“Money makes the world go ’round.”
Whether you believe this this figurative adage or not, it is a hard truth. Money is ubiquitous; it pervades everyday life. And money is the cornerstone of business. So I’m shocked to hear “pretty much nothing” when I ask residents what they’re taught about business and money these days.
Not to insult anyone’s intelligence, but I’ll venture an assumption. If you are a medical student, resident, or newbie doctor, I’ll assume you know as much about business as I knew back then, and that is … pretty much nothing. And yet the practice of medicine is a business. Your profession as a doctor — whether as an employed physician or entrepreneur — is part of a business entity, requiring business relationships and business transactions. This is the reality of the world, where the exchange of services and goods is as regular as the air we breathe, and so it’s crucial to learn about business during those starving years of youth. Or perhaps you’re an old-timer who still has very little business knowledge. No matter where along your professional journey, business knowledge is vital.
There’s a myth surrounding physicians and money that you may have heard. And that myth has become a beacon for all sorts of disingenuous, exploitive people who view doctors as fatted calves ready for the slaughter, belly-full of money, waiting to be drained.
The myth is doctors are utterly clueless when it comes to money. The myth also goes that doctors have loads of money and are itching to spend it away. Tap into a doctor as you would a keg of beer and witness all that wealth pour out for the taking, suds and all.
The myth is based on some degree of fact. Physicians are notoriously bad when it comes to money. Not all physicians, mind you, but plenty of them, and I daresay at perhaps a percentage greater than the general population. I’ve seen some really head-scratching poor judgment when it comes to money, and I admit I’ve committed a few myself. Many doctors make bad choices in investments, spend too much on unnecessary luxury items, and go into far too much debt (aside from their student loans). Some find themselves in dire financial conditions owing too much and owning too little tangible assets, despite working for years and earning huge incomes. How does this happen? Doctors are responsible people: They care for the sick and dying, for God’s sake! How can they be irresponsible when it comes to money?
The answer: because many doctors themselves believe the myth. They fall prey to what the exploiters tell them, what they see in the media, and what they believe is common wisdom — that their occupations as doctors will richly reward them with loads of money, year after year, in perpetuity. So many docs spend more than they can afford on things they don’t need and save or invest little to nothing, anticipating future income will forever flow to satisfy their unquenchable appetites. The problem is feel-good behaviors tend to become “needs” in their minds. The spending and frivolous lifestyle then becomes a habit. And habits — like smoking, junk food, and social media — are hard to break. Then the spigot dries, and the poor doc can no longer work due to age or misfortune, and the money flow ends.
Does this mean doctors are stupid? Certainly not. We suffer through years of hard work and delayed gratification, the gratification, in this case, being the ability to enjoy the monetary fruits of our labor. And I stress delayed, well over a decade if you include undergraduate education, medical school, and residency — far longer than any other profession. That’s a lot of delay. So when doctors come into a bit of money after more than a decade of stressful training and delayed pecuniary gratification, they can get a bit carried away spending their newfound booty. Certainly, indulging yourself every now and then is not bad; it’s the perpetual overindulgence that becomes the noose that hangs their goose.
During the long journey to become doctors, wannabe doctors spend most of their waking hours studying medical stuff. When I was a medical student and resident, our curriculum had no business education, and this still appears to be the case. Discussions around business or money seem taboo. My business education came through independent study and a whopping load of trial and error. But as my financial IQ increased, I found business topics intriguing (especially accounting!), and my thirst for business knowledge has never ended. The world opened up, becoming more interesting and far more exciting. Once perceived problems became opportunities, risks were willing to be taken when weighed against potential rewards. I would have never developed this mindset had I not learned about business.
Based upon lectures on business I’ve given to medical students and residents, I created a guidebook that teaches basic business, bare-bones fundamentals every doctor ought to know. I don’t proclaim any genius-level investing advice or magical wealth-building techniques, but business concepts from the perspective of a health care provider.
Business literacy is vital to prevent you from making huge money blunders and to develop a secure and rewarding financial future. You want to work for its joy and nonpecuniary rewards. You’ll learn to play good offense and defense when it comes to money matters. Good offense is meaningful work that earns a good income. Doctors already do that. Good defense is saving and investing that hard-earned money and avoiding spending frivolously on unnecessary stuff or getting into unnecessary debt. Think of each dollar saved as a little employee who works for you 24/7, never sleeps, and never takes a break. That employee works day and night, generating income whether you’re sleeping, sipping cocktails on the beach, or sitting on the can. Accumulate enough of these little employees, and they’ll finance your lifestyle forever. And when money is no longer the primary purpose of work, work takes on a whole new meaning.
Randall S. Fong is an otolaryngologist and can be reached at his self-titled site, Randall S. Fong, as well as his blog.