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Cold Winds of Recession Ahead? – You Decide

Staff Writers

We previously hinted that there was a strong headwind for the economy with continued pressure on US strength. And, this may be truer in the healthcare industrial complex. In fact, if it has not already done so, the country may well be into a recession; ditto for doctors and medical providers.

Financially Surviving Recession

Some pundits feel that we are either are already in a recession, which may be substantiated by future GDP numbers, or we are sliding into one, slowly. The question for all medical professionals then becomes; “can your personal finances survive a recession”? 

Fortunately, there are several things you can do now to shore up your finances. If we miss a recession, then you are just that much further ahead.  Here are some of the things you need to take a look at:

1) Reduce your debt

It is very important to work as hard as you can to reduce your overall person and corporate debt levels. Existing debt is often the burden pushing us into bankruptcy when there is a change to present income or additional new expenses. Physicians and patients are not immune. Currently, the average American household has almost $10,000 in credit card debt. 

2) Build an emergency cash fund

This is true at any time, but might be more helpful in the near term. Some general economists say to keep 6 months of living-expenses in a cash savings account. This is all well and good in the academic world, but realistically you should shoot for 6-12 months as a partnered private physician, or 12-24 months as an employed doctor. Employment opportunities, or crises, change fast!

3) Review your portfolio

Consider a portfolio review by a professional fiduciary, and/or medically focused financial advisor, and/or health economist. You might be surprised by what a fresh set of eyes might discern. 

For example, are you choosing investments that are likely to make a good recovery? 

We don’t recommend market-timing, but there are strategies available to capitalize on current market conditions. 

Economic Indicators 

The headwinds against the economy keep getting stronger. They are sensed by the following economic indicators:

• Last week, the Census Bureau reported that the number of vacant homes for sale hit a record high. The report showed that 2.9% of US homes, excluding rental properties, were vacant and up for sale in the first quarter. That translated to about 2.28 million properties or the highest quarterly number on record since 1956.  
• Home prices posted another record decline, as most of the nation’s largest markets suffered double-digit drops last year.
• Housing prices dropped in February at the fastest rate ever, showing that the housing slump is gaining momentum. 
• Consumer confidence dropped in April on inflation and job worries. Eroding consumer [patient] confidence foreshadows weakening consumer spending, which could further hurt the already deteriorating economy, and your medical practice. Consumer spending accounts for more than two-thirds of the nation’s economic activity.   
• Of course gasoline saw a 26% price increase in the cost, per gallon, since April 2007.
• The dollar continued to drop against the Euro.

Assessment

In this “interesting time”, we have identified several strategies which may be prudent for readers and subscribers of the Executive-Post.

If you plan now, and take the appropriate steps, your personal finances should be able to survive current market conditions. Making the wrong financial moves could easily make you come up short. And, a wrong financial move does include “doing nothing”. 

Conclusion

And so, we welcome the opportunity for you to submit queries to our “Ask-an-Advisor” feature.

Hopefully, we might offer some ideas on how you can benefit from professional management and objective counsel; or use our books, texts, dictionaries, white-papers and/or institutional subscription services.

Not all questions will be answered, of course, but representative queries may be posted.  

Please be aware that you must register as a subscriber-member to “Ask-an-Advisor”.

But, don’t worry; registration is free!

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And, for the physician-executive, CXO, or hospital administrator; and the medical clinic or practice manager, let our 2-volume, 1,200 pages, institutional print journal guide, Healthcare Organizations [Financial Management Strategies] be the blue-print for your future enterprise-wide success. $525/yr. Toll Free: 1-800-251-0381 http://www.stpub.com/pubs/ho.htm

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Financial Planning: http://www.jbpub.com/catalog/0763745790

Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Administrative Terms: www.HealthDictionarySeries.com

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact him at: MarcinkoAdvisors@msn.com  or Bio: http://www.stpub.com/pubs/authors/MARCINKO.htm

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