Doctors should learn personal finance during medical school

Doctors should learn personal finance during medical schoolI read somewhere in the comments here something to the effect of this: “Physicians are only good for one thing: doctoring.”

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.

 is an internal medicine physician and on the Board of Contributors at USA Today.  He is founder and editor of KevinMD.com, also on FacebookTwitterGoogle+, and LinkedIn.

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  • Anonymous

    Sensible.  This Google presentation on investing should be required viewing for every med school graduate: http://www.youtube.com/watch?v=wnCxlIQjT-s&feature=channel_video_title

  • http://www.facebook.com/profile.php?id=100000977601479 Melissa Gastorf

    I would argue that business training should be done during residency. Medical school is too far away from when they will actually be out and in the real world.  There is between 3 and 7 years between medical school and practicing medicine depending on residency and if fellowship training is done.  However, I think there could be some training done during residency.  This might help some.  I speak from personal experience, since after being in practice for 3 years, I did earn my MBA because I did not have the business knowledge needed to successfully run a practice

  • John Huyette

    Thirty years ago we were told to go big on the house — it was a certain investment.

  • http://dinosaurmusings.wordpress.com/ #1 Dinosaur

    I disagree with the primary premise that doctors as a group are any worse with money than any other cross section of Americans. Financial management should be taught in high school; there’s plenty of other material far more important during medical education.

  • Anonymous

    Very true – maybe patients should read and know this also. considering also the psychological aspects of being a doctor – not prioritizing how to deal with finances – may not be out of lack of knowledge or skills (which could easily be developed) but due to inherent pressures of the  career where focus and time goes mostly into treating and managing patients rather than ones own self.  

  • http://pulse.yahoo.com/_XI4S6QJL6SIJMIOB33US27EQBI Lacey Whitmire

    I think people often run to the solution of “make this part of medical education,” whenever physicians as a group do something sub-optimally.  Personal finance is a problem for many Americans (subprime crisis, anyone?) and should not edge its way into the medical school curriculum, like so many other things purported to be of similar value that doctors aren’t trained in.  But really—the days of individual practitioners having to manage finances are soon to be gone, anyway.  They will die off since no one in my generation of MDs wants to go that route—and have to deal with the inefficencies therein.  We are more interested in fixing the inefficiencies from other positions, such as becoming policy-makers.

  • http://twitter.com/EntrepreneurMD Steven Hacker, MD

    I do think it is “educational malpractice” (to borrow a term from Dr. Arlen Myers of SOPE), that physicians are graduated without any business knowledge. I am strong advocate of changing medical school curricula and for sure, residency training, to include much of the material covered in the popular book, The Medical Entrepreneur Pearls, PItfalls and Practical Business Advice for Doctors. (written by the same pen that is writing this comment). It is inconceivable that physicians finish their residency and the very next day either sign a contract or are expected to compete on even ground with veteran docs in highly comeptitive highly regulated specialties. This is why I have found the CME course anad Symposium for doctors, fellows and residents enttiled The Medical Entrepreneur Symposium. This 3 day course gives physicians everything they need to know to be successful in their practice or as physician entrepreneurs. The course in Delray Beach Florida is being held March 29, 2012 , with faculty experts and a comprehensive agenda, attempts to give an intensive education to physicians because they never received it in their training programs or in medical school. It is my hope that physicians learn to recognize danger zones in business and life in teh same way that a surgeon avoid inadvertently a neurvascular danger zone in surgery.

  • http://www.facebook.com/people/Terence-Ivfmd-Lee/1523282856 Terence Ivfmd Lee

    I’m with you. Understanding money is critical information for everybody, not just doctors. There is no role for it to be part of a required medical curriculum. Rather, the responsibility should be on every person, doctor or not, to learn it for themselves. One of the most important lessons to learn is the concept of inflation and who is responsible for that. Because without inflation, there would be no need for investing, only for simple saving.

  • Anonymous

    William A. Nolen talked about this topic in his book A Surgeon’s World, published in 1972. Almost 40 years later, it’s the same story.

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