Talking About Taboo Subjects

I’ve been working in an emergency department for over 10 years now.  I’ve become used to talking about many subjects that are essentially taboo in most adult conversations.  I coax vivid descriptions of stool from patients every day.  I talk about what’s coming out (or going in) to their penis, vagina, or mouth on a routine basis.  I talk with patients quite matter-of-factly about their multiple sexual partners, their drugs of abuse, their hallucinations, their delusions, and their bad habits.  My discharge instructions frequently contain phrases such as “Stop using cocaine, it’s ruining your life,” “Wear a condom,” or “Follow-up with both your therapist and your dentist within the next week.”  There is no bodily fluid that hasn’t gotten on to my clothing at work.  I touch patients that no one else in their life will touch.  We all do.  It’s part of the blessing and the curse of “wearing the white coat.”  Yet, there is one taboo subject that we don’t seem able to broach with others- managing our money properly.

Reasons We Don’t Talk About Money


There are a number of reasons why people, and doctors in particular, don’t talk about money.  First, we don’t want to be seen as gloating.  We have an income that is higher than 90% (and sometimes 99%) of the people in this country.  Talking about money issues when you make $200K a year makes you look bad to the guy who makes $40K a year.  He thinks, “If I made $200K a year I wouldn’t have money issues.”  He would, of course, but he just doesn’t know it because he hasn’t been placed in that situation.  But it keeps doctors quiet.  And doctors who don’t talk about money, don’t learn about money and eventually get taken advantage of.

Second, we feel guilty that we have money issues at all.  How can I make $300K and still not be able to max out my 401K?  How did I blow through $25K last month?  What’s wrong with me?  I make $400K and I can’t afford the nice house, the nice car, the nice vacation AND to pay for my son’s tuition?

Third, we assume we’re the only ones who don’t know what’s going on with money.  I get dozens of emails a week from physicians just like you.  Trust me when I say that if you don’t know the difference between a Roth IRA and a 457 and have no idea what an expense ratio is you are far from alone.

Fourth, we’ve been ripped off so many times, we’re hesitant to seek help from professionals lest we make even more mistakes.  It’s an unfortunate truism that by the time you can discern a bad financial adviser from a good one, you probably no longer need an adviser.  Along those same lines, the best person to ask for a recommendation for an adviser isn’t someone who needs one, but someone who doesn’t.

Fifth, we (wrongly) assume that “rich people” don’t talk about money because it’s beneath them.  Now that we’re doctors, we are “rich people” (even if we have a negative $300K net worth) and so shouldn’t talk about money.

Sixth, we never learned to talk about money from our parents, and have carried that bad habit forward into our own lives.

Talk About Finances And Investing

It’s time we removed money from the “taboo subject” list.  That doesn’t mean you should brag about your latest hot stock at the next cocktail party (I own all the good stocks so that’s easy to do), or your fancy Lexus,  but it does mean you can talk to your colleagues about your 401K, mortgages, disability insurance, or even how much you plan to pay toward Junior’s college.  We’re all in the same boat here.  You might not know exactly how much that gastroenterologist you sit by in the doctor’s lounge makes, but you know the ballpark.  Some doctors make more than you and some make less.  That’s just the way life is.  It’s okay to talk about it.  It’s not a sin to earn money by offering valuable services to others.

Just like with medicine, there is a vocabulary involved in personal finance and investing.  Until you learn the vocabulary, you can’t do anything useful for yourself or for anyone else.  You’re the equivalent of an MS3 in the financial OR.  You don’t even know how to “hold the financial retractor” right.

Consider Yourself A Steward


I find it becomes far easier to talk about money when you don’t consider the money to be yours.  Consider yourself a steward – that you’re managing the money for someone else.  If you’re religious, you may consider it God’s money that you’re managing to do some good during your short life span.  You might also consider yourself a steward for your family.  Your parents managed money to your benefit, and you’re managing it for the benefit of your children, grandchildren and future generations.  You’ll find it far easier to talk about money that you don’t really consider yours.  You’re not “filthy rich,” you’ve just been entrusted with an important task.

Your Challenge

If you’re reading this site, you’re likely among the most educated of your colleagues about finance and investing.  I challenge you to discuss what you know with colleagues.  Refer them to this site or similar ones.  Discuss something you read on a financial forum.  Help younger partners avoid the mistakes you made.  Most importantly, start talking to your children about money.  You’d be surprised how much a 7 or 8 year old can learn about earning interest, the stock market, debt, and taxes.

What do you think?  Should money be a taboo subject?  How can we help our colleagues take care of their money so they can concentrate on patient care and enjoy a healthy life balance?  Comment below!

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Comments

Talking About Taboo Subjects — 22 Comments

  1. I avoid this topic with my colleagues, because it is not poor investing decisions that are the main problem (though certainly a component as well). The main issue I see is poor spending habits. I’ve observed a lot of doctors spending lavishly straight out of residency because they “deserve it”, and then complain about how poor they are despite a $200,000+ yearly income. I don’t think there’s anything I can say in a non-confrontational way to change such behavior.

  2. I’ll talk money with a few select colleagues and we don’t talk about who makes what.. just plans in general in regards to 401k, college savings, etc.

    But I’m not going to talk money with someone I don’t know well because it turns into [an ego] contest many times.

  3. Underpinning many of your reasons is a sense of entitlement, ignited by poverty in residency and sustained by public opinion throughout life. When you don’t live up to Hollywood’s glorification of being a doctor, or perhaps even your own definition of success, envy takes over. “Z” got it right above, but that’s no excuse for self destruction.

    When you think of living a truly successful life, start by defining what success means to you. While any level of accomplishment, in any area of life, can be gratifying, I prefer a much broader and more balanced version of being successful. I would rather raise the level of my whole life experience than pursue millionaire status (or a Maserati) while everything else falls by the wayside.

    Understanding money, and its synergies with success, is an important ingredient of living a meaningful life. And participating in this blog is an excellent first step.

  4. I find finance very interesting. I was a finance major in undergrad and almost bailed on medicine to pursue a career on Wall Street (don’t think less of me). I have several collegues that I openly discuss topics such as income, investing, retirement, etc. However, some collegues seem hesitant to talk about it whether it is because of privacy, lack of interest in money issues–which often leads to lack of knowledge in such areas, or other various reasons that often are not apparent. A couple of my closest friends have told me that they don’t understand even the very basics which ends up being a road block to understanding/learning about the essentials of 401k, practice management, overhead, retirement funding goals, etc. I enjoy talking about it because it gives me an opportunity to learn from others. One collegue with very little understanding and background has become very interested over the years and we have discussed many topics in great length. He is now a frequent visitor to this site, has fired his self-serving “financial planner” and is an avid saver for retirement. My feelings are that openness helps everyone to learn from each other and be better prepared. I agree and appreciate the “stewardship” view of the WCI.

  5. Like most physicians that follow this blog and others like it, I’m interested in finance and enjoy playing the game. I find that the majority of my colleagues are simply uninterested in the subject and have, if any, a very rudimentary understanding of anything related to money. They would sooner let someone else do it for them, even if I attempt to educate them. I’m certain time is a factor as well.

    I remember in residency we had very few opportunities to have lectures on finances, and when we did, most were not interested. If it wasn’t gonna be on the inservice, they didn’t want to hear about it. I find this to be extremely short-sighted, but unfortunately many people don’t realize the importance until they are behind the eight ball already.

  6. Full disclosure of money matters, such as how much you’ve earned and saved, is still taboo to me. Similarly, I wouldn’t sit stark-naked in front of my doctor in the middle of a check-up because it’s unnecessary. Sharing information on the manner in which you invest, save money, pay taxes, etc is information worth sharing and always gets good dialogue going. My husband and a few of his similarly-minded colleagues do this on a regular basis. Almost to the point where they look after eachother.

    Blogs like this are fantastic for anyone to stay fresh on investing. But having a spouse who is interested in learning about investing, but not as time-limited, helps a lot too.

  7. Finances are like coding or HIPAA or practice management.

    Most people dont at first realize how important it is for them to understand the information personally (and not just delegate it) both for themselves and for their practice of medicine/patients. Once you get it, you wouldnt dream of allowing someone to pull the wool over your eyes. If you take this stuff seriously, you dont have to wiz through as many patients in a day.

  8. I would guess you are not asking fellow physicians about their sexual practices, etc. So not sure the analogy works entirely.

  9. Hi Sam,

    I am only 34 so my net worth is still in the red… :( I aspire to be like you one day! This blog and bogleheads has helped set me on the right path I believe.

  10. Hello heart Surgeon and Others,

    How did I build my nest egg to $6.5 million at 52 years of age? That is an excellent question. I didn’t do everything perfect, in fact made mistakes along the way. Hopefully you can learn from my mistakes and accumulate more money than I at my age.

    First off I graduated without any debt from medical school and residency. That was huge not having to spend my 30′s paying off college loans.

    Started private practice at the age of 29. Around the age of 30, I began to have excess money which I realized needed to be invested. Got lots of advice from partners on which financial advisers to use vs do it yourself, or some combination of the above. I decided to ready, study financial investing and decided to do it on my own, which in retrospect was one the smartest decisions I made financially.

    I remember initially talking with one of my senior partners as he was readying for retirement. He told me all the investments he had made over the years……brokers, apartment houses, rental property, K1 partnerships, etc. He told me what a hassle all these investments were despite alleged tax advantages. He told me about brokers just being in it for themselves. His advice…..”Have fun, spend some, but also save some and live below your means.” He said any excess money I had, “just put it into Vanguard Index 500 and forget about it.”

    That is basically what I did. Also had Vanguard Health Care and Total Stock Market funds. Eventually added Vanguard International stock market fund when it became available. I was 100% equity until probably 7 years ago, now about 60:40.

    I maxed out my group 401K, traditional IRA(no tax benefit) and any leftover money after expenses invested monthly in above funds. I also have lived below my means. I am also clearly “underhoused” relative to my income, but house has just over 5,000 square feet, appraised at 600K. I don’t trade cars every other year, but have enjoyed Porsche, Mercedes and Lexus vehicles. I don’t take expensive, exotic vacation frequently. Although we do go once a year somewhere nice and typically stay at The Ritz or Four seasons. We dine out frequently 3-4 nights per week. So I am clearly not depriving myself or family.

    Mistakes I have made? During the 2000′s I also had an investment account that I bought and sold individual stock and options in. I thought I was a genius buying and selling. But I was extrapolating a bull market to mean I was a great stock trader. I sadly realized that in the 2000-2003 bear market. I lost much money, which I never regained. Eventually I sold much of my stock at a long term loss to take against the gains of my mutual funds. DON’T trade individual stocks, guys that do this for a living everyday can’t beat the indexes. How could we possibly think we could while working away in the operating room?

    My final thought: We are all intelligent. We wouldn’t have made it through medical school and residency if we were not. You can invest on your own with low cost mutual funds from Vanguard or Fidelity. Buy index funds, over the long term, no adviser consistently beat their index. Read about “Lazy portfolios,” find the one you like and put your investments on auto pilot. Read John Bogle and Bernstein’s books.

    • What kind of income were you dealing with? I would guess you must have been saving from 150k to 250k a year. You post is excellent but it may be helpful to know if you were doing this making 800k a year vs 300k a year.

      Thanks

      • No not making 800k per year. First year of partnership made ~$200,000 take home per year. Most most recent take home income around $375,000 per year. These figures are after contributing maximum to my 401K.

        • Great post and great job Sam Adams.

          However I would love to get your thoughts on the fact that it seems that all or most of your savings is in taxable or tax-deferred accounts, which with a rising long-term capital gains and income tax rate, will eat away a good sized chunk of that $6.5M when you start to withdraw it.

          Over the years, have you found or considered any other ways of investing your money more tax efficiently (besides the usual Roth, backdoor Roth, etc), and if so, can you share your thoughts on why you did or did not choose them?

          • Hello Doctor K,

            Actually the majority of portfolio is not in tax sheltered accounts. Approx 70% is in private accounts. The equity portion of my non tax sheltered accounts is entirely in index funds, which do spin off quarterly dividends and yearly capital gains, but are the most tax efficient. The fixed income portion of my non tax sheltered account is nearly entirely tax exempt mutual funds. The tax exempt mutual funds are “laddered” from short term to high yield tax exempt funds.

            The remainder of my portfolio is in tax sheltered accounts 401K and traditional IRA.(no I am not going to convert to roth)

            Actually, when I begin withdrawing from my accounts, I plan on using non tax sheltered first and hopefully just live off income, dividends and capital gains spun off. I suspect this will amount to $125,000 to $175,000 per year. This amount should keep me in the lower capital gains rate bracket and avoid Obama’s 3.8% Obamacare tax on higher capital gains rates.

            That is all I have done. I have watched my partners invest in apartment houses, homes, ethanol partnerships, K2 Corps, etc. Near as I can tell, none have done well financially with these. I firmly believe slow and steady wins the race.

            Good Luck, live life as you go along. In our job we recognize we are not guaranteed 80 years. Spend some, save some in case we are lucky enough to make into later years!

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