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A forensic accountant is a financial professional who blends traditional accounting expertise with investigative skills to uncover, analyze, and explain financial irregularities. While many people associate accounting with routine bookkeeping or tax preparation, forensic accounting operates in a very different arena—one where money trails intersect with legal disputes, fraud schemes, and complex financial conflicts. The role requires not only technical knowledge of accounting principles but also the curiosity of an investigator and the clarity of a communicator who can translate intricate financial data into understandable conclusions.
At its core, forensic accounting involves the examination of financial information for use in legal settings. The word “forensic” itself means “suitable for use in court,” which captures the essence of the profession. Forensic accountants are often called upon when financial information must be scrutinized with a level of detail and rigor that can withstand legal scrutiny. Their work may support civil litigation, criminal investigations, insurance claims, business valuations, or internal corporate inquiries. Because of this, they frequently collaborate with attorneys, law enforcement agencies, regulatory bodies, and corporate leadership.
One of the most recognized responsibilities of a forensic accountant is the detection and investigation of fraud. Fraud can take many forms—embezzlement, financial statement manipulation, asset misappropriation, or complex schemes involving shell companies and hidden transactions. Forensic accountants use a combination of analytical procedures, data mining techniques, and professional skepticism to identify patterns that suggest wrongdoing. They may trace the flow of funds through multiple accounts, reconstruct destroyed or incomplete records, or analyze inconsistencies in financial statements. Their goal is not only to uncover what happened but also to determine how it happened and who was responsible.
Beyond fraud detection, forensic accountants play a crucial role in litigation support. In legal disputes involving financial matters, attorneys rely on forensic accountants to provide objective, evidence‑based analysis. This may include calculating economic damages, evaluating the value of a business, assessing lost profits, or determining the financial impact of a breach of contract. In divorce proceedings, forensic accountants may help identify hidden assets or evaluate the true income of a spouse. Their findings often become part of expert reports submitted to the court, and they may be called to testify as expert witnesses. In this capacity, they must present complex financial information in a clear, concise manner that judges and juries can understand.
Another important aspect of forensic accounting is prevention. Organizations increasingly recognize the value of proactive measures to reduce the risk of fraud and financial misconduct. Forensic accountants may design internal controls, conduct risk assessments, or evaluate corporate governance practices to help organizations strengthen their defenses. By identifying vulnerabilities before they are exploited, they contribute to a healthier financial environment and help protect stakeholders from potential losses.
The skill set required for forensic accounting is broad and demanding. Technical proficiency in accounting and auditing is essential, but equally important are analytical thinking, attention to detail, and strong communication skills. Forensic accountants must be able to interpret large volumes of financial data, identify anomalies, and draw logical conclusions. They must also be comfortable working with digital tools, as modern investigations often involve electronic records, data analytics, and specialized software. Integrity and objectivity are critical, given the legal implications of their work and the trust placed in their findings.
The profession also requires adaptability. Every case is different, and forensic accountants must be prepared to navigate unfamiliar industries, evolving fraud techniques, and changing regulatory environments. They may work in public accounting firms, government agencies, law enforcement units, insurance companies, or as independent consultants. Regardless of the setting, the common thread is their role as financial detectives who bring clarity to situations where the truth is obscured by complexity or deception.
In summary, a forensic accountant is far more than a traditional number‑cruncher. They are investigators, analysts, communicators, and trusted advisors who operate at the intersection of finance and law. Their work uncovers hidden truths, supports the pursuit of justice, and helps organizations safeguard their financial integrity. As financial systems grow more complex and fraud schemes become more sophisticated, the role of the forensic accountant continues to expand in importance. Their unique blend of skills makes them indispensable in a world where transparency and accountability are more critical than ever.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
The Net Investment Income Tax (NIIT) occupies a distinctive place in the modern U.S. tax landscape. Introduced as part of the Affordable Care Act, it was designed to generate revenue from higher‑income households by taxing certain forms of unearned income. Although it affects a relatively small portion of taxpayers, its implications reach into investment strategy, tax planning, and broader debates about fairness and economic policy. Understanding how the NIIT works—and why it exists—offers insight into the evolving relationship between tax policy and wealth in the United States.
At its core, the NIIT is a 3.8 percent surtax applied to specific types of investment income for individuals whose modified adjusted gross income exceeds statutory thresholds. These thresholds—$200,000 for single filers and $250,000 for married couples filing jointly—are not indexed for inflation. As a result, over time, more taxpayers may find themselves subject to the tax even if their real purchasing power has not increased. This “bracket creep” is one of the subtle but important features of the NIIT, shaping its long‑term reach.
The tax applies only to “net investment income,” a term that includes interest, dividends, capital gains, rental income, royalties, and passive business income. It does not apply to wages, self‑employment earnings, or distributions from qualified retirement plans. The logic behind this distinction is straightforward: the NIIT targets income derived from wealth rather than labor. In practice, this means that two taxpayers with identical total income may face different NIIT liabilities depending on how much of their income comes from investments versus work.
The mechanics of the NIIT involve a comparison between two amounts: net investment income and the excess of modified adjusted gross income over the applicable threshold. The tax is applied to whichever of these two figures is smaller. This structure ensures that the NIIT functions as a surtax on high‑income households without taxing investment income for those below the threshold. It also means that taxpayers with large investment portfolios but modest overall income may avoid the tax entirely, while those with high wages and relatively small investment income may still owe it.
One of the most significant effects of the NIIT is its influence on investment behavior. Because the tax applies to capital gains, it can affect decisions about when to sell appreciated assets. Taxpayers may choose to time sales to avoid pushing their income above the threshold in a given year. Others may shift toward tax‑exempt investments, such as municipal bonds, or toward assets that generate unrealized rather than realized gains. The NIIT therefore becomes not just a revenue tool but a factor shaping the broader investment landscape.
The tax also interacts with other parts of the tax code in ways that can be complex. For example, rental real estate income is generally subject to the NIIT unless the taxpayer qualifies as a real estate professional and materially participates in the activity. Trusts and estates face their own NIIT rules, often reaching the surtax threshold at much lower income levels than individuals. These layers of complexity mean that the NIIT is often a central topic in tax planning for high‑income households, especially those with diverse investment portfolios.
Beyond its technical features, the NIIT reflects broader policy debates about equity and the distribution of tax burdens. Supporters argue that it helps ensure that high‑income individuals contribute a fair share to the cost of public programs, particularly those related to health care. Because investment income is disproportionately concentrated among wealthier households, the NIIT is seen as a way to align tax policy with ability to pay. Critics, however, contend that the tax discourages investment, adds unnecessary complexity, and imposes an additional layer of taxation on income that may already be subject to corporate taxes or other levies.
Despite these debates, the NIIT has become a stable part of the federal tax system. It raises billions of dollars annually and plays a role in funding health‑related initiatives. As discussions about tax reform continue, the NIIT often resurfaces as policymakers consider how best to balance revenue needs with economic incentives. Whether it remains unchanged, is expanded, or is modified in future legislation, the NIIT will continue to shape the financial decisions of high‑income taxpayers and contribute to the ongoing conversation about how the United States taxes wealth.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Posted on February 16, 2026 by Dr. David Edward Marcinko MBA MEd CMP™
Dr. David Edward Marcinko MBA MEd
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Why podiatry surgery volume matters so much?
Podiatry Management Service Organizations typically rely on three revenue pillars:
Office visits (high volume, low margin)
Ancillaries (DME, orthotics, imaging)
Surgery (low volume, high margin)
Surgery is the only pillar that reliably moves EBITDA in a meaningful way. Buyers know this, so they scrutinize surgical volume harder than anything else.
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🔍 What “surgery volume” really means in podiatry
It’s not just the number of cases. Buyers look at:
Case mix (forefoot vs. rearfoot vs. trauma)
Site of service (ASC vs. hospital vs. office)
Provider concentration (is one surgeon doing 40% of cases?)
Payer mix (Medicare vs. commercial)
Seasonality (podiatry has real seasonal swings)
Referral stability (orthopedics, PCPs, wound care centers)
If any of these look unstable, the MSO’s valuation drops fast.
🚧 What happens to surgery volume when an MSO misses its exit window
1. Surgeons become less motivated
When the exit stalls:
Equity feels less valuable
Surgeons may slow down elective cases
Some shift cases back to hospitals
Others reduce ASC utilization
A few may even explore leaving the MSO
This is one of the biggest hidden risks.
2. Case mix often deteriorates
High‑value cases (rearfoot, reconstructive, trauma) may decline, while:
Nail procedures
Callus debridements
Routine diabetic care
…take up more of the schedule. This drags down EBITDA even if total visit volume stays stable.
3. Referral patterns weaken
If the MSO is perceived as unstable:
Orthopedic groups may stop referring
PCPs may shift to independent podiatrists
Wound care centers may diversify referrals
Referral leakage is subtle but devastating.
4. ASC strategy becomes strained
Many podiatry MSOs depend on:
Owning ASCs
Leasing block time
Negotiating better payer rates
If surgery volume softens:
ASC utilization drops
Fixed costs become painful
Lenders get nervous
Buyers discount the valuation
ASC underperformance is one of the top reasons podiatry MSOs fail to exit.
5. Productivity gaps widen between providers
Podiatry MSOs often have:
A few high‑volume surgeons
Many low‑volume generalists
When the exit stalls:
High performers may feel under‑rewarded
Low performers may drag down averages
Buyers see concentration risk
If one surgeon leaves, the MSO’s EBITDA can collapse.
6. Compliance scrutiny increases
Surgical coding in podiatry is a known risk area. When an MSO can’t sell, buyers often dig deeper into:
Modifier usage
Global period billing
Site‑of‑service documentation
Medical necessity for certain procedures
If anything looks aggressive, the deal dies.
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🎯 The bottom line
Podiatry surgery volume is the core value driver of a podiatry MSO. When an MSO fails to sell at its vintage year, surgery volume usually:
Softens
Becomes more concentrated
Shifts toward lower‑margin cases
Shows referral instability
Raises compliance questions
Buyers interpret this as EBITDA fragility, which is why podiatry MSOs often end up in continuation funds or sell at discounted multiples.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
A capital call is a notice sent to investors requesting that they contribute additional capital to a private equity fund. Capital calls are made when the fund manager has identified a new investment opportunity that requires additional funds.
Investors must be prepared to respond to capital calls with the required funds in a timely manner, as failure to do so could result in penalties or even the loss of their investment.
Carried Interest: Understanding the Concept
Carried interest is a form of incentive fee paid to private equity fund managers. This fee is calculated as a percentage of the profits generated by the fund’s investments.
Carried interest is often criticized as a tax loophole, as it is treated as capital gains, which are taxed at a lower rate than ordinary income.
Deal Flow: What it Means for Investors
Deal flow refers to the number of potential investment opportunities that a private equity firm evaluates. A robust deal flow is important for private equity firms, as it provides a pipeline of potential investments to consider.
Investors may want to investigate a private equity firm’s deal flow as part of their due diligence process, as a strong deal flow can indicate the firm has a good track record of finding attractive investment opportunities.
Due Diligence: A Key Step in Private Equity Investing
Due diligence is the process of evaluating a potential investment opportunity to assess its viability. This process involves a thorough investigation of the company’s financials, operations, and management team.
Due diligence is a critical step in the private equity investment process, as it helps to identify potential risks associated with an investment opportunity. Investors who skip due diligence do so at their own risk.
Exit Strategy: How Private Equity Firms Make Money
Exit strategy refers to the plan that private equity firms have in place to cash out of their investments. Private equity firms typically exit investments through an initial public offering (IPO), a sale to another company, or a management buyout.
Exit strategy is critical to the private equity investment process, as it is how investors ultimately make returns on their investments.
Fund of Funds: An Overview
A fund of funds is a type of investment fund that invests in other investment funds. In the private equity space, fund of funds typically invest in a portfolio of private equity funds.
Fund of funds can be a good way for investors to gain exposure to a wider range of private equity investments with less risk than investing in individual funds.
General Partner vs Limited Partner: What’s the Difference?
The general partner is the party responsible for managing the private equity fund and making investment decisions. Limited partners, on the other hand, are typically passive investors who provide capital but have little involvement in the investment process.
The distinction between general partners and limited partners is important for investors to understand, as it can impact their level of involvement in the investment process.
Investment Horizon: A Crucial Factor in Private Equity Investments
Investment horizon refers to the length of time an investor plans to hold an investment. In the private equity space, investment horizons can be several years or even a decade.
Investment horizon is a critical factor for investors to consider, as it impacts the level of liquidity they will have and the returns they can expect to make on their investment.
Leveraged Buyout (LBO): Definition and Examples
A leveraged buyout is a type of acquisition where the acquiring company uses a significant amount of debt to finance the purchase. The idea is that the acquired company’s assets will be used as collateral to secure the debt.
Leveraged buyouts can be an effective way for private equity firms to acquire companies with minimal capital investment. However, the use of leverage also increases the risk associated with these types of acquisitions.
Management Fee vs Performance Fee: Understanding the Two
The management fee is the fee paid to the general partner for managing the private equity fund. The performance fee, or carried interest, is paid based on the fund’s performance and returns generated for investors.
The distinction between management fees and performance fees is important for investors to understand, as it affects the level of fees they will be responsible for paying.
Pitchbook: A Guide to Creating an Effective Pitchbook
A pitchbook is a presentation used by private equity firms to pitch their investment strategy to potential investors. An effective pitchbook should be clear, well-organized, and provide a compelling rationale for why investors should consider investing in the fund.
Investors reviewing a fund’s pitchbook should look for evidence of a well-thought-out investment strategy and a track record of successful investments.
Private Placement Memorandum (PPM): What it is and Why It Matters
A private placement memorandum is a legal document provided to potential investors that details the terms of the private equity fund. It includes information on the fund’s investment strategy, expected returns, fees, and risks associated with the investment.
Reviewing a fund’s private placement memorandum is a critical step in the due diligence process, as it provides investors with a comprehensive understanding of the investment opportunity.
Recapitalization: A Strategy for Restructuring a Company
Recapitalization is a strategy used by private equity firms to restructure a company’s capital structure. This can involve issuing debt to pay off equity holders or issuing equity to pay off debt holders.
Recapitalization is often used to improve a company’s financial position and increase its value, making it a key tool in the private equity arsenal.
Valuation Techniques Used in Private Equity Investing
Valuation techniques are used to determine the value of a private company. These techniques can include discounted cash flow analysis, market multiples analysis, and asset-based valuation.
Understanding valuation techniques is important for investors, as it allows them to evaluate the relative value of investment opportunities and make informed investment decisions.
The idea of a physician who is also an accountant might sound unusual at first, almost like two worlds that rarely intersect. One is rooted in diagnosing illnesses, understanding human physiology, and providing compassionate care. The other revolves around financial statements, regulatory compliance, and strategic fiscal planning. Yet when these two disciplines come together in a single professional, the result is a uniquely capable individual who can navigate both the complexities of modern healthcare and the equally intricate world of financial management. As healthcare systems grow more complicated and financially pressured, the combination of medical expertise and accounting acumen becomes not only valuable but transformative.
Physicians traditionally focus on clinical decision‑making, patient outcomes, and the ethical dimensions of care. Their training emphasizes scientific reasoning, empathy, and the ability to make high‑stakes decisions under uncertainty. Accountants, on the other hand, are trained to think in terms of precision, structure, and long‑term financial sustainability. They understand how organizations allocate resources, manage risk, and maintain compliance with regulatory frameworks. When one person embodies both sets of skills, they gain a rare vantage point: the ability to see how clinical decisions ripple through the financial health of a practice, hospital, or healthcare system.
One of the most significant advantages of this dual expertise is the ability to bridge the communication gap between clinicians and administrators. In many healthcare organizations, physicians and financial officers often struggle to fully understand each other’s priorities. Physicians may feel that financial constraints undermine their ability to provide optimal care, while administrators may worry that clinical decisions are made without regard for cost efficiency or long‑term sustainability. A physician‑accountant can translate between these two perspectives, helping each side understand the other’s reasoning. This can lead to more balanced decision‑making, where patient care remains central but financial realities are acknowledged and managed responsibly.
Another area where this combination shines is in private practice management. Running a medical practice is, at its core, running a business. Physicians who lack financial training often find themselves overwhelmed by budgeting, billing systems, tax obligations, and regulatory compliance. Mistakes in these areas can be costly, both financially and legally. A physician who is also an accountant is far better equipped to manage these responsibilities. They can design efficient billing workflows, interpret financial reports, and make informed decisions about staffing, equipment purchases, and long‑term investments. This not only strengthens the practice but also allows the physician to maintain greater autonomy and stability in an increasingly competitive healthcare landscape.
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Beyond individual practices, physician‑accountants can play influential roles in healthcare policy and leadership. Healthcare spending is a major concern in many countries, and policymakers often struggle to balance cost control with quality of care. Professionals who understand both the clinical and financial dimensions of healthcare are uniquely positioned to contribute to policy development, hospital administration, and health‑system reform. They can evaluate the economic impact of clinical guidelines, assess the cost‑effectiveness of new technologies, and design reimbursement models that incentivize high‑quality care without creating unnecessary financial burdens.
The dual training also enhances ethical decision‑making. Financial pressures in healthcare can sometimes lead to conflicts of interest or difficult trade‑offs. A physician‑accountant is better prepared to navigate these dilemmas because they understand the financial implications without losing sight of the ethical obligations inherent in medical practice. They can advocate for solutions that protect patient welfare while ensuring that resources are used responsibly. This balanced perspective can help organizations avoid short‑sighted decisions that might compromise care or create long‑term financial instability.
Of course, becoming both a physician and an accountant requires an extraordinary level of dedication. Medical training alone demands years of study, residency, and ongoing professional development. Adding accounting education—whether through a degree, certification, or extensive coursework—requires additional time and effort. Yet for those who pursue this path, the rewards can be substantial. They gain a level of professional versatility that few others possess, and they can shape healthcare environments in ways that purely clinical or purely financial professionals cannot.
In a rapidly evolving healthcare landscape, the intersection of medicine and accounting is becoming increasingly relevant. Rising costs, complex insurance systems, and the growing emphasis on value‑based care all demand professionals who can think across traditional disciplinary boundaries. Physicians who are also accountants embody this interdisciplinary approach. They bring clarity to financial decisions, insight to clinical operations, and a holistic understanding of how healthcare systems function. Their unique skill set positions them as leaders who can help shape a more efficient, ethical, and sustainable future for healthcare.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
A concept of tax fairness that states that people with different amounts of wealth or different amounts of income should pay tax at different rates. Wealth includes assets such as houses, cars, stocks, bonds, and savings accounts. Income includes wages, interest and dividends, and other payments.
A business authorized by the IRS to participate in the IRS e-file Program. The business may be a sole proprietorship, a partnership, a corporation, or an organization. Authorized IRS e-file Providers include Electronic Return Originators (EROs), Transmitters, Intermediate Service Providers, and Software Developers. These categories are not mutually exclusive. For example, an ERO can at the same time, be a Transmitter, a Software Developer, or an Intermediate Service Provider, depending on the function being performed.
Assuming all other dependency tests are met, the citizen or resident test allows taxpayers to claim a dependency exemption for persons who are U.S. citizens for some part of the year or who live in the United States, Canada, or Mexico for some part of the year.
Amount that taxpayers can claim for a “qualifying child” or “qualifying relative”. Each exemption reduces the income subject to tax. The exemption amount is a set amount that changes from year to year. One exemption is allowed for each qualifying child or qualifying relative claimed as a dependent.
This allows tax refunds to be deposited directly to the taxpayer’s bank account. Direct Deposit is a fast, simple, safe, secure way to get a tax refund. The taxpayer must have an established checking or savings account to qualify for Direct Deposit. A bank or financial institution will supply the required account and routing transit numbers to the taxpayer for Direct Deposit.
The transmission of tax information directly to the IRS using telephones or computers. Electronic filing options include (1) Online self-prepared using a personal computer and tax preparation software, or (2) using a tax professional. Electronic filing may take place at the taxpayer’s home, a volunteer site, the library, a financial institution, the workplace, malls and stores, or a tax professional’s place of business.
Electronic preparation means that tax preparation software and computers are used to complete tax returns. Electronic tax preparation helps to reduce errors.
The Authorized IRS e-file Provider that originates the electronic submission of an income tax return to the IRS. EROs may originate the electronic submission of income tax returns they either prepared or collected from taxpayers. Some EROs charge a fee for submitting returns electronically.
Free from withholding of federal income tax. A person must meet certain income, tax liability, and dependency criteria. This does not exempt a person from other kinds of tax withholding, such as the Social Security tax.
Amount that taxpayers can claim for themselves, their spouses, and eligible dependents. There are two types of exemptions-personal and dependency. Each exemption reduces the income subject to tax. While each is worth the same amount, different rules apply to each.
A program sponsored by the IRS in partnership with participating states that allows taxpayers to file federal and state income tax returns electronically at the same time.
The federal government levies a tax on personal income. The federal income tax provides for national programs such as defense, foreign affairs, law enforcement, and interest on the national debt.
Provides benefits for retired workers and their dependents as well as for disabled workers and their dependents. Also known as the Social Security tax.
To mail or otherwise transmit to an IRS service center the taxpayer’s information, in specified format, about income and tax liability. This information-the return-can be filed on paper, electronically (e-file).
Determines the rate at which income is taxed. The five filing statuses are: single, married filing a joint return, married filing a separate return, head of household, and qualifying widow(er) with dependent child.
Spending and income records and items to keep for tax purposes, including paycheck stubs, statements of interest or dividends earned, and records of gifts, tips, and bonuses. Spending records include canceled checks, cash register receipts, credit card statements, and rent receipts.
A foster child is any child placed with a taxpayer by an authorized placement agency or by court order. Eligible foster children may be claimed by taxpayers for tax benefits.
Money, goods, services, and property a person receives that must be reported on a tax return. Includes unemployment compensation and certain scholarships. It does not include welfare benefits and nontaxable Social Security benefits.
You must meet the following requirements: 1. You are unmarried or considered unmarried on the last day of the year. 2. You paid more than half the cost of keeping up a home for the year. 3. A qualifying person lived with you in the home for more than half the year (except temporary absences, such as school). However, a dependent parent does not have to live with the taxpayer.
Taxes on income, both earned (salaries, wages, tips, commissions) and unearned (interest, dividends). Income taxes can be levied on both individuals (personal income taxes) and businesses (business and corporate income taxes).
Performs services for others. The recipients of the services do not control the means or methods the independent contractor uses to accomplish the work. The recipients do control the results of the work; they decide whether the work is acceptable. Independent contractors are self-employed.
A person who represents the concerns or special interests of a particular group or organization in meetings with lawmakers. Lobbyists work to persuade lawmakers to change laws in the group’s favor.
An economic system based on private enterprise that rests upon three basic freedoms: freedom of the consumer to choose among competing products and services, freedom of the producer to start or expand a business, and freedom of the worker to choose a job and employer.
You are married and both you and your spouse agree to file a joint return. (On a joint return, you report your combined income and deduct your combined allowable expenses.)
You must be married. This method may benefit you if you want to be responsible only for your own tax or if this method results in less tax than a joint return. If you and your spouse do not agree to file a joint return, you may have to use this filing status.
Used to provide medical benefits for certain individuals when they reach age 65. Workers, retired workers, and the spouses of workers and retired workers are eligible to receive Medicare benefits upon reaching age 65.
When the amount of a credit is greater than the tax owed, taxpayers can only reduce their tax to zero; they cannot receive a “refund” for any excess nonrefundable credit.
Allow taxpayers to “sign” their tax returns electronically. The PIN, a five-digit self-selected number, ensures that electronically submitted tax returns are authentic. Most taxpayers can qualify to use a PIN.
Taxes on property, especially real estate, but also can be on boats, automobiles (often paid along with license fees), recreational vehicles, and business inventories.
Benefits that cannot be withheld from those who don’t pay for them, and benefits that may be “consumed” by one person without reducing the amount of the product available for others. Examples include national defense, streetlights, and roads and highways. Public services include welfare programs, law enforcement, and monitoring and regulating trade and the economy.
To be a qualifying child, the dependent must meet eight tests: (1) relationship, (2) age, (3) residence, (4) support, (5) citizenship or residency, (6) joint return, (7) qualifying child of more than one person, and (8) dependent taxpayer.
There are tests that must be met to be a qualifying relative, they are: (1) not a qualifying child, (2) member of household or relationship, (3) citizenship or residency, (4) gross income, (5) support, (6) joint return, and (7) dependent taxpayer.
If your spouse died in 2010, you can use married filing jointly as your filing status for 2010 if you otherwise qualify to use that status. The year of death is the last year for which you can file jointly with your deceased spouse. You may be eligible to use qualifying widow(er) with dependent child as your filing status for two years following the year of death of your spouse. For example, if your spouse died in 2010, and you have not remarried, you may be able to use this filing status for 2011 and 2012. This filing status entitles you to use joint return tax rates and the highest standard deduction amount (if you do not itemize deductions). This status does not entitle you to file a joint return.
Compensation received by an employee for services performed. A salary is a fixed sum paid for a specific period of time worked, such as weekly or monthly.
Similar to Social Security and Medicare taxes. The self-employment tax rate is 15.3 percent of self-employment profit. The self-employment tax is calculated on Schedule SE—Self-Employment Tax. The self-employment tax is reported on Form 1040, U.S. Individual Income Tax Return.
If on the last day of the year, you are unmarried or legally separated from your spouse under a divorce or separate maintenance decree and you do not qualify for another filing status.
Provides benefits for retired workers and their dependents as well as for the disabled and their dependents. Also known as the Federal Insurance Contributions Act (FICA) tax.
Develops software for the purposes of (1) formatting electronic tax return information according to IRS specifications, and/or (2) transmitting electronic tax return information directly to the IRS.
For dependency test purposes, support includes food, clothing, shelter, education, medical and dental care, recreation, and transportation. It also includes welfare, food stamps, and housing provided by the state. Support includes all income, taxable and nontaxable.
Interest income that is not subject to income tax. Tax-exempt interest income is earned from bonds issued by states, cities, or counties and the District of Columbia.
The amount of tax that must be paid. Taxpayers meet (or pay) their federal income tax liability through withholding, estimated tax payments, and payments made with the tax forms they file with the government.
Money and goods received for services performed by food servers, baggage handlers, hairdressers, and others. Tips go beyond the stated amount of the bill and are given voluntarily.
Taxes on economic transactions, such as the sale of goods and services. These can be based on a set of percentages of the sales value (ad valorem-sales taxes), or they can be a set amount on physical quantities (“per unit”-gasoline taxes).
The concept that people in different income groups should pay different rates of taxes or different percentages of their incomes as taxes. “Unequals should be taxed unequally.”
A system of compliance that relies on individual citizens to report their income freely and voluntarily, calculate their tax liability correctly, and file a tax return on time.
This provides free income tax return preparation for certain taxpayers. The VITA program assists taxpayers who have limited or moderate incomes, have limited English skills, or are elderly or disabled. Many VITA sites offer electronic preparation and transmission of income tax returns.
Compensation received by employees for services performed. Usually, wages are computed by multiplying an hourly pay rate by the number of hours worked.
Money, for example, that employers withhold from employees paychecks. This money is deposited for the government. (It will be credited against the employees’ tax liability when they file their returns.) Employers withhold money for federal income taxes, Social Security taxes and state and local income taxes in some states and localities.
Physicians are entrepreneurial by nature and take great pride in the creation of their businesses. Market pressures are motivating physicians to be proactive and to make informed decisions concerning the future of their businesses. The decision to sell, buy or merge while often financially driven and is inherently an emotional one. Other economic reasons for a practice valuation include changes in ownership, determining insurance coverage for a practice buy-sell agreement or upon a physician owners death, establishing stock options, or bringing in a new partner.
Practice appraisals are also used for legal reasons such as divorce, bankruptcy, breach of contract and minority shareholder complaints. In 2002, the Financial Accounting Standards Board (FASB) issued rules that required certain intangible assets to be valued, such as goodwill. This may be important for practices seeking start-up, service segmentation extensions, or operational funding.
Estate Planning is another reasons for a medical practice appraisal and the considerations that go along with it are discussed here.
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Estate Planning
Medical practice valuation may be required for estate planning purposes. For a decedent physician with a gross estate of more than $1 million, his or her assets must be reported at fair market value on an estate tax return. If lifetime gifts of a medial practice business interest are made, it is generally wise to obtain an appraisal and attach it to the gift tax return.
Note that when a “closely-held” level of value (in contrast to “freely traded,” “marketable,” or “publicly traded” level) is sought, the valuation consultant may need to make adjustments to the results. There are inherent risks relative to the liquidity of investments in closely held, non-public companies (e.g., medical group practice) that are not relevant to the investment in companies whose shares are publicly traded (freely-traded). Investors in closely-held companies do not have the ability to dispose of an invested interest quickly if the situation is called for, and this relative lack of liquidity of ownership in a closely held company is accompanied by risks and costs associated with the selling of an interest said company (i.e., locating a buyer, negotiation of terms, advisor/broker fees, risk of exposure to the market, etc.).
Conversely, investors in the stock market are most often able to sell their interest in a publicly traded company within hours and receive cash proceeds in a few days. Accordingly, a discount may be applicable to the value of a closely held company due to the inherent illiquidity of the investment. Such a discount is commonly referred to as a “discount for lack of marketability.”
Discount for lack of marketability is typically discussed in three categories: (1) transactions involving restricted stock of publicly traded companies; (2) private transactions of companies prior to their initial public offering (IPO); and, (3) an analysis and comparison of the price to earnings (P/E) ratios of acquisitions of public and private companies respectively published in the “Mergerstat Review Study.”
With a non-controlling interest, in which the holder cannot solely authorize and cannot solely prevent corporate actions (in contrast to a controlling interest), a “discount for lack of control,” (DLOC), may be appropriate. In contrast, a control premium may be applicable to a controlling interest. A control premium is an increase to the pro rata share of the value of the business that reflects the impact on value inherent in the management and financial power that can be exercised by the holders of a control interest of the business (usually the majority holders).
Conversely, a discount for lack of control or minority discount is the reduction from the pro rata share of the value of the business as a whole that reflects the impact on value of the absence or diminution of control that can be exercised by the holders of a subject interest.
Several empirical studies have been done to attempt to quantify DLOC from its antithesis, control premiums. The studies include the Mergerstat Review, an annual series study of the premium paid by investors for controlling interest in publicly traded stock, and the Control Premium Study, a quarterly series study that compiles control premiums of publicly traded stocks by attempting to eliminate the possible distortion caused by speculation of a deal.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
A growing number of surveys measure physician compensation, encompassing a varying depth of analysis. Physician compensation data, divided by specialty and subspecialty, is central to a range of consulting activities including practice assessments and valuations of healthcare enterprises. The AMA maintains the most comprehensive database of information on physicians in the U.S., with information on over 940,000 physicians and residents, and 77,000 medical students. Started in 1906, the AMA “Physician Masterfile,” which contains information on physician education, training, and professional certification information, is updated annually through the Physicians’ Professional Activities questionnaire and the collection and validation efforts of AMA’s Division of Survey and Data Resources (SDR).A selection of other sources of healthcare related compensation and cost data is set forth below.
“Physician Characteristics and Distribution in the U.S.” is an annual survey based on a variety of demographic information from the Physician Masterfile dating back to 1963. It includes detailed information regarding trends, distribution, and professional and individual characteristics of the physician workforce.
“Physician Socioeconomic Statistics”, published from 2000 to 2003, was a result of the merger between two prior AMA annuals: (1) “Socioeconomic Characteristics of Medical Practice”; and, (2) “Physician Marketplace Statistics.” Data has compiled from a random sampling of physicians from the Physician Masterfile into what is known as the Socioeconomic Monitoring System, which includes physician age profiles, practice statistics, utilization, physician fees, professional expenses, physician compensation, revenue distribution by payor, and managed care contracts, among other categories.
The Medical Group Management Association’s (MGMA) “Physician Compensation and Production Survey” is one of the largest in the U.S. with approximately 3,000 group practices responding as of the 2023 edition publication. Data is provided on compensation and production for 125 specialties. The survey data are also published on CD by John Wiley & Sons ValueSource; the additional details available in this media provide better bench marking capabilities.
The MGMA’s “Cost Survey” is one of the best known surveys of group practice income and expense data, having been published in some form since 1955, and obtaining over 1,600 respondents, combined, for the 2008 surveys: “Cost Survey for Single Specialty Practices” and “Cost Survey for Multispecialty Practices.” Data is provided for a detailed listing of expense categories and is also calculated as a percentage of revenue and per FTE physician, FTE provider, patient, square foot, and Relative Value Unit (RVU). The survey provides information on multispecialty practices by performance ranking, geographic region, legal organization, size of practice, and percent of capitated revenue. Detailed income and expense data is provided for single specialty practice in over 50 different specialties and subspecialties.
The “Medical Group Financial Operations Survey” was created through a partnership between RSM McGladrey and the American Medical Group Association (AMGA), and provides benchmark data on support staff and physician salaries, physician salaries, staffing profiles and benefits, and other financial indicators. Data is reported as a percent of managed care revenues, per full-time physician, and per square foot, and is subdivided by specialty mix, capitation level, and geographic region with detailed summaries of single specialty practices in several specialties.
“Statistics: Medical and Dental Income and Expense Averages” is an annual survey produced by the National Society of Certified Healthcare Business Consultants (NSCHBC), formerly known as the National Association of Healthcare Consultants (NAHC), and the Academy of Dental CPAs. It has been published annually for a number of years and the “2023 Report Based on 2022 Data” included detailed income and expense data from over 2,700 practices and 4,900 physicians in 62 specialties.
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Medical Specialty Trends
The characteristics of both the practice and the profitability of different physician specialties vary greatly. Information on trends affecting specific specialties should further refine the types of industry information gathered including changes in treatment, technology, competition, reimbursement, and the regulatory environment. For many of the subspecialties, oversupply and under supply issues and the corresponding demand and compensation trends are central to the analysis of potential future earnings and the value of established medical entities. Information that is available and that may be gathered can range from broad practice overviews to, for example, specific procedural utilization demand and forecasts for a precise local geographic area.
A large number of national and state medical associations and organizations gather and produce information on these various aspects of the practice of different individual physician specialties and subspecialties. Information may be found in trade press articles, medical specialty associations and their publications, national surveys, specialty accreditation bodies, governmental reports and studies, and elsewhere. The American Medical Association’s (AMA) as well as the MGMA both publish comprehensive physician practice survey information.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Artificial Intelligence (AI) is revolutionizing the banking industry by enhancing efficiency, security, and customer experience. This 500-word essay explores how AI is transforming banking operations and shaping the future of financial services.
Artificial Intelligence (AI) has emerged as a transformative force in the banking sector, reshaping traditional operations and introducing innovative solutions to age-old challenges. As financial institutions strive to remain competitive in a rapidly evolving digital landscape, AI offers tools that enhance efficiency, improve customer service, and bolster security.
One of the most visible applications of AI in banking is customer service automation. AI-powered chatbots and virtual assistants are now commonplace, handling routine inquiries, guiding users through transactions, and offering personalized financial advice. These systems operate 24/7, reducing wait times and freeing human agents to focus on complex issues. For example, banks like Bank of America and JPMorgan Chase have deployed AI-driven assistants that interact with millions of customers daily, providing seamless support and improving satisfaction.
AI also plays a crucial role in fraud detection and risk management. By analyzing vast amounts of transaction data in real time, AI systems can identify unusual patterns and flag potentially fraudulent activities. Machine learning algorithms continuously adapt to new threats, making fraud prevention more proactive and effective. This not only protects customers but also saves banks billions in potential losses.
In the realm of credit scoring and loan approvals, AI has introduced more nuanced and inclusive models. Traditional credit assessments often rely on limited data, excluding individuals with thin credit histories. AI, however, can evaluate alternative data sources—such as utility payments, social media behavior, and employment history—to generate more accurate credit profiles. This enables banks to extend services to underserved populations while minimizing default risks.
Operational efficiency is another area where AI shines. Through process automation, banks can streamline back-office functions like document verification, compliance checks, and data entry. Robotic Process Automation (RPA), powered by AI, reduces human error and accelerates workflows, leading to significant cost savings and improved accuracy.
Moreover, AI enhances personalized banking experiences. By analyzing customer behavior and preferences, AI systems can recommend tailored financial products, investment strategies, and budgeting tools. This level of personalization fosters deeper customer engagement and loyalty.
Despite its benefits, the integration of AI in banking is not without challenges. Data privacy concerns, regulatory compliance, and ethical considerations must be addressed to ensure responsible AI deployment. Banks must invest in robust governance frameworks and transparent algorithms to maintain trust and accountability.
Looking ahead, the role of AI in banking will only expand. Emerging technologies like natural language processing, predictive analytics, and AI-driven cybersecurity will further revolutionize the industry. As banks continue to embrace digital transformation, AI will be at the forefront, driving innovation and redefining the future of finance.
In conclusion, Artificial Intelligence is not just a technological upgrade for banks—it is a strategic imperative. By harnessing AI’s capabilities, financial institutions can deliver smarter, safer, and more customer-centric services, positioning themselves for long-term success in the digital age.
SPEAKING: ME-P Editor Dr. David Edward Marcinko MBA MEd will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Posted on January 7, 2026 by Dr. David Edward Marcinko MBA MEd CMP™
By Dr. David Edward Marcinko MBA MEd
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Tariffs on medicines and healthcare products increase costs, disrupt supply chains, and ultimately harm patient access and public health. They raise prices for essential drugs and medical devices, create shortages, and undermine innovation in the healthcare sector.
The Economic Burden of Tariffs
Tariffs are taxes imposed on imported goods. In healthcare, this means pharmaceuticals, medical devices, and raw materials like active pharmaceutical ingredients (APIs) become more expensive. Since the United States imports a significant share of these products from countries such as China, India, and the European Union, tariffs directly raise costs for hospitals, clinics, and patients.
Drug prices rise because manufacturers pass on higher import costs to consumers.
Medical devices such as surgical instruments, diagnostic equipment, and imaging technology become more expensive, straining hospital budgets.
Insurance premiums may increase as healthcare providers face higher operating costs.
This economic burden is not abstract—it translates into higher bills for patients and reduced affordability of care.
Supply Chain Disruptions
Healthcare supply chains are highly globalized. APIs, raw materials, and specialized equipment often come from multiple countries. Tariffs disrupt this delicate balance by:
Creating shortages when suppliers cannot afford to export to tariff-heavy markets.
Delaying shipments as companies seek alternative routes or suppliers.
Reducing resilience by concentrating production in fewer regions, making systems more vulnerable to shocks.
For example, if tariffs make APIs prohibitively expensive, pharmaceutical companies must scramble to find new suppliers, often at higher cost and with longer lead times. This can delay drug availability and compromise patient care.
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Impact on Public Health
The consequences of tariffs extend beyond economics into public health outcomes.
Patients face reduced access to life-saving medicines and devices.
Hospitals may ration supplies, prioritizing urgent cases while delaying elective procedures.
Preventive care suffers, as higher costs discourage investment in vaccines, diagnostic tools, and routine screenings.
In the long run, tariffs can exacerbate health inequities, disproportionately affecting low-income populations who are least able to absorb rising costs.
Innovation and Research Setbacks
Healthcare innovation relies on global collaboration. Tariffs discourage cross-border partnerships by raising costs and creating uncertainty.
Research institutions may struggle to import specialized lab equipment.
Pharmaceutical companies face higher costs for clinical trials and drug development.
Digital health technologies that depend on imported components (like sensors and chips) become more expensive, slowing adoption.
This stifles progress in areas such as cancer treatment, biotechnology, and precision medicine.
Conclusion
Tariffs in healthcare are a blunt economic tool with unintended consequences. While they aim to protect domestic industries, they increase costs, disrupt supply chains, reduce access to care, and hinder innovation. In medicine and healthcare, where lives depend on timely and affordable access to products, tariffs are particularly damaging. Policymakers must weigh these human costs carefully before imposing trade barriers on essential goods.
Required Minimum Distributions (RMDs) are mandatory withdrawals from certain retirement accounts that begin at age 73, designed to ensure the IRS collects taxes on previously tax-deferred savings.
Required Minimum Distributions (RMDs) are a critical component of retirement planning in the United States. They represent the minimum amount that retirees must withdraw annually from specific tax-deferred retirement accounts, such as traditional IRAs, 401(k)s, and other qualified plans, once they reach a certain age. As of 2025, individuals must begin taking RMDs at age 73, a change implemented by the SECURE 2.0 Act for those born between 1951 and 1959.
The rationale behind RMDs is rooted in tax policy. Contributions to tax-deferred accounts are made with pre-tax dollars, allowing investments to grow without immediate tax consequences. However, the IRS eventually wants its share. RMDs ensure that retirees begin paying taxes on these funds, preventing indefinite tax deferral. The amount of each RMD is calculated using the account balance at the end of the previous year and a life expectancy factor provided by IRS tables.
Failing to take an RMD can result in steep penalties. Historically, the penalty was 50% of the amount not withdrawn, but recent changes have reduced this to 25%, and potentially 10% if corrected promptly. These penalties underscore the importance of understanding and complying with RMD rules.
Not all retirement accounts are subject to RMDs. Roth IRAs are exempt during the original account holder’s lifetime, and under the SECURE 2.0 Act, Roth 401(k) and Roth 403(b) accounts are also exempt from RMDs while the original owner is alive. However, beneficiaries of these accounts may still face RMD requirements.
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Strategically managing RMDs can help retirees minimize tax impacts and optimize their retirement income. For example, retirees might consider withdrawing more than the minimum in years with lower income to reduce future RMD amounts. Others may choose to convert traditional IRA funds to Roth IRAs before reaching RMD age, thereby reducing future taxable distributions. Additionally, using RMDs to fund charitable donations through Qualified Charitable Distributions (QCDs) can satisfy the RMD requirement while excluding the amount from taxable income.
Timing is also crucial. The first RMD must be taken by April 1 of the year following the year the individual turns 73. Subsequent RMDs must be taken by December 31 each year. Delaying the first RMD can result in two withdrawals in one year, potentially increasing taxable income and affecting Medicare premiums or tax brackets.
In conclusion, RMDs are more than just a tax obligation—they are a planning opportunity. Understanding the rules, calculating the correct amount, and integrating RMDs into a broader retirement strategy can help retirees maintain financial stability and reduce unnecessary tax burdens.
As regulations evolve, staying informed and consulting with financial professionals is essential to make the most of retirement savings.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Posted on December 31, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Dr. David Edward Marcinko MBA MEd
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A Comparative Essay
Retirement planning is a cornerstone of financial security, and employers often provide structured plans to help employees prepare for the future. Two prominent options are Defined Benefit (DB) Plans and Cash Balance Plans. While both fall under the umbrella of employer-sponsored retirement programs, they differ significantly in design, funding, and how benefits are communicated to participants. Understanding these distinctions is essential for employers deciding which plan to offer and for employees evaluating their retirement prospects.
Defined Benefit Plans
A Defined Benefit Plan is the traditional pension model. It promises employees a specific retirement benefit, usually calculated based on a formula that considers salary history, years of service, and age at retirement. For example, a plan might provide 2% of the employee’s final average salary multiplied by years of service.
Key Features:
Employer Responsibility: The employer bears the investment risk and is obligated to deliver the promised benefit regardless of market performance.
Predictable Income: Employees receive a guaranteed monthly payment for life, often with survivor benefits.
Funding Requirements: Employers must contribute enough to meet actuarial obligations, which can be costly and complex.
Decline in Popularity: Due to high costs and liabilities, DB plans have become less common in the private sector, though they remain prevalent in government and unionized workplaces.
Advantages for Employees:
Security of lifetime income.
No need to manage investments directly.
Often includes inflation adjustments or survivor benefits.
Challenges for Employers:
Heavy funding obligations.
Sensitivity to interest rates and market fluctuations.
Long-term liabilities that can strain balance sheets.
Cash Balance Plans
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A Cash Balance Plan is technically a type of Defined Benefit Plan but operates more like a hybrid between DB and Defined Contribution (DC) plans. Instead of promising a monthly pension, the plan defines benefits in terms of a hypothetical account balance. Each year, the employer credits the account with a “pay credit” (a percentage of salary or a flat dollar amount) and an “interest credit” (either a fixed rate or tied to an index).
Key Features:
Account-Based Presentation: Employees see a notional account balance that grows annually, making benefits easier to understand.
Employer Responsibility: The employer still manages investments and guarantees the interest credit, meaning the investment risk remains with the employer.
Portability: Benefits can often be rolled into an IRA or another retirement plan if the employee leaves the company.
Popularity Among Professionals: Cash Balance Plans are increasingly used by small businesses and professional practices (like medical or law firms) to allow higher contributions and tax deferrals.
Advantages for Employees:
Transparent account balance that feels similar to a 401(k).
Portability of benefits upon job change.
Potential for larger accumulations, especially for high earners.
Challenges for Employers:
Still responsible for funding and guaranteeing returns.
Requires actuarial oversight and compliance with pension regulations.
Can be complex to administer compared to pure DC plans.
Comparison
While both plans are employer-funded and fall under defined benefit rules, their differences are notable:
Aspect
Defined Benefit Plan
Cash Balance Plan
Benefit Format
Lifetime monthly pension
Hypothetical account balance
Risk
Employer bears investment risk
Employer bears investment risk
Employee Perception
Complex, formula-based
Simple, account-based
Portability
Limited
High (can roll over)
Popularity
Declining in private sector
Growing among small businesses/professionals
Conclusion
Defined Benefit Plans and Cash Balance Plans represent two approaches to retirement security. The former emphasizes guaranteed lifetime income, offering stability but imposing heavy obligations on employers. The latter modernizes the pension concept by presenting benefits as account balances, improving transparency and portability while still requiring employer guarantees. For employees, Cash Balance Plans often feel more tangible and flexible, while Defined Benefit Plans provide unmatched security. For employers, the choice depends on balancing cost, risk, and workforce needs. Ultimately, both plans underscore the importance of structured retirement savings and highlight the evolving landscape of employer-sponsored benefits.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
The Modigliani-Miller Theorem asserts that under ideal market conditions, a firm’s value is unaffected by its capital structure—that is, whether it is financed by debt or equity. This principle revolutionized corporate finance and remains foundational in understanding how firms make financing decisions.
The Modigliani-Miller Theorem (M&M), developed by economists Franco Modigliani and Merton Miller in 1958, is a cornerstone of modern corporate finance. It posits that in a world of perfect capital markets—where there are no taxes, transaction costs, bankruptcy costs, or asymmetric information—the value of a firm is independent of its capital structure. In other words, whether a company is financed through debt, equity, or a mix of both does not affect its overall market value.
The theorem is built on two key propositions. Proposition I states that the total value of a firm is invariant to its financing mix. This implies that investors can replicate any desired capital structure on their own, making the firm’s choice irrelevant. Proposition II addresses the cost of equity: as a firm increases its debt, the risk to equity holders rises, and so does the required return on equity. However, this increase offsets the benefit of cheaper debt, keeping the overall cost of capital constant.
Initially, the M&M Theorem was criticized for its unrealistic assumptions. Real-world markets are far from perfect—companies face taxes, bankruptcy risks, and information asymmetries. Recognizing this, Modigliani and Miller later revised their model to include corporate taxes. In this modified version, they showed that debt financing can create value because interest payments are tax-deductible, effectively reducing a firm’s taxable income and increasing its value.
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Despite its limitations, the M&M Theorem has profound implications. It provides a benchmark for evaluating the impact of financing decisions and helps isolate the effects of market imperfections. For instance, it explains why firms might prefer debt in a tax-heavy environment or avoid it when bankruptcy costs are high. It also underpins the concept of arbitrage in financial markets, suggesting that investors can create homemade leverage to mimic corporate strategies.
In practice, the theorem guides corporate managers, investors, and policymakers. Managers use it to assess whether changes in capital structure will truly enhance shareholder value or merely shift risk. Investors rely on its logic to understand the trade-offs between debt and equity. Policymakers consider its insights when designing tax codes and regulations that influence corporate behavior.
Critics argue that the theorem oversimplifies complex financial realities. Behavioral factors, agency problems, and market frictions often distort the neat predictions of M&M. Nonetheless, its elegance and clarity make it a vital tool for financial analysis. It encourages a disciplined approach to capital structure, reminding decision-makers to focus on fundamentals rather than financial engineering.
In conclusion, the Modigliani-Miller Theorem remains a foundational theory in finance. While its assumptions may not hold in the real world, its core message—that value stems from a firm’s operations, not its financing choices—continues to shape how we think about corporate value and financial strategy.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Posted on November 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Dr. David Edward Marcinko MBA MEd
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Retirement planning has evolved significantly over the past several decades, with employers and employees seeking solutions that balance security, flexibility, and predictability. Among the various retirement plan options available today, cash balance plans stand out as a hybrid design that combines features of both traditional defined benefit pensions and defined contribution plans. Their unique structure makes them an attractive choice for employers aiming to provide meaningful retirement benefits while maintaining financial predictability.
At their core, cash balance plans are a type of defined benefit plan. Unlike traditional pensions, which promise retirees a monthly income based on years of service and final salary, cash balance plans define the benefit in terms of a hypothetical account balance. Each participant’s account grows annually through two components: a “pay credit” and an “interest credit.” The pay credit is typically a percentage of the employee’s salary or a flat dollar amount, while the interest credit is either a fixed rate or tied to an index such as U.S. Treasury yields. Although the account is hypothetical—meaning the funds are not actually segregated for each employee—the structure provides participants with a clear, understandable statement of their retirement benefit.
One of the primary advantages of cash balance plans is their transparency. Employees can easily track the growth of their account balance, much like they would with a 401(k). This clarity helps workers better understand the value of their retirement benefits and fosters a sense of ownership. Additionally, cash balance plans are portable: when employees leave a company, they can roll over the vested balance into an IRA or another qualified plan, ensuring continuity in retirement savings.
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From the employer’s perspective, cash balance plans offer several benefits as well. Traditional pensions often create unpredictable liabilities, as they depend on factors such as longevity and investment performance. Cash balance plans, by contrast, provide more predictable costs because the employer commits to specific pay and interest credits. This predictability makes them easier to manage and budget for, particularly in industries where workforce mobility is high. Moreover, cash balance plans can be designed to reward long-term employees while still appealing to younger workers who value portability.
Despite these advantages, cash balance plans are not without challenges. Because they are defined benefit plans, employers bear the investment risk and must ensure the plan is adequately funded. Regulatory requirements, including nondiscrimination testing and funding rules, add complexity and administrative costs. Additionally, while cash balance plans are generally more equitable across generations of workers, transitions from traditional pensions to cash balance designs have sometimes sparked controversy, particularly among older employees who may perceive a reduction in benefits.
In recent years, cash balance plans have gained popularity among professional firms, such as law practices and medical groups, as well as small businesses seeking tax-efficient retirement solutions. These plans allow owners and highly compensated employees to accumulate larger retirement savings than would be possible under defined contribution limits, while still providing benefits to rank-and-file workers. As such, they serve as a valuable tool for both talent retention and financial planning.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Physicians are increasingly facing car repossessions in 2025 due to rising debt, high vehicle prices, and economic pressures that are reshaping the financial landscape for medical professionals.
Traditionally viewed as financially secure, doctors are now among the growing number of Americans struggling to keep up with auto loan payments. The surge in car repossessions—expected to reach a record 10.5 million assignments by the end of 2025—has not spared the medical community. While physicians often earn higher-than-average incomes, they also carry significant financial burdens, including student loan debt, practice overhead, and personal expenses. These pressures are being amplified by macroeconomic forces such as inflation, high interest rates, and stagnant reimbursement rates.
One of the key contributors to this trend is the soaring cost of vehicles. In 2025, the average price of a new car in the U.S. surpassed $50,000, a dramatic increase from just a decade ago. For physicians who rely on vehicles for commuting between hospitals, clinics, and private practices, owning a reliable car is not a luxury—it’s a necessity. However, the combination of high sticker prices and elevated interest rates—averaging 7.3% for used cars and 11.5% for new cars—has made financing increasingly difficult.
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Even high-income professionals are not immune to the broader auto loan crisis. Subprime auto loan delinquencies reached 6.6% in early 2025, the highest rate in over 30 years.While physicians typically fall into the prime or super-prime credit categories, many are still affected by cash flow disruptions, especially those in private practice or rural areas where patient volumes and insurance reimbursements have declined. Additionally, younger doctors with substantial student debt may find themselves overleveraged, making it harder to keep up with car payments.
The emotional and professional toll of a car repossession can be significant. Beyond the embarrassment and logistical challenges, losing a vehicle can disrupt a physician’s ability to provide care, attend emergencies, or maintain a consistent work schedule. This can lead to further income loss, creating a vicious cycle of financial instability.
To combat this trend, some physicians are turning to financial advisors to restructure their debt, refinance auto loans, or downsize to more affordable vehicles. Others are advocating for systemic reforms, such as student loan forgiveness, higher Medicare reimbursements, and better financial literacy training during medical education.
In conclusion, the rise in car repossessions among doctors is a stark reminder that no profession is immune to economic volatility. As the cost of living continues to climb and financial pressures mount, even those in traditionally stable careers must adapt to protect their assets and livelihoods.
Addressing this issue requires both individual financial planning and broader policy changes to ensure that physicians can continue to serve their communities without the looming threat of personal financial collapse.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Posted on November 10, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Dr. David Edward Marcinko MBA MEd
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Taxation is a cornerstone of modern governance, providing the financial resources necessary for governments to deliver public services, maintain infrastructure, and support social programs. While paying taxes is a legal obligation, individuals and businesses often seek ways to reduce their tax burden. This pursuit gives rise to two distinct concepts: tax avoidance and tax evasion. Though they may sound similar, the difference between them is profound, hinging on legality, ethics, and consequences.
Tax avoidance refers to the use of lawful strategies to minimize tax liability. It involves taking advantage of deductions, exemptions, credits, and other provisions explicitly allowed by tax laws. For example, individuals may contribute to retirement accounts, claim mortgage interest deductions, or invest in tax-free municipal bonds. Businesses may structure operations to benefit from tax incentives or credits designed to encourage innovation, sustainability, or job creation. In essence, tax avoidance is legal tax planning—a way to reduce obligations while staying within the boundaries of the law.
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By contrast, tax evasion is illegal. It involves deliberately misrepresenting or concealing information to avoid paying taxes. Common forms of evasion include underreporting income, overstating deductions, hiding assets offshore, or falsifying records. Unlike avoidance, which is permitted and often encouraged, evasion constitutes fraud against the government. The consequences are severe: individuals and corporations found guilty of tax evasion may face hefty fines, penalties, and even imprisonment.
The distinction between the two lies in compliance versus deception. Tax avoidance complies with the letter of the law, even if it sometimes exploits loopholes. Tax evasion, however, breaks the law outright. This difference is critical not only legally but also ethically. While avoidance is lawful, aggressive avoidance strategies—especially by wealthy individuals or multinational corporations—can raise moral questions. Critics argue that such practices undermine fairness, shifting the tax burden onto ordinary citizens. Governments often respond by reforming tax codes to close loopholes and ensure equity.
Tax evasion, on the other hand, is universally condemned. It erodes trust in the tax system, deprives governments of essential revenue, and places greater strain on compliant taxpayers. Moreover, evasion can damage reputations, leading to loss of credibility and public backlash for businesses or individuals caught engaging in fraudulent practices.
In summary, tax avoidance is legal and strategic, while tax evasion is illegal and punishable. Both aim to reduce tax liability, but they differ fundamentally in method and consequence. Avoidance leverages lawful opportunities provided by tax codes, whereas evasion relies on deception and concealment. Understanding this distinction is vital for taxpayers, as crossing the line from avoidance into evasion can result in serious legal and financial repercussions. Ultimately, responsible tax planning requires not only knowledge of the law but also an awareness of ethical considerations, ensuring that efforts to minimize taxes do not compromise legality or fairness.
Posted on November 5, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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According to colleague Dan Ariely PhD, the Scitovsky Paradox and using the Kaldor–Hicks criterion, allocation A may be more efficient than allocation B, while at the same time B is more efficient than A.
Moreover, the Scitovsky paradox in welfare economics which is resolved by stating that there is no increase in social welfare by a return to the original part of the losers. It is named after the Hungarian born American economist, Tibor Scitovsky. According to Scitovsky, ther Kaldor-Hicks criterion involves contradictory and inconsistent results.
What Scitovsky demonstrated was it is possible that if an allocation A is deemed superior to another allocation B by the Kaldor compensation criteria, then by a subsequent set of moves by the same criteria, we can prove that B is also superior to A.
Posted on November 4, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Staff Reporters
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Irish economist Frances Edgeworth put forward the Edgeworth Paradox in his paper “The Pure Theory of Monopoly”, published in 1897.
It describes a situation in which two players cannot reach a state of equilibrium with pure strategies, i.e. each charging a stable price. A fact of the Edgeworth Paradox is that in some cases, even if the direct price impact is negative and exceeds the conditions, an increase in cost proportional to the quantity of an item provided may cause a decrease in all optimal prices. Due to the limited production capacity of enterprises in reality, if only one enterprise’s total production capacity can be supplied cannot meet social demand, another enterprise can charge a price that exceeds the marginal cost for the residual social need.
And so, according to colleague Dan Ariely PhD, the Edgeworth Paradox suggests that with capacity constraints, there may not be an equilibrium.
Product costing deals with determining the total costs involved in the production of a good or service. Costs may be broken down into subcategories, such as variable, fixed, direct, or indirect costs. Cost accounting is used to measure and identify those costs, in addition to assigning overhead to each type of product created by the company.
Managerial accountants calculate and allocate overhead charges to assess the full expense related to the production of a good. The overhead expenses may be allocated based on the number of goods produced or other activity drivers related to production, such as the square footage of the facility. In conjunction with overhead costs, managerial accountants use direct costs to properly value the cost of goods sold and inventory that may be in different stages of production.
Marginal costing (sometimes called cost-volume-profit analysis) is the impact on the cost of a product by adding one additional unit into production. It is useful for short-term economic decisions. The contribution margin of a specific product is its impact on the overall profit of the company. Margin analysis flows into break-even analysis, which involves calculating the contribution margin on the sales mix to determine the unit volume at which the business’s gross sales equals total expenses. Break-even point analysis is useful for determining price points for products and services.
Cash Flow Analysis
Managerial accountants perform cash flow analysis in order to determine the cash impact of business decisions. Most companies record their financial information on the accrual basis of accounting. Although accrual accounting provides a more accurate picture of a company’s true financial position, it also makes it harder to see the true cash impact of a single financial transaction. A managerial accountant may implement working capital management strategies in order to optimize cash flow and ensure the company has enough liquid assets to cover short-term obligations.
When a managerial accountant performs cash flow analysis, he will consider the cash inflow or outflow generated as a result of a specific business decision. For example, if a department manager is considering purchasing a company vehicle, he may have the option to either buy the vehicle outright or get a loan. A managerial accountant may run different scenarios by the department manager depicting the cash outlay required to purchase outright upfront versus the cash outlay over time with a loan at various interest rates.
Inventory Turnover Analysis
Inventory turnover is a calculation of how many times a company has sold and replaced inventory in a given time period. Calculating inventory turnover can help businesses make better decisions on pricing, manufacturing, marketing, and purchasing new inventory. A managerial accountant may identify the carrying cost of inventory, which is the amount of expense a company incurs to store unsold items.
If the company is carrying an excessive amount of inventory, there could be efficiency improvements made to reduce storage costs and free up cash flow for other business purposes.
Constraint Analysis
Managerial accounting also involves reviewing the constraints within a production line or sales process. Managerial accountants help determine where bottlenecks occur and calculate the impact of these constraints on revenue, profit, and cash flow. Managers then can use this information to implement changes and improve efficiencies in the production or sales process.
Financial Leverage Metrics
Financial leverage refers to a company’s use of borrowed capital in order to acquire assets and increase its return on investments. Through balance sheet analysis, managerial accountants can provide management with the tools they need to study the company’s debt and equity mix in order to put leverage to its most optimal use.
Performance measures such as return on equity, debt to equity, and return on invested capital help management identify key information about borrowed capital, prior to relaying these statistics to outside sources. It is important for management to review ratios and statistics regularly to be able to appropriately answer questions from its board of directors, investors, and creditors.
Accounts Receivable (AR) Management
Appropriately managing accounts receivable (AR) can have positive effects on a company’s bottom line. An accounts receivable aging report categorizes AR invoices by the length of time they have been outstanding. For example, an AR aging report may list all outstanding receivables less than 30 days, 30 to 60 days, 60 to 90 days, and 90+ days.
Through a review of outstanding receivables, managerial accountants can indicate to appropriate department managers if certain customers are becoming credit risks. If a customer routinely pays late, management may reconsider doing any future business on credit with that customer.
Budgeting, Trend Analysis, and Forecasting
Budgets are extensively used as a quantitative expression of the company’s plan of operation. Managerial accountants utilize performance reports to note deviations of actual results from budgets. The positive or negative deviations from a budget also referred to as budget-to-actual variances, are analyzed in order to make appropriate changes going forward.
Managerial accountants analyze and relay information related to capital expenditure decisions. This includes the use of standard capital budgeting metrics, such as net present value and internal rate of return, to assist decision-makers on whether to embark on capital-intensive projects or purchases. Managerial accounting involves examining proposals, deciding if the products or services are needed, and finding the appropriate way to finance the purchase. It also outlines payback periods so management is able to anticipate future economic benefits.
Managerial accounting also involves reviewing the trendline for certain expenses and investigating unusual variances or deviations. It is important to review this information regularly because expenses that vary considerably from what is typically expected are commonly questioned during external financial audits. This field of accounting also utilizes previous period information to calculate and project future financial information. This may include the use of historical pricing, sales volumes, geographical locations, customer tendencies, or financial information.
Turning 50 with little to no savings can be daunting, especially for a doctor who has spent decades in a demanding profession. Yet, all is not lost. With strategic planning, discipline, and a willingness to adapt, a broke 50-year-old physician can still build a solid retirement foundation by age 65.
First, it’s essential to confront the financial reality. This means calculating current income, expenses, debts, and any assets, however small. A clear picture allows for realistic goal-setting. The target should be to save aggressively—ideally 30–50% of income—over the next 15 years. While this may seem steep, doctors often have above-average earning potential, even in their later years, which can be leveraged.
Next, lifestyle adjustments are crucial. Downsizing housing, eliminating unnecessary expenses, and avoiding new debt can free up significant cash flow. If possible, relocating to a lower-cost area or refinancing existing loans can also help. Every dollar saved should be redirected into retirement accounts such as a 401(k), IRA, or a solo 401(k) if self-employed. Catch-up contributions for those over 50 allow for higher annual deposits, which can accelerate growth.
Investing wisely is non-negotiable. A diversified portfolio with a mix of stocks, bonds, and alternative assets can provide both growth and stability. Working with a fiduciary financial advisor ensures that investments align with retirement goals and risk tolerance. Time is limited, so the focus should be on maximizing returns without taking reckless risks.
Increasing income is another powerful lever. Many doctors can boost earnings through side gigs like telemedicine, consulting, teaching, or locum tenens work. These flexible options can add tens of thousands annually without requiring a full career shift. Additionally, monetizing expertise—writing, speaking, or creating online courses—can generate passive income streams.
Debt reduction must be prioritized. High-interest loans, especially credit card debt, can erode savings potential. Paying off these balances aggressively while avoiding new liabilities is key. For student loans, exploring forgiveness programs or refinancing options may offer relief.
Finally, mindset matters. Retirement at 65 doesn’t have to mean complete cessation of work. It can mean transitioning to part-time roles, passion projects, or advisory positions that provide income and fulfillment. The goal is financial independence, not necessarily total inactivity.
In conclusion, while starting late is challenging, a broke 50-year-old doctor can still retire comfortably at 65. It requires a blend of financial discipline, income optimization, smart investing, and lifestyle changes. With focus and determination, the next 15 years can be transformative—turning a precarious situation into a secure and dignified retirement.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com
Posted on October 23, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Dr. David Edward Marcinko MBA MEd
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NFTs, or Non-Fungible Tokens, are unique digital assets stored on a blockchain that represent ownership of a specific item or piece of content. Unlike cryptocurrencies like Bitcoin or Ethereum, which are fungible and interchangeable, NFTs are one-of-a-kind and cannot be exchanged on a one-to-one basis.
In recent years, Non-Fungible Tokens (NFTs) have emerged as a groundbreaking innovation in the digital world, revolutionizing how we perceive ownership, art, and value online. At their core, NFTs are cryptographic tokens that represent a unique digital item or asset. These tokens are stored on a blockchain—a decentralized digital ledger—which ensures that each NFT is verifiable, traceable, and immutable.
The term “non-fungible” means that each token is distinct and cannot be replaced with another token of equal value. This contrasts with fungible assets like dollars or cryptocurrencies, where each unit is identical and interchangeable. For example, one Bitcoin is always equal to another Bitcoin. However, each NFT has its own metadata, ownership history, and attributes, making it unique and often valuable.
NFTs can represent a wide range of digital content, including artwork, music, videos, virtual real estate, gaming items, and even tweets. Artists and creators have embraced NFTs as a new way to monetize their work, bypassing traditional gatekeepers like galleries and record labels. By minting their creations as NFTs, they can sell them directly to collectors and fans, often earning royalties from future resales thanks to smart contracts embedded in the blockchain.
One of the most popular blockchains for NFTs is Ethereum, which supports smart contracts and has a robust ecosystem for digital assets. Platforms like OpenSea, Rarible, and Foundation have become marketplaces where users can buy, sell, and trade NFTs. These platforms often require users to have a digital wallet and use cryptocurrency to complete transactions.
The rise of NFTs has sparked debates about their environmental impact, speculative nature, and long-term value. Critics argue that the energy consumption of blockchain networks can be significant, especially those using proof-of-work mechanisms. Others worry that the NFT market is driven by hype and may not sustain its current levels of interest and investment. Nonetheless, proponents believe that NFTs offer a new paradigm for digital ownership and creativity, empowering artists and reshaping industries from gaming to fashion.
In conclusion, NFTs represent a fusion of technology, art, and commerce, offering a novel way to own and trade digital assets. As the technology matures and adoption grows, NFTs may become a standard part of our digital lives, influencing how we interact with content, creators, and each other in the virtual world.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com
The following are 4 common financial psychological biases. Some are learned while others are genetically determined (and often socially reinforced). While this essay focuses on the financial and investing implications of these biases, they are prevalent in most areas in life.
Loss aversion affected many investors during the stock market crash of 2007-08 or the flash crash of May 6, 2010 also known as the crash of 2:45. During the crash, many people decided they couldn’t afford to lose more and sold their investments.
Of course, this caused the investors to sell at market troughs and miss the quick, dramatic recovery.
Overconfident investing happens when we believe we can out-smart other investors via market timing or through quick, frequent trading.
Data convincingly shows that people who trade most often under-perform the market by a significant margin over time.
Mental accounting takes place when we assign different values to money depending on where we got it.
For instance, even though we may have an aggressive saving goal for the year, it is likely easier for us to save money that we worked for than money that was given to us as a gift.
Herd mentality makes it very hard for humans to not take action when everyone around us does.
For example, we may hear stories of people making significant profits buying, fixing up, and flipping homes and have the desire to get in on the action, even though we have no experience in real estate.
Investment fees still matter for physicians and all of us, despite dropping dramatically over the past several decades due to computer automation, algorithms and artificial intelligence, etc. And, they can make a big difference to your financial health. So, before buying any investment thru a financial advisor, planner, manager, stock broker, etc., it’s vital to understand these two often confusing costs.
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Fee Only: Paid directly by clients for their services and can’t receive other sources of compensation, such as payments from fund providers. Act as a fiduciary, meaning they are obligated to put their clients’ interests first
Fee Based: Paid by clients but also via other sources, such as commissions from financial products that clients purchase. Brokers and dealers (registered representatives) are simply required to sell products that are “suitable” for their clients. Not a fiduciary.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit a RFP for speaking engagements: MarcinkoAdvisors@outlook.com
“THE INVESTOR’S CHIEF problem—even his worst enemy—is likely to be himself.” So wrote Benjamin Graham, the father of modern investment analysis.
With these words, written in 1949, Graham acknowledged the reality that investors are human. Though he had written an 800 page book on techniques to analyze stocks and bonds, Graham understood that investing is as much about human psychology as it is about numerical analysis.
In the decades since Graham’s passing, an entire field has emerged at the intersection of psychology and finance. Known as behavioral finance, its pioneers include Daniel Kahneman, Amos Tversky and Richard Thaler. Together, they and their peers have identified countless human foibles that interfere with our ability to make good financial decisions. These include hindsight bias, recency bias and overconfidence, among others. On my bookshelf, I have at least as many volumes on behavioral finance as I do on pure financial analysis, so I certainly put stock in these ideas.
At the same time, I think we’re being too hard on ourselves when we lay all of these biases at our feet. We shouldn’t conclude that we’re deficient because we’re so susceptible to biases. Rather, the problem is that finance isn’t a scientific field like math or physics. At best, it’s like chaos theory. Yes, there is some underlying logic, but it’s usually so hard to observe and understand that it might as well be random. The world of personal finance is bedeviled by paradoxes, so no individual—no matter how rational—can always make optimal decisions.
As we plan for our financial future, I think it’s helpful to be cognizant of these paradoxes. While there’s nothing we can do to control or change them, there is great value in being aware of them, so we can approach them with the right tools and the right mindset.
Here are just seven of the paradoxes that can bedevil financial decision-making:
There’s the paradox that all of the greatest fortunes—Carnegie, Rockefeller, Buffett, Gates—have been made by owning just one stock. And yet the best advice for individual investors is to do the opposite: to own broadly diversified index funds.
There’s the paradox that the stock market may appear overvalued and yet it could become even more overvalued before it eventually declines. And when it does decline, it may be to a level that is even higher than where it is today.
There’s the paradox that we make plans based on our understanding of the rules—and yet Congress can change the rules on us at any time, as it did just last year.
There’s the paradox that we base our plans on historical averages—average stock market returns, average interest rates, average inflation rates and so on—and yet we only lead one life, so none of us will experience the average.
There’s the paradox that we continue to be attracted to the prestige of high-cost colleges, even though a rational analysis that looks at return on investment tells us that lower-cost state schools are usually the better bet.
There’s the paradox that early retirement seems so appealing—and has even turned into a movement—and yet the reality of early retirement suggests that we might be better off staying at our desks.
There’s the paradox that retirees’ worst fear is outliving their money and yet few choose the financial product that is purpose-built to solve that problem: the single-premium immediate annuity.
How should you respond to these paradoxes? As you plan for your financial future, embrace the concept of “loosely held views.”
In other words, make financial plans, but continuously update your views, question your assumptions and rethink your priorities.
Artificial Intelligence and Investing: A Transformative Partnership
Artificial Intelligence (AI) is revolutionizing the world of investing, reshaping how decisions are made, risks are assessed, and portfolios are managed. As financial markets grow increasingly complex and data-driven, AI offers powerful tools to navigate this landscape with greater precision, speed, and insight.
At its core, AI refers to systems that can perform tasks typically requiring human intelligence—such as learning, reasoning, and problem-solving. In investing, this translates into algorithms that can analyze vast amounts of financial data, detect patterns, and make predictions with remarkable accuracy. Machine learning, a subset of AI, enables these systems to improve over time by learning from new data, making them especially valuable in dynamic markets.
One of the most significant applications of AI in investing is algorithmic trading. These systems can execute trades at lightning speed, responding to market fluctuations in milliseconds. By analyzing historical data and real-time market conditions, AI-driven trading platforms can identify optimal entry and exit points, often outperforming human traders. High-frequency trading firms have long relied on such technologies to gain competitive advantages.
AI also enhances portfolio management through robo-advisors—digital platforms that use algorithms to provide personalized investment advice. These tools assess an investor’s goals, risk tolerance, and time horizon, then construct and manage a diversified portfolio accordingly. Robo-advisors democratize access to financial planning, offering low-cost, automated solutions to individuals who might not afford traditional advisory services.
Risk assessment is another area where AI shines. By processing alternative data sources—such as social media sentiment, news articles, and satellite imagery—AI can uncover hidden risks and opportunities. For instance, a sudden spike in negative sentiment around a company on Twitter might signal reputational issues, prompting investors to reevaluate their positions. AI models can also forecast macroeconomic trends, helping investors anticipate shifts in interest rates, inflation, or geopolitical events.
Moreover, AI is transforming fundamental analysis. Natural language processing (NLP) allows machines to read and interpret earnings reports, SEC filings, and analyst commentary. This enables investors to extract insights from unstructured data that would be time-consuming to analyze manually. AI can even detect subtle linguistic cues that may indicate a company’s future performance or management’s confidence.
Despite its advantages, AI in investing is not without challenges. Models can be opaque, making it difficult to understand how decisions are made—a phenomenon known as the “black box” problem. There’s also the risk of overfitting, where algorithms perform well on historical data but fail in real-world scenarios. Ethical concerns, such as bias in data and the potential for market manipulation, must also be addressed.
In conclusion, AI is reshaping the investing landscape, offering tools that enhance efficiency, accuracy, and accessibility. While it’s not a panacea, its integration into financial markets marks a profound shift in how capital is allocated and wealth is managed. As technology continues to evolve, investors who embrace AI will be better positioned to thrive in an increasingly data-driven world.
Posted on October 4, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
OVERHEARD IN THE DOCTOR’S LOUNGE
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By D. Kellus Pruitt DDS
According to money journalists Max Tailwagger and Allan Roth of MoneyWatch, the trade publication Medical Economics Magazine [“advertising supplement”] nearly listed a dog on its’ 2013 list of Best Financial Advisors for Doctors. Indeed, being listed as a top financial advisor in this publication would enhance any advisor’s credibility as well as reach a high income readership.
For example, several advisors in the Financial Planning Association, mentions this prestigious award year after year. And, the NAPFA organization of fee-only financial planners has issued press releases when member advisors make this annual list. In fact, in 2008, it touted that 52/150 listed FAs were NAPFA members.
Yet, the dog is well known in the financial advisory world, having allegedly received a plaque as one of 2009 America’s Top Financial Planners by the Consumers’ Research Council of America, and has appeared in several books including Pound Foolish and Money for Life. The fee for Maxwell Tailwagger CFP® [a five year old Dachshund] was reported to be $750 with $1,000 for a bold listing. Colorado Securities Commissioner Fred Joseph is reported to have said, “Once again, Max is gaining national notoriety for his astute, and almost superhuman, abilities in the financial arena.”
The only two qualifications for the listing were to pay the fee and not have a complaint against them. In 2009, James Putman, then the NAPFA chairman who touted his own Medical Economics award, was charged by the SEC for securities fraud. NAPFA spokesperson Laura Fisher allegedly opined that “NAPFA no longer promotes the Medical Economics Top Advisors for Doctors list. We felt promoting a list that included stock-brokers was inconsistent with NAPFA’s mission to advance the fee-only profession.” When an advisor name drops an honor to you, congratulate him and then ask how s/he achieved the award. Ask how many nominees versus award recipients there were. What were the criteria for selection and how were they nominated. Ask if they had to pay for the honor, and go online to check out the organization.
Then ask yourself this question: If your financial advisor is buying credibility, do you really want to trust your financial future to him or her?
Sometimes debt is a necessary tool in building wealth
Using debt to build wealth might seem counterintuitive. After all, when you calculate your wealth, you look at what you own (assets) and subtract what you owe (debts and liabilities) to determine what your net worth (wealth) is.
It’s easy to oversimplify that debt is bad and is harmful to your wealth. Because some debt is really harmful, like credit cards, automobile, debt gets lumped into the category of “bad.”
But some types of debt can be useful and sometimes necessary to create wealth; home, education, business, etc. For folks that don’t readily have access to large sums of cash or capital, debt may be the tool that allows them to expand.
Yourmedical practice. Your personal goals. Your financial plan. Our experienced confirmation guide.
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When you know exactly where you are today, have a vision of where you want to be tomorrow, and have trusted counsel at your side, you have already achieved so much success. Marcinko Associates works to keep you at that level of confidence every day. We use a comprehensive economic process to uncover what’s most important to you and then develop a financial strategy that gives you the highest probability of achieving your monetary goals.
We assess, plan, and opine for your success
To accurately see where you are today, chart a strategic path to your goals and help you make the most informed decisions to keep you on financial track, our key services for physicians and high net worth medical clients include:
Investment Portfolio Review
Fee, Charge and Cost Review
Comprehensive Financial Planning
Insurance Reviews
Estate Planning
Investment and Asset Management Second Opinions
We take a deep dive into your financial retirement plans
Physicians and dental employers now have options for how to design and deliver retirement benefits and we can help you make the best choice for your healthcare business. Our services for retirement plans include:
Fee, Charges & Fiduciary Review
Portfolio Analysis
Single Employer Retirement Plan Advisory
Retirement Plans Risk Analysis
Capital Funding and Financing
Business Planning and Practice Valuations
Career Development
and more!
We take a broad and balanced look at your financial life life
We coordinate our recommendations with your other advisors, including attorneys, accountants, insurance professionals and others, to ensure each decision is consistent with your goals and overall strategy. For example, through our partnerships we offer physician colleagues deeper expanded advisory services, like:
Posted on September 26, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By A.I. and Staff Reporters
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Bonds: The 10-year Treasury yield popped on solid economic data yesterday, including weekly jobless claims falling to their lowest since mid-July and Q2 GDP rising unexpectedly.
Stocks: But good news for the labor market and economy is bad news for anyone hoping the Federal Reserve cuts interest rates next month, and the major indexes sank for a third day in a row yesterday. All eyes now turn to today’s key PCE reading.
Crypto: Digital assets continued to tumble yesterday with ether falling below $4,000 for the first time in months. There may be more pain ahead: $22 billion in crypto options expire today.
Despite their high salaries, not all doctors are wealthy, and some live paycheck to paycheck. Here are 5 reasons why many doctors today are broke, according to https://medschoolinsiders.com
1 | Believing They Are Universally Smart
The first reason so many doctors are broke is that many doctors believe they are universally smart. While most doctors have deep specialized knowledge, there’s a big difference between being smart in your profession and being smart with money. A physician’s schooling is quite thorough when it comes to the human body, but med school doesn’t include a prerequisite class on how to handle finances.
Graduating medical school is a major feat and certainly demonstrates superior work ethic and cognitive abilities. But many new doctors believe these accomplishments transcend all aspects of life. If you’re smart enough to earn an MD, you’re certainly smart enough to handle your finances, but only once you properly and intentionally educate yourself.
The truth is doctors, especially traditional graduates, haven’t had an opportunity to manage large sums of money until they become fully trained attending physicians and start pulling in low to mid six figures in income. Prior to that, there was very little of it to manage.
Far too many aspiring doctors, and students in general, don’t take the time to learn financial basics, in part because it’s uncomfortable and seems like something they can figure out “later”, whenever that may be. Their poor spending habits and lack of investment knowledge carry over into their careers, causing many to make irresponsible decisions.
The second factor is overspending too soon, and this comes up at two points in training.
First, it’s natural to want to start spending more as soon as you get into residency and start making a little more money. After all, you’ve been a broke student for 8 or more years, and now you’re finally making a reasonable and reliable wage. But that’s where young doctors get into trouble. Residency pays, but not nearly as much as you will be making once you become an attending physician. The average resident makes about $60K a year, and if you begin spending all of that money right away, thinking you’ll handle your loans once you become an attending, you delay paying off your medical school debt, which means the compounding effect through your student loan interest rate works against you.
Now that $250,000 in student loans has ballooned to over $350,000 by the time you finish residency. The compounding effect, which can be one of your greatest allies in your financial life, becomes an equally powerful enemy when working against you through debt. But of course, pinching pennies is easier said than done, especially when you’re in residency and are surrounded by peers in different professions. They’ve been earning good money much longer than you have, and they can afford more luxurious lifestyles.
They may not be worried about indulging in fine dining or how much a hotel costs when traveling. Students in college and medical school are often confident they will resist the temptations, but the desire to keep up with your friends and family can be difficult to ignore, which causes many to overspend before they technically have the money to do so.
The same is true of attending physicians. As soon as those six-figure salaries come rolling in, many physicians go overboard with spending, trying to make up for lost time and to treat yourself.
Now, we are not suggesting you shouldn’t reward yourself for completing residency, but that reward shouldn’t be a Lamborghini. It’s best to continue living like a resident in your first few years after becoming an attending to pay off loans, put a down payment on a home, and get your financial foundation built before loosening the purse strings.
3 | Decreasing Salaries
Third, doctors continue to make less money than they did before. And this includes nearly all 44 medical specialties. For example, while physician compensation technically rose from $343k to $391k between 2017 and 2022, this rise does not keep up with inflation. The real average compensation in 2022 was less than $325k—a $20k decrease in purchasing power in only six years.
For doctors who are already spending to the limits of their salaries with huge mortgages, car payments, business costs, and other luxuries, a decreased salary can have a huge impact. You might be able to cut back by going on fewer vacations or eating out less frequently, but many accrued costs are locked in, such as a mortgage payment, car loan, or leased rental space for your practice.
4 | Increasing Costs of Private Practice
In the past, running a private practice was much simpler, but recent stricter guidelines and regulations have made it difficult for solo practices to keep up. While regulations like the Health Insurance Privacy and Portability Act, or HIPAA, and mandatory Electronic Medical Records, or EMRs, are necessary to protect patients, they make costs higher for physicians who run their own private practice. These physicians need to spend their own money to set up and maintain EMRs as well as invest in security to ensure patient data is protected.
With the steep rise of inflation we’ve seen over the past couple of years, everything is more expensive, which means costs, such as business space, equipment, and even office supplies, have gone up for private practice physicians while salaries have not. 2013 to 2020 saw an annual inflation rate of anywhere from 0.7% to 2.3%. This skyrocketed to an annual inflation rate of 7.0% in 2021 and another 6.5% in 2022. In fact, the cost of running a private practice has increased by almost 40% between 2001 and 2021.
These increased costs are exacerbated by another problem plaguing private practices; decreased reimbursement. While costs increased by almost 40%, Medicare reimbursement only increased by 11%. When doctors see patients who are insured, the insurance companies pay the physicians for their time. For Medicare, the new proposed rules for 2023 would cut reimbursement by around 5%. When adjusting for inflation, Medicare reimbursement decreased by 20% in the last 20 years.
These costs add up, making it extremely difficult for physicians to thrive financially while running a private practice.
5 | Tuition Debt
Lastly, we can’t talk about a doctor’s finances without mentioning the exorbitant debt so many graduating physicians are left with. It won’t shock you to hear that med school is expensive. Extremely expensive. The average cost of tuition for a single year is nearly $60k, with significant variance from school to school, and that’s before accounting for living expenses.
In-state applicants pay less than out-of-state applicants, and students at private schools typically pay more than students at public medical schools. The astronomical costs mean the vast majority of students can’t pay for medical school out of their own pockets. And unless your family is part of the 1%, even with your parents footing the bill, it’s difficult to cover tuition, let alone rent, groceries, transportation, tech, social activities, exam fees, and application costs.
The average total student debt after college and med school is over $250k. But keep in mind that’s the average, which includes 27% of students who graduate with no debt at all. This means the vast majority of students leave medical school owing much more than $250k.
For some perspective, in 1978, the average debt for graduating MDs was $13,500, which, when adjusted for inflation, is a little over $60,000. There are multiple ways to eventually repay these loans, but time and discipline are essential to ensure this money is paid off as quickly as possible.
According to financial advisor Dr. David Edward Marcinko MEd MBA CMP™; consider the following:
Place a portion of your salary (15-20% or more) into a savings account, and another portion (10-20% or more) into wise investments [stocks, bonds, mutual funds, and/or ETFs].
Pay off your bills each month, and then use leftover spending money to purchase fun things like vacations and fancy dinners, within your means. Shop sales, buy used clothes, and use credit card points for travel.
Hire an excellent tax professional and meet with an investment advisor once or twice a year about your investment status and strategy. http://www.MarcinkoAssociates.com
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Although 97% of people aren’t yet millionaires, many could eventually meet that target if they start investing sooner rather than later; especially doctors [MD, DO, DPM, DDS or DMD].
A 20-year-old, for instance, needs to invest just $330 a month into an asset class that delivers a 7% to 8% annual return to reach $1.26 million by the time s/he turns 65 years old. The luxury of time significantly boosts your chances of becoming a millionaire.
This doesn’t mean it’s too late for middle-aged savers to reach that millionaire milestone, but it will take a significantly greater investment. If a 50-year-old doctor hasn’t started saving for retirement, s/he would need to invest $3,958 a month at a steady 7% return to reach $1.26 million by retirement.
However, according to one Goldman Sachs report, investors could expect the S&P 500 to deliver just 3% annualized nominal returns over the next 10 years.
After an average 13% yearly return for the past decade, a new strategy outside of the stock market may be needed for that level of outsized gain, especially if you’re late to investing.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
According to Hello Divorce, alimony, often referred to as spousal support, is a court-ordered payment from one spouse to the other following a divorce or legal separation. Its existence is tied to the legal status of marriage. The underlying principle is that both spouses contributed to the marital standard of living, and the dissolution of the marriage should not cause an inequitable economic outcome for the lower-earning spouse. This support is not intended as a punishment but as a means of mitigating the financial impact of divorce.
The purpose of alimony can vary. In some cases, it is rehabilitative, providing temporary support while one spouse obtains education or job training to become self-sufficient. For longer marriages, it might serve to help maintain the standard of living established during the partnership. Alimony is a legal tool derived from family law statutes to address the financial interdependence created by marriage.
Note: The federal tax treatment for alimony changed with the Tax Cuts and Jobs Act of 2017. For any divorce or separation agreement executed after December 31st, 2018, alimony payments are no longer tax-deductible for the person paying them. The recipient of the support does not report the payments as taxable income. This change is permanent and does not expire with other provisions of the act.
What is Palimony
According to Wikipedia, Palimony refers to financial support that may be awarded after an unmarried couple separates. Unlike alimony, palimony is not rooted in family law but is a concept derived from contract law. An award depends on the existence of an agreement between the partners. This agreement can be a formal written contract or an oral or implied agreement for support in exchange for services, such as managing the household.
The legal basis for palimony was established by the 1976 California Supreme Court case, Marvin v. Marvin. In that case, the court ruled that unmarried cohabitants could make enforceable contracts for support, as long as the agreement was not based on sexual services. Because it is a contract claim, a palimony case is pursued in civil court, not family court. Palimony is not available in all states and is only recognized in a minority of jurisdictions.
Note: The tax implications of palimony are less defined than alimony because the IRS does not have a specific rule for it. How palimony is treated depends on the nature of the underlying claim. If the payments are a settlement for services rendered, they may be considered taxable income to the recipient. If the payments are characterized as a gift, they are not considered taxable income for the recipient.
Posted on August 28, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL PROVIDER PAYMENTS LOWERED
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Statistic: $2.8+ billion dollars
That’s how much Blue Cross and Blue Shield plans agreed to pay to settle litigation over claims they conspired to lower payments to providers. (Healthcare Dive)
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
The so-called money factor (abbreviated as MF on invoices) is a number in a decimal form that dealers use to calculate the APR of a car lease. It’s a major part of your monthly payment and dealers are known to jack up the money factor to pad their profits.
Most doctors don’t ask to see it because they’re not aware of it or don’t know how to calculate it. Ask to see the money factor, then multiply it by 2,400.
For example, if the money factor is .00150, you multiply it by 2,400 to get 3.6%. If that’s higher than the prevailing rate, you have room to talk them down.
How to reduce it
So how do you get a good interest rate when you lease a vehicle? The same way you do when borrowing for any other reason, whether it’s buying a home or applying for a personal loan: by having good credit. This may reduce your interest rate because you’ll represent a lower risk to a lender.
A high residual value on the car could also help you get a better interest rate. A higher residual value means you’d have lower monthly payments because there would be less depreciation on the vehicle. Since interest is applied to your monthly payment, a lower monthly payment would equate to reduced interest charges.
The money factor is one of the many numbers you may want to learn about when leasing a car. It’s one of the transactional costs that come with leasing, and allows dealers and finance companies to make a profit on every lease they execute. As a consumer, it’s a smart idea to learn the financial implications of this number and how it’ll affect your overall costs over the course of a multi-year lease.
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If the interest rate is too high, you may need to shop around for a better rate, negotiate with the dealer or lender to lower the money factor, or consider leasing another vehicle that’s more in line with your budget. Either way, make sure you explore all your financial options before taking a car off the lot.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Net worth is everything you own of significance (Assets) minus what is owed in debts (Liabilities). Assets include cash and investments, real estate, cars and anything else of value.
How is net worth calculated? Assets – Debt = Net Worth. Net worth is calculated by adding all owned assets (anything of value) and then subtracting all of your liabilities.
Is net worth yearly? No, net worth is not yearly. Net worth isn’t inherently yearly but is often tracked on an annual basis to assess financial progress year over year.
What net worth is considered wealthy, rich and upper class? In the U.S. salary average is around $59,000, and only 20% of Americans have a household income of $100,000 or more.
Is net worth the same as net income? No, net worth is not the same as net income. Net income is what you actually bring home after taxes and payroll deductions, like Social Security and 401(k) contributions.
Can one measure their net worth if they don’t have many assets or a high income? Yes. Knowing your net worth isn’t about the amount you have; it’s about understanding your financial position. It helps you track your progress, informs your financial decisions, and motivates you to improve your financial health, regardless of where you start.
A SPECIAL MEDICAL-EXECUTIVE-POST GUEST PRESENTATION
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What Is a Special Purpose Vehicle (SPV)?
A special purpose vehicle is a subsidiary created by a parent company to isolate financial risk. It’s also called a special purpose entity (SPE). Its legal status as a separate company makes its obligations secure even if the parent company goes bankrupt. A special purpose vehicle is sometimes referred to as a bankruptcy-remote entity for this reason.
These vehicles can become a financially devastating way to hide company debt if accounting loopholes are exploited, as seen in the 2001 Enron scandal.
Whatever the statistics regarding physician standard of living, the reality is that within most marriages the husband more frequently takes responsibility for understanding and managing the finances. Additionally, women are more likely to remain in the marital home following a separation, thus inheriting a large fixed expense that may prove be an excessive, albeit short-term burden to them. At the time the decision is made to separate or divorce, many women do not have an understanding of how to manage their household budget, or how to manage their assets and liabilities.
An issue many divorcing physicians face is that the other spouse (in the past the wife), may have concentrated their energies on managing the home, while the physician concentrated on earning and managing the finances. The problems of the spouse of a physician are often compounded in divorce; not only do they not understand their personal finances, but that their absence from the work force has made them financially dependent on the other.
At what probably be the most emotionally taxing time in their lives, they are forced to play catch-up.
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Taking a more active role in their own financial planning during the marriage may help the spouse of a physician avoid some of the financial pitfalls of separation and divorce.
NOTE: Barbara Stanny provides an excellent overview and reading bibliography on how people can get smart about money in her book Prince Charming Isn’t Coming. [1]
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
According to Wikipedia, Phantom debt or zombie debt is a debt that is old, defaulted, or not owed and is somehow still being pursued for collection to be paid by the presumed debtor. It generally refers to debt that is more than 3 years old, is long forgotten about or belonged to someone else – like someone with the same name or a deceased parent. The amount owed can grow to hundreds or thousands of dollars more than what was originally owed.
An example of this is from George Miller. George missed an 11 cent Verizon bill and seven years later it had grown to $4,000.00.
Sometimes it was never owed, was owed by a deceased parent, or that was previously owed by the presumed debtor, but was previously paid in full, settled, discharged via bankruptcy or a dismissed court case, is beyond the statute of limitations, or is otherwise not legally collectible, but that a collection agency or other similar service is aggressively attempting to collect, often fraudulently.
While the concept of phantom debt is quite old, it has gotten a lot of attention since the 1990s.
Very often, collectors of phantom debt use intimidating, abusive, or otherwise illegal tactics in an attempt to collect phantom debt that include frequent phone calls, calls to the victim’s place of employment, or threats of scary consequences against the victim that sometimes include arrest and/or criminal prosecution. In the USA, such tactics violate the Fair Debt Collection Practices Act [FDCPA]
The source of phantom debt may be from collectors who buy the debt from other collectors for pennies on the dollar, some of which take action that is not legal in order to collect that debt. Unlawful techniques used include suing or threatening to sue, re-aging the debt on the victim’s credit report to circumvent limits on reporting, or falsely promising to remove a negative credit report entry in exchange for a partial payment.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Doctors and dentists earn money by treating patients. CPAs and Attorneys have clients, and retail stores buy items low and sell them at higher prices. This is called a business model.
More formally, a business model identifies the products or services the business plans to sell, the target market, and any anticipated expenses, in order to outline how to generate a profit. Business models are important for both new and established businesses. They help companies attract investment, recruit talent, and motivate management and staff.
Businesses should regularly update their business model, or they’ll fail to anticipate trends and challenges ahead. Business models also help investors to evaluate companies that interest them and employees to understand the future of a company they may aspire to join.
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The Business Model of Pharmacy Benefits Managers
In the United States, health insurance providers often hire a third party to handle price negotiations, insurance claims, and distribution of prescription drugs. Providers that use such pharmacy benefit managers include commercial health plans, self-insured employer plans, Medicare Part D [drug] plans, the Federal Employees Health Benefits Program, and state government employee plans. PBMs are designed to aggregate the collective buying power of en-rollees through their client health plans, enabling plan sponsors and individuals to obtain lower prices for their prescription drugs. PBMs negotiate price discounts from retail pharmacies, rebates from pharmaceutical manufacturers, and mail-service pharmacies which home-deliver prescriptions without consulting face-to-face with a pharmacist.
Pharmacy benefit management companies can make revenue in several ways.
First, they collect administrative and service fees from the original insurance plan.
Then, they can also collect rebates from the manufacturer.
Traditional PBMs do not disclose the negotiated net price of the prescription drugs, allowing them to resell drugs at a public list price (also known as a sticker price), which is higher than the net price they negotiate with the manufacturer. This practice is known as “spread pricing”. The industry argues that savings are trade secrets. Pharmacies and insurance companies are often prohibited by PBMs from discussing costs and reimbursements. This leads to lack of transparency.
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Therefore, states are often unaware of how much money they lose due to spread pricing, and the extent to which drug rebates are passed on to en-rollees of Medicare plans. In response, states like Ohio, West Virginia, and Louisiana have taken action to regulate PBMs within their Medicaid programs.
For instance, they have created new contracts that require all discounts and rebates to be reported to the states. In return, Medicaid pays PBMs a flat administrative fee.
SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors@outlook.com -OR-http://www.MarcinkoAssociates.com
Posted on July 31, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
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On July 14, 2025, the Centers for Medicare & Medicaid Services (CMS) released its proposed Medicare Physician Fee Schedule (MPFS) for calendar year (CY) 2026.
In addition to the agency’s suggested increase to physician payments, the proposed rule also announces a new payment model and more tele-health flexibilities.
According to CMS, the “proposed rule is one of several proposed rules that reflect a broader Administration-wide strategy to create a health care system that results in better quality, efficiency, empowerment, and innovation for all Medicare beneficiaries.” (Read more…)
Classic Definition: Research from Ernst-Young [Nikhil Lele and Yang Shim] uncovered a chasm between how consumer patients think they’re doing financially, and the actual state of their finances. Even more striking, their study suggested that improving consumers’ financial health will become one of the top imperatives in reframing consumer financial services.
Modern Circumstance: For example, the study asked consumers to rate their own financial health, and 83 percent rated themselves “good,” “very good” or “excellent.” Now, contrast this figure with what is known about their actual situation:
60 percent of Americans say they are financially stressed.
56 percent of Americans have less than $10,000 saved for retirement.
40 million American families have no retirement savings at all.
40 percent of Americans are not prepared to meet a $400 short-term emergency.
Paradox Example: Fortunately, even though the vast majority of consumers rate themselves as financially healthy, the study found that most still want to improve. Importantly for health economists, the attractive 25-34 and 35-49 year-old age groups were most likely to be extremely or very interested in improving their financial and economic health.
Paradox Example: Massively affluent consumer patients are even more interested in improving this paradox than their mass market counterparts.
Posted on July 26, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Health Capital Consultants, LLC
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On July 15, 2025, the Centers for Medicare & Medicaid Services (CMS) released the proposed rule for the Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System for calendar year (CY) 2026.
Among other items, the agency proposes increasing payments to all outpatient providers, eliminating the Inpatient Only (IPO) List, and changing quality reporting programs.
This Health Capital Topics article reviews the proposed updates and changes to outpatient reimbursement. (Read more…)
Posted on July 21, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
By Rick Kahler MSFP CFP™
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When Maria needed $400,000 for a down payment on a new home, her broker at a large Wall Street firm offered a solution: “Don’t sell investments and trigger capital gains. Just take out a margin loan.”
A margin loan is a line of credit from a brokerage firm, secured by the client’s investment portfolio. It offers quick access to cash with no immediate tax consequences and minimal paperwork. But the convenience comes at a cost. As of mid-2025, margin loan interest rates range from 6.25% to over 11%.
Margin loan recommendations are often presented by brokers as tax-savvy strategies that allow clients to access “tax-free” cash while keeping their portfolios intact. In many cases, however, the math benefits the advisor more than the investor. The cost of borrowing often exceeds what an investor is likely to earn by holding on.
For example, let’s assume an interest rate of 7.5% on Maria’s $400,000 margin loan. While borrowing delayed the payment of $20,000 in capital gains tax, she will eventually have to pay that tax anyway unless she holds the investments until her death. Two years later, with portfolio returns of 4% annually, she had earned around $32,000 from the $400,000 in investments she might have sold. Meanwhile, she had paid $60,000 in interest—leaving her some $28,000 worse off. That’s without factoring in ongoing interest payments, or the risks of a margin call if the investments securing the loan drop in value.
Why do advisors keep recommending margin loans? Because selling investments reduces the portfolio size and the advisor’s fee. Borrowing keeps the portfolio intact and the compensation unchanged—while the firm receives additional income from interest on the loan. In some cases, advisors suggest using margin loans to buy more investments, increasing both the portfolio and the fee they collect.
None of this is illegal. But when the borrowing cost is higher than expected returns and the advisor benefits financially, the ethics are questionable. The client takes the risk, while the advisor keeps the revenue.
This kind of conflict appears more often in portfolios where compensation is tied to asset volume and the company’s primary culture rewards gathering assets over delivering unbiased advice. By contrast, fee-only financial planning and investment advisors typically operate on simpler hourly, flat, or tiered fee structures. Their compensation doesn’t depend on whether a client borrows, sells, or holds. The culture of the firm focuses on conflict-free advice aligned with the client’s best interest.
Wall Street brokers are often held to a fiduciary standard, but structure still matters. In 2024 the SEC reported their examinations of brokers would continue to focus on advisor recommendations unduly influenced by the company’s compensation and incentives.
There are rare situations where a margin loan may be appropriate. A client with large unrealized gains might use a short-term margin loan to minimize taxes. An elderly investor might borrow tax-free rather than sell assets that will receive a step-up in basis at their death. Even in those cases, the math must be exact and the client must clearly understand the risks, including the possibility of a margin call.
If your advisor recommends a margin loan, especially to buy more investments, ask strong questions. What’s the interest rate? What return is realistic? What are the tax consequences of selling? How does this affect the advisor’s income?
In a high-rate, low-return environment, margin loans rarely favor the client. The exceptions are narrow. The risks are significant. And the conflict of interest is measurable.
Sometimes the smartest move is the simplest: sell what you need, pay the tax, and leave leverage out of your plan.
As we plan for our financial future, I think it’s helpful to be cognizant of these paradoxes. While there’s nothing we can do to control or change them, there is great value in being aware of them, so we can approach them with the right tools and the right mindset.
Here are just seven of the paradoxes that can bedevil financial planning and investment decision-making:
There’s the paradox that all of the greatest fortunes—Carnegie, Rockefeller, Buffett, Gates—have been made by owning just one stock. And yet the best advice for individual investors is to do the opposite: to own broadly diversified index funds.
There’s the paradox that the stock market may appear overvalued and yet it could become even more overvalued before it eventually declines. And when it does decline, it may be to a level that is even higher than where it is today.
There’s the paradox that we make plans based on our understanding of the rules—and yet Congress can change the rules on us at any time, as it did just a few weeks ago.
There’s the paradox that we base our plans on historical averages—average stock market returns, average interest rates, average inflation rates and so on—and yet we only lead one life, so none of us will experience the average.
There’s the paradox that we continue to be attracted to the prestige of high-cost colleges, even though a rational analysis that looks at return on investment tells us that lower-cost state schools are usually the better bet.
There’s the paradox that early retirement seems so appealing—and has even turned into a movement—and yet the reality of early retirement suggests that we might be better off staying at our desks.
There’s the paradox that retirees’ worst fear is outliving their money and yet few choose the financial product that is purpose-built to solve that problem: the single-premium immediate annuity.
Assessment
QUESTION: How should you respond to these paradoxes? As you plan for your financial future, embrace the concept of “loosely held views.” In other words, make financial plans, but continuously update your views, question your assumptions and rethink your priorities.
Yes, you can contribute to both a Roth IRA and a 401(k), provided you don’t exceed annual contribution limits for each account.
Determining whether to contribute to a Roth IRA, 401(k), or both can be an important step in planning for your retirement. Here are the key differences, including tax advantages, employer contributions, and investment options.
Eligibility requirements are the first consideration when contributing to a Roth IRA and a 401(k). For Roth IRA contributions, your eligibility is determined by your income. Specifically, if your modified adjusted gross income (MAGI) exceeds certain thresholds, your ability to contribute to a Roth IRA may be reduced or eliminated. However, there are no income limits for contributing to a 401(k), making it accessible to anyone with earned income.
IRS rules do allow for contributions to both a Roth IRA and a 401(k), provided you adhere to the annual contribution limits for each account.
This means you can take advantage of the higher contribution limits of a 401(k) while also benefiting from the tax-free growth of a Roth IRA. This dual approach can be a strategy for maximizing your retirement savings. The advantages to contributing to both accounts present some key benefits, such as:
Tax diversification in retirement, allowing for better management of taxable income.
Potential reduction of overall tax burden.
Maximization of savings potential by taking full advantage of the benefits each account offers.3
Balancing contributions between a Roth IRA and a 401(k) requires careful planning. You might start by contributing enough to your 401(k) to receive the full employer match, which is essentially free money, if your employer offers this. Once you’ve secured the match, consider maxing out your Roth IRA contributions, if you’re eligible.
Posted on July 18, 2025 by Dr. David Edward Marcinko MBA MEd CMP™
MEDICAL EXECUTIVE-POST–TODAY’SNEWSLETTERBRIEFING
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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants
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Lucid exploded 36.24% higher on the news that the EV maker is partnering with Uber to roll out the ridesharing company’s new robotaxis.
PepsiCo popped 7.45% thanks to a strong quarter for the snack and soda giant, while shareholders cheered the details of its turnaround plan.
UnitedAirlines may have missed Wall Street’s revenue forecast, but its profits were enough to impress investors. Shares rose 3.11%.
Reports that Union Pacific is thinking about acquiring a rival sent shares of fellow train operators CSX and NorfolkSouthern up 3.73% and 3.65%, respectively.
Sarepta Therapeutics soared 19.53% after the biotech announced it will lay off 500 employees and restructure its entire business.
Quantumscape continued its hot streak, rising yet another 19.82% thanks to its recent battery breakthrough.
Speaking of hot streaks, OpenDoorTechnologies rose another 10.74% as retail traders pour into what is quickly becoming the next big meme stock.
Stocks down
GE Aerospace crushed earnings expectations and raised its fiscal guidance, but it still wasn’t enough to impress investors, who pushed shares of the engine maker down 2.10%.
USBancorp sank 1.03% after revenue and net interest income missed forecasts last quarter.
AbbottLaboratories beat on both top and bottom line guidance, but still fell 8.53% after the pharma company narrowed its fiscal forecasts.
President Trump is expected to sign an executive order in the coming days designed to help make private-market investments more available to U.S. retirement plans, according to people familiar with the matter. The order would instruct the Labor Department and the Securities and Exchange Commission to provide guidance to employers and plan administrators on including investments like private assets in 401(k) plans.
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