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Entries in Financial Management (5)


An Uncommon Cure for Physician Burnout

A recent Mayo clinic study concluded that almost 50% of physicians are experiencing at least one symptom of burnout. I actually think it's much higher.

Inevitably we're told to cope with burnout using a variety of methods. I take that to mean "Shut up and put up." Well, I've got a different solution for physician burnout. Watch my video where I explain my alternative solution:


Physicians + Money Management

If you've been in medicine for even a little while, you know there are a number of taboo subjects that just aren't discussed.

One of the most important discussions that medical students do not have while in training is the subject of money and overall financial management.

Last, at our most recent Medical Fusion Conference I was able to sit down with Dr. Setu Mazumdar, an Emergency Medicine physician turned financial manager.  Setu gives his perspective of "financial independence" in this interview.  Check it's worth watching.  Hopefully, by learning a bit about finances while in training you'll avoid some of the common pitfalls of physicians and money.

Click to read more ...


Physicians and The Richest Man in Babylon

If you're a physician looking to transition into some form of business, do yourself a favor and read some of the business classics.

Like every career area, business has a collection of classic texts that many in the field have read and to which they often refer.

After seeing it listed in multiple business books recently, I finally sat down and read the famous finance book, The Richest Man in Babylon by George S. Clason.

Originally published n the 1920's, The Richest Man in Babylon explains how to build wealth and handle money through a series of parables.  While the language is sometimes stilted due to a less-than-modern style and wording, the principles ring true and are fundamental to basic financial health.  It has been a popular text for many years-- cited by multiple sources-- and has reportedly sold over 2 million copies since its original publication.

The book is not a long or difficult read.  Here are some of the basic principles and meaningful quotes:

  • "I found the road to wealth when I decided that a part of all I earned was mine to keep. And so will you."  (ie- pay yourself first and save your money)
  • "Opportunity is a haughty goddess who wastes no time with those who are unprepared."
  • "Which desirest thou the most? Is it the gratification of thy desires of each day, a jewel, a bit of finery, better rainment, more food; things quickly gone and forgotten?  Or is it  substantial belongings, gold, lands, herds, merchandise, income bringing investments?  The coins thou takest from thy purse bring the first.  The coins thou leavest within it will bring the latter."
  • "Good luck can be enticed by accepting opportunity"
  • "If thou desire to help thy friend, do so in a way that will not bring thy friend's burdens upon thyself."
  • "Better a little caution than a great regret."

If you're going to be getting into entrepreneurial pursuits, jumping into a business endeavor, or simply interested in better managing your finances, you really need to begin learning the principles contained in the business canon.  The Richest Man in Babylon is a business classic and contains timeless principles.  It's not a bad place to start your financial education.



Physician: What Are Your Assets?

With all the concern over the economy and the changes in health care, I thought it would be a good idea to write just a quick post about financial assets.

Most physicians do not understand the concept of financial assets and wonder why they feel like they are working harder and faster for less and less reward.  

Now, I want to be clear, I am not a financial expert or a wealth manager.  However, I have found a few principles that have really helped me personally, so I though I would pass them along to the readers of Freelance MD.

First, it needs to be said loudly and clearly that when a physician first graduates from his or her residency program, they have not "made it" in the financial sense.  Yes, graduating from residency is a great achievement and does signify the completion of a long, difficult training period.  It also usually is accompanied by a significant increase in salary and the ability to live better and spend more.

However, in the financial sense, a newly minted physician is in a horrible financial place.

Most physicians finish residency with significant debt, debt that is made worse due to the young physician's new salary, a salary that places the physician in a tax bracket that precludes the interest on student loans from being tax deductible.  

Next, most physicians have little financial training so they immediately "reward" themselves for all the years of focus and discipline with a "few" nice things.  I clearly remember many resident friends of mine who bought expensive luxury cars and nice homes immediately after graduation.  Since few residents have significant savings, these new physicians simply added to their significant student loans even more debt in the form of car loans and large mortgages.

The problem with all this is that the new physician is suddenly saddled with enormous overhead.  His or her lifestyle looks nice, but at the end of each month very little money goes to savings or retirement or investing in other financial assets that could help increase their overall net worth.  Even those physicians who are aggressive about paying down debt and funding retirement often do not rise as high as they could financially because they make the mistake of pouring their disposable income into items that they believe are assets but actually are liabilities.

Robert Kiyosaki, author of Rich Dad Poor Dad, has produced a couple of very short informational videos (around 2 minutes each) that summarize the issue of assets.  The true definition of an asset is something that makes you money.  While this seems obvious, it is often misunderstood.  For instance, many physicians consider their homes and their cars "assets."  Strictly speaking, these items are not assets since for the most part they take money out of your pocket.  

Here's a short video of Robert defining a true asset:

Make sense?

For an item to be a true asset it needs to produce cash for you.  

Physicians work very hard and make a good salary, but most take their disposable income and instead of using it to buy assets, they pour it into items that actually increase the outflow of money from their pockets.  If the physician hits a snag in his/her career-- illness, salary decrease, burnout-- they suddenly realize how fragile their financial world really is.  Without true assets putting money each month back into their pockets, these physicians realize they are simply highly-paid hourly workers who are forced to exchange time for money indefinitely if they are to survive.  This realization is a very depressing concept, and one that I believe significantly contributes to the frustration of many physicians today.

To break out of this cycle, a physician absolutely must understand the principle of investing in true assets with their disposable income so that they begin to slowly wean themselves off of the dependence of their physician salaries.  In the end, a wise physician will have lived frugally, paid down debt, placed money in retirement, and instead of buying "toys" with their disposable income, instead slowly built up a collection of assets that put money back into their pocket and made their physician salary superfluous.  Ideally, a physician will eventually reach a point where their living expenses are covered by the income from their assets and their salary as a physician becomes simply the "icing on the cake" so to speak.  Perfectly executed, this freedom from the time-money continuum allows a physician to see their careers as something they choose to do for whatever reason-- desire, interest, altruism, curiosity, etc...-- not something they are forced to do to continue surviving.  It truly is a life-empowering shift in perspective.

So what are some examples of assets?

Again, Robert Kiyosaki succinctly describes the three broad categories of assets in the following video:

I hope this all makes sense and you're beginning to get a vision about how you can begin breaking free from the time-money grind through the purchasing and development of true financial assets.  In future posts we'll go deeper into this subject, and  at our Medical Fusion Conference we'll also be explaining these concepts in more detail.


Dr. Setu Mazumdar Joins Freelance MD

Freelance MD today announced the addition of Dr. Setu Mazumdar as a contributing physician writer covering physician investing and wealth management.

Dr. Mazumdar is an affiliate of the National Association of Personal Financial Advisors (NAPFA) and a member of the Financial Planning Association (FPA>, the National Association of Tax Professionals (NATP, and the American College of Emergency Physicians (ACEP).

"Setu is a great resource for our physican members." said Jeff Barson, Freelance MDs Founder. "Dr. Mazumdar is a passionate proponant for physicians and offers level-headed advice and fantastic insight that set him apart. We're excited to have him on board as a contributing writer."

As a Freelance MD physician contributor, Dr. Mazumdar will be writing on both wealth creation and wealth management for doctors.

About Dr. Setu Mazumdar
Setu Mazumdar MD graduated as the valedictorian of Woodward Academy, the largest independent day school in the US. He then attended Johns Hopkins University and was admitted to the Phi Beta Kappa honor society for ranking among the top 1% in his class. After earning his MD degree from Johns Hopkins School of Medicine, he practiced emergency medicine in Atlanta, GA. As his passion for financial planning and investment portfolio management grew, he completed the CFP Board registered professional education program and passed the rigorous 10-hour CFP Certification Examination. He then worked for a finacial planning firm in Atlanta before launching his own wealth management firm, Lotus Wealth Solutions.

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