06 Aug Money Talent Vs Medical Talent
Money talent and medical talent do not always mean the same thing. A doctor can be an absolutely brilliant cardiac surgeon and yet be the most financially unsuccessful person in the neighborhood.
Our Accounting Executives Do Not Judge You On Money Talent
At Gavrilov & Co, we meet medical professionals who cannot make ends meet. And that is not an uncommon phenomenon. Many doctors are never successfully wealthy. However, that does not make them less talented in the medical world.
We have alluded to this condition in physicians several times previously. However, unlike some gold-plated financial wizards, we are not judgmental.
We know it’s shocking when average people learn that a talented physician has no money talent. In the first place, we know medical school has no required courses in personal finance or money talent.
We also know that the very qualities that might make a physician lack money talent can create a doctor with great medical talent. In this blog, we will briefly explain 2 of the 4 talents that make many physicians good with medicine and not-so-good with money.
Money Talent vs. Medicine Talent
James Turner, MD, is an anesthesiologist who writes “The Physician Philosopher” blog. He also wrote the book by much the same title. It was named, The Physician Philosopher’s Guide to Personal Finance: The 20% of Personal Finance Doctors Need to Know to Get 80% of the Results.
Dr. Turner helped us learn that physicians must possess three distinctive attributes: (We call these your medical talents.
- Physicians are hardworking.
- They must have intelligence.
- Likewise, physicians absolutely must exhibit dedication to the cause.
Then Dr. Turner informed us that “These are the same attributes… that result in financial success.” (That means they could become your money talents.)
A recent Medscape Wealth Survey revealed that only fifty percent of our physicians have a million dollars in net worth. (And that number must include their home.) The average people may wonder, “How in the world can doctors be bad with money?” Below, we are going to investigate 2 of the 4 reasons money talents do not always correspond with medical talents.
1. Physicians and Rationalization (Money Talent)
We know it requires raw intelligence and strong reasoning skills to become a doctor. But, doctor, did you know these same skills can hurt you? When you rationalize spending decisions, finances suffer. See the terrible truth at Dr. Turner’s own confessions at this online resource.
How Reason Can Transform into Rationalization: A Very Short Story
You see, a doctor might see an expensive indulgence like a fancy sports car or a Cadillac Escalade. Then, intelligent rationalization goes right to work: The physician thinks, “This makes me look successful.” Or, “It will help me get to work when it snows!”
Dr. Turner states, “Of course, these reasons all sound good … but that’s the point…” “We can “reason” our way into almost any bad choice.”
To summarize, reasoning is a strong talent in a doctor’s job. However, rationalization can lead to bold spending habits. At this point, financial stability, personal and retirement savings suffer.
Our Answer: Discover the Beauty of a Backwards Budget
To turn rationalization into a money talent, we recommend a backwards budget. Learn a simple spending precept.
- First, program yourself to save enough money for your specific financial goals. Only then should you spend-or–better yet–save for your future.
- Do you see how this is directly backwards to what average people do? They spend first on what they rationalize to be desirable. Then, they think about financial goals with the left-overs.
2. Physicians and Outsourcing Addiction (Money Talent)
Outsourcing becomes an addiction with many professionals, not exclusively physicians. “They have nannies, maids, lawn care services, pest control, gardeners, mechanics, and food-delivery services.” And Et Cetera!
We get it. Doctors are busy saving lives. They do not want to waste time doing other things. So, we don’t say outsourcing is a bad philosophy. However, it just becomes habitual.
Dr. Turner says, “None of these things are intrinsically bad…” And then, he adds, “physicians love to outsource things that they would rather not spend their time doing themselves.”
Doctor, What You Don’t Know Can Hurt You
Therefore, sometimes physicians’ financial outsourcing leads them into making expensive, but bad financial choices.
They lose money on bad investments. Then they lose more on fancy advisors fees and commissions. This can amount to a loss of 10,000.00 to 50,000.00 dollars. At best, this outsourcing becomes a financial crutch. At worst, it can mean falling into a poor or even fraudulent investment.
Sharpen Your Money Talent: Our Answer to the Physician’s Outsourcing Habit
At Gavrilov & Co, we think this occurs to physicians when they have not discovered enough about personal finances to protect their financial lives. (Remember, doctors have a financial target on their backs. You might not be rich, but people think you are.)
Yes! We work with you on accounting and tax matters. Additionally, we believe in helping you sharpen your money talent. We want you to learn enough about personal and business finances to protect yourself. In Dr. Turner’s words, “learn the 20% doctors need to know about personal finance to get 80% of the results.”
Next week, in Part Two of this topic, we will cover two more money vs. medical talents of the four we promised. Likewise, we will share more about the twenty percent you need to know about personal finance. (Your Money Talents!)
Knowledge of that twenty percent of personal finance will allow you to reap 80 percent of the benefits. You’ll also meet a personage we like to call “Dr. Pareto.”
Thank you for reading our blog and please return. Learn more about fighting poverty with wealth.