Any discussion of the word “privilege” these days fires up both extremes of the political spectrum so much that rational conversation rapidly becomes impossible. That's fine though since there is very little that you or I can do individually about it in our own personal financial lives. If you are lucky enough to benefit from a ton of privilege, well, that's great. If you aren't, well, Santa Claus isn't coming by to fix the situation any time soon; you'll need to make lemonade from the lemons life has dealt you. We can all only play the hand we are dealt. If you think life isn't fair (and I agree with you) then I suggest you advocate for a more fair world at the ballot box and in your interactions with others. But I also suggest you live your financial life without an expectation that the cavalry is coming to rescue you from the unfairness you have experienced.
Privilege is a Spectrum
The truth is that privilege is not an either/or thing. We are not either privileged or unprivileged. The word “underprivileged” is problematic because it never seems to define what an appropriate amount of privilege is. There is a spectrum of privilege. We are all overprivileged compared to somebody. And we are all underprivileged compared to someone else.
I've lived an incredibly blessed life, with excellent health and the most privileged skin color, gender, sexual attraction, and birth country. But my level of privilege pales in comparison to that of Donald Trump, Jr. Likewise, comparing my situation to that of a young man I saw hustling to sell balloons and cotton candy in front of a church in rural Baja California is similar to comparing me to Donald Jr.
In eight years of working with docs to improve their financial lives, I've seen people that are incredibly fortunate and people that are incredibly unfortunate. But the vast majority of people lie somewhere in the middle. They have some things going for them and some things working against them. My advice is to take your strengths and use them to crush your weaknesses. It's a little bit like getting into medical school, right?
When I applied to medical school at the University of Utah, I had a few things working against me. First, I was applying as a non-resident. Since 85% of the seats in the class were reserved for those from Utah and Idaho, that was a bit of an uphill battle. I also couldn't claim any sort of underrepresented minority status, had relatively limited shadowing experience, my research chops were weak at best, and I hadn't started a third world orphanage or even been outside of North America. But what did I have? Well, I managed a solid science GPA and excellent MCAT scores while playing college hockey. I had lots of leadership and community service experience. So when I wrote my essay and went to my interviews, I emphasized the areas where I was strong and minimized the areas where I was weak. Most of you did something similar.
The same can be done in our financial lives. Let's look at a few examples.
Strengths and Weaknesses
Consider a doc with a $400K student loan burden, a stay at home partner, and two small kids. From a financial perspective, those are all weaknesses. But maybe the doc is an anesthesiologist, has a super frugal partner, and just received a $100K inheritance. Those are strengths. That doc can wipe out $100K of that $350K loan today, then dedicate half of her net income to the student loans for the next year and a half and wipe them out.
How about a family practice doc that didn't finish residency until 42, has $20K in credit card debt, a car loan on an Audi, and $300K in student loans? Sounds bad, right? But what if he's married to a 45-year-old debt-free plastic surgeon. Weakness, meet strength.
Consider a physician married to a software engineer in the Bay Area. Weaknesses include a high cost of living and high taxes and probably some student loans. But maybe that spouse has some stock options coming due, helped keep the student loan burden down by working, and started his 401(k) a decade ago.
Or how about a 45-year-old emergency doc with six kids who just realized he hasn't saved anything for college or retirement but happens to live in Texas? Cheap colleges, no income tax, and a low cost of living can be employed to rapidly catch up.
Or how about a military emergency doc making only $120K a year and married to a stay at home mother trained as a teacher with 3 kids under five. How could that doc possibly become a millionaire 7 years out of residency? (If you don't know, I've got a book to sell you.) Luckily, they possessed the strengths of frugal habits, a low tax bill, financial literacy, no student loans, and were stationed somewhere that moonlighting was easy to do. He gets out at the first available opportunity, makes partner in a fantastic group, starts a successful blog, and the rest is history.
Insert your own situation here. You likely have some strengths. They might include the following:
List of Possible Strengths
- An early start
- A high-paying specialty
- A high-paying job within your specialty
- A job at a 501(c)3 that qualifies for PSLF
- Received good financial advice early on
- A willingness to work hard
- A nice side hustle
- Financial literacy
- An inheritance
- A working spouse
- No kids
- Cheap cost of living
- Tax-free state
- A great 401(k) at work
- Self-employed but no employees
- No need to support family members
- No student loans
- A frugal nature
You probably also have some weaknesses. Perhaps they include some of the following:
List of Weaknesses
- A late start
- A low-paying specialty
- A toxic job
- Physical disabilities
- A race/gender/sexual orientation/religion that is discriminated against
- Many kids
- High cost of living area
- High state taxes
- A lousy 401(k)
- Credit card loans
- Extended family dependents
- Massive student loan burden
- A spendthrift nature
- A spouse with a spendthrift nature
- Car loans
- A divorce, or two
- An “advisor” who took advantage of you
- A need to hire a nanny
- Didn't match
- Feeling burnt out
- Financially illiterate/lack of interest in finance
- Unable to qualify for disability or life insurance
Use Your Strengths to Overcome Weaknesses
Now take whatever strengths/advantages/privilege you may have and use them to crush your weaknesses/disadvantages/lack of privilege. The higher your student loans and the lower your income, the longer you will need to live like a resident to pay off your student loans. The higher your income and the lower your expenses, the faster you will be able to build wealth.
We all have a unique set of advantages and disadvantages in life. You are neither the most nor the least privileged person you know. Use your unique advantages to minimize the effects of your weaknesses and disadvantages. Then pay it forward.
What do you think? What do you see as your financial strengths? What do you see as your financial weaknesses? What have you done or what are you doing to overcome them? Comment below!