Doctors should learn the lessons of these 5 money masters

By Physician Sense
Published October 8, 2020

Key Takeaways

Money’s tight right now. A recent California Medical Association survey found that physicians have experienced an average 64% revenue decline since March 1. Ninety-eight percent of queried physicians said they had a “substantial decrease in patient volume.” Moreover, 95% of responding physicians said they’re worried about financial health.

Like COVID-19, there’s only so much we can do to control our financial outlook and the related anxiety. We can re-evaluate our budgetsreassess our retirement strategies, and cure our money maladies, for example. We can also look to the past for financial wisdom. Each of these five money masters has something to teach physicians.

Mark Zuckerberg

Lesson: Focus.

Caution: You may open Pandora’s Box.

Zuckerberg unlocked billionaire status in 2008 at 23, and he did it with an unshakable focus that resulted in a few bruised toes and egos along the way. He eschewed the traditional college lifestyle at Harvard and opted to log hours in his dorm, coding, launching, and perfecting Facebook. All along, he knew what he wanted to do: Connect people. 

While you may not have the time or skills to develop the next life-altering social media platform, you can copy Zuckerberg’s resolve and apply it to your personal finances. What is it that you want your money to do for you more than anything else? Perhaps it’s an early retirement, funding your kids’ college education, or owning that dream home by the water. Whatever it is, set your sights on it and don’t stray. 

Just remember, blind pursuit of goals — financial or otherwise — can have unintended consequences. See Cambridge Analytica, or the recent militia activity in Kenosha Wisconsin, for example.

Putting it into action: Write down 1-3 financial goals. Possibilities may include retirement by a specific age, eliminating your student loan debt, or paying off your mortgage. For each of these goals, write down 1-3 habits that will support each goal.

Bill Gates

Lesson: Frugality pays.

Caution: And so does generosity.

Routinely ranking among Forbes wealthiest in the world for more than 40 years, worth more than $100 billion, Bill Gates wears a $10 watch. He lunches on Big Macs and if you fly coach, you just might find him seated next to you. There’s an old adage in the personal finance space: It’s not about what you earn, but what you keep. This may not make for the most glamorous lifestyle, but a Mazda will get you to the hospital just as well as a Maserati. (Check out our car-buying guide for doctors here.)

But don’t let a miserly existence make you miserable. While Gates is among the world’s wealthiest, he and his wife Melinda are also among the world’s most generous citizens. From 1994-2018, the Gates family has pumped more than $36 billion into its own foundation, which has made numerous inroads in the fight against infectious disease. 

Putting it into action: Frugality starts with knowing your fixed monthly costs. Check out this post on building the perfect physician budget. Once you know your budget, read this post on common budget bleeders and find out where you can make some strategic cuts. Redirect the surplus to the goals you identified earlier. If charity is something that speaks to you, check out the Effective Altruism movement, which has made progress in combating one of the world’s most persistent diseases, malaria. 

Ray Dalio

Lesson: Use principles to not just set goals, but also make plans.

Caution: It isn’t just about what you want.

Dalio, a hedge fund manager with a proven track record at Bridgewater Associates, topped the best-sellers lists in 2017 with his book, Principles. If you want to understand Dalio’s approach, it helps to understand his take on how the economy functions. He made a fun, animated explainer video on that topic, called How The Economic Machine Works. Start there. Then, if you don’t have time to digest this nearly 600-page tome, you can check out the animated version, Principles for Success

Paraphrasing in broad strokes, Dalio’s approach is to carefully formulate financial goals. This comes easily to most of us. The hard part is imagining the obstacles you may encounter to those goals. Harder still is coming up with a plan to overcome them. This is where principles serve you well.

For example, Dalio’s first principle is to embrace reality, which requires you to “own your outcomes,” “confront your weaknesses,” and reflect on pain to make progress. Many of us have a tendency to resort to what professional poker players call “resulting.” If we win, it’s because we played well and we’re great talents. If we lose, it’s because we had bad luck. Embracing reality, becoming a “hyperrealist,” as Dalio would say, prevents this kind of thinking and keeps us oriented toward our financial goals.

Proceed with caution, however. While goals are admirable, if you blindly pursue them, you’ll miss out on other life experiences — things that money or conventional definitions of success don’t bring.

Putting it into action: Revisit the list of goals and habits you created at the beginning of this post. For each goal, embrace reality by listing 1-3 things that could derail your progress. For each of the possible derailments you identify, describe how you will respond.

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