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Early Retirement Is Possible For Doctors and Professionals

Posted on September 2, 2015September 4, 2015 by SmartMoneyMD

Early retirement isn’t just a pipe dream for doctors or even most professionals. It can be achieved if that is your goal. You simply have to establish a plan and execute it. Routinely (but not obsessively) monitor and track your progress. There are plenty of (non-physician) bloggers who document their achievement of early retirement—many at ages where doctors only are hoping to finish residency or fellowship. If they can do it, so can you.

You Must Define What Early Retirement Means To You

Before you embark or consider early retirement, you must establish what it means to you. Everyone will have a different goal in early retirement. The main reason why people even consider retiring early is to free up your time to pursue activities other than what you’d do in your normal routine job without being homeless. Financially, being in early retirement means that you no longer require income from your routine job. It does not necessarily mean that you no longer generate income either. In early retirement, you still may have passive streams of income or simply a source to draw your living expenses from.

Examples of early retirement include:

Lawyer who retires early to travel the world with his kids and stays home to blog.
Software developer who retires early to blog at home and take care of his son. (Retire by 40)
Software developer who retires early to pursue his hobbies in construction work and later just enjoys life with his family and also runs a blog. (Mr. Money Mustache)

Excessively Lavish Lifestyles Cannot Be Sustained. Period.

Early retirement does not mean that you can take a Four Seasons Around the World trip every year while putting two of your kids through Ivy League schools and funding a new Mercedes AMG every year. That’s just not possible unless you’re able to draw out a mid six-figure living expense fund every year. Most doctors can’t even do that while earning their peak salaries, so it is unlikely possible if you’re not generating doctor income. Furthermore, this type of lifestyle is actually taxing physically and mentally. Eating Michelin-star food every day can even become mundane (and unhealthy).

In order to be able to retire early, your living expenses have to be reasonable while allowing you to live comfortably and enjoy your time. It will be different for everyone. What works for the former software developer may not work for the retired cardiologist. Ask yourself what you need to be able to sustain a happy early retirement and work backwards in your financial plan.

Is Early Retirement Truly Suitable For You?

Before you embark on your financial strategy, make sure that you really know what you’d like to be doing if you gave up your medical career. We went into the field to help and heal people (it also took many years of your 20’s)—is it worth it to give it up? Make sure that you won’t be bored if you do hang up your stethoscope.

Most importantly, is your spouse in agreement? If he/she likes his/her job and wishes to continue working, will it strain your relationship if you gave up your career? What will your extended family think of your choices?

Get A Pen And Draft A Plan

Give yourself some time. Figure out what you want to do, and jot down your goals on a notepad or on your favorite note-taking software. Keep saving money in the meantime. When you’re ready to take the leap, go for it!

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What strategies have you implemented towards early retirement, and do you think that it will work for you?

When Is A Hybrid Car More Cost Effective Than A Traditional Car?

Posted on August 14, 2015 by SmartMoneyMD

When I was choosing to buy my first car after finishing my training (read: eminent income boost), I agonized over a handful of dissonant choices: fancy vs budget, SUV vs sedan, SUV vs hatchback, sedan vs hatchback, hybrid vs traditional, and American vs Japanese vs European. Or should I just let loose and buy a Hummer?

I strongly considered getting a hybrid vehicle, not because I am environmentally conscious, but I did not want to spend as much of my time waiting at the pump getting gas. At first glance that’s a silly requirement, but you can lose 20 minutes every one to two weeks at the pump. Combine that with your daily commute and you have wasted at least 5 hours of your week in your car. The environmental advantages of a hybrid have been debated online as well, as some claim that the energy consumed from production of hybrid car batteries and components vastly outweighs any savings from pollution reduction. While the government has ceased giving tax breaks to hybrid vehicle owners, the price differential between hybrids and their gasoline counterparts has become marginal over the past few years.

I decided to look at two categories of cars:

Mazda 3 vs Toyota Prius

I test drove both of these cars and decided that there were very similar in price point. A mid-range Mazda 3 came in roughly at $20,000 new while a Toyota Prius was around $24,000 new for the base model. I did note that the Toyota dealers in the area often added many accessories into the car, which often drove up the sticker price at least $1,500. I also considered used vehicles for added savings but unfortunately did not have the cash to make a full payment on the car, and there were limited used car options in my area at the time I needed a car. Alas that is the life of a poor doctor!

The Mazda 3 and Prius were advertised to support a 39mpg and 48mpg highway fuel economy, respectively. This was impressive since the Mazda is not a hybrid vehicle! I decided to compare the annual cost of gas for each car and made a graph:

Comparison of Gas Expenditures Between Mazda 3 and Toyota Prius

At the time I was deciding to buy a car, car prices were at an all time low, around $1.85/gal! During the past two years, I believe that the higher I would have paid for gas was around $2.60 a gallon, with averages in the $2.20 range. For the purposes of the graph, I assumed that gas was $2.50/gal. At 15,000 miles per year, the difference in gas expenditure between the Prius and the Mazda would have been $180.29! Assuming that the Mazda 3 and Toyota Prius are equivalent cars (they are not), is it worth spending $4,000 more up front for the Prius to save around $180 a year in gas? Obviously the breakeven point could change if I clocked in more mileage per year or the price of gas were higher, but cost-wise, it did not make sense in my situation to drive a Prius.

Lexus ES300h vs Lexus ES350

What if I wanted a luxury car? A hotshot doctor shouldn’t be driving a common car, right? We need leather seats, power, and class! I looked into a Lexus ES350 and its hybrid counterpart, the ES300h. The advertised prices were $38,000 vs $40,920, respectively. There doesn’t appear to be as much of a price differential. The fuel economies were 31mpg on the highway for the ES350 and 40mpg combined for the hybrid. At 15,000 annual miles, the hybrid would save $326.61 if premium gas were $3/gal (yes I live in an area where gas is cheap!)

Annual Cost of Gas Comparison Between the Lexus ES350 and Lexus ES300h

Conclusion

At any rate, it is clear that the gas cost benefit of a hybrid vehicle increases as the price between the hybrid and its gas equivalent diminishes. The breakeven time will of course diminish as price of gas rises and number of miles driven increases (you don’t need a graph to understand that). The estimates that I used compared highway driving for the gas vehicles to combined driving for the hybrid (highway fuel economy for hybrid cars can actually be less than city driving since the gas engine has run).

There is also a huge discrepancy between the cost of the hybrids from model to model. My example of the Lexus ES350/ES300h is seems to be an anomaly at a $2,000 difference. The Lexus LS460 commands a price of $72,000 while its hybrid counterpart (LS600h, albeit with more features) comes in at $120,000!

Frankly, if I had the money to buy a used vehicle with cash, I would have done so. I opted for the best choice I could afford at the time, a Mazda 3 from the dealer. I was able to finance (cringe) the vehicle at 0% APR for 5 years! That’s right, no interest for the life of the loan. I currently average around 38-41mpg combined driving (no hypermiling tactics used) on the car and drive around 16,000 miles a year (MMM would give me a face punch for driving so much, but that story is for another time).

My selection against a hybrid (Prius or Civic) works for me because gas is so inexpensive in my area. Regular gas at its peak was only $2.60/gal!

Did I make a reasonable choice for a car purchase at the time? What car would you have opted for?

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Your House Sucks As A Retirement Account

Posted on August 8, 2015 by SmartMoneyMD

Soon after my colleague asked me about 401k Plans and retirement, a real estate agent (who was trying to sell me a house) pitched to me that homes are a good means to “diversify my retirement”. After all, I have to live somewhere, right?

Owning a Home “Forces” You To Save.

The sales pitch definitely hit a nerve. Owning a house can be considered a method of “forced savings” through mortgage payments into your home. You get a mortgage tax deduction and have a place to live! If putting money into your home is the primary means for you to save for retirement, you are screwed. Yes you could have purchased a flat on Champs-Elysees in the 1950’s or a plot of farmland in Shenzhen worth billions now, but buying a home does not equate to buying a lottery ticket.

Can owning a home serve as a means to park your money? Absolutely. But it doesn’t mean that it’s a good place to park your money. My parents bought their home in rural America in the early 1980’s for $66,000 where interest rates were around 12%. They put in another $20,000 in the 1990’s to add a garage and bedroom, but needed to move a few years later for medical care. We ended up selling (after 3 years on the market) for $70,000 before realtor and closing fees. While I don’t have the exact numbers, I believe that my parents paid approximately $150,000 in just their primary mortgage after interest rates!

To make numbers simple, suppose that my parents invested $48,000 in the 1980’s and kept it in a bank that only pays up to the inflation rate. In 1995, that $48,000 should grow to $88,777. Instead, we spent approximately $150,000 to own and live in the house (not including all other expenses of owning a house) and sold it for $70,000 (minus fees).

If you consider this strictly as a way to park you money and “forced savings”, my family clearly made a crappy investment in buying a house. From a qualitative standpoint, we did have great memories and a stable place to live.

But You Made A Crappy Investment In Buying A Crappy House In A Crappy Location!

Sure, hindsight is 20/20. Sometimes you end up living in a lousy part of the country with horrible real estate options simply because of your job. Maybe it’s not possible to move elsewhere because of family. Some markets have limited rental options and you end up having to buy a home in an artificially inflated market.

The truth is that you have to decide whether a home purchase is going to be for living in OR an investment. The math becomes easier if you make the distinction between investment property or a house you live in.

Buying a House To Use As A Primary Residence

Objectively, you can determine the costs of renting an equivalent dwelling or buying a house to live in. The costs of renting typically include the rent itself, renter’s insurance, and any other ancillary costs of renting.

The costs of buying are more complex. You must consider the purchase price, mortgage (plus interest), down payment costs, property taxes, insurance, maintenance fees, and hassle of dealing with problems. You can deduct mortgage insurance and property taxes from your net income, but you still end up spending the money to own.

Owning your home confers more stability from rent increases but limits mobility in case you find a new job in a different city.

The Right Approach To Using Your Primary Residence As An Investment Is To Treat It As A Non-depreciating Asset

Treating your primary residence as an investment actually isn’t a horrible means to stash your cash. There are plenty of other worse options like buying speculative plots of land, precious metals, or timeshares. Statistically, there is a low chance of you losing your home completely (like in a fire, natural disaster, or robbery). However, it is nearly as difficult expecting your house to rise in value without putting any work into it. Extracting value out of a home is nearly as challenging. You have to put your house on the market and hope that someone will come along and make an offer. You will eventually make the sale, but it is certainly not as easy as executing a trade and selling your mutual fund.

How much you can get out of your house will depending on regionality, the current real estate market health, and your ~~desperation~~ desire to unload your home. I wouldn’t expect you to lose a significant amount of money on the home, but it is often difficult to extract enough value to consider your primary home as an investment.

Would I consider your home as a means to store your money? Yes. As a retirement account, it doesn’t fare as well.

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Do you treat your home as a primary investment? Does it make financial sense?

Your 401k Plan Sucks As A Retirement Account

Posted on August 4, 2015 by SmartMoneyMD

One of my more financially interested colleagues recently asked me how it is even possible to retire even after maximizing his 401k his entire working career. This is definitely a valid questions. If he were to contribute every year for 35 years (starting contributions at age 30 right after he finishes residency), he’d only have $18,000 x 35 = $630,000 in today’s dollars, not assuming any growth from his investments.

That’s not a huge amount of money, especially by doctor standards.

In contrast, a poll by Financial Samurai shows that 25% of his readers have between $201,000-$500,000 in their 401k’s and 17.5% have over $500,000! To add insult to injury, 76% of his readers are between the ages of 26 and 45!

Financial Samurai’s poll is both enlightening and motivating. Clearly the majority of his audience are not doctors—if you look at my friend’s situation, in the absence of investment windfall there is no way he’d have as much in his 401k as his non-medical professional counterparts. This is simply due to the fact that doctors are usually at least 10 years behind their peers in retirement contributions. The maximum limits for 401k contributions are set universally; sometimes you can shove more in with profit-sharing plans, but duration of working life plays the largest role in building your 401k size.

It’s also sobering to think that despite earning solid six-figure incomes, doctors are still typically in the lower end of high net worth individuals. Those that fill the top can include real estate moguls, small business owners who picked the right niche for their industries, and the community college dropout who started a business selling parts for construction cranes.

If You Want To Get Rich, You Have To Work For It.

Just as we spent weeks mastering our basic medical science knowledge to pass the USMLE Step 1, we have to spend time and brainpower in order to get rich. I’ve discussed ways doctors can become rich previously, but the fundamental principle in doing so is still blood, sweat, and tears. As doctors, we can work harder than probably 90% of others around us (exceptions that come to my mind include the marines, military workers, and a handful of other grueling labor-intensive occupations), so I have no doubt that we can become rich if we want it badly enough.

We’d have to want money badly enough to become rich because time is limited. Success requires many trials, failures, reassessments, perseverance, and luck. It’s difficult to experience all of that simultaneously. To win, something in our lifestyle has to be sacrificed.

Great surgeons I’ve known became great from talent and the years they spent operating emergency cases while being away from their families. Prolific scientists dedicate their time on their research and publications—this is time not spent on any of their ancillary hobbies. I’ve also known a handful of successfully rich doctors who are twice divorced with alimony from L.A. to Washington D.C.!

If A 401K Not The Solution To Retirement, What Is?

Even though there is a limited amount that can be squirreled away in a 401k, it still is one of the only means for a doctor to save in a tax-deferred manner. You still have to max it out. But know that contributing to a 401k in not enough. You will have to build your retirement by saving through other means. This means that you have to make an active plan to put away a percentage of your income towards retirement. This money should be put to work, either through interest growth from CD’s or savings, dividends in equities, or capital growth. If you believe in banking on yourself while having a defined amount of your net worth allocated for your heirs, buy some whole life insurance. Whatever you do, save some before you buy a fancy car.

I told my colleague that he still needs to maximize his 401k every year, and even consider front loading the entire amount during the first quarter of the year to maximize the amount of time his money is in the market working for him. Whether or not his employer decides to match or offer a profit sharing plan within the 401k is irrelevant. As a moderately high income employee, he should have no problem contributing the maximum allowed amount. Additionally, he should aim to save 20% of his post-tax income for additional investments with the intention of increasing that percentage until the amount left over after each paycheck is sufficient only for living expenses. As living expenses change, so will that percentage of income that you save. The earlier he can contribute his earnings into workhorses for the market, the higher chance these workhorses will grow. Remember, he is financially a decade behind his non-medical peers.

If he is motivated, he can project out his savings rate and rate of return on his investments to predict the amount that he will have in 1, 5, or even 10 years.

How else are you contributing your earnings towards retirement?

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Doctors Are Still In Financial Despair

Posted on July 20, 2015 by SmartMoneyMD

I recently came across a post on Sermo written by a family medicine doctor who claims to earn slightly more than a manager at Starbucks and is over half a million dollars in debt (not including the house mortgage and car payments). His wife apparently is going back to school and incurring additional debt. The rest of his post essentially consisted of contemplating what options he has to get out of his predicament.

Ho-Lee-Sheeeeet!

Is this guy for real? Last I checked, I don’t believe a store manager at Starbucks earns more than $75k a year. A family medicine doctor should earn at least a six figure salary, which is still a pittance for the level of education needed and debt incurred. Many physician’s assistants command salaries similar to that of some family medicine physicians. Unfortunately, this type of story is common on Sermo, which seems to have become an online venue for doctors to vent. While it’s not possible to verify the validity of his situation, it still does confirm my suspicion that physician debt is alive and well. I truly feel sorry for the guy and hope that he figures how to bail himself out.

He clearly has a spending problem.

Mr. Money Mustache calls it a “hair on fire” situation. Even if his family’s spending habits aren’t horrible, he still needs to cut out any lavish spending habits. If the car payments are going toward new cars, he’d better not be driving a Mexican-made German luxury vehicle that gets 15mpg! I see many doctors actually lease cars, stating that they deserve something new every few years. That’s one of the fastest ways to get yourself in financial trouble. His house should not be a McMansion, and he could even consider renting if his work environment is unstable.

Salmon at $28.99/lb at Whole Foods is definitely out of the question. As are Louboutins for the wife, $400 Burton ski jackets for his kids, or a monthly membership to the local car wash.

The spending problem started with educational debt.

While it’s not difficult to dig yourself into serious debt from medical school, it does take some effort to dig yourself half a million dollars in the hole during medical school. You simply combine a non-miserly lifestyle with a non-working spouse and kids. If you’re going to do that, then you need to have a strategy to get yourself out of debt and avoid financial ruin before you even start your career. I was able to pay off almost $150,000 in debt by the end of my first year of practice earning a low six-figure salary. That was without sketchy arbitrage business with loan disbursements either.

If this family medicine doctor were earning $150,000 a year, I’d expect him to take home at least $100,000 after taxes. I would expect him to dedicate at least half of that amount towards his debt for at least a few years until his income situation improves. His kids should not expect an inordinate amount of financial assistance for college either. The wife should consider helping the family diversify their income streams as well when she is able to. This is unfortunately their situation, but there is still hope.

Don’t panic and formulate a plan.

Doctors need to take some of their own medicine. I often have patients who are a nervous wreck for no reason, and fail to listen or take initiative in controlling their diseases. The “more” proactive ones ask for a magic pill to cure everything while others simply don’t attempt to do anything. Likewise, a debt problem isn’t the worse thing in the world. As long as you have income potential, you can still take control of it. Just formulate a plan, stick with it, and adjust as needed. Rinse and repeat.

What strategies have you implemented to get out of debt or avoid getting into debt?

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A Female Doctor’s Guide To A Raise

Posted on July 18, 2015 by SmartMoneyMD

As doctors, we deserve to be compensated for our hard work. We dedicate at least a decade of our lives to acquire the privilege to care for people and the rest of our careers doing so. Unfortunately many of us get taken advantage of despite putting in the hard work. Prior to taking our jobs, we try to educate ourselves by consulting with our predecessors, going to seminars, and having lawyers review our contracts. That is still no substitute to experience in the workforce, so most of us still make our career decisions based on limited (and sometimes inaccurate) information.

Female doctors have to work even harder, as medicine is still predominantly a male dominated profession. You have to work harder to get what you deserve, but it can be done. Fortunately the rules for getting compensated fairly as a doctor are similar to that of most other corporate jobs. The following is a step-by-step list to get that raise you deserve.

Know How Much You Are Worth

Your value to the practice or company is determined by what you can offer. As a doctor, that means that you must know the value of your medical knowledge to your boss. Are you the only person in the state who can deal with certain medical conditions? Are there a hundred more of you in the same city? Are you expendable? How much revenue ARE you bringing into the practice, and how much CAN you bring to the practice?

Before you begin your negotiations, you need data. You need to know approximately how much revenue each one of your consultations, procedures, or surgeries bring into the practice. You need to know the spread of insurance payors of your patients, and ideally the range of reimbursements you receive per carrier. You need to know what your collections rate for billed charges are. You need to know your practice expenses too (if they open the books to you). This includes all operational expenses of the department, like employee salaries, benefits, fixed costs…etc.

If you are employed by the hospital, you will obviously not know its operational expenses. Focus on what you bring to the table. That is your bargaining chip.

Obviously the tips above are contingent upon your effort in the practice as well. If you truly are not seeing many patients and bringing in money to the bosses, then your bargaining power diminishes substantially. However if you are actually very busy but stuck with non-revenue patients, then you still have negotiating power.

Know How Much Others Are Making

Salary negotiation is also dependent on the income of your peers both in your group and in the local vicinity. How many male and female doctors in your profession are there in town? You must have a baseline to start with. If your current salary is significantly lower than others within your group, you should have better negotiating power (if your boss wishes to treat you fairly).

Formulate Your Strategy And Be Assertive

This is most critical for female doctors. Women are traditionally more timid in male-dominated professions, and are expected to acquiesce. This stereotype and tradition transgresses through the entire workplace. When a male doctor asserts himself to the mid-levels, he is accepted to be in charge and headstrong. When a female doctor does the same, she is seen as a b*tch. The same requests by different genders are unfortunately interpreted differently.

You must be firm when you make your requests, and be logical as well. Administrators love data even if the decision to raise your salary is subjective. A sample argument that you can work from is as follows:

In the past year, I have seen a growth in patient visits of 25%. This has translated to 500 patient visits to date and 8000 rvu’s generated. My professional fees total $1.1 million, and I have also brought in $2 million in technical charges to the practice. To date, my total revenue and patient visits exceed that of all the senior partners in the group. I feel that I have built up the practice significantly, and have a steady referral stream from Dr. Outside, who previously was not referring to our practice. I believe that a $100k bonus for my effort for the past year is very reasonable. I hope to continue growing the practice in the future.

Reassess On A Regular Basis

If you don’t get exactly what you deserve, keep trying. You will never get more if you never ask. It doesn’t hurt to ask as long as you remain professional and provide evidence of your work. This applies not only to salary, but also with logistics of practicing medicine like call schedules and fair division of patient care.

It continues onward into partnership as well. When you start looking into practice real estate, buy-ins, and stock, you want to ask questions to make sure you are as informed as possible and you are getting what you want and deserve.

Conclusion

Obviously it takes effort to do all that I have mentioned, but nowhere as difficult as the path to become a doctor. You simply have to stay organized, state your case, and keep trying.

What strategies have you implemented to obtain a raise? Let us know below!

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What is Motif Investing and Does it Belong in My Portfolio?

Posted on July 5, 2015June 22, 2018 by SmartMoneyMD

Note: I do NOT receive any commissions from writing this review, although I wish I did. All opinions expressed in this article are not influenced by any third parties. Any information should not be construed as investment advice either.

Update: Motif reached out to me, and mentioned that they do have a dividend auto-reinvesting program. This program is different from a traditional DRIP in that it allows you to reinvest dividends in any other Motif fund. The article has been updated to reflect this change.

I recently came across Motif Investing, a startup that focuses on an alternative way of investing. The company was co-founded in 2010 by Hardeep Walia and Tariq Hilaly. They are both smart guys with business degrees from Wharton and HBS, respectively. Hardeep was an executive at Microsoft while Tariq belonged to Alliance Bernstein, a large hedge fund. This means serious experience with money.

What is Motif Investing?

I would consider Motif Investing a hybrid between individual stock picking and indexing. The premise is that in a “motif”, you have up to 30 stocks or exchange traded funds (ETFs). Each stock in the motif shares a common outlook, and one of the presumed advantages is that you can own a set of stocks that provide an appropriate amount of exposure to the market.

There are at least 150 predefined Motifs to choose from. When you first sign up with them, you can complete a survey to analyze your “Investment DNA”. Some Motifs include Horizon Models, “Biotech Breakthroughs”, “Housing Recovery”, and “Eating Out”. Obviously each motif has a catchy title to represent your investment sentiment. The “Eating Out” Motif holds stocks in fast food chains, casual dining chains, cafes, and fine dining establishments.

How Much Does Motif Investing Cost?

One of the advantages of Motif Investments is that the purchase of each Motif is CHEAP. You are charged $9.99 for a purchase that contains up to 30 stocks or ETFs. This means that each stock trade is only $0.33! I don’t have the details on how Motif is able to accomplish this but I’d imagine part of this comes from have a set volume of trades and some relatively deep pockets in their funding. I don’t know if the trade costs are part of the burn rate of the company.

If anyone from Motif wants to enlighten me, please contact me through the website!

All of the Horizon Motifs incur no transaction costs as well. For instance, if you purchase the Horizon 1-Year Aggressive Motif, you will get a mix of VTI, BNDX, BND, VXUS, IVR, and GSG at no trading costs! Great deal, if you ask me.

If you decide to customize your own motif, you are charged $4.95 to change a single stock or $9.99 to change your entire motif.

What Advantages Does Motif Investing Confer to Me As A Doctor?

As mentioned above. Spending less than 10 bucks for 30 stocks is a steal. If you are computer savvy and a data junkie, Motif Investing offers you all of that. You get data points of all of Motifs, nice graphs, and plenty of information to maximize your “control” of your portfolio. The amount of data available to interpret is amazing, and Motif’s interface is a data junkie’s paradise.

There is a strong social presence on Motif. There are commentary options throughout the entire website, and you can also share your motifs on Facebook, Twitter, and Linkedin. Is this an advantage? I’m not sure, but you have all the options to share your investing prowess to the world. Conversely, the world also has the opportunity to critique your investments as well.

What Disadvantages Does Motif Investing Have?

For the first several years of existence, Motif did not have a DRIP option to reinvest your dividends. Investors lost the ability to dollar cost average commission-free, albeit in small amounts. They now offer their own auto reinvesting program which allows you to invest any cash dividends in any other stock or ETF the service offers. Think DRIP, but only better.

While not exactly a disadvantage, there’s no magic formula in investing. Motif provides a framework to select categories of investments that suit your interests, but it’s unclear to me that long term this will confer advantages. Yes, you feel like you are in more control, but if you look at many of the motifs available, they have incurred losses over the past 12 months, just like the how their underlying stocks have performed individually.

Conclusion

I think that Motif Investing offers an interesting spin for the techie world. You get some advantage of an immense amount of data to make your decisions, and you might get some diversification from owning up to 30 stocks with one trade. However, you still aren’t protected from human idiocy. If you decide to play margin (which is available) and lose big, you’re still out some money. If you like buying and selling to time the market, you can still do it and incur transaction fees.

Most non-finance professionals (read: doctors) aren’t really going to benefit largely from having these options. We doctors as a whole are bad businesspeople and bad investors. Even those of us who claim to understand biotech firms and have medical knowledge of pharmaceuticals are not necessarily going to do well with biotech stocks. Instead of buying individual stocks in a particular genre, you get up to 30. Big deal. If you’re going to get rich with stock investing through Motif, you’ll likely have gotten rich without it.

I may consider using Motif in the future when I have ancillary income. It gives some more diversification to individual stock picking that I itch for, but I definitely won’t put all of my taxable income in Motif.

What opinions do you have for Motif Investing? Have you had experience investing through them?

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