[Editor’s Note: If you missed the special Facebook Live event with The Peak Group, where we talked all about its private REIT and why single-family homes are a great investment, the conversation lives on the WCI YouTube page! Remember, WCI readers can get in with Peak for a relatively small minimum investment ($25,000), and this fund, which is already performing far above expectations, could be a great way for you to add diversity to your real estate portfolio. Check out our conversation here on YouTube!]
By Dr. James M. Dahle, WCI Founder
Doctors and other high earners need to become financially literate. Basic financial literacy, when combined with a bit of discipline and a physician’s income, is worth millions of dollars over a lifetime. You can’t afford NOT to become financially literate.
The initial process of becoming financially literate requires some basic education and the development of a written financial plan. This can be done by reading a few good books (I generally recommend one on personal finance, one on investing, one on behavioral finance, and a doctor specific one), by taking an online course such as our online Fire Your Financial Advisor course, or even through multiple meetings with a financial advisor who does a lot of teaching and helps you come up with a financial plan.
However you choose to do it, that initial financial education is critical. Even afterward, you need some continuing financial education just like you do continuing medical education. This usually involves following a good blog/podcast or two and reading one good financial book per year.
Once a year, we dedicate a week to helping you to become financially literate. I talk about some of the new books available out there, and we provide discounts on all of our resources.
What’s On Sale?
Everything is on sale from now through midnight MT next Monday (November 29). Everything in the WCI Store is 10% off (no codes). That includes T-shirts, stickers, other swag, and the various WCI books. If you are interested in a bulk book order (25+ copies of a book), each book is $1 less than it usually costs (already a significant discount from the regular price). Contact [email protected] to make a bulk book order.
All of our online courses are on sale too, again at 10% off with code CFE2021. This includes:
- Fire Your Financial Advisor—our eight-hour flagship course that helps you become financially literate and write your own financial plan
- Financial Wellness and Burnout Prevention for Medical Professionals—a 16-hour course that includes the entirety of Fire Your Financial Advisor plus eight hours of CME-qualifying wellness material. The combination allows you to buy the course using dedicated CME funds or write the course off as a business expense.
- Continuing Financial Education 2021—a 50+ hour course that qualifies for 17 hours of CME or Dental CE credit. This course is compiled from presentations given at the March 2021 virtual Physician Wellness and Financial Literacy Conference (WCICON). Other CFE courses from prior conferences are also on sale with the same code.
All three of those courses are 10% off this week only, simply by using code CFE2021 at checkout. The usual seven-day, no-questions-asked refund policy applies so long as you have taken 25% or less of the course.
Also, don’t forget that registration is still ongoing for the 2022 Physician Wellness and Financial Literacy Conference in sunny Phoenix on February 9-12, 2022. Whether you choose to attend in person or virtually, this CME-qualifying experience is going to be fantastic. While registration does not end next Monday, the swag bag deadline (December 1) is approaching rapidly. Our famous swag bags are worth over $1o0 and include books from each of the keynote speakers. If you have already registered, be sure to book your hotel room before the room block is filled. Our room block is cheaper even than booking at many offsite hotels at this point. Join 800+ of your colleagues at this awesome conference.
This week I’ll be reviewing a number of financial books. I’ll do a few on the blog, but most of the new ones will be reviewed on this week’s podcast. So if you only read the blog, be sure to check out those show notes on Thursday. Today, I’ll be talking about two books that I thought deserved special mention.
This very short book was written by an entrepreneur (Jim Sheils) initially for other entrepreneurs because he saw many of them working so hard that they were neglecting their families. He found the solution to this to be what he calls regular “Family Board Meetings.” The idea isn’t to get the whole family together and have a meeting. The idea is to have a mini-retreat with each of your kids once a quarter. Here are the rules for the retreat:
- It must last at least four hours
- The child gets to choose the activity (food is also usually involved at some point)
- No electronics (including switching off your phones)
- You spend a few minutes at the end “reflecting”
We have tried to do this occasionally over the years, and it is always a good thing. Cindy, our podcast producer, and her husband have a “date” every month with one of their kids (so they each get three dates a year with each parent). I think it is a great practice to ensure that you are prioritizing that which matters more to you. I’m trying to start up the practice with each of my kids. Wish us luck!
The book only takes about an hour to read and gives more details, anecdotes, encouragement, and solutions to problems you may run into.
Financial Freedom Rx
This book, written by ophthalmologists and Bogleheads Chirag P. Shah and Jayanth Sridhar, deserves special mention this year as the best physician-specific general financial book published in 2021. Sure, I published a book this year, but it was specific to medical students. Financial Freedom Rx is just under 200 pages and is subtitled The Physician’s Guide to Achieving Financial Independence.
Nothing in this book is going to be particularly new to someone who has been following this blog for years, has read one or two of my books, and regularly has spent time on the Bogleheads forum. I don’t think that is the target audience. However, it is a well-written book that covers all of the basics of physician-specific financial planning and investing.
- Why financial planning matters
- Jobs and contracts
- Initial steps post-training
- Disability, health, and malpractice insurance
- Student loans and retiring debt
The first chapter includes the most important four words in physician financial planning—Live Like A Resident—so I give the book my stamp of approval. If someone will just do that for 2-5 years after training, they can screw up just about any other financial aspect for the rest of their lives and still be fine.
Table 3-1 is a nice addition to the book. It is a chart that considers your savings rate, annual spending, starting net worth, and the real rate of return and then tells you how many years it will take you to reach financial independence. For example, at one end of the table, it shows that a doctor with a $300,000 income, a negative-$250,000 net worth, a 10% savings rate, a 2% rate of return, and annual spending of $150,000 will reach financial independence after a 72.5-year career. However, if that same doctor already has $250,000, saves 35%, earns 6% real, and spends just $75,000, the doc will be FI in just a decade. It’s a nice doctor-adjustment attached to Mr. Money Mustache’s famous table from his post about the shockingly simple math behind financial independence.
The insurance section was pretty minimal, not surprising given the larger focus on investing in the book. But just one paragraph on malpractice and nothing at all in the book on asset protection?
The next section of the book, chapters 6-8, is all about investing. It hits all the right notes, although I found the brief discussion of tax location somewhat superficial. Don’t expect any discussion of private investments or alternative asset classes.
The remainder of the book includes short chapters on property and umbrella insurance, interacting with advisors, estate planning, calculating your number, retirement spending, and a really nice chapter on the big pitfalls.
If you took the 20 most important posts on this website and put them all together in one offering, it would look like this book. I can’t really quibble with much in it, but there’s nothing there that is particularly revolutionary in the physician financial space. It has all been said many times before, but Drs. Shah and Sridhar did a really nice job packaging it all up together, so I’m going to add this one to my recommended list (and actually remove some other ones from that list.)
Perhaps the most impressive part of the book (although I confess I did not read every single word) is that they didn’t get anything wrong. That’s actually pretty rare in financial books, particularly in those aimed at doctors. Sure, one can quibble that more should have been included on any given topic, but it’s really nice to see a book that doesn’t give any bad advice at all!
What do you think? What are you doing this year to boost your financial literacy? Have you read either of these books? What did you think? Do you have any questions about the sale this week? Will we see you in Phoenix? Comment below!