There is a new book out by Christopher Burton, MD, a PM&R doc who is also expanding his career as a speaker, author, and coach. It is entitled Personal Finance for Physicians. When I found out about it, I emailed him asking for a review copy and he sent me the mobi file (it's only available on Kindle.) That is the extent of our financial relationship.
The book is extremely short and basic, for better and for worse. One of my partners confessed to me the other day that she couldn't quite get through my book (about a 4 hour read). Suffice to say she can get through this one. I took me less than a half hour, including the email I sent Dr. Burton about it with some suggestions for the next edition.
The downside of a short book, of course, is that you can't put as much information into it. For this reason, most regular readers of this blog aren't going to learn a great deal from the book. But hey, it's less than 5 bucks and will take less than an hour of your time. How many pearls do you want for that kind of an investment?
Unlike most personal finance books written by physicians for physicians, which generally advocate a more do-it-yourself approach, this book heavily advocates the use of advisors. In fact, the first chapter is “Building Your Team.” He recommends both temporary team members, like a realtor and mortgage broker, and permanent team members including an accountant, an asset protection attorney, an estate planning attorney, a tax attorney, an insurance advisor, an investment adviser, and a financial planner. He gives recommendations on how to select each of these people and what their role is.
He then has short chapters on retirement, insurance, investments, estate planning, real estate, and asset protection. He isn't as negative on cash value life insurance as I would like, but he does emphasize the importance of using index funds.
A Few Issues
Aside from a different point of view from me (much more pro-advisor and recommends individual health care stocks for physicians for instance), the book had just a few minor errors. It states that revocable trusts are useful for asset protection. Unfortunately, that's not true. They are mostly for avoiding probate. The general rule of asset protection is a creditor can't take something you've given away (like an irrevocable trust.) You haven't really given away anything in a revocable trust.
The tax chapter mistakenly lists the estate tax exemption limit at $1 Million. It is currently at $5.34M ($10.68M Married) and climbing. It also mistakenly suggests the IRS can take more money depending on where you live. While it is true that estate tax burdens vary by state, it's the state tax commissions that care, the IRS doesn't.
The book, like many others, mistakenly recommends a SEP-IRA over an individual 401(k) (actually doesn't mention an individual 401(k)). As regular readers know, the 401(k) not only allows you to max it out on lower income, but also allows for a Backdoor Roth IRA. It is slightly more complicated than a SEP, but worth it for most doctors.
The book also states trusts are taxed at your regular tax rate. They actually have their own set of tax brackets. I suspect these minor issues will be fixed in the next update. That's one nice thing about e-publishing. You can fix little things like these very quickly.
Overall, the book is a quick and easy primer to some of the personal finance issues physicians face. I think it is too basic for most who will find and read this review, but for the vast majority of doctors who will rely heavily on advisors and who don't like reading personal finance or investing books, this book just might be perfect. You can buy your copy today on Amazon.
Have you read the book? What did you think? Comment below!