Month: March 2017

Welcome ScrubNotes Visitors!

Hello everyone! I am grateful for ScrubNotes to feature one of our articles today discussing the prestige of medical schools, and whether they are worth the cost. As an overview, Smart Money MD is a physician-oriented financial and lifestyle website to help guide us through the complicated world of delayed gratification from medical training.  Once you become an attending, do you earn enough to power through any financial considerations? Or do you still have to watch what you spend?

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Building wealth – Don’t sweat the small stuff unless you should

Back when I was a resident, I lived in a high cost of living area. About one and a half of my paychecks went towards my monthly rent.  I know this sounds crazy as a resident earning about $50,000 a year, but that was my situation.  I probably paid more than what most of my readers pay for their mortgages on an entire house! This wasn’t a nice pad either with a Sub-Zero fridge or Toto toilet either—I lived in a roach-infested studio where the amount of heat I got in the winter was controlled by the building’s superintendent.  But, the trade-off for such an expensive unit was that I felt safe living there…most of the time.

With a skewed budget like that, I did pay close attention to my budget even though I wasn’t attuned to the finer aspects of finance. Cheap cellphone providers weren’t in style yet, so I shopped around frequently if my phone company decided to jack up their rates.  Likewise, I spent a few hours every year on the phone with my Internet provider, threatening to leave their company if they wouldn’t keep my bill the same.

I sweat the small stuff.

Most doctors have some sort of compulsive behavior in their blood.  All financial bloggers DEFINITELY have compulsivity in their fabric too (Yes, if you like spending your weekends plotting out your dividends from your stock market funds, you have compulsive behavior!).  As a busy resident, the time I spent sweating the small stuff could have been probably better allocated to sleeping, studying, or even socializing.  But, I was very aware that my budget had a narrow range before I needed to break out the awesome balance transfer checks that tempted me.

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So lowering my Internet bill from $80 a month to $29.99 a month was worth negotiating for an hour or two each year with the frustrating service representatives.  So was fighting through extra crowds of customers at the cheaper ethnic supermarket.

Total savings of getting your feet stepped on at the supermarket: probably $15 a week.

The savings do add up. And for most families, the $50,000 a year resident stipend could easily feed a family of four.  Saving a few thousand dollars of post-tax dollars a year could help fuel your Roth IRA, 529, or emergency fund. That is a practical use of time and money for that budget.

Once your life gets busier and you begin to command a higher price for your services, the small stuff might actually become too small for your time.  You might not want to drive an extra two miles and wait in line for gas at Costco to save ten cents a gallon.  Do you risk your child’s well-being by using the babysitter who is $1 an hour cheaper? What about $5 cheaper? Or $10?

Pinch hard enough and it might go into your veins!

The decisions become more complicated as more variables come into play.  If you are justifying a minuscule cost savings in exchange for time already in your limited schedule, then it’s probably not worth it.  For instance, if you have to round for 4 hours on Saturday and Sunday morning, then you probably would not want to raise your blood pressure on the phone with a Comcast agent trying to lower your Internet/TV bill.

On the other hand, if you typically spend your weekends building furniture or at the local park with your kids, you could probably spare an hour a year to save $1000 on your Internet bill.  It wouldn’t really matter if you otherwise had a salary of $50,000 or $500,000. I would venture a guess that even some people I know with a $5,000,000 net worth would still be willing to argue with a phone rep to save a grand.

Some people will sweat the small stuff no matter what situation they are in.

Another consideration on savings depends on how much your job allows you to earn more for working more.  If you are an ER doctor, you could probably fill in a few extra shifts and earn a few extra thousand bucks.  You might end up deciding that it’s easier for you to just go to work to earn more rather than going out of your way to save on gas or groceries.  If you really like money and are willing to sacrifice time your time, you could do BOTH.

Whatever your threshold for pinching pennies, make sure you actually have a threshold.  At some point, you have to decide what makes you happy.  Sure, that high sugar, high calorie Starbucks latte might cost $6, but you could swing it a few times a year if it can help you get you through your clinic.

You might also like: Money Does Buy Happiness

What is your threshold for saving a buck?

(Photo courtesy of Flickr)

What should doctors do if their jobs are not a good fit?

We’ve all seen it. Some of us have experienced it.  The rest of us WILL experience it.  You take your dream job after your training, and it turns out that the dream job was really a dream.  Perhaps your q2 call schedule turned out to be tougher than you had anticipated.  Maybe your hospital ends up being short on doctors so you end up taking more shifts than you’d prefer to. And no, you don’t get overtime pay as a doctor! You get the same rate as you would otherwise. I’ve known a few unfortunate doctors who actually end up taking new jobs and finding themselves in another similarly unfavorable situation. What gives? Is the world out to get you?

Find out what makes the situation unpleasant to you. 

Everyone is different.  I have friends who are okay with taking two to three weeks off a year and working holidays.  I have others who cringe at taking no less than six weeks.  I have friends who are okay with spending their weekends rounding (their spouses and kids are apparently okay with it as well) instead of hanging out at home or taking a road trip.

Common issues that I’ve seen my colleagues complain about include:

  • Call schedule too onerous.
  • Pay is too low.
  • Patients are too sick.
  • Patients are too healthy.
  • Job is too boring.
  • Location of the practice/hospital is too remote.
  • Senior partners abuse them.
  • Too many satellite locations.
  • Partnership track too unfavorable (they find out two-three years into employment).
  • Work hours too long (many outpatient specialties are open on weekends)

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Whatever situation that makes your life unpleasant, you need to identify what needs to change in order for you to be happy.  As doctors, we are great at shutting out unpleasant memories.  It would be a shame for you to seek out a new opportunity only to have the same problems that you encountered in a previous job.

You might have problem if you sleep here more frequently than in your own bed.

Try to remedy the unpleasant situations at your current job first.

Look, most people don’t like to move, especially if they have established friends and family in a particular area.  Some of us have strong religious ties to a location.  Even most financially independent early retirees with school-aged children choose to stick around most of the time (That’s you Justin @RootOfGood and @RetireBy40).  It would behoove you to talk to your coworkers, managers, administrators, and bosses to determine if any of your gripes can be resolved amicably.  I’ve discovered that in negotiation, you have to figure out what you bring to the table in order to justify your worth.

You might also like: How are doctors paid?

If you are the world’s expert on melanoma, you probably will have more negotiating power than even the most skilled orthopedic surgeon.  Even then, the negotiating power has to align with what your employer needs.  A private practice Dermatology practice may prefer to have a proficient and friendly general Dermatologist over the world’s smartest melanoma guru.

Not all of us will have that magical ace up our sleeves for improving our work/life situation, but it is definitely financially advantageous for most people to keep the same job if possible.  This is mostly because of the effort and potential lost income that comes from job changes.

If you end up moving to another state, you will need to apply for a new medical license, get credentialed on insurance plans, and potentially spend months without income if you end your prior job prematurely.

You need to figure out an exit plan.

If all else fails and you find that your current situation cannot be rectified, you will have to find greener pastures.  But wait, you shouldn’t just march into your boss’s office and give her the middle finger! You need a backup plan. It is easier and less stressful to find alternative opportunities if you have an existing job.  Once you’ve made the decision to make the switch, plan out your next steps:

  1. Look for opportunities nearby. Perhaps in the same city or nearby regions. Then look elsewhere in the same state, if you would prefer minimize your move.  You already have an active medical license in your state, so that is the easiest route to take if you decide to change jobs. Be sure to check if your existing practice has restrictive covenants.
  2. Check with your colleagues elsewhere who might have some leads on potential opportunities. An potential opportunity might crop up that you might otherwise not know about.
  3. Look at your professional society job bulletins for opportunities.  Given that there are so many postings, it can be confusing if you are not locked into a particular region.  Try to narrow down opportunities that might suit you, and check them out. Make sure that you have an updated CV, clean up your online profiles, and go at it. You might find yourself looking for over a year for the right fit. That is okay, if you are able to maintain you current job.
  4. As with any profession, the more people you speak to, the more that you will learn about the profession. You will develop a better understanding of what is important to your lifestyle and what the critical questions to ask a practice or hospital.  You are also more marketable as a doctor if you have already been in practice for several years.
  5. Don’t be afraid! Many doctors in this situation are primary breadwinners in the household. They may have kids, a stay-at-home spouse, and no ancillary income. If you have been playing your cards appropriate, you should have an emergency fund and have been living below your means!

You might also like: How to burn through a $1 million salary

Go for it.

It is not easy to pull the trigger. A new job means a potentially big move. Take a breath, don’t fret. You are still (hopefully) an able-bodied doctor with good earning potential.  Don’t be worried that you might make a mistake.  We all do. Don’t be afraid to keep your head high, regroup if you have to, and keep whittling away. Good luck!

Any tips for the job hunter?

(Photo courtesy of Flickr)

How hard should you work as a doctor?

How hard should you work as a doctor?

I can’t think of too many white collared jobs that rival the intensity and duration of work endured by doctors.  Sure, there are plenty of physically and mentally demanding occupations out there, but what other job involves handling the livelihood of others, triaging life-threatening events, and multi-tasking multitudes of time-sensitive matters?

The work of a lawn maintenance guy.

Take, for instance, the duties of “just” a lawn irrigation serviceman. Let’s say the lawn guy is tasked with installing a drip irrigation system in a lawn.  This is an extremely labor-intensive process.  A general overview is that supply lines have to be placed, individual irrigation lines have to be delivered to the plants, the valves tested, lines buried, and landscaping created to make the lawn aesthetically pleasing.  Even more labor intensive is searching the lines to identify any leaks in the lines after they’ve been buried! Combine this work with the scorching summer heat, and you’ve got yourself one strenuous job.

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Rinse and repeat. Let’s say you and your crew of three guys repair and install new irrigation every day, five to six days a week. Fifty weeks a year.  You’ve got yourself a pretty strenuous and repetitive schedule. Plenty of people do it. It pays the bills, and it is hard work.

Falling asleep in front of your computer is probably okay but not in the operating room during a surgery!

The work of a corporate finance guru. 

The finance industry works hard. I would consider finance bankers, analysts, associates, or whatever title they may have to be the grunt workers of the white-collared world.  Think 80+ hour weeks for projects, presentations galore, and meetings to consume your life.  Many financial analysts I know party hard too. Extreme vacations and sports in the limited downtime they may have.  Some of these guys get smart and save up a financial nut like Sam from Financial Samurai.  Others just spend it on an expensive lifestyle. Many of these people don’t last in their industry.  After they move up the ranks, they either transition out of the industry altogether or just move into a more administrative role.

Sure, I’m biased, but why do people in the this industry eventually leave? The guys that I know who are in their first five years of financial banking tell me they love the challenge, hard work, and helping improve our economy and quality of lives. Huh?

The work of doctors.

Yes, I’m a doctor, but I do think that our line of work is genuinely gratifying.  Take away all of that administrative B.S., healthcare regulations, and management issues of any workplace, and you’ve got a profession that is out there to do some good. Look at the Hippocratic oath. I don’t know of any other profession that makes you swear by such a statement.

You might also like: How to identify physician burnout.

You might also like: Why doctors need a four-day workweek.

 

I know doctors who spend six days a week working to care for their patients.  Some of them take only two weeks of vacation per year.  Some others work either three to four days a week.  Some others take twelve weeks of vacation.  There is amazing flexibility in medicine—you just have to make a decision to what is most important to you.

Is the the money?

Is it the lifestyle?

Do you want to work 70 hours a week, take only two weeks of vacation per year, and make $1 million a year? Some of us don’t have the luxury of titrating our work-money-lifestyle balance due to the nature of our work, but this is a subject that I’ve been contemplating for a long time.  Given the intensity of our line of work, there has to be a breaking point.

I once had a patient who was in the truck driving industry for thirty five years.  He ended up getting placed on dialysis because his kidneys shut down after going for so many years in an occupation that didn’t necessarily allow for bathroom breaks!

Another one of my patients was a construction worker for twenty years, but ended up getting on disability not because of an injury, but simply because his joints broke down after many years on the job.

At what point will you draw the line on balancing your work, money, and health?

(Photo courtesy of Flickr)

How to check the engine oil level on a Subaru Impreza

Checking the engine oil level on your car isn’t difficult, but it probably isn’t at the top of everyone’s list.  Most of us simply take our vehicles to the garage get the oil changed every 5,000 miles, or at whatever interval your mechanic has instructed you to follow.  I’ve had colleagues NEVER realize that they had to change the oil in their vehicles, and had gone 20,000 miles! Thanks to the marvel of modern manufacturing, their cars still run.

That’s not recommended, unless you’re the type to get a new car every five years anyway.  For most cars built within the last decade, you really just need to stick with the routine oil maintenance schedule.  There are some people who like to stretch out the oil change interval using fancy filters and synthetic oil, but a regular interval will keep you safe.

However, there are several makes of cars that consume large amounts of oil.  These are more common in flat engine vehicles like Subarus.  Other cars that are known to “burn” oil include Audis, Porsche’s, and some BMW’s.  I remember reading a report years ago that over half of the 2010 Audi A4’s required additional engine oil between oil changes!

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If you own any of these cars, you should learn to check the oil levels.  Don’t wait until the fancy Google-enabled computer system in your Audi A8 to kick on. Just check the oil levels routinely.

This is how I check the oil on my Subaru Impreza:

Pop the hood.

Don’t be scared!  The hood release is usually under the steering wheel close to the driver’s side door of your vehicle. Take a look at the engine:

This is what a 11 year-old engine looks like under the hood!

There is usually a cap that is labeled for engine oil, and a dipstick.

If you want a dipstick in your Audi A8, you’ll have to pay extra!

The dipstick allows you to check the oil levels in the reservoir.  Most dipsticks have a high and low level hatch mark. When you first take out the dipstick, be sure to wipe it dry, place it back into the engine, and then take it out to read. You will be able to get a more accurate reading.  If there is no oil on the dipstick, you are likely short at least 1 qt.

The dipstick on my car has two holes indicating both the low and high levels:

Snatch some hospital gloves if you don’t want to get your hands dirty!

If the engine oil level is low, simply visit your friendly auto store (or Walmart) and pick up a few quarts of engine oil rated for your vehicle.  Use a funnel to prevent spillage, and try to add the oil gradually while checking the dipstick in between.  If you overfill the engine, then you will have to take the car to a garage to have them drain some of it out.

I typically change my engine oil and filter once a year (yes, that is long interval), and I usually end up adding about 2 quarts of oil throughout the year!

Any questions on vehicle maintenance? Sound out below!

How would your life change if you earned an extra $100,000 a year?

I’m sure all of us have either wondered or openly discussed the prospects of having a higher income.  We’d actually be able to “afford” those outfits that the celebrities sport or cruise into the hospital parking lot with that dream car.  On a smaller scale, perhaps we could choose to have more meals out in restaurants or splurge on a nice vacation that would otherwise be lengthen your working career.

Interestingly, being a physician actually awards us the experience of incremental income growth over many arduous years. We start out in debt during college and medical school, build up to a positive but meager resident income, incur a potentially lower income as a fellow (Yes, this can happen!), and finally a decent but questionably delayed higher income.  How does that affect the psyche? Let’s take a look:

 

The guy who becomes unleashed

We’ve all seen this.  There are people in medical school who always seem up for a round of drinks at the bar or a hedonistic winter vacation.  Obviously these guys are either funding their lifestyle through family money, a spouse, or loans.  Once they secure a solid five-figure income during residency, they spend as if they had a six-figure income with a seven-figure net worth.  The expenditures grow at every step of the trajectory.  The present lifestyle is essentially supported by future income.  Can this be sustainable? Absolutely if the future self makes good on his earnings.  I know a guy who did just that.  He is doing fine, but working like there is no tomorrow.

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Ironically, this model of lifestyle represents much of our society.  That is why there is so much consumer debt and how credit card companies survive. If this guy earns another $100,000, I frankly don’t think that he’d change much of anything to his lifestyle.  He is already on a mortgaged lifestyle.  A pretax increase of $100,000 in income may only mean another $55,000 of post-tax take at the higher federal and state marginal tax brackets.  This welcome addition might mean additional frivolous purchases in someone with already frivolous spending habits. Nothing else.

The ultra spender can pick up one of these the first year she has a salary bump.

The ultra-saver

I think that most financial bloggers out there are in this camp.  The debt-adverse, ultra-saving, crazy bunch prefers to stash away everything towards retirement.  This camp of doctors were frugal during medical school, residency, and are still living the conservative lifestyle.  These guys just like watching their Personal Capital accounts build up, gloat when their investment accounts actually increase after several years of retirement with 4% spending, and take extended month-long family vacations since they are not beholden to any boss after retirement.

You could imagine that a windfall of an extra $100,000 might not impact the habits of this camp either.  This extra income is going straight to the bank or index fund of the ultra saver.  Give it some ten years, and the bank of ultra-saver will have an extra $1,000,000.  If invested prudently, this additional income can shave off a few years of your working career, or fund some great charities.  Either way, the lifestyle of the ultra-saver doctor isn’t going to change with a salary bump of $100,000.

I wished that I could be in this camp, but I’ve unfortunately been tainted with a moderate desire for materialism, overpriced foods, and luxury.  ?

Ultra savers log into their Personal Capital accounts several times a day!

The average middle of the pack doctor

Most doctors are in this boat.  They have a higher-than-average income compared to the rest of society, but they aren’t in the ultra-celebrity net worth range.  A salary bump will likely have an immediately positive impact on her lifestyle.  It can be used to pay down some student loan debt, contribute to a mortgage downpayment, or fund a well-deserved vacation.

An extra $100,000 income can be used as a temporary patch for an immediate need.  After a few years, your lifestyle will either transition to a higher baseline, but it’s unlikely to make a significant impact on happiness, lifestyle, or your hobbies.  There will be a new steady state, but the steady state will still be in the same tier as the doctor of ten years prior.

 

The percentage change in income is what counts.

In all three scenarios, an increase of income didn’t really change much of anything.  For the average doctor, a $100,000 salary income could represent anywhere between a 10% increase in income to a whopping 100% increase in income (I do feel sorry for those doctors out of training who slave at a $100,000 income).  Either way it’s not enough to quit your day job. How much would it have to change to make a meaningful difference? 500%? 1000%? Either way, most doctors aren’t going to reach that level of change.

To this end, doctors need to realize that any narrow range of income that they may fall under may not necessarily impact their lifestyle in a significant way.  A Hospitalist can double her shifts to bump up her income from $200,000 to $400,000, but working harder would be best suited if there was a goal in mind.  Do you want to retire earlier? Do you want to buy a nice stove? Is it worth the stress of putting in the extra shifts? Figure these questions out, and you’ll be a happier person.

How much of a salary change would it take to change your lifestyle?

(Photos courtesy of Flickr)

Springing some positive attitude our surroundings

Whew! This year has gone by quickly. It’s already time to move our clocks ahead and “lose” an hour. I’ve taken many hours recently reflecting on our accomplishments at the workplace, in life, and in my colleague’s lives.  It’s easy to keep trucking along going at full pace, but in order to maintain a healthy balance we really have to remind ourselves of our accomplishments and goals.

How have the New Year’s Resolutions progressed?

Well, it’s very easy to meet all of your resolutions if you had none to begin with, right? I came into the year without having many defined goals outlined other than staying sane in the workplace, tracking my finances more accurately, and come up with good content that my readers would want to see. Let’s take a look at each one:

 

Sanity in the workplace

Everyone has stress at work, whether you are a bartender, IT professional, or neurosurgeon.  We deal with stress in different ways, and as doctors, I think that we generally do a good job of handling stressful situations.  That’s our job.

Eating cake every day to stay positive would NOT be a long-term solution for stress reduction!

Now in the medical profession, there is no single cowboy or hero that can solve all of the problems.  We work as a team.  It doesn’t matter if you are the only person in the ICU who can intubate someone and interpret blood gas levels.  If you have four patients crashing at the same time, you are beholden to all of those around you to help keep the ship afloat.  If you are the Intensivist and the most qualified person in the ICU, you need to delegate, teach, and positively enforce good behavior among all of those around you.

That is not easy.

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I would hope that all of us strive for self improvement.  These goals don’t have to be lofty  and earth-changing. In an ideal world, all of our colleagues should share the same vision. Reality, I have learned over and over, is never the case.  I work with a technician who has had over twenty years of experience in my profession, but is relatively fixed in his routine. Whenever there are tasks that build up throughout the day that require organization, things fall through the cracks. If Patient Y calls in a 9am with a question about her lab results and Dr. X calls in at 10am for a consultation, there is a high possibility that neither task gets completed.  It appears that no amount of coaching over two years had made much of a dent in any improvement.  He claims that with a stressful workday, it is difficult to remember everything that comes in.

Is this type of deficit correctable? Is this technician actually trying to improve himself? Or am I, the doctor, simply expecting too much? In our profession, it is not possible to outline every single expectation for an employee in a manual, so should this technician be expected to remember to complete tasks that come in?

What if I, as a surgeon, don’t always remember to tie off the veins before I resect them? If a bad outcome occurs, you’d better believe some legal person will be knocking down my door!

No matter what pace those around us actually improve, I have constantly reminded myself to present each situation positively to others. It makes for an overall more positive work experience.

 

Positive attitude in tracking finances

Most financial bloggers out there just love money. They love spreadsheets, and can pull out their monthly expenses for the past five years.  I sense some OCD in this department.  I prefer to reserve my OCD tendencies in making sure my surgeries go well.   It doesn’t leave much left to tracking all of my receipts.

However, I have started tracking my expenditures by cataloguing them on a spreadsheet.  Some of my numbers are tracked on Personal Capital, but I use gift cards for many purchases so many of my expenditures have to be tracked manually. I am happy to say that I will soon be able to post my results!  No, I’m not going to have amazing savings like other money bloggers out there—I just spent $40 on a lunch for a restaurant week outing!  But I hope that my numbers will give some motivation for those still pulling out of debt that you don’t have to eat instant cup ramen (Not the fresh stuff from Japan either) to get a positive net worth.

 

Positive content

This part is for you, my readers.  I am grateful for the support of the online community and the readership for helping unite the physician and professional community.  I want some feedback.  What do you want to see? What do you want to learn? Should we have some guest posts here? Do you want more DIY tutorials unrelated to medicine or money? One of the most popular articles on this website is the guide to changing the headlight bulbs on a Subaru!

Comment below, or send me an e-mail on the website!

Thanks again for your support this year!

(Photo courtesy of Flickr)