That would explain the general ineptitude of many physicians when it comes to skills outside medicine, such as political lobbying, or business and personal finance decisions.
The New York Times has written a helpful column that’s required reading for any new physician, Investment Advice for Doctors: First, Do No Harm.
In the article, columnist Rob Lieber gives some reasons why physicians, in general, are so poor at managing their money:
We begin with physicians, for whom a combination of factors can conspire against success. They take eight or so years off from the world to do nothing but learn how to be doctors, then receive a six-figure annual paycheck with no real idea of what to do with it. If they can save lives, many believe, managing money ought to be easy. But self-certainty like that can lead to all sorts of horrible mistakes.
I’ve posted before that most physicians aren’t as rich as many think, as doctors have a shorter working life, pay more in taxes, receive next to no financial aid for their college children, and have fewer years for their retirement savings to compound.
An interesting point was that the collegial, team-based environment, where medical professionals would work together for the common goal of treating the patient, was nowhere to be found in the personal finance arena. Doctors are naive and gullible when it comes to investment choices. According to one financial adviser, “Physicians are viewed as marks, because they are known to have money.”
Doctors have few formal courses in personal finance and other life skills during their training, which more or less immerses them in the sheltered world of medicine for seven or more years. After graduating, they’re entrusted with significant debt along with a six-figure income. It’s no wonder that many squander that money, instead of sensibly investing for the future or paying off loans.
Some have said, in jest, that an MBA should be a requirement before medical school. While I wouldn’t go that far, there is merit to having doctors have some basic business and personal finance training during their educational years.