You, like all doctors, enjoy the potential to earn top dollars. Why, then, do some doctors translate their high incomes to wealth, while others struggle financially?
To offer some emotional distance from a deeply personal issue, consider differences among professional athletes. Just as physicians and dentists have raw earning power, so, too professional athletes have raw talent.
However, the average Minor League player in the great American sport of baseball earns $44,00 while the average Major League player earns $4 million.
Do the athletes in the MLB perform 100 times better than the athletes in the Minors? No! Here are the differences:
If wealth-building were a sport, most doctors want to play in the Majors; however, I observe that most doctors are playing in the Minors.
My work with my doctor clients helps me see:
With the right coaching, skills and tools, doctors can join the Wealth-Building Majors. The first step is education and awareness.
© 2019. Vicki Rackner MD. All rights reserved. You may reproduce this post with this byline:
Vicki Rackner MD is an author, speaker and coach who offers a bridge between the world of medicine and the world of business. Though her company Thriving Doctors she helps physicians achieve the personal, professional and financial rewards that attracted them to a career in medicine. Click here to get a complimentary copy of her latest book The Myth of the Rich Doctor.
Every medical organization needs a steady stream of new patients. As you make your own plans for attracting new patients to your practice, here are three “buckets" you can dip into.
I was at a family wedding when a 9-year-old budding journalist came to introduce herself to me me. She said, “I hear you’re a doctor. What kind?”
I replied, “I’m a surgeon”
She asked, “What kind of surgeon?”
I said, “I’m a general surgeon.”
Her eyes got big as saucers and she said, “Oh. So you’re that person who puts the warning labels on the cigarette packs!”
The many people in your life who know, like and trust you—including your own patients and referring physicians— may know the specialty in which you are boarded. How well do they understand what you do?
There is something about the way you deliver care that puts you in a class of one. What is it? How well do you communicate it?
Create a positioning statement that communicates the problem you solve, the results you help patients get and/or the experience you deliver.
2. Power Partners
I worked with an orthodontist who wanted to grow his practice. When I asked him to describe his ideal patient, he said, “I like working with adults.” I asked, “What triggers an adult to invest in his or her smile?” He said, “Brides and people looking for new jobs.” We made a plan for him to reach out to job recruiters and wedding planners with special promotional offers.
To find your power partners, ask yourself these questions:
The answers will lead you to power partners. Meet them. Consider ways you can help your power partners to be more successful by sharing your expertise.
3. Information Seekers
Thirty years ago, my surgical mentor quipped, “The whole world is pre-op.” Now this is literally the case. Patients from around the globe consult with Dr. Google to get answers to their questions. They join online communities. They listen to podcasts and read books.
Imagine if these information seekers found YOUR answers to their questions. This is how my own teenage son found the orthopedic surgeon who treated his shoulder impingement symdrome.
If you’ve ever purchased a new food at the grocery store after accepting a yummy sample, you know the power of a taste test. Technology now allows you to deliver a taste of your value to large groups of people 24/7 at virtually no cost. You can create videos with answers to frequently asked questions. You can offer little pearls of wisdom, like the best way to remove a bandage, or suggest questions patients can take to their own doctors.
To successfully engage information seekers, avoid questions you think patients should be asking; instead gather the intelligence that gives you clues about how you will be found by information seekers. Ask patients who call your office:
You can also engage information seekers locally through radio interviews, TV appearances and local speaking appearances.
Attracting new patients to your practice is critical to your clinical success. Fortunately, with the right strategies and tactics, it’s easier than ever.
© 2019. All right reserved. Vicki Rackner MD calls on her experience as a practicing surgeon, clinical faculty at the University of Washington School of Medicine and serial entrepreneur to help physicians thrive through her company Thriving Doctors. Contact her at 425 451-3777.
by Vicki Rackner MD
As I caught up with an old friend, she shared that she’s in the midst of adding an in-law apartment to her home. She plans to have her parents move in with her.
I said, “That’s wonderful! I know how close you are. Now your kids can grow up with their grandparents.” She replied, “Yes, that’s true, but that’s not why we did it. My parents ran out of money!”
My friend’s father was a top-earning surgeon, and the Deacon in his church. How could this happen?
Today about half of physicians are behind in retirement planning. Here are some steps that you can take today to prevent outliving your money in retirement.
Create a vision of your retirement years. You may have been told that your expenses will go down in retirement. However, if your ideal retirement looks more like a long vacation, budget accordingly.
Plan for a long life. As you know from your own clinical experience, people are living longer. In fact, the number of Americans age 100 and older is up by 44 percent since 2000. How long will you and your life partner live? Best to prepare for a long life.
Factor in taxes. During your earning years, tax deductions for contributions to your 401K’s and IRA’s look very attractive; it’s not as attractive as you pay taxes on the money you withdraw in retirement. Work with an expert who can help you minimize your lifetime tax burdens—both during your working years and in retirement years.
Sequence your retirement revenue. You have a portfolio of investments. The order in which you tap into these “pools of money” can have a huge impact on your total lifetime investment income.
Invest in your health. This is a great way to decrease health-related expenses in retirement.
Explore non-clinical sources of earned income. You can serve as an expert in medical malpractice lawsuits, consult or speak. This income can accelerate retirement savings and augment retirement income.
Consider moving. You can make your money go further in retirement by moving to a place where the cost of living is lower.
My guess is that you would prefer not to be forced to live with your children in your golden years. The best time to plan your retirement is today.
© Vicki Rackner MD 2018
I was awakened at 3 AM by a call from the ER. Nothing too surprising! This is a regular occurrence in the life of a surgeon.
The caller, however, surprised me by saying, “Hi, Honey. It’s Mom. I’m in the emergency room and the doctors tell me I need my gallbladder out. Will you fly out and do the operation?”
The right answer is, of course, “No.” But why?
It’s because when we doctors treat people we love, emotions can cloud our clinical judgment and compromise the medical outcome.
When the stakes are high, we want to make logical considered choices based on the best information available. This is true whether you’re helping patients optimize their health, or you’re building wealth.
Is this how people REALLY make choices?
In the book Nudge: Improving Decisions About Health, Wealth, and Happiness, authors Richard Thaler and Cass Sustein assert that real life decision-making is flawed in predictable and systematic ways.
This may explain why only about half of patients take medication as prescribed.
This may also explain why only about half of physicians report they are on track to retire.
Nudge author Richard Thaler of the University of Chicago received the 2017 Nobel Prize in Economics in recognition of his contributions to behavioral economics. This field explores how psychological biases cause people to act in ways that diverge from pure rational self-interest.
Here are a few predictable errors that erode financial health:
• Loss aversion We will take greater risks to avoid loss than to experience gains. That means investors take risks at the time they should be erring on the side of safety.
• Over and under reactions Investors tend to behave with optimism when the market goes up, and become much more pessimistic when the market goes down.
• Over confidence Investors tend to overestimate their ability to beat the market, and underestimate investing challenges.
• Relativity Investors see the world through the eyes of relative experience. Imagine how you would feel if someone gave you a gift card. Now imagine how you would respond if someone gave you two gift cards and took one back. You have the identical outcome is each case, but it feels much different.
While this is not a formal part of behavioral economics, I observe two other investing mistakes that physicians and dentists make. First, many burned-out physicians use spending as a stress management tool. Second, many physicians are basing their choices on the wrong information.
Here are some steps you can take to avoid the bad decisions that can unwittingly undermine your efforts to achieve financial freedom:
The most important piece of advice? Bring the principles that work well in the world of medicine into the world of finance. While I did not remove my mother’s gallbladder, I helped select the surgeon with the experience, skill and judgement to optimize the chances of getting a great outcome. I also wanted someone who would listen to my mother and be sensitive to the things that were important to her.
Please allow me to suggest that you want to have in your corner a seasoned expert who can help you assess your financial health, remain divorced from emotion and focus on the things that matter when it comes to diagnostic and therapeutic interventions with your money.
© Vicki Rackner MD 2017. You are welcome to reproduce this blog post with this by-line:
Vicki Rackner MD, founder of Thriving Doctors, helps physicians and dentists achieve the personal, professional and financial rewards that attracted them to a career in medicine. Her latest book The Myth of the Rich Doctor that explores doctors’ relationship with money is now available. Reach her at 425 451-3777.
You help your patients prepare for their futures. Are you proactively preparing yourself and your family for disaster?
I know how important this is. A few weeks before Katrina hit, I lost my home and my possessions in a house fire.
Here are a few tips I learned:
I hope that you never need this advice; however, should disaster strike, you and your family will be glad you prepared.
Our thoughts and prayers go out to those in the path of Irma.
by Vicki Rackner MD
I listened to the story of a physician’s financial challenges. He described how unanticipated taxes were eroding his financial health, and along with it his retirement dreams.
This story had an oddly familiar ring.
Not only have I heard other physicians and dentists tell this story. I was reminded of the challenge of treating patients with late-stage malignancy.
How Unmanaged Taxes are Like a Malignancy
Malignant cells demonstrate characteristic behaviors: unregulated growth, a propensity for invasion and the ability to divert resources from healthy cells.
The same is true of taxes. Have you ever considered how much of the money in your 401K is REALLY yours, or what percentage of the sale of your practice you will pay in capital gains, or how much of your estate your heirs will inherit?
Further, the damage from ovarian or pancreatic cancer share something else with unmanaged taxes. They tend to be diagnosed late, mostly because of the absence of screening tests or public awareness campaigns.
Tools to Treat Unmanaged Taxes
You treat patients with ever-evolving therapeutic tools; a treatment plan that incorporates surgical interventions, chemotherapy and radiation therapy.
So, too, financial tools evolve.
Further, the tools for high-earning, high-net-worth doctors are different from the tools for the average American.
Consider this: in 2016 Warren Buffet reported an income in excess of $10 million. He paid a 16.3% tax rate. How? He worked with experts who knew how to use the financial tools and align his investing strategies with the tax code. Remember, the tax code rewards behaviors that benefit society, like philanthropy, job creation and building homes. Warren Buffet knows how to work with the tax laws to let his wealth serve in a bigger way.
Early Interventions Lead to the Best Results
The best time to proactively manage taxes is today.
With whom do you address your tax burdens in each stage of your financial life?
Whether you are in the accumulation phase or distribution phase of wealth-building, seek out experts who can help you minimize your lifetime tax burdens.
Remain open to all of the financial tools that will allow to you manage your tax burdens.
© Vicki Rackner MD 2017. You are welcome to reproduce this post with this by-line:
Vicki Rackner MD, President of ThrivingDoctors.com helps physicians achieve the personal, professional and financial rewards that attracted them to a career in medicine. She calls on her experience as a practicing surgeon, clinical faculty at the University of Washington School of Medicine and entrepreneur to help her physician clients thrive. Her most recent book is The Myth of the Rich Doctor. You can reach her at (425) 451-3777.
Would you like to learn more about doctors and their relationship with money?
Click here to read The Myth of the Rich Doctor. You will discover what Vicki Rackner MD learned through her interviews with hundreds of doctors. She describes the habits that separate thriving doctors from struggling doctors.