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Category: lifestyle

Conferences are bad for your health

Posted on January 22, 2016 by SmartMoneyMD

I love going to conferences. If you’re not in the clinic, hospital, or operating room, it means that you’re not dealing with patient care of administrative issues. Conferences are sort of like a mini-break from your daily routine even though you are still involved with something in your specialty. Furthermore, it is an opportunity to catch up with old colleagues, learn about the exciting new developments in your field, and interact with thought leaders in your field. I’d say that overall they are a great way to vacation without feeling guilty about not working your day job.

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Conferences aren’t healthy for you.

Most of us spend our days at meetings sitting. I’ve been to intense medical courses that have lectures from 7am until 10:45pm! And we all know that inactivity increases cardiac risk factors. Not only are you sitting, you might even be taking notes and focusing on the lectures. As far as I can recall, having to pay attention is mentally taxing.

We network with our colleagues during refreshment breaks and speaking to vendors. I am always aware of my plans for the day, and stay relatively busy meeting with colleagues. This is also mentally taxing. Most of us have our clinic and hospital routines in motor memory, and can operate on autopilot most of the day. Not so in a meeting situation. We are out of our routine, and no matter how savvy or upbeat you are, you will be mentally and physically tired at the end of a meeting day.

We eat more during conferences.

I rarely have time to eat during my work days. If I am lucky, I can get a granola bar or yogurt in between patients. Combine a low caloric consumption with dashing around dealing with patient issues and you have an automatic weight loss system. Not so at meetings and conferences.

Food is plentiful at meetings. There are at least three full meals each day—sometimes more if there are snacks during breaks. This food is often catered, tasty but probably unhealthy. It is just sitting in front of you. Sometimes the food is even free for the taking. I probably consume at least twice the number of calories during meetings than during a typical workday.

We often punish at the end of a conference day with fancy dinners. Think steak soaked in butter, or seafood soaked in butter. Have a few beers or glasses of wine to wash down the fat. There is serious caloric intake at these dinners, especially if you are fortunate enough to attend a sponsored dinner.

We don’t exercise as much during conferences.

Since we are out of our rhythm, sitting all day, and eating big meals, we don’t necessarily find the time to exercise. Psychologically, we “aren’t working” during meetings, so it is considered a mini-vacation. Mental and physical fatigue from sitting through hours of lectures further discourage us from hitting the gym or exercising.

You can make a change and alter your conference routine.

It’s not too late to make lifestyle modifications! The next time you plan to attend a conference, allocate some time to exercise! It could be at the hotel gym, on a jogging path around your conference center, or even just a simple exercise video in your room.

Control your caloric intake! Just because you can financially afford the $15 slice of coconut cake doesn’t mean that your gut can! Remember that your waist will grow along with the size of your wallet.

Don’t forget to have a good time at your meetings! Consider it a mini-vacation, but make sure that you maintain some of your routine to keep your body healthy!

(Photo courtesy of Sebastiaan ter Burg)

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Grow your value in order to advance your career

Posted on January 9, 2016 by SmartMoneyMD

One of the tenants of becoming a successful doctor is the three A’s. These are fundamental steps into order to prosper. However, to develop your career further, you have to grow your value. What this means is that in order to be marketable in your profession, you have to have a skill to offer. This essentially means that you need to figure out what your job description is and fully maximize your ability to fulfill that niche. Do it better than anyone else around who might be vying for that position and you become a superstar.

How can I grow my value?

As a doctor, you need to practice good, ethical medicine. Take care of your patients (as much as they let you). That is the foundation to build upon.

Identify your role models. Children learn from their parents and caretakers. Professionals learn from their seniors and others who have taken the same footsteps. There is never going to be a single ideal role model. Someone who can help you develop your clinical or research skills is not likely going to teach you how to run a medical practice. Likewise, a role model for a particular skill may even be someone from a competing practice who is willing to show you the ropes.

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Your accomplishments must be made known. It does not matter if you are the best diagnostician in the world if no one knows who you are. Many good deeds go unnoticed all of the time. You don’t have to boast your successes, but they must be publicized to promote your value. If you made a diagnosis or cure that others missed, casually introduce the topic in conversion with your coworkers or managers. In order for you to move the chain, your peers have to respect your clinical, managerial, and leadership abilities. Make a case for everything you excel in.

Be firm but reasonable. This goes for job promotions, equipment needs, staffing needs. Everything. You must keep a level head in negotiation. People tend to ignore crazy people even if they are right. If you are getting paid at the 10th percentile of your specialty’s salary range and you are doing 90th percentile work, you need to gather enough data to present to your case. Collect your RVUs, staff utilization, expenses, and show that you are being undervalued. If you are the more qualified surgeon in the state but have inadequate nursing staff, make your case. Perhaps you need to show that most doctors in your specialty require a certain number and skill of staff, and that you could make more money if you have better staff.

You must have a goal.

Growing your value is ultimately useless if you have no finish line. You won’t really know what you are working for if you don’t have a goal in mind. Whether the goal is to achieve a certain annual income or giving yourself enough time to exercise every day, have your sights set on something. After that, map out your plan to increase your self worth to achieve that goal.

To recap:

Choose a goal. Short-term and long-term.
Map out the qualities and achievements that you need to accomplish to reach that goal.
Start growing your value. Make yourself a desired commodity.
Work hard to get there. Hustle.

What have you done to grow your value?

Exchanging Freedom For Income – Is it Worth It?

Posted on January 3, 2016January 3, 2016 by SmartMoneyMD

I’ve previously discussed strategies to become rich as a doctor. The formula is somewhat straightforward in that you have to hustle and discover your value. Unfortunately doctor incomes vary quite a bit among specialties, and even dramatically within a specialty.

For instance, Internist income can range from $160,000 a year for strictly outpatient care to $200,000-$300,000 in Hospitalist care, and even in the $400,000’s if you opt for locums positions on top of a full-time job. The trade-off from increasing income in this situation is that you are exchanging your time and skill set for money.

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Is it worthwhile to exchange time for money?

Obviously it depends on your needs and expectations. Most workers on Wall Street and businessmen would argue that if you are still young and have no dependents, it is to your advantage to build your net worth as quickly as possible. Many engineers turned early retirement bloggers did the same during their twenties have have since accumulated enough wealth to retire in their thirties. As a doctor, you exchanged your youth for earning potential later in life. The advantage that you have is that your hourly rate ought to be higher than that of an average software engineer so you could build your net worth more quickly.

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There are also consequences for a rapid growth of salaried income. Your marginal tax rates will be high, much more than if that income came from capital gains. As a service worker, you incur high amounts of stress when working harder. You have to ask yourself these questions. If you have clearly defined timelines and goals to hustle, it may be worthwhile to make this compromise. Just make sure you don’t inflate your lifestyle along with your income.

How do the ultra-wealthy get rich?

Unless your skills command an outrageously high compensation (like Taylor Swift or most professional athletes), you still don’t have enough hours in a day to generate business-mogul money. This is the wealth it takes to own skyscrapers, rent out an entire nightclub for a party, or frequently charter private jets for travel.

The fact is that you don’t need to have a stock ticker under your name to generate this wealth. The wealthy build their worth through other people’s time. If you are really successful, you build wealth through other people’s money (OPM). A multi-millionaire owner of a junk metal recycling company hires out hourly service workers to get the job done. The billionaire cellphone charging cable maker has multiple factories of workers churning out simple widgets.

Medicine has some corollaries to this rapid wealth generation phenomenon through pharmaceutical development, electronic medical records, and medical device development. Billionaire Patrick Soon-Shiong is a prime example of a medical doctor who catapulted his wealth first through drug development and subsequently in venture capital, ancillary investments, and healthcare data mining. Being a one trick pony is great, but using that trick to fuel further ventures is the key to sustain financial success.

How does that apply to me as a lowly doctor?

Treat your primary occupation as your buffer to venture into other revenue streams. If you want to work harder and longer hours as doctor, that is fine too. However, alternative income streams outside of medicine can potentially help you pay your bills if you end up not practicing medicine (downtime between job switches).

I have been exploring alternative income means outside of medicine. Obviously none of them have come to self sufficient fruition, so I still am keeping my day job in the meantime. ? However I will be documenting more of this in the future when I receive more results.

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(Photo courtesy of Christopher Dombres)

The hassles of hiring out your chores

Posted on December 23, 2015January 3, 2016 by SmartMoneyMD

I’m a big supporter of DIY tasks that are minimal risk to yourself and saves you from unnecessarily spending after-tax dollars. Understand that I am a big supporter that money does buy happiness, but throwing money at a problem can sometimes be more hassle than its worth.

Case in point: one of the smoke alarms in my rental started chirping. I am the tenant. The fix is a simple replacement of a low 9V battery…except that the alarm happened to be in the foyer where the ceiling was 12 feet high. I did not have a ladder that high, and it’s unclear whether I should risk falling off a ladder and ending my career over a 9V battery.

Unfortunately, I couldn’t snap my fingers and have a handyman replace the battery at a moment’s notice. In reality, it took many steps to outsource this simple task:

E-mail the landlord listing the items requiring repair.
Wait for e-mail reply stating that it is okay for my to contact her handyman to schedule a repair.
Call the handyman several times to schedule.
Handyman no shows for the repair twice, and does not call back to reschedule.
Handyman shows up 1 hour late, and tells you that the smoke alarm is actually defective.
Handyman takes the defect smoke alarm, and never calls back to finish the repair.

While this process consumed approximately only one hour of my time, having the incomplete task of the smoke alarm looming over my shoulder likely distracted me from other tasks. Moreover, the repair still has not been finished!

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The cons of outsourcing tasks.

Reliability. This is the key factor in determining how efficient you can pay someone to take care of errands for you. I don’t remember the last time I had a reliable handyman who showed up on time, actually knew what he was doing, and took care of the problem quickly. Most of the time, I actually lost productivity by outsourcing minor tasks! If you’ve had a great experience with handymen, comment below!

Theft. Obviously if you leave your belongings out for the taking, you are tempting your housekeeping staff to steal your belongings. I have never used a housekeeper, but I have heard horror stories of my colleagues being robbed by their cleaning staff. Think about it. Most housekeepers are compensated at a mid-low hourly rate. They may only earn $50 pretax for a 5-hour cleaning job in your house. If you leave out your $5,000 Omega watch lying on the counter, you are tempting your $10/hour cleaner to take it.

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Pros of outsourcing tasks.

Manual labor. You are a busy professional. Your livelihood depends on you being able to do a colonoscopy or throw a central line. It would be a shame to become disabled from throwing out your back while mowing the lawn. Yard maintenance, house painting, and furniture moving are all straightforward tasks that are physically taxing. It’s a no brainer to outsource these tasks if you are too tired at the end of the day to be mowing your lawn that needs a trimming every week.

Have someone deal with tasks that you have absolutely no interest in dealing with. This is human nature. I know people who choose to pay for a $150/month gym membership to exercise than to rake leaves in the back yard. I know plumbers who choose to pay another plumber to replace their toilet. I have had a financial advisor tell me that they hire financial advisors to manage their own money! To each his own.

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Money Does Buy Happiness

Posted on December 13, 2015January 3, 2016 by SmartMoneyMD

Doctors need to care about money. Not only because we deserve it, but it also helps provide a roof over our heads and keeps our bellies full. Those who say that money doesn’t buy you happiness are misled or lying.

Being Poor is no fun.

One could say that all college students are impoverished, but that is simply NOT TRUE. There are plenty of wealthy kids in college, especially elite private colleges. I was by no means poor in college, but felt like I was financially disadvantaged being surrounded by kids with huge bank accounts who could go to parties and enjoy expensive meals every weekend (I had no bank account). There were a lot of wealthy college kids in the U.S.

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In medical school I felt the same way, except that I had borrowed money sitting in my bank account at 6.8% interest. Since my medical school class was smaller than my college class, the concentration of wealth surrounding me seemed magnified. My classmates planned weekend ski trips and international spring break trips. I skipped out on those trips (as did many other people) simply because there was not enough money to go around.

In contrast, the business school students put the medical students to shame—their weekend and holiday excursions consisted of jetting to Europe, South America, and the Pacific. I’m sure that many business students have pre-existing bankrolls to fund their trips, but perhaps they are exercising financial leverage for their future self. Who knows?

Money Solves Problems.

I can recall that money would have solved many of the problems I have faced in my career. If I had more money to order food as a student, perhaps I could have spent more time studying or networking instead of making spaghetti for dinner! If money were not a concern, I would have sprung for a more expensive direct flight for my job interviews instead of taking a more budget friendly multi-layover flight. If I had more income, I would not have had to live in a roach-infested rent-stabilized studio during my residency.

Even as a practicing physician making a comfortable low six figure income, I would say that having more cash reserve attached to my name would give my family a larger buffer of reassurance. You never know when you might lose your job, get injured, or suddenly have large expenses.

Use The Power of Money As A Goal

Just because you understand that money buys you happiness doesn’t make you a greedy pig. You can use its allure to drive your success as a doctor. Make yourself rich doctor. Once you reach your goal, use your experience to guide others in your field, care for your patients, and make the world a better place. After all, isn’t that why you went into medicine?

(Photo courtesy of Nick Ares, Flickr)

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Your Spouse Is The Best Retirement Plan You Will Ever Have

Posted on December 8, 2015December 6, 2015 by SmartMoneyMD

While most of us consider having a stable job and effective investment plan our best strategy for ensuring a financially secure retirement, having a spouse whose financial beliefs aligns with your own is even more important. Whether or not your spouse has any control over your finances, he or she will influence your flow of money anyway.

Your Spouse Can Spend You Into The Ground.

It doesn’t matter if you earn $100,000 or $1,000,000 a year. If you spend 99% of what you earn, you won’t have much left over. You will end up making expenditures whether or not your spouse has an income. If your partner/spouse is a spendthrift, you will likely have a longer working career. This applies to husbands and wives. I’ve seen plenty of husbands of doctors who enjoy their fancy custom-made suits and alligator shoes as much as their female counterparts. Everyone has their own spending habits. Make sure you and your significant other agree on your finances?

Your Spouse Can Cut Your Net Worth in Half.

Yes, we’re talking about divorce. I’ve seen divorce rates quoted to be as high as 50%, whether or not the statistic is true. While most doctors I know stay married, I also know a good number of doctors who are divorced or separated. The reasons for separation always revolve around similar themes: spending too much time at work, incongruent spending habits, and infidelity (probably stemming from the problem of work). Add in legal fees, and a bad divorce can destroy years of hard work. If you’re less fortunate, add in child alimony and you will be in bad shape. We’ve worked too long and too hard for our family lives to implode. Don’t let that happen to you.

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A Working Spouse Supercharges Your Net Worth

If you have a spouse whose income isn’t whittled away by taxes and opportunity cost from being outside of the home, you’ve hit the jackpot. Anything that your family can do to generate income will translate into more opportunities to contribute to your tax-advantaged accounts and savings. Having a dual income is NOT an excuse to spend more; consider it a luxury and opportunity build your target nest egg faster.

Additionally, your working spouse is likely also contributing to his Social Security earnings. While I don’t consider Social Security in my retirement calculations, it would be a nice bonus if it still existed by the time we need it. Having extra governmental money from your spouse would be even sweeter.

A Working Spouse Makes Losing Your Job Less Stressful.

If you are the sole breadwinner in your family and you lost your source of income, you are screwed. You have mouths to feed, and your entire family will be out on the street if you don’t find work. It also means that if your boss is taking advantage of your work, you can’t walk away. Not so if your husband is gainfully employed. If you have a second source of income, you could tell your boss F-You if you needed to.

Think about it. If you want stability in a web server, you need redundancy—multiple means to stay online. If you want security and redundancy in your financial plan, you need a spouse who is on board. Your spouse is your best means of achieving a sound retirement.

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(Photo Courtesy of an iconoclast)

The Truth About Deductions – You Keep What You Don’t Spend

Posted on December 4, 2015 by SmartMoneyMD

I still receive a good amount of advice from colleagues, friends, and family that it’s okay to buy a service or product because I can deduct it as a business expense.

Business deductions are great if you own a business. Small business owners have a great deal of flexibility in terms of deductions. Essentially any purchase or expense related to the business can be included: mileage driven to work, desks, computers, postage, utilities, rent…etc. The purpose of deductions is essentially a tax credit against your profits.

A simple example is that if you earn $100 but incurred costs of $80 in order to earn that $100, you only have a tax liability of $20. This amount is quite huge if your marginal tax rates are high, which is typically the case for most high earning individuals. The U.S. tax laws are quite generous to small business owners and allow many options for a business to succeed. For expensive equipment, you can opt for a Section 179 to depreciate items over a number of years. If you are going to spend the money anyway, you might as well take advantage of these benefits.

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Deductions are not for everyone.

Unfortunately, the majority of doctors are shifting towards salaried positions, which means that we receive our income through W-2 payments. As an employee, your ability to deduct your expenses is dramatically less than that of a business owner. Expenses for employees can only be itemized if they exceed 2% of your annual gross salary! Even then, you can only expense the amount that exceeds 2% of your income. For an employed physician who grosses $200,000 a year, you can only deduct the amount over $4,000. Let’s say that you went to one CME meeting and spent $5,000 on all expenses, and that your marginal federal tax burden is 35%. Essentially, the government will consider that you made $1,000 less in income, thereby “saving” you $350 in taxes. Okay, by spending $5,000, you “saved” $350 in taxes.

The math is better than having no deductions, but does that impact your spending decisions? Did you have to attend that particular meeting? What if you spent only $3,000 at the same meeting (stayed at a less fancy hotel, and ate cheaper food)? At a gross salary of $200,000, you don’t meet the 2% minimum requirement for deductions. However, you spent $2,000 less than you could have otherwise and also paid tax on the amount that you kept.

In scenario #1 ($5,000 meeting), you spent $5,000 and paid taxes (likely marginal) on $4,000 (the amount less than 2% of your income) of it.

In scenario #2 ($3,000 meeting), you spent $3,000 and paid taxes on $3,000 of it. However, you are “ahead” $2,000 from the amount that you didn’t spend. At a 35% marginal tax bracket, you still end up with an extra $1,300 to spend on other things.

Understand your goals.

Everyone is going to have different goals. If spending only $3,000 at a meeting would make you miserable, then you might as well spend $5,000 to enjoy your hard-earned money. Otherwise, you might be better off roughing it with $3,000 at the meeting, and putting the $1,300 you save towards your kids school tuition or a nice vacation.

What are your thoughts on deductions?

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(Photo courtesy of Tax Time)