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Why doctors need to learn about money

Dr. Tom works hard.  Between his office practice and hospital work, he always feels busy and whatever time is leftover is quickly absorbed by family responsibilities.  Every day he drags himself out of bed, defibrillates his brain with coffee, and puts his shoulder to the grindstone once again.  Tom likes his work and loves his family.  He knows he’s fortunate to have a stable job that pays well.  But he’s also tired, and as the years go by, he can’t escape the feeling that the busyness is masking a deeper problem.

Even though he makes good money and has nice stuff, Tom doesn’t feel wealthy.  He’s saving on a regular basis and his financial advisor seems content with his financial progress, but Tom feels his workload is unsustainable and he’s a long way from retirement – too long.  He hears younger colleagues talking about achieving financial independence and working part-time “for as long as it’s still fun”.  Tom knows – knows it in his bones – that he needs a break, but the idea of taking an unpaid vacation feels irresponsible.  How can he be making such good money and still feel financially out of control?

A slowly burning problem

Tom’s situation is so common, you might not recognize it as a crisis.  The fact that he is still functioning as a physician and husband/father doesn’t change the fact that he feels trapped by his work and out of control of his financial future.  He doesn’t know why his investments aren’t growing like he thought they would, is afraid to decrease his spending because -well – life is hard enough, and doesn’t feel like he has the time or energy to learn about personal finance himself.  Tom is barely getting by as it is and fears he’s on the path toward burnout.

He’s right, but it doesn’t have to be that way.

Financial stress is a cause of burnout

A 2018 Medscape survey of 15 000 physicians found that, after job stress, finances were the leading cause of burnout among doctors.

Financial stress isn’t just associated with burnout, it’s also associated with anxiety, depression, worse physical health, and higher rates of divorce.  Being in a respected profession and making a good income doesn’t protect us from financial stress and the consequences of it.

Financial illiteracy has consequences

Doctors are not educated about personal finance.  Combine a demanding career in medicine that leaves little time for anything else and a high income, it’s no wonder physicians are targeted by those who are more financially literate and, unfortunately, sometimes less ethical.  Even if we manage to avoid the outright scams (15% return per year – guaranteed!), many doctors like Tom, watch their nest eggs generate anemic returns even as they pay several percent every year in fees to their advisors and the funds that they have been convinced to buy.   A 2% fee can seem small, but after 25 years, it can easily eat up half of one’s investment returns.

Understand money.  Unlock life.

If physicians lose control of their money we lose control of our lives.  On average, we make 6 to 8 financial decisions every day.  Money permeates every aspect of our lives from where we live to what we eat, and how we spend our time.  If we don’t understand money, these decisions will be made half-blind.  We can hope that our high income will compensate for our financial myopia but, more often than not, more income just leads to more spending, and the results are the same: financial stress and burnout.

The key to unlocking this problem is simple: understand money.  After several years of teaching doctors about money, I can tell you:  it’s never too late and it’s not too difficult.

A little education goes a long way

All of these problems – feeling like a slave to the next paycheck, at the mercy of the financial services industry, over-worked with no way out – these burdens that we carry with us day after day can disappear with just a little knowledge.  I get it, money is intimidating for a lot of people, but in my experience, the problem is not complexity, it’s misunderstanding fundamental concepts.  The essential rules of the money game are far simpler than those of medicine, and well within the ability of every doctor to understand in a relatively short amount of time.

The highest purpose of money is not to buy stuff, but rather to buy time.  Most of our purchases don’t provide lasting happiness anyway, they just clutter up our big houses and entice us to work more so that we can buy the next thing.  What makes us happy is time with friends and family, time to eat well and exercise,  and time to work on things that we value whether that’s volunteer work, hobbies, or a side-hustle.

You can take control of your money

Don’t believe anyone who tells you that taking control of your financial future is beyond your abilities.  It is not.  Chances are whoever is sending you that message stands to gain by keeping your financial literacy low.  The best financial plans are simple, evidence-based, and easy to understand.  You don’t have to be an expert in everything; with the right foundation, you will know when more research and/or employing experts might be in your best interests.

No matter what stage of your career you’re in, learning about money now is a smart move.  It might even save your career in medicine.  The moneySmartMD course is one option, but you could also read a book (here are a few favourites), listen to a podcast, or join the Physician Financial Independence Facebook group.  It’s never too late. 

If you’re early in your career, you will reap the greatest benefit from starting out on the right foot – more wealth in less time.  If you’re mid-career, imagine how good it will feel to have balance in your life and to know that you’re on track to achieve your financial goals.  And, if you’re close to retirement, it’s incredibly empowering – and financially rewarding – to take control of your financial life so that your years after medicine will be secure and satisfying.

A financially secure doctor is a better doctor

My mission is to help more doctors escape the burden of financial stress and take control of their financial lives.  I want to see more of my colleagues excited to get up in the morning.  Maybe they’re headed to the clinic where they smile a little more because they’re no longer stressed about money.  Maybe they’re taking a few days off to do something fun because they know their financial situation allows it.  Maybe they’re working in the morning and golfing or hiking in the afternoon because a few months ago they were able to decrease their hours.  Do any of these appeal to you?

Financial stress is both preventable and treatable.  If you are looking for a friendly, unbiased, and doctor-focused way to improve your financial literacy, consider signing up for the moneySmartMD course.

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