Doctors who are broke – 3 helpful concepts

Doctors who are poor or broke? It just doesn’t seem possible!

But I heard the same story again just recently. I presented my signature program called Reclaim the Joy of Practice as a speaker at a PM&A chiropractor‘s  conference in Brookfield, Wisconsin. The presentation was well received with doctors telling me how much they enjoyed my information, stories, and real life examples of how a doctor can become a better doctor.

Dr Tom Potisk speaking at doctor's conference

Then one doc approached me afterward and asked “Can you please meet with my friend? He has been practicing for 34 years and wants to cut back and retire but is broke.” Yikes!!!! After 34 years? How can this happen? And I know this broke doctor; he’s had a successful practice all the way through! Doctors need to learn how to manage money.

Here is a related article from on January 11, 2012:

Physicians going broke because the health care system doesn’t work

“Physicians whose private practices are barely staying afloat in the current economy look forward with dread to the changes in the federal budget which could cut Medicare physicians pay by 27.4%. Even top-rated doctors, some of whom have sacrificed a personal salary in order to pay their staff members and keep their practices open, are contemplating personal bankruptcy and/or leaving medicine.

Observing that a wave of physician bankruptcies could leave many communities “without a vital health resource,” the CNN article also briefly touches on at least one of the factors which have contributed to this state of affairs. “In oncology, doctors were allowed to profit from drug sales. So doctors would buy expensive cancer drugs at bulk prices from drug makers and then sell them at much higher prices to their patients.” One physician quoted in the article stated: “I grew up in that system. I was spending $1.5 million a month on buying treatment drugs.” Revised Medicare guidelines mean that physicians are now reimbursed for less than half the cost of those cancer drugs.”

#1) Listen, having a good income does not translate into automatic financial security, they are two completely different things. You’ve heard the expression “It’s not the size of it, it’s what you do with it that really matters.” LOL.

#2) It’s so easy to fall into the trap of overspending, living beyond your means, and not realizing that most investments, especially those that are commonly promoted, are nothing short of gambling. Most gamblers end up losers!

So what’s a person to do? Where can one place their money for a decent return and safety?

The truth is that there is no completely fail safe place. No not even under or in your mattress. LOL

But the experts say that “The stock market has consistently returned higher yields than any other investment.” Bull !!!!!!

This particular broke doctor was invested in the stock market, followed all the usual advice about asset allocation and having a diversified portfolio. For the most part, all the usual advice is all bull.

One enlightened investor I heard said that most professional investment managers are nothing short of thieves, that most will recommend only what pays them the highest commission.

#3) What solution do I offer? Invest like a kindergartner. LOL. I’m not kidding! Here is an excerpt from my book Reclaim the Joy of Practice – An Advanced Guide For Advancing Doctors:

Invest Like a Kindergartner

Financial gain is of course not the main goal and purpose of being a doctor. But, your years of good doctoring will likely reward you financially. Surprisingly, a significant number of successful doctors end up with little or no financial reward at the end of their careers. The most common reason for this is risky investing.

Understand that there is a significant difference between “investment returns” and “investor returns”. An investment return is the theoretical expectation of gain. Investor return is the actual gain, and it’s not mentioned much because it’s dismal. Most investors make their decisions based on emotion and make irrational choices as a result, dramatically lowering their return. The only emotions that should play any part in your investing is stability, security, and peace of mind. Be very careful of over exuberant investment counselors, brokers and advisers that don’t share this understanding, they can lead you astray.

I see and hear all the same financial management information in the media you do, and I stay away from most if not all of it. Claims like “the stock markets have consistently out performed all other investments” and “real estate has always gone up and always will” are traps. The one financial principle that I’ve always followed is the same one we all learned in kindergarten – Aesops fable aka The Tortoise and the Hair. The lesson of that story is this –  slow and steady wins the race. I take it a step further to – slow, steady and insured wins the race. With that principle in mind, there is no need to risk or gamble your money in any way. Sure, own a nice home, car, and even some toys, but live below your means, pay off the debts for these ASAP, and then invest the remainder of your money in a secure, insured way like US Treasury bonds or tax free municipal bonds. These are the most secure place to invest your money. Don’t be discouraged that they pay less interest than the other hyped investments you’ll hear about, it’s the security, tax free, and consistent return that makes all the difference.

You won’t hear municipal bonds recommended much because they don’t pay the brokers near as much commission as other investments. Start buying a few tax free municipal bonds each year throughout your career and you’ll enjoy a wonderful secure tax free income for your retirement. If you’re going to gamble on anything, gamble on this sure bet – taxes are going to go up, so invest tax free. Near the end of Albert Einstein’s life he was asked what was the most amazing thing he has observed in his life? “Compound interest”, he answered. Having secure, tax free, compounding interest will give you peace of mind to further focus on being a partner in your patient’s health, rendering better service, and then having more joy as a doctor.

Here’s one more secret about investing, probably even more important than what I’ve just shared with you: the best investment you can make is in yourself. This means that money spent on improving ones self, whether it be paying for a communication course, buying motivational/educational books and tapes, getting chiropractic treatment, having a custom designed nutrition program, and even hiring the best practice management coach is money well spent. The return on investment for making you and what you do better is enormous and near guaranteed. In endeavors of personal betterment, you almost can’t go wrong.

Ok docs? Got it now? Can you do that? It’s never too late to start.

Practice On,

Dr Tom Potisk

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Categories: burnout/stress, investing, money


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