How Physicians Can Learn to Manage Money

An interview with Physician on FIRE's Leif Dahleen, MD
Leif Dahleen, MD is a part-time anesthesiologist on the brink of early retirement from medicine at the age of 43. When he realized that work had become optional in his life, he started a website, Physician on FIRE (Financial Independence Retire Early) to help educate and enlighten others on personal finance topics. He can be found via his website, Twitter, Facebook, and Instagram.

Do you think doctors approach money differently than other groups? Why?
Well, money is money and the money we doctors earn is no different than the money that everyone else gets. Nevertheless, there are some unique aspects to our career trajectories that necessitate an approach to money that addresses them. We get a late start, are often saddled with large student loan debt, and are taught next to nothing about money management throughout our education and training.

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Do you think physicians have any financial advantages? 
Physicians earn a lot of money. Any published list of the top-earning professions will be dominated by medical specialties. The high salaries are an advantage in that they allow us to potentially save a lot. However, it's not unusual for a doctor and his family to spend the vast majority of that income. Gratification has been delayed for so long that it's hard not to splurge once you finally see a real payday.

We also benefit from relatively good job security. I actually lost my first "permanent" job as an anesthesiologist when a hospital was going bankrupt, but that's relatively rare and I had plenty of opportunities at that time to work elsewhere. Our skills are portable, too. Locum tenens work can be a great way to supplement our incomes without having to learn a "side hustle."

Do you think physicians have any financial disadvantages?
They start earning late, the massive debts, and the lack of financial literacy. That last piece makes us sheep facing a financial services industry with far too many wolves. 

Physicians also too often mistakenly assume that because they've been successful in their careers, they will also be successful in other endeavors. Unfortunately, understanding the complexities of the nephron does not translate well to the business world. I've known physicians to go bankrupt after putting too many eggs in one faulty basket with business and real estate ventures.

How would you recommend that a physician get started learning about managing money and investments? 
Start with a good book or two. My first money book was The Only Investment Guide You'll Ever Need, which I read as a medical student. I read The Millionaire Next Door shortly after finishing residency. Since then, a few good books have been written by physicians, including books from The White Coat Investor and The Physician Philosopher.

With a good foundation from a well-organized book, delve into topics of interest via blogs and podcasts.

What blogs, websites, books or podcasts do you recommend? 
I've written a pretty thorough guide to DIY investing that's chock full of resources. I've also got a two-part series on Investing Basics for busy professionals. But my site is just one little sliver in the personal finance world, and the number of physicians participating has increased more than tenfold since I started in 2016.

I'm a part of the White Coat Investor Network which also includes WCI, Passive Income MD, and The Physician Philosopher. All are excellent.

Helpful podcasts include Dr. Nii Darko's Docs Outside the Box, Dr. David Draghinas' Doctors Unbound, and Dr. Carrie Reynolds' Hippocratic Hustle. These are insightful podcasts with guests doing unusual and extraordinary within and in addition to medicine. 

There are dozens of other great resources out there, and I can't possibly mention them all. I do my best to keep a blogroll that's reasonably up-to-date, but the landscape changes rapidly in the online world.

Do you think there is a magic number in terms of how many hours/week a physician should spend on managing money? 

The number isn't magic, but for the vast majority of physicians, that number should be less than one. I think people ought to spend a few hours a week learning about personal finance, but money management is generally best when it's automated and not tinkered with much at all. Invest in a three fund portfolio or variant and earn the market returns. Most who try to do better fail, including very well-paid investment managers with vast resources in terms of data, connections, and quantitative analysis. 

Simple and effective money management shouldn't take much more than an hour a month once you've set things up the way you want them.