Residents’ Night! Transitioning into Practice Seminar

I attended the local residents’ night seminar put on here at the local medical school.  I ran into a friend from my med school class who was in charge of part of it so it was just like the good old days, sitting in the back row.  The seminar ran 3 1/2 hours.  There was a lot of work put into it, but two things stood out the most to me, an outsider looking in.  I’m neither a resident, nor one of those in charge of the seminar, so I was just observing.

The first thing that surprised me was just how superficially several very important subjects were treated.  There was an entire lecture that I could sum up in one sentence as “Eat well, exercise, sleep 8 hours a night, and don’t be the doctor for your family.”  Yet several of the lectures despite being packed with good advice, due to time constraints were barely able to glance over many important subjects.  I’m confident most of the residents didn’t quite get them.  For example, the “financial portion” was 40 minutes long, and taught by a CFP and a mortgage lender.  They tried their best, but you just can’t cover much in 40 minutes.  It’s impossible to teach everything these graduating residents need to know about personal finance, investing, insurance, estate planning, asset protection, mortgages, loan management, practice management, business principles etc in just 40 minutes.  But the truth of the matter is that this is probably all the training these residents received on these subjects in 7 years of med school and residency.

The second thing I noticed was just how superficial both the financial advice given by the physicians as well as the financial questions asked by the residents were.  “Don’t buy the big house right out of residency.  Don’t buy a Lexus SUV right out of residency.  Live within your means.  Grow into your income slowly.  Buy disability and life insurance. Find a good financial planner.”  Yes, it’s all good advice (and probably the most important that could be given) but there’s little depth to it.  No discussion at all about disability insurance contracts (other than “get specialty-specific”).  No explanation of how to buy life insurance.  No discussion of how to differentiate between a solid fee-based adviser and a shark.  Forget learning about index funds.  They didn’t even discuss investments other than a vague reference to “stocks and bonds.”  No tips for owning your own practice other than “Don’t expect much of an income those first 6 months.”  Meanwhile the residents and their spouses are asking questions like “Is my spouse going to be home more now that he’s finishing residency?” and “When should I buy a house?”

If this is the best we can do for our graduating residents, it’s probably time to introduce a mandatory Business of Medicine course into the curriculum.  It could be combined with a Personal Finance/Investing Class.  2 weeks of the fourth year of medical school would probably be adequate.  Better yet, a course for residents could be run for an hour or two once a week in the evenings.  50 lectures repeated every year (so you could get the ones you missed) would do wonders for our graduating docs.  Until then well-intentioned financial advisors and sources of information like this website will have a lot of work to do.



Residents’ Night! Transitioning into Practice Seminar — 19 Comments

  1. Its not gonna happen and i think you know it.

    The main reason given will be lack of time but there are others.

    For example who would give the advice? As im sure you are aware, most docs dont have a great grasp on this themselves at least on all the topics and i dont know about you but i wouldnt give up my day job to do it. Then we would have to contend with the “professionals”. You know like the insurance agents who think permanent insurance and variable annuities are good investments for docs and that those who dont… well then just dont know what they are talking about or should leave investing to the professionals. Or the stock pickers who had a great track record last month better than our index funds and of course that will continue into the future. The “professional” industry isnt about helping us. Its about helping themselves. If we get helped along the way then maybe they can raise their fees. There are a few good eggs out there in that industry but they are far and few between.

    Its going to remain sites like this and maybe a few books. You should write one.

  2. Rex, unfortunately the good advisors that are few and far between don’t want to give up their day job either, unless perhaps it would be worthwhile from a financial standpoint. I personally think it would be fun to do consulting to medical schools, if they were to pay me enough jointly, to replace my income as an advisor. That is not just the only way a qualified advisor would help, but perhaps more importantly the only way of truly avoiding the conflict of interest. There are a number of advisors, some good and some absolutely terrible doing seminars for residency programs around the country which is hopefully better than no education at all – but no matter how pure their intentions may be, prospective business is still the lead motivator.

    Are medical schools really going to dish out the cash to get a qualified professional to teach/consult their students and residents?

  3. Rex-

    Most of medical education happens out of the goodness of attendings’ hearts and from the students’ independent studying. Why should financial education for docs be any different?

    Surely there’s a doc in every academic hospital in the country with a reasonable amount of financial knowledge who’d be willing to give back in this manner as part of his academic roles. Look at Financial Peace University- 12 weeks or so of 1 hour classes for $100. The teachers are volunteers, but even if you paid them $100 an hour it wouldn’t increase the price too much if there were an adequate number of students to spread that cost around. There’s still hope.

  4. Didn’t you just witness what volunteer education provides?

    I like optimism but don’t expect me to bet on it.

    Sadly there is a doc at seeking alpha trying to pretend the CSV return on overfunded Wl is almost 5% In his articles. Thus I’m also worried about who might volunteer.

  5. I graduated from a US school in the Midwest in 2006. We had only about 2 hrs worth of lectures on this. As a chief resident, I brought in a CFP who is also a MD who spoke for 2 hrs – but still very superficial (I think he was looking for clients and didn’t want to go into too much detail).

  6. It may be really difficult to get this sort of thing incorporated into med school curriculums. Maybe it was just my med school, but I almost felt like discussion of financial issues was a taboo of sorts. We were basically told to not worry about it, and we would all do fine and make plenty of money. My med school really pushed primary care, despite having some of the highest tuition in the country, even for in state residents. I have to wonder if some of the avoidance of financial discussion was to prevent students from realizing the potential financial difficulties associated with choosing primary care while graduating with a huge debt burden. Med school deans have their own agendas and motives, which aren’t necessarily aligned with what is best for the graduates. Residency may be a more receptive venue, but with hour limits etc there really just isn’t enough time anymore.

  7. 3.5 hours for a Transitioning into Practice Seminar is a very long period of time. I’m surprised that the residents (and everybody else) was still awake at the end of it.

    When I speak, I usually do 30 minutes – 90 minutes depending upon the audience and make sure to focus on specifics points, where some of which can be implemented immediately.

    I usually hit some bullet points on income taxes, employment contracts, disability insurance, 403(b)s, IRA Rollovers, the “Back Door” Roth IRA and managing debt.

    Then I give them several websites that they can visit (like this one) to learn more about some of the topics.

    Do I get clients out of the talks – absolutely. Do all of the participants enjoy the talk and walk away with some information they didn’t know before that is valuable to them – I sure hope so!

  8. So that sounds like what we had when I finished med school but in residency a fee-based financial firm came in and did three four hour sessions after work my final year. Seemed like they could have been worthwhile until one of the presenters went on an hour long rant about how the government was going to raid everyone’s 401k to pay off the national debt and how if we just went back on the gold standard everything would be fixed…figured I could find a better use of my time after that.

  9. Rex-

    I wouldn’t be surprised to see 5% for an overfunded policy from Age 30 to life expectancy age if you use projected values. Guaranteed return would be lower. I have a post on that in a week or two. The problem is that the return is quite a bit lower for the first 10-30 years, and probably negative for 10. But you’re right, you never know who you’ll get.

    JR- We had one hour in med school and it was a lunchtime speaker who was the spouse of a doc. It was good, but not enough.

    Keeping the presentations “high yield” is obviously key. Med students and residents have very little tolerance for unfocused presentations.

  10. My wife’s in her 3rd year and they never talk about anything. I have talked with a great number of her students who have no clue even what they might make. I told on non-trad, 35-year old that he’ll probably start around low 100s ($120k) in pediatrics in Oklahoma and he was blown away, super excited. I asked him, why would you have taken out all the debt without knowing what doctors make? I then told him what a surgeon/Cards/EM can make and his eyes nearly exploded.
    The sad thing is that most of the students don’t care. They used to have a one-day thing, but the students complained because it was taking time away from the Step studying.

    I tell every med student i know to read this site. I know more about tail coverage, malpractice, and coding proficiency than I should. Hopefully it pays off and my wife can run a more profitable practice.

  11. he wasnt talking to life expectancy. That isnt a problem since at life expectancy csv and DB are the same. Earlier than that, CSV is less. He was trying to convince people of using this instead of bonds. I just cant go along with that for any significant portion. Small portion, no big deal. Multimillion whole life policy as an investment, then no i cant go along with that type of advice.

  12. CSV was a little less than DB at life expectancy for a policy I recently looked at. Guaranteed was 2% for CSV, 3% for DB, Projected was something like 4.9% for CSV and 5.1% for DB. But that was all for a 30 year old expected to die at 81. 5 decades is a long time.

  13. sorry i misspoke, i should have said csv and db equal one another at maturity which is typically age 100. in any event trying to pretend csv is going to be 5% at 2 decades isnt realistic and neither is 3 in my view.

  14. WCI – You might be interested in looking at a Khan Academy/ Udacity etc type of website, but specific to financial learning. I don’t believe one currently exists. The key to these things is that they can be completed on each person’s own time, allowing for it to flow around their busy lives as needed. They are also cheap compared to traditional class structures.

    These are quite popular, if you’re unfamiliar google search and enjoy.

  15. During my internship orientation at the University of Utah in 2002, there was an older gentleman from Northwestern Insurance company gave us a talk about DI and variable anuity. He gave a brief introduction, then proceeded by reading a letter from some former resident who thanked him for advising him about the policy as the former resident received disability. Then he choked up and wiped off his tears. I and many of my peers did buy his policy for the three years of residency. When I finished residency, they sent letter and asked me to continue. I thought it was very odd, almost like a sale tactic when I thought about the crying man. Fortunately I did more research and learned that you should not mix insurance and investment, hence did not continue their policy. I often wonder why the U allows companies like Northwestern come in to sale directly to residents like that.

  16. I am a little late to this party, but I think the information is not getting to Doctors early enough in their careers. Realistically, the medical schools should be teaching this information no later than the start of fourth year. That way students can slowly start learning about the financial world before the decisions need to be made and create a philosophy on investing/personal finance. I read quite a bit about personal finance, but I still have trouble with some topics on this website. I cannot imagine how hard it would be for my wife to learn personal finance at the end of residency after spending 3-5 years of residency hearing quacks tell her random self-serving pieces of financial advice.

    TLDR: It is easier to learn from this site overtime than in one sitting. It is also easier to apply lessons learned when the learning takes place way before the information is needed.

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