HELPING PHYSICIANS ATTAIN FINANCIAL SECURITY
By Robert M. Doroghazi, M.D., F.A.C.C.
A subscriber sent me a clipping from the Wall Street Journal of 1/7/11 by executive business editor John Bussey entitled “For My Dad, the “New Normal” is Old Hat”. It notes “To many older Americans, austerity isn’t a novel concept”. Mr. Bussey starts off by teasing his dad that he should buy a dozen doughnuts for $2.50. His 90 year old father retorts “Wait until tomorrow when they’re a day old, they’ll be a buck and a quarter”. My subscriber notes “Hey Bob, your kind of guy”.
Austerity—you call it “thrift”, or being careful with your money—is the most important factor in building wealth. This intro gives me a chance to tell some stories about how I was thought to be thrifty.
I saw my first Cardinal baseball game at age 7 in 1958 at “old, old” Busch Stadium (nee Sportsman’s Park) at the corners of Grand, Dodier, Sullivan and Spring in North St Louis. The left field bleachers were 90 cents. The right field pavilion (because there was a roof over it) was either a dollar or $1.10 (sorry, but my memory failed me on that one. If I had been paying, rather than my dad, you can be sure I would have remembered exactly). The next year the bleachers went up to $1.00 (where they stayed for almost 2 decades) and the pavilion went up to $1.25.
Aside from a scorecard (I have kept a scorecard at every major league game I have ever attended), my dad wouldn’t buy us anything at the ballpark. “The stuff here is too expensive. I’m not going to pay 10 cents for a bag of peanuts”.
But, there was a place on the way home in Granite City named the “Park-N-Eat”. They had awesome hamburgs, their trademark “pizza burger”, and creamy cold slaw way before the Colonel (older brother John worked there during HS). In exchange for nothing at the ballpark, dad would buy us anything we wanted at the Park-N-Eat.
By junior high, I would go to the ballgame with friends. A roundtrip on the “Red Bird Express” bus from the Kroger parking lot to the ballpark was 75 cents. The bleachers were still a dollar, and add in a scorecard, Coke and bag of peanuts; for a grand total of $2.35 (My boys are really tired of hearing this story. It’s great to have a new audience).
The bottom line is that I got used to having very little at the baseball game (I refuse to buy anything at a basketball or football game). Now, the occasional times that I go (I really find it tough to spend $40 or 50 or more for one ticket. A family of 4 costs more than $200), it’s easy to pass up the $10 beer, the $8 hotdogs and the other bizarrely-priced items. It’s like I’m immune, I feel nothing.
About 3 years ago, son Michael and I went to a ballgame in Cleveland (we sat in the upper deck of the outfield). I was in line to get my soda and peanuts. The man in front of me, as part of his $40 order, asked for 2 bottled waters. I glanced up at the prices; bottled water=$4.25. I glanced to my left. Less than 10 feet away was the drinking fountain. I first thought of my dad, then I thought “If I had a garden hose, I could make a million bucks”.
For 15 years, we had what I thought were the two best seats for U. of Missouri basketball in the Hearnes Arena; first row, on the floor, next to the Missouri basket. The Golden Girls and cheerleaders were right in front of us, I knew the TV man, and the ball would come in our seats all the time. Both of my sons were ball boys.
When Mizzou Arena was built about 6 years ago, to re-up for equivalent seats would have required 1) a leadership gift of $25K, 2) $5K per seat per year, and 3) then you would pay for the seats. I said no, and used the money I would have spent to help establish and fund the Doroghazi Outstanding Clinical Teaching Award at the University of Chicago, Pritzker School of Medicine.
So, my secret, the reason I can afford to buy a George Caleb Bingham painting, own a Lake Ozark condo, a piece of recreational land with a 21-acre lake, and make significant charitable donations, is because I can’t tell the difference between tap water and bottled water, the free coffee in the doctor’s lounge tastes better to me than the $32/gallon brew at Starbuck’s, the bleachers are the best seats in the house, and I simply refuse to buy anything besides a scorecard, Coke and bag of peanuts at the baseball game. I’m really delighted the pro sports figures make so much; good for them. It’s just not going to come out of my hide.
RMD recommendation: The next time you’re thinking about going to a sports event where you would drop a couple of hundred bucks or more—look at the game on TV and put the money you saved in your children’s or grandchildren’s college account, or give it to the Salvation Army. You’ll survive and society will be better off.
For 5 or 6 years, at the beginning of the summer, I would invite family and local Hungarian friends over for a day of food, visiting and cards. I was getting out the cold cuts and bread for lunch and was about to toss the heel away. Uncle George said “Bobby, you’re going to eat that aren’t you? That’s the best part of the bread”
Now, whenever I have bread, I make sure to eat the heel. It does taste good, and to be truthful, if I didn’t, I would be terrified that U. George would send a lightning bolt from heaven aimed straight at me.
I once asked U. Steve (Silver Star, Bronze Star, Purple Heart, 1944) about what people did with the remainder of the tobacco when they smoked a cigar or cigarette down to the butt. If they smoked a pipe, they just shredded the tobac and smoked it. If they didn’t, he said they would turn the lit end of the cigar inward, put it out with saliva on their tongue, and then chew it.
Such anecdotes are useful to make points because it helps you remember them. If I reviewed the financial statement of Exxon Mobil (XOM), a year from now you would be more likely to remember one of my stories about thrift than XOM’s Return On Equity.
RMD
Wall Street Journal, 2/12-12/11. “Prepaid College-Savings Plans Take Another Hit…Several cash-strapped states have abandoned or scaled down one of the most popular college-saving options: prepaid tuition credits”.
RMD comment: I have had significant concerns about these plans from day one. I didn’t use them for my boys, and in the second edition of my book The Physician’s Guide to Investing: A Practical Approach to Building Wealth, devote two full pages to my reservations.
The main problem is that whenever the government makes the rules, it can change them. Whenever anything is really good, such as in the 1980s, when everyone, regardless of income, could contribute to an IRA, the government reneges. This is the same reason I have not personally done a Traditional to Roth IRA conversion and discussed it but did not strongly recommend it to you.
Remember, the greatest threat to your investments is political.
The Obama budget was introduced last week.
RMD comment: If you cut out the entire defense budget, every penny, you would still have a deficit. There will be no real progress on the budget until there is a serious discussion of the entitlements; Social Security, Medicare and Medicaid.
I am at the “Creativity and Madness” conference in Santa Fe. In the handout materials was a 90-question test on the “Interpersonal Motivation Scale” by Dr. Ken Hultman. I found it spot-on accurate. My highest score was in the “Contractual Giver” category, which is associated with 1) Looks for a fair deal, 2) Wants everything out in the open, 3) Organized, efficient, and 4) Hates surprises. In his talk, Dr. Hultman says these are often successful business people.
Go to YouTube and type in “Family Feud, Name something that gets passed around. A joint”. It is the funniest thing on TV since 1) The State did the skit “The Popeah”, 2) Ed Ames threw the hatchet on Johnny Carson and 3) Ethel took out her manicure scissors and cut the spaghetti from Lucy’s mouth at the Brown Derby.
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