5 Ways Good Finance Parallels Good Cooking

Having grown up on the kitchen counter while my gourmet chef mother cooks, surrounded by the aroma of her 24 hour simmer chicken broth, and her 200+ types of wines jam packed in our 1,000 square foot apartment, cooking is in my DNA.

Feeling powerless when the Taiwanese creditor/mafia shows up at our door, banging and shouting to see my dad, the debtor, and worrying about my dad losing an extremity each time he leaves house to re-negotiate pay back terms with the mafia, personal finance resourcefulness became a survival necessity.

Today I love equally sharing financial tips and cooking up a storm to entertain my friends. On my walk this morning, after yoga, I had an epiphany. Cooking and personal finance work stunningly the same.

  1. A little goes a long way.

5.5k I put in Mini Wise Money’s (my 9 yo kid) Roth IRA today in 2016 will be worth more than 300k at her retirement (assuming 8% annualized return and retirement at 62.)

Similarly, the most delicious and popular part of my 4 hour slow baked baby-back ribs are the caramelized sweet delicious onions, which brings life to any ordinary starch like mashed potato or quinoa or wild rice.

  1. Healthy ingredients may not be the cheapest

Healthy financial habits, such as saving, discipline, and patience seem costly, at the opportunity cost of not doing retail therapy, not buying a sports car the day you get your residency or attending job contract. Yet, if we look closely inward, we know that investing our money and finding our happiness from within rather than purchasing temporary ecstasy is not only healthy for our finances, but more importantly for our inner peace and joy.

Many Americans are lead to believe that healthy foods such as produce and un-processed/un-tampered meats are more expensive than TV dinners/ fast food. That’s not true. When you buy seasonal local fresh veggies and fruits on sale and on credit intentionally, you can get great deals. Not to mention the exorbitant lifelong medical bills you save by eating healthy.

  1. Homemade is always better and cheaper than restaurant made.

Financial advisers who charge AUM (asset under management fee = a % of the amount of money you turn over to them to manage) are like restaurants, their primary goal in business is to make money off of their clients. Your dollar goes to supporting their family (rightfully so, as they too have to make a living, but it sure is easy to make 13 million over 6 decades from sitting on just One average physician’s assets!), to the advertising, to the facility/building, to their time preparing a portfolio or a meal for you.

Homemade is always better and cheaper in the long run if not immediately. DIY cooking and finance alike, you cut out all the expenses not related to the actual quality and quantity of the food, and you make a delicious healthy meal for your family out of such love and care that no one who’s trying to make a profit can surpass.

  1. A little knowledge goes a long way.

Watch 1 documentary on food (I recommend hungry for change), watch another one, you start seeing repeating themes and principles. So is finance. Just because we study and train really hard for 26 years to become a fully boarded physician, does not mean other professions demand the same dedication and qualification.

Majority of financial advisers had 2 weeks of training before showing up at your door, selling you financial products with commissions they hunger for as most of them have little to no base pay. Their bosses know how low the educational/professional threshold is to get another swarm of financial advisers, so they are paying these salesman as little as they can. I know this because I was recruited to do so as a college junior at UC Berkeley. And my father, with all the love and respect, who’s financial idiot, was taking such a 2 week online course in hopes of making it big in his 60’s! The fact that my dad was in a training class of financial advisers tell you a lot.

  1. It’s simple.

As much as the workers of the financial industries want you to believe finance is complex, it is SIMPLE as hell. Use 1% of your giant central processing power that got you through 26 year of schooling/training and beyond, you will be the best financial adviser to your loved ones and yourself in no time. I’d say in exactly the time it takes you to read your first investing/personal finance book.

Personal Finance, Investing, Retirement, Lifestyle More articles like this on Physician’s Money Digest.

5 Ways to Stay in Clinical Medicine & Be Happy

My hero and mentor recently wrote “5 Ways to Get Out of Clinical Medicine.” His article inspired me to write “5 Ways to Stay in Clinical Medicine & Be Happy.”

 

Even though I am radiology resident and frequently seen by the society and other doctors as Not a Real Doctor, I think of myself as very much practicing clinical medicine every day.

Not only do I do procedures involving educating an partnering with my patients, but also I frequently call up patients to share findings with them, answering their questions, and recommending follow up with their clinicians with appropriate imaging modalities when warranted.

I recently learned in a very humbling and scary fashion, how challenging clinical medicine is. I missed a critical fracture in a multiply injured patient who was a high-speed car struck pedestrian. Even though my miss was caught immediately and that I recommended the appropriate management immediately for all the other critical findings I reported, I was shaken by the fact that I could have harm this patient.

I came to realize that bearing the weight of a fellow human being’s life or death is simply too heavy for any human like myself, fallible, imperfect, distractible, and fatigueable. Now compound the fact that a “fast” clinician may see 60 patients daily, yet an average radiology resident will see the images of at least 60 patients daily. The impact of practicing clinical medicine on the practioner is multiplied simply by the number of cases/lives he or she touches.

I thought about leaving the clinical practice of radiology. I would love to be a yoga instructor. I don’t need to make more than 50k a year to have a happy life and save for my retirement, and as it is, I can easily work 20 hrs/week and make 50k annually. There are so many things I could do and would do extremely well and make a living out of, from blogging, tutoring, writing books. I’ve always made more money hourly doing something else other than medicine. The easier way out is certainly tempting. But I decided, like how I initially chose medicine in my teens and 20’s, to take the path of great resistance and greater rewards (albeit not financially speaking.)

Fully recognizing the stress, burden and sacrifices associated with practicing clinical medicine is not worth a million or even 5 million and more, I also know that the true rewards of clinical medicine is also priceless.

So for those of us who are overwhelmed, overworked, underpaid (like I said, financially, no amount of money makes it worthwhile to bear the burden of another’s life), squeezed and taxed in all directions, let’s look at some ways we could be happy doctors rather than leaving our once-upon-a-time “dream career” all together.

#1 Give yourself the permission to work less.

Why are you on a treadmill, running and running trying to keep up? I also abhor the endless, mindless, tedious paperwork associated with getting insurance pre-auth and workman’s’ comp. When you are so overworked, seeing 60 patients daily, back to back with hardly any food or bathroom break, no one is going to be a happy doctor. But if you see 30 patients and work 8 hours daily with a 1 hour lunch break, you’ll be happier. To get from stressed out overworked to relaxed and happy, one just needs to cut his/her paycheck. You ask, how can I cut my paycheck in half?

Sit down with a cup of your favorite beverage and track your monthly expenses for 2 months. Find out where your money goes. I bet there’s fat to be cut out. Ask yourself, “Is my happiness and well-being worth half of my paycheck?” My answer is, of course, your health in mind and body is the greatest asset you have to generate wealth!

If you have been successful with all the fear and stress you have, imagine how much more successful you’d be if you are filled with love and positive energy instead. For instance, I increased my sleep hours by 50%, from 4 to 6 hours daily, and I found myself writing 3-5 articles in the same amount of time that I used to take for just 1 article!

#2 Reduce clinical hours and increase academic/educational hours.

Many of us go into medicine because we enjoy the role of a teacher and life long learner. If the goal was to obtain the most amount of money for the least amount of work, medicine is probably the worst choice of professions to accomplish such. So reduce your clinical hours to half, increase patient/student teaching hours.

You may think that the latter is fine and dandy but don’t put food on the table or pay the bills. Then first, go back to step I and cut out the fat in your expenses, allowing yourself to work less for money and more for passion.

In this age of YouTube and blogging, you’d be surprised you could in fact make money educating others. See the next point.

#3 Replicate yourself.

We all don’t enjoy repeating ourselves, to our children, our parents, or our patients. So replicate your voice, your knowledge, your recommendations in a video or a publication. Refer those who need your teaching and expertise to the educational materials you produced to perfection. Save yourself time (time is money), make money (YouTube views and online article blog views make you money), and free yourself to do more good for your loved ones, yourself, and the society.

#4 Outsource tedious work.

Hire someone from oversea for 4 bucks/hour to do your grunt work. Writing a research paper, PhD’s abroad are available at $10-15/hr to do the literature search for you and/or even draft the entire paper for you! You can outsource as much as you’d like, only you know how much your time is worth. If you ask me, your time, should be priceless (at least to you and to those who love you.)

#5 Practice medicine in a different country.

I’ve heard that medical system is not so messed up in Canada, Europe, or Australia. Consider that. You may make less. But I’ve also heard that radiologists in Australia makes only slightly less than their miserable US private practice counterparts. It’s worth exploring to say the least.

We spend 1/3 of our lives and 1/2 million dollars to obtain the privilege of practicing clinical medicine.

Before trying to get out of it, perhaps we can figure out ways to be happy staying in clinical medicine. 

Personal Finance, Investing, Retirement, Practice Management, Lifestyle More articles like this on Physician’s Money Digest.

 

8 Wealth-Fulfilling Prophecies

We are so hard on ourselves sometimes that we jam-pack our mind with self-defeating prophecies. Some of us do so before a big, expensive, high-stake standardized exam, prohibiting our hard-earned knowledge and experience to shine through the test questions as deserving high scores.

Some of us do so moment by moment, defeating ourselves in all aspects of our lives, from social, professional, physical, to emotional and financial.

While it is difficult to remove bad foods from our diets cold turkey, it’s frequently a tad easier to replace junk foods with healthy and delicious foods. So let’s say goodbye to wealth-defeating and say hello to wealth-fulfilling prophecies.

  • I never fail. I simply try until I succeed.

 

Robert Kiyosaki says, “Failures defeat losers. Failures inspires winners.” Key to success is to be encouraged and excited about mistakes and failures, as counter-intuitive as it seems. Pick ourselves up exactly where we fall.  Share our defeats openly because they help others too.

  • I work to learn.

 

This is why we went to medical school and went through residency. If we are working for money, we would not have spent our peak learning/productive years getting paid negative money (tuition, fees, interest, and loan origination fees) up to 10+ bucks/ hour.

  • I work to serve.

 

This is why we choose medicine. By a combination of nature and nurture, we gravitates to those in need. Rather than cherry-picking those who can benefit us, we find ways we can benefit others. Not so coincidentally, those who focus on serving others are often the most successful in many areas of their lives, including money matters.

  • Money is a useful tool.

 

We are no above money and money is not too good for us. We need money to take care of our loved ones and ourselves. Money can buy my time, the most precious commodity I have to offer as a human being to worthy causes on this earth. It’s a great tool and I will learn to optimize using it.

  • Money works for me.

 

My or someone else’s money (I borrow at a good rate) are my tireless, vacation-less workers who never complain or want a raise. My dollars work for me when I use them to purchase and amass assets such as index funds holding, rental properties, build my companies.

  • Luck is preparation meets opportunity.

 

We get lucky because we are prepared and seize an opportunity that swings by. So don’t those people who attribute all your successes to random chance. Be happy that you are prepared to utilize the chance, and get prepared for the next chance!

  • The universe is for me.

 

I’m also for the universe. We are social animals. We sleep better at night if we don’t perceive our fellow human beings as prowling tigers at our doorstep. Knock on wood, I’ve always believe in the innate kindness of human beings. Not only do I sleep well at night and feel relaxed in my own skin in the day, but also I keep giving out the same energy I receive/perceive from my surrounding. Sure, I have gotten negative comments in front of me and behind my back, but I’ve never gotten too injured to have faith and to continue giving to people around me.

I usually don’t define anything by what it is not. I was once berated, ridiculed, and humiliated by an attending radiologist while reading out because I didn’t answer his pimp questions correctly. I cried for 30 minutes during read out with 3 medical students sitting behind the reading station and a room full of other fellows and residents on that rotation.

 

I asked everyone I esteemed. They all told me to bite my tongue since this attending is known to be this way with every trainee in the program.

 

Then, in the same room, I overheard him berating, humiliating a fellow, whom I respect for his knowledge and benevolence. I spoke up this time. I said, “Dr. so and so, you are one of the most brilliant doctors I’ve ever came across… [10 minutes later of perfect silence in that great big reading room full of residents/fellows/and medical students]… I don’t believe anyone of us in this room is dumb sh*t. and even if we are, we shouldn’t be treated like one.”

 

Medical hazing is full of abuse, derision, and exhaustion-techniques. Do not internalize such, for they will destroy your chances of success in every aspect of your lives, including, money, marriage, mind, and motherhood (fatherhood.)

 If you like this article, you might enjoy other DWM articles on Personal Finance, Investing, Retirement, Practice Management, & Lifestyle.

All articles by DWM are for informational purposes only and not intended as a substitute for professional advice. Please consult a professional accountant, financial adviser or lawyer, before making financial decisions.

5 Ways to Keep More $

 

  1. Keep $ from Uncle Sam’s claws legally.

Set up a business. What is your hobby? Turn it into a business by submitting some simple documentations to set up a Liability Limited Cooperation (LLC.)

My hobby is to help every day common people like myself build wealth, so I started my blog, contributing to PMD, giving speeches (unpaid), and writing books. With the modest income from this hobby, I set up the DWM LLC, which allows me to deduct business expenses, pay my kid for her work (allowing her to fund her Roth IRA at the tender age of 9 years old).

Sky is the limit once you set up a business; even if your business is net negative like it was for me in early years, it helps with reducing your taxes, effectively allowing to keep more of the money you earn.

Uncle Sam loves businesses, that’s why businesses pay themselves first before paying taxes while every day employees (who work for but do not own the business) pay Uncle Sam first before taking care of themselves.

So join the game! Set up a side business and deduct (legally) away and reduce your taxes.

  1. Keep $ from retailers.

Don’t buy anything full price! Duh. Does the instant gratification of buying something full price/ at a premium bring you lasting happiness? Not for me. Buy all things on sale and buy used whenever possible. Gentler living on the earth is great for your wallet too.

  1. Keep $ from banks.

Strive to be like the big bad banks. They borrow from tax payers at prime rate of 0% (not long ago, currently 0.25%) and they practically predate on ordinary people 30% APR when someone misses a payment or 2. I know the pain the vicious cycle of such a debt, as I picked up 7 odd jobs to help my parents pay their 20k credit card debt at 30% while double majoring at UC Berkeley.

Be selective with where you set your cash. If it is not making you more than 3% annual return/interest, you need to find better opportunities.

I have less than 1k sitting in liquid savings with the banks because they highest interest they’d pay me is 1.11%, deplorably less than rate of inflation.

All my money are working hard for me in the stock market, in low fee index funds at Vanguard. My rainy day fund resides in the endless credit card offers I get, where I can purchase or get emergency cash whenever I need it. And frequently, there’s incentive such as cash back, gift cards, or air mileage to borrow for emergency. Not to mention the sweet 0% APR for 15-21 months depending on the credit card terms.

  1. Keep $ from consumerism.

Whenever you want to buy something, ask yourself:

One, do I need this?

Two, how long does this make me happy?

Three, why does this purchase make me happy?

I hardly find any purchase that warrants legitimate answers from these 3 questions.

The more I buy, the poorer I get. I know what it’s like to be the consuming poor, we are in a nation of ironic and counterintuitively causative rampant consumerism and poverty. Want to reclaim some tax payer dollars from the super-rich? Stop buying stuff from the rich who made the stuff!

  1. Keep $ from your kids.

For those of us who are minimalist and non-material, we find it easy to splurge on our loved ones. The material luxury that never interest us seems perfectly befitting to be bestowed on our loved ones, especially our little princes and princes. Guess what, I learned the hard way!

It is not good to shower our little ones with material luxuries. Excessive materialism (nice looking stuff, new toys) is toxic to all of us, particularly to the young, malleable minds.

I learn that it is ok to spend money on her pilot lessons, but not ok to spend the same hundreds of dollars on clothes, fashion, school supplies, etc. Desire for possessions is a monster with insatiable appetite. While I thought I was giving the best I could to my girl (Mini Wise Money), I really was setting her up for failure in life.

After the sharp U-turn, Mini and I have learned together just because we have $ doesn’t mean we should spend it on how we look or on adding to our possessions. We learn that $ is better spent on experiences that make us better people, or on making someone else’s life better, or simply invested so that our $ works for $, and we are free to work to learn and improve ourselves.

Personal Finance, Investing, Retirement, Lifestyle More articles like this on Physician’s Money Digest.

8 Wealth-Defeating Prophecies

We are the kings and queens of self-defeating prophecies. We place such high internal standards that we failed before we even tried. While everyone around us would be clapping hands at our valiant efforts or excellent performances, we thought our results are subpar, we judged our efforts to be misguided and inefficient.

I had a co-intern 2 years ago who awed me with her presence of mind and her self-confidence. When I’m calculating how I can pay my bills, save for retirement, she just said to me, “I don’t worry about money. I just know that I will be very rich one day. I know it in my heart. I’m generous with giving and it always comes back to me.”

She has 300k+ in student loans but she also has enough in the stock market that she gets a couple thousand dollars in stock dividend every year. She exudes confidence. I know that she will be very wealthy one day as well. She’s the perfect antithesis of (self- and) wealth-defeating prophecies.

  • I will never be rich.

You can be rich or poor. It’s completely up to you, regardless of your professions. I focus more on net-worth to income ratio to evaluate a person’s financial intelligence.

For instance, a janitor with net worth of 1 million and income of 40k a year definitely have greater financial genius than a doctor with a net worth of 1 million and an income of 300k a year.

It’s both how much you make and how much you keep. I’d venture to say that the latter matters more.

Yes, you will and you can pay it off within 2-5 years of finishing residency, as white coat investor urges all of us to do.

You can even pay off your student loans within 2-5 years of finishing medical school. If you have the will, you will find the way. (I paid off my student loans as an intern.)

  • I work for money.

No you don’t. We all need money to survive and we want to thrive with some of our hearts’ desire fulfilled. Working for money is an oppressive and constrictive way of being. We work to learn and to serve, and with those intentions, money follow us.

  • I don’t know how to make money work for me.

Although it is true that we each measure the rest of our world with our own ruler, it is a good idea to check in with reality once in a while.

As much as the financial industries strive to make money matters as murky and as complicated as possible, money matters are stupidly simple compared to medicine.

Doctors, please don’t assume the average financial professionals went to school/training for 23 years (equivalent to shortest residency) to be mange your wealth. That’s what you do to manage your patient’s health.

Pick up an investment book today. Read it. You’ll be amazed how easy it all is. There’s one Harrison in the study of medicine, yet we can be all be Harrisons in the study of money.

  • I will never be good with money.

If you can be good with medicine, you can be good with money. You are not good because you choose to not invest 3 hours to read an investment book and choose to allow someone else to manage your money for you over your life time for 13 million (what average physician pays financial adviser with Asset Under Management fees over 6 decades.) check out PoF’s genius math here.

  • Money matters are too complicated.

Again. BS.

  • Money matters are too boring and tedious.

Once you’ve tried to study money matters, with just 1/1000th of the dedication, diligence, and discipline as you did medicine, then tell me it’s boring and tedious.

Even if it is till boring and tedious, you’ve won 90% the battle, just automate your money matters. Set it up for stupid-simple-success with passive, emotionless, automatic accumulation of assets.

Set it up once correctly, re-evaluate and re-balance every few years. It doesn’t take much time to save yourself 13 million dollars.

  • I’m too good for money.

Everyone is too good to work for money, but no one is too good to let money work for him or her. Think of the time and freedom that you can enjoy with your loved ones the minute you reach financial independence (the point where your money for your to support your lifestyle freeing you to work for anything your heart desires.)

 If you like this article, you might enjoy other DWM articles on Personal Finance, Investing, Retirement, Practice Management, & Lifestyle.

All articles by DWM are for informational purposes only and not intended as a substitute for professional advice. Please consult a professional accountant, financial adviser or lawyer, before making financial decisions.