April 2016

April 29th, 2016

It’s the last of seven strategies in Pay Yourself First: A Financial Guide for Doctors Entering Practice:

“Choose your friends wisely. Remember, the concept of social comparison—the more uniform and expensive the lifestyles of your friends, the higher the pressure to comply with the implicit status expectations of your peer group.”

Really? How presumptuous.

So, it’s also interesting that one of the questions asked by the moderator during New England Journal of Medicine’s recent online discussion about managing medical education debt was:

“Why is medicine so averse to discussions about lifestyle?”

Panel expert James Dahle, MD, FACEP replies this way:

“I've spent a lot of time thinking about this. It's not just the discussion of lifestyle, but also the discussion of money. Just the terms applied to it are revealing- "Filthy lucre" for instance. Time is really money and money is time, so lifestyle and money are really the same thing.

From the beginning of our training, as lowly premeds, we are taught that medicine is a calling and a profession. You should want to do it even if you weren't paid at all. We are taught (and sometimes mandated by law) to take care of everyone, even if they will not pay us. That's all true. Unfortunately, medicine is also a business, but the guilt we all feel to treat it that way due to our teaching causes us to make poor business decisions and to be taken advantage of by insurance companies, hospitals, and even other physicians. That lack of knowledge of business, finance, and investing also carries over into our personal financial lives.”

It seems that the natural aversion that most of us have when it comes to discussing money gets extra amplification where doctors are concerned. The financial aspirations of a physician get hit from both sides: by the ethics of their profession, which tell them that being rich is not something to be proud of (and perhaps causes them to avoid educating themselves about money), and by the expectations of everyone else in society, who expect them to display that they are the wealthiest among us (which, along with anyone’s natural desire for social status, may cause them to overspend).

What does a lack of money smarts and / or lots of spending lead to? Problems that will keep you up at night. Problems that become pretty stark when you’re in your mid-50’s and you realize you are way behind in your retirement accumulation.

One word: stress.

This brings me to a great article that Dahle wrote last year, in which he makes the direct connection between money woes and physician burnout.

“In the ten years since I graduated from residency, I have noticed an interesting correlation between burnout and finances among my physician colleagues: The more secure we are financially, the more we enjoy our work.”

While most studies about physician burnout cite work-related causes, ask yourself: doesn’t it make sense that an added layer of financial worry would contribute to physician burnout? And as Dahle correctly points out in the same article, the opposite must also be true:

“When we are out of debt, adequately insured, and on track to meet our savings and investing goals, such as college and retirement, we are free to practice in the way we see fit. That might mean fewer call nights or fewer shifts. It might mean a slower pace in clinic. It might mean hiring more help such as a PA, a scribe, or an RN instead of an MA. It might mean being able to turn down the hospital trying to buy our practice so we can practice the way you want without being beholden to “the man.” It certainly makes it easier to always do the right thing for our patients. Financial security can actually make better doctors.”

What a wonderful thing to have confidence about your financials.

So ask yourself another question: would you rather appear to be financially independent or actually be financially independent? They are pretty much mutually exclusive choices.

This is the reason that a good financial advisor should coach you about your lifestyle choices. They know that even the best financial plans can be decimated by lifestyle. They know that their best clients are partners in financial growth. You must resist the heavy signals the mass media spews about the trappings of wealth.

So what was that about friends? One word: influence.

Ever been out with a friend who knocked you out of your financial comfort zone? Made you paste a smile on your face while your wallet cringed?

As a physician, you will almost certainly be among the top 5% of all wage earners. And of course, many, if not most of your friends will be physicians. But it’s best to have a financially eclectic array of friends to balance things out. Whether they be physicians or friends in other professions, make sure that at least some of them have made the decision to be financially independent rather than just seeming to be well-off.