How rare are financially savvy physicians?

[Complete_newbie]

PEMDoc wrote:

I surveyed 400+ residents/fellows at 2 large universities on their financial knowledge and preparedness for a study.

If I can ever get the study published I can provide some insight to the question.  We’re in a revise/resubmit status so hopefully this gets published soon (working on revisions now with plan to resubmit in 1-2 weeks).  WCI was a contributor (in the acknowledgments) for the study, so if/when it’s published he may mention it in the blog (hopefully).

Summary of what we found: poor knowledge, high debt, ill prepared.

I should note WCI has not seen the results; he contributed to the methods when I came up with the study

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Would be very interested. Which journal is this going to come out in?

[RogueDadMD]

Complete_newbie wrote:

PEMDoc wrote:

I surveyed 400+ residents/fellows at 2 large universities on their financial knowledge and preparedness for a study.

If I can ever get the study published I can provide some insight to the question.  We’re in a revise/resubmit status so hopefully this gets published soon (working on revisions now with plan to resubmit in 1-2 weeks).  WCI was a contributor (in the acknowledgments) for the study, so if/when it’s published he may mention it in the blog (hopefully).

Summary of what we found: poor knowledge, high debt, ill prepared.

I should note WCI has not seen the results; he contributed to the methods when I came up with the study

Click to expand…

Would be very interested. Which journal is this going to come out in?

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It's not officially accepted yet so would prefer not to say.  This particular journal is open access so anyone will be able to read it if/when accepted.  Whenever it's published I'll be sure to let people know via the forum, and to try to get WCI to give it a plug.  

[The White Coat Investor]

PEMDoc wrote:

I surveyed 400+ residents/fellows at 2 large universities on their financial knowledge and preparedness for a study.

If I can ever get the study published I can provide some insight to the question.  We’re in a revise/resubmit status so hopefully this gets published soon (working on revisions now with plan to resubmit in 1-2 weeks).  WCI was a contributor (in the acknowledgments) for the study, so if/when it’s published he may mention it in the blog (hopefully).

Summary of what we found: poor knowledge, high debt, ill prepared.

I should note WCI has not seen the results; he contributed to the methods when I came up with the study

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And I can't wait for the results and of course I'll do far more than just mention it.

[pulmdoc]

My definition of financially savvy that I used to answer is quite a low bar. Not knowing that 401k contributions are tax deductible, not knowing that high income docs can do backdoor Roth contributions, investing 100% of savings into a VUL policy without contributing to 401k, etc etc does not a financially savvy doctor make. Obviously I have no idea what people's savings rates or net worth are.

[Hatton]

I agree with Kamban in that I am much more forthcoming  about financial matters on this forum than with people I know in real life.  Some people realized that I must have some money since I quit ob at 56.  I have one good friend who is another ob/gyn that I talk to.  I find most docs spend too much, under save, and like gold.  I generally assume that if someone is talking or bragging about their salary then they likely have a low net worth.  Thinking in terms of net worth is an important concept and it does not matter if you achieve it via real estate, brute force savings, or stock investing.

[PhysicianOnFIRE]

How rare are financially savvy physicians?

Ten years ago, probably as rare as a filet mignon that's cold and purple inside.

Today, I'd say medium rare, like a prime, thick cut sirloin with a pinkish red center.

No, I have not had breakfast yet, but steak and eggs sounds mighty good right about now.  8-)

The amount of information readily available to us has grown exponentially over the last decade, thanks in no small part to this site and other financial sites like Bogleheads and others. When I started residency 15 years ago, some good books existed, but the web did not have even a small fraction of the information available to us now. Helping young physicians find it and understand why it's important to make the time to read it will always be a challenge.

[canadianoutlaw]

PhysicianOnFIRE wrote:

The amount of information readily available to us has grown exponentially over the last decade, thanks in no small part to this site and other financial sites like Bogleheads and others. When I started residency 15 years ago, some good books existed, but the web did not have even a small fraction of the information available to us now.

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completely agree. not to state the obvious, but the internet, enabling the easy exchange of ideas and knowledge, has played a huge role in the growth of passive management and decline of active management. its leveled the playing field.

[Hatton]

I used to spend a lot of Saturday's perusing bookstores for good readable personal finance books.  Now this info is free and online. Amazing change really.  Also it used to be hard to really manage your own money.  Now with apps it is easy to do.  No more yellow legal paper and financial calculators.  I also love the community that WCI has created to allow those of us who are interested to talk to one another.

[Lithium]

PhysicianOnFIRE wrote:

The amount of information readily available to us has grown exponentially over the last decade, thanks in no small part to this site and other financial sites like Bogleheads and others. When I started residency 15 years ago, some good books existed, but the web did not have even a small fraction of the information available to us now. Helping young physicians find it and understand why it’s important to make the time to read it will always be a challenge.

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I can only imagine how uninformed and misguided an investor I'd be if I lived a generation ago, before the age of the internet.  Before I found this total godsend of a website (I think through the Student Doctor forums), I knew I wanted to invest, but didn't have a clue how, so I searched for four-star books on Amazon and bought Peter Lynch.  Everything in that seemed so rudderless and haphazard that it just scared me straight into TDF's (which was a wise choice at the time, though I felt like I was settling).  I also probably would have listened to people like my Dad, who was telling me to sell everything after Obama was reelected so that I wouldn't lose my shirt like he did in 2008, and continued to use a family friend as a high-fee financial advisor (which my mom and sister still do, much to my chagrin).

Fortunately with the web one can sort out high-quality reputable publications more efficiently than our parents could at the library.

[Zaphod]

People really underplay how much has changed even in the last ten years. I also dont know that I would have been able to follow through on my quest for financial knowledge so thoroughly and consistently if it wasnt as easy as a part of my morning coffee enjoyment. I might have quit early after reading the wrong book and thinking penny stocks were the key or something.

That when combined with how easy it is to access and manage your portfolio and historical returns, etc.. (also a double edge sword) is a game changer. I had recently read where in the early/mid 20th century inflation adjusted cost to invest in whole lot (only way you could) shares was around 50k with 3k commission. Fast forward to today where you can buy a single share and many platforms have zero commission trades. Its a world of difference, mostly good, some bad.

[MrsIMDoc]

I would say rare.  People continuously ask why my husband and I have not bought a house.  We continue to rent until we know we want to live in our town for a long period of time.  Meanwhile we also are pouring money into my student loans at $8000 - $10000/month.

I think one of the biggest  issues I see is many physicians are so desperate "not to throw money away" by renting that they feel they must buy a house.  I know a couple that moved to a small town (population 6000), purchased a house, hated the job, moved to another town and are completely unable to see the house in the first town.   They told me that they plan to just "own the house forever" because they cannot sell it.  If the market was that bad, why did they not wait to purchase a home?

I am also a member of the physician mom group on Facebook with over 60,000 physician moms.   Many of them are planning on paying on their student loans for 20-30 years and see their debt as something that they will always have so might as well make the lowest payment.  Usually when there is a financial post one or two people will mention WCI but that is often in a sea of 30 other posts encouraging paying as little as possible on student loans, etc.

[DMFA]

Ugh, PMG finance talks...I see so much awful advice on there that my wife runs by me. Well, that, and the "should I fly my nanny first-class to Tahiti or have her ride coach" questions .

[Hatton]

I recently joined the group.  Knowledge base is low so lots of work to do!

[Dicast]

My wife is a member of PMG but I guess she knows enough to not ask about the financial discussions that happen there.  More often she asks me how long until we have the student loans paid off, can we pay them off any faster...

 

I think most financially savvy physicians are stealth and as a whole we represent the general population with the exception that we are targeted more.

How rare are financially savvy non-physicians?

[jfoxcpacfp]

Dicast wrote:

How rare are financially savvy non-physicians?

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In my experience, not really any different but the high income professional tends to do a lot more damage than the average middle class American. People who don't earn high- or mid- 6-figures salaries tend to be much more aware of their limitations.

The best comparison to high-flying physicians are successful small business owners who can't keep their hands out of the cookie jar. We worked with such a client a few years ago and (fortunately) had documented conversations over several years recommending he quit buying so many toys and start saving more. I was really quite hard on him, but nothing worked. Unfortunately, he refused to change and dropped dead of a heart attack in his mid-30's when they were on a trip in the fancy camper, under-insured, leaving a wife and 2 young kids. She had to sell everything and find work. The business was worth only the value of used equipment because the knowledge died with him. His young widow had so much resentment. It was just awful,