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How to find wall studs the right way

Posted on March 9, 2016 by SmartMoneyMD

One common household task that many of us have dealt with is identifying a sturdy point in our walls to either hang a painting or frame a shelf. There are studs (2”x4”) behind the dry wall, but how do we find them?

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Hardware stores sell stud finders. You can pick up one of these battery powered devices for around $20.
Ascultation. Most interior walls are not insulated. This means that there is air space in between the dry walls. Use your ascultatory skills and identify where the hollow points are, and what the dense points are. You can even use your stethoscope!
Understand fundamental housebuilding codes. Typical walls in the U.S. are framed with 2”x4” posts at 16” apart on-center. Once you find one, you can measure out and find another one.
Use a magnet. You can tie a neodymium magnet to a piece of floss. Dangle it on the dry wall, and it will stick to head of the nail.

I typically use a magnet in combination with auscultation. Once you find the nail head, you can typically find the strong points behind the wall to mount your TV, shelves, or wall art.

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Should I file my own taxes? Step by step rules to help you decide

Posted on March 2, 2016February 28, 2016 by SmartMoneyMD

Now that tax season is in full swing and we are all scrambling to round up our tax forms to file, it’s worthwhile to discuss whether one should use an accountant or just file taxes yourself. Essentially the purpose of tax season is to ensure that you are paying a fair amount of your income back to the government. The government provides infrastructure, safety, and rules in exchange for a share of our earnings.

Most professionals I know actually hire accountants to file their taxes. While each person has their own reasons for hiring an accountant, the most common excuses include:

Too busy
Too complex
Don’t want to be audited
Time could be used to earn more money

I asked ten of my colleagues whether or not they have ever filed taxes on their own, and none of them have. Not in residency, not in fellowship, and certainly not while they are holding a full-time job. Interesting.

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Why you should file your own taxes.

While our tax system has only gotten more complex, access to technology has only allowed us to file more easily. You can file everything electronically through third-party vendors at a fraction of the cost of an accountant. This can be done through software you purchase offline or even completely within the cloud. If you have any ability to search online, you can find most answers to everything that you will encounter. It really doesn’t get much easier.

Self-filing is cheaper. The up-front cost of filing your own taxes will definitely be lower than filing through an accountant. Third-party software ranges from FREE for 1040EZ forms to around a hundred bucks for more bells and whistles. Some vendors will charge an additional nominal fee for state filing, but typically that is also less than $50. Out the door, you will likely spend less than $150 if you self-file. I believe that I spent $70 through TurboTax last year even after (unnecessarily) upgrading (being tricked) to a fancier package.
You will understand the tax system more thoroughly if you file yourself. If you have to go through the steps of tax filing yourself, you will understand more about the federal and your state’s tax laws. You’ll probably understand more than the majority of your peers even if you file your taxes only once.
Self-filing is a no brainer if you are a resident or have limited income. If you earn $44,000 a year on a fixed income and your spouse stays at home, you’d better learn to file your own taxes, or have your spouse learn. Your accountant might charge you upwards of $500 to $1000 even if the simplest returns. If your accountant charges you $1000 to file a return on $44,000 of gross income, you are paying over 2% of your income to your accountant!
If you are on a fixed salary, self-filing will be easier. If the majority of your income comes from a W2, then it is likely that your tax return will be easy to file. You may not benefit too much from advanced help from an accountant.

When should you hire an accountant

In general, hiring an accountant is worthwhile if you are likely going to save more taxes by having professional help.

You have multiple income streams. Suppose that both you and your spouse have incomes. You have multiple investments that kick out dividends and distributions. Some of them are foreign investments. Maybe you own some land that is used for hunting or oil drilling. You are getting paid through many means of passive income. Lucky you.
You have a complex income structure. If you are self-employed, you have a slew of options to reduce your tax burden. Let’s say that your company employs you, and pays you a salary and distribution every month. What is the right ratio to justify your job? You might not understand or have the time to consider what expenditures are considered necessary for your business. An accountant may be able to help with that.
You just don’t care to learn about taxes. Okay, this is the most common reason my colleagues are relatively uninformed about their money. Chances are that if you fall into this category, you won’t make it on my website to learn either.

It might be helpful to do your own taxes AND hire an accountant

Look, having the option to outsource your tasks doesn’t mean that you have to stick with an accountant or vow to DIY on everything. It would be prudent to try doing your own taxes while you still have a simple financial arrangement, perhaps like in residency. You learn a lot about the U.S. Tax System simply by reading the help files in TurboTax or TaxACT (insert your favorite tax software). I sure did. Saved me a lot of money too.

One of my co-residents years ago told me that he paid his accountant $1,500 each year to do his taxes. His longstanding relationship with his accountant (repeat business) conferred him access to questions throughout the year if they arose (he did not consult with his accountant much outside of tax season). I was worth about $25 an hour during residency. The first year I did my taxes it took me maybe 3-5 hours to run through everything. I spent most of my time reading topics not directly pertaining to my tax situation, but I was curious. I saved $125 of post-tax or UNTAXED income by filing my own taxes. In contrast, my co-resident spent $1,500 of POST-TAX income on accounting fees while earning $52,000 of gross income. Assuming that he had little wealth from his parents, he probably spent 3% of his gross income paying his accountant! (I think that he was considerable more wealthy than I was or am even now). My tax situation did not really change during residency, and I breezed through subsequent returns in less than 2-3 hours each year.

While I still complete my own taxes (so far), it’s becoming more practical to consider hiring an accountant as I [hope to] grow my income in various ways. Unfortunately I am still in a salaried position that still pays out a W2, so my taxes are still a breeze. Consider reviewing what suggestions your accountant makes on your tax return to learn about his/her strategies. If you tax situation doesn’t change from year to year, you could consider filing the forms yourself in later years.

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Can doctors lose their jobs? How to protect yourself from getting fired

Posted on February 26, 2016 by SmartMoneyMD

We went into the medical profession to heal others. One of the perks of spending a decade of your life training to become a doctor is that you are likely to have job stability. With aging baby boomers and simply an insufficient number of medical graduates, we are projected to have a huge physician shortage over the next 10 years. If that’s the case, then doctors will always be in demand, right?

Not necessarily so.

Can doctors get fired?

Absolutely. Aside from misconduct, doctors can definitely lose their jobs for the same reasons why any white-collar worker can lose his. Hospitalists are a common example. They are typically employed by a hospital or through a medical group contracted by a hospital. If the hospital decides to contract out their Hospitalists or terminate an existing contract, then doctors may be out of work. Hospital employed specialists can lose their jobs in a similar manner if a hospital decides to eliminate coverage of a particular field.

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Take necessary steps to prevent your obsolescence

Fortunately, you still have control over your future. You can take proactive measures to both ensure that you are indispensable for your organization and prepare yourself in the unlikely event that you do find yourself kicked to the curb.

Remember that everyone else is dispensable except for yourself. Suppose that your department is financially unstable. If the budget does not become neutral by the end of the year, the losses will come out of your salary. That is unacceptable. As the physician, you are the revenue generator. Find out where your funds are going towards and don’t be afraid to fire staff if you have to.
Make your hospital/practice need you. This boils down to knowing your value. What experience and skills do you offer to your organization? Is it your profound medical expertise or your leadership skills? If your organization no longer had you, would they crumble? Find out what your strengths that you bring to the table and make it known.
Make time to enrich your skill set. Read. Blog. Learn about your field. Learn about your organization, and figure out what you bring to the table.
Network. This includes physicians outside and within your organization. You have to be known, and understand what you can offer to others outside of your group.
Maintain contact with headhunters. You don’t have to actively solicit these recruiters if you have a relatively stable job, but definitely keep the doors open. You never know what options might present themselves and when you might need their assistance. Maintain contact with your colleagues in academia, and keep your skills sharp. Sign up for the mailing list for your society’s career bulletin.

Be mentally prepared if you are released.

If you are let go despite your best efforts, then you should already have your escape plan in development. You’ve engaged with your medical community, shown them your skills, and also kept in touch with other viable medical groups in your field where you could potential jump ship to. Job loss and job changes are psychologically taxing. If you have taken adequate precautions, any changes will be more palatable.

What lessons have you learned about job changes in medicine?

Do you want to be a winner? How to win in life

Posted on February 23, 2016February 23, 2016 by SmartMoneyMD

I tend to stay out of politics and out of political discussions in all situations. However, it’s impossible to avoid hearing about the political discussions if you watch the news or read anything online. It’s also interesting to learn about each candidate’s personalities. I found it particularly entertaining that one candidate called himself a winner.

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What does being a winner mean?

A “winner” is generally construed as a successful person in life. This certainly has different definitions depending on who you ask. In medical school, I had classmates who somehow considered not getting AOA (generally the top 5% of your graduating class) to be a failure or not getting one’s first choice in residency a failure. If that is the case, then most doctors are failures.

I know plenty of foreign medical graduates and doctors who were horrible students who run departments in well-known institutions, and an even greater number of them who earn more and work less than some of the most successful graduates from top medical schools and residencies. Are the lesser qualified doctors winners?

In order to become a winner, you must define the term for yourself.

Does being a winner mean that you are the most knowledgeable physician in your field or subfield? Does it mean that you have maximized your understanding of a particular subject? Or does winning mean that you are outrageously rich?

Make sure you want to be a winner.

Once you’ve established what your perception of what a winner means to you, you have to ask yourself if that is an achievable goal and that it is something that you want to accomplish. Be prepared to lose some sleep in the process. Map out a plan, and work at it every day.

Go become a winner.

Start early and go hungry. Time is your biggest ally. If you want your savings and investment accounts to grow, you must start early and let compound interest work its magic. The sooner you figure out your goals, the more time you have to make mistakes and learn.
Out hustle your competition. If you spend enough time on a subject, you will become an expert at it. If you spend more time on it than everyone else, you’ll likely become the definitive resource for others.
Sleep less and work more. No pain, no gain. One hour less of sleep in exchange for work will undoubtedly result in increased productivity. It may not happen every day, but do it for a year and I bet that you will accomplish more.
Rinse and repeat. Keep adapting, and roll with the punches.

What other strategies have you implemented to become a winner?

Should I buy the BMW X5 xDrive 40e Hybrid luxury SUV?

Posted on February 17, 2016February 3, 2021 by SmartMoneyMD

I previously assessed the economical merits of driving a hybrid car. The vehicles I reviewed were more wallet friendly and not frequently seen in communities whose annual income exceed $200,000. Mazdas and Priuses aren’t typically considered luxury cars. If you cruise down Highway 101 in the greater Los Angeles area, the luxury cars you see are Teslas, Mercedes AMGs, Hummers, Maseratis, and high-end SUVs. If you stroll down any of the tree-lined neighborhoods of Boston, you’ll see Range Rovers galore. Among this wide range of luxury vehicles, only a handful reflect consideration to the environment. This leads up to our next question: if you can afford to splurge on a luxury car, should you aim to be environmentally responsible as well? After all, wealth and environmentally conscious is always morally superior, right? ? This is where hybrid vehicles and electric cars come in. Is it worth it to buy a luxury environmentally conscious vehicle?

I recently received a flyer in the mail advertising the new BMW X5 xDrive 40e Hybrid SUV from our local BMW dealer. They were willing to deliver the SUV to your doorstep to test drive! Business must be tough these days, especially with sub $2/gallon gasoline in most of the country (not in California!) This level of service for luxury vehicles is actually not rare at all—Ferrari dealers will deliver your vehicle and pick it up for service from your doorstep. However, I never considered BMW’s to be in that league. Nothing screams more of moral superiority than a 5000 lb luxury hybrid SUV delivered to your doorstep.

I looked into the specifications of this monstrosity: luxury German parent company, assembled in South Carolina, $63,000 base price tag, with fancy Bang & Olufsen speakers. Acceleration from 0-60 is less than 7 seconds, and the electric motor can clock in somewhere between 13 to 18 miles. Prominent logo in the rear hatch that proudly reminds others on the road that this monstrosity has an electric engine as well.

Does this car save you gas?

A driving range of 13-18 miles on electric power sounds absolutely horrible. While I hate commuting, I still ended up living about 13 miles away from my workplace. If I owned that car, I’d still have to eat some gas on every roundtrip commute. If I travel between offices and the hospital, I’d run out of electric power halfway through the day. You have to recharge your charge every single night to make sure the battery stays charged.

BMW says that the average errand involves running to the grocery and department stores and is less than 10 miles so the X5 Hybrid is covered. While this may be true, why should anyone ever need to haul 5000 lbs of vehicle to buy groceries? No one should ever lug around that much weight to buy groceries even if you’re buying 100lbs of dog food!

You’d be better off driving a smaller, more fuel efficient car if your sole aim was to save gas.

Who should own this car?

All practicality aside, the BMW X5 is actually a very nicely designed SUV. The engine under the hood and the interior design exudes luxury. This car makes one of two statements about its driver:

I am filthy rich and enjoy luxury cars or
I am in over my head and paying for this car’s lease through my biweekly pay check.

I’d say that if you’re going to drop $60+k on a luxury SUV, there are far worse vehicles (read less reliable and less practical) to spend your money on. The hybrid aspect of the car isn’t going to save you much money, but sounds a whole lot more practical than driving a hybrid Porsche.

Since I am a firm believer of stealth wealth, I would probably not own this car under any circumstance. With a fancy car, I’d want to make sure to keep it in the garage to protect it from the elements. I’d be wary of it being in the supermarket parking lot, lest some careless customer slams their car door onto mine. I’d worry about people breaking into the car, since a luxury car attracts attention.

If this car does strike your fancy, make sure that it represents a relatively minor portion of your wealth. Any luxury splurge like this shouldn’t exceed 1% of your total net worth. For a $60,000 car, this means that you should have at least $6 million of net worth. I understand that this is an incredibly conservative assessment, but this is a pricey splurge.

Would you buy a BMW X5 Hybrid?

Maintain interest in your job to minimize burnout

Posted on February 10, 2016 by SmartMoneyMD

I previously discussed strategies to avoid physician burnout and that a four-day workweek will help keep your stressful job manageable. A second approach to maintaining your drive in your work is to find one aspect of your job that you find interesting and challenging. Focus on conquering it. If that challenge is compelling enough, it will keep you going.

What interested you in childhood?

Did you ever have one skill or interest that you mastered during childhood? Remember how many hours you spent learning about a particular subject? You found a means to improve your understanding of this topic, whether or not the material was easily accessible. The key to success is the hustle, motivation, and drive.

This is no different in any job you do. The magic in becoming good at your job or career is to find a topic or area that you are passionate about. This can include simply clinical practice, practice management, or administrative duties (meh!). In my experience, there is always an unmet administrative role in every medical practice that needs additional manpower (or woman power). If any of these roles suits you, you can make a side career out of hospital or medical administration.

What if you hate your job?

How can you find a challenge in your workplace to conquer if you simply hate your job? I certainly do know physicians to passionately hate their job, but those people are few and far in between. The most common reasons why people hate their jobs involve coworkers, subordinates, the income, or the environment itself. I have plenty of malicious subordinates who try to undermine the success of my department. Office politics and mounds of paperwork are also common topics that make our jobs miserable.

The most important step in finding a resolution is to consider what aspects of your workplace or coworkers that make your experience unpleasant. What variables can you influence or change? Consider the negative factors and whether improving on these issues will make you happier. For me, there were dozens of issues that need to be corrected. I made a priority list and started tackling them. It certainly made the workplace more manageable as we fixed glaring mistakes and inequities.

What if your job cannot be salvaged?

It is possible that your job still wakes you up more frequently than your newborn no matter what you’ve tried to do to salvage it. At this point, you have to decide whether you will still be able to support your family if you stopped working and start looking elsewhere if you don’t have an alternative stream of income. This is a great time to brush up on some passive income stream options and create a plan to allow yourself to retire early if you find yourself in the same situation in the future.

What other options have you considered to make your job more pleasant?

Should You Be Content With Your Income?

Posted on February 2, 2016 by SmartMoneyMD

My financially interested colleagues often ask me whether they should be content with their income. It’s obviously a loaded question since there are too many variables that will influence the answer. Fortunately it does not have to be a difficult question to answer, especially if you ask the question early and frequently in your career.

How important is income to you?

This is the primary question to ask yourself. Are you planning to retire in the next five years but still have three kids to put through college? Do you have expensive hobbies or habits that you can’t forgo? Establishing a realistic goal of how much you need and how much you’d want to have in a certain timeline will help you focus on an income target.

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Does your income in your main occupation provide your income goal?

If it does, then you’re set. You don’t have to do anything other than keep your job. Make sure you do it well, and make sure you continue to enjoy what you do. If your main occupation becomes a chore, then you will not be happy no matter what you earn.

If not, figure out what you can do to increase your primary income. Do you need to look for a better job? Do you need to negotiate a higher salary? Can you reach the upper tier for your specialty and level of experience? Would doing so compromise your lifestyle or secondary obligations?

If you cannot increase your primary income and still need to increase your overall income, you have to decide whether you want to spend your free time making money. Do you have hobbies that can generate income? Money is plentiful in the world, but it is not easy to come by. You can hustle and earn lots of money. You can hustle and earn nothing. Expect to have many failures before finding success. For instance, I spend a disproportionately high number of hours per week managing this website, but still have not generated any income. Who knows, maybe one day it will reward me with ancillary income. But I can’t quit my day job yet.

What is important to understand is that we are not limited to one venue for income. You can have income through your primary job, an online consulting business, or driving for Uber. All it takes is hunger, hard work, and time.

Keep reassessing your financial situation.

Ask early, and ask often. Is income important to you? What have you done today to increase your income? What is your time horizon to achieve these goals? Rinse and repeat.

What are you doing to assess your income needs?