5 Ways Need for Less Felt as Want for More: Perpetuating the Consuming Poor

This post calls out to those who have made it to attending-hood, having experienced and habituated to the great pay raise going from the last day of PGY to first day of attending-hood.

 

Look back at your life. When were you happiest? Based on what I’ve experienced (up to PGY3) and observed first hand, attending radiologists I look up to in academic hospitals, private practice, and VA hospitals, are not that happy or healthy, unfortunately. Since I’m also pretty sure that radiologists are some of the happiest doctors, right after pathologists, I think most attending doctors are not that happy L

 

Why is that? We have spent 26+ years training and learning, invested more than ½ million in borrowed money, to practice medicine. Why are we not happy at the pinnacles of our career, height of material wealth?

 

As we pine after the next upgrade: larger homes, faster cars, more fashionable clothes, have we wondered our want for more is stifling the little voice asking “I need less. Less is more. I was happier when I had so little.”

  1. We buy clothes to look better.

It’s not the clothes, it’s the hanger. Go on a hike, do YouTube Yoga, 30 sit-ups twice a day. Not only will you look better each day with these practices. Ever wonder how Hollywood celebrity looks sexy in rags with disheveled hair? Find beauty from inside out.

 

  1. We buy expensive toys to entertain ourselves.

Stop consuming to be entertained. How about entertain others for once. How much more satisfying it is to bring a smile to another person’s face than to indulging indefinitely in our abysmal desire for materials for that short-living high associated buying/possessing a new toy?

 

  1. We buy cosmetics to adorn ourselves from the outside.

Eat healthy and exercise. Not only does your skin radiate when you eat lots of fruits and vegetables, your wallet gets buffer too. Beauty is not meant be plastered on from the outside in creams loaded with carcinogenic toxic chemicals.

  1. Retail therapy.

I was shocked when my acquaintance in med school shared that she was going to mall to make herself feel better after performing poorly on the final. Of all actions to take when academically struggling, how in the world does shopping/ consuming material objects help with anything?

 

Retail therapy hurts:

  • Financially (simply empties your bank account)
  • Psychologically by hollowing one’s soul out to find solace in soul-less objects
  • Mentally (passive consumers get dumber as active creators get smarter/richer each day)
  • Physically (we rely on quick easy fixes of how we look rather than taking good care of ourselves and letting out beauty shine from inside out.)

 

  1. Nothing is ever good enough. Everything needs upgrade.

It’s self-perpetuating. Only you can break the cycle. The more money you make, the more monstrous this want for more will get. You are the one who can realize and replace your want for more with your need for less.

 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.

 

Big Bad Bank Lesson #1

Big Bad Bank Lesson #1: It Takes (Someone Else’s) Money to Make Money.

 

People say it takes money to make money. Not true. Just look at the big bad banks. It takes big banks Nothing to make money. What do I mean?

 

Theoretically, anyone, without any assets, can make infinite amount of money if he or she is a bank. A bank in the US can borrow money from the tax-payers (federal government) at 0% (currently 0.25%) interest rate, then lend this money out to consumers at rates ranging from 2-30+%. Isn’t that incredible? A penniless bank, borrows money which it in turn lends out at pretty much any rate it chooses. The only risk here is default, but when you have 30% growth off of borrowed money, you can withstand some defaults.

 

So banks don’t have their own money… they don’t even hold onto the money they borrow. All banks do is to create this money current, making themselves the conduit that the money river flows through, they take interest difference (between the lower rate they borrow at and the higher rate they lend at), transaction fees, loan origination fees, and other fees galores.

 

So why don’t we every day people also turn ourselves into mini banks?

Learn from the BBB’s, and make ourselves a channel for money river…

 

So here’s how I did it and made $3,300 by a few mouse click using about 2-3 hours of my time.

Now, there is online sources that states that the Citibank is no longer taking credit card funding for new Citibank bank accounts. Since it is not an official statement from Citibank and you’d still like to try, ahead… but Don’t get mad if it doesn’t pan out.

 

The point here is learning from BBB and seizing the opportunity to be the bank yourself for once!

 

Here’s the synopse of what I did to create a money river with me being the conduit that directs the money flow and profits off of it.

 

  1. Open Citibank online account
  2. Fund the Citibank account with my BOA Visa Cash Reward card
  3. Once money in new Citibank account, pay off BOA credit card
  4. BOA credit card gives me 1.1% cash reward
  5. Since I funded $50k, I get $550 cash rewards in my BOA checking account
  6. Close the Citibank bank account after 30 days (not much longer, I wanted to avoid the monthly fee).
  7. Open a new Citibank bank account online and then repeat 1-6 steps. Every cycle, I make $550.

So I made $3,300 when I had $0 in my bank accounts. It was just 1.1% cash back, imaging 3% or even better 30% cash back (which is the kind of deal our BBB ‘s are getting.) BBB’s did nothing but moved tax-payer’s money around… the more profitable directions the BBB’s manufacture, the more rewards they make for themselves. (16% interest rate on credit cards, 30% once credit cards defaulted, 5% on student loans, 4% on mortgage, 6% on used car loan, etc.)

 

In summary, it does not take money to make money. Money can be collected from the money river flowing through your property. Much like all living things on the banks of river thrive from what the river offers as it runs by.

 

Be the bank, capture what the cash river offers you as it goes by.

5 Myths about the Dr.’s Wife (or Husband)

The 9,000+ views and counting of my recent article 5 myths about doctors our society believes made me realize that we are all interested in raising awareness on the personal and professional life of doctors with the ultimate goal of getting more support on physician wellness.
As it is definitely true that there’s a great woman behind every great man and vice versa, I hope this post will debunk some of the most damaging and isolating myths about doctors’ better halves. (In fact, it is frequently true that the doctor’s spouse is the larger half of the successful work/home life.)

1.    Gold-digger.
Did I hear you wrong? Did you mean goal-digger? Remember medicine as the ultimate career of delayed gratification, remember that doctor who has ½ million in student loan debt snowballing at 7% before he got his first attending paycheck?
Gold-diggers don’t marry doctors; they marry those in business or Hollywood.
To survive as a (candidate) spouse for a doctor for a few years, let alone a few decades, one has to be extremely diligent, resourceful, and dedicated, which is largely representative of the doctor spouses I have met and known.

2.    Trophy.
If you trophy in the sense of Jessica Simpson looking wives, you are wrong. Sure, I’ve met many doctor’s spouse fit for Hollywood stardom, but I’ve also seen them straddle 1 kid in front, holding hand of another kid, while pushing a stroller of a 3rd kid to drop off a homemade lunch for the medical student who’s studying for the 10th hour at the library.
Trophy is meant to be marveled at. Doctor’s spouses don’t even stay still for long enough to get a paparazzi picture out of.

3.    Don’t lift a finger.
Again, these individuals are as devoted to serving others as their doctor spouses. The reason they became husband and wife is because they share the same ideals and passions. Not only do you see doctor’s spouses serving their family, kids, kids’ schools, home churches, but you may find them in many more places instead of just the malls or nail salons.

4.    Spend all the money on herself.
First of all, during the first 10 years after college, there’s not much money to go around. Living under the doom of a large negative net worth while watching your spouse work to death, wondering where the end of the tunnel will be, is not for the faint or vain of heart.
Most doctors’ better halves are the thriftiest people I’ve ever met. They know by heart the value of the precious $12 dollars made as her husband is away for the 36th hour of the day. She knows the sacrifice and she takes nothing for granted.

5.    Spend all her time on herself.
Did I mention she’s busy, industrious, and goal-digging, with a heart of gold and so much love for her doctor spouse, kids, and community? There’s no time to spend on herself.
I do hope that instead the raised eyebrow of “oh, you are a doctor’s wife” and the sneaky glance at her finger anticipating a giant diamond, those at dinner parties will give this dedicated, incredible person in front them a pat on the back, “Thank you for supporting your spouse tirelessly, allowing him/her to be such an incredible doctor, an asset to our community.”
That would be a better day for doctors and their better halves.

 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 8 Year Old Mini Makes Her Own $

time _httpffscashcom

IRS is pretty strict about what you can pay your kids for. In a tax audit, paying an 8 year old 10k a year may seem hard to justify. But I think I have a case with my 8 year old Mini Wise Money (MWM).

Moneywise, it makes sense to pay Mini 10k, deduct her pay from Dr. Wise Money LLC business income, let MWM file and pay her own taxes, and then fund her own Roth IRA. Not only is MWM’s 10k AGI tax rate way lower than mine and that of DWM LLC, but also it is likely the lowest tax bracket MWM will ever enjoy going forward. Both Mini’s income and the tax rate are bound as she gets older.

As many of you know, MWM is a gifted artist. Here’s a piece of oil-painting she completed in 9 hours, over 3 Sundays as a 4 year old. Her art teacher, taught a group of 15 5-13 year old, MWM got in the group class because I convinced the teacher she was a very well behaved 4 year old.

Her art teacher loved MWM so much that when I went on residency interview trail, she offered to take MWM off of her dad’s hand. She joked she would adopt MWM if she could.

Many people have offered to purchase MWM’s artwork, but parents, grandparents are not willing to part with MWM’s original art pieces. Hence MWM has only sold replica so far, but she has sold one original sculpture to my company DWM LLC at $300, and that’s with a generous discount.

MWM has generously displayed her artwork in galleries on drwisemoney.com. So for that, she’s getting compensated for $1500/year. Additionally, you noticed her pictures throughout many of my blog posts and even published on Physicians’ Money Digest. For her modeling work, she gets $1500/year flat fee.

IMG_0896
Mini’s been in the business of art production for 5 years now. This was her very first oil painting when she was just 4 years old. She’s certainly earned her right to make some $ from her art after half a decade of passion and dedication for art 🙂

We recently moved into our dream home (the second home I purchased in 2 years). We kept the first home in our family and got this dream home for MWM, my parents, and myself. As soon as the seller signed our purchase contract, MWM started planning parties and summer camps.

 

I was going to hire a professional party planner for MWM’s 9th birthday, but to my great surprise, Mini rose up to the occasion with quality-work that beats the professional I was going to hire. The tear-jerking party invitation letter (essay) and the party schedule (planned down the minute) certainly would have taken me more than 4 hours to produce (which is worth $388/hr x 4 to me.)

So MWM deservedly earned herself $1500 orchestrating her own 9th year old birthday party. See below for her party invitation letter, and the party schedule. I would definitely hire MWM for future company parties and events. Since at this party, we will be entertaining  & feeding business associates and conducting business meetings for DWM LLC, we can definitely justify paying MWM from the DWM LLC. So it’s definitely wonderful that I am not paying as person, but my company DWM LLC is paying Mini. When I pay Mini, it’s post-tax dollars. When DWM LLC pays mini or me, it’s pre-tax money.

party cake
From my mom, to me, to Mini, we all love entertaining. Professional party planner isn’t a bad gig, huh?

Back to MWM’s talent and hobby in art. She is designing and making our DWM LLC company uniform. The art supply and raw materials would be deducted from DMW LLC. Furthermore, MWM makes $500 for her creative design of the company T shirts. Then she gets $30/shirt purchased. I’m buying 40 shirts for business associates and volunteers. She made another $1200 here. We’re now at $6500.

 

Do you notice how many posts/articles I write are about MWM? She’s my think tank and creative juice. For every post she helps me generate, I started paying her $50 on 1/1/2016. Then I realized MWM was involved in so many posts that it was getting expensive, so we negotiated a fair deal after we discussed DWM LLC’s balance sheet.

Mini gets $2500 flat fee for the year of 2016 regardless of how many posts she help me generate. It’s already saving me money, as I have written more than 50 articles inspired by her this year, not counting all the other ones from prior year when MWM worked for free. $9,000.

 

While I can’t exactly justify Mini’s equestrian lessons as DWM LLC company expenses, I could certainly justify her art lessons as furthering employee education. Since she directly benefits DWM LLC with her digital art gallery contribution on drwisemoney.com, time she spends on improving her art skills are compensated. MWM, voluntarily on average spends 15 hours per week watching art/DIY videos and creating new art pieces: 1-2 hour on each week day; 5-8 hours on the weekend. To be safe, we will count 10 hours per week and that’s 520 hours per year. So I pay her $2,000 for her 520 hours of work, which is just south of $4/hour. Not too shabby right?

 

So MWM will have made $11,000 in year 2016. She’s a pretty good little entrepreneur, right? As her mommy, I’m more than happy to deduct her pay from my business, watch her fund her Roth IRA at the tender age of 8 years old.

 

This one-time 5.5k she contributes to Roth IRA in 2016, assuming 8% annualized return, will double every 9 years. She’d have (2 to the 5th power= 64x of 5.5k = $352,000) at retirement age of 62; tax free too. Let alone if she contributes 5.5k for the next 10 years before she starts college. The 10th 5.5k would have 4 doubling time, so still worth $171,000 at 62. Now imagine adding up all the 5.5k’s impact from 2016 to 2026.

 

I didn’t fund My Roth IRA until 30.

Mini’s certainly starting early and using time value of money as her ally, rather than a foe!

 

Why Low Interest Rates Don’t Matter (Guest Post)

A common question I hear is what to do with money that you are saving for a short-term goal, such as a car replacement, a wedding, or a special trip. Let’s face it – nobody is getting rich off money markets and savings accounts in today’s world! But are you asking the right question? Let’s start with a couple of definitions:

  • An investment is a property bought with the intent of creating wealth. Investing is along-term term process, a time period for you to let your property (stock portfolio, real estate, a partnership interest) grow in value. You should not meddle with your portfolio except to rebalance periodically (yearly for me). In the long term (which I define as 5+ years), your goal is to suitably diversify, reinvest income, and, most importantly, behave appropriately as a long-term investor.
  • Savings, on the other hand, is money accumulated for a short-term goal. Since we define “long term” as at least 5 years, the short term is, by definition, a period of less than 5 years. In the short term, markets are very volatile, results are erratic and unpredictable, and we do not want to risk our savings by risking our savings for extra growth. While chances are that your investment will grow even in the short term, that’s just not good enough.

Buying property for short-term growth and income isn’t “investing” at all. It’s speculating (a.k.a. gambling). You should never count on an “investment” to grow much in the short term and you should not be surprised if it declines in value during that time frame.

Bear markets (defined as a sustained drop of at least 20% in the markets) have occurred, on average, every 5.5 years since the end of WWII. The stock market suffers a 14.1 % drop, on average, at some point every year. Is this a risk you are willing to take, knowing that you may have to put off buying a house for a 2 or 3 years? Of course, this assumes you wouldn’t panic and sell while the market is down 25%, turning a temporary drop into a permanent loss.

So what should you do with money you’ll need during the next 5 years? Actually…very little except to make sure it will be there for you. In the short term, income is of secondary importance. The fact that you may earn a bit of interest while your money waits for the next emergency is nice, but not something you should focus on.

You should allocate short-term savings as follows:

  1. Funds for unpredictable, current spending belong in a basic interest-bearing account. This includes your monthly living costs, your emergency account, and so forth.
  2. Money for “planned needs”, such as what you’ve set aside for a house when you finish training, should be loaned using debt (CDs and bonds) timed to mature when you will need it.

Remember: short-term priorities for your money are liquidity and safety. Long-term priorities for your investments are growth and income. How do you define which is which? By creating a financial plan, of course. Your plan should always dictate your financial decisions.