Dr. Michele Cho-Dorado, Guest Writer

If you are a follower of The White Coat Investor, you probably already have at least some basic knowledge of financial literacy—if not a more sophisticated understanding of financial planning and making investments. Or perhaps you are new to this site and just starting to learn.

I went through all of medical school, residency, fellowship, and almost the first decade of practice as an attending physician without any financial literacy at all. Someone recommended I read The White Coat Investor book. You know the saying, “The more you know, the more you realize you don’t know?” That is how I felt reading The White Coat Investor. I was learning new financial terminology and concepts for the first time, which made me realize how much more there was to learn. I found out quickly that I wasn’t the only doctor in this boat. Turns out, there are so many physicians and healthcare professionals who go through decades of school and training without ever learning about personal finance. Meanwhile, they're racking up debt. It’s quite shocking, actually.

It took a couple of years to educate myself—reading about personal finance, different types of investments, real estate investing, and mindset and growth. And I am still learning. But now that I have young kids of my own, I have also committed to teaching them as early as possible. I believe having financial literacy is such a valuable life skill that it should be part of every child’s education. Unfortunately for most, this is not something that is traditionally taught in school.

It is up to us to teach the future generations.

 

Teaching Ourselves Financial Literacy

Here are the lessons I learned and the things I wish I had done differently:

 

Start Early — As Early as Possible

I wish I educated myself on basic financial literacy much earlier—basic things like investing in the stock market, understanding index funds, creating a budget, and making financial goals. The earlier the better.

 

Develop a Financial Plan and Review It Often

Creating a financial plan and writing it down would have been very helpful. This should include your plans for paying down any debt (like student loans) and for putting a percentage of earnings into different buckets, including savings, investments, etc. This would also be a great place to determine how you want to allocate your investments. Once my husband and I got a better idea of what we had and where things were going, we could define clearer goals and find ways to reach them.

 

Read Daily

While medical school and training are generally very busy times, I wish I spent even 15 minutes a day reading about personal finance or strategies for investing. Even small doses of information can add up and build on itself. A few pages from a book, one blog post, one podcast . . . anything is better than nothing!

 

Work on Developing a Growth Mindset

I was so laser-focused on getting through training and getting my work done. I had a very fixed mindset, which I can only see now in hindsight. I believe this limited what I thought of my abilities and what I could accomplish outside of medicine. Changing my mindset was life-changing. What helped me was to read and to surround myself with others who also had an abundance mindset. You’ve heard the phrase, “You’re the average of the five people you spend the most time with.” Stop hanging around the complainers and nay-sayers. Also practice embracing challenges, learning from your mistakes, and appreciating your journey.

 

Find a Community of Like-Minded People, In and Out of Medicine

I am grateful for my fellow physician friends. I also wish I was more open to getting to know people with interests other than the daily grind of training. I’ve learned so much from people who think outside of the box and who challenge me to do the same. My ideas and goals have gotten bigger, and I have learned to stretch myself in uncomfortable ways.

 

Write Down Goals and Review Them Quarterly

You know the saying, “Where your focus goes, energy flows.” If you set goals and focus your energy on finding ways to get there, you are more likely to accomplish them.

 

Develop Good Habits

Small daily actions build habits. These are what will get you closer to your goals. Read for 10 minutes while drinking your morning coffee. Set autopayments to transfer money from your paycheck to savings or investment accounts. Make it a habit to review your finances at a set frequency. Don’t stop at reviewing finances; review your goals regularly as well. Putting these reviews on your calendar will help you stick to it.

 

Do Things That Align with Your Core Values

When you define what your core values are, you can choose to do things that align with those values and feel less guilty about saying no to those that don’t.

 

These are some of the things I wish someone had told me before starting medical school or even while in training.

Growing up, my parents worked relentlessly hard to provide a better life and education for my sibling and me. We knew money didn’t grow on trees, but we weren’t taught how to manage money, either.

hello kitty empowering future generations

I still remember my mom giving my sister and me $20 to spend at the mall. We came back with $20 worth of Hello Kitty pencils. She was flabbergasted that we would waste money on pencils! I learned that $20 for pencils was a bad purchase. But I didn’t really understand why since that was what we wanted at the time. When it came to spending, giving, and saving habits, it was not openly discussed. It wasn’t necessarily taboo; it just wasn’t on my parents' radar to teach us about these concepts. There was much more of a focus on getting good grades and doing well in school. They probably didn’t want us to worry about money—whether we had it, needed more, had enough for our college or their retirement, etc. And there was zero talk about investments.

It was well-intentioned, but it shielded me from understanding personal finance. After decades of financial illiteracy, I finally started learning what I wish I had learned sooner. Now that we have young kids of our own, we have committed to teaching them these concepts starting at a young age. That means NOW.

More information here:

How I Teach My Kids About Money

 

Teaching My Kids About Money

Here are ways I will teach my kids about financial literacy so they don’t make the same mistakes I did:

    1. Start as early as possible. I cannot reinforce this enough. Exposing our kids to money concepts early, even before grade school, is a must. Over time, you will be surprised at what sticks.
    2. Be transparent. Money should not be a taboo topic. I believe being open about how a family earns, spends, saves, gives, and invests money is important for children to see within their own homes. If you don’t teach them, they will learn from media or other outside influences.
    3. Use clear jars or a money management box so they can start budgeting and setting aside buckets of money. Help them find ways to earn.
    4. Read books. Find light-hearted stories and books that teach money concepts. This is a fun way to introduce these concepts as part of the daily routine.
    5. Play games/activities that will engage kids and make it entertaining. Have family game nights and play Monopoly (or Monopoly Junior). Even simple activities like playing store with fake money can teach them valuable money ideas.
    6. Teach gratitude. By showing thanks for what they have and recognizing these as blessings, kids are less likely to focus on what they lack and more likely to understand their ability to help others who are less fortunate.
    7. Teach the importance of giving. Find ways to practice giving as a family. I believe this develops compassion and empathy toward others while also developing a sense of social responsibility.
    8. Introduce the concept of investing. Help them understand the concept of making money grow and having money work for them. Have investment properties? Take them with you as you do work or maintenance. Own a business? Let them see you interacting with your employees or budgeting for supplies.

More information here:

How to Teach Gratitude to Your Kids

 

Financial literacy is a vital skill and is associated with far more benefits than just understanding money management. By teaching about these concepts earlier, I hope to help shape a brighter future—not only for my children but for future generations.

In doing so, we can help raise a generation that is more financially savvy. We can empower them to take control of their own finances, be bold thought leaders, and become compassionate changemakers.

Did it take you a long time before you became financially literate? What caused you to start learning? How do you teach your children or younger family members about finance and investing? Comment below!

Dr. Michele Cho-Dorado is a pediatric gastroenterologist, medical director, real estate investor, and children's book author. You can find her work at Bright Futures EDG. This article was submitted and approved according to our Guest Post Policy. We have no financial relationship.