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Financial Foundations for Physicians · Voices of Otolaryngology

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Welcome to the Voices of Otolaryngology podcast series, where we spotlight
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diverse perspectives and insights within the field of otolaryngology.
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I'm your host, Rahul Shah.
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Let's jump into
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Welcome to Voices of Otolaryngology.
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My name is Rahul Shah. I'm your host.
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As I said, some days we just get lucky.
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You all know that. Today we're very lucky to have Craig Dell with us.
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Merrill is a Bank of America company.
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For full disclosure.
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Bank of America and Merrill help us
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as advisors of the investment portfolio of the Academy.
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We've started working with them, let's say, about six months ago.
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And it's not Craig Dell, it's a separate part of the team.
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Craig is on the advisory side
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and answered our call to say, how do we help educate
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our physicians about finances?
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Indeed, the Young Physicians section and the section for resident fellows
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really wanted a framework to start thinking about finance for physicians.
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Craig, welcome.
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I'd love you to introduce yourself and let's get started educating our docs.
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Yeah, well, I appreciate the opportunity, Doctor Shah.
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It's I've been in the industry since 1996 doing
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private banking, some high net worth lending.
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In 2009, I transitioned over the wealth management area,
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where I joined the team, grew my practice, focusing in on physicians, executives
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at hospitals, private practices, and just really making sure
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that everyone out there understands the importance of financial planning.
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Well, thank
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you for making time for our Academy members.
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You have a lot of clients yourself, Merrill
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Bank of America, that are physicians, physician practices.
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This is not a commercial for them.
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You're going to educate us today.
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Why finance for physicians?
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Why are we unique?
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Yeah, it's interesting because the easy answer is
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everyone should have financial planning.
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But physicians really are a unique subset, different than a lot of,
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professions where due to extensive school in residency,
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that the incomes in the higher incomes come later in life and without a plan.
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What we've seen is, you know, there's a lot of financial stress
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out there that that doesn't need to be.
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And, you know, the the idea of starting early with a plan makes a huge difference.
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I was struck one of our young physicians, Craig,
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we define young physicians as those that are seven years out.
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So they've finished their residency fellowship and they're seven years out.
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I heard the other day, one of them say, I'm in my mid to late 30s,
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and I have a half million dollars in debt.
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And in most of America, that's that's a beautiful house.
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I mean, talk to me a little bit about that.
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That might represent some of your clients.
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Where does that person even start?
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Yeah.
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And and debt being defined as a few different pieces,
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I think another unique piece of physicians
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is the the school debt burden that's out there as well.
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And, you know, starting early on it, I think
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just the idea of making sure
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you know where to focus
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your, your, your monthly budget and, you know, if
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if a school debt is out there, you know, understanding,
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you know, where to tackle that and making sure at the same time,
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you're still planning for the future and the idea of planning in general
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is just really breaking down the personal goals that you have.
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And, you know, it's easy for us to talk about what what goals should be.
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But every person you know, if you if you're married, you have a partner.
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Those goals need to be discussed and impact that way.
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And you know, $500,000 in debt is an absolute large number for some.
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And you want to avoid being an ostrich, sticking your head in the sand
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and, and not, you know, really focusing on how to pay that down
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or just paying that down and not saving for some of the goals.
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And I think that's where we try to focus people when we do planning.
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Yeah.
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I need to have you talk a little bit about goal planning.
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I had a quote from one of my professors.
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This was in the early 2000s, and I want you to reflect on it.
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And he said, when I got my first paycheck
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as an attending or after fellowship, I was blown away
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and he said, but now I still live paycheck to paycheck.
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And he was 20 years out.
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And there's a lot of things to read into that.
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One is, maybe he was saving first, but his point was,
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what he was teaching us as young students is you have to plan.
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Just because you have more money doesn't mean life gets easier.
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So let's go back to that person in their mid to late 30s,
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they have a $500,000 med school college debt.
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I mean, they're making good money.
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They're making a couple hundred thousand.
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It should all work out. Right, Craig?
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They don't need their 401K.
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They don't need their savings.
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They'll catch up later.
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Maybe they'll catch up in their 40s or 50s.
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Yeah.
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The the idea
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that, you know,
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even going back to to residency and and learning from the beginning
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to create a plan and being able to put away money early
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on and, and experience that compounding which we can certainly talk about later,
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which is such a powerful.
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No, go on. And now go ahead.
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Talk about that. Yeah.
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I mean, when I think that first stage of of being into residency,
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you're finally getting
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a little bit of income, it's certainly not going to be your your high income,
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but at that point build in a strong foundation of, of creating a budget.
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You if you have the opportunity to participate in a 401
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or 403 with the hospital, putting away money, even, you know,
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tax deferred before taxes are paid, it's not going to be that big of a hit.
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But if you can get money in early, especially knowing incomes come and later
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getting money in in your 20s letting compounding happen,
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which compounding is when you put money in your money gets reinvested.
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The growth just continually builds on each other.
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We're talking hundreds of thousands of dollars,
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that can be gained over a 30-40 year period before you need the money for
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retirement.
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It incredibly important.
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And getting that foundation of a budget allows
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you allows talking to a professional early on of,
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you know, if it's figuring out that that school debt
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or that $500,000 debt that you are talking about,
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what's the interest rate there and determining,
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you know, what's the likelihood of putting away
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money now, long term,
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getting a bigger benefit than knocking all the debt out
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early and understanding the options.
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So there's there's a lot of moving pieces with that.
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But what I can say in doing this for 15 plus years,
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some of my clients who have the largest amount of wealth,
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it was simply due to them starting
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early, putting as much away early as they can, and letting compound
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just just continue to take care of it and set them up for retirement.
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So let me let me give you real numbers.
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So 22, 23, the average otolaryngologist
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probably finishes college, let's say, now a days.
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A lot of them are taking a gap year.
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So 23, 24, then four years of med school, 28 and then five years of residency.
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So 33.
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So they come out in their mid to early 30s.
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You're saying let's let's forget
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about what they could have done their teens and 20s.
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Let's assume nothing was done.
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You're saying even in your mid 30s to start planning, because the fallacy is
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you know what, I'll wait till I'm 50 when I'm making double my income.
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But you're saying no, even a small bite early on is good.
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Is that what you're saying?
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Absolutely. Saying that.
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And, you know, I think,
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again, I talk to continually talk about that foundation.
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I see some of the pitfalls of that same, you know,
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person that, that, that you put out there is,
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you know, it's kind of the keeping up with the Joneses
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sometimes mentality where you, you are finally starting to make a little money.
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You've been working incredibly hard.
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Now you get that desire for that,
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shiny toy or maybe immediately wanting to buy a larger house.
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That's where sitting with a professional, having a plan
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allows you to to understand all those things are important.
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A shiny toy is very aspirational, keeps you working hard.
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But but understand the buckets of money and understand
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you know, where you should focus on.
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Because if you are able, even though it might not feel great
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to put away money early, the idea of that longer term retirement
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goal, freeing up money for the larger house,
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the toys later on, that that happens because you started early.
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And I think in my prior job, Bank of America and Merrill,
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were assisting the organization
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with the medical staff, and I know you've spoken to them a lot.
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And the
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statistic across health care, this is across health care.
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Craig, is astonishing.
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And I want you to reflect on it.
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I want the audience to fill in the blank
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what percent of physicians max out their 401 K?
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Let's give a multiple choice, Craig.
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I'm going to have the audience do it. I don't want you to answer.
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Is it 100% what it should be?
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Is it 75%,
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50% or 25%?
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I want the listeners to answer that at a macro level.
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What percent of physicians max out their 401K?
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The answer is E, none of the above.
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It was like 18% or 17%.
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Craig. Why?
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And I'm not telling you to to say that to push them into their 401K.
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But I think what you're getting at.
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You're coming right out in your 30s.
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And I made that mistake.
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I didn't do it right on Craig early on.
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It's a fallacy that we all fall into.
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And it really is.
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And I think the idea is, again,
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going back to how hard physicians have worked to get to where they are,
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where they're at in wanting to to feel, you know, that.
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All right, finally, I can spend some money.
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Doesn't mean you can't.
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But, the ability to put away money,
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even if you're doing it before taxes, you're not going to feel this.
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As much as I think people are afraid they will coming out of their paychecks.
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And that's where where I go back to,
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you know, be very upfront about what's important to you.
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It's, you know, I can use a doctor analogy, you know, if
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if I go to see a doctor and, and I'm they're wanting the professional to,
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to give me advice if I lie about how many drinks
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I have a week, you know, what are my eating habits?
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That's that's not going to do what's best for me.
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I need to be upfront and say, you know, I do enjoy a glass of wine or,
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you know, I do want, you know, to still be able to do this.
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That's what planning does, you know, understand, be very upfront and say,
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you know, I, I, I do want to travel now, you know, I,
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I do want to have, a nice house for, for my family.
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But retiring is important.
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And that's where when you look at plan and that's where a professional
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can help focus those so you can accomplish all those and understand
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that early importance even at, you know,
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a, a conservative return,
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putting away that money to for long term
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focus in on some intermediate term focus in on some shorter term pieces.
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I think I think people just don't understand it's it's possible.
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They're just too afraid to have to commit to that.
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Maybe similar to, you know, afraid to have to commit to a diet,
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you know, if it's done properly, long term success can be there.
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You know, for both.
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And we
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mentioned Bank of America and Merrill, I'm agnostic to where you get your advice.
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Many 401Ks, many employed
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physicians, many practices have different plans.
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And usually those plans.
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Do you have an advisor that you can just pick up the phone and get it?
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So when you say professional, I'm just going to say for you,
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you're not saying you're the end all and be all, always go to Craig Dell.
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No, your point is just reach out.
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Whether it's through your 401 K or even your bank, just talk to somebody.
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What are the buckets Craig you mentioned early on the buckets.
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I'm I'm a bit confused.
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Our physicians are confused.
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There's the investing bucket.
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But you said there's other buckets where a dollar should go.
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Let's say you make a dollar every two weeks.
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How do you think about those buckets for young physicians
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those less than ten years out, Craig?
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I love it. And
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again, when when I
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meet with individuals and again, if they have a partner,
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I think it's incredibly important for for both of you to be there.
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But it's it's a conversation to start.
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It's, you know, what's most important to you.
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And again, I want to know what's important short
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term, what's important intermediate.
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And if we say long term would be something like retirement.
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If a short term goal is I you know what you what are you talking about?
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That younger physician I want to buy a house at some point.
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We would put that in the shorter term bucket intermediate would be,
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you know, I maybe have a small family and we want to do some education planning.
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The different budget buckets help set
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a, a risk level to, to the dollars that you have.
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So everyone knows about an employer plan, putting a one way money in a 401,
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403, maybe even a 457, which we can dive into later.
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But when we're talking about short term monies
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and this comes from your paycheck,
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and maybe you have it
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in a savings account, or maybe you've opened up a brokerage account.
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If I have someone that wants to purchase a home in the next
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6 to 24 months,
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I want to make sure that that money is there for them.
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So inside of that bucket, we're going to look at, very
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what would be determined conservative opportunities if there's cash, CDs,
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maybe some Treasury bonds to guarantee that that bucket of money,
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although might not grow substantially,
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grows enough, but most importantly, is there for them.
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And as you spread out the time
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for each of your goals, that's where maybe the risk level.
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And we can talk about that later.
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But the risk level, increases a little bit, all guided by an investment
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time frame for, for those buckets and understand in all aspects.
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And that's where being upfront about what's important to you
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and putting everything out there, all the different, different goals,
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that, you know, a physician or a family might have and how to attack those.
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I've heard this
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from my friends, my peers.
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Not once, not twice.
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But I hear it often.
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Craig, I'm getting called in to the hospital three in the morning.
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When I come back into my driveway, I want to be in a reasonable car
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and enter a reasonable house.
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You know, I'm sure you've heard that because you're you're smirking
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a bit there.
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I think from what you're saying,
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they could have it all you could do to 401 K.
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You could reasonably buy that ride that you want.
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But your point is just saying, think about those buckets and goals.
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You're not saying no, no, no.
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You're saying there's a way to get there.
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Absolutely.
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And that's where kind of I use that analogy of going to a doctor.
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Be very upfront.
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It makes it it only allows the person, whether it's myself
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or you, doing, playing in yourself to, to be able to, to help.
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So if it isn't important, for a nicer car
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or if are guaranteed, nice vacation once a year.
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I feel like that's incredibly important.
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Based on how how hard you work.
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You just talk about, you know, someone going in at three in the morning.
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In order to do that, you need aspirational,
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you know, reasons to want to do that.
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And, you know,
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I think the way we look at planning, it's what are your essential goals?
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Your important goals?
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Your aspirational goals?
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I think most people have a centralized retirement,
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but I want to hear about those aspirational as a second home,
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because that we've been working together can understand how to accomplish that,
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where your buckets of money should go, understanding
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what budgets you you have and, you know, really talking through,
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you know, what's important, said in the roadmap can be created to understand
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how to accomplish those in absolutely in all different incomes.
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Those things can can happen.
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And you know, most importantly, within the time frame that you're looking for.
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Let me
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be upfront and honest and admit one of my mistakes.
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And can you tell me if you see this mistake for physicians?
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We're a two physician family.
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We were training in Boston, and I didn't contribute to the 401.
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We both didn't
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because we said, you know, we're we're just getting started as residents.
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It's a lot of money we shouldn't do it.
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It was until our mid 30s that we started doing it,
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and that was my dad that gave the advice and he said, don't worry about it.
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You know, you'll make it up as a doctor.
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And I lost probably a decade of the 401 K compounding.
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I'm super mad about this to this day.
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Do you see that happening?
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So basically I'm asking you, why should they start early?
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Why should the residents and those in their late 20s, even if it's
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$50 a paycheck, even if it's $20, the compounding.
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Now, I've lost that time. Craig.
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Yeah.
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And and I would say what I found interest in in in in again
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more unique within physicians is I do believe physicians in their mind are
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have the
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fallback that I'm willing to work into my 70s work
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and you know I'll I'll catch up with later.
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It's not a problem.
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What what I tend to find out is when I talk to
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some of let's say, the, the older physicians, you know, the, the mid 60s,
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that although they're willing to work, I think they're, you know,
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a little disappointed they didn't save more earlier because,
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you know, working into your 70s again, going back to something unique
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with physicians is, you know, later in life,
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being able to have passion projects, do consulting things like that,
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that maybe free you up.
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So you're you're still working into your 70s,
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but not because you have to.
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So that's where the focus of putting away, as you said, $50, $100
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growing, compounding on itself.
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Look, I'm not going to talk about what expectations are in the markets.
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I can only look historically at what the markets have done.
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And you could look at any time period
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whether three year, five year, ten year, 20 year period.
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And the longer you are in the markets, that the better you're going to do.
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And, you know, I still firmly believe that to be the case.
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And so putting away that that money, closing your eyes to it,
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letting it do its thing, it it will absolutely get you to
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where you need to be and then give you the flexibility of determining in your 60s
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whether you know, you want to fully retire at that point or again,
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move on to consultant.
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Are doing some type of passion work.
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All right, let's do a fast math test.
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And you do all this speaking.
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So if it's wrong, you don't get in trouble.
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And if we get it wrong, our members can help us.
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So let's take the rule of 70.
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The rule of 70 looks at a population doublings.
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And let's assume a rate of return of 7%.
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So the rule of 70 divided by 7% is ten years.
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So if you put x amount of dollars,
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let's say you put $1,000 today in ten years, that's 2000.
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Okay.
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Assuming roughly it's
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the rule is 72, but it's the rule of 70 divided by the percent.
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7% is ten years.
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I'm doing all the math, Craig, but I want to drive this home
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if you're doing well.
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Yeah.
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$2,500 in year one.
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Okay.
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Let's assume somebody does that over ten years.
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Then after that time, no rate of return.
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They have 25,000.
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You double that becomes 50,000. You double.
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That becomes 100,000.
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You double that.
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It becomes 200,000. You double that.
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It becomes 400,000, you double it.
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That's five decades.
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And what.
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Well, I learned it. It's already like that.
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Yeah.
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All starting with that thumb, which was a very small amount.
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You know, inside of what your budget is,
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that's, that's absolutely, a big part of it.
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And, you know, the idea that, you know,
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there's there's different ways to save, I get
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a lot of
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questions when, when I do financial planning with, with,
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you know, high income earners and they're like, I pay too much in taxes.
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You know, you just went back in and gave us that stat
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about how much how many people participate in the 401 plans.
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Look, you maxed out your 401.
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That not only puts money in before you pay taxes on it,
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it grows tax deferred, but that takes money off
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of the amount that you have to pay taxes on at a very high level.
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Some hospitals even, offer a 457.
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And I know I was in, one institution where we do financial planning
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and 7% of the population
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that could put money into an extra plan,
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work or participate, and we're taking advantage of that.
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And then I would talk to them about plan and and they would complain
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about taxes are, you know, ways to put away money.
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So part of going through a financial plan, especially with someone who,
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who understands what your benefits are, is really making sure
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that your you're doing the most that you can,
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with inside of your, your budget, which could have the effects of helping,
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you know, to be as tax efficient as possible, to accomplish the
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all of those goals of compounding on top of everything that we've discussed.
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Yeah, that's why I'm very frustrated in my late
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20s, early 30s, we didn't put that $100 a paycheck
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because it would have been 2500 over ten years,
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would have been a million in our 80s.
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All right. So now now I'm a young physician.
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I'm a resident.
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You had me at.
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Hello, Mr. Dell, I'm ready to go.
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I'm going to get off this call and go buy me some Nvidia.
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Go buy some Google. Go buy some Microsoft.
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I'm going to just do it all.
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My favorite person is Harry Markowitz, who won a Nobel Prize in economics.
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Can you tell the group about Markowitz?
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Yeah, I love that you even know who that person is.
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So really,
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really,
23:57
the modern modern portfolio theory is, is really what he's known for.
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But it's, you know, he did work in the 50s, that
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what I do today still really stems from, from everything that that he's done.
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What he figured out and figured out very, you know, mathematically
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was the idea of,
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you know, instead of maybe buying 1 or 2 companies
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and putting all your risk there is, you know, taking a look,
24:27
across the board at different asset classes
24:30
and trying to develop
24:34
a risk/return model for an individual.
24:38
And everyone is unique again, with their goals.
24:41
But understand in, you know, a risk level, the standard deviation
24:46
across a portfolio that's going to give you
24:49
the type of return tier towards what type of risk level
24:54
you want to take and make sure you're maximizing,
24:56
that it's really where diversification came,
25:00
which ultimately led to, you know, we've talked about goals based,
25:04
you know, really goals based investing.
25:08
So, you know, I think everyone knows
25:12
a little bit about it based on investing inside of their 401.
25:16
You know, you've got a limited menu, but there may be,
25:19
inside of that there's diversification.
25:22
But instead of doing it blindly again, I, I know
25:26
I'm saying talk to a professional.
25:27
I think the same way doctors would,
25:29
you know, recommend people talk to professionals.
25:31
I think that's the, the best way to do it.
25:34
So I know I didn't answer directly.
25:37
Your, your individual once.
25:39
Said, don't give me stock tips.
25:41
You can't even stock it. Right.
25:43
But but my point was simply that it's not just all stocks.
25:47
And if somebody says, well, Mr.
25:49
Dell, I'm so excited, I'm going to go park it in my bank account.
25:52
It's it's those extremes that that I want you to reflect on that.
25:56
It's kind of a blend.
25:57
It's asset allocation and diversification.
25:59
It's not just one and done or it's not binary.
26:02
No. And I and I feel like I'm on repeat when I say, you know,
26:06
understanding what your goals are.
26:08
But for me, when I work with someone there,
26:12
I don't even think about how I'm going to recommend investments to them
26:16
until I understand every aspect of their life.
26:19
And, you know, the Nvidia is absolutely,
26:23
might be perfect for, for a portion of money
26:28
for a period of time for that person, for a resident.
26:31
I would first and foremost,
26:35
number one thing is, is putting away money.
26:37
That's that's where you start is okay, how much
26:42
how much can I put away.
26:44
And then from there, understanding what vehicle.
26:48
Some questions that I've gotten from from residents is, you know,
26:51
I do have the opportunity to put money into a 401, but
26:54
I might not be there long enough to have
26:57
the the matching contribution vest.
27:00
That's okay.
27:02
Any money that you put in is, is money
27:05
that will stay inside of a 401.
27:08
You've got the control over it over a period of time.
27:11
So again, that's where building that budget and being able
27:15
to start to put away money, is is really the most important piece.
27:20
This is a complex question.
27:23
Let me try to say, just as we talked
27:26
about the rule of 72 and doubling
27:29
taxes and inflation can completely erode.
27:33
So you can't say but I can say let's let's say we look historically
27:37
back at the S&P index.
27:38
And I know 9 to 11% something like that.
27:40
Historically over 50-60 years.
27:43
But the reason 401 K's are important is
27:48
tax savings.
27:50
It grows it compounds.
27:52
And then the
27:53
reason diversification is important is you want to stay ahead of inflation.
27:57
That's a loaded question.
27:58
But can you just educate, our audience about some of those
28:02
and how you think about the erosion of taxes and inflation on savings?
28:06
Yeah, absolutely.
28:07
And, and I think
28:10
what I've really appreciated, over the, you know, let's say
28:15
the last ten years, I think it's become a little more relevant is,
28:18
inside of employer plans 401s, 403s,
28:23
the opportunity for the individual to, to decide, hey,
28:28
I can put away money tax deferred before I pay taxes.
28:33
That money then grows tax deferred.
28:37
But at some point the IRS, the government wants their money.
28:40
So in retirement, when you go to pull that money out,
28:45
you're going to have to pay taxes on it at that point.
28:48
The idea is without a crystal ball of, you know what are going to be the,
28:53
you know, the tax rates at the time of your retirement, is there
28:57
probably going to be less than than at your highest income.
29:02
Right now there's a lot more opportunities,
29:05
where you can also decide that, hey, instead of put money away, tax deferred,
29:10
I can rip the band aid, pay taxes on it now and move it
29:14
into a Roth inside of a 401 again, 403, if that's an opportunity for you.
29:21
When you do that, you've ripped the band aid.
29:24
Now you pay taxes.
29:25
That money is going to grow, not tax deferred, but tax free.
29:30
So in retirement,
29:32
past 59.5, you can pull the money out at that point
29:37
and not have to pay any, any taxes on there.
29:40
So, you know, it it's more individualized.
29:44
So I don't want to spend too much time on this.
29:47
But that would certainly be, a discussion point,
29:50
based on, you know, really where you are within your budget.
29:54
My number one goal is to put as much money away as you can.
29:57
So when I think of younger residents, I,
30:00
if possible, like, look, do the tax deferred spot.
30:04
That way you can put as much money away as you can because it's really that
30:08
although you're putting away money, it's coming out of your paycheck.
30:12
Before tax it doesn't feel as bad.
30:14
So that's that's my high recommendation without talking to anyone.
30:19
Yeah. Yeah. Previous applications.
30:22
Another point I can dive into, but I think, you know, first and foremost,
30:27
start with, if possible, getting as close as you can to maxing out the the 401.
30:33
The employer plans don't stop at what the matching contribution is.
30:38
I say that's that's a mistake that, you know, when I talk to a lot of individuals,
30:42
I get where, you know, they're said, oh yeah, I am maxing it out.
30:45
You know, my the hospital's giving me 5%.
30:48
I'll put in 5% in not understanding that you can put much more into it,
30:54
you know, and that's, you know, the the 5% match is great.
30:59
I absolutely get to that as a bare minimum.
31:01
That's you know, without doing that you're leaving free money out there.
31:05
But that shouldn't be the goal.
31:07
And and you know, I think unfortunately, a lot of physicians
31:11
don't do more than that, even all they possibly could.
31:14
And, you know, if if you can put away money inside
31:17
of the plan, again, for retirement, that's great.
31:22
You mentioned taxes.
31:25
The there's the opportunity
31:27
if your paycheck allows to start saving outside of retirement plans.
31:31
And again, that's what savings accounts.
31:33
That's with brokerage accounts.
31:35
You know, whether you're doing it
31:37
self-directed or you're doing it working with a professional.
31:41
That money we talked about different buckets,
31:45
could be money for retirement, more than likely early on.
31:50
It's money for those other goals.
31:52
And making sure you're being as tax efficient along
31:56
the way can really help out.
31:58
You know, if you are doing stocks and bonds,
32:04
making sure each year where possible, you know,
32:07
you're looking at gains and losses, to possibly offset each other.
32:12
So you're not too surprised at the end.
32:15
You know, if you are looking to buy a house five years from now,
32:19
you've you've purchased investments that have large gains.
32:23
You're really excited, but then realize, oh, no, I've got to pay taxes on this.
32:26
And even long term taxes could take away 20% of of your savings.
32:31
So, there's a lot of avenues we could go down.
32:35
But, you know, taxes are a huge part of investing in general.
32:40
And I think a lot of times that's for that.
32:42
So thank you for that.
32:43
Two more questions. And then we're going to wrap up.
32:45
And we had talked about a webinar series for our members that will get started
32:49
maybe quarterly,
32:51
with you, Craig, I know you've done that with medical staffs and other practices,
32:54
and that might be a nice way, for folks to interact and learn from you all.
32:59
So two, two final questions.
33:01
One is, here's a quote.
33:03
Not all debt is bad.
33:07
Okay. Can you talk about that?
33:09
I mean, let's go back to this mid-thirties year old female
33:13
physician with a half million dollars in med school debt.
33:17
Somebody could say, pay off all your debt!
33:18
Pay pay pay pay.
33:20
But if that's a 6% versus she's got some credit card debt at 28%.
33:26
And just talk a little bit about
33:28
I know you can't give guidance, but just not all debt is bad.
33:31
And then the I'll have a final question for you. Great.
33:34
And I would say where I think
33:37
people
33:39
are understanding that which is caused
33:43
a little bit of a clog inside of, the housing market.
33:47
There's absolutely
33:51
different types of debt along the way.
33:53
I mean, there's and it's not just interest rate driven.
33:56
There's there's credit card debt and credit card rates are extremely high.
34:02
There's, student loan debt that, you know, might have a lower
34:07
interest rate, but, you know, different factors go go into that.
34:11
There's auto auto loans and then mortgages,
34:16
It it's interesting.
34:18
Over the time period you talked to, you know,
34:21
our parents, grandparents, you know, they had 18% mortgage rates.
34:26
They think, you know, a 6% mortgage is, you know, you couldn't be luckier.
34:32
What they sometimes forget to tell you is they were getting,
34:35
you know, 14% in their savings account.
34:37
So, you know, it's a little little, you know, not the full story being told.
34:41
Mortgage debt.
34:45
And if I, if I talk about having a home that that would go as an asset class.
34:52
That's real estate.
34:52
You know whether you bought the home to, you know, have as,
34:57
strictly as an asset that that's going to gain,
35:01
debt is is different across the board as, as we're talking about.
35:06
So unfortunately we've got, you know,
35:09
a lot of folks that have two and a half,
35:13
three, 3.5% mortgage rates when the current rate might be 6%,
35:19
which is causing them to,
35:21
you know, decide that, hey, you know, I'm not ready to move.
35:23
I've got this debt. I understand it's a good debt.
35:26
I if I'm looking to invest money right
35:28
now, it's a pretty low bar historically to get higher than that.
35:33
And, you know, I have those conversations, of,
35:36
you know, look, we can do CDs,
35:39
bonds, that will get you more than than what that debt is.
35:43
Let's not quite be in a rush to pay it off.
35:45
Whereas 6% rates right now,
35:49
again, historically low and pretty average.
35:53
You know, it's easy.
35:54
Easy again for our grandparents to say that.
35:56
But over the,
35:57
you know, the 10-15 years it is higher, house prices have gone higher.
36:01
So if you do have a 6% mortgage rate, the there's options out there.
36:07
Maybe rates will come down.
36:09
We know that, you know what our, our leaders are looking to do now.
36:14
But it's also of, hey, trying to figure out, you know,
36:18
if I am long term invest in where should that money
36:20
go and, opportunities to say, you know, let's make that minimum payment,
36:26
but maybe not rush to pay that, that debt off
36:28
because we know there's going to be an opportunity
36:30
later to, to a refinance, or maybe we're going to move in three years
36:35
and it's it's more important to add money towards the the goals we've discussed.
36:41
You know, so everyone's unique in there.
36:44
But mortgages are I think the biggest factor of
36:48
of have a discussion, understand what the opportunities are,
36:53
for, for future possible refinances are invest into
36:58
to hedge and possibly get a higher interest higher return.
37:02
Perfect. Well last question.
37:04
We often ask this in performance improvement.
37:06
Don Berwick, who founded the Institute for Health Care Improvement, was a CMS
37:11
administrator, implores us to always ask, what will we do by next Tuesday?
37:16
So today is actually Tuesday, I think.
37:20
Yeah.
37:20
So we got folks that are listening to this whenever they're listening to it.
37:24
What advice do you give?
37:26
And let's really focus
37:27
on those young physicians that are less than seven years out.
37:32
And and the residents
37:34
give them a few things that they can easily do or start thinking about.
37:38
I'll give how about I give you the easy ones?
37:40
You say Craig, all right, it's your show.
37:42
You say, what are the easy ones?
37:44
I mean, we might we might have different opinions about what's what's easy.
37:47
For me, it it it it may not be the absolute easiest,
37:51
but understand first and foremost.
37:54
Yeah. What's available to you?
37:56
I again I mentioned
37:58
I do a lot of financial wellness programs at different hospitals.
38:02
HR groups are great, but not everybody pays
38:05
attention with information that that comes to them.
38:08
First and foremost, understand what opportunities are out there.
38:12
Let's just number one understand what.
38:16
What what your options
38:17
are what your benefits are. Yes.
38:20
Awesome. Awesome.
38:21
I just want to make it absolutely concrete. That's the first thing.
38:24
Give me more I can do that by Tuesday.
38:26
Give me 1 or 2 more. Yeah.
38:28
Take a look.
38:29
Make a budget.
38:30
There's you could you could Google ChatGPT,
38:34
go out there and find find the best
38:38
line item budget, put everything down, be honest with yourself.
38:43
You know, you put put all how many times you've DoorDash that week.
38:49
Put everything down there and understand what extra money is out there.
38:54
Once you've determined what extra money is out there,
38:57
then determine the next step of, you know, where do I want to put that money?
39:02
Do I want to put it towards retirement longer term?
39:06
Do I want to put it in a bucket that,
39:09
instead of going out and getting a car tomorrow
39:12
that I'm going to have a high interest rate on?
39:14
Maybe I put it away in an acount, let it grow
39:18
until it gets to a point where I could possibly pay it all off.
39:23
Allow myself other opportunities.
39:24
So, you know.
39:26
So understand what opportunities are available to you.
39:29
Make a budget. Now.
39:30
Now I'm getting busy because now you give me a lot to do.
39:33
Anything else?
39:33
By next Tuesday I think, how would I say this?
39:36
Just save just do it.
39:38
You know, I think you said that earlier.
39:40
It's it's pretty simple.
39:41
If you're not doing it for the 401 K or something.
39:44
That. Right.
39:45
I don't want to put words in your mouth, but you said just start.
39:47
Yeah.
39:48
Just just start and and, you know, figure out
39:51
even if it's a small a small amount,
39:55
if you set up to increase a small amount on a monthly basis,
39:59
I feel very confident you're not going to notice that coming out of your paycheck.
40:05
So make that your takeaway. Craig.
40:07
Thank you, thank you.
40:09
I know you speak to physician groups all the time.
40:11
We're thrilled that you recorded this podcast with this.
40:14
And I know we're going to be starting a
40:15
a webinar series where we call it, wellness for our physicians.
40:19
Much gratitude to you.
40:20
Thank you, thank you. Thank you, Dr.
40:22
Shah, I enjoyed it. It.
40:23
We hope today's episode sparked some fresh ideas.
40:26
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40:30
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40:31
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40:33
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40:35
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40:36
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40:40
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