Work Should Be Optional, Even for the Unluckiest Physicians

In my last column, I showed you why no matter what part of your medical career you’re at, you should be working less now.

If you have a solid investment plan based on academics and financial science—what I like to call evidence-based investing—you should have captured the spectacular returns the markets offered all of us over the past several years. You should be at the point where you don’t need to pick up that extra shift, extra weekend, or extra call.

If you’ve been practicing medicine for a long time, work should be optional for you.

Unfortunately, many physicians keep working longer and harder because they didn’t get anywhere near the types of results they should have—and, then, they complain about their financial situation.

After writing that column, I received some hate mail from physicians who didn’t capture those returns—I’ll share those with you next time.

But let’s go back and quash your doubts altogether.

In my previous column, I talked about 3 different types of physicians: an early-career physician (less than 10 years in practice, 100% stocks), a mid-career physician (10 to 20 years in practice, 75% stocks/25% bonds), and a late-career physician (more than 20 years in practice, 50% stocks/50% bonds). The portion in stocks is equally split between US and international stocks.

I assumed each physician is making $200,000 to $300,000 in gross annual income and is saving $50,000 annually. With those assumptions, your portfolios should have grown substantially from March 2009 through now.

March 2009 was the bottom of the market, so you might object that the analysis is unfair.

OK, no problem.

Let’s do the same analysis again, except this time you are going to be the unluckiest investor on the planet. You invested your money in November 2007 right before the market crash, and you contributed your annual $50,000 at the beginning of November 2007. Again let’s start out with $0, $500,000, and $1 million for the early-, mid-, and late-career physicians, respectively. Each physician has the same portfolio mix as before.

Here’s where you should be now:

What this means is not only should you have recovered all of your losses during the market crash, but you should have gotten a decent rate of return even if you timed the market exactly wrong.

No matter which way you look at it or which part of your career you’re at, you should be strutting into the hospital, the clinic, or the ER with your head held high. The onslaught of patient satisfaction scores, ICD-10 codes, electronic medical records, increasing patient volumes, and other challenges we face in medicine should not affect you as much, because your financial fortress should be really strong by now.

You can cut down on your workload and live a little, or you can give it up altogether if you want. If you can’t, then figure out why you missed these returns that were offered to you. Common reasons why you or your financial advisor did not capture these returns include:

• You bailed out of the market as it crashed

• You weren’t in the market for the entirety of its huge upswing

• You didn’t continue saving as the market dropped

• You don’t have a solid investment plan

• You made big investment mistakes in managing your portfolio by yourself

• Your financial advisor was “gambling” with your money, not investing

• A combination of the above