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One of my favorite patients told me this anecdote as he recalled the story of the old man who spent a day watching his physician son treating HMO patients in the office.
The doctor had been working at his usual feverish pace all morning, and although he was working hard, bitterly complained to his dad that he was not making as much money as he used to.
Finally, the old man interrupted him and said,
“Son, why don’t you just treat the sick patients?”
The doctor-son looked annoyed at his father, and responded,
“Dad, can’t you see, I don’t have time to treat just the sick ones.”
Posted on November 18, 2022 by The D.E.A. ROGUE WARRIOR
Bridging the Medical School – Financial Services Industry & Business Education Gap
[By Ann Miller RN MHA]
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iMBA Inc., routinely presents to residents and fellows across the country on a variety of medical, financial, accounting and practice management related topics.
Whether on-site or via webinar, our educational sessions are tailored to fill the finance, economic, practice management, business and practice management educational gap and to provide physicians and allied healthcare professionals with practical advice and strategies to help make sound financial and business decisions.
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Our firm works exclusively with physicians and their advisors, and we understand the stresses and financial pitfalls that are unique to the medical profession. We are doctors who are passionate about equipping, training, and advising physicians so they can work toward achieving their professional and financial goals.
We can tailor our presentations to the needs of the program or group. Above all, we aim to empower residents and fellows with the knowledge they’ll need to succeed financially as they begin their career in private practice or in academics.
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In addition to speaking with individual programs, we speak with House Officers Associations, Fellowship & Residency Associations, Spouse Support Groups, etc. We are regularly invited to present at Grand Rounds, weekly practice management gatherings, and after-hours dinners.
Educational sessions can be done either on-site or via webinar.
Assessment
To see a list of presentations and topics, click here:
Have you visited our other topic channels? Established to facilitate idea exchange and link our community together, the value of these topics is dependent upon your input. Please take a minute to visit. And, to prevent that annoying spam, we ask that you register. It is fast, free and secure.
Conclusion
Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.
Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:
Financial planning as a concept has been around for a long time, but not as we know it today. When Loren Dunton set up the Society for Financial Counseling Ethics in 1969, or when the first graduating class of the College of Financial Planning graduated in 1973, financial planning was very different. It was centered around selling limited partnerships, which came to end with the Tax Reform Act of 1986.
However, financial planning re-emerged — all thanks to Richard Averitt III. The certified financial planner gave new meaning to financial planning, this time with a focus on who the client is and what their needs are. This approach was purely methodological in nature.
Soon after, financial planning picked up again. According to the Certified Financial Planner (C.F.P.) Board of Standards in Denver, today, there are more than 94,000 C.F.P.s worldwide, including over 48,000 in the U.S. Additionally, there are also organizations that have been set up for C.F.P.s, such as the Financial Planning Association (FPA), which has approximately 22,000 members.
Financial planning, as we know it now, includes investing, tax planning, retirement planning, and basically other ways to get your finances in order and create mindful budgets to ensure a safe and secure future. Getting a step ahead of your spending and finances is beneficial in the long run and Financial Planning Month in October is the perfect time to do that.
U.S. Financial Planning Month is observed nationwide during October.
With the holiday season coming up (aka hefty gifting expenses) and the new year just around the corner, Financial Planning Month is a great opportunity to get your finances and budgets in order before life gets too busy.
Posted on October 17, 2022 by The D.E.A. ROGUE WARRIOR
“The rich get richer and the poor get poorer”
By Rick Kahler CFP®
One of the pillars of my profession of financial planning and counseling is to help people get richer. For many people, this statement might evoke the idea of “income inequality” as summed up by the phrase “the rich get richer and the poor get poorer.” This is a common money script around a topic that evokes a lot of difficult emotion.
Of course, there are people who have wealth that tends to increase over time. This includes some who inherit vast wealth and others who achieve wealth through business ownership or creative successes. It also includes those who live on less than they make, invest the difference, and make sound investment decisions with the money they have saved.
Goals of financial planning
Regardless of the economic class people start out in, one of the goals of financial planning is to help them expand their lifestyles—in in other words, to get richer. We help them build wealth so they can afford to send their children to college, or can take care of themselves in old age, or can someday not have to work for an income. We help the poor to become middle class, the middle class to become affluent, the affluent to become rich, and the rich to become richer.
When I frame “the rich getting richer” in that manner, people typically respond, “I never thought of it that way.” It contradicts the popular interpretation that the way the rich get richer is by taking from the poor, hence “the poor get poorer.”
Certainly it’s true that some rich people and companies do exploit the poor or try to influence legislation in their own interests. The artificially high prices they charge can be one factor in causing the poor to get poorer. Examples of this might include the secondary educational system as well as industries where excessive regulations limit competition.
However, just as most of the rich don’t get richer by exploiting the poor, most of the poor don’t get poorer by being exploited by the rich. Some get poorer because they lack education or don’t know how to access help. Some get poorer by events out of their control, such as job layoffs, serious illnesses, or cultural, racial, or sexual discrimination. There are many reasons.
Some get poorer through choosing careers with little future, not taking care of their health, or making poor money decisions such as financially enabling children. Others are caught up in destructive behaviors like addictions or compulsive gambling. A few even choose poverty for religious or philosophical reasons.
Complex
As with many things, income inequality is complex.
For example, some people choose to take large risks that could result in their becoming very rich or very poor.
Others choose the security of a steady paycheck. There could ultimately be a huge wealth gap between the entrepreneur who hits it big and the more conservative person who wants to play it safe. Does that mean the gap is inherently bad, or that the risk-taker doesn’t deserve the rewards of success?
Certainly, the risk-taker could have ended up far worse than the person who played it safe. Does that make one right and the other wrong? I don’t believe so.
Assessment
Just as with other money scripts, “the rich get richer and the poor get poorer” is true in some circumstances. At other times, the truth can be that “the rich get poorer and the poor get richer.” It can also be true (think of the 2008 economic crash) that “the rich get poorer and the poor get poorer.” And the final truth—one that financial planners work toward—is to help “the rich get richer and the poor get richer.”
Conclusion
Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, urls and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.
Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements.
Book Marcinko: https://medicalexecutivepost.com/dr-david-marcinkos-bookings/
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Written by doctors and healthcare professionals, this textbook should be mandatory reading for all medical school students—highly recommended for both young and veteran physicians—and an eliminating factor for any financial advisor who has not read it. The book uses jargon like ‘innovative,’ ‘transformational,’ and ‘disruptive’—all rightly so! It is the type of definitive financial lifestyle planning book we often seek, but seldom find. —LeRoy Howard MA CMPTM,Candidate and Financial Advisor, Fayetteville, North Carolina I taught diagnostic radiology for over a decade. The physician-focused niche information, balanced perspectives, and insider industry transparency in this book may help save your financial life. —Dr. William P. Scherer MS, Barry University, Ft. Lauderdale, Florida This book was crafted in response to the frustration felt by doctors who dealt with top financial, brokerage, and accounting firms. These non-fiduciary behemoths often prescribed costly wholesale solutions that were applicable to all, but customized for few, despite ever-changing needs. It is a must-read to learn why brokerage sales pitches or Internet resources will never replace the knowledge and deep advice of a physician-focused financial advisor, medical consultant, or collegial Certified Medical Planner™ financial professional. —Parin Khotari MBA,Whitman School of Management, Syracuse University, New York In today’s healthcare environment, in order for providers to survive, they need to understand their current and future market trends, finances, operations, and impact of federal and state regulations. As a healthcare consulting professional for over 30 years supporting both the private and public sector, I recommend that providers understand and utilize the wealth of knowledge that is being conveyed in these chapters. Without this guidance providers will have a hard time navigating the supporting system which may impact their future revenue stream. I strongly endorse the contents of this book.—Carol S. Miller BSN MBA PMP,President, Miller Consulting Group, ACT IAC Executive Committee Vice-Chair at-Large, HIMSS NCA Board Member This is an excellent book on financial planning for physicians and health professionals. It is all inclusive yet very easy to read with much valuable information. And, I have been expanding my business knowledge with all of Dr. Marcinko’s prior books. I highly recommend this one, too. It is a fine educational tool for all doctors.—Dr. David B. Lumsden MD MS MA,Orthopedic Surgeon, Baltimore, Maryland There is no other comprehensive book like it to help doctors, nurses, and other medical providers accumulate and preserve the wealth that their years of education and hard work have earned them. —Dr. Jason Dyken MD MBA,Dyken Wealth Strategies, Gulf Shores, Alabama I plan to give a copy of this book written ‘by doctors and for doctors’ to all my prospects, physician, and nurse clients. It may be the definitive text on this important topic. —Alexander Naruska CPA,Orlando, Florida
Health professionals are small business owners who need to apply their self-discipline tactics in establishing and operating successful practices. Talented trainees are leaving the medical profession because they fail to balance the cost of attendance against a realistic business and financial plan. Principles like budgeting, saving, and living below one’s means, in order to make future investments for future growth, asset protection, and retirement possible are often lacking. This textbook guides the medical professional in his/her financial planning life journey from start to finish. It ranks a place in all medical school libraries and on each of our bookshelves. —Dr. Thomas M. DeLauro DPM,Professor and Chairman – Division of Medical Sciences, New York College of Podiatric Medicine
Physicians are notoriously excellent at diagnosing and treating medical conditions. However, they are also notoriously deficient in managing the business aspects of their medical practices. Most will earn $20-30 million in their medical lifetime, but few know how to create wealth for themselves and their families. This book will help fill the void in physicians’ financial education. I have two recommendations: 1) every physician, young and old, should read this book; and 2) read it a second time! —Dr. Neil Baum MD,Clinical Associate Professor of Urology, Tulane Medical School, New Orleans, Louisiana
I worked with a Certified Medical Planner™ on several occasions in the past, and will do so again in the future. This book codified the vast body of knowledge that helped in all facets of my financial life and professional medical practice. —Dr. James E. Williams DABPS, Foot and Ankle Surgeon, Conyers, Georgia
This is a constantly changing field for rules, regulations, taxes, insurance, compliance, and investments. This book assists readers, and their financial advisors, in keeping up with what’s going on in the healthcare field that all doctors need to know. —Patricia Raskob CFP® EA ATA, Raskob Kambourian Financial Advisors, Tucson, Arizona I particularly enjoyed reading the specific examples in this book which pointed out the perils of risk … something with which I am too familiar and have learned (the hard way) to avoid like the Black Death. It is a pleasure to come across this kind of wisdom, in print, that other colleagues may learn before it’s too late— many, many years down the road. —Dr. Robert S. Park MD, Robert Park and Associates Insurance, Seattle, Washington
Although this book targets physicians, I was pleased to see that it also addressed the financial planning and employment benefit needs of nurses; physical, respiratory, and occupational therapists; CRNAs, hospitalists, and other members of the health care team….highly readable, practical, and understandable. —Nurse Cecelia T. Perez RN, Hospital Operating Room Manager, Ellicott City, Maryland
Personal financial success in the PP-ACA era will be more difficult to achieve than ever before. It requires the next generation of doctors to rethink frugality, delay gratification, and redefine the very definition of success and work–life balance. And, they will surely need the subject matter medical specificity and new-wave professional guidance offered in this book. This book is a ‘must-read’ for all health care professionals, and their financial advisors, who wish to take an active role in creating a new subset of informed and pioneering professionals known as Certified Medical Planners™. —Dr. Mark D. Dollard FACFAS, Private Practice, Tyson Corner, Virginia As healthcare professionals, it is our Hippocratic duty to avoid preventable harm by paying attention. On the other hand, some of us are guilty of being reckless with our own financial health—delaying serious consideration of investments, taxation, retirement income, estate planning, and inheritances until the worry keeps one awake at night. So, if you have avoided planning for the future for far too long, perhaps it is time to take that first step toward preparedness. This in-depth textbook is an excellent starting point—not only because of its readability, but because of his team’s expertise and thoroughness in addressing the intricacies of modern investments—and from the point of view of not only gifted financial experts, but as healthcare providers, as well … a rare combination. —Dr. Darrell K. Pruitt DDS, Private Practice Dentist, Fort Worth, Texas This text should be on the bookshelf of all contemporary physicians. The book is physician-focused with unique topics applicable to all medical professionals. But, it also offers helpful insights into the new tax and estate laws, fiduciary accountability for advisors and insurance agents, with investing, asset protection and risk management, and retirement planning strategies with updates for the brave new world of global payments of the Patient Protection and Affordable Care Act. Starting out by encouraging readers to examine their personal ‘money blueprint’ beliefs and habits, the book is divided into four sections offering holistic life cycle financial information and economic education directed to new, mid-career, and mature physicians.
This structure permits one to dip into the book based on personal need to find relief, rather than to overwhelm. Given the complexity of modern domestic healthcare, and the daunting challenges faced by physicians who try to stay abreast of clinical medicine and the ever-evolving laws of personal finance, this textbook could not have come at a better time. —Dr. Philippa Kennealy MD MPH, The Entrepreneurial MD, Los Angeles, California Physicians have economic concerns unmatched by any other profession, arriving ten years late to the start of their earning years. This textbook goes to the core of how to level the playing field quickly, and efficaciously, by a new breed of dedicated Certified Medical Planners™. With physician-focused financial advice, each chapter is a building block to your financial fortress. —Thomas McKeon, MBA, Pharmaceutical Representative, Philadelphia, Pennsylvania An excellent resource … this textbook is written in a manner that provides physician practice owners with a comprehensive guide to financial planning and related topics for their professional practice in a way that is easily comprehended. The style in which it breaks down the intricacies of the current physician practice landscape makes it a ‘must-read’ for those physicians (and their advisors) practicing in the volatile era of healthcare reform. —Robert James Cimasi, MHA ASA FRICS MCBA CVA CM&AA CMP™, CEO-Health Capital Consultants, LLC, St. Louis, Missouri Rarely can one find a full compendium of information within a single source or text, but this book communicates the new financial realities we are forced to confront; it is full of opportunities for minimizing tax liability and maximizing income potential. We’re recommending it to all our medical practice management clients across the entire healthcare spectrum. —Alan Guinn, The Guinn Consultancy Group, Inc., Cookeville, Tennessee Dr. David Edward Marcinko MBA CMP™ and his team take a seemingly endless stream of disparate concepts and integrate them into a simple, straightforward, and understandable path to success. And, he codifies them all into a step-by-step algorithm to more efficient investing, risk management, taxation, and enhanced retirement planning for doctors and nurses. His text is a vital read—and must execute—book for all healthcare professionals and physician-focused financial advisors. —Dr. O. Kent Mercado, JD, Private Practitioner and Attorney, Naperville, Illinois
Kudos. The editors and contributing authors have compiled the most comprehensive reference book for the medical community that has ever been attempted. As you review the chapters of interest and hone in on the most important concerns you may have, realize that the best minds have been harvested for you to plan well… Live well. —Martha J. Schilling; AAMS® CRPC® ETSC CSA, Shilling Group Advisors, LLC, Philadelphia, Pennsylvania I recommend this book to any physician or medical professional that desires an honest no-sales approach to understanding the financial planning and investing world. It is worthwhile to any financial advisor interested in this space, as well. —David K. Luke, MIM MS-PFP CMP™, Net Worth Advisory Group, Sandy, Utah Although not a substitute for a formal business education, this book will help physicians navigate effectively through the hurdles of day-to-day financial decisions with the help of an accountant, financial and legal advisor. I highly recommend it and commend Dr. Marcinko and the Institute of Medical Business Advisors, Inc. on a job well done. —Ken Yeung MBA CMP™, Tseung Kwan O Hospital, Hong Kong I’ve seen many ghost-written handbooks, paperbacks, and vanity-published manuals on this topic throughout my career in mental healthcare. Most were poorly written, opinionated, and cheaply produced self-aggrandizing marketing drivel for those agents selling commission-based financial products and expensive advisory services. So, I was pleasantly surprised with this comprehensive peer-reviewed academic textbook, complete with citations, case examples, and real-life integrated strategies by and for medical professionals. Although a bit late for my career, I recommend it highly to all my younger colleagues … It’s credibility and specificity stand alone. —Dr. Clarice Montgomery PhD MA,Retired Clinical Psychologist In an industry known for one-size-fits-all templates and massively customized books, products, advice, and services, the extreme healthcare specificity of this text is both refreshing and comprehensive. —Dr. James Joseph Bartley, Columbus, Georgia
My brother was my office administrator and accountant. We both feel this is the most comprehensive textbook available on financial planning for healthcare providers. —Dr. Anthony Robert Naruska DC,Winter Park, Florida
Posted on August 30, 2022 by The D.E.A. ROGUE WARRIOR
By Sen G. TODD; Esq., CPA, CFP, MTax
To make a thorough or dramatic change
Begin by taking the first step
Will you make things change or will you let change happen to you
Define your outcome
If it was easy everyone would be a multi-millionaire – it is if you work with the right professional
Have you honestly considered what YOU get from planning? Your safe and secure retirement is YOUR responsibility. What steps should you take – If your climbing Mt. Everest, you don’t do it alone – you follow your Sherpa to guide you there. Why, they have already done this many times and are there to help you. This is similar to working with Estate Management Counselors – we are your guide – we have already assisted others in making the decisions you face.
Posted on August 19, 2022 by The D.E.A. ROGUE WARRIOR
All about the Medical Executive-PostBusiness Model
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One of the questions we receive most often from readers of the Medical Executive-Post is how can we “afford” to give away so much content for free. Or stated another way, “how do we get paid for all of this?”
The simple answer is that we know many (or even most) of you will simply take the ideas that we share and implement them yourself. Do-It-YourSelfers can always simply purchase our texts, books and peer reviewed handbooks redacted in more than a thousand, medical, law, business and graduate schools, as well as the Library of Congress,Institute of Health and Library of Congress.
On the other hand, some of you will realize you need some additional help.
For example:
Maybe as a financial advisor you’re “stuck” in your financial planning business and recognize that some outside assistance is necessary to help you get to the next level of niche specificity thru our Certified Medical Planner™ chartered certification program designation. Helping physicians of all specialty types in a fiduciary focused manner is the proverbial Win-Win for all concerned.
OR, perhaps you are seeking a glossary of terms and definitions in heath economics, finance, accounting, insurance, managed care, health information technology and security; found in our Health Dictionary Series Wiki Project? Free and print versions are available.
OR, as a doctor maybe your medical practice is growing so much you just hit a wall where you don’t have time to do it all for your patients. After all, with only “so much” time available every day and week, it’s vital to delegate or outsource anything that isn’t really core to your practice and management skill set.
OR, maybe you are even starting, buying or selling your medical practice and need our financial and valuation services. Part (1) – Part (2) – Part (3) Financial, estate, investing and retirement planning services are also available.
OR, you may just need a second informed opinion about a topic not listed; there are a myriad of issues to consider in the competitive ecosystem today.
So, in the meantime, I hope that the ME-P content continues to be helpful food for thought, and perhaps we’ll have an opportunity to cross paths soon at a future conferences or podcasts. Feel free to invite us to speak at your own seminar/podcast online V-log, as well.
Posted on May 22, 2022 by The D.E.A. ROGUE WARRIOR
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By Dr. David Edward Marcinko MBA
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Big Short’ investor Michael Burry MD warns stocks will crash and rallies won’t last.
“The Big Short” investor Michael Burry expects a far steeper decline in the stock market.
The Scion Asset Management chief’s view is based on how past crashes have played out.
Burry warned brief rallies were likely, and joked about his penchant for premature predictions.
Michael Burry, the hedge fund manager of “The Big Short” fame, rang the alarm on the “greatest speculative bubble of all time in all things” last summer. He warned the retail investors piling into meme stocks and cryptocurrencies that they were careening towards the “mother of all crashes.”
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Mike also wrote a popular chapter in our financial planning textbook for physician investors. With our appreciation and gratitude.
Posted on April 28, 2022 by The D.E.A. ROGUE WARRIOR
A PODCAST
By Vitaliy Katsenelson CFA
One of the best wedding gifts I received was lunch with my friend, Mark. Here, I reflect on the financial advice Mark gave me then, and how it could help young people like my son Jonah settle into adulthood with a lot more forward-thinking.
Posted on March 14, 2022 by The D.E.A. ROGUE WARRIOR
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Investing and Chess
By Vitaliy Katsenelson, CFA
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Conclusion: Investing and Chess
I read somewhere that chess is a game of small advantages. When the game starts, the players are equal – both hold the same number of pieces in the same positions. But then every move either adds to your position (competitive advantage) or subtracts from it. These little decisions (resulting in a better pawn structure, a more secure king, a centrally positioned knight, and so on) that you make with every move accumulate into victory.
Investing is not that much different, especially in today’s world where access to information has flattened. A mutual fund that manages $100 billion may spend $100 million on research, but that $100 million doesn’t buy any more than what a patient value investor can glean by reading financial statements.
I am not talking about Warren Buffett either, who doesn’t even have a PC in his office. Ted Weschler and Todd Combs (Warren Buffett’s right-hand men) achieved phenomenal investment success without a fancy research department by simply reading carefully and following our Six Commandments.
The key to succeeding in this irrational world is to actively ingrain each one of these principles into your investment operating system, improving your process just a little on a daily basis, and then success will follow.
Finally, this would not be a worthy chapter if I did not contradict myself, just a little. Investing is also unlike chess. Investing affords us a luxury that few people appreciate: You can choose your own opponent. In chess tournaments, you don’t get to choose your opponent. Tournament organizers match you to someone with an equal rating; then as you win, you are progressively matched against better opponents.
In investing, you are the “tournament organizer.” You get to walk into the room and, instead of choosing the geekiest opponent – the dude with thick glasses who hasn’t been on a date in years and has only thought and dreamt about chess – you can go for the muscular guy who spends five hours a day in the gym, and only joined the tournament because he lost a bet.
Money doesn’t know how you made it. A hundred dollars made by solving easy problems (buying stocks where both your IQ and EQ were at their highest) buys as much as a hundred dollars that caused you to lose your hair. In investing, you don’t have to solve the problems that everyone else is solving. There are thousands of stocks out there, and your portfolio needs only a few dozen.
Posted on March 11, 2022 by The D.E.A. ROGUE WARRIOR
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EDITOR’S NOTE: Although it has been some time since speaking live with busy colleague Vitaliy Katsenelson CFA, I review his internet material frequently and appreciate this ME-P series contribution. I encourage all ME-P readers to do the same and consider his value investing insights carefully.
By Vitaliy Katsenelson, CFA
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5. Risk is a permanent loss of capital (not volatility)
Conventional wisdom views volatility as risk. Not value investors. We befriend volatility, embrace it, and try to take advantage of it. For someone who has not researched a company, it is not readily apparent whether a decline in shares is temporary or permanent. After all, if you don’t know what the company is worth, the quoted price becomes the quotient of intrinsic value. If you do know what the company is worth, then the change in intrinsic value is all that is going to matter. The price quoted on the exchange will be your friend, allowing you to take advantage of the difference between intrinsic value and quoted stock price. If the quoted stock price is significantly cheaper than your estimated intrinsic value, you buy it (or buy more of it if you already own it). If the opposite is true, you sell it.
What is a company worth?
Determining the intrinsic value requires a combination of art and science, in that order – it is not quoted on the exchanges. We go about this the same way a businessman would figure how much he’d want to pay for a gas station or a McDonald’s franchise. Analysis of each company will be different, but at the core we estimate the cash flows the business will produce for shareholders in the long run (at least ten years) and what the business will be worth then (based on our estimate of its earnings power at the time). The combination of the two provides us an approximation of what the business is worth now. To further embed “the right” type of risk analysis into our investment operating system, we build financial models. Models help us to understand businesses better and provide insights as to which metrics matter and which don’t. They allow us to stress test the business: We don’t just look at the upside but spend a lot of times looking at the downside – we try to “kill” the business. We look at known risks and try to imagine unknown ones; we try to quantify their impact on cash flows. This “killing” helps to us understand how much of a discount (margin of safety) we should demand to what the business is worth. By applying this discount to fair value, we arrive at a buy price. For every stock we buy we probably look at a few dozen (at least).
For instance, if we are looking at a company that is selling products or services to consumers, we’ll be focusing on customer-acquisition costs. We try to drill down to the essential operating metrics of each company. If it’s a convenience store retailer, we’ll look into gallons of gas sold and profit per gallon. If it’s an oil driller, we’ll look at utilization rates, rigs in service, average revenue per rig per day. If it’s a pharmaceuticals company, we’ll have revenue lines for each major drug it sells and model the company for the eventuality that patents will run out. (Revenues usually decline 80-90% when a patent expires).
These models help us to understand the economics of the business. We usually build two type of models. We start with what we call the “tablecloth” model. This is a very detailed, in-depth model that zeros in on different aspects of the business. But the risk we run with a tablecloth model is that we get lost in the trees and forget about the forest.
This brings us to our “napkin” model. It’s a much simpler and smaller model that focuses only on the essentials of the business. It is easier to build the tablecloth model than the “napkin.” If we can build a napkin model, that means we understand the drivers of the business – we understand what matters. Models are important because they help us remain rational. It is only the matter of time before a stock we own will “blow up” (or, in layman’s terms, decline).
In this type of analysis, what happens this month, this quarter, or even this year is only important in the context of the long run – unless the company’s good or bad earnings report in any quarter changes our assumptions on the company’s long-term cash flows. If you methodically focus on what the company is worth and if your Total IQ is maximized, then price fluctuations are just noise. Volatility becomes your friend because you can rationally take advantage of it. It’s an under-appreciated gift from Mr. Market.
Side Note:As an advisor, I feel it is one of my great responsibilities to be an honest and clear communicator. There is an asymmetry of information between us and our clients. We have invested weeks and months of research into the analysis of each stock; therefore, we have a good idea what each company is worth. Our clients have not done this research, and they should not have to – that is what they hired us to do.This is why we pour our heart and soul into our quarterly letters – we want to close this informational gap and so we try as hard as we can to explain what we think the companies in our portfolio are worth. Our letters are often 15-20 pages long.
The physician, nurse, or other medical professional should easily recognize that there are a vast array of opportunities, obstacles, and pitfalls when it comes to managing one’s finances. Still, with some modicum of effort, the basic aspects of insurance, investments, taxes, accounting, portfolio management, retirement and estate planning, debt reduction, asset protection and practice management can be largely self-taught. Yet, it is realized that nuances and subtleties can make a well-intentioned financial plan fall short. The devil truly is in the details. Moreover, none of these areas can be addressed in isolation. It is common for a solution in one area to cause a new set of problems in another.
Accordingly, most health care practitioners would be well served to hire [independent, hourly compensated and prn] financial help. Unlike some medical problems, financial issues may not cause any “pain” or other obvious symptoms. Medical professionals tend to have far more complex financial situations than most lay people. Despite the complexities of the new world of health reform, far too many either do nothing; or give up all control totally, to an external advisor. This either/or mistake can be costly in many ways, and should be avoided.
In reality, and at various time in their careers, the medical professional needs a team comprised of at least a financial analyst, lawyer, management consultant, risk manager [actuary, mathematician or insurance counselor] and accountant. At various points in time, each member of the team, or significant others, will properly assume a role of more or less importance, but the doctor must usually remain the “quarterback” or leader; in the absence of a truly informed other, or Certified Medical Planner™.
This is necessary because only the doctor has the personal self-mandate with skin in the game, to take a big picture view. And, rightly or wrongly, investments dominate the information available regarding personal finance and the attention of most physicians. One is much more likely to need or want to discuss the financial markets with their financial advisor than private letter rulings by the IRS, or with their estate planning attorney or tax accountant. While hiring for expertise is a good idea, there is sinister way advisors goad doctors into using all their retail services; all of the time. That artifice is – the value of time.
True integrated physician focused and financial planning is at its core a service business, not a product or sales endeavor. And, increasingly money is more likely to be at the top of the list for providers as the healthcare environment is contracting.
So, eschewing the quarterback model of advice, and choosing to self-educate thru this book and elsewhere, may be one of the best efforts a smart physician can make.
Posted on January 1, 2022 by The D.E.A. ROGUE WARRIOR
STRATEGIES AND MITIGATION
Finding investments to weather the storm. Strategies and ways to mitigate inflation risk, including investing in businesses with pricing power, capital intensity, and investing abroad.
For me, the Christmas season doesn’t seem complete without Charles Dickens’s A Christmas Carol. I’ve long been captivated by the transformation of the cold-hearted and calculating Mr. Scrooge, the seemingly inherent goodness of Bob Cratchit, and the haunting visits of the Ghosts of Christmas.
As a student of Dickens’s fable, I’ve been amazed at the wisdom and universal truths contained in that seemingly simple story. I have discovered that Mr. Scrooge isn’t merely the villain he’s often made out to be, nor is Cratchit the straightforward hero.
It’s not uncommon for the average American to have a stressful, even adversarial relationship with money, especially since half of Americans have no savings or investments and live month to month. Stress over money is especially exacerbated during the Christmas season each year. Many Americans borrow heavily on credit cards for gifts and end up stressing for months afterward trying to pay the bill.
Financial Transformations
How ironic that what Dickens unveils in the short A Christmas Carol is a powerful process for financial transformation (or any desired transformation). Dickens gives us a four-step process that anyone can employ to change destructive financial behaviors.
A few years ago I co-authored a book, The Financial Wisdom of Ebenezer Scrooge that highlights the subtle wisdom of Dickens’s story as it pertains to transforming one’s behavior around finances. The story became the heart of a successful model employed by financial planners and therapists to help transform a person’s relationship with money.
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The Story
The first big event in the story is the visit to Scrooge by the ghost of his old business partner, Jacob Marley. Scrooge takes to heart Marley’s warning to change his ways, thereby becoming willing to consider changing. Psychologists would call this an intervention.
The first and most important step toward transformation needs to be a personal realization that something is amiss with your behavior and it’s you who wants to contemplate changing, as opposed to someone else insisting you ought to or should change. Meaningful and sustainable change comes only from within, not without. Blaming personal financial problems on family, employers, the wealthy, or the government just keeps a person stuck in delusion.
What is the key to developing an internal desire to change? Addiction recovery programs call this “hitting bottom.” I describe it as reaching a state of openness to accept the facts and circumstances as they are, not as you wish they were. It is becoming convinced that change is crucial and that you are passionately ready to take action to change.
On that Christmas Eve, inexplicably, Scrooge was finally ready consider the message his old friend Marley had tried to deliver to him on many Christmas Eves previously.
In the book Changing for Good, psychologist James O. Prochaska and his co-authors describe this as moving from the stage of pre-contemplation to contemplation. Scrooge was willing to consider that his firmly entrenched world view might be skewed and to consider seeing the facts for what they were, not as he assumed they were.
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We may not be misers like Scrooge, but when it comes to our beliefs around money, we have as many delusions as he did. A few of the more popular of these beliefs, or money scripts, are: “More money is the answer,” “The stock market is a gamble,” “I work hard so I deserve to spend money,” and, “If I work hard I will make money.”
Assessment
Becoming willing to consider change is half the battle to free ourselves from destructive financial behavior based on these delusions. But it is only half. Next time we will look at three additional steps to transformation.
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Conclusion
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Posted on November 10, 2021 by The D.E.A. ROGUE WARRIOR
For Doctors and Advisors
BOOK REVIEWS WITH FOREWORD
Reviews
Written by doctors and healthcare professionals, this textbook should be mandatory reading for all medical school students―highly recommended for both young and veteran physicians―and an eliminating factor for any financial advisor who has not read it. The book uses jargon like ‘innovative,’ ‘transformational,’ and ‘disruptive’―all rightly so! It is the type of definitive financial lifestyle planning book we often seek, but seldom find. ―LeRoy Howard MA CMPTM,Candidate and Financial Advisor, Fayetteville, North Carolina I taught diagnostic radiology for over a decade. The physician-focused niche information, balanced perspectives, and insider industry transparency in this book may help save your financial life. ―Dr. William P. Scherer MS, Barry University, Ft. Lauderdale, Florida This book was crafted in response to the frustration felt by doctors who dealt with top financial, brokerage, and accounting firms. These non-fiduciary behemoths often prescribed costly wholesale solutions that were applicable to all, but customized for few, despite ever-changing needs. It is a must-read to learn why brokerage sales pitches or Internet resources will never replace the knowledge and deep advice of a physician-focused financial advisor, medical consultant, or collegial Certified Medical Planner™ financial professional. ―Parin Khotari MBA,Whitman School of Management, Syracuse University, New York In today’s healthcare environment, in order for providers to survive, they need to understand their current and future market trends, finances, operations, and impact of federal and state regulations. As a healthcare consulting professional for over 30 years supporting both the private and public sector, I recommend that providers understand and utilize the wealth of knowledge that is being conveyed in these chapters. Without this guidance providers will have a hard time navigating the supporting system which may impact their future revenue stream. I strongly endorse the contents of this book.
―Carol S. Miller BSN MBA PMP,President, Miller Consulting Group, ACT IAC Executive Committee Vice-Chair at-Large, HIMSS NCA Board Member This is an excellent book on financial planning for physicians and health professionals. It is all inclusive yet very easy to read with much valuable information. And, I have been expanding my business knowledge with all of Dr. Marcinko’s prior books. I highly recommend this one, too. It is a fine educational tool for all doctors.
―Dr. David B. Lumsden MD MS MA,Orthopedic Surgeon, Baltimore, Maryland There is no other comprehensive book like it to help doctors, nurses, and other medical providers accumulate and preserve the wealth that their years of education and hard work have earned them. ―Dr. Jason Dyken MD MBA,Dyken Wealth Strategies, Gulf Shores, Alabama I plan to give a copy of this book written ‘by doctors and for doctors’ to all my prospects, physician, and nurse clients. It may be the definitive text on this important topic. ―Alexander Naruska CPA,Orlando, Florida
Health professionals are small business owners who need to apply their self-discipline tactics in establishing and operating successful practices. Talented trainees are leaving the medical profession because they fail to balance the cost of attendance against a realistic business and financial plan. Principles like budgeting, saving, and living below one’s means, in order to make future investments for future growth, asset protection, and retirement possible are often lacking. This textbook guides the medical professional in his/her financial planning life journey from start to finish. It ranks a place in all medical school libraries and on each of our bookshelves. ―Dr. Thomas M. DeLauro DPM,Professor and Chairman – Division of Medical Sciences, New York College of Podiatric Medicine
Physicians are notoriously excellent at diagnosing and treating medical conditions. However, they are also notoriously deficient in managing the business aspects of their medical practices. Most will earn $20-30 million in their medical lifetime, but few know how to create wealth for themselves and their families. This book will help fill the void in physicians’ financial education. I have two recommendations: 1) every physician, young and old, should read this book; and 2) read it a second time! ―Dr. Neil Baum MD,Clinical Associate Professor of Urology, Tulane Medical School, New Orleans, Louisiana
I worked with a Certified Medical Planner™ on several occasions in the past, and will do so again in the future. This book codified the vast body of knowledge that helped in all facets of my financial life and professional medical practice. ―Dr. James E. Williams DABPS, Foot and Ankle Surgeon, Conyers, Georgia
Posted on October 20, 2021 by The D.E.A. ROGUE WARRIOR
OVERHEARD IN THE DOCTOR’S LOUNGE
By Jaan E. Sidorov MD
*** DEFINITION: Prospect theory is a theory of behavioral economics and behavioral finance that was developed by Daniel Kahneman and Amos Tversky in 1979. The theory was cited in the decision to award Kahneman the 2002 Nobel Memorial Prize in Economics.
Amanda, an RN client, was just informed by her financial advisor that she needed to re-launch her 403-b retirement plan. Since she was leery about investing, she quietly wondered why she couldn’t DIY. Little does her FA know that she doesn’t intend to follow his advice, anyway! So, what went wrong?
The answer may be that her advisor didn’t deploy a behavioral economics framework to support her decision-making. One such framework is the “prospect theory” model that boils client decision-making into a “three step heuristic.”
Prospect theory makes the unspoken biases that we all have more explicit. By identifying all the background assumptions and preferences that clients [patients] bring to the office, decision-making can be crafted so that everyone [family, doctor and patient] or [FA, client and spouse] is on the same page.
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*** Briefly, the three steps are:
Simplify choices by focusing on the key differences between investment [treatment] options such as stock, bonds, cash, and index funds.
Understanding that clients [patients] prefer greater certainty when it comes to pursuing financial [health] gains and are willing to accept uncertainty when trying to avoid a loss [illness].
Cognitive processes lead clients and patients to overestimate the value of their choices thanks to survivor bias, cognitive dissonance, appeals to authority and hindsight biases.
ASSESSMENT
Much like in healthcare today, the current mass-customized approaches to the financial services industry fall short of recognizing more personalized advisory approaches like prospect theory and assisted client-centered investment decision-making.
The first World Financial Planning Day was held on October 4, 2017. The Financial Planning Standards Board (FPSB) hosts the day. Every year, the FPSB partners with the International Organization of Securities Commissions (IOSCO).
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Today, it is always held during the first Wednesday of October during IOSCO’s World Investor Week.
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QUERY: But, what about the entire ecosystem of personal and professional financial planning, investing, risk, business and medical practice management for physicians and healthcare professionals? A vital, unique and complicated niche!
ANSWER: According to the Institute of Medical Business Advisors, Inc., WFP Day is every day for CERTIFIED MEDICAL PLANNER® professional certification holders.
So – If you are in this WFPD industry – Become a fiduciary focused board CERTIFIED MEDICAL PLANNER with extreme healthcare industry ecosystem specificity.
The saver’s credit is a tax credit that’s intended to promote retirement savings among low- and moderate-income workers. It can reduce an eligible taxpayer’s federal income taxes when they save in a qualified retirement plan. It may be especially useful to medical students, nurses, interns, residents and fellows.
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In 2021, the maximum credit is worth $1,000 for individuals and $2,000 for married couples filing jointly, although it phases out for higher earners. To qualify for the credit, individuals must have an adjusted gross income of $32,500 or less. The income threshold for married couples is $65,000.
Because the credit is non-refundable, eligible taxpayers are able to use it to effectively reduce their tax bill to zero – but it cannot provide them with a tax refund.
Use National Financial Awareness Day to your Advantage
Aug. 14th is National Financial Awareness Day. Financial awareness is about more than just understanding the basics on how money works. It’s also about evaluating your own budget, savings and investments to make sure your finances are working for your needs.
So if it’s been a while since your last financial “check up,” National Financial Awareness Day can be the extra push you’ve needed to finally take a look under the hood.
Posted on July 10, 2021 by The D.E.A. ROGUE WARRIOR
Dr. David Edward Marcinko is Speaking Up
Dr. David Edward Marcinko MBA CMP® enjoys personal coaching and public speaking and gives as many talks each year as possible, at a variety of medical society and financial services conferences around the country and world.
These have included lectures and visiting professorships at major academic centers, keynote lectures for hospitals, economic seminars and health systems, keynote lectures at city and statewide financial coalitions, and annual keynote lectures for a variety of internal yearly meetings.
His talks tend to be engaging, iconoclastic, and humorous. His most popular presentations include a diverse variety of topics and typically include those in all iMBA, Inc’s textbooks, handbooks, white-papers and most topics covered on this blog.
Posted on July 9, 2021 by The D.E.A. ROGUE WARRIOR
Earnings before interest, taxes, depreciation, and amortization
A company’s earnings before interest, taxes, depreciation, and amortization is an accounting measure calculated using a company’s earnings, before interest expenses, taxes, depreciation, and amortization are subtracted, as a proxy for a company’s current operating profitability. Though often shown on an income statement, it is not considered part of the Generally Accepted Accounting Principles by the SEC.
Posted on June 23, 2021 by The D.E.A. ROGUE WARRIOR
OVER HEARD IN THE DOCTOR’S LOUNGE
The financial planner is a like juggler, trying to keep a variety of balls simultaneously in the air. Each aspect of practice becomes critical, just as action is needed.
Some of the activities of operating a successful financial planning practice generally attract more attention than others, such as marketing and advertising, closing engagements, and office administration. Because product review, selection and implementation are often related to advisor compensation, they attract a great deal of the financial juggler’s concentration.
But, the heart of financial planning, niche advice, often receives little attention. Not because it is unimportant, it just doesn’t seem immediately and predictably urgent. Here, that ball does not seem to be dropping so rapidly.
However, retaining clients and receiving referrals from other professionals is very dependent on the quality of the advice delivered. And, the first line of protection from practitioner liability exposure is to not deliver incorrect or incomplete advice.
But, where does the financial advisor turn for ideas and organized research in the healthcare sector?
Posted on June 17, 2021 by The D.E.A. ROGUE WARRIOR
Dr. David E. Marcinko is at your Service
Dr. David Edward Marcinko MBA CMP® enjoys personal coaching and public speaking and gives as many talks each year as possible, at a variety of medical society and financial services conferences around the country and world.
These have included lectures and visiting professorships at major academic centers, keynote lectures for hospitals, economic seminars and health systems, keynote lectures at city and statewide financial coalitions, and annual keynote lectures for a variety of internal yearly meetings.
His talks tend to be engaging, iconoclastic, and humorous. His most popular presentations include a diverse variety of topics and typically include those in all iMBA, Inc’s textbooks, handbooks, white-papers and most topics covered on this blog.
I am not a neurologist, psychologist, or psychiatrist. But, it is well known that emotional and behavioral change involves the human nervous system. And, there are two parts of the nervous system that are especially significant for holistic financial advisor; the first is the limbic system and the second is the autonomic nervous system.
According to Dr. C. George Boerre of Shippensburg University of Pennsylvania, this is known as the emotional nervous system.
1. The Limbic System
The limbic system is a set of structures that lies on both sides of the thalamus, just under the cerebrum. It includes the hypothalamus, the hippocampus, the amygdala, and nearby areas. It is primarily responsible for emotions, memories and recollection.
Hypothalamus
The small hypothalamus is located just below the thalamus on both sides of the third ventricle (areas within the cerebrum filled with cerebrospinal fluid that connect to spinal fluid). It sits inside both tracts of the optic nerve, and just above the pituitary gland.
The hypothalamus is mainly concerned with homeostasis or the process of returning to some “set point.” It works like a thermostat: When the room gets too cold, the thermostat conveys that information to the furnace and turns it on. As the room warms up and the temperature rises, it sends turns off the furnace. The hypothalamus is responsible for regulating hunger, thirst, response to pain, levels of pleasure, sexual satisfaction, anger and aggressive behavior, and more. It also regulates the functioning of the autonomic nervous system, which means it regulates functions like pulse, blood pressure, breathing, and arousal in response to emotional circumstances. In a recent discovery, the protein leptin is released by fat cells with over-eating. The hypothalamus senses leptin levels in the bloodstream and responds by decreasing appetite. So, it seems that some people might have a gene mutation which produces leptin, and can’t tell the hypothalamus that it is satiated. The hypothalamus sends instructions to the rest of the body in two ways. The first is to the autonomic nervous system. This allows the hypothalamus to have ultimate control of things like blood pressure, heart rate, breathing, digestion, sweating, and all the sympathetic and parasympathetic functions.
The second way the hypothalamus controls things is via the pituitary gland. It is neurally and chemically connected to the pituitary, which in turn pumps hormones called releasing factors into the bloodstream. The pituitary is the so-called “master gland” as these hormones are vitally important in regulating growth and metabolism.
Hippocampus
The hippocampus consists of two “horns” that curve back from the amygdala. It is important in converting things “in your mind” at the moment (short-term memory) into things that are remembered for the long run (long-term memory). If the hippocampus is damaged, a patient cannot build new memories and lives in a strange world where everything they experience just fades away; even while older memories from the time before the damage are untouched! Most patients who suffer from this kind of brain damage are eventually institutionalized.
Amygdala
The amygdalas are two almond-shaped masses of neurons on either side of the thalamus at the lower end of the hippocampus. When it is stimulated electrically, animals respond with aggression. And, if the amygdala is removed, animals get very tame and no longer respond to anger that would have caused rage before. The animals also become indifferent to stimuli that would have otherwise have caused fear and sexual responses.
Related Anatomic Areas
Besides the hypothalamus, hippocampus, and amygdala, there are other areas in the structures near to the limbic system that are intimately connected to it:
The cingulate gyrus is the part of the cerebrum that lies closest to the limbic system, just above the corpus collosum. It provides a pathway from the thalamus to the hippocampus, is responsible for focusing attention on emotionally significant events, and for associating memories to smells and to pain.
The ventral tegmental area of the brain stem (just below the thalamus) consists of dopamine pathways responsible for pleasure. People with damage here tend to have difficulty getting pleasure in life, and often turn to alcohol, drugs, sweets, and gambling.
The basal ganglia (including the caudate nucleus, the putamen, the globus pallidus, and the substantia nigra) lie over to the sides of the limbic system, and are connected with the cortex above them. They are responsible for repetitive behaviors, reward experiences, and focusing attention.
The prefrontal cortex, which is the part of the frontal lobe which lies in front of the motor area, is also closely linked to the limbic system. Besides apparently being involved in thinking about the future, making plans, and taking action, it also appears to be involved in the same dopamine pathways as the ventral tegmental area, and plays a part in pleasure and addiction.
2. The Autonomic Nervous System
The second part of the nervous system to have a particularly powerful part to play in our emotional life is the autonomic nervous system.
The autonomic nervous system is composed of two parts, which function primarily in opposition to each other. The first is the sympathetic nervous system, which starts in the spinal cord and travels to a variety of areas of the body. Its function appears to be preparing the body for the kinds of vigorous activities associated with “fight or flight,” that is, with running from danger or with preparing for violence. Activation of the sympathetic nervous system has the following effects:
dilates the pupils and opens the eyelids,
stimulates the sweat glands and dilates the blood vessels in large muscles,
constricts the blood vessels in the rest of the body,
increases the heart rate and opens up the bronchial tubes of the lungs, and
inhibits the secretions in the digestive system.
One of its most important effects is causing the adrenal glands (which sit on top of the kidneys) to release epinephrine (adrenalin) into the blood stream. Epinephrine is a powerful hormone that causes various parts of the body to respond in much the same way as the sympathetic nervous system. Being in the blood stream, it takes a bit longer to stop its effects, and may take some time to calm down again
The sympathetic nervous system also takes in information, mostly concerning pain from internal organs. Because the nerves that carry information about organ pain often travel along the same paths that carry information about pain from more surface areas of the body, the information sometimes get confused. This is called referred pain, and the best known example is the pain in the left shoulder and arm when having a heart attack.
The other part of the autonomic nervous system is called the parasympathetic nervoussystem. It has its roots in the brainstem and in the spinal cord of the lower back. Its function is to bring the body back from the emergency status that the sympathetic nervous system puts it into.
Some of the details of parasympathetic arousal include some of the following:.
pupil constriction and activation of the salivary glands,
stimulating the secretions of the stomach and activity of the intestines,
stimulating secretions in the lungs and constricting the bronchial tubes, and;
decreases heart rate.
The parasympathetic nervous system also has some sensory abilities: It receives information about blood pressure, levels of carbon dioxide in the blood, etc.
There is actually another part of the autonomic nervous system that is not mentioned too often: the enteric nervous system. It is a complex of nerves that regulate the activity of the stomach.
For example, if you get sick to your stomach with a new financial advisory client – or feel nervous butterflies with your first patient encounter as a doctor- you can blame the enteric nervous system.
EDITOR’S NOTE: It has been a few years since I spoke with my colleague Rick. But, I read his newsletters and blog regularly and suggest all ME-P readers do the same.
Posted on November 13, 2020 by The D.E.A. ROGUE WARRIOR
About iMBA, Inc
By Staff Reporters
iMBA Inc., is a healthcare consulting and financial planning analytics firm specializing in medical practice management and physician alignment.
Our mission is to empower physician colleagues and healthcare organizations to drive clarity, improve performance, and create accountability.
Our team combines a cross-section of skill-sets including public and population health, financial operations, business intelligence, and data science.
And, our diverse background of experience includes advanced academic training, economic and financial research, global marketing, management consulting, and entrepreneurial spirit.
SCHEDULE A MEDICAL PRACTICE & FINANCIAL PLANNING CONSULTATION TODAY!
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“The financial planner is a like juggler, trying to keep a variety of balls simultaneously in the air. Each aspect of practice becomes critical, just as action is needed.
Some of the activities of operating a successful financial planning practice generally attract more attention than others, such as marketing and advertising, closing engagements, and office administration. Because product review, selection and implementation are often related to advisor compensation, they attract a great deal of the financial juggler’s concentration.
But, the heart of financial planning, niche advice, often receives little attention. Not because it is unimportant, it just doesn’t seem immediately and predictably urgent. Here, that ball does not seem to be dropping so rapidly.
However, retaining clients and receiving referrals from other professionals is very dependent on the quality of the advice delivered. And, the first line of protection from practitioner liability exposure is to not deliver incorrect or incomplete advice.
But, where does the financial advisor turn for ideas and organized research in the healthcare sector?”
Edwin P. Morrow; CFPTM, CLU, ChFC, RFC
[Middletown, Ohio, USA]
Your thoughts are appreciated.
BUSINESS, FINANCE, INVESTING AND INSURANCE TEXTS FOR DOCTORS:
“The extensive experience of our professional team allows us to implement a rigorous process to identify ‘Best in Class’ opportunities in our focus areas,” said Amaury Cifuentes CFP®, CMP® one of the firm’s founders. “We assist in providing capital, innovative solutions and strategic expertise to our portfolio throughout the investment cycle.”
Amaury Cifuentes, CFP®, CMP® has 30 years of experience in banking and finance; financial planning and investments with an emphasis on business lending, real estate and private investments. He is a Certified Medical Planner®, giving him an enhanced knowledge of the medical industry’s specific needs.
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Previously, in Part 1, we discussed the most important step of changing a problematic financial behavior: becoming willing to admit that changing the behavior is important and to seriously contemplate the change. Ebenezer Scrooge in A Christmas Carol took that step when he heeded a warning from the ghost of Jacob Marley.
Financial Transformations
The next step in the financial transformation process is probably the most difficult and requires the most courage. It is looking into the past to revisit the events in our lives where our strongly held delusions were formed. Scrooge resisted this step and tried his best to skip over it. Yet his guide, the Ghost of Christmas Past, gently turned him toward the past.
Bringing objectivity and understanding to entrenched financial delusions isn’t easy. Many people want to focus instead on obtaining more information on how to save, invest, or spend wisely. We try to jump into the present before visiting the past, which is typically the last thing we want to do.
Yet, what we need most for transformation is emotional intelligence, which cannot be learned academically or developed by oneself. It must be learned emotionally, experientially, and in community. Just as Scrooge found a guide in the Ghost of Christmas Past, people wanting to gain the emotional intelligence needed to change their financial behaviors require the assistance of a financial coach or therapist. This is a journey that cannot be taken alone.
The New Reality?
Once we have taken that difficult but transformational journey into the past, we are ready to become present and see reality with new clarity. While Scrooge was less resistant to looking at the present than the past, it was the one step that terrified him the most. Once emotional intelligence is gained, we must face replacing our faulty beliefs with accurate cognitive information. This is the place for learning about budgeting, debt reduction, investments, and other financial skills.
In Changing for Good, Dr. James O. Prochaska calls this the stage of preparation, where we begin to acquire necessary knowledge and take the necessary steps to get ready to act. Scrooge’s guide, the Ghost of Christmas Present, helped him negotiate the present and obtain this knowledge. Our real-world guides may include accountants, attorneys, financial planners, and educational books and workshops.
When we gain accurate financial knowledge, we are ready to look toward the future to see where our previous delusional decisions potentially were taking us. Like the vision that the Ghost of Christmas Future unveils before Scrooge, the scene is often harsh. However, because of our preparation, we have the capacity and tools to enter what Prochaska calls the action phase.
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Now we can begin to create a future that is consciously and deliberately planned. We can take control of our money rather than our money controlling us. Our guides can be financial advisors, financial planners, and financial mentors.
Many of us try to shortcut the transformation process by starting here, in the last step of looking toward the future. Sadly, without first taking the critical steps of viewing the past and learning the present, we often lose heart. This is why resolutions for financial change often fail, not because the goal is bad or unattainable, but because we are unprepared to go into action.
The end product of Scrooge’s difficult journey with the three Spirits was a transformed person, full of joy, generosity, and spirit. He experienced this transformation because he had the courage and conviction to start the process.
Assessment
It’s not possible to give the gift of a financial transformation. It is a gift that can only be received. This Christmas and New Year 2019, perhaps it’s time for you to receive yours.
Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.
Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:
David K. Luke focuses on helping physicians, medical professionals, and successful retirees with financial planning, investment and risk management.
In the past 24 years of industry experience, David has held licenses including general securities registered representative, registered investment advisor, Branch management supervision, and Life, Accident, and Health Producers.
David, a fee-only advisor, is able to help his clients to achieve peace of mind and greater assurance with their financial goals by giving advice and providing investment management that is in their best interest, untainted by commissions or sales objectives. Likewise, in a true fiduciary capacity, he is able to help investors determine the reliability and suitability of products and services that they have been sold by other advisors.
David began his career managing money in 1986 in the General Motors of Canada Banking and Investments department where he was engaged in cash management, foreign currency hedging, and the debt issuance of a $100 million Eurobond and a $300 million Note Issuance facility. In 1988 as Supervisor of Borrowings for GMAC Canada David was responsible for the daily average issuance of $125 million in short-term Commercial Paper. David worked as a stock broker and portfolio manager for 2 major national brokerage firms (A.G. Edwards and Wachovia Securities) from 1989 to 2008.
Additionally, at Wachovia Securities David was among an elite group of financial advisors approved as a PIM (Private Investment Management) Portfolio Manager. Prior to joining Net Worth Advisory Group in 2010, David managed his own independent firm, Luke Wealth Strategies, working as a registered representative and investment advisor.
Education and Designations
President 2009/2010, Financial Planning Association (FPA) – Utah Chapter Affiliate
National Association of Personal Financial Advisors (NAPFA)
Member, Medical Group Management Association Master of International Management (Finance concentration)
American Graduate School of International Management Bachelor of Arts, Brigham Young University
Book Dr. David Edward Marcinko CMP®, MBA, MBBSfor your Next Medical, Pharma or Financial Services Seminar orPersonal and Corporate Coaching Sessions
Dr. Dave Marcinko enjoys personal coaching and public speaking and gives as many talks each year as possible, at a variety of medical society and financial services conferences around the country and world.
These have included lectures and visiting professorships at major academic centers, keynote lectures for hospitals, economic seminars and health systems, keynote lectures at city and statewide financial coalitions, and annual keynote lectures for a variety of internal yearly meetings.
Written by doctors and healthcare professionals, this textbook should be mandatory reading for all medical school students—highly recommended for both young and veteran physicians—and an eliminating factor for any financial advisor who has not read it. The book uses jargon like ‘innovative,’ ‘transformational,’ and ‘disruptive’—all rightly so! It is the type of definitive financial lifestyle planning book we often seek, but seldom find. —LeRoy Howard MA CMPTM, Candidate and Financial Advisor, Fayetteville, North Carolina
I taught diagnostic radiology for over a decade. The physician-focused niche information, balanced perspectives, and insider industry transparency in this book may help save your financial life. —Dr. William P. Scherer MS, Barry University, Ft. Lauderdale, Florida
This book was crafted in response to the frustration felt by doctors who dealt with top financial, brokerage, and accounting firms. These non-fiduciary behemoths often prescribed costly wholesale solutions that were applicable to all, but customized for few, despite ever-changing needs. It is a must-read to learn why brokerage sales pitches or Internet resources will never replace the knowledge and deep advice of a physician-focused financial advisor, medical consultant, or collegial Certified Medical Planner™ financial professional. —Parin Khotari MBA,Whitman School of Management, Syracuse University, New York
In today’s healthcare environment, in order for providers to survive, they need to understand their current and future market trends, finances, operations, and impact of federal and state regulations. As a healthcare consulting professional for over 30 years supporting both the private and public sector, I recommend that providers understand and utilize the wealth of knowledge that is being conveyed in these chapters. Without this guidance providers will have a hard time navigating the supporting system which may impact their future revenue stream. I strongly endorse the contents of this book. —Carol S. Miller BSN MBA PMP,President, Miller Consulting Group, ACT IAC Executive Committee Vice-Chair at-Large, HIMSS NCA Board Member
This is an excellent book on financial planning for physicians and health professionals. It is all inclusive yet very easy to read with much valuable information. And, I have been expanding my business knowledge with all of Dr. Marcinko’s prior books. I highly recommend this one, too. It is a fine educational tool for all doctors. —Dr. David B. Lumsden MD MS MA,Orthopedic Surgeon, Baltimore, Maryland
There is no other comprehensive book like it to help doctors, nurses, and other medical providers accumulate and preserve the wealth that their years of education and hard work have earned them. —Dr. Jason Dyken MD MBA,Dyken Wealth Strategies, Gulf Shores, Alabama
I plan to give a copy of this book written ‘by doctors and for doctors’ to all my prospects, physician, and nurse clients. It may be the definitive text on this important topic. —Alexander Naruska CPA,Orlando, Florida
Health professionals are small business owners who need to apply their self-discipline tactics in establishing and operating successful practices. Talented trainees are leaving the medical profession because they fail to balance the cost of attendance against a realistic business and financial plan. Principles like budgeting, saving, and living below one’s means, in order to make future investments for future growth, asset protection, and retirement possible are often lacking. This textbook guides the medical professional in his/her financial planning life journey from start to finish. It ranks a place in all medical school libraries and on each of our bookshelves. —Dr. Thomas M. DeLauro DPM,Professor and Chairman – Division of Medical Sciences, New York College of Podiatric Medicine
Physicians are notoriously excellent at diagnosing and treating medical conditions. However, they are also notoriously deficient in managing the business aspects of their medical practices. Most will earn $20-30 million in their medical lifetime, but few know how to create wealth for themselves and their families. This book will help fill the void in physicians’ financial education. I have two recommendations: 1) every physician, young and old, should read this book; and 2) read it a second time! —Dr. Neil Baum MD,Clinical Associate Professor of Urology, Tulane Medical School, New Orleans, Louisiana
I worked with a Certified Medical Planner™ on several occasions in the past, and will do so again in the future. This book codified the vast body of knowledge that helped in all facets of my financial life and professional medical practice.
—Dr. James E. Williams DABPS, Foot and Ankle Surgeon, Conyers, Georgia
This is a constantly changing field for rules, regulations, taxes, insurance, compliance, and investments. This book assists readers, and their financial advisors, in keeping up with what’s going on in the healthcare field that all doctors need to know.
—Patricia Raskob CFP® EA ATA, Raskob Kambourian Financial Advisors, Tucson, Arizona
I particularly enjoyed reading the specific examples in this book which pointed out the perils of risk … something with which I am too familiar and have learned (the hard way) to avoid like the Black Death. It is a pleasure to come across this kind of wisdom, in print, that other colleagues may learn before it’s too late— many, many years down the road.
—Dr. Robert S. Park MD, Robert Park and Associates Insurance, Seattle, Washington
Although this book targets physicians, I was pleased to see that it also addressed the financial planning and employment benefit needs of nurses; physical, respiratory, and occupational therapists; CRNAs, hospitalists, and other members of the health care team….highly readable, practical, and understandable.
—Nurse Cecelia T. Perez RN, Hospital Operating Room Manager, Ellicott City, Maryland
Personal financial success in the PP-ACA era will be more difficult to achieve than ever before. It requires the next generation of doctors to rethink frugality, delay gratification, and redefine the very definition of success and work–life balance. And, they will surely need the subject matter medical specificity and new-wave professional guidance offered in this book. This book is a ‘must-read’ for all health care professionals, and their financial advisors, who wish to take an active role in creating a new subset of informed and pioneering professionals known as Certified Medical Planners™. —Dr. Mark D. Dollard FACFAS, Private Practice, Tyson Corner, Virginia
As healthcare professionals, it is our Hippocratic duty to avoid preventable harm by paying attention. On the other hand, some of us are guilty of being reckless with our own financial health—delaying serious consideration of investments, taxation, retirement income, estate planning, and inheritances until the worry keeps one awake at night. So, if you have avoided planning for the future for far too long, perhaps it is time to take that first step toward preparedness. This in-depth textbook is an excellent starting point—not only because of its readability, but because of his team’s expertise and thoroughness in addressing the intricacies of modern investments—and from the point of view of not only gifted financial experts, but as healthcare providers, as well … a rare combination.
—Dr. Darrell K. Pruitt DDS, Private Practice Dentist, Fort Worth, Texas
This text should be on the bookshelf of all contemporary physicians. The book is physician-focused with unique topics applicable to all medical professionals. But, it also offers helpful insights into the new tax and estate laws, fiduciary accountability for advisors and insurance agents, with investing, asset protection and risk management, and retirement planning strategies with updates for the brave new world of global payments of the Patient Protection and Affordable Care Act. Starting out by encouraging readers to examine their personal ‘money blueprint’ beliefs and habits, the book is divided into four sections offering holistic life cycle financial information and economic education directed to new, mid-career, and mature physicians.
This structure permits one to dip into the book based on personal need to find relief, rather than to overwhelm. Given the complexity of modern domestic healthcare, and the daunting challenges faced by physicians who try to stay abreast of clinical medicine and the ever-evolving laws of personal finance, this textbook could not have come at a better time.
—Dr. Philippa Kennealy MD MPH, The Entrepreneurial MD, Los Angeles, California
Physicians have economic concerns unmatched by any other profession, arriving ten years late to the start of their earning years. This textbook goes to the core of how to level the playing field quickly, and efficaciously, by a new breed of dedicated Certified Medical Planners™. With physician-focused financial advice, each chapter is a building block to your financial fortress.
—Thomas McKeon, MBA, Pharmaceutical Representative, Philadelphia, Pennsylvania
An excellent resource … this textbook is written in a manner that provides physician practice owners with a comprehensive guide to financial planning and related topics for their professional practice in a way that is easily comprehended. The style in which it breaks down the intricacies of the current physician practice landscape makes it a ‘must-read’ for those physicians (and their advisors) practicing in the volatile era of healthcare reform. —Robert James Cimasi, MHA ASA FRICS MCBA CVA CM&AA CMP™, CEO-Health Capital Consultants, LLC, St. Louis, Missouri
Rarely can one find a full compendium of information within a single source or text, but this book communicates the new financial realities we are forced to confront; it is full of opportunities for minimizing tax liability and maximizing income potential. We’re recommending it to all our medical practice management clients across the entire healthcare spectrum.
—Alan Guinn, The Guinn Consultancy Group, Inc., Cookeville, Tennessee
Dr. David Edward Marcinko MBA CMP™ and his team take a seemingly endless stream of disparate concepts and integrate them into a simple, straightforward, and understandable path to success. And, he codifies them all into a step-by-step algorithm to more efficient investing, risk management, taxation, and enhanced retirement planning for doctors and nurses. His text is a vital read—and must execute—book for all healthcare professionals and physician-focused financial advisors.
—Dr. O. Kent Mercado, JD, Private Practitioner and Attorney, Naperville, Illinois
Kudos. The editors and contributing authors have compiled the most comprehensive reference book for the medical community that has ever been attempted. As you review the chapters of interest and hone in on the most important concerns you may have, realize that the best minds have been harvested for you to plan well… Live well. —Martha J. Schilling; AAMS® CRPC® ETSC CSA, Shilling Group Advisors, LLC, Philadelphia, Pennsylvania
I recommend this book to any physician or medical professional that desires an honest no-sales approach to understanding the financial planning and investing world. It is worthwhile to any financial advisor interested in this space, as well. —David K. Luke, MIM MS-PFP CMP™, Net Worth Advisory Group, Sandy, Utah
Although not a substitute for a formal business education, this book will help physicians navigate effectively through the hurdles of day-to-day financial decisions with the help of an accountant, financial and legal advisor. I highly recommend it and commend Dr. Marcinko and the Institute of Medical Business Advisors, Inc. on a job well done. —Ken Yeung MBA CMP™, Tseung Kwan O Hospital, Hong Kong
I’ve seen many ghost-written handbooks, paperbacks, and vanity-published manuals on this topic throughout my career in mental healthcare. Most were poorly written, opinionated, and cheaply produced self-aggrandizing marketing drivel for those agents selling commission-based financial products and expensive advisory services. So, I was pleasantly surprised with this comprehensive peer-reviewed academic textbook, complete with citations, case examples, and real-life integrated strategies by and for medical professionals. Although a bit late for my career, I recommend it highly to all my younger colleagues … It’s credibility and specificity stand alone. —Dr. Clarice Montgomery PhD MA,Retired Clinical Psychologist
In an industry known for one-size-fits-all templates and massively customized books, products, advice, and services, the extreme healthcare specificity of this text is both refreshing and comprehensive. —Dr. James Joseph Bartley, Columbus, Georgia
My brother was my office administrator and accountant. We both feel this is the most comprehensive textbook available on financial planning for healthcare providers. —Dr. Anthony Robert Naruska DC,Winter Park, Florida
Posted on June 29, 2017 by The D.E.A. ROGUE WARRIOR
Understanding the Difference
By Rick Kahler CFP®
Retirement planning is one of the issues that commonly lead clients to consult financial advisers.
One of its essential aspects is creating a plan to save and invest in order to provide a comfortable retirement income. Ideally, this starts many years ahead of retirement, even as early as your first paycheck.
As retirement comes closer, planning for it expands to take in a host of other considerations, such as deciding when to retire, where to live, and what kind of lifestyle you hope to have. When retirement becomes a reality, the focus shifts to carrying out the plan.
Preparing
All of this planning is crucial. Yet, for both financial advisers and clients, it’s good to keep in mind that planning has its limits. In the post-retirement years, it may be helpful to think in terms of preparing for old age rather than planning for it.
The older we get, the more important this distinction between planning and preparing becomes. Too many life-changing things can happen without regard to our best-laid plans. Often they occur unexpectedly, resulting in emergency situations where urgent decisions have to be made. A stroke or a fall, a diagnosis of terminal illness, a broken hip that leaves someone unable to go back to independent living—and suddenly, right now, the family needs to find an assisted living facility, arrange for live-in help, or sell a home.
What are some of the ways to prepare for these contingencies?
Explore housing options well ahead of time. Find out what assisted living, home care, and nursing home services and facilities are available where you live and whether they have waiting lists. Have family conversations about possibilities like relocating or sharing households:
Research the financial side of these options. Investigate the cost of hiring help at home, assisted living facilities, and nursing care centers. Find out what is and is not covered by Medicare and long-term care insurance. For example, people are sometimes surprised to learn that Medicare does not pay for nursing home care other than short-term medical stays.
Designate someone to take over decision-making, and do the paperwork. Execute documents like a living will, medical power of attorney, and contingent power of attorney. Update them as necessary, and give copies to your doctors, your financial planner, and appropriate family members.
Start relatively early to downsize. Well before you’re ready to let go of possessions or move into smaller housing, start considering what to do with your “stuff.” Focus on the decisions rather than the distribution. There’s no need to get rid of possessions prematurely, but decide what you want to do with them—and put in writing. Do this while it’s still your choice, rather than something your family members do while you’re in the hospital or nursing home
Do your best to practice flexibility and acceptance. No matter how strongly you want to live in your own home until the end of your life, for example, it may not be possible. The physical limitations of aging can limit our choices, and even the best options available may not be what we would like them to be. It is a profound gift to yourself and your family members to accept these realities with as much grace as you can muster.
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Assessment
Finally, please don’t underestimate the importance of planning financially for retirement. Because the bottom line is that you can’t plan for all the things that might happen as you age, but you can prepare to deal with them. One of the most useful tools to cope with those contingencies is having enough money.
Conclusion
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