50M. Instead of simply telling people not to engage in any sort of entrepreneurial pursuit, it would be better to provide advice about going about the process in a smart way, minimizing leverage and providing the longest possible runway, especially if it can be done initially on the side.
#8 Liquidity Is Critical
Talking to some investors you would think there was a high likelihood that they would need to liquidate their entire portfolio tomorrow. For a group that encourages a long-term perspective and avoids market timing, you would think they would be a little more open to capitalizing on the illiquidity premium with at least some portion of their portfolio. I simply cannot reconcile the need to have 100% of a portfolio be liquid when one only needs about 4% a year from it. I have surveyed groups of docs and asked how much of their portfolio they would keep liquid if they were being paid significantly more for being illiquid. Most respondents chose to place a majority of the portfolio into illiquid investments! Certainly putting 10-25% of a portfolio into illiquid investments is not an insane move.
#9 Doctor Bills Should Always Be Negotiated Retroactively
The last couple of years an “anti-doctor” vibe seems to have crept onto the forum. Post after post in the “consumer issues” section seems to relate to a medical bill and how unfair it is. While I'll be the first to admit that our health care system (and especially how we pay for it) has serious problems, the repeated suggestions on the forum to not pay bills or demand discounts wear thin. Guess what? Doctors are expensive. If the bill is accurate and your insurance company has paid its portion, then it's time for you to pay your portion. If you don't like the deal you made with your insurance company or the deal the insurance company made with the doctor on your behalf, then go to a new insurance company. But singling out physician bills over all other professions is not fair when they have already provided you the promised services.
#10 Mr. Money Mustache and Dave Ramsey Are the Devil Incarnate
Once or twice a month there is a thread dealing with one or the other of these two individuals. Rather than acknowledging the massive amount of good these two public figures have done in the world, posters nitpick the things they do not agree with and warn against ever reading anything these two gentlemen have written or said.
As I mentioned at the beginning, there are many Bogleheads who aren't holding on to any of these misguided beliefs. It is a very diverse community after all with a variety of incomes, professions, genders, races, sexual orientations, and religions. But there are too many Bogleheads who are not only making these mistakes, but evangelizing them.
What do you think? Anything else that Bogleheads frequently get wrong? Do you think these are valid criticisms?
“you would think they would be a little more open to capitalizing on the illiquidity premium with at least some portion of their portfolio”
Bogleheads do try to capitalize on the liquidity risk premium, when they invest in tax advantaged accounts and buy CDs. And also when then invest in funds containing small cap stocks and funds containing corporate or munipical bonds.
But when you want more of the liquidity risk premium than what is mentioned in the preceding paragraph, active management is necessary. And many Bogleheads aren’t confident of their ability to use active management.
My experience with illiquid investments:
1. you only get the excess return promised (over traded investments) for a year or two.
2. management is always structured so they can increase their fees every year.
3. you’ll take a 35% minimum haircut when you finally throw in the towel and sell (through one of the very few exchanges that handle illiquid investments) after seeing returns drop BELOW those of traded investments.
I disagree with # 2 and # 3. That hasn’t been the case with any illiquid investment I’ve ever had. I’m not sure I have had the same experience as you as far as # 1 goes either. I am curious what you invested in that cost 35% to get out.
Non-traded REITs, BDCs, direct oil & gas investments.
The latter also provide significant tax advantages…costs are front-loaded, and as a general partner you can use them to offset ordinary income.
All paid a significant premium for the first few years but then…
While the notion that 3 fund is special is common, it is by no means the overwhelming position in Bogleheads. Just consider the regular “International is not needed. Because Bogle. Because Buffett. Because underperformance. Because the US is exceptional and always will be” threads. I actually am basically 3 fund (plus some real estate), but don’t think 3 fund is inherently awesome. It is adequate and simple though. LifeStrategy style funds are probably best for most investors, in that hiding the stock declines in a balanced fund may improve behavior, and the auto-balancing is good for discipline.
“Because the US is exceptional and always will be” is a huge unexamined assertion in not just the 3-fund portfolio but most of US index fund investing, it seems to me. I love this country but it’s no longer the 1950s and our ability to produce stuff has been declining for a long time. Who says our stocks won’t just go sideways for the next 30 years like Japan after the Fed stops pumping money into them?
This fear is why my retirement accounts are only about 30/70 and will probably stay that way even if it means I end up working for a few more years. It’s also why I prefer to use more of my money than the average Boglehead for other “suboptimal” things like paying cash for a house and other things with lower historical returns but high utility value.
#9: “ If you don’t like the deal you made with your insurance company or the deal the insurance company made with the doctor on your behalf, then go to a new insurance company..”
You realize that for the vast bulk of America, that’s impossible, right? Nearly everyone’s insurance is based on where their employer got the best deal on premiums. I’m not saying people shouldn’t pay their medical bills, but the idea that any of the people complaining about their bills on Bogleheads have any choice in the matter is ridiculous.
There’s no reason medical care in the US should be as expensive as it is. It isn’t in other countries that have care that’s at least as good as ours. Suck it up and pay isn’t really a useful answer, and I would have hoped you’d know that. But apparently not.
Agreed. Medical care in the United States is a jumbled mess.
So what are you actively doing to help fix the problem?
I think you need to go back and read what I wrote. Like many on the Bogleheads thread, you seem to be misunderstanding it. Let me quote for your convenience:
“The last couple of years an “anti-doctor” vibe seems to have crept onto the forum. Post after post in the “consumer issues” section seems to relate to a medical bill and how unfair it is. While I’ll be the first to admit that our health care system (and especially how we pay for it) has serious problems, the repeated suggestions on the forum to not pay bills or demand discounts wear thin. Guess what? Doctors are expensive. If the bill is accurate and your insurance company has paid its portion, then it’s time for you to pay your portion. If you don’t like the deal you made with your insurance company or the deal the insurance company made with the doctor on your behalf, then go to a new insurance company. But singling out physician bills over all other professions is not fair when they have already provided you the promised services.”
If the bill is accurate and your insurance company has paid its portion, it’s time for you to pay your portion…singling out physician bills [to not pay] is not fair.
That says nothing about health care not being expensive, the system not being stupid, the health care systems in other countries etc. I fully acknowledge all that. But the anti-doctor thing on Bogleheads gets old. I could literally cite hundreds of posts where people complain about bills and a bunch of responses include “just don’t pay the doctor.” That’s a ridiculous solution. And the “doctors make too much money” thing is also ridiculous. I have met literally dozens of doctors who have left medicine, work half as hard, and make more money. A recent online summit encouraging that sort of behavior was ridiculously popular among docs. Like the police, if you treat doctors badly enough they’ll just go do something else with their lives.
Don’t forget the “balance billing” issue.
Even if one goes to an in-network hospital’s ER the patient can be stuck with an out-of-network provider…some news stories report 5 figures in balance bills from a single provider.
So, how would you address the above?
How do I address balance billing? I just don’t do it. We have contracts with the payers for almost all of our patients. No sense getting bad press for balance billing the last few for a few extra dollars.
Balance billing is just the symptom of a disease. The disease is doctors/hospitals and insurance companies not working together in good faith to negotiate a fair price. Sometimes it is the fault of one party, sometimes both.
The best part of the Bogleheads thread about this piece is it is now locked. Reasoning?
“topic exhausted, discussion has no focus – derailed in 10 different directions”
Sounds like it was spot on. It was like ten Bogleheads thread in one!
I think the thread on BH should not have been locked. It’s provoked an interesting discussion, and a better awareness. There are some grains of truth in some of your observations — in the end, it is a FORUM of diverse opinions.
Joel
It’s perfect that it got locked. That’s exactly what I expected to happen and the thread illustrated very well the points made in this post. I took ten of the biggest arguments that happen over and over again on Bogleheads and put them all into one place. Of course it exploded into 10 different directions!
I agree, and thank you. When I saw this post, I was so happy to see thoughts eloquently put to paper — each of which I have observed in my short tenure on BH forum (<6months). Several times I have almost given up on BH, and left it completely. What has brought me back is the occasional sharing of _opinions_ (good & bad) that promote thought and application to my own situation.
The biggest disappointment was the reason for the Locked thread: (topic exhausted,).
Seems weak coming from moderators — in the last 6 hours, I see threads that have had [462, 684, 2152, even 6305 responses) – from almost two years ago.
My frustration is when the self-promotion/pride/vanity gets in the way. Particularly the recommendation that others "stop reading" your works (or anybody with a differing perspective)..
I'll continue to read BH, filter out the rants, and hunt for the nuggets of sincere sharing.
THANK YOU for your medical service and knowledge/experience sharing with your forum, your podcasts, and a very enlightening and entertaining last few days (from my perspective).
11. Strong USA exceptionalism bias and an unwillingness to appreciate that alternative histories which have happened in the stock/bond performance in many other developed countries is entirely possible.
WCI:
Thanks for having this forum to exchange ideas. It is through websites like this and the Bogleheads forum that people can learn. So Thank You.
I too realize that medical care does seem expensive, but, in comparison to what? When I hear/see people complaining about Doctor fees, it does kinda make me bristle. When I am in pain, I call to see my doctor. I don’t ask “how much is it gonna cost me”; my only care at that time is getting help.
I look at things a little differently. Doctors spend about 1/4 of their income earning life just going to school. And when they come out, many are loaded with huge debts.
I, for one, certainly appreciate my doctor. He has helped me with my PMR, which can be at times can be extremely painful.
I too am a Boglehead. The forum has been very helpful, but, I agree that sometimes it seems to be “penny wise, pound foolish” in attitude. Yes, I want to keep the expense ratios as low as possible. But it seems that Vanguard’s customer service and website technology have suffered because of this penny pinching mantra. And yes, I do think there a few posters over there wear a badge of courage for the number of posts.
But, all in all, I like it just as I like WCI.
Again, Thanks for all you do; both here at WCI and as an emergency doctor.
Great post!
Re#6. I am new to the FI space and have been considering Residential real estate investing. I found the advice on the boglehead forum a refresher from everything else on the internet that says invest invest invest in real estate now! The claims I was reading about how easy the money is went strongly against my own experience as a renter and a homeowner. I found the multiple accounts on the boglehead forum from people who sold their rental properties due to the endless hassle of home maintenance/repairs (also my experience with home ownership) very helpful for my decision to pursue crowdfunded real estate instead.
Lastly, I too am a very happy Fidelity customer. Great customer support and an excellent app as well. Love the zero expense ratio index funds for the Roth IRA too!
I agree that too many real estate authors/bloggers make landlording sound way too easy. Lots of “ra ra ra” there. You know why though–you have to get really motivated to do it because it’s a lot of hard work to be successful.
Great summary… I read the book a couple years ago and it is so interesting to see the various directions Boglehead philosophy can take, especially on that site. Some survivorship bias, cherry picking ad nauseam, extreme pessimism, downright wacky portfolios, etc.
I remember seeing one post recently about someone making $80k a year, saving diligently for retirement and budgeting… yet several responders cautioned this person to increase income or “pinch pennies” for the rest of his/her life.
I appreciate the Bogleheads in theory, but I’ve not met a more “anal” group of financiers, as a hole, er um, as a whole, in my 50 years of investing. To suggest that in today’s extremely low yield bond environment that 33-40% should be allotted to BND is just irresponsible in my thinking. Mr. Larrimore was investing in bonds no doubt money markets were delivering 12% or more (due to the high yield bond envirnoment of the early ’80’s). Since then bond yields have been coming down and have nowhere to go but up in the long run (next 15-20 years), decreasing yield even more. This will have a great affect on long term 3-fund portfolio returns for the next 10 years. Though I appreciate a simple portfolio, in truth, one cannot just “set it and forget it” anymore. It is said that most of the returns in the next 10 years will come from dividends rather than growth. It doesn’t take a rocket scientist, though I know a few, to observe that with FDN and QQQ at all time highs and going higher that growth will revert to the mean, meanly in short order. Also, VNQ is a horrible way to invest in REITs, as it’s yield is ridiculously low compared with what one can achieve through simple research into individual, quality REITs, such as SPG, STOR, etc. We own scores of REITs with an average yield of 7.2% per year, not counting potential growth, should it come. That is far more than the “4% rule” that is regularly mentioned on the Bogleheads, one which is old, unreliable news at this juncture. I owe a debt of gratitude to one Boglehead who informed me of how I can collect about 50% on my wife’s social security (spousal benefit) until I begin taking my own SS benefits and she takes her half (slightly less) of my monthly SS benefits. That advice earned me about $24K that I would have thrown away, through ignorance of SS rules, which they surely would not let me know about! Bogleheads serves a purpose, but they are insanely anal on mincing over 1 or 3 or 4 basis points. I would rather pay .20% expense ration on QQQ than .03$ on VTI at the bottom of a market by far! Oh and market timing. Again, it doesn’t take a rocket scientist, though I know a few, to consider that 3 months ago was a great time to buy into QQQ or FDN; but now, not so much. What the 3-portfolio concept does do well is to keep people from messing with their portfolios often, a chief reason for underperformance. So maybe a “set it and forget it” 3-fund portfolio saves us from disaster in the long run because it addresses, unintentionally, the behavioral side of investing. I’m done. I need another cup of coffee.
I am new to learning about personal finance and investing. My husband and I had a low income and we were burdened by student loan debt for 15 years. The advice that has resonated the most with us and helped us more than anything has been Dave Ramsey’s Total Money Makeover, as well as his YouTube videos. I have also read The Bogleheads Guide to Investing and The Bogleheads Guide to Retirement Planning. I found those books to be helpful, so I did more digging and discovered the Bogleheads forum. I appreciate some of the advice there, but they really come across as being so stuck up. I was surprised at what they think of Dave Ramsey and people like me who follow Dave’s advice. Some of them seem to think we’re stupid and inferior. My husband and I were naive, and we’ve done stupid things with money, but we’re not stupid. The Bogleheads seem so conceited that I don’t really trust their advice nor have a desire to frequent the forum. I do like Vanguard, and we are about to start investing there. I like Jack Bogle based on the little bit that I’ve read about him, but I’m just not so sure about his followers!
Thank you for your website. We’re not doctors, and we’re not high income (yet!), but I have found it to be very informative.
Sorry to hear about that experience. Keep in mind the Bogleheads (like Ramsey listeners) are a broad swath of humanity…good, bad, ugly, whatever. Take what you find useful and leave the rest.
EXCELLENT article. I have seen and noted each and every one of the ten errors you mention. I was beginning to think Maybe I was not a “true” boglehead at heart—nice to hear that I am indeed. I retired at 52 after 21 years in the Air Force and 7 years a DoD contractor/consultant. I use a 50/50 allocation of my invested funds in 7 stock/bond Etfs (there are Capital gains tax reasons for the “extras”.) but together they are all 50/50 US stocks and US bonds—no direct intl funds. I’m 60 now, I’m beating the S&P 500, my wife and I own our home outright, have no debt and live completely off my military pension well beneath our means—no draw on investments nor any forseeable in the future and I’m not even drawing Social Security yet. Thanks for the confirmation I’m not lost!
Bogleheads is ok to read but a crapshow to participate in. I’ve been a member for over 5 years and recently a thread I started was mod locked with the stated reason being the thread had run its course. Then the mod who locked the thread allowed another member to make a response to something I’d said and relocked the thread. Complete BS and I’ll never log in and contribute again.
The forum doesn’t allow users to block or ignore other users when there are clearly some users who spend all of their waking moments posting. People with 5k posts per year aren’t unknown and there’s a certain fool on the site, if you look up dogmatic in the dictionary you’ll see his picture.
Lots of good info there but it is run like a concentration camp.
A concentration camp? Really? You mean nobody there gets fed, they’re forced into slave labor all day, and every now and then they’re marched off to the gas chamber or ovens? Seems a little overly dramatic. I agree the forum is perhaps the most heavily moderated I’ve ever participated in, but it sure beats no moderation at all which is what you see below every CNN or Fox News article ever published.
You’re right, it is run like a thought control summer camp.
Lol.
Quite telling a website geared towards “white coat investors” is saying NOT to negotiate your medical bill.
LOL. There’s always an agenda.
Thanks for demonstrating my point.
BANNED for some political nonsense and talking about the secure act before passage
They will not let me back
Ken,
The IISC makes are laws at an International level, so being a member there interested in your mention of “The Secure Act”. Fill me in please.
Cheers!
TBotNik
All,
I went to Boogleheads, signed up, sent an introductory post, they erased it, so I see Boogleheads is one of those “We’re Superior” sites that will never ever help you, since they’re all “BETTER” than you!
Cheer!
TBNK
Dave Ramsey is the devil incarnate. Just Google how kind he is to his staff or anyone not paying for his products.
Great list, except for the self interest in point 9. You know why people complain more about medical bills than other bills?
1) It’s the only place in our society where cost varies so much from provider to provider for the same stuff. Once in the same year I was billed $125 by one doctor and $800 by another, when the $125 one took longer with me and did an x-ray, and the $800 one was a quick chat. I’ve never been billed $12.50 for one hamburger and $80 for another of much worse quality. I never see a new Civic being sold in one lot for $12,500 and in the neighboring lot for $80,000. News organizations have done things like calling around pricing common surgeries or scans, and gotten wildly differing prices in just one city. And do you know why prices vary so much? It’s because…
2) Medical billing the only place in our society where we’re only told the cost after we incur it. (There are rare exceptions—my father is a retired psychiatrist, and in that field one does give prices up front, but almost nowhere else.)
I was recently in an ER in New Zealand. They literally had prices posted on a list in the waiting room. I didn’t end up paying anything at all, because they have a great government-funded system that covers even foreigners (wow!), but if I had been charged, I would have known the exact amount prior to consenting to treatment. Here in the US, even if I go see a doctor I’ve seen several times before and have the same consultation as usual, I have no idea what I’ll end up being charged until I get the bill months later. No idea. Sometimes the prices are 50% higher than last time. Why? I don’t know. I’ve talking with billing, with admins, with the doctors, no one knows. Americans avoid medical treatment precisely because of this.
And no, we don’t have any choice in insurance companies, since medical insurance is tied to our jobs in the US. And insurance companies have a weird frenemy relationship with medical systems, where the bills get massively inflated so that the insurance companies can claim huge negotiated discounts… except when there aren’t discounts, for some reason?
But I totally understand the cognitive dissonance that makes doctors shut down thinking about this, because you profit massively off this broken system. You’re far from the only ones to do so. Insurance companies, medical administrators, and so on all profit from it too.
And you really do profit from this broken system. It’s not about you being smart, highly skilled, offering valuable services, etc. We know this because you get paid way more than doctors in other countries, including high-income countries with better medical outcomes than the US, like France, the UK, or New Zealand. You get paid several times more than doctors in these countries. It’s not a small difference. You’re not the only ones profiting from this rotten mess, but you do profit from it.
And just in case you’re tempted to argue that you get paid a lot because you’re smart, highly trained, went to school for a very long time, and are the cream of the crop from a competitive system… ask yourself why other people who fit all those traits aren’t paid nearly as much as you. Teachers, college professors, engineers, even computer programmers and airline pilots – all paid much less.
Average pay by profession, top 18 are all medical: https://www.investopedia.com/personal-finance/top-highest-paying-jobs/ . And only 3 of those 25 are not in medical fields, and that covers CEOs, pilots, and CIS managers.
Add that to the comparison to physician salaries in other countries—again, including countries with better healthcare outcomes than the US—and you have a pretty damning argument.
However, physicians (like people in finance, and some other fields) can get very attached to the idea that their pay reflects their intrinsic worth. So I expect you to dismiss me as you’ve dismissed others with the same concerns above*. You’re doing so because otherwise you’d have to question your own self worth, and also the morality of your participation in this system.
*I used to teach the physics portion of an MCAT prep class, designed for students who’d completed their coursework. They made me take a practice MCAT, for some bizarre reason. I outscored nearly all my students, despite having never taken chemistry, biochemistry, or biology at the college level. My point here is that I easily could have been a doctor if I’d chosen that. I’m not envious. I’m just frustrated that you think you deserve that entire paycheck, and that those who question this are nefarious.
This is a troll post, deliberately inflammatory. Really like the touch about how you “outscored all your students” prepping for the MCAT and that must mean you could have “easily become a doctor.” Also the, “those who question this are nefarious” bit. If by chance you genuinely mean the things you typed, then I pity you.
I totally agree the medical system is broken, especially the way it is paid for. I actually see that as mostly a separate issue from physician pay though. Whether docs get paid more under this broken system or not is debatable. I lean toward no or not much more, but I could be wrong.
As far as your argument that the average doc is paid too much, I disagree. There are far easier ways to make a low to mid six figure income than medicine. Fewer hours, less training, less liability, less emotional pain etc. Heck, I sit around and type dumb stuff into the internet and make more than I do doctoring.
When I first embarked on my investment journey, the Boglehead forum proved to be an invaluable starting point, providing a wealth of practical guidance and a seemingly welcoming community for novice investors like myself. The forum’s emphasis on low-cost, diversified index funds and long-term wealth-building strategies offered a solid foundation for understanding the complexities of personal finance. Members shared insights generously, and I felt encouraged to explore various approaches to growing my wealth.
However, this supportive atmosphere took a sharp turn when I began to express curiosity about dividend-focused investing strategies. Suddenly, the once-helpful community transformed into a hostile environment, with members turning on me with surprising ferocity. It was as though I had crossed an unspoken line, violating a core principle of their investment philosophy. Their responses were no longer constructive but instead laced with condescension, as they dismissed my interest in dividends as misguided or inferior. The criticism felt disproportionate, akin to a pack of hyenas ruthlessly pouncing on a vulnerable target, tearing apart my inquiries with unwarranted aggression. This experience left me disillusioned, questioning the forum’s openness to diverse financial perspectives and prompting me to seek more inclusive spaces to explore my evolving investment interests.
While I generally think a dividend focused approach is a mistake (it’s really just a value tilt and there are better ways to get it), there’s no reason to be mean about it. More info on the topic here:
https://www.whitecoatinvestor.com/the-pros-and-cons-of-income-investing/