HELPING PHYSICIANS ATTAIN FINANCIAL SECURITY
By Robert M. Doroghazi, M.D., F.A.C.C.
Several weeks ago I had lunch with Jack Mohatt. Jack is a Rotary buddy and successful local businessman. He told me of several physicians who many years ago teamed up with a local businessman to buy rental property. The physician supplied most of the capital; the businessman supplied some capital and all of the expertise and sweat equity to manage the property. The mortgages are now paid off and generate 5-figure rental payments—per month—to the principals.
Businessmen with complimentary talents team up all the time; one typically has the business/management/financial savvy, the other the technical/engineering expertise. This certainly worked well for Alfred P. Sloan and Charles Kettering at General Motors, Hewlett and Packard, and Gates and Ballmer at Microsoft.
I believe physicians should be more active in the community. The first reason is most important: the more money you make, the higher your position in society, the more obligations (Noblesse oblige, the obligation of the nobility); to contribute back to the community that has provided you such a good living and a prominent position.
The second reason relates to the subject of this letter. Being active in Rotary, Kiwanis, the Chamber of Commerce, the Boy Scouts, your church, your children’s school, is how to meet the smart businessmen who can help make you money (and be the kind of patients you want in your practice).
But here is what happens. The academic medical establishment looks down upon any discussion of money, investing, or sound financial management, so the average doctor graduates with $148K of student debt and totally naïve when it comes to money. The physician enters practice and works very hard but spends no time on their investments because they have been conditioned that the money will take care of itself (yea, right).
Now they are in their 50s, working as hard as ever, and realize they have made $5M in their career ($300K per year for 17 years) yet are still paying on the mortgage and paying as they go for the kids’ education. Then they meet Bob Businessman. Bob probably went to college (although the physician made better grades and graduated ahead of him in class) and probably did not go to grad school. But Bob was taught to have respect for money (note; I say respect, not greed) and how to make and invest it. Now Bob really is the millionaire next door. He doesn’t drive as hot a car, live in as big a home, or flash money around, yet has $5M in the bank.
Search out such people in hopes of building a mutually-beneficial relationship. Note that the businessman will also profit. Not only can he profit from the availability of capital, but when he needs a physician he already has one he knows and trusts and who will make darn sure his business partner is well cared for. The relationship can also provide contacts the businessman would not have made otherwise.
Now don’t just go run out and hook up with the first person you meet. You are more likely to land with the local slick shyster than a man of honor. Be patient; you only need to establish one or two such relationships in your life.
One more piece of advice: This person should be about your age or a little younger. It will be a better, more natural fit. Secondly, remember the old adage: You want your doctor, lawyer and accountant to be younger than you. When you get old, you want to be able to rely on them, not the other way around.
RMD
I just finished The End of Influence: What Happens When Other Countries Have the Money (Cohen and DeLong, Basic Books/Perseus). Although I think enough of the message to quote some below, I recommend you do not purchase it. There are only 148 small pages of text, I think it should be less than ½ of the $22 list price.
“the United States no longer has the money. It is gone and it is not likely to return in the foreseeable future. The American standard of living will decline…America has been consuming more than it produces and living beyond its means…
The United States will lose power and influence…
But this massive effort (to put back the shattered pieces of the financial system) is an attempt to put Humpty Dumpty back together again. By itself, it will not be sufficient….
After all, Humpty was an egg”.
I received this from a new subscriber.
“Like your relatives, my parents and grandparents are from the “Old Country” and came to America for a better life. They worked blue collar jobs so my brother and I could go to school…. Frugality and temperance were embedded in us from an early age. Everything they taught me about finances and living a good life is re-iterated in your book….your newsletter is an excellent and much-needed publication”
MNS, PA
RMD comment: There it is in one paragraph; the secret to success: Keep your nose clean, work hard, save your money and stay out of debt. It is that easy; most people just aren’t willing to do it.
Ah, the pleasures of retirement. When I was in practice, my number one personal goal for the day was to be home for supper with my boys. As I got busier and busier, I got up earlier and earlier in the morning. My schedule for almost 15 years:
Wake up 455 AM
Down stairs for breakfast 519-522
Back up stairs, brush teeth, put on coat and tie 538-540
(It didn’t take long to realize you must brush your teeth before you put on your tie).
Leave home 548-550
In MICU to start rounds 600 AM
This way I could put in 12 hours work and still be home at 6PM for supper. No matter what time of the year, I always woke up when it was still dark. Now when I wake up, if the sun is not up, I don’t get out of bed if I don’t want to. It is beyond decadent!!
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