Tag: willpower

Frugality does not guarantee financial independence

Frugality does not guarantee financial independence

Medicine is a humbling profession in that no matter how advanced healthcare becomes, we are far from guaranteeing a particular result.  Fate, as one might say, is fate.  Financial temperament, on the other hand, fortunately has a more manageable learning curve.  Investments really don’t have guaranteed returns, but if we invest enough relative to our income and expenses, the math inevitably works in our favor.  We are all not doomed!

Ego is the enemy

What we don’t know can actually hurt us.  We all are guilty of overestimating our own abilities at some point in our lives.  Sometimes we pay the price.  For many doctors, believing that we have more earning power than we actually do serves as our downfall.  There are plenty of smart people in medicine who simply don’t acknowledge that small expenses in great numbers can overtake even the biggest of salaries. Two fancy car leases? $1600/month. Restaurant nights several times a week? $1000/month. Take-out meals for the family? Another $1000. Each one of these purchases is achievable alone, but together can whittle away a solid physician salary.

Put aside the ego, and you can get far in life.

Life can deal you the worst of hands

Sometimes even with judicious financial planning, you can even come up short.  My heart aches when I hear about these unfortunate stories, but we can all learn from others.  This is the case of Doctor D, who conglomeration of several of my colleagues’ financial situations.  Doctor D, despite having sound fundamental financial sense, will likely protracted medical career beyond her control. Let’s delve into the details:

Doctor D, an anesthesiologist, enjoys a relatively high physician income with shorter work hours than the average physician. Her husband, armed with a business degree from a top 5 institution, commands an income after bonuses in the mid-$300k range.  Along with prudent real estate ventures, their combined pretax income will hover around $700,000.  They live in an expensive part of California, and will roughly have a net state and federal effective tax rate of 45%. For most people, $385,000 is a generous annual fund to work with.

Keep on hustling, and maybe you’ll get your lucky break.

Doctor D has two children, one of whom requires lifelong extensive healthcare expenses.  She also has aging parents with recurring medical and lifestyle expenses that require financial support. These two factors alone will erode most of their savings:

Therapy and cognitive classes – $120,000/yr, 50% of which is covered by health insurance.

Senior living and healthcare expenses – $100,000/yr

Rough Total: $160,000

Fortunately, her parents do have some savings that offset some of the senior care needs, but if you add the rest of their expenses, there is really nothing much left to invest:

Property tax – $30,000/yr

Mortgage – $60,000/yr

Nanny – $3000/month – $36,000/yr

Food – $3000/month – $36,000/yr

Household/misc – $2000/month – $24,000/yr

Total: $186,000

Finding the escape plan

I have been wondering how one can escape from this vicious cycle.  When you have fixed health expenses consuming roughly 50% of your post-tax income, you are already starting the race with one foot.  Let’s look at several options that might be palatable:

Geographical Arbitrage

Those who practice geographical arbitrage swear by it.  The fact is that not everyone will be able to adjust their interests to a particular region, no matter how financially advantageous living in Wisconsin is (sorry Badgers!). Doctor D would do well packing up from the OC and reducing taxes, mortgages, and essentially all other food costs.  A recent article by @HiringLab shows just what you can account for with geographical arbitrage.  Even if there is a comparable region-adjusted salary for Doctor D and her family, it may be tough to pick up the family and move.

Running lean on what you already have

This is the strategy that we should all employ if we need to work with what we have. Perhaps one could find a more economical nanny, groceries, or recurring daily expenses.  Doctor D is in a predicament because her recurring expenses really aren’t necessarily the problem.  Running leaner on these expenses may only make the family less happy without significant savings.

Find an employer who can front the medical bills

This is an interesting option.  Big players in the tech industry are often known to offer generous benefits to its employees.  There may be options in the healthcare industry that have similar arrangements.  Large public hospitals and the Veterans Affairs are two options that come to mind. Perhaps there are options for their employees to purchase healthcare benefits that will cover the high cost of healthcare for Doctor D.  In exchange, Doctor D will accept the lower salaries or perhaps more inefficient medical practice.

The bottom line

I feel badly for Doctor D.  But her situation is more common than we realize.  She may not be able to retire by 45, but there is still light at the end of the tunnel.

What alternatives would you suggest she take? 

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Budgeting Time for Time-Starved

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)

Becoming a rich doctor: having the winning mindset.

mindset of a rich doctorI don’t have a bone with pick with the wealthy, but wealth can help you and your heirs get ahead in life.  Tennis lessons. Music tutors. Private schools with other like-minded peers. Connections that can get you into high places. Wealth is not a bad thing.


Most physicians in the United States are considered “wealthy” too. Not Sultan-of-Brunei wealthy, but comfortable-upper-middle-class wealthy. We have a relatively good earning potential despite the length of training we incur.  Despite the similarly long number of years we spend perfecting our trade, there is still a wide income range across medical specialties. Some doctors will definitely become “wealthy” faster than others.

I previously wrote about becoming a rich doctor through building a strong offense through multiple income sources. I think that these remain strong tenants in maximizing our worth, but the appropriate mindset allows you to keep what you earn and build your wealth through passive means.

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A winning mindset to wealth should include retention of wealth.


You keep what you don’t spend. This is part one of the winning mindset. Whatever you retain can be used to work for you. Your army of millions of pennies can be put to work with almost no effort in an interest bearing fund. If you want more potential for reward with higher risk, use a P2P lending mechanism or simply the index market. If you want to  manage your financial minions actively, you can invest in other means like real estate. No matter what you do, you still need to be able to retain that wealth to grow for you.

Understand what you really need to be happy.


We all have material desires to a certain degree. The goal in wealth accumulation and financial freedom is not to restrict these desires, but to actually assess what we actually need. Having that nice $120,000 AMG in the garage does you no good if you only drive it on the weekend and still pay thousands of dollars a year for maintenance. Could you have done without it, and turned that $120,000 into $240,000 in 7 years?

I see plenty of wealthy people, especially doctors and lawyers, who seem unhappy. Are they unhappy that their jobs consume so much of their life but they are loathe to quit because it pays so well? Are they unhappy that the other partners in their practice make so much more money than they do? Are they just unhappy people?

Clearly the lack of money is unlikely the cause of their unhappiness. This is a situation that you don’t want to get yourself into. Most of us really have never thought about what actually makes us happy. It doesn’t really matter either if you’re a hotshot neurosurgeon or a physician’s assistant—if you don’t really have a strong grasp on your needs, you will spend down your income and risk being unhappy in the process.

How to figure out your key to happiness.


What do you actually need to get you through the day? Does that daily Starbucks coffee actually make you happy, or does that just get you through a 10-hour workday? Would you be happier if you got to ride your bike to work everyday? Do you prefer to spend your day tending to your garden? Typically that core set of needs will not cost you millions. MMM is able to pare down his family spendings down to $25,000 a year. Where is your number?

What is your magic list of happiness?

(Photo courtesy of Flickr)

How Shark Tank Makes You A Better Doctor

shark tank will make you a better doctorI like watching the business ideas pitched on Shark Tank. In this weekly show, aspiring entrepreneurs pitch their services and products to wealthy investors. Not only do I feel inspired by the entrepreneurs while watching their pitch, but I also learn about the thought processes of successful businessmen (women).

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“You’re dead to me.” 

Kevin O’Leary, one of the investors, has a demeaning quip whenever the potential investment opportunity is no longer viable to to him. It sounds horrible, but it is an effective approach to running a business.  You can’t take things personally in business. What are your goals? Do you plan to make friends or run a profitable endeavor? Don’t expect that you’d be able to run a successful business AND run a profitable business all the time? The last thing you want is to dwell on issues either out of your control or not in keeping with the plan.

This mentality also works in medicine. We are bombarded with information overload—an excessive number of clinical patients, excessive e-mails, and hiring/firing of staff. Prioritize and only sweat the details that you have control over. Even those issues under our direction need to be prioritized. I’m not a big fan of last-minute decision making, but trying to do everything at once is also a recipe for disaster.

Set your plan. Automate, and reassess frequently.

Learn to Hustle

Successful entrepreneurs hustle. They work out of a corner of their living room or build their businesses out of their garage. They eat and sleep their work. Some of them put their families’ livelihood on the line. As a doctor with a stable income, you probably don’t need to be so extreme, but hopefully you understand that there is a correlation between hard work and success.

You will be more productive in your work if you hustle. It may be more stressful, but remember that you are always compensated at a rate that is dictated by efficiency. I have seen plenty of Internists spend an extra 2-3 hours closing notes and following up lab work after they’ve signed out. This is mostly a problem with our healthcare system, but we still have to adapt. How can you function during your work day more efficiently so that you don’t have excess work to deal with after hours? Are you able to take a short lunch break? What about following up on labs in between patients and consults? If you are a dermatologist seeing fifty patients a day, can you get a scribe?

Hustle while you are at work. You might need to do it for a few years, but no matter how much you work, you probably still have a better lifestyle than you did while you were in training. After you hit your financial goals, you can cut back.

What characteristics of an entrepreneur do you mimic?

(Photo courtesy of Flickr).

Why most doctors aren’t rich – Fighting the mental game

how to become a rich doctor fighting the mental gameMost doctors or any other high-income professional really don’t have difficulty with the offense game. We all are capable of earning a relatively good income. Even if you live in a high cost of living area, you can still make out relatively well. For some reason, most of our still aren’t rich. Given that almost half of doctors don’t even fully contribute to their own 401k accounts, I doubt that this same portion of doctors will NEVER become rich.

Why does this happen?



Most of our childhoods weren’t filled with abject poverty. Most of us weren’t rich, but we had food on the table. I would get nice toys on my birthday, even though I had no idea how much of my dad’s paycheck went into the present. The new video game? Two day’s worth of salary. That new computer? Think AN ENTIRE MONTH’S PAYCHECK. You can’t blame your parents for it either. They wanted you to have a nicer childhood than they did. I have seen colleagues coming from Uber-rich families who have little clue about how to save money, and I have also seen Uber-rich penny-pinchers. Perhaps there is some correlation between financial awareness and parental wealth, but not always.

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Most money-conscious people I know have had certain experiences in their lives that directed their attention towards money. Many them have had early life work experiences like mowing lawns, babysitting, or working the fast food market. Perhaps the minimum wage environment led them to cherish every dollar. Whether it was having a minimum wage job early in life or having no money in college, these experiences left a mark on their psyche.



As a doctor, you are expected to have a nice German-branded car, wear luxury clothing items, and own a giant house. There is pressure to portray that image. You’ve spent a decade of your youth becoming a doctor. Some of you do brain surgery. Others save lives. There is no reason why you aren’t rich. How would your patient feel if he saw you at the local Hispanic discount shopping center buying oranges for 4lbs / $1? An openly frugal doctor conveys the notion of an unsuccessful doctor.  Hell, if I were money conscious, I’d never expect to see my surgeon bargaining at a yard sale or buying discounted produce.

The premise goes back to The Millionaire Next Door, where a plumber with a similar salary as a lawyer would be more likely to have a higher net worth simply because the public persona influences how the professional should appear. One of the critical steps in becoming wealthy is to fight the convention of a wealthy persona. The most common type of rich person employs stealth wealth.



You spent years of your life studying, followed by more years of low income. All of a sudden, you’re earning a six-figure salary. Who cares if you’re pulling in 60-70 hour weeks and risking liability every time you touch a single patient? You’ve never made so much money. You are rich!

News break, sucker. Nearly every single financial independent/early retirement blogger out there has more net worth that you, the highly educated doctor. That blogger might even be a decade your junior and still is more financially well-off than you are.  Who’s educated now? It might take a physician another decade of hard work before she catches up financially with the equivalent financially savvy early retiree. At that point, the physician would still have to work to maintain growth in her finances.

As a physician or any highly compensated professional, you have high net worth potential. More accurately, you only have high earning potential. Your job is to remain a productive member of your profession (not disabled) and convert potential into substance. It will still take at least five years of hard work and high savings rate to generate a substantial amount of net worth assuming you don’t have educational debt.

Don’t consider yourself rich or wealthy until your bank accounts say so. It doesn’t matter if you crack brains open for a living or maintain IT servers at the local food pantry.



You can’t change your upbringing, but you sure can learn from it. If your parents were frugal and intelligent with their finances, figure out how they managed. If they weren’t, then remember what NOT to do. It will surely make you a better parent yourself. This isn’t a parenting blog, but it would be prudent to impart your hard-earned wisdom onto your little ones if you don’t want them to be knocking on your front door for a handout when you’re 70.

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You can control your public image, and you have to mold it into how you want to be presented to the world. If you are not concerned about running into your patients at the Sav-O-Lot store, then you have it easy. There are plenty of doctors, lawyers, and surgeons who share this belief, particularly in the Midwest and rural areas. The coasts have a completely different and more formal mindset. If I ran into my patient in Boston while I was shopping at Thrift Town, it would be an embarrassing moment. Likewise, you typically won’t see this scenario in San Francisco or New York City either. How can you avoid this encounter? Employ your spouse to make these purchases, or simply dress so that it would be unlikely for you to be recognized. Shop at less common hours, like early morning or late evenings. You will decrease the likelihood of running into your patients.

The last mental hurdle in becoming rich is to know when you are rich, and when you aren’t.  Look, as a doctor, you have the earning potential. Convert it into substance. A net worth of -$239,000 with an annual income of $250,000 doesn’t mean that you’re rich. A net worth of $79,000 with the same salary still doesn’t mean you’re rich. Not even $400,000. Most people on a $250,000 salary will lose about 25% to federal taxes, and maybe another 10% to state and local taxes in metropolitan areas. It is not easy to build up $1,000,000 in net worth, even with a six-figure salary. Don’t stop hustling until you get a substantial seven-figure net worth. You never know how long your working career will be, and the sooner you build up that nest egg, the easier you can flash your F-you money when the healthcare system cuts your salary by a half.


Break out of the cycle, and learn to become a rich doctor.

(Photo courtesy of Gaby Av)


What other mental strategies have you employed to build your wealth?

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

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.

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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

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.

  1. 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.
  2. 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.
  3. 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.
  4. Rinse and repeat. Keep adapting, and roll with the punches.


What other strategies have you implemented to become a winner?