The argument for paying fees

[djohnflatfeecfp]

Interesting guest post on Michael Kitces' site today analyzing the reports that focus on the benefits of using a financial advisor.  https://www.kitces.com/blog/trust-research-advisor-planner-use-benefits-value-vanguard-alpha-morningstar-gamma/

 

 

[jfoxcpacfp]

FIREshrink wrote:

Crixus wrote:

Nobody but yourself is going to be your fiduciary in the strictest sense. You have to edjumacate yourself and be your own asset manager. If you have 1M in liquid net worth then you are an accredited investor and the sharks will be circling. They’ll be happy to take your money.

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wow, i feel like a real loser because i have never, even once, been circled.

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Don't feel bad. Maybe you're just a nobody.

[FIREshrink]

Crixus wrote:

Nobody but yourself is going to be your fiduciary in the strictest sense. You have to edjumacate yourself and be your own asset manager. If you have 1M in liquid net worth then you are an accredited investor and the sharks will be circling. They’ll be happy to take your money.

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wow, i feel like a real loser because i have never, even once, been circled.

[Hatton]

No financial lectures at all in my med school or residency.  A much older doctor gave me one useful pearl.  He was always on the phone talking to his broker in between cases (trading commodities) and I asked him how he learned to do that.  He said he took a brokerage sponsored course.  He told me no one will ever care as much about your money as you do.  The only wise thing the guy ever said.

[Zaphod]

Our finance talks were in the hallway and they were just, "dont worry".

[The White Coat Investor]

djohnflatfeecfp wrote:

This is great as I am learning how much financial education physicians receive (or don’t) while in training.  I was talking to one my physician clients the other day and was shocked when he said he had a total of 2 hours of finance education in medical school, and it was focused more on running his practice than personal stuff.  Sounds like his case was not the outlier.

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He got two hours more than I got.

[ajm184]

q-school wrote:

maybe i read too much into the word hound.  i’m not their mother, and i don’t feel like hounding is my responsibility.  ymmv obviously.

as for coding, that seems to me at least related to the practice of medicine and more naturally a topic for discussion during training.  i still subscribe to the overall philosophy that teaching occurs in steps, and so coding for me is less important than clinical teaching.

i surmise msbonnie deals with her trainees more frequently and regularly and for a longer duration than i do.

if i saw them regularly i probably would teach them about coding eventually.  but i feel that personal finances are none of my business.   i would disagree slightly with msbonnie and say that if someone maxed out 403b for their whole career, they would likely be fine.  they certainly wouldn’t retire early if they wanted a luxurious retirement, and the retirement wouldn’t be exactly what they hoped perhaps, but there would be enough in there between ss and retirement funds for a reasonable retirement.  probably better than 90% of america.  maybe higher.

half the residents here drive range rovers and bmw and tesla.  i’m assuming they have family money and probably have advisors who can give better information than i could.  another fraction is from international schools and have no debt and are super young.  they will be fine if they choose to save any reasonable amount.

half the attendings have bentleys and porsche and couple ferraris.  so the residents are in good company.

i remember my first attending job when someone stuck a note on my windshield of my beater that i was parked in the doctors lot.   good times.

 

 

 

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The comment about everyone having BMW's may or may not be true, though not all pay their car notes.  In late 2015, I purchased a repossessed 2012 328I BMW with 18K miles on it.  It was repossessed from a Physician in Texas.  I had searched high and low for several months for a BMW with one particular feature; a manual transmission (not that x-drive junk).

[djohnflatfeecfp]

This is great as I am learning how much financial education physicians receive (or don't) while in training.  I was talking to one my physician clients the other day and was shocked when he said he had a total of 2 hours of finance education in medical school, and it was focused more on running his practice than personal stuff.  Sounds like his case was not the outlier.

[Hatton]

The White Coat Investor wrote:

Of a partnership of >150 docs, the last time I looked only about 6 were maxing out a $30K cash balance plan. I’m confident that I am personally responsible for doubling that number over about 5 years. Success? Sure. But indicative of the size of the problem.

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Clearly the docs who post here are financially educated and likely to have enough retire on.  More likely to have estate tax issues and Rmd concerns.

[q-school]

The White Coat Investor wrote:

Miss Bonnie MD wrote:

The White Coat Investor wrote:

Sometimes I wonder if you talk to real people in real life with real financial issues. Seriously, go hang out in the doctor’s lounge, try to talk a few of them into managing their own finances well for a few minutes. Then check back with them in a year and see where they are at. Let us know your percentage of successfully getting someone to manage their own portfolio in any sort of reasonable manner. In my experience doing this with dozens, perhaps hundreds of people, I think I run about 20%.

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My experiences exactly. I teach my residents (and hound them semi regularly…) and only a few are doing anything about it. I am the only attg in my dept maxing out the 403b and the only one that participates in the 457b and backdoor Roth IRA…

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Of a partnership of >150 docs, the last time I looked only about 6 were maxing out a $30K cash balance plan. I’m confident that I am personally responsible for doubling that number over about 5 years. Success? Sure. But indicative of the size of the problem.

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do you think the nonparticipating docs don't understand the value of the plan, it is not currently a priority (but maybe someday), or they think they have better investment or spending options?  or other?

 

 

[The White Coat Investor]

Miss Bonnie MD wrote:

The White Coat Investor wrote:

Sometimes I wonder if you talk to real people in real life with real financial issues. Seriously, go hang out in the doctor’s lounge, try to talk a few of them into managing their own finances well for a few minutes. Then check back with them in a year and see where they are at. Let us know your percentage of successfully getting someone to manage their own portfolio in any sort of reasonable manner. In my experience doing this with dozens, perhaps hundreds of people, I think I run about 20%.

Click to expand…

My experiences exactly. I teach my residents (and hound them semi regularly…) and only a few are doing anything about it. I am the only attg in my dept maxing out the 403b and the only one that participates in the 457b and backdoor Roth IRA…

Click to expand...

Of a partnership of >150 docs, the last time I looked only about 6 were maxing out a $30K cash balance plan. I'm confident that I am personally responsible for doubling that number over about 5 years. Success? Sure. But indicative of the size of the problem.

[CM]

Miss Bonnie MD wrote:

My experiences exactly. I teach my residents (and hound them semi regularly…) and only a few are doing anything about it. I am the only attg in my dept maxing out the 403b and the only one that participates in the 457b and backdoor Roth IRA…

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They may not pay close attention to advice now, but may still benefit.

I had no financial education as a resident, but I'm not sure that it would have mattered. I had other priorities then.

During my first year as an attending I attacked my student loans and devoured investing books, starting with three by Peter Lynch. I would have remembered at least some of my financial education as a resident if only someone had provided any. That would have helped.

[Miss Bonnie MD]

I work w them everyday, have 1-2 in my clinics and on rounds.

[q-school]

maybe i read too much into the word hound.  i'm not their mother, and i don't feel like hounding is my responsibility.  ymmv obviously.

as for coding, that seems to me at least related to the practice of medicine and more naturally a topic for discussion during training.  i still subscribe to the overall philosophy that teaching occurs in steps, and so coding for me is less important than clinical teaching.

i surmise msbonnie deals with her trainees more frequently and regularly and for a longer duration than i do.

if i saw them regularly i probably would teach them about coding eventually.  but i feel that personal finances are none of my business.   i would disagree slightly with msbonnie and say that if someone maxed out 403b for their whole career, they would likely be fine.  they certainly wouldn't retire early if they wanted a luxurious retirement, and the retirement wouldn't be exactly what they hoped perhaps, but there would be enough in there between ss and retirement funds for a reasonable retirement.  probably better than 90% of america.  maybe higher.

half the residents here drive range rovers and bmw and tesla.  i'm assuming they have family money and probably have advisors who can give better information than i could.  another fraction is from international schools and have no debt and are super young.  they will be fine if they choose to save any reasonable amount.

half the attendings have bentleys and porsche and couple ferraris.  so the residents are in good company.  

i remember my first attending job when someone stuck a note on my windshield of my beater that i was parked in the doctors lot.   good times.

 

 

 

[Miss Bonnie MD]

Rex wrote:

Residents don’t make enough but you shouldn’t discount what you are doing.  I trained at U of M.  The previous PD there used to teach about coding, finances, insurance (I’m sure you know who this is).  People sort of snickered at the lectures as though they weren’t that useful and that’s putting it kindly.  I cant tell you how many times other grads have told me later on that they have gone back to those lectures and how important they were.  Many made some initial mistakes.  I personally got stuck in a disasterous WL situation.  Some day previous residents will also thank you.  Ive also trained residents and I can tell you that any non medically related mentoring takes more time to appreciate.  Medically they can use immediately and they under value the rest.

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Oh I don't expect miracles from one lecture.

A few residents now have Roth IRAs ;-) and many of my female residents got some of the last unisex DI policies from principal earlier this year. Two of my residents are on track for FIRE for sure (I am seriously in awe of these 2 - but they were like this before me but it's fun to chat w them about their plans)

No idea who that PD is...