HELPING PHYSICIANS ATTAIN FINANCIAL SECURITY
By Robert M. Doroghazi, M.D., F.A.C.C.
There is an ongoing debate in science. How much of a person’s behavior, intelligence and success is nature (their genes) or nurture (their upbringing). The latest numbers I have seen are about 60% nature, 40% nurture. But the more I read and see and experience, the more I’m convinced it is at least 95% nature. Your genome has programmed how you will react to the environment. Genetics said that Mozart would be a musical genius, that the Big O (Oscar Robertson) would be the greatest basketball player ever.
I was recently talking with a subscriber, the editor of a major medical journal. I said “I really, really hate to shop”. He said “Bob, I think it’s polygenic”. It made me think:”How has nature blessed me with this competitive advantage?”
Gene #1) The majority of people, about ¾, are extroverts. I’m an introvert, I’m shy, I’m often nervous talking to people. The more crowded a store, the less I like it. Just thinking about what the mall must be like the Friday after Thanksgiving makes me shake.
(Gene #1A. I’m not sure if this is a different gene. Many people find relaxation through stimulation, such as riding a roller coaster. For me, relaxation is lack of stimulation, such a reading a book. One more reason to avoid the crowds of shopping).
Gene #2) I don’t like to spend money, I like to save it. By definition, if you are going shopping, it means that you might buy something; that you could spend money. A nice example of a negative feedback loop.
Gene #3) I’ve said many times that I am terribly impatient, very time conscious, and try to be as efficient as I can. No matter how quickly and smoothly I can finish my errands, I’ve still spent time that could have been directed toward more productive efforts, such as reading, writing, practicing my clarinet, playing on-line poker, etc.
Gene #4). People actually like to go shopping, just to look around. When I first heard of this phenomenon, I thought someone was pulling my leg. But it’s true; in fact, it’s much more common than I would have ever imagined. Since not wanting to go shopping is fairly uncommon, I presume it is recessive, probably an X-linked recessive trait.
(For the non-physician subscribers, a female is 46 XX, the male 46 XY. Duchenne’s Muscular Dystrophy and Factor VIII Deficiency (classical hemophilia) are examples of X-linked recessive disorders. The defect is on the X chromosome. The mother is a carrier, but is functionally normal thanks to her other normal X chromosome. With only one (abnormal) X chromosome, the male expresses the disease).
Why should I write this tongue-in-cheek, sort of whimsical, newsletter?
My subscribers run the gamut; about half are physicians, half are non-physician investors. Some are just starting their investing careers; some are quite sophisticated, who are happy to pay up for just one idea that will make them money. One runs $4B of investment money. Another runs a $2B energy company. So at one time or another I have to write something that caters to everyone.
The two most important factors in building wealth are thrift, not spending your money (in the context of today’s letter, by not shopping), and the avoidance of debt. If making your think more about thrift by framing it in the fanciful context of genetics and natural selection, it will save you far more than the cost of this letter.
RMD
In Issue #117, I gave some ideas about ways to generate income during a bear market in financial assets. I recently came up with another idea: take profits. Say the S&P 500 goes up 10%—sell. That’s two years return on a long-term bond. You have a stock position that’s up 20%: take some profits. Even corrections in the precious metals will occur from time to time (see Interim Bulletins #136A and #138A). When things are looking sweet and you are convinced of your investment genius, when it gets really easy to make money; sell and take some profits. There is your income.
WSJ, 1/6/11. “Health Spending Eats of Record Chunk (17.6%) of GDP (in 2009)”.
RMD comment: More than 20 years ago, when health care made up about half of the percentage of GDP that it does now, I saw a bumper sticker that said “If you think health care is expensive now, wait until it’s free”.
This is from a new subscriber, writing in response to my comments about learning how to make correct change when I worked at Graham’s Book Store in Granite City, IL, during my junior and senior years in high school.
“I was raised in Granite…graduated HS in 1954. My dad (as did your father) worked at the Commonwealth (General Steel) for over 40 years and also faithfully saved US Savings Bonds with the money withheld from every paycheck.
I was also one of the “Graham’s boys” (as were my two brothers). I will never forget my interview with Mr. Graham….”What are you going to do with the money?” I knew the answer must be “Save it for college”.
Mr. Graham walked to the store daily at 530 AM and then closed at 9 PM—except Sundays, when we closed at 6 PM (When I worked there from 1967-69, Mr. Graham was in his early 80s and had slowed down. He only worked until 6 PM on Tuesday and Friday nights, otherwise, he still worked 630 AM to 9 PM, 365 days a year!!!)…We learned countless life lessons under his employ”
DM, Peoria, IL
RMD comment: Mr. Graham was in business from 1918 until his death in 1971. There were two high school workers; one junior and one senior; thus one part-time (if you call more than 30 hours a week during HS part-time) worker hired each year.
This was the most plum job in Granite City; they had the pick of the best kids. Mr. Graham was one of the most respected people in town; Scoutmaster of Troop One; which sold the most War Bonds in the US in WW I and he was in the first group of Silver Beaver Award winners in the 1930s from the Cahokia Mounds Council
I don’t specifically remember the question “What are you going to do with the money?” although my answer would have been the same. But I do remember on the application “What are your qualifications?” I had just turned 16. Aside from mowing (a lot of) lawns, this was my first job. My mother told me to put “willing to work hard”. I have put that on every job application I ever filled out in my life. I suggest you share the responses to both of those questions with your children and grandchildren.
Saw some folks the other night I haven’t seen in a couple of years. In 2004 and 2005, they took my suggestion and purchased physical gold (when it was about $5-600 per ounce). I told them at the time it would eventually generate enough profits to pay their mortgage.
He said each time gold goes up, his wife wants to sell. I instantly said “I’ll buy the gold (US Gold Eagles) from you tomorrow for cash”. He said “No (the correct answer). They will eventually be enough to pay off our mortgage”.
RMD comment: Buy gold, as much as you are comfortable with. The politicians, the ones we have elected, are destroying the US dollar. History shows that all paper currencies are eventually bankrupt (the subject of next week’s letter)
The legend of the Gordian Knot (from Wikipedia). The Phrygians were without a king. An oracle decreed that the next person to enter the city on an ox cart should become king. In gratitude of how his father Gordias became king, Midas tied his father’s ox cart to a post with an intricate knot. When Alexander the Great could not find the end to untie the knot, he sliced it in half with a stroke of his sword to produce them. The “Alexandrian solution” is used as a metaphor for solving an intricate problem with a bold stroke.
We were at a party on New Years Eve. The 14-ball was placed on the lip of a corner pocket. The Q-ball was in front of the adjacent corner pocket two feet away. Six or seven people tried to make a triple-bank shot; bounce the Q-ball off a side cushion, the far end cushion, the other side cushion, and have it come back to knock the 14-ball into the pocket.
They said “Bob, it’s your turn (I was just watching, and I’m not a good pool player). I said “Have you ever heard of the Gordian Knot” and turned to slam the 14-ball directly into the pocket.
RMD comment: One of my best newsletters is “A Physician is an Executive” (#16, 4/16/07). Don’t be distracted; just focus on the problem and take care of it.
The next time you’re on call and complain about having to drag your rear end out of bed at 2 AM, think about the TV shows “Swamp People”, where they try to get 600 lbs. alligators into the boat who really doesn’t want to come, or “Dog Bounty Hunter”, where they bring in some very, very nasty people who have jumped bail.
OR:
About 10-12 years ago I was on call, seeing a heart patient in the Emergency Ward. A lady, about 6 ft 4, 240-50 lbs, a known schizophrenic, brings her mother in with pneumonia. She immediately goes bonkers, totally berserk.
I said to the House (Nursing) Supervisor; “call the cops”. She calls security. The poor guys didn’t have a chance. I said “call the cops”. The Nursing Super says “yeah, I think we should call the cops”.
They were very prompt. In about 3 minutes, a Columbia Police car is in the EW parking lot with lights flashing and sirens blaring. As the officer jumps out of the car, I said “that ain’t enough cops”. It was like WWF wrestling on the TV. The lady throws him around like a toy. It finally took three policemen to get things under control.
RMD comment: There are some tough ways to make a living that pay only a fraction of what a doctor makes.
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