I recently had the opportunity to speak to a large group of emergency physicians. I do this periodically and really enjoy it, especially when it can be combined with me getting some CME and getting some turns in at a world class ski resort. However, it made me a little depressed when I realized just how much more work there is to do out there as far as educating physicians about personal finance and investing.
This was a conference for a state chapter of the American College of Emergency Physicians (ACEP). As regular readers know, I have been writing a column in the throwaway journal (ACEP NOW) for ACEP for over a year. When the emcee for the event introduced me, he asked how many of them had heard of The White Coat Investor. It was less than 2%. Total fail. I'd feel a little better about that if I were speaking to neurosurgeons or endocrinologists, but after 4 years of blogging, a best-selling book, and writing a column in a magazine ALL of the attendees of this particular conference receive every month, they hadn't even heard of the site, much less learned anything from it.
Name the mountain for bonus points.
I really enjoy getting out and meeting random groups of physicians. Interacting with blog readers through emails and comments gives me a very skewed view of doctors…skewed for the better that is. Doctors who find the site are not only at least a little bit educated about this stuff, but also interested. When I speak to random groups at CME conferences, I get a group that is far more typical of physicians. The results aren't necessarily pretty. They were all very nice and appreciative (wouldn't you be if this was the first time you heard this stuff?) but hearing about their personal financial issues sometimes brings a tear to my eye. I'm going to discuss the stories I heard from several of them in an effort to educate, but definitely not to poke fun at these docs or make light of their situations. I have changed all the details enough to make them completely anonymous, but not so much that the lessons their stories teach can't be learned.
Physician # 1 Time to Retire But No Portfolio
This doctor is in his early 60s, still in good health, and enjoying his practice. He makes around $300K a year. However, he mentioned to me that his portfolio was about $350K. That's right. After 3 decades of work, he has a portfolio approximately 1X his annual salary. When confronted with physicians in this situation, I try to be positive and point out all the great ways they can still improve their financial situation (keep working as long as you can, delay SS to 70, really start saving like crazy, turn any non-income generating assets into income generating assets etc.) And it's true that it really never is too late to start being smart about your finances. But at the same time, it's hard for me not to think, deep down inside, that the game has already been lost. This doctor is no longer playing to “win”, but rather to lose by the least amount possible.
If you didn't get it from the first picture, here's a selfie from the top
How did he get into this position? Well, in 2008, when he was in his mid 50s, he had an $800K portfolio. Great! That's a doc who can still win. He'll probably double his money between 55 and 65, add some more contributions, and retire with a couple million, which combined with SS, will provide quite a nice retirement. However, when the market crashed and his portfolio value dropped to $500K, he got out. Then he decided to take some time off and spent some of that money. Then he apparently never got back into the market. So 9 years later, he has less than half as much money. So many lessons there.
Physician # 2 Too Much House
This is a doctor also in his 60s, married, and planning to retire shortly. He is in a far better financial position than physician # 1. He has a portfolio of around $1.3M and two homes, a $400K main residence and an $800K vacation home that is occasionally rented out, providing about $10K per year in income. Net worth wise, this couple is doing great. A net worth of $2.5 Million should be plenty to provide a reasonably comfortable retirement. However, not in its current form. He and his wife have been debating selling the 2nd house in order to boost the portfolio. However, his wife wants to keep the vacation house in case the market drops again. She would feel terrible if she sold something they both really enjoy and then lost half the value of it in a market crash. There were several great learning points here:
1) $10K of income on an $800K property is a terrible investment. In fact, it is such a terrible investment, that its investment qualities can essentially be ignored and it can be treated as a consumption item. Is that item a little cheaper than it otherwise would be? Sure. But it's still a consumption item. Consider that typical maintenance costs on a home are 1-2% of its value every year ($8-16K) and that property tax (1.5% per year in this area) is another $12K.
2) A 1:1 ratio of portfolio to home equity is way too low. I would aim to keep that at 2:1 or better.
3) Real estate markets can drop 25-50% just as easily as the stock market. Rents tend to be more stable than property values, but this isn't exactly a rental property.
4) Vacation property can be rented very easily. You don't have to buy it. He could go there for a week every quarter for the rest of his life and never get anywhere near $800K.
5) People in their 60s probably shouldn't hold a 100% stock portfolio. A 50/50 portfolio only dropped 18% in 2008.
Again, this couple isn't in a bad position at all, but they can certainly reallocate their assets in a manner that will likely bring them more happiness, and certainly bring more financial security.
Physician # 3 Young Doc with Big Loans in Financial Toxic Wasteland
I also spoke with a soon to graduate resident with a large debt burden ($300-400K) who is moving to take a job in one of the areas of the country I often describe on the blog as a “financial toxic wasteland” due to a high cost of living, high taxes, and low physician pay. His question was how long he should wait to buy a home as his spouse was pressuring him a bit to buy sooner rather than later. There were two useful learning points from this discussion.
1) This is the wrong question to be asking. The question should be how this couple can get to a net worth of zero as soon as possible. The way to do that is to live like a resident, refinance the student loans, pay them down like crazy, and max out retirement accounts. Hopefully within 5-10 years, the student loans will be gone, they'll be in their dream house, and they'll be millionaires. That leaves the details of how to get from here to there, but the key is to live far below their means for a few years after residency.
2) I don't have a problem with an attending in a stable job buying a house. If he has tons of high interest student loans, it can even make more sense to use their cash to pay down their loans rather than using it for a down payment. That means a “doctor mortgage” (0-10% down but no PMI, just slightly higher rates and/or fees.) Since most docs change jobs in the first year or two it seems wise to me to wait at least 6-12 months to make sure you love the job and the job loves you before buying that first post-residency house. But there's no reason you need to wait 2, 3, 5, or even 7 years to buy a house.
A car I followed down the road on this trip. See if you think it's as funny as I do.
You don't have to wait until the loans are gone or even until they're paid down to a certain point. What you do you have to do, however, is live far below your means. So whether you are renting a house or buying a house, it needs to be relatively inexpensive (you know, something you could afford as a resident) so you can redirect that income toward building wealth (paying off student loans and maxing out retirement accounts.) If your future financial plans include a “forever house” or an “attending house,” the time to buy that isn't 2 months before you graduate from residency with $400K in debt.
Interacting with “real life physicians” rather than those who find their way to a personal finance and investing blog can be very educational for me and for those who frequent this site. We spend far too much time arguing the merits (or lack thereof) of whole life insurance, backdoor Roth IRAs, and the home office deduction and far too little making sure our colleagues learn the ultra high-yield basics like:
1) Save in your retirement accounts
2) Invest a significant portion of your assets in riskier assets like stocks or investment real estate
3) Don't sell low in bear markets
4) Don't hire commissioned salesmen as advisors
5) Don't buy whole life insurance/annuities etc when you haven't even maxed out your 401(k) (and probably not even then)
6) Save a significant percentage of your income (15-25% of gross) for retirement starting with your graduation from medical school, or at least residency.
7) If you're not going to take the time to learn how to do this stuff yourself, hire a competent, low-cost advisor.
What do you think? What have you learned from talking to colleagues with little knowledge/interest in personal finance and investing? How can we get “the message” out to the rest of our colleagues? Comment below!
From talking to my resident colleagues and attendings…they have no clue. The amount of financial illiteracy is astounding. An attending tried to sell me on whole life. After an at length discussion, I got him to switch over to term life and invest the difference.
The best way to get out the message, in my opinion, is to get them while they are young. I’m a senior resident and I volunteered to give a talk to my resident classes about finance under the guise of “Resident Well being.” Of course I’ll be citing you as one of my main influences WC with a recommendation to check out your book.
I often think that in the academic world, there is so much shielding of residents from being influenced by money that the pendulum has swung too far to where we have no knowledge of our financial future. Hopefully my talk helps. Thanks for all your help WCI. You’ve definitely put me on the right track towards financial independence and I wanted to thank you for all you’ve done.
Shah,
I am also doing a lecture for my co-residents too this May. Mine is an openly advertised “Financial Education 101 for Residents” and was OK’d by my residency (we have had other actual financial advisors come speak to us in the past about debt management and finances; None of our attendings had adequate financial understanding to realize that those lectures were probably not appropriate). Like your situation, I think our financial education is highly lacking. I am hoping that going over some financial basics such as those on this site and in the WCI book can help them with their Continuing Financial Education. I hope your talk goes well.
Good for you. I stumbled upon WCI right when I started my residency and I’ve been grateful ever since. And I came to WCI when I watched the FRONTLINE documentary on America’s Retirement Gamble in 2013.
Most of my colleagues, and they are very smart people, have openly told me they have no idea how retirement investing works. 0.
Definitely you have to catch them young. As they graduate into attending-level knowledge/skill and ego, they will be much less likely to listen to others. Imagine, they’ve been under someone’s tutelage for years and now they are finally their own person.
you’re right it’s sad/scary out there.
my partners have (i guess correctly?) identified me as a tiny bit smarter than the average bear about finance and often ask me questions about stuff. some of the questions just leave me shaking my head. $320k combined salary, nothing in college funds, still paying mortgage on $400k condo and looking at $1.1M house while spouse goes to <1/2 time. 2 luxury cars it goes w/o saying.
latest sob story i heard is a friend who is within 5-8 years of retirement who invested about half is portfolio in what was basically a hot stock tip. company is now in bankruptcy and he's staring down the barrel of full time work at least until 70.
is there any way to describe this behavior other than craziness?
That’s heartbreaking. The worst part about your friend is it’s not like he got the enjoyment of spending the whole wad like your partners. He saved all that money, then threw it away by investing stupidly. Even paying an advisor 1.5% a year is better than that.
Wow – that is a really sad story. I cannot believe someone would take on that amount of risk like that in such a situation.
That guy has twice my income and 5x my home expenses. No idea how he would afford that.
Attended a course on collections yrs ago. The lecturer sampled the attendees. Most were dentists
Very few real doctors. The lecturer said that’s common as most docs make so much money they really do not care about collections
It would take me an hour to educate a doctor about stock and bond investing
A 5th grader can learn passive investing with a diversified portfolio of index mutual funds
Too many docs want the toys first
Tried to advise grads in dental school. The schools had zero interest yet they probably have ins salesmen visit the campus
“Most were dentists. Very few real doctors.”
Ummm, dentists are real doctors.
The best part about that comment is that Ken is a retired dentist.
I had a similar experience as Shah. I’ve learned a ton about personal finance from your blog over the years and it’s helped me tremendously with student loans, investing and everything in between. I have a plan, and it really didn’t even take that much work or any particularly heavy calculations either.
After a barrage of emails recently spamming our resident list with offers for whole life, financial advisory arrangements, along with conversations with peers who are in some dire financial straits I tried to set up a financial education talk in my residency. With 7 months of notice I hit a wall with the formal resident education time- plenty of space for seminars on medical topics and even personal happiness etc but no willingness put put finance into the educational curriculum. I did a “wellness” talk as well outside of official time and about 10% of the residency attended with an overall apathetic level of engagement. It really turned me off from the whole financial peer education process, and I really have to applaud you for being both so thorough and persistent when many just don’t seem to care that much. Those who do engage and take the time are certainly well served by your efforts. The lack of knowledge combined with lack of interest in financial matters among residents and attendings is pretty amazing though given the stakes involved. It’s also doubly frustrating when I see it combined with a sense of entitlement among these physicians, as if they expect and deserve to be wealthy just because of their position, without consideration for all the hard work, planning, and self reflection required along the way.
too bad to hear that there was such push back to doing what is critical education for your fellow residents.
i’ve been fortunate as our residency director is a very strong supporter on additional education. we put on a 3 part financial wellness seminar – very well attended by residents AND faculty!
I’ve decided the key is “just in time” education, and a website that is available 24/7 and shows up in Google searches for any financial term + doctor is my best solution so far.
Graduated from dental knowing what a cd was. That was what I knew about finance but my dad taught me to SOCK IT AWAY. Does not matter what you do if you spend more than you make
First things first. Save 10-20 percent of your income
Learn to invest or hire a competent honest advisor fee based but
Still start learning
How can anyone trust an advisor without knowing the basics
If anything sounds too good to be true or promises returns, run don’t walk away
why does percent of gross income ever get discussed? States taxes vary so widely its an apples to oranges comparison from the start.
Jim – again fantastic site/post. We speak to every one of our clients about WCI. Most have not heard of it (we send most a copy of your book and link to the site) which amazes me.
Since a high number of our clients are residents/fellows, we always suggest telling their PD about it and forwarding the website to all their peers. I thought the WCI Book would be mandatory reading by most programs by now…we’ll continue to do what we can to help you fight the good fight.
-Jon
Contract Diagnostics
Mt. Bachelor. Central Oregon.
Yes, and as icy as anything I’ve ever skied this year.
I try at the med student level. During orientation a few years ago I was granted time to give a talk to our class of 175. Only 12 showed up as it was optional. However my close friends have paid attention over the last few years and are on the right path.
I think that if your mission is truly to “win the war” against financial ignorance among our physician colleagues, you will need to expand the army. Consider a geographically diverse, age diverse, ethnically diverse and or specialty diverse panel of personal finance-istas, all waging war against our common enemies. It might be considerably more effective than the mission of a single individual.
I’ve thought about something like that- develop a course, find volunteers to teach it in every hospital/medical school etc. Sell materials for the course for $100. Basically Financial Peace University for docs. Lots of work there though. If I had to actually pay the teachers, it wouldn’t work. There’s not enough money there. Docs simply aren’t willing to pay it.
I had a speech lined up in Boise last year. They decided to charge for it. I think it was $50-70 for a couple and included dinner. Like 3 people signed up so it was cancelled and postponed. This year, not only the dinner was free, but the attendees got a free copy of my book. (In reality, it was all paid by their dues either way.) Every chair was filled. Docs just aren’t willing to pay for this info. That’s why the info on this site is free to docs. It’s the only way they’ll get it!
That would be very Dave Ramsey of you. I would gladly teach a course at TCOM in Fort Worth if you put together the material
Sad they cant see an investment and enrichment opportunity for what its worth. 50 bucks is relatively nothing and Im sure they blow it without thinking. There is a lot about finance that is behavioral and psychological and there is just something about paying that feels like an admission of incompetency, something docs just hate.
I tell everyone there isnt a more worthwhile subject out there and just a couple hours can save/make you more money than you could imagine. Sounds a little infomercially at that point, but so true.
If it makes you feel any better, you made a huge difference for me!
has to be mt bachelor!
and you’ve made a huge difference for me and many others.
from your experience, when you meet other doctors in these situations, do they not know how bad off they are? or are they ignoring it because they are ashamed? i’m curious to hear what you think the hurdles are
Mostly ignorance and fear. Maybe some shame. Most have a vague sensation that something isn’t right/isn’t going well. But it’s mostly just lack of knowledge.
thanks for the reply.
mt bachelor was pretty terrible this year. some of the worst ice i’ve ever seen up top (during the rare days the summit was open). thankfully can always visit family and spend a few days at alta!
seems like you guys got a bit of decent snow if the last few weeks of the season
Yea, but most of it fell the week after the resorts closed. We had a better year than California, but not by much.
I agree with everything noted above. Current young physician entitlement (my favorite word) group, has been delaying gratification all along, now wants everything NOW. A little bit of the “keep up with the Joneses” too. Seems like the biggest problems with the novices is not saving enough and the behavioral aspect of not selling in a panic during an actual buying opportunity. Thanks for everything WCI
I could not agree more! I am a partner in a large metropolitan Anesthesia group. I am amazed at the financial stupidity demonstrated by some of the world’s best trained physicians and extended care providers. You can not make this stuff up! Over the years I have given out hundreds of books and many hours of advise to new physicians and rotating students. Most of the books go unread and the advise goes in one ear and out the other. The few that “get it” are extremely appreciative years later. WC you should be very proud of the impact you are having on many families. Keep up the great work!
The millennium crowd seems to respond to Wm. J. Bernstein’s booklet “If You Can”
http://srv.spulk.com/wjb/if_you_can_v1.pdf
One of my older colleagues, age 72 tried to give me his financial advice of buying the biggest house you can afford with taking on the biggest mortgage. We live in a market where real estate has been hot the last decade or so. One of my other colleagues listened to him and did just that but he is slaving his life away to pay the mortgage, whereas I can retire before age 40. Probably a reason why my colleague is still working at age 72.
I did math and physics in college and we used to make fun of the biology people because they couldn’t do math (much like how Sheldon on Big Bang does it). Now I see the consequences of being mathematically illiterate. Finance only requires a rudimentary understanding of math, but most doctors have failed to master this simple skill. Quite sad really.
Interesting post, Jim. (And headline). This reminds me of your post about people still believing in active investing. After you do something for a period of time with success and growth and the type of loyal following you have, it is easy to forget how limited your overall exposure is. Much to my dismay, I visit with people all the time who don’t know who/what Vanguard is, much less how much they have changed the investing options in the last 40 years. Many people are simply in the midst of their lives and get their financial advice from, well, whomever they come across. Many just stick with it – they do not necessarily have any reason to believe that the expensive products and hyped management services they are using are expensive and hyped. In fact, many of the people that I associate with personally and professionally do not even know much at all about the blogosphere and have no interest in reading a book on finance.
In my view, you are clearly not losing the battle. 2% may not seem like a lot, but it is actually impressive since it was created out of thin air and who knows how much exposure the WCI will end up having in 2, 5, 10 years and how it will impact the community of medical practitioners.
To WCI, don’t get discouraged. Remember that Jack Bogle got off to an inauspicous start as well. However, Bogle’s Folly turned out to be more than allright in the end.
+1 for that, and thank goodness he stuck with it!
It’s hard to imaging that people have not heard about Vanguard by now… certainly the record inflows they received in 2014 indicates more and more people are shifting toward passive strategies (maybe not strategies but at least low cost index/active funds).
So I think the word is getting out but just because one parks money at Vanguard doesn’t mean much if your behavior gets in the way with high turnover, selling low/buying high, having inappropriate risk exposure for your goals, etc.
http://www.wsj.com/articles/vanguard-sets-record-funds-inflow-1420430643
Imagine it. It’s true. I run in to people every day who have never heard of Vanguard.
Is that a cat on top of the Outback???
No, I don’t think that was Mitt’s Subaru. It’s a snowboard.
http://www.answerbag.com/q_view/2782912
Totally looks like a cat on the roof on it’s back with the back legs and tail sticking straight up. (and yes, it’s a slow day at the office)
I wouldn’t be discouraged WC. The truth is most people, not just doctors, have no interest in personal finance. Some friends of mine use advisors simply because they don’t want to be bothered or they have been effectively convinced (usually by their parents)that they can’t do it themselves. I don’t understand it either, but that’s just the way it is. It is sad but as a physician I’m sure you can appreciate the mantra that you can’t help people that don’t want any help. Now for those of us that are interested, this blog has indeed been life altering. I would guess that as time goes on and interest compounds you will have saved people tens of millions if not significantly more with your advice. That’s a huge impact.
When I stumbled across this blog my wife was less than six months away from finishing residency. We were contemplating taking out a loan for a larger house on top of our already daunting student debt and even though I had a basic level of financial literacy, I was pondering paying an advisor 1% since I wasn’t a financial professional. Now I manage everything myself, we refinanced all our student loans and are closing in on paying them off in full. I’ve already steered five of my wife’s colleagues into refinancing as well saving them thousands annually. I’ve talked three docs out of whole life insurance including jumping in front of a guy I was golfing with who was on his cell with his new advisor about to agree to some absurdly expensive whole life policy. I regularly post on the Boglehead forum trying to help others make smart financial choices especially in regards to student debt. I’m sure there are many more like me that you’ve help immensely and who do their best to help others make better financial decisions.
I love the story about the golfer!
Its definitely hard to spread the word. My co residents are certainly sick of hearing me tell them they should read the book and check out the website and get control of their finances. I will say, though, I have had some people pay attention and really take control, even in residency. Pretty awesome to see them get excited about financial independence.
I think it’s camping gear on the Outback– with a disabled parking sticker 🙂
Even worse. Those are snowboards. Seriously. Two snowboards on a rack on a car with a disabled sticker. Crazy!
I thought it was snowboards + disabled.
Maybe they were going on their first snowboarding trip and were planning ahead for the worst-case scenario…
The more I think about it it was probably just a shared car. The disabled person, who actually needs the plates when they use the car, probably wasn’t on the trip. I don’t know, it made me chuckle. I had this image of this guy hobbling up to the lift with a cane and then strapping on his board and cruising through the terrain park.
I get the humor. 🙂 But people with disabilities certainly may be expert skiers/snowboarders/sportsing people in general. Paralympics, anyone? Of course, I stay pretty far away from sliding down a mountain on flimsy pieces of wood, so I’ve no idea if that particular board on the Subaru indicates someone needing adaptive equipment or not. There could also be the possibility of a disability that would allow one to get the disabled sticker but also allow skiing such as a shared car with someone with low vision or loss of use of hands.
Visually impaired skiing with a guide shouting out what to do. Now that sounds terrifying!
http://www.ktvz.com/news/OAS-Ski-Day-at-Mt-Bachelor-for-visually-impaired/31656248
I’ve found that the thing about financial advice is… it’s often taken in the same way dieting advice is.. or flossing in my case.
I think most people don’t want to do it, and equally don’t want to hear about it.
A few non-doctor friends I’ve had have asked for advice from time to time, and I guess the advice I gave them was so unpalatable that they either didn’t do it at all, or in many cases did the exact opposite.
A lot of people want to live for today… tomorrow be damned. I suppose in some ways I can’t blame them…. especially the docs that see people die before they should a lot.
On the other side of the coin I think it’s amazing that someone could spend so much time taking the courses to figure out how to do their job and make money, but then won’t spend the time to read 2-3 easy reading books (finance sure as heck isn’t biochem) that could make a difference over the course of their life of hundreds of thousands of dollars.
On a third note, for the docs that make sub 200k it can be pretty tough to get everything done you are supposed to do and have enough money to make it look like you’re a successful doctor… and that can be hard for a lot of people to stomach.
You, the WCI have the 300k income and a hobby that generates a good amount of revenue on top of that… you can afford to stock away the massive bucks and still splurge enough that the average person thinks you’re doing really well for yourself.
With a 200k or less income, by the time you take advantage of all the tax advantaged accounts, make sure you’re adequately insured, and pay the bills for a modest lifestyle, there’s not too much left over. So I’m 37, just achieved millionaire status, but because I live in a home that’s barely nicer than a starter home and drive an 11 year old Chevy, I think most people think I’m really not very successful or good at my job… and that’s where it continues to be tough not to keep up with the Jones’
*high five, Z*
Strong work, good post.
Remember that I may have a very high income now, but I became a millionaire on an average income of $180K. That first million was all from medicine, not WCI. The second million is obviously coming a lot faster, but I was only making $120K, less than most pediatricians, for my first 4 years out of residency.
But you’re right, it’s tough on a $200K income to pay off the loans, max out the retirement accounts, and look like a “successful doctor.” Actually, that’s not all that easy on far more income! It just takes time to get the fancy car, house, boat etc. You can get it all eventually, even on $200K, but you can’t have it one year out of residency AND become financially independent.
And congratulations on hitting millionaire status at 37. You beat me by a year!
I dont get the pressure to “look like a doctor”. The only people that know Im a doctor are friends and family, and everywhere else I try to hide and certainly would never mention it. I dont care and I certainly dont want people to assume I have money and wonder why I live in the same crappy neighborhood they do while they have a nicer car. First, i really dont have much money after tax, max+ retirement, student loans, etc…but its not as if you can reasonable without looking like a db explain that your loan payments are mansion sized, etc….
Im perfectly fine living modestly now and getting affairs in order, and living like someone who planned well for their future in the near term. Every year that goes by I sleep a little better at night as I approach zero net worth.
You sound like you haven’t been out of school that long.
I’ve been out 14 years and when nearly all of your friends have nicer homes and cars and when people that make a lot less than you do live in nicer homes and drive nicer cars you have to have a ROCK solid personality to not let it get to you a little.
People only judge your wealth by your home and car… that’s about it. It’s pretty tough to defend your lifestyle by saying.. yeah, my main goal is early retirement so i could definitely afford a BMW, I just really don’t want one… heck, I could even pay cash for one right now.
90+% of people just flat don’t get that… if you could afford a nicer home or car, they assume you would acquire that… sooner rather than later.
You’ll feel that pressure someday unless you have a partner with absolutely ZERO sense of vanity.
z – great points. I’ve been out of med. school for almost 30 years. I’m in primary care – have never topped $175k/yr. I have never, since day one, been caught up in the image or appearance that many of my colleagues have. I also think I’m happier. 25 yr marriage, 4 kids (college savings full up), same house for 20 years, 2 cars – 8 & 15 years old. Had I been making $300K, I would already be retired. As it is, I’m shooting for out at age 59. Status is overrated IMHO.
Could be where you live too. Not one of the 16 docs on the floor has an auto without a cracked windshield and scratches on it. Not a big deal to anyone.
You live in Anchorage. There are no autos without cracked windshields in the entire town.
Being a plastic surgeon in SoCal I get that, but again, I just dont care I guess Im different. I especially dont want other people thinking or wondering about my wealth, im part of that stealth wealth movement as opposed to all flash no cash. I know of plenty of middle aged docs that live paycheck to paycheck but look like theyre ballers, yet call repeatedly for sub 1k call checks if late 3 days. I could go months missing a paycheck. There are very few people whose opinions I care about or allow to affect me materially and those usually would be of a character/personal issue.
I’d much rather live modestly for a bit, btw I dont think this excludes a lexus/bmw as those kinds of arguments are ridiculous as theyre nominally tiny expenses and percentage wise should be rounding error (of course be able to afford it) I dont think that keeps you from retiring. If that keeps you from your goals your problems are huge. I dont want to have to work if I dont want to and I want my fancy beach house sooner than later. I want to travel often (mostly paid for by rewards cards). I dont think those neighbors will bug me at all and I still wont care what they think.
Some great posts here. ‘all flash, no cash’ that’s the new ‘big hat, no cattle’ is it. Was just telling some ‘mature’ colleagues that a particular student was a ‘gunner’ not a ‘keener’.
It takes a certain type of MD to keep their head down and keep driving their 6-year-old Honda in the face of pressure from peers (and others) to upgrade to the Bimmer. I bit my tongue yesterday talking to one of the office managers who was complaining about the $700 service charge for her Audi. Actually, check that, she wasn’t even really complaining, it was just a mention as if a fact of life. I would have been apoplectic!
Great work WCI, we all do what we can do and you are doing far, far more than most! I’m writing this while taking a break from yard work. Mid-70s and sunny. Listening to a library audiobook of Four Pillars by my other favourite MD investing advocate. You’re in good company. Keep plugging away!
zach – keep up the good work. sounds like you are doing the right things becoming a young attending. as crazy as its sounds, my wife and i were thrilled to get to net worth zero. i’m still on that track just a few years ahead of you, next step is getting the debt $$$ to zero as well.
the financial security – and freedom – you are working towards is priceless.
I hope so and great job getting towards yours.
While 200k isn’t THAT high in income. It’s still astonishing to see people unable to fund retirement/investing.
The median US income is about 50k, so I can see how others will shake their heads at MDs who make 4 times that. Of course tax will be a big hit. At 200k, fed rate will be roughly 50k, so that leaves about 150k of take home pay (minus state/local taxes). But that is still an incredible amount of money. One can easily live on 50k and then be able to save/invest 100k a year!
Seriously, I talk to clueless doctors every day who don’t know the difference between a checking account and the company 401k. Your cynicism has grown as you’ve gotten sheltered inside the blog. It is a bad world out there. But thank you for keeping on in the good fight.
I fail to see the humor of the handicap-tagged Subaru with a snowboard. I have several one-legged friends who play in powder and others who are wheelchair-bound but are pulled down on a rope tow.
Good point. Or maybe the handicapped person isn’t the one using the car right now. At any rate, I got a chuckle out of the juxtaposition.
I think you are more like Charlie Sheen, and you will start Winning!
Maybe you could get Ashton Kutcher to be your new spokesperson and we could drive some serious traffic to the website 😉
Great post. I was a little surprised at first, but after thinking about it, 2% is probably a pretty remarkable number. I have been able to convince at least 1/3 of my group to check out the website and a few other interested parties. Most people either think they already know the right path or are afraid to act as if they don’t know what to do concerning finances. Even with great information available, old habits are still hard to break. A few individuals have checked out the website and read your book, however still spend a significant amount of money while having large amounts of debt. Multiple car leases, new cars with long-term loans, extra ‘fun’ vehicles and ‘nights out’ costing in the $1-400s range are pretty common. It always comes down to personal choices and different priorities.
My wife and I finished training with a significant debt burden and we made a plan within a few months of finding your website. We have made a lot of progress and believe we are on the right path. I am not as frugal as you Jim, but you have helped us make some important decisions at a critical time in our life/career. We really appreciate all the information and all of your effort. On the bright side, I guess you’ve got a lot of growth potential left on this subject in the medical community.
That growth potential for this business is a significant upside, isn’t it! I can do more good and make more money!
Yes, this is the way I’d interpret your meeting, the fact that information that is readily available for either free or next to no money (the price of a couple books is negligible) and is still not known means the business is ripe for harvesting.
Sadly, like I mentioned before I think it’s something that a lot of people really don’t want, and even if they were exposed to it, the burden for getting their financial stuff right is more difficult than doing nothing.
The commissioned brokers should be celebrating a post like this.. it means in an era where their business should be dying or dead that the reality is they are thriving and there is really no end in sight to their ability to continue selling stuff to docs and others that are not the best product for their needs.
I think what we need in personal finance is the equivalent of the ads that the anti-smoking people do.. they show people who have gotten cancer and who look and feel horrible. Or the anti-meth ads show a person before meth and then 10 years into the habit.
We need like confessions from people who didn’t get any personal finance religion and now are living a relatively crappy retirement in near poverty…
(retired poor person): I made a lot of money over the years doctoring, but then I reached 65.. my plan was to work until 70 because I’d done a poor job saving for retirement… but then my back gave out and I couldn’t work anymore.
Now instead of having a ‘money magazine’ quality retirement that I’d dreamed about where we traveled, enjoyed fine meals, and rode around in my Cadillac now I’m suffering through what most people would call a Craptirement. With very little savings, no investing skills, and only social security, my retirement consists of a 10 year old Hyundai, Jeopardy, Applebees for a night out, and travel only consists of short vacations to small nearby towns where we stay in Motel 6’s and visit stupid museums.
Read WCI friends, and retire in ‘money magaine’ style! Don’t let your golden years suck! Save now for a better tomorrow!
The problem is nobody wants to be the “retired poor person.” Those folks don’t hang out in places like this, and certainly don’t contribute guest posts.
completely agree
Its in Wall Streets best interest to dumb down the public convincing them investing is outside their realm of intelligence
Imagine there is 24 TRILLION in ret plans and the BILLIONS wasted in fees lining the pockets of brokers and other salesmen, like 401 administrators