Author: SmartMoneyMD

Welcome FutureProofMD readers!

Posted on by SmartMoneyMD

Hello everyone! I am grateful for FutureProofMD 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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How much would housekeeping set back your financial plan?

Posted on by SmartMoneyMD

I’ve been thinking about housekeeping services for a while, and have dismissed it every time the discussion has arisen.  But those mailers in the junk mail piles are enticing.

Free estimates!

$50 off first cleaning after you sign up for a subscription!

Obviously having too much house to maintain is a problem that I solely created for myself.  It’s a vicious problem that most Americans have. Land is cheap. Homes are cheap. Utilities are cheap.  Loans are cheap.  This is the perfect formula to become enslaved to your lifestyle.

The problem with home maintenance can be divided into two zones: outdoor and indoor maintenance. Both of these can be incredibly time consuming, expensive, and exasperating.

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Outdoor maintenance.

Subdivisions can be great. They are often somewhat planned communities with shared amenities.  Some neighborhoods have shared swimming pools or organized neighborhood events.  We pay into these associations depending on what amenities are provided.  However, these associations also impose restrictions to each household in order to ensure that its neighborhood is presentable.  This can often mean that your house has to be painted a certain approved color. Your lawn has to be groomed and watered, even if your water bill has to take a hit.  It means that you have to eradicate lawn pests, weeds, and any other element that would otherwise thrive under no supervision.

That’s right. We pay extra to have more land, and more to maintain it. That is the American way.

Indoor maintenance.

The same principles apply indoors.  The more space you have in your house, the more space you have to fill your house with “things”. Do you actually need these “things”? Probably not, but who wants to have an empty house? These “things” in the house get misplaced, disorganized, and dusty too.  I keep my windows open often to circulate the outside air in the house.  This brings in a lot of dust, insects, and various pollen in the house as well. What a mess!

How do I deal with this?

Currently everyone in the family pitches in to organize and clean. Pulling weeds, Mowing the lawn.  Cleaning the bathrooms.  Dusting the windowsills.  I’m suspecting that when all is done and over, I’ll probably have spent a shocking number of months of my life organizing.  Yikes!

Despite the number of hours I spend on cleaning and home maintenance, my home still isn’t spotless by any standard.  I just don’t have time to do all of this.

Will hired housekeeping help lengthen my working career?

Most likely.  I asked around several services, and got baseline yearly quotes on common tasks that I currently complete myself:

Damn housekeeping! No one really likes to clean either.

So I’d probably spend an extra $10k annually on doing most of the things that I am currently doing myself.  Over a decade, I will have saved about $100k, and have it grow through investments.  This isn’t exactly pocket change.

The biggest question that I have yet to quantify is whether the lost hours I spend cleaning the house could be better spent generating income.  Sure, I’d have a higher tax burden, but in theory I should have a much higher hourly earning wage than what hired help should charge even after taxes.  I am still not sure, since most of my maintenance tasks occur on my days off, so it would be challenging for me to be able to bring in extra income without taking on more work.

What do you guys think of doing your own chores?

How many investment accounts are you willing to open?

Posted on by SmartMoneyMD

Having too many open investment accounts was never a problem that I ever fathomed facing.  I don’t think that I have too many active accounts right now, but presumably the longer we remain investing, the more confusing accounts we will end up with.

Over time, I find myself signing up for accounts whenever custodians end up offering savings or cash back.  I think that I started my E-Trade account years ago when they offered $100 for signing up and a few discounted trades.  I opened a Fidelity account when my residency offered a 401k/403b plan.  I had another 401k custodian through an employer that lasted for a year.  When I finally became more educated on index funds, I opened a Vanguard account.  I went back to Fidelity when they offered some airline miles and marginally lower expense ratios.  I’ll probably open a Schwab investment account in the future since they now advertise expenses even lower than that of Vanguard and Fidelity.

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It’s also easy to rack up bank accounts. As a student, I opened quite a few bank accounts for minimal bonuses like a free mp3 player, $100, or free tickets.  Was it worth my time then? Absolutely.  I had a negative net worth with essentially no income.  I even had to shuffle around my money to make the minimum balance requirements.  It was worth spending my free time to get “free” stuff.  Is it worth it now? Probably not, unless the sign-up bonuses are huge.  I still have most of my old bank accounts open, but it’s relatively easy to manage since I have very little money in most of them.  I don’t receive any 1099 interest forms at the end of the year, so I don’t really have to track them during tax season.

Fixed income deposits like CD’s also result in accumulation of excess accounts.  Some banks require you to sign up for a savings account so that any interest accumulated can be deposited into an account outside of the CD.  Other banks allow you to keep open a CD by itself without ancillary accounts.  As you get older, you will inevitably open accounts, whether through the Treasury, banks, or even brokerage firms.

I have about twenty accounts of some sort under my name, including one from Macy’s that I opened while in college.  It is too much that I can’t handle? Not yet, but it is becoming more difficult to track, especially when I get occasional mailings from banks that I have no recollection working with (yes, that is also a factor from age)!

It all of this worth it in the end? I still think so.  I squeak out some marginal earnings that I otherwise would not have, and over my working career, I will likely squeeze out a few extra bucks.  Once my CD’s start maturing, and these banks no longer offer great deals for renewing fixed income vehicles, I’ll start transferring out my funds and shutting them down.  I still keep track of my accounts through Personal Capital, which does require some maintenance (I hate the login failures).

Do you have a threshold for the number of open accounts to deal with?

(Photo courtesy of Flickr)

How do you handle working night shifts?

Posted on by SmartMoneyMD

Please note that there is no medical advice offered in this article. The topic discussed is only for discussion purposes.

One recurrent issue that healthcare workers frequently face is the unpredictable hours that we have to work. The same goes for any occupation that has long shifts and nocturnal hours—this includes nurses and truck drivers too. How does one adapt to an odd schedule, and what impact does that have on your health?

You need your beauty rest if you job requires keeping people alive!

Since the majority of Smart Money MD readers are in the healthcare profession, I am curious to see what everyone does.

Doctors who take call face this their entire careers. You get called at 1am for an emergency, and your entire evening and following day (or week) is shot.  Working harder in this manner doesn’t even necessarily translate to increased pay.  Doctors who work shifts face similar issues when they’re assigned an overnight shift. This includes Emergency Room physicians, Radiologists, Anesthesiologists, Hospitalists (Apologies if I missed your specialty!). Sometimes these evening shifts alternate between day and overnight shifts. For instance, a Hospitalist may have five straight overnight shifts followed by a week of days. Or even one overnight shift interspersed between day shifts.  These odd hours take a toll on your health, and becomes even more burdensome as we age.

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How do people manage to adjust to these hours for an entire career? I get jet lagged for weeks after travel across the world, and I only make these trips once every couple of years.

Pharmacologic assistance.

Caffeine is a common strategy that almost everyone I know has consumed in the course of life. This commonly comes in the form of coffee, tea, energy drinks, and even mints! A cup of coffee helps me power through a rough day of clinic after no sleep from an evening of call previously.

Melatonin. I’ve seen melatonin tablets in the nutritional supplements section of most grocery stores and pharmacy aisles.  I know doctors who use them to help them sleep during the day after a night shift.  The idea is that these tablets supplement your body’s production of melatonin, which in turn triggers the sleep-wake cycle. The mechanism of action isn’t quite known exactly, but it seems to have some effect on fighting jet-lag and altered sleep patterns. I don’t believe that there is any proven statistical benefit of melatonin supplements but there are clearly people out there who claim it works for them.

Antihistamines / sleep agent. I know people who just take non-specific H1 blocker for sleeping. Some people take prescription medications to help. Long term use of this type of medication is not condoned by any medical professional, but in a pinch, it can help you get by.

Lifestyle modification.

I tend to modify my activities and allow time to readjust my clock.  Fortunately I do not work the evenings often, so I don’t have to deal with the changes as frequently as other specialists.  I usually try to adjust my sleep schedule according to my work schedule. For the first two nights I often am groggy as have not adapted yet. I probably go through at least one sleepless night before I am able to catch up.

I try to stay hydrated. This means additional bottles of water at work, and additional trips to the bathroom! I don’t recall reading any scientific evidence on hydration to combat altered sleep cycles, but mild hydrotherapy shouldn’t hurt if you’ve got working kidneys. ?

I try to exercise to jumpstart my body. This includes mild stretches, runs, or calisthenics. No marathons. Exercise does help me sleep better when my schedule gets flopped. I usually don’t do anything extremely strenuous, as I am probably fatigued anyway from work or the lack of sleep.

I try to avoid other mentally taxing activities outside of work.  You only have so much brainpower.  I need that brainpower for work. If my altered sleep schedule is only a temporary change, I try to minimize critical decisions (like buying a house, semi-dangerous lawn work). Just go to work, come home, exercise, eat and sleep. Simple.

Those of you evening shift workers, what tips do you have?

(Photo courtesy of Flickr)

How much time do you take off a year?

Posted on by SmartMoneyMD

As a whole, Americans don’t have much freedom in vacation time.  When I first considered working in the tech and finance industry, many starting offers I received granted about 2 weeks of paid time off (PTO) a year.  Some of the smaller startups had one to two weeks of PTO with some flexibility to take more time without pay.  I don’t think that many of their employees ever invoked that privilege unless they had some emergency crop up. Most of these jobs also catered to younger people who didn’t have families either.  They were happy working over eighty hours a week with potential bonuses that more than doubled their initial salary.

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Guess what? The guys running the large corporations know what they’re doing. They can afford to pay you $70k a year, have you average out 60+ hours a week with two weeks of PTO and easily afford to pay you $150k at the end of the year.  Who knows how much you earned the corporation.  They don’t even have to give their employees overtime pay since everyone is salaried.  You just work more for a bonus that you will probably get at the end of the year but at the discretion of your boss. In my book that isn’t a smart situation to be in.

Sometimes clinic seems like an assembly line. One day that will really be true…

Doctors in medical training don’t get bonuses for extra work. We’re not in it for the money…at least that shouldn’t be the primary reason to become a physician.  It’s part of the vetting process. I didn’t really consider maximizing my resident salary either and neither did most of my friends.  I don’t really think that any of my close colleagues went into medicine for the money.  If they did, they probably left after internship or even before.  One could EVEN make a case that the more that one actively cared about money during their medical training, the less accomplished they were. (Cringe. This will be a topic for future discussion).

We spent a lot of time in the hospital work and learning.  Regardless of whatever regulations we had in training, I definitely spent over eighty hours a week in the hospital for at least a three month period.  This doesn’t even include the amount of time I spent outside of the hospital studying or preparing presentations.  That was probably another five to ten hours a week.  The other months probably averaged out to 60 hours a week plus study time.  No bonuses there.  We put in the extra time so that we actually will be good doctors in the future.

But we actually got at least 3 weeks of vacation each year (I did not actually use all of my allotted vacation times in most years however, but that is the topic for another discussion). That’s already more than the average person receives in other industries.

In practice, the amount of PTO/vacation that doctors receive subsequently varies from two weeks to even several months! Some medical specialties that involve shift work may not offer any PTO, but can involve significant amounts of time off of work.  Several of my friends in Emergency Medicine only work 12 shifts a month, which is considered a “full-time” arrangement. I know others who only work 8 shifts a month! I have another friend who is a Radiologist who gets three months of vacation time a year (and still earns a sizable salary)!

Not bad. I usually take about a month (or less) off a year, which is actually considered on the low end. Life still isn’t bad. When you take into account what your hobbies are, what your family obligations are, how much time your kids get off from school, the amount of travel time actually diminishes.  Most people with school-aged kids have activities after school and on the weekends (unless you choose to home-school your kids, and that is another topic for future discussion!)

And ultimately I have decided that while vacation time is great, having a relaxed weekly routine is even better. Space out the week so that you work four full days a week, and you might not need as much vacation.

You might also like: Why doctors need a four day work week.

I’ve considering trying to rearrange my schedule to ease up the week such that my income doesn’t take a significant hit.  In some situations that is not possible, but if you can swing the change your life will improve.

How many weeks do you take off from work annually?

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(Photo courtesy of Flickr)

I submitted my taxes!

Posted on by SmartMoneyMD

It’s a recurring problem. Every year in April I frantically file my taxes at the last moment.    Life doesn’t have to be a struggle to file taxes, but I allow it to be.  Call it delinquency.  I blame all of the institutions that are obligated to send me tax forms to file. They never send it at the same time.  It forces me to wait until I receive all of the paperwork before I can submit everything to Uncle Sam. My motivation to file my taxes waxes and wanes in an unpredictable frequency and amplitude.  You really have to catch me at my high point in order to get everything completed.

I file my own taxes.  Yes, most financial bloggers do. My taxes really aren’t that challenging, as the bulk of my income still comes from a W2.  That means I don’t get to fill out fancy deductions to save money after spending more money.  I started doing my own taxes during internship when I received real taxable income.  I remember that since half of my internship spanned the same calendar year as my 4th year medical school, I essentially paid no taxes.  I think I earned like $20k that year.  The tax software was also free, but I probably paid some amount to file my state taxes online.  I also learned to decrease my withholdings through my W4 that year too so I also came close to receiving no money back afterward.  I felt like a badass.

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Tax filing does become more complicated as we go through life.  Kids. Mortgages.  Tax lost harvesting.  Second homes.  Real estate deals.  Multi-state income.  Foreign transactions.  Trusts.  The redeeming aspect of complexity is the skillset is additive over time.  It is actually beneficial to start learning about taxes when you’re making little money and have either negative of low net worth.  You get through the filing process quickly and you learn.  Tax software like TaxACT and TurboTax allows you to get through the process as painlessly as possible.  Life isn’t as daunting as before the Internet age.  By the time you get five bank accounts, three 401k custodians, a handful of brokerage custodians, and a few real estate properties, you will have had (probably) many years of practice.  It might not be as challenging as jumping in headfirst into an eight-figure portfolio.

I’ve moved up in the world and no longer file 1040EZ forms!

As with most other people who choose to file their own taxes, I hope to minimize my tax burden as much as possible.  Jeremy from GoCurryCracker is a master at this.  I think I paid more taxes when I earned $20k a year than he does now earning a near six-figure income!  If you had the choice between earned income or passive income, passive income wins all the way in being more leniently taxed.  For W2 employees, the only deductions you really get are mortgage interest, property tax, and business expense deductions.  The business expense part is really a moot point unless you spend significant mounds of money on conferences and meals because these expenses have to exceed 2% of your income.  Generally speaking, on a $400,000 W2 salary you get to deduct business expenses that exceed $8000.  All meal costs are only deductible at 50% too.  I know plenty of doctors who spend more than that in unreimbursed expenses, but that’s somewhat lavish.  I’d say that one could spend roughly $8000 for 2 1/2 fancy meetings (yes, PoF, cringe). Some conference registration fees can easy run over $1000 plus additional mini-courses. Put that in an expensive resort area, and you’ve got hotel fees in the $300 range.  I probably attend one of these meetings a year, but really cringe at how expensive meals can be when there is limited access to grocery foods.

This year it took several hours to sort out my receipts and enter the data into TurboTax. I probably could have shaved off at least one hour had I known my poorly organized folder of receipts did not exceed 2% of my taxable income.  Lesson learned.

All in all, it wasn’t a bad year. I paid more tax than I would have liked, but that’s what you get if most of your income comes from your primary job and you’re still building wealth.  For 2017, I plan to implement the following changes to streamline my taxes:

1) Keep a running spreadsheet of meeting expenses. Fill out the blanks soon after the conferences so that expenses are still fresh in my mind. This will make the year’s end easier.

2) Make sure I keep track of my donations, especially to Goodwill. Ask for receipts so that I can clearly prove that my clothing drop-off is real.

3) Consider switching tax filing software. TurboTax is great. It’s also the most expensive of the bunch. The amount that we truly save is probably negligible ($20-$30) total, but it might create a good review of what is available.

What other pointers have you learned while filing your own taxes?

Budgeting Time for Time-Starved

Posted on by SmartMoneyMD

There simply aren’t enough hours in a day.  I guess that if you are hypomanic, then you probably end up accomplishing more than the average person but you still might not think that there are enough hours in a day.  Fact of life.  As doctors, we think that we are able to budget time and multitask better than the average Joe on the street, but we still have demanding lives.  Patients to see. Kids to pick up from daycare before they charge you an inordinate amount of late fees (Yes, it happens in NYC). Meetings to prepare for. Meetings to attend. It doesn’t end. I am always impressed to see how some of my colleagues are able to accomplish so much with all of their obligations to meet. One could only wish that they had a device to stop time, but the overachievers we know simply find ways to tweak their schedules efficiently. It’s like how one doctor can see two patients and hour and another, four patients an hour.

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While I’m no time management savant, I’ve found myself more and more involved with assignments related to my job and out of work over the years. Some of it is gratifying work, others just a requirement of the job. As I am procrastinating on a budget proposal for my workplace, I’ve decided to reflect on five of the top strategies I’ve implemented for getting stuff done.

Do you wish you could stop the clock? I actually wish that I were younger, poorer, and have fewer responsibilities!

Without adieu, here they are:

  1. Sleep less. One less hour of sleep can accomplish a lot. If you slept one less hour a night for one year, you gain a little over fifteen days and potential productivity! Incredible. The key in trading sleep for productivity is that you have to ensure that you are actually productive. I slept very little during college, and I was probably very unproductive. If you intend to carve out extra time for a project in your already time-starved schedule, make sure you set goals and deadlines. Follow these deadlines and make yourself accountable if you have trouble accomplishing them.
  2. Outline your specific goals and how you intend to accomplish them. This concept parallels point #1.  For instance when I conducted clinical research, I had to follow deadlines to the extreme.  Some research topics were pitted against the clock.  If you don’t get your research published first, someone else will. (That’s right, it actually happened to me). Before anyone embarks on a research project, the research topic has to be deemed appropriate and that the hypotheses could be answered through this research.  We submit proposals to the Institutional Review Board (IRB), and often work against a deadline in order to get the research approved. After all research is completed, there is yet another deadline to get the research analyzed and have a paper written.  Every journal will have different guidelines on publication. Once you submit, there is yet another deadline in order to respond back to the reviewers in order to have your research accepted for publication.  Outlining your goals allows you to have a set schedule to make progress.  The more concrete you make your goals, the more likely you can document your progress. Even though we’ve all been doing this our entire careers, I still find it difficult to accomplish.
  3. Make yourself accountable.  Did your parents ever bargain with you to eat your vegetables by offering you the gift of dessert afterward? Perhaps you do this to your kids too? Bloggers implement this strategy all the time by announcing to the world what they hope to accomplish.  Financial bloggers publicly announce that they plan to reach financial independence by a certain date, and start writing about how they’re going to achieve it.  Then it gets done (Mr. 1500 was the first FI blogger I came across who did this)  It is psychologically more acceptable to let yourself down than it is to let someone else down.  If someone else knows about your goals, you have a higher chance of achieving it because it gives you something to prove. You don’t have to write about your goals online, but you could confide in a friend, spouse, or colleague what you hope to achieve. Keep them posted on your progress. If they care enough about you, they will follow-up on your progress.
  4. Add a wager to your goals.  That’s right, if money if involved, people get serious.  There are a few doctors in my hospital who play semi-competitive golf and they always have a pot.  Most doctors have some sort of competitive blood. Use that to your advantage.  When I enter the NCAA Tournament pool with a buy-in, I get serious.  I dig through the stats and the most recent games that each team has played. If there wasn’t a wager, I probably wouldn’t go through the trouble to study the teams as much. (I did horribly again this year in my tournament bracket despite “working hard”).
  5. Don’t be afraid to ask for help.  That is what teams are for. There is validity in delegation of power. I remember that very rarely in medical school did a single person, no matter how smart she was, solve a problem before a group of people.  If you are short on time, see if there is someone who could help you out. In fact, I think that I should ask my office manager to help me out on this budget proposal…

What other time management strategies do you implement?

(Photo courtesy of Flickr)