HELPING PHYSICIANS ATTAIN FINANCIAL SECURITY
By Robert M. Doroghazi, M.D., F.A.C.C.
This last weekend I spoke at a seminar in Fargo, ND put on by MD Wealth Protector. It is a company devoted to the education of physicians on topics ranging from basic risk management, investment, tax and estate planning, to advanced asset protection and estate planning strategies.
The LLC was started earlier this year by Dr. Mark Monasky (with the help of Mark Merric, JD, CPA, MT). Mark is a neurosurgeon who did his training at the Mayo Clinic (the “Mayo Brothers” as some still call it here in mid-Missouri). Mark then received his law degree in 2002 from the University of North Dakota. His area of expertise is sophisticated estate planning with a focus on asset protection. Mark also still sees neurosurgery patients and takes every third weekend call.
My first exposure to MD Wealth Protector was when I attended a full-day symposium in Bismarck in April. I was very impressed. In general, wills and trusts and similar things usually keep my attention for about 5 minutes (tops). The presentations in April kept me interested all day. Moreover, these are very important issues, and I learned a lot. It is because of attending this symposium that over the last several months I have repeatedly encouraged you to see your estate lawyer before the end of the year. I again make that recommendation: Estate laws change significantly next year. A visit to your attorney is a must.
Being an experienced physician, Mark has credibility, a cache; that is otherwise impossible to have. He is very knowledgeable. He doesn’t sell any products. If you get your advice from an insurance agent; they want to sell you insurance. You get your advice from a stockbroker; they want to sell you stocks. All Marks sells in hands-off advice to educate you.
He can be reached at .(JavaScript must be enabled to view this email address)
Earlier this year (Issue #93, 2/22/10), I told you about Resolve Physician Agency, started by local physician Sid Christiansen, to act as physician’s agents in contract negotiations, analogous to how agents have helped professional athletes realize monetarily what they are worth.
In my opinion, at least one of the reasons that MD Wealth Protector, Resolve Physician Agency, and my book and newsletter, have come about is to fill the void left by the academic medical establishment in failing to provide physicians with even rudimentary business, financial and investing skills. The average physician graduates with $150K of student debt and is financially about as naïve as a country bumpkin in the big city for the first time.
I will note that organized medicine, the associations, societies, colleges, etc, are more receptive. For example, the North Dakota Medical Association sponsored Mark’s talk.
RMD
One of the first questions new subscribers ask is how they can invest in gold. I recommend that your core position in the precious metals, the core position in your entire investment portfolio, be US-minted 1 oz Gold Eagles that you keep in your personal possession in the safe deposit box at the bank. Blanchard and Co. has been in business for decades and Stephen Davidson (888-830-2646) has always given me good service (I again note for the record I receive no commissions).
Today’s Barron’s, from an interview with Henry McVey of Morgan Stanley Investment Management.
“Our most likely scenario is that we are in a secular bear market that started in 2000…(It) was related to a contraction in P/E multiples” (RMD comment: Very important point. In the very long term, stock prices are most influenced by what a company earns (the “E” of the P/E ratio). In the shorter term, it is more influenced by expectations, reflected in the price (P). In bull markets, P/E goes up, in bear markets, it contracts).
“The second phase of the bear market…occurred in 2007 and 2008 and resulted in a 50% contraction in earnings growth. We expect the third and final phase, which will occur over the next several years, will be related to the massive debt overhang…with developed governments around the world”.
RMD comment: As I have been saying for some time, my reading suggests that bull and bear markets in financial assets and commodities alternate in periods that average 15-18 years. Since the bull market in gold and commodities began in 1999 and the stock bear market began in 2000, it suggests that both will continue until 2015-2020. Unfortunately, I believe we have more years of pain to go. Plan accordingly.
I just finished The End of Wall Street by Roger Lowenstein. It chronicles the buildup to the housing bubble and bust and the ensuing economic meltdown.
“Bankers have always been well compensated, but before the 1980s, they had no special call on privilege—no rank above surgeons, top-rated lawyers, or corporate executives. (RMD comment: I have made that point before)….
Bankers who took home these enormous paychecks were crafty financiers, but their cleverness served their personal interests first, their clients and shareholders, and the economy barely at all. The bakers learned to fool the system; to game the rating agencies, to bundle deadbeat mortgages into paper that was Triple A and foist it on trusting clients. They fooled their compensation committees and they fooled society, collecting astronomical pay for products (such as synthetic CDOs) that made only bankers richer….Their pay engendered a false sense of entitlement and invincibility. Ultimately, the bankers fooled themselves”.
RMD comment: I print this because I agree, and Lowenstein said it much more eloquently than I ever could have. I recommend this book to you.
I also note that the “bankers” are the Wall Street bankers at places such as Citigroup (C), Merrill-Lynch, Bear-Stearns, Goldman Sachs (GS), etc. If the government had let all those that should have failed fail, then the responsible banks, such as many of the local institutions that subscribe to this letter, would have picked up the pieces and we would be much nearer the end of this mess. Many of the chumps that caused the mess still have their (high-paying) jobs.
We were at the Lake of the Ozarks over Labor Day. On Saturday night we went to our favorite restaurant. A lady, in her mid-to-late 40s, who has waited on us before, said “What can I get youse to drink?”
I said “You are from the St. Louis area, aren’t you?”
With a quite surprised look, she said “Yes, Alton, Illinois (just 10 miles north of my home town of Granite City)”.
I said “because if there are two idioms that identify people as being from the St. Louis area it is “youse” (the plural of you) and “icebox” rather than refrigerator.
She also added that she has frequently heard “warsh” instead of wash. I have heard others pronounce it that way, but I never would. The correct phrase would be “Are youse going to wash your icebox”, not “Are youse going to warsh your icebox”. The way some people talk!
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