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    As a former Dean and appointed University Professor and Endowed Department Chair, Dr. David Edward Marcinko MBA was a NYSE broker and investment banker for a decade who was respected for his unique perspectives, balanced contrarian thinking and measured judgment to influence key decision makers in strategic education, health economics, finance, investing and public policy management.

    Dr. Marcinko is originally from Loyola University MD, Temple University in Philadelphia and the Milton S. Hershey Medical Center in PA; as well as Oglethorpe University and Emory University in Georgia, the Atlanta Hospital & Medical Center; Kellogg-Keller Graduate School of Business and Management in Chicago, and the Aachen City University Hospital, Koln-Germany. He became one of the most innovative global thought leaders in medical business entrepreneurship today by leveraging and adding value with strategies to grow revenues and EBITDA while reducing non-essential expenditures and improving dated operational in-efficiencies.

    Professor David Marcinko was a board certified surgical fellow, hospital medical staff President, public and population health advocate, and Chief Executive & Education Officer with more than 425 published papers; 5,150 op-ed pieces and over 135+ domestic / international presentations to his credit; including the top ten [10] biggest drug, DME and pharmaceutical companies and financial services firms in the nation. He is also a best-selling Amazon author with 30 published academic text books in four languages [National Institute of Health, Library of Congress and Library of Medicine].

    Dr. David E. Marcinko is past Editor-in-Chief of the prestigious “Journal of Health Care Finance”, and a former Certified Financial Planner® who was named “Health Economist of the Year” in 2010. He is a Federal and State court approved expert witness featured in hundreds of peer reviewed medical, business, economics trade journals and publications [AMA, ADA, APMA, AAOS, Physicians Practice, Investment Advisor, Physician’s Money Digest and MD News] etc.

    Later, Dr. Marcinko was a vital and recruited BOD  member of several innovative companies like Physicians Nexus, First Global Financial Advisors and the Physician Services Group Inc; as well as mentor and coach for Deloitte-Touche and other start-up firms in Silicon Valley, CA.

    As a state licensed life, P&C and health insurance agent; and dual SEC registered investment advisor and representative, Marcinko was Founding Dean of the fiduciary and niche focused CERTIFIED MEDICAL PLANNER® chartered professional designation education program; as well as Chief Editor of the three print format HEALTH DICTIONARY SERIES® and online Wiki Project.

    Dr. David E. Marcinko’s professional memberships included: ASHE, AHIMA, ACHE, ACME, ACPE, MGMA, FMMA, FPA and HIMSS. He was a MSFT Beta tester, Google Scholar, “H” Index favorite and one of LinkedIn’s “Top Cited Voices”.

    Marcinko is “ex-officio” and R&D Scholar-on-Sabbatical for iMBA, Inc. who was recently appointed to the MedBlob® [military encrypted medical data warehouse and health information exchange] Advisory Board.



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Evaluating a Sample Physician Financial Plan III

Stress Testing Results a Decade Later

[By Dr. David Edward Marcinko; CPHQ, MBA, CMP™]

[By Hope Rachel Hetico; RN, MHA, CPHQ, CMP™]dave-and-hope4

We are often asked by physicians and colleagues; medical, nursing and graduate students, and/or prospective clients to see an actual “comprehensive” financial plan. This is a reasonable request. And, although most doctors who are regular readers of this Medical Executive-Post have a general idea of what’s included, many have never seen a professionally crafted financial plan. This not only includes the outcomes, but the actual input data and economic assumptions, as well.

The ME-P Difference

And so, in a departure from our pithy and typically brief journalistic style, we thought it novel to present such a plan for hindsight review. But; we present same in a very unusual manner befitting our iconoclastic and skeptical next-generation Health 2.0 philosophy. And, we challenge all financial advisors to do same and compare results with us.

How so?

By using a real life plan constructed a decade ago and letting ME-P reader’s review, evaluate and critique same.

  • Part I is for a married drug-rep, then medical school student [51 pages] with no children.
  • Part II is for the same mid-career practicing physician [28 pages] with 2 children.
  • Part III is for the same experienced practitioner at his professional zenith [56 pages].

Part III: Sample Financial Plan III

Fiduciary Advisors


As former financial advisors and licensed insurance agents – and a reformed certified financial planner – it is our duty to act as economic fiduciaries for clients. In other words; to put client interests above our own. This culture was incumbent in our participatory online www.CertifiedMedicalPlanner.org educational program in health economics and medical practice management; since inception in 2000.


And so, as Edward I. Koch famously asked as Mayor of New York City from 1978-1989: “how am I doing”; we sought to ask and answer same. What did we do right or wrong; and how were our assumptions correct or erroneous?  As Certified Professionals in Healthcare Quality this is the question we continually seek to answer in medicine. And, as health economists, this is the financial advisory equivalent of Evidence Based Medicine [EBM] or Evidence Based Dentistry [EBD] etc. It is a query that all curious FAs should ask.

Note: Be sure to review sample plan I and II, right here:

Link: Sample Financial Plan I

Link: Sample Financial Plan II


And so, your thoughts and comments on this Medical Executive-Post are appreciated. As a financial advisor, accountant, financial planner, etc., we challenge you to lay bare your results as we have done. And, be sure to “rant and rave” – and – “teach and preach” about this post in the style of Socrates, with Candor, Intelligence and Goodwill, to all. Doctors – chime in – too. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors



Sample Mega Plan for a New Physician

Joe Good, a 30-year-old pharmaceutical sales representative, and his pregnant wife Susie Good, a 30-year-old accountant, sought the services of a certified financial planner because of a $150,000 inheritance from Joe’s grandfather. The insecurity about what to do with the funds was complicated by their insecurity over future employment prospects, along with Joe’s frustrated boyhood dream of becoming a physician, along with only a fuzzy concept of their financial future.

After several information-gathering meetings with the CFP, concrete goals and objectives were clarified, and a plan was instituted that would assist in financing Joe’s medical education without sacrificing his entire inheritance and current lifestyle. They desired at least one more child, so insurance and other supportive needs would increase and were considered, as well. Their prioritized concerns included the following:

1. What is the proper investment management and asset allocation of the $150,000?

2. Is there enough to pay for medical school and support their lifestyle?

3. Can they indemnify insurance concerns through this transitional phase of life,  including the survivorship concerns of premature death or disability?

4. Can they afford for Susie to be the primary bread winner through Joe’s medical school,   internship, and residency years?

5. Can they afford another child?

Current income was not high, and current assets were below the unified estate tax-credit. Therefore, income and estate-planning concerns were not significant at that time.

After thoroughly discussing the gathered financial data, and determining their risk profile, the CMP™ made the following suggestions:

1. Reallocate the inheritance based on their risk tolerance, from conservative to long-term growth.

2. Maximize group health, life, and disability insurance benefits.

3. Supplement small quantities of whole life insurance with larger amounts of term insurance.

4. Create simple wills, for now.

Sample Mega Plan for a Mid-Life Physician

A second plan was drawn up 10 years later, when Joe Good was 40 years old and a practicing internist. Susan, age 40, had been working as a consultant for the same company for the past decade. She was allowed to telecommunicate between home and office. Daughter Cee is nine years old, and her brother Douglas is seven years old.

The preceding suggestions had been implemented. The family maintained their modest lifestyle, and their investment portfolio grew to $392,220, despite the withdrawal of $10,000 per year for medical school tuition. The financial planning aspects of the family’s life went unaddressed. Educational funding needs for Cee and Douglas prompted another frank dialogue with their CMP. Their prioritized concerns at this point were as follows:

1. Reallocation of the investment portfolio

2. Educational funding for both children

3. Tax reduction strategies

4. Medical partnership buy-in concerns

5. Maximization of their investment portfolio

6. Review of risk management needs and long-term care insurance

7. Retirement considerations

The following suggestions were made:

1. Grow the $392,220 nest egg indefinitely.

2. Project future educational needs with current investment vehicles.

3. Maximize qualified retirement plans with tax efficient investments.

4. Update wills to include bypass marital trust creation, and complete proper testamentary planning, including guardians for Cee and Douglas.

5. Retain a professional medical practice valuation firm for the practice buy-in.

Sample Mega Plan for a Mature Physician

At age 55, Dr. Joseph B. Good was a board-certified and practicing internist and partner of his group. Susan, age 55, was the office manager for Dr. Good’s practice, allowing her to provide professional accounting services to her husband’s office and thereby maximizing benefits to the couple from the practice. Daughter Cee was 24 years old, and her brother Douglas was 22 years old. The preceding suggestions had been implemented.  They upgraded their home and modest lifestyle within the confines of their current earnings. They did not invade their grandfather’s original inheritance, which grew to $1,834,045. Reallocation was needed. The other financial planning aspects of their lives had gone unaddressed. Retirement and estate planning issues prompted another revisit with their original CMP’s junior partner.

Their prioritized concerns at this point were as follows:

1. Long-term care issues

2. Retirement implementation

3. Estate planning

4. Business continuity concerns

The following suggestions were made:

1. Analyze the cost and benefits of long-term case insurance, funded with current income until retirement.

2. Reallocate portfolio assets and  plan for estate tax reduction, with offspring and charitable planning consideration..

3. Retain a professional practice management firm for practice sale, with proceeds to maintain current lifestyle until age 70.

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8 Responses

  1. Ms. Hetico and Dr. Marcinko,

    Well done. But, at some point, the Federal Reserve will have to shrink it’s balance sheet. When it does, watch-out for rising interest rates and inflation.

    THINK: The early 1980s.




    Joseph and Susan Good, both ages 30, have a challenging future ahead of them with Joe’s goal of going to medical school. Fortunately, Susan has a good job and the inheritance of $150,000 will help offset any possible extra expenses that the family may incur while Joe is in medical school including the birth of future children.

    Current Assets and Insurance

    The inheritance was invested quite conservatively with 80% in bonds and 20% in stocks. The couple has inadequate life insurance of $20k each as a death benefit and inadequate disability insurance of only $13,200 long term for Joe and no disability insurance for Susan. There is no estate planning concerns at this time but certainly with the expected income of a physician and the reduction of the personal exemption happening in future years that the Goods will certainly have a need for competent estate planning strategies in later years.

    Current Budget

    Susie’s income of $36,000 a year would be sufficient for the couple to survive medical school assuming that the expense of medical school tuition was covered by student loans and assuming they are willing to make some financial sacrifices. Currently their expense of $54,000 a year greatly exceed the income of Susie, and so the couple will have to rationalize many expenditures such as housing (currently $19,200 a year) and eliminate perhaps others such as vacation ($3,000), entertainment ($2,400) and furnishings ($2,400). With such adjustments, the family should be able to weather the future medical school years.


    Reallocation of Investments

    The plan recommends that the current 80/20 bonds/stock portfolio of $150,000 be reallocated to 100% stock with 10% Emerging Markets, 20% Foreign Equities, 20% Large Cap, 20% Mid Cap, 20% Small Cap and 10% Growth and Income. While this aggressive allocation mix would be great for most couples their age (30 years old), I don’t believe this allocation is appropriate for them with their impending need over the next 8 years or so to have access to funds in the event of a birth of a child (which would by nature leave the family with no one employed for a period of time) or for other emergency needs. I would leave the allocation at mostly bonds.
    Insurance needs addressed

    A calculation of approximately $3.8 million shows a large need for financial independence. Subtracting out the direct income sources available, a need of about $2,000,000 is calculated that will have to be achieved by accumulations before retirement.

    Suzie has an insurance need of about $1,100,000 as survivor if Joe dies. Joe has almost a $1,000,000 insurance need as a survivor if Susie passes away.
    Both have a shortfall of disability income.

    10 years later . . .

    The Goods survived medical school, had two children (ages nine and seven) and even have a portfolio worth $392,220 thanks to their aggressive investing of the $150,000 nest egg.

    In retrospect, the Goods lucked out. Their investment portfolio invested 100% in stocks more than doubled and they did not have any serious insurance needs during the intervening 10 years.

    Any death, disability, market downturn, serious health issue had the potential to derail their financial plan, but none of those events occurred.

    David K. Luke MIM
    Certified Medical Planner™ candidate


  3. [Part 2] Financial Plan Review

    Joseph and Susan Good are now both age 40, with two young children. Joe is now an Internist and Susie retains her job as a consultant.

    Financially the Goods look good when looking at their family Balance Sheet. They are well off considering no medical school debt and a portfolio that grew during medical school to now be almost $400,000.

    Many Challenges Ahead for the New Doctor

    There are many challenges ahead however for the Goods. As a new doctor, their income is relatively low and they are barely meeting their current expenses with the added cost of raising two children. They have some critical savings goals both for their own retirement plans and for the two children’s college education. A premature death, especially for Joe, or a disability would be a serious calamity for the family at this point and so there is a large need to buy some insurance protection.

    With total family income in the $113,000 range, the family faces higher taxes (Federal Income Tax, State and Local Income Tax, Social Income tax of OASDI and Medicare) of almost $30,000. Considering the after tax annual cash need of about $85,000 to live, the Goods have no funds left to fulfill the demands of their financial plan, which include:

    • Disability and Long Term Care Insurance protection. A monthly shortfall of almost $4,000 would occur if Joe became disabled.

    • Accumulation needed for financial independence at retirement. A financial independence goal with a net capital need of 2.1 million dollars by age 55 is projected.

    • Survivor and Estate planning needs. A $500,000 life policy on Joe is needed to protect shortfall in income to Susie if Joe dies.

    • Educational goal of paying for 4 years college for each of their two children (approx. $62,000 in today’s dollars)


    It is fair to assume that Joseph Good’s income will increase steadily in the next 10 years as he becomes a more seasoned internist. Currently however there is no income available to provide for these essential financial planning goals above that needed to sustain their current modest living standards. Therefore, until the Good family’s income can catch up to their financial planning needs, it is recommended that their current investment portfolio of almost $400,000 be partially used to:

    • Pay annual premiums for adequate Disability and LTC policies

    • Pay for a 20 year certain Term policy for $500k for Joe

    • Make annual contributions to 529 plans for their two children, which effectively converts a portion of their current taxable investment portfolio to a tax-deferred
    educational savings account that has tax free distributions for college expenses in future years.

    Dr. Good should maximize any contributions to his practice’s 401k or other defined benefit plan. The shortfall created to their income by making these payroll deductions can be subsidized from their investment portfolio. This will give the Good family a needed tax deduction and essentially convert some of their investment portfolio to a tax-deferred plan.

    At some point in the next few years, the Good family’s income will increase to the point that subsidizing their financial plan goals by using their investment portfolio will no longer be necessary. In the interim, they will have the peace of mind knowing their major financial risks are covered and they are working tax-smart towards their accumulation goals for retirement and education.

    David K. Luke MIM
    Certified Medical Planner™ candidate


  4. Dr. Marcinko

    I must agree with you. I will typically recommend a client “self-insure” regarding Long Term Care but I will always show the risk and cost to the client’s portfolio in a financial plan so that they understand and are aware of the risk to the portfolio should extended care be needed.

    Many long-term care providers have pulled out of the market in the past few years and remaining providers are raising their rates. The Insurance industry I believe overstates and distorts in brochures and on websites the probability that a client will need long-term care. Here are two of my favorites from a website selling long-term care insurance:

    • For a couple turning 65, there is a 70% chance that one of them will need long-term care.

    – Wall Street Journal

    • 97% of people over age 85 require assistance in the last year of life. – The LTC Report

    Of course with a 70 – 97% chance we will all need LT care, we should all go out today and buy a policy, right? The definition of Long-Term Care (taken from the trusty “Dictionary of Health Insurance and Managed Care”) is: “Ongoing health and social services provided for individuals who need assistance on a continuing basis because of physical or mental disability.” Recuperating from surgery and end of life medical care usually involves a period of a few days in which an individual cannot care for himself or herself. Are these events included in the “scare statistics” that the LTC agent is quoting? Should I get a LTC policy and pay $4,000 to $7,000 in premiums a year for 40+ years because there is a good chance that there will be a few days in the last decade of my life that I might not be able to care for myself?

    Two Ironies of Long Term Care Insurance

    Irony #1

    Of course, good financial planning is about covering risks. One irony of long-term care insurance is that those individuals that can least afford to self-insure (those with smaller portfolios under say $500,000 at retirement) are the ones that can only get rid of the risk of LTC by offsetting it to another party (buying LTC insurance). However, telling a couple that they need to divert a big chunk of their savings to a LTC policy premium instead of to their retirement capital portfolio when they can scarcely afford to creates a self-fulfilling prophecy: little savings at retirement and a portfolio that easily disappears with a 3-year long term care experience.

    Irony #2

    Once an individual age 65 or older runs out of money in the United States, Medicaid picks up the cost of long-term care, which includes room and board and health care. I am aware of individuals that have been in assisted living “group homes” in the Phoenix area that live quite nicely in converted luxury homes with 3 square meals and great care from pleasant, kind, and attentive care takers, all paid by Medicaid. I have also visited clients in the same area in assisted living group homes that are paying $4,000 to $6,000 a month for the same care. Honest. Maybe going broke ain’t so bad?

    My wife and I personally have a great long-term care policy: 11 children. I realize many clients do not want to “burden” their children in the event that they need extended help and care in their retirement years. In the event the well runs dry for us and we are hit with debilitating health issues, we actually have no problem moving in with the kids. It is called “payback”. We have already warned them and know they have been debating amongst themselves already over who gets to change Dad’s diapers. I just hope that out of the 11 choices we will have one agreeable participant!

    A Final Thought

    With ACA in the wings, maybe we all will not need to worry about long-term care. In many single payer countries, there is compulsory long-term care insurance (Germany has had it since 1995). Don’t worry, be happy! The Government is here to help you.

    David K. Luke MIM
    Certified Medical Planner® candidate


  5. Final Analysis

    Dr. Joseph Good and wife Susan Good are now 55 years old and empty nesters, have successfully raised and educated their two now adult children, and have a net worth of $1.8 million. Not bad. Frugality wins the day!

    They have covered the risks of premature death and premature disability at a modest cost. The AIG and Fortis Life Insurance policy also have cash values projected to add a total of $200,000 at Independence.

    The disability insurance policy on Dr. Good fills in the monthly gap of $3,500 ($1,200 monthly gap for Susan) should disability occur. Depending on whether the Goods still plan on working at age 55 now that they don’t have to (locum tenens Caribbean perhaps?) they may want to consider dropping the DI policy and pocketing the $950 a year premium.

    The emergency reserves of $34k in place are sufficient when considering also that 20% of portfolio (approximately $370,000) in more liquid short term bonds per portfolio slight restructure may be available should they decide to tilt their investment portfolio a little more conservatively (see below).

    Issues to Address:

    Rebalance of portfolio

    The Goods really don’t need to rebalance the aggressive 100% stock portfolio now, which would normally be rare advice for a 55 year old couple looking at immediate retirement. Because they will be using funds for the next 15 years (age 55 to age 70) from the sale of the medical practice, the portfolio will not begin depletion until age 70. This gives the Goods a good time period to stay somewhat aggressive while other funds are being used to cover retirement spending.

    If the Goods became more concerned about their portfolio and could not handle the volatility any longer, an alternative strategy would be introduce a 20% short-term bond position using primarily treasury inflation protected instruments (an ETF such as TIP-NYSE or other low cost mutual fund). Balance of 80% in stocks with 10% emerging, 15% Foreign, 15% Large Cap, 15% Mid Cap, 15% Small Cap, and 10% Growth and Income. At this point this does not seem needed as the Goods have survived the past 15 years without a change or withdrawal.

    Using a total return from the plan of 10.83%, the Goods portfolio will be $8,576,000 at age 70. The miracle of compounding and being patient now provides the Goods at age 70 perpetual income more than they can reasonably spend. Assuming no growth and life expectancy to age 90 the Goods can deplete $425,000 a year and still have a remaining balance on death.

    Long Term Care

    The Good family has sufficient assets to self insure the risks of long term care. In the event of an extended stay in a nursing facility or assisted facility the overage needed can be drawn from their existing portfolio.

    Sale of Medical Practice

    The key to the Good family financial plan is to sale the medical practice at age 55 (now) and structure a payment plan with the new buyer that provides income to the Good family in the intervening 15 years until age 70, at which time their investment portfolio will be worth more than $8 million and provide the balance of retirement capital.

    The Goods have a desired annual income of about $96,000 a year at age 55 that keeps up with inflation (3.5%). By age 70 the annual need adjusted for inflation will be about $160,000. At that time Social Security income will help offset the need by about $79,000 so there will be a net need from outside funds of about $81,000. The key is to structure the practice sale to provide a 15 year cashflow that covers this.

    Knowing that $96,000 (with a 3.5% annual adjustment upward for inflation) is the annual need for 15 years and working backwards, using a 6% cap rate, the Goods can structure a sale of the practice to be paid over 15 years, reducing the tax hit that the Goods would take if receiving all the income in one year, and making it easier to purchase from the buyer’s perspective by allowing payments to come from future cash flow of the practice.

    Because of the goodwill (recurring existing patients, practice location, practice reputation) of Dr. Good’s internal medicine practice, and allowing for hard assets such as existing medical equipment and lease agreements, Dr. Good is able to see the fruits of his well-managed practice in real dollars and cents. Dr. Good may be obligated (or offer) as part of the sale a phase out period of perhaps 6 – 18 months in which he continues to practice at the office (tapering off hours gradually over the phase out period) to ensure a smooth transition of existing patients. Assuming the practice is valued and is sold for $1,000,000, the installment sale could be set up as follows:

    Net Present Value: $1,000,000
    Periods of Payment: 15 years
    Annual Cap Rate: 6%
    Payment : $102,962.76 annually for 15 years

    This annual payment to Dr. Good more than satisfies the $96,000 annual shortfall for 15 years.

    Estate Planning Issues

    The real problem that must be addressed by the Good family is the ticking time bomb they have created by all their hard work and frugality in terms of a huge future estate tax bill looming for the two Good children upon the death of the second spouse (most likely Susan). The plan projects at her death an estate valued at about $32 million dollars. But without proper estate planning the estate taxes owed on this amount could be many millions of dollars more than needed. This savings in estate tax is money in the pockets of their two children. The Goods would be wise to seek competent legal help from an experience Estate Planning Attorney preferably referred by a trusted colleage or their financial planner to further legally reduce their future estate tax bill. Establishing a Unified Credit Trust, Charitable Remainder Trust, increasing annual gifting, increasing annual charitable contributions and other tools can be employed to reduce a future unneeded payment by the two children to Uncle Sam.

    Summary Comments

    The Good family played their cards right in many ways (financially speaking) when they were younger and just out of medical school. Primarily, the Goods did not upgrade to a “mini mansion” upon being knighted “MD” but rather kept their living expenses, vacation budgets, and most importantly, their housing allowance, to a modest amount. While the family had access to a nice approximately $400,000 inheritance from Joe’s grandfather, the family resisted the urge and quite frankly the justifiable need to tap into it. The end result? The Good family now at age 55 has options. The nest egg that was their safety blanket now untapped is worth $1,834,045. Dr. Good owns his medical practice and has decided to sell the practice to provide “gap” income for the first 15 years of his and Susie’s retirement to age 70. After age 70 the investment from their accumulation and original inheritance along with the small supplement from Social Security will provide a nice life style for their final years.

    David K. Luke MIM
    Certified Medical Planner candidate


  6. TO: David K. Luke MIM
    Certified Medical Planner™

    FROM: iMBA, Inc.
    RE: CMP™ Graduation Day

    Greetings – Colleague David,

    One drawback of online education is the lack of personal interaction among, and between, learners and faculty. Electrons just don’t seem to have the human touch … warm and fuzzies … yet! But hopefully, one day, we all will meet.

    Nevertheless, our respect, cudos and congratulations on your achievement are very real! You took a bold step, embarked on a new career path … and won! But, this is a commencement; a beginning … and not the end.

    So, please accept our sincere wishes for a great future as a newly minted Certified Medical Planner® . Your sheepskin has already been mailed to you.

    Finally, this poem is much more eloquent than us. It remains a favorite.

    Make us proud.
    Welcome to the family.


    Hope, Ann, David, Edward, Gene and Rachel, et al

    Suite #5901 Wilbanks Drive
    Norcross, Georgia, 30092-1141 USA
    Phone: 770.448.0769

    ADMINISTRATORS: http://www.springerpub.com/Search/marcinko
    PHYSICIANS: http://www.MedicalBusinessAdvisors.com
    PRACTICE: http://www.BusinessofMedicalPractice.com
    HOSPITALS: http://www.crcpress.com/product/isbn/9781439879900
    ADVISORS: http://www.CertifiedMedicalPlanner.org
    BLOG: http://www.MedicalExecutivePost.com


  7. The Physician-Focused Financial Plan
    [A Critique]

    First of all, congratulate to Dr. Good on his brilliant investment portfolio that grew over 250% in short 10 years.

    Secondly, on the Good family continue to live a modest lifestyle despite being an MD.

    These two strategies alone had certainly contributed a very well financial pathway during the roughest time of their lives.

    However, after Dr. Good medical practice has been established; all financial burdens become a matter of following a good business plan rather than survival of single income, two kids and medical school tuition of the previous years.

    As mentioned earlier, Dr. Good weathered the stock market nicely and came out as a winner as a result. Others may not be so lucky as the stock market may not be always as bull. Crashes are real and can change investors’ life for good and for bad (Lehman brother financial crisis 2008). As a financial advisor and Certified Medical Planner™, I would have suggested not to put all eggs in one basket during the toughest time of their lives. Instead I would have suggest the following to protect the family in case of things do not work out as it did:

    * Use at least half the inheritance to pay off the existing house if possible and refinance the mortgage to minimum payment for the next 15-20 years in order to have no mortgage or the lowest monthly mortgage expense possible

    * Purchase Home Insurance to protect the home in case of catastrophic event (unemployed, disable or death)

    * Purchase modest Health and Life Insurance

    * Search for scholarship or low interest student loan (only borrow manageable amount as required)

    * Remaining 1/2 to 1/3 of the inheritance to be all in stock market

    * Have 6-12 months of monthly expenses in cash at the bank

    Once the Good family get through this rough period, the challenge becomes how to grow and sustain the medical practice business for the right buyer and right time for the acquisition. Further tax deferred and tax shelter schemes should be adapted as well with the advise from the tax-accounting specialist.

    Overall, there is no one clear cut to safe investing for the future; we must uncover all possibilities as a financial advisor to our clients as if we were living in their shoes. I would also urge the Good family to have all their bases covered prior to making a difficult decision such as going back to medical school, residence and internship, etc.

    Ken Yeung MBA CMP™


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