Finance for Physicians

Are you stressed out about inflation? There's no reason to worry. It's better to focus on what you have control over and apply it to your situation. If changes need to be made, start making some good changes. In this episode of the Finance for Physicians Podcast, Daniel Wrenne talks about what you should do about inflation, your concerns, and your assets. Topics Discussed: Inflation: What is it, why is it occurring, and how are recent events amplifying it? How much should you have in your pocket versus in other places? Financial Components: Consider income and assets when it comes to inflation Short- vs. Long-Term Inflation: Ups and downs of volatile times and emotions Steps to Take: Solid Financial Plan: Pair up your goals and purpose for your resources Cash: Maximize efficiency to be far less concerned/susceptible to inflation Key Takeaway: Worry less about inflation to have more confidence in decisions Links: Navigating High Inflation Periods How Will The Russian And Ukraine War Affect Your Planning Historical Inflation Rates: 1914-2022 For most U.S. workers, real wages have barely budged in decades Stocks vs. Bonds: Differences in Risk and Return Make a Case for Both Contact Finance for Physicians Finance for Physicians Full Episode Transcript: Hey, everyone. I am looking forward to talking about a hot topic today. It seems like it keeps coming up in our conversations with people. It's definitely in the news and the topic is inflation. We're going to be talking about inflation. Really focus today would be on applying it to your situation, just some things to be thinking about. The goal here is to not stress about it and make sure you're making good decisions at the end of the day. We're going to talk about that and hopefully, you'll get some takeaways to put you at ease here or if changes need to be made, start making some good changes. We'll jump into that now. Okay, so we're talking inflation. A few episodes back, I got into inflation and a little bit more of the why behind it and how it works. Definitely check that out. If you want to learn more about what's going on, what is inflation, why is it occurring now, and how's the recent events tying into that and amplifying it, so definitely check that out. I'll link to it in the show notes. Just a summary or quick review on that, basically, inflation is when prices, or the cost of goods and services increase over time. Whether it be like the gas prices are going up, over time, or the cost of bread and milk goes up. If you think about it, I'm sure you've seen those little books that they show the year you were born. I always remember seeing them in the Cracker Barrel, if you're from the South, you hopefully know what that is. They had to have these books. It shows 1983, that's when I was born. You can buy the book and it shows what was going on in 1983. One of the things they have in there is the cost of bread and milk, cost for a movie ticket, and all those sorts of things. It's always interesting to look at that because it's surprisingly low. If you especially talk to your grandparents or anyone that's older, they're going to remember the day when things were very inexpensive. That's basically inflation over long periods of time. The end result of it is that your money, especially like a dollar in your pocket, is going to lose value. The government targets to keep inflation, ideally until 2.2%–3% ranges. Their target, which they've done a pretty good job at until recently. I think the pandemic, at least that's what a lot of people say is. That set off this recent increase in inflation. As of this recording, it's closer to 8.5%, 12 months ending. That’s considered higher inflation. That's about, I think that was as of April of 2022. Most people consider that high inflation. If you're not careful, the concern here is that inflation is another element, like adding into the mix. If inflation was just consistently 2% exactly forever every year, that would simplify the world a little bit, and it would make it just one less thing to think about. But when you add it into the mix, when things change, it's just one additional factor to take into consideration that can potentially cause problems or mistakes. It can be an opportunity, as well. We're going to talk through that a little bit more like how you can take some steps to make sure you're doing what you need to do. The big issue is things are getting more expensive. I think the question to ask is are you keeping pace? Are you being efficient? You have to have a dollar in your pocket, or I guess, these days as much but most people like to keep some cash—pure straight up currency in their pocket. But that is going to, for sure, lose value as inflation goes up and it's going to increase. The higher inflation is, the faster it's losing value as it's sitting in your pocket. I think the question is how much should you have in your pocket versus in other places and that sort of thing. So we'll talk about that a little bit more. But first, I think the way I would look at it is there are two main components of your finances to think about and keep an eye on in regards to inflation. The first would be income, and the second would be assets. Income is really a great inflation hedge. Historically, wages keep up with inflation, maybe even slightly outpace inflation. I'm talking for the masses. Maybe your pay has not quite gone up with inflation. But overall, historically, wages are a great inflation hedge and they keep pace very well with inflation, which is a very good thing, as long as you're working and earning an income. If you're retired or you're not currently working, that amplifies the effect of inflation on you. But if you're working, I think the key takeaway here is just to make sure your compensation is keeping pace with inflation, that will allow you to at least maintain your ground. Assets get a little bit more complicated. I guess, let's start out with cash. It's straightforward. It's like a dollar in your pocket, like I was talking about, or just a checking account that pays nothing. If inflation is 10% per year, prices are getting higher by 10% a year. In that example, your cash in your pocket or in your checking account is essentially losing 10% of value per year. On the other hand, if you have an investment, that's a different type of asset. If you have an investment over that same 12 month period of time, it loses 10% of its value. Inflation is 10%. That compounds it. It's really like a real loss of almost 20%, like 19%. Inflation has a way of eating up the value of your assets, especially if you're not careful. I think it's good to look short-term, long-term and start to parse them out. Short-term, the numbers can get really scary to look at. Right now inflation is over 8%, like I mentioned. Cash is paying nothing and investments lately have been down. Even bonds have been down. Bond values have gone down lately. A lot of that is due to fears about inflation in the future. But either way, cash is paying nothing, investments have gone down lately. Inflation is over 8%. That's a very concerning peckish picture. Because if you look over the past 12 months, your checking account has lost 8% of value just by inflation eating it up. Your investment account maybe is down 8% percent before even incorporating inflation. It's even down more than your cash accounts, but we have to remember that the short-term very easily can get all backwards and tons of emotion. That's when a lot of the errors happen, when people make big decisions based on short-term, volatile times and emotions kick in, especially when we're talking about long-term oriented things. I'll circle back to that in a second. Be careful with the short-term. Short-term periods of time get wack. That's normal, like things get backwards and don't make much sense. Because if we only looked at this 12 month period slice of time, it would not make much sense. That's very highly unlikely. Historically, this thing does not last for the long-term. You have to keep the long view in mind also when we look at all this stuff. It's good to understand what's going on, but you have to  remind yourself of what that long-term tends to historically revert to. Historically, the long-term reverts to basically some sort of sanity. It cuts out a lot of this emotional volatility that we're seeing. Long-term—I have a link to some long-term return reports and graphs and that kind of thing. But if we look at the long-term, long-term inflation tends to be pretty, pretty low. There are spikes in time. Right now it's 8.5%, past 12 months. But the past multiple years, it's been below 5%. I guess all the way back to the 1980s. The last time it was high, the last time it was in the range of what it is now was back in the early 80s, maybe 1982. In January 1982 it’s 8.4% 12 months, and then 1981 had over 10% inflation. That was a spike. But if you look at long-term averages of inflation, it ends up flattening out to be relatively low. Some things you can compare it to if we're looking long-term, might be stocks and bonds, or maybe cash or real estate or those sorts of things. If we compare it to stocks, like I mentioned just a minute ago, if we're talking short-term, it's all over the place. short-term right now, it's like inflation is higher than even the performance of stocks. you're losing ground, but I'm talking about the long-term now. So let's say, 10+ years, and this all linked to a chart that's all the way back, I think this thing goes back to 1926. This visual I'll link to, it’s going all the way back to 1926 before the Great Depression. Stocks do exceptionally well. They outpace inflation dramatically. Over long periods of time, stocks can be volatile, but they dramatically outpace inflation. They're historically a fantastic inflation hedge. They outpace inflation considerably. They perform very well, historically relative to inflation. Bonds even do very well. Their historical long-term performance is below stocks, especially longer term bonds historically perform very well relative to inflation. They tend to outpace inflation. There are types of bonds that are designed to keep pace with inflation, like an I bond. I'll talk a little bit about an I bond that's been coming up lately. I bonds are designed to be exactly like inflation is. I bonds are basically equal to inflation. But historically, they're at the bottom of the returns, they're like neck and neck with inflation. They're not doing as well as long-term bonds or stocks. Real estate tends to do well, versus inflation, especially real estate as a business. Just owning real estate itself tends to be around inflation, but when you're running it as a business, that can outperform inflation very well. Then cash, we've already talked about cash. Cash, historically, underperformed inflation quite a bit. In other words, cash is losing ground to inflation. The interesting part about it is what are you doing about this? What are your concerns? How many of these different assets do you have? I think, before we get into specifics, I would think about some of these questions and ask them of yourself, or even before that, are you concerned about inflation? What is the underlying reason? Why are you worried about inflation? I think that's a good question to ask yourself. Why might you be worried about inflation? Because maybe you have a very good mix of all those assets, and you're basically doing the best you can. In that case, there's no reason to worry about this stuff. You're doing all you can, and you're good. But in a lot of other cases, maybe you're not, or maybe you're just not sure. Common concerns we see pop up, people will say something like I'm getting killed on my cash. My cash is not returning anything. I need to do something with it, maybe buy I bonds, or something else. Maybe people are saying my investments lately are getting killed, which they have been. Short-term, it's a downturn. Maybe I need to make some changes on how I'm investing or not invest as much of my new cash into investments. The news amps this all up, they tell you, you should be worried. We take that in a little bit, and it can amplify our fears. How do you address those concerns? Well, looking at cash, I think the big killer in inflationary times is cash. What can sometimes happen when there's fear, people make changes towards the direction of safety. They like to flock to safety, and safer assets, in particular, like cash, or savings accounts, they long-term perform the worst relative to inflation but there's this short-term pool towards them. No matter what crazy markets are going on, but with inflation, people are concerned. Maybe people are worried about investing so that a lot of these problems where people lose ground tie in to having too much cash. Or the other big mistake is making changes to how you're investing because of inflation changing. I think the key to all of this is having a solid financial plan. This goes back to when you got to peel back the layers, ideally. A solid financial plan is where you're pairing up your goals and the purpose for your resources together. In other words, you're partnering your resources with or matching your resources with their given purpose and tying it into your goal. It helps you have better answers to some of those questions I was throwing out. It gives you some intent and some purpose. Inflation concerns are normal. They come up but it gets really, really amped up when you don't have a solid, clear financial plan. A good financial plan is going to help you, like I said, pair up those goals and purpose with the resources you have. First part of a good plan is, it's going to help you map out a good short-term reserve plan. A lot of this stuff about inflation is external, factors you have zero control over. It's better to focus on what you have control over and make a plan based on your goals. In the short-term, there's only so many things you are going to need. Short-term wise, typically, cash is a fantastic resource to pair up with a short-term goal. For these short-term plans, oftentimes, a common one is emergencies, like who knows what's going to happen, or like a big major purchase in the next year. You can map out what all that short-term stuff is that you need to earmark cash for. Ideally, you should have an exact cash number that is based on your plan. It is what it is. Cash is a fantastic place to put resources that are tied to those short-term reserves. Inflation is what it is. I mean, it's going to happen, and it's going to eat up the value of that, but it still doesn't change the fact that you need to have it in cash. Then long-term, a good financial plan is going to help you map the long-term goals and your long-term game plan with your resources as well. Investing is the most common vehicle or approach to help people maximize or make progress towards those long-term plans. It's efficient. It works really well, like I was mentioning before it outpaces inflation considerably. Ideally, you have all that matched up where your dollars are doing its thing. Your cash makes sense. You don't have too much cash. You don't have too little. Everything else is  earmarked for long-term stuff, and it's invested in doing its thing. You should be maximizing efficiency and you're going to be far less susceptible to inflation, or even concerns about inflation. When you don't have a plan, you're going to be prone to worrying about all these scary news stories in the markets, and maybe you take action on that fear, or maybe you don't take any action, which can also be potentially an error. The key, though, I think, is having a plan, your plan. I think a lot of these concerns that people are having are rooted in the fact that they have these dollars that are just not exactly accounted for, or they don't have a clear purpose. One of the common scenarios is maybe you have a lot of cash, maybe you feel like it's a good amount, or maybe you're just not sure, but you have a lot of cash. Right now you're like, man, I'm getting killed with inflation. Common solution is I need to do something about it, and I'm going to buy something like I bond. I bonds are designed as the best way to match inflation. They're a great tool for doing that. Maybe you start buying I bonds with that cash. That is a better solution than just sitting in cash, because it does return more, especially right now. It's going to be right with inflation. The problem is you had too much cash potentially or you're not even sure. Maybe a large chunk of that cash should have been paired up with longer term goals. May have been better suited going into something totally different than either one of those things in the first place. If it has a long-term use, you pair that up with something like a longer term investment, then it's not even a consideration for I bonds. I think a lot of times, the problem is that there's not an underlying plan. There's not a purpose for the dollars. When there's not a purpose for the dollars, it's very scary to see them. It makes it almost scarier to see them losing value. If you haven't invested and it's for your retirement, you're like, yeah, no big deal. I mean, I'm not going to use the money in the short-term anyway. It's for retirement. That's a long time away. I get the markets going up and down, not a big deal. But when it's in your cash accounts, and you feel this inflation eating it up, well, that really stinks. It just really gets to you. I think the takeaway is if you don't have a financial plan, this is a very good reason to have one. Make sure you're pairing up those goals that you have with all these resources that you have available. I think that the end goal will be you'll worry less about things like that, like inflation. You'll have more confidence in the decisions that you're making. Alright, that's enough inflation for today. Hopefully, we don't have to talk about it much in the future. Hopefully, things revert back to this lower inflation phase but you never know. I'm terrible at predicting the future. It's best to assume we don't really know what the future is and if it keeps continuing, we'll keep talking about it. Make sure you're navigating it as best as best you can. As always, good catching up with you and we'll talk to you next time.  

What’s your perspective on money? Do you view it as a tool? Do you know how to use that tool? Is it like a hammer that you use to build a house, murder somebody, or that sits on the shelf and collects dust? In this episode of the Finance for Physicians Podcast, Daniel Wrenne talks about using money as a tool and what happens when people don't view money as a tool. Topics Discussed: Money Spectrum: Some people go to extremes, but most are in the middle Temptation: What is more important—more money or more time with family? Money is a tool that does not buy happiness but helps you attain happiness 3 Ways to Recognize Money as a Tool: A tool for what? What are you building? Learn to use the tool. Are you using money to build your ideal life? Maintain awareness about the outcome. Are you using money effectively? Key Takeaway: Money should not be the end goal—you can't take it with you Links: The billionaire who refused to pay kidnappers to save his grandson’s life The Man Who Quit Money: An Interview with Daniel Suelo The Young Physicians Complete Guide To Creating A Financial Plan Financial Vitals Check Part 1: Clarify Values 3 Exercises To Help You Clarify Your Values The Key Process Behind Using Money To Live Better Lives with Jennifer Quire How Can You Become More Financially Competent What’s Your Relationship With Money Contact Finance for Physicians Finance for Physicians Full Episode Transcript:   What's up guys? I hope you're having a great day. I was talking with a client the other day and he was sharing what I thought was a really interesting perspective on money. He was talking about teaching his kids about money. He described money like a hammer. You can use a hammer to build a house. You can also use it to murder somebody, or you can just let it sit on the shelf and collect dust. Most people don't exactly view money like a tool, like a hammer, for instance. Maybe they don't even know how to use the tool, like a hammer. If you see somebody swinging a hammer and they've never done it before, it's pretty obvious that they don't know how to use it. What he was sharing is that he wants to make sure that he's teaching his children to view money more like a tool, and help them to learn how to use the tool. I thought that was a fantastic concept to understand and remind ourselves of not only for our children, but really, it's a good reminder for most adults. I thought today, we would talk about that a little bit, talk about using money as a tool, maybe go through what this might look like, and how you can make sure you're continuing to move that direction. Before we get into using money and viewing money as a tool, what happens when you don't view money as a tool? I think that's a good starting point to think about that. One thing that can happen is you start to, or at least the temptation is to start to view money as the end goal. It's almost like you worship money. That's the extreme, but it can easily become the most important thing in your life like your number one. It can drive everything you do. Along those lines, one interesting story that comes to mind. I'm sure many of you have heard this story. They even made a movie about it. This is a true story. There was a rich oil tycoon and his grandson was kidnapped. I think he was a teenager, maybe like 16 years old or something. Probably because they knew his granddad had billions of dollars so the kidnappers ultimately wanted money to return their grandson. They went after the granddad. I think they were asking a few million dollars or something along those lines. Basically, it was the amount that the grandfather could have easily paid to release his grandson. He refused to pay the kidnappers eventually. I think he made a deal with him and paid him, and this is after months. He made a deal with him and paid him. I think it was like the max tax deductible ransom which I didn't even know was a tax deduction. But pay them a couple million dollars because it was the max tax deduction. Then the agreed upon amount was a little higher than that so he considered that a loan to his grandson which made him or tried to make him pay back afterwards. He eventually paid them some money. The grandson came out of it or was released and had a super rough time afterward. I think he ended up overdosing on drugs and having a rough stretch in between them. That to me comes to mind is the classic example of the person that has become so money consumed that they're not even willing to give up money to get their family member back. It's one thing to negotiate. I don't want to dig too much into this and I wasn't in that situation so I don't know what was all going on. To me, there's months and months of negotiation, and not budging pretty much at all. Taking that long tells me that guy had to have put a pretty high view on his money. I think that if I was in that situation, I would give all my money. I think of my child, if somebody kidnapped my child, I just write a check and you can have all of it because having the people in my life that are most important have a much higher ranking than the balance in my accounts. That's an extreme example. Maybe you're thinking, well, I'm good there. I'm not like the oil tycoon. I'm doing a good job using money as a tool. This is really more of a spectrum here. I think most people are probably somewhere in the middle. It's not as easy as you might think on the surface to see. It's one of these things that’s hard to self identify sometimes, to see where you are on the spectrum. The other extreme would be, I found a story about a guy who basically quit using money completely. I'll link to it in the show notes. It's an insane story as far as how far the other direction can go. This guy lived without money for 15 years in the wilderness, like they lived off the land. He basically gave up money completely. He's like, I don't even want to use it at all. He advocates that we can get by completely fine. He  proved it, and even be happier without even having money at all in the equation. That's definitely, a bit too extreme or way too extreme, probably, as well. Like I said, it's a spectrum and a lot of us are going to be somewhere in the middle there. Probably a better example for us, and I've felt this temptation is, maybe we're deciding to work a little more, just a little bit more. We're already fully committed. We have a family at home. We're already pretty busy but we agree to a little bit more. Say yes to one more thing, just to make a little bit more money. What is that saying? I know, everybody's probably had that and felt that temptation, but what does it really say at the end of the day, especially if you have kids? It's easier to think about it from their perspective, because they're just innocent, and they just want to spend time with you. It's easy to justify that, I'm working hard to support my family. That's easy to justify. At the end of the day, what are we teaching our kids? I think what that is teaching is or at minimum, I would think it would be safe to agree that it's a slippery slope that we're starting to teach them that money is important, or maybe even money is the most important thing. Like I said, it's a slippery slope. I've been there. I'll confess, it's easy to do. It's a constant temptation out there. It's the temptation to earn more, work more, that thing to have more. It's easy to slip up on, but I think the key or the most important foundation is being aware of this. That's mainly what I wanted to talk about today is just having a little bit better awareness. That's always a great starting point. Then taking some proactive steps, because if we're not, the world's going to pull us in the other direction. The world pretty much teaches us that saving money is good and spending money is bad. In other words, money is the end goal. But, is that really true? I mean, most people agree that saving money is good and spending less is generally good, but that would also mean that the people with more money are more successful. The takeaway from that is that I have to work really hard to get more money so I can become more successful and happier, but there's a big part missing there in what the world teaches us. The problem is money itself. It's easy to see money as the end goal—more work makes more money equals a happy life. That's so if we're not careful, that's the way the world is going to tend to pull us. There are all these temptations out there. The problem is the money itself is not going to bring you happiness. It's everything else that's important. In fact, the pursuit of the money pulls you away from everything else that's far more important. Money is not irrelevant. I mean, I don't want to get that confused. It's just a valuable tool to help you live out whatever else is most important. We have to keep those things in order and remind ourselves that money itself does not equal happiness. Money can be used as a tool for attaining happiness but that's a very different thing. I'm convinced that this is the root issue for a lot of the unhappiness in our world today. I think there's a really important thing. There's not enough attention put on this, like on teaching us to view money as a tool, and reminding us that money does not equal happiness, money itself does not equal happiness. That's important to recognize, I think, seeing money as a tool. Beyond that, I think, the next question is what else can we do? We'll talk about three things that you can do beyond just recognizing money should be used as a tool. The first thing is asking yourself, a tool for what? What are you building? You need to know what the end goal is. You need to be clear on what's most important. Otherwise, you're going to be susceptible to getting knocked off track, and all the temptations that we just talked about. Having a clear idea of your values is key. We talked about that. I'll link in the show notes. We talked about exercises for clarifying your values, if you're not clear on that, but being clear on what's most important and what are you trying to build. Then what are those logical steps to get there? If you're looking at the house analogy, what's the floor plan? What's the building plan for actually building the thing? In finance, it's a financial plan. The financial plan is basically the process of putting all this together. We'll link to another show we've done where we cover what a financial plan actually is. At the end of the day, it's building out those steps to use money as a tool to reach that ideal life that everybody's going for. Then just look at how you are tracking in your plan. I think that's a good first step is thinking about well, what's a tool for? What are you building? Asking yourself those questions, making sure you're clear on your values, having a written financial plan, and how are you going to track progress along the way. The second big thing is learning to use the tool. You can't just let it sit on the shelf and collect dust. But you also have to be careful, if you don't know how to swing the hammer, that's going to cause some damage. The question to think about is, are you using money, the tool, to help you build your ideal life out? Think of it like the hammer. Are you using the hammer effectively to build a house? So, learning to use the tool. Well, what does that look like? Regularly referring to your financial plan, gaining financial competency, educating yourself, working on the skills and behaviors. We'll link to some shows on that as well. There's a lot of different ways to fine tune those skills. It's not just about the knowledge and the skills. You have to focus on the behaviors as well, which is like the definition of competency. Having a good relationship with money, we also cover that in another episode, I'll link to that. Practicing money decisions that align with values so it's a little easier to clarify your values, but when you get in your day to day, the problem is you revert to the norm. Practicing in your day to day decision making, practicing moves that align with your values, is a good way to begin to use that tool effectively. As you make these values based decisions, no need to regret, you got to watch out for the guilt and regret. Because if you're using it as a tool, say, you're spending money on something you've planned for and saved up for, and you're feeling this guilt about spending money, don't do that. That's a fantastic thing to do because you're something you value. You've taken the right steps, and you're basically using money as a tool to enjoy time away. Then just being efficient with money. I mean, that's just making efficient money decisions that helps you more effectively use the tool. At the end of the day, it's about moving towards that ideal life, and feeling confident and on track, and well balanced along the way. When you're using the tool effectively, that's how it's going to feel. The third big thing is maintaining awareness. Over time, there are all these pulls and temptations along the way. If you're not intentional about this, you're going to get pulled the wrong direction. This is not something you can set and forget. It's like a lifelong thing. Even sometimes, as you start to see success, there's an added temptation. As you build wealth, for example, as you have more money, there's this additional temptation, it's building wealth in itself can become alluring. Every once in a while, it's good to just remind yourself, am I using money effectively as a tool to live out my values, avoiding the temptation to think about having money, or spending money as good or bad? It's more about the outcome. I think it’s the important thing. If you're saving and investing, you're not actually saving forever, you're just saving to use the money later. At the end of the day, I think the one big takeaway or a thought I'll leave you with, I think it's helpful to remind ourselves every once in a while, you can't take it with you. I think I've talked to older people that have some regrets, or have some wisdom to share. They're typically not like I wish I had more money. A lot of times, it's like I wish I had spent more time with my family because at the end of the day, when you're in your final moments, that doesn't matter. It's irrelevant, because it's gone. You can't take it with you. Money should not be the end goal. Otherwise, you're going to have a letdown at some point. The end goal should be really leaning into what you are going to use this tool for? Focusing on what that looks like because that's much more exciting, more rewarding, and less regrets, that sort of thing. Okay, so make sure you're using that hammer effectively. Remember to use money like a tool. Don't beat yourself up too much on this like this is a lifelong thing. Like I said, I feel the pull, I'm guilty of making some poor decisions along the way. But I think the bigger thing is doing your best to move the direction of what we're talking about today. As always, I enjoy chatting with you. I hope it's been helpful and we'll talk to you next time.  

What is one of the best opportunities you have to take back control of your professional life and avoid burnout from happening? Physician entrepreneurship. In this episode of the Finance for Physicians Podcast, Daniel Wrenne talks to Dr. Myrdalis Diaz-Ramirez about how to get started as a physician entrepreneur. Dr. Díaz-Ramírez is a fellowship-trained, board-certified pain medicine physician and anesthesiologist with more than 20 years of experience. One of her passions is to help other physician entrepreneurs and future physicians design their lives to avoid burnout and be happy physicians practicing under their terms. She is the founder of maxAllure Mastermind and host of the Design Your Physician Life Podcast. Topics Discussed: Physician Entrepreneurship: What is it, and why is it beneficial? maxAllure Mastermind: Physicians talk, advance, and acquire momentum Either entrepreneurs or not? Everything can be taught and learned Happiness = Significance, control, and contribution of what you do in life Entrepreneurship Opportunities: Investor, inventor, coach, etc., to regain control Mission/Vision: Treat your life as a business and find/define your ‘what’ and ‘why’ Plan Priorities: Burnout is unsustainable and makes you unhappy, miserable Action Items: Recognize the problem and that change is needed Surround yourself with those who are successful and willing to help Join and participate in Facebook physician groups and masterminds Read/listen to Rich Dad Poor Dad and The Ultimate Jim Rohn Library Links: Dr. Myrdalis Diaz-Ramirez on LinkedIn maxAllure Leverage and Growth Summit for Physicians White Coat Investor Rich Dad Poor Dad by Robert Kiyosaki The Ultimate Jim Rohn Library Breaking Away From Traditional Primary Care to Start a Concierge Medical Practice Contact Finance for Physicians Finance for Physicians Full Episode Transcript: Daniel: What's up everyone? Welcome to the Finance For Physicians podcast. I'm your host, Daniel Wrenne. Join me as we dig into what it looks like for physicians to begin using their finances as a tool to live better lives. You can learn more about our resources at financeforphysicians.co. Let's jump into today's episode. Hey guys, hope you're having a great day. I'm excited to share my conversation I recently had with Dr. Myrdalis Diaz. We're going to be talking about what I would consider one of the best opportunities many of us have to really take control back in your life professionally and potentially move away from some of the burnout that's commonly happening. That's physician entrepreneurship. Dr. Diaz has been through this herself. She started medical practices, she sold them. She has started an entertainment business even, and has recently started a practice in innovative medicine and has a business where she helps lead physicians and facilitates a mastermind group, which if you're not aware of what a mastermind group is, that's a fantastic way to kind of move this direction. You'll definitely get something out of that. She also has a podcast called Design Your Physician Life, where she helps, throughout nuggets along the lines of physician entrepreneurship. She definitely has worked in this area and has experienced it herself. I think you're going to get some takeaways. At the end, she even shares a few specific action items to help you start making progress towards that, if that's the direction that you want to go in your life. So excited to share that. Without further ado, let's jump into it right now.  Hello, everyone. I am excited to be joined by my guest, Dr. Myrdalis Diaz today and we're going to be talking about physician entrepreneurship, which I love as a topic. I'm an entrepreneur myself. Dr. Diaz is an entrepreneur and has been through many, many different experiences. We're going to get into all that sort of experience and what that looks like to be a physician entrepreneur. Before we jump in, Dr. Diaz, I'd love it if you could give our listeners just a brief background about your story, how you got where you are today. Myrdalis: Well, thanks a lot for having me on the program. I'm so excited to be here. I know that you work a lot with physicians struggling with this precise topic—entrepreneurship and finances—and that's what we've been doing. We have what we call the Physician Entrepreneur Exclusive maxAllure Mastermind. I created that because of my experience. As we discussed before, I've been through different entrepreneurial endeavors myself. At some point not too long ago, we discovered this concept of mastermind where you basically meet to talk about one topic and to advance to acquire momentum for whatever your entrepreneurship or your activities. We decided to do that for physicians because as a physician, I'm truly concerned about what's happening in healthcare in terms of burnout. We have physicians committing suicide 300–400 a year. That's 3–4 medical classes, and I've been burned out myself. I've experienced burnout and through entrepreneurship, we found that to be a great tool to get us out of that and then regain control and remain in control of our physician lives. That's where we have our podcast, Designed Your Physician Life. We give physicians specific tips on how they can regain that. Then our mastermind where we’ll meet for six months. First, since I was very little, I was always entrepreneurial. When I was 7 years old, my father had businesses and I was always wanting to sell out of their businesses at a children's boutique. They have many different things going on. Besides the children’s boutique, they have an ice cream parlor. I would love to go there and take care of the clients. I'm telling you, I was already only 7 years old when I was doing these things. Then throughout my life, I was always so happy when I was working and I don't know if that's something that I had in me. I always visualize when I had my job as a physician to have my office, out of the example of my pediatrician. My pediatrician would go to his office and it was so happy and they were really entrepreneurs, him and his partner. That whole concept of ownership and taking care of your clients, in our case, our patients was always really dear to me. When it came to the time for me to have our clinic—I say “our” because my husband helped me do that clinic. By that time, I had already been designing pain clinics. I'm an interventional pain physician out of anesthesiology, and then we had our clinic. We develop them. We won prizes for them. Eventually, we successfully sold it so that we could take care of our family as our growing family, just trying to take advantage of oh, I'll just be a doctor for now and let somebody else deal with the business so I can have time for my family. It's been seven years of that and I truly learned that really, that's not me. We're back. We had other clinics. We had another anti-aging clinic. Then we got into the entertainment business. I own songs, we were on TV, and media tours with our artists. Then we decided just for us to be the talent. Now the latest project, besides our mastermind for physicians, is really that we're putting together an innovative center, innovative medicine wellness center here in Sarasota, Florida. Daniel: Yeah, it sounds like you've had a lot over the years and have experienced quite a bit. That's entrepreneurship, I think of quintessential. It sounds like you're an entrepreneur from a very, very early age. Some people kind of notice that early or see that they have the gift and pour into that. But I'm curious, especially being someone like you, do you think people are either an entrepreneur or they're not? Or do you think anyone has that in them? What are your thoughts on that? Myrdalis: One of the things that we've studied about mindset, I think everything can be really taught, we are taught to be physicians. You might not want these responsibilities in one way but you want some other things. You might want to have a good experience for your patient or you have an idea and that comes to you. I think it can be learned on how to do that. Like everything, we learn medicine. We are not born physicians. We know that we're healers. For the most part, we don't know how to do it, so we learned that. I think anybody can learn entrepreneurship like medicine, the same way that we invested time, learning all those things that took us to the point where we are physicians today. You still have to learn a lot of things to be an entrepreneur. The fact that as a little child, I was so excited about all these things doesn't mean that I'm really an entrepreneur because I didn't know about finance, I didn't know about how to get money or get loans or get paid, this and that, and develop products. These things can be taught. Obviously, you have the people who have the tendency, who are more in their spirit, a little bit more restless about what they want to do and more defined. I think as physicians, if we're physicians, we can learn entrepreneurship. It's a great tool to really regain and remain in control of our physician lives. Daniel: Tell me about that. I'm curious about regaining control, because I think that's a lot of the issue behind burnout. That's the challenge in the career. It's like I got into medicine because I love it, but now I'm hating my work. Can you talk about that regaining control aspect? Myrdalis: Well, when we have our physicians come and I was there myself, we feel like we have so many people in between our plans or thoughts that we have for that patient. That patient, they experienced the physician, patient experience is really lost. We have no control nowadays—between the expectations from the government, insurance, hospitals, all these other costs, and things that are putting. You've been trained to do something, then you get there, and you have some many obstacles to do them that when you get through entrepreneurship, you’re it. You're the head of the vessel, and then you're doing it. Now, what we find is that you're able to be a physician for pleasure, for joy, you're not a physician for need. That's what we've been trying to do. Then regaining control is when you talk about the definition of happiness, the things that make people happy. One of them is to have significance and control of what they do in their lives and contribution. This is how the tool that we've identified really gives physicians that sort of freedom again. Once you learn these concepts, it's hard to go back, so you're able to regain control of your life and then you're able to remain gaining control of your physician life. Daniel: Yeah. I think back, we had a prior episode, where my friends, Dr. Brown—both their last name is Brown, they're a married couple—but they were really kind of burned out in primary care and mainly because it was not how they saw, ideally medicine being practiced. That was their number one issue. That drove them to explore. They would not consider themselves like natural entrepreneurs, but that drove them to consider alternatives or solutions or whatever. They explored and found concierge medical practices and started going down that route. Then basically started their own practice from scratch, where they could have practiced medicine on their terms. Now they're like, five years later, as happy as could be in their medical practice and can't imagine even retiring. It has become the solution to their burnout by actually starting business for themselves. I'm sure that a lot of people's stories in several years. Myrdalis: Yes. We have them in our mastermind. You can find entrepreneurship within the medical practice, which is ideal for many. We still want to remain doctors. You can also find entrepreneurship by becoming, for example, a real estate investor, like we have many physicians who have as examples to come as coaches to our practice, and they decided that they wanted to invest it in one to really be in the part of doing so much of the work. They found passive income through real estate investments like syndications and things like that. They become entrepreneurs that way. You have to have your own company. You have to learn about the laws of that, the taxes, and the benefits. You really have to learn that aspect and you're an entrepreneur like that, and then when they come back to be physicians, they don't have to worry about the income that the physician's life will give them. They will be happier going to work. All these obstacles we have, that's okay, it doesn't matter, because I know I have something that I can leave out of by achieving financial independence and ideally, financial freedom through these other investments. You can do that. There's some other physicians who are also like, you know what, I'm just going to completely step out of medicine, but still use my physician skills and they might be going to become coaches directly for different sorts of topics, like I'm a coach right now for physician entrepreneurs. That's what they want to do. Then some want to do a combination or outside. Some might find that they decided to invent the greatest next thing in medicine in terms of devices and they learn how to get money and get investors and laws through that process. The stories are amazing for how you can get that control back like your friends, Dr. Browns did. Daniel: How do you start to find that or how do you start that path? Myrdalis: Well, some people know what they want already. What I see is that many of our maxAllure Mastermind members are really burnt out. You're numb with the pain of this and you get lost, so you have to really do some work. One of the things that we do is that we try to define the vision and try to find you. We go through a series of exercises where we find your vision. We treat your life as you would treat a business like trying to find the meaning, defining your mission, your vision, and then defining your why. Because if you will tell you, oh, you have to find your why. But you cannot think to find what these why they're talking to me about. Daniel: What do you mean? Myrdalis: Why? Why are you talking? We go through a series of exercises to define first the things that you would like to lead your life like you want to live your life based on what so we go through that exercise. Then let's go through your day. Let's define the analytic, find what you want out of life. Then once you know that, then we go into the different things that are your interest, maybe you have an idea, and you haven't explored it before. Maybe you already have a business but you are kind of stuck. Maybe you want to learn a different skill. Then that's when we get into those but you really have to work on defining these things before being successful. Because it's not going to be based. One of the things that I found out when I was burned out is that you're so tired, you want something to happen. One of the things that you might want to get to is that I don't care what it is. I'll just add it into my life, and I'll see if it works. But it's not going to work if you don't have a solid plan, a solid base. In medicine, we have all that, like we've been trained for so many years. That's there, the solid bases of knowledge. But we don't necessarily have the entrepreneurial concept. For example, somebody might come to you and say, as a doctor, do you want to be medical director for this? Then you’re thinking, oh my goodness, I'm so tired of this. This thing on the side could give me some extra money, and then I could get out of it. But do you really know what medical directorship would entail? Still, it’s not your business so we get all these things. We have to define that first. Then you get to see what things you want to do and you can be successful. Daniel: Yeah, you mentioned real estate. A lot of people we work with bring up real estate or try or start into real estate, whether they start buying rental houses or syndications, or there's a bunch of different flavors of real estate. A lot of them struggle with it. I like what you said about values and purpose and leading with that. I think the number one reason where they get hung up on is like, you were also saying, it's like they're adding on, especially if you're buying real estate, like if you're buying a rental property, it's a completely new thing. Myrdalis: It’s a business. Daniel: A business, yes. Myrdalis: One rental property should be seen as a business. One rental property should ideally have its own LLC, for asset protection, for tax purposes of business. Then you have to make sure that the rental you're buying, what the restrictions of the area are. Maybe you're going to get your rental, and then they're going to suddenly say, oh, we're not accepting any of that type of rentals anymore in the area. Then you have to have your team that's going to help you say you don't have to be with the toilet thing in the middle of the night. Daniel: What if they leave? What if they don't pay? What's your late policy? Do you have a lease? What do you do when I've got one rental property and then now, I have none. I've got the call in the middle of the night, it's like the toilets are overflowing. Who handles that? Then what happens when it causes marital problems is your spouse is like, this is ridiculous. You don't get calls in the middle of the night to deal with the rental property when you already have a job. I think the issue is that, well, there's a bunch of issues, but it's like adding on top of an already full plate. Like when you add stuff, you have to say no to other stuff. When you say yes to new stuff, you have to say no to other stuff, unless you have extra capacity. But if you're the type of person like all of us that's always saying they're busy all the time, in order for you to add a new thing, you have to say no to something else, because it's just like time and time out. The values part is the other big thing. They don't have a passion at all. In fact, they have the reverse, they hate it. They're not interested or maybe they have a soft spot where they're not going to be able to collect rent or something or they just haven't gone through the process like you're describing.  Thinking about it, what's the purpose of it? What's my why? What's my values? What's the values of the business, and getting that right on the front end? First, before they even get into the business. It's just more like I did the business because my buddy said so or I did it because my parents did it and they made good money in it. Myrdalis: Would you choose Urology because your parents said so? Daniel: I mean, it's common. People do it all the time. Myrdalis: Well, you wouldn't choose a medical specialty because your parents said, right? You wouldn't be into OBGYN or pediatrician. These are things that deliver passion to some extent, and for any business to be longer lasting, you should have some sort of passion. One of the things that physicians don't know is well, first, maybe your friend who has this successful house, well, they probably have a passion for it. They have been loaned the knowledge that they have acquired somehow because to have a successful business, either do it through coaching or experience that you've had for a long time. It's a process. It's not just successful. The other thing is that your friends, they chose that and maybe they didn't choose something else because they didn't like that something else. For you to be able to choose, you have to know your options. If you don't know your options, and you just grab whatever comes to you, you don't know if you're really doing a good investment. You have to learn about that to be successful. One thing is that nowadays more than ever, we have ways as physicians of learning these things. There's tons of people who are successful at this. I would tell you, don't do any financial investment without knowing about it, without being coached, without really finding your bases, covering them, then do your plan. These are not emergencies. It's not an emergency that you have to buy. Nobody's bleeding. If you don't buy that house right now, and then that deal, it might tell you, this is going to be what the next deal is going to come. That sounds like there's no urgency for that. Oh, but she did. The numbers are changing. Things are just better, then you know what you want and how to do it before you invest that sort of money. Oh, actually, it's not an investment. It’s losing your money. Daniel: Yeah, and none of us want to do that. Are there specific stories that come to mind for you of people that are hung up? I've had times in my life where I'm really overworked, and I'm thinking more of the hours—my plate’s full scenario. I know we work with some people that are in this situation. There's something about when you have, say, it's your work and your work is 50–70 hours a week, or whatever, and you have a family at home with kids and commitments. That and you don't like it, or you're burned out, but there's no space in your life to even start to make any progress. How do you work through that if there's no space, because we know we've kind of gone through that hardship? Myrdalis: We make the space. We have to learn about priorities. What's the priority here really, to get out of that situation, that burnout, because you're going to die. Either you're going to commit suicide, or you're going to be so unhappy, something bad's going to happen. You can lose your marriage. You can lose your children. Daniel: It’s not sustainable. Myrdalis: It's not sustainable. I'm going to give you this example, a wonderful example—bariatric surgeon, female, three children, with problems at home, on call, going to the hospital every single day for five years in a row, no vacation. With all these challenges coming with COVID, problems coming where the volumes went down, the pressures of the hospital, then wanting to partner with people who were really not quality physicians, and having directorship of three different programs. She started these programs, brought a lot of resources for the hospital and more income, and still hasn't made any extra money on those positions that she has. She has no control over those things. Once we still remain in the community, how can you talk to somebody who every single day goes to the hospital? The other day, going out, goes out to dinner, goes home to her children and gets called to the hospital, goes home back again at four in the morning to start again at eight in the morning rounding for five years. You tell it to somebody like this, they're exhausted, they don't know. You have to turn to them and tell them, you know what, this is what you're going to do. Sometimes that's what it takes. That's what it took for this physician. Now, with one hour of these meetings a week, they find out, once they define what they have to do, what they can do, what the possibilities are, that you can remain, then the time will come. You will make the time, trust me. If somebody calls you that your house is burning, you're going to make the time. You're going to leave everything or something's happening to your child, you leave everything. Then you go there. This is what's happening. Our homes are burning. We're burned out. Our relationships are burned out—our relationships with ourselves, with our family, with our friends. We just have to make the time. If you make these commitments of one hour a week, you'll see how you make the time for the rest. Then you learn where you have to prioritize. Now you learn what to say yes to and what to say no to. But it's a commitment you have to recognize. Like somebody who's sick, unfortunately somebody who is with an addiction, or a mental problem in some sort of way, which is this mental health. Burnout is mental health. Once you recognize that the problem is there, you have to seek the solution. It has to really come from you. Then we have the resources to do that. Then after all this is taken care of, that's when you go to Daniel. Hey Daniel, where can I put my money? Which type of property? Is this a good deal? Because you're not going to invest in a good deal before you talk to Daniel, your financial adviser, and then you run the numbers by Daniel. Then he will tell you that deal doesn't sound good, don't invest there or this deal. Please don't let this one go. This is your time. But you have to solve all those things first. Daniel: You got to get that balance. I mean, there's never a perfect balance too. That's another thing like perfectionism is kind of common itself. That's a separate problem. That's why I'm hesitant with the word balance, because it's not really possible. Myrdalis: Well, it’s not perfect. For example, do I exercise every day? Do I meditate every day? I don't. I know the days that I do and I know that it's a priority. You have to do it everyday. That comes into habits. That's another section that we teach about habits and the things that you have to make you successful, but you have to be aware. These things have to come where you are intentionally planning your life, intentional planning your day, and it's not like you're going to go crazy doing the planning, but you're going to go crazy if you don't plan. Daniel: Yeah, you got to take a timeout. I think even just having some silent time, maybe once a week, or I don't know, a little bit is key. If I take a day off of work and I'm solo by myself, and less interruptions, that's when most of the ideas start coming. You can kind of think outside your day-to-day but it does tie in to time, which is difficult, because time is already already in your head. You're used to these commitments. You have to carve it out at the end of the day. Myrdalis: Yeah, but think about this. Do you want to be an information consumer all the time where you're consuming a movie that somebody else made, a TV show that somebody else made, and a news that somebody else made, whatever it is, all day long? Or do you want to be creative, free to be creative, you need that time, space, like nothing. It's not only talking about the cell phone or social media, anytime on your own, in the shower, whatever. You need to have some time, or you can create something. You cannot create if you have noise in your head all the time and that you have to carve out. You have to carve out time for you to get out of the hole. You cannot get out of the problem if the hose is right there on top of you and you're staying under that hole. How are you going to dry it? You're never going to get dry. You're never going to get out of the problem. You have to get out of there. Daniel: I mentioned perfectionism. I think it seems like that's common. I don't know, everybody's got a little bit of it. I have some of it in me. In medicine, I think that maybe they attract people that are perfectionists or maybe it's furthered in training. I don't know, but I think that makes it even more challenging, possibly to go the entrepreneurship route. Because entrepreneurship is like failures guaranteed pretty much. You're like putting yourself out there, in some ways, your idea, or whatever, you're putting it out in the world, and there's a chance it's going to completely flop. Myrdalis: It's a combination of both things. The way that we go as physicians, we develop a career that you're expected to be the best from before. You're a doctor, right? The screening to be a physician, you have to be so good at so many things, or otherwise you won't be a physician. It starts way before from when we're very young. That's not to say that there's people who don't have the best reasons till they make it to medical school, and they're probably better physicians than anybody else. But it starts from there. Then once you're in, forget it. If you make a mistake, something bad's going to happen. You don't want anything bad to happen. In terms of entrepreneurship, this is the same thing, like you fear. However, it's crazy, you have this doctor or somebody told me they purchased this home, I'm going to buy one and then just make it a rental but you know it doesn't make sense. Then they have more work instead of just trying and not being afraid at that point of failing because they think that they see one to one kind of thing too, which is not in this case. But perfectionism, yes, it keeps us from doing a lot of things. One of the things that I mentioned is like this is not an emergency. So you can train yourself  and there's a lot of teaching and resources and coaching that you can prepare yourself the same way you did for medicine. You don't have to wait as long. Obviously it is much quicker, like for us is six months and people are really doing great things within six months. Then you can prepare yourself before you go to failure. Like anything else, if you do enough medicine, they say that you're going to be sued. I give people over 90% chance if you get into your 78th into your 60s, and you're practicing medicine, that at least you're going to be sued. It's not failure, but it's just something that’s not a good outcome that you have in your life. But the same thing with business, yes, you can fail. The important thing is that if you educate any of your plan, you're really going to mitigate the losses. That's where we have resources, and you really have just to carve that little time out. That's it. Daniel: Yep, carving that time out. Do you have specific actions people can take to move? Maybe in doing the traditional practice, I'm grinding it out, working, and I'm like, ah, I got to change this. Something's got to change, something's got to give. Do you have specific actions that that type of person can take? I'm talking today, like quick steps? Myrdalis: Well, first is recognizing that we all have a problem there. If you don't recognize that you really need change, you're not going to be because people can say, oh, you know what, that's okay. I have all these things, I can take it, and I can do it. I can just keep going. But we really have to take, like you were saying, that pause, and then think about ourselves first. So that would be the first thing that I would say. Number two, we're really the sum of who we associate with. You are who you are hanging out with. If you're hanging out with people who are burned out, or negative all the time, that's the vibe that's going to surround your life. That's how you're going to behave. So you have to really surround yourself with people that you see more successful. Maybe you identify somebody around you who's happier, maybe they have that rental that's really working really well for them. But he's not just going about to get a rental because they have one. It’s really asking them. Ask the people around you. They’re really willing to help. They're really wanting to tell people nowadays, what they've done that they're successful at, and they can hook you up with other learning opportunities so that we learn before you do. In terms of resources for physicians, online for example, you can go to Facebook and LinkedIn. For physicians specifically, there's quite a few groups and you can explore that. There's a lot of physicians wanting to help each other. To mention some, if you're a female physician, there's female physician entrepreneurs. That’s one group. There's physician side gigs, where any physician, for the most part, can join these types of groups. There's Leverage & Growth Summit, a meeting that happens once a year. That's where I started my first mastermind. You can look online. Daniel: The conference, Leverage & Growth. Myrdalis: That's it. That's a conference here and there's many different conferences that are happening. I know why cold investors are very popular and they have tons of financial topics. Daniel: Then they have like total wellness and they seem to cover a lot of topics there. Myrdalis: Exactly. Then you have coaches, like our coaching group is maxAllure Mastermind. We get in small groups. We coach small groups of 10. We want to coach in a group because you really grow in a group. But we want to coach in small groups because we want everybody to have the opportunity to participate. There are some other groups that are bigger, and some other physicians are really teaching and coaching for bigger. The other thing is that in our group, you can call it holistic. We don't really call it holistic, but we have six pillars where we help you to really figure out your vision and get you through these steps. Then we take people who already have businesses and were very successful. For example, we have this particular mastermind coach, she's financially free. She handles over $200 million in assets through syndication. She did this process within less than five years, really closer to three years. She's been on our mastermind as a member and now as a coach. We've talked about branding, for her case so I don't have to teach her about business, but we talk about branding. Then we bring an expert for branding, and we help them so it doesn't matter which stage people are at, they can benefit from the work that we do in terms of either defining what they want for personal change, defining their business that they want, or acquiring momentum for their current business. Those things you can do is first, identify that you really have a problem. These are like two years. That's like anything. Burnout and being in control is really a mental situation. Then finding and surrounding yourself with people who really are useful, going to groups that can help you and then seriously considering coaching. Unlike other things, medicine was very long time to become a doctor. We can really help physicians within six months to have these plans, and they're ready to go for whatever it is in their personal or business life. Daniel: Right. Then the sky's the limit. I mean, I completely agree with you. You made me think of a few things as you were going through that. It seems like you were saying, recognizing is always the first step, and then committing to make a change. I do volunteer work sometimes at a homeless shelter in Lexington. I was doing it this morning, actually, that's why I'm wearing a baseball cap and a T-shirt. Myrdalis: He's wearing a baseball cap backwards, by the way. Daniel: But anyway, I was doing that this morning. I do outreach, which is like we go out and talk to homeless people and try to help them come up with solutions, basically. There was a guy we were talking to. He's addicted to drugs and went through rehab, had a slip up, and was back on the streets because of it. He was telling his story. I've talked to a bunch of homeless people on the streets but what was unique about this guy this morning is he was like, I'm ready to go. Because the guy I'm with is like the resource guy. He's like, I'll connect you with this rehab or we can get you here, we just got to plug in. When we find a guy like that we plug him in. So that's what I've learned in it is like 95%, the majority of them are not ready. But this guy was on it and ready. He's just like, I know I need to get help. I'm ready to get up. That's what I was talking to the other guys I was with about it. They're like, yeah, when you get somebody like that, when they recognize it, it's just about plugging them in with the resources, which is just exactly what you were saying.  Myrdalis: That's the main predictor of success. Once you have somebody who wants to do it, you just give him. There was something that they didn't mention that when the student is ready, the teacher will appear. That's what happens. That's exactly what happens. Daniel: Yeah. Then the second part about it, I thought was interesting. I always say, you're the average of your five best friends. That's like a Jim Rohn quote. I don't know if you've seen that before.  Myrdalis: Yes, you have to lead. Actually that's another tip. Okay, before you tell me the rest. Jim Rohn. The ultimate Jim Rohn library. So read that edition. It's not a reading but an audio power review. Daniel: Oh, yeah. Jim Rohn everything is fantastic. Myrdalis: But the ultimate Jim Rohn library. If you do that, and you also do like Rich Dad Poor Dad, those two things and you're like, fired. That's another thing you can do right away today. Go and buy those. Daniel: And put it in your car. You can listen to it in your car too if you have a CD player. Do people still have CD players? I have a CD player in my car. You can listen to it on your mp3 or whatever in your car. Jim Rohn is great. I listened to his stuff for like a year straight in my car as I was driving. Myrdalis: My whole family—16 years old, know Jim Rohn. Daniel: Really? Myrdalis: Yeah. The whole family knows Jim Rohn and Rich Dad Poor Dad. Daniel: Yes. Those are two great resources. Myrdalis: The books that we read and that we listen to. But yeah, those two are like the Bibles.  Daniel: That's like getting your mind right. The philosophy is like getting your head in the right spot. Myrdalis: Philosophy. Daniel: Yeah, he's an old guy, kind of talks a little unique, but it's fantastic content, I promise. But yeah, you're the average of your five best friends. This guy is about to go to rehab again. The guy that the connector that I was with, he's like, we got to find the right one. It's all about getting him into the right rehab place because we want him around the people that are going to lead them in the right direction. You can even be proactive about it too. When I realized I could, I mean, it's not like you want to fire friends, but you can choose your friends. Myrdalis: You can love your friends, you can love your family, you can love them. Don't stop loving them. But hang out with people with similar interests, like-minded people, and then you have the time for your family and friends. Then you have the time where you're going to be growing and getting out of this burnout experience. That's going to be where you're going to be spending most of your time if you really want to heal and if you really want to take control of your life again. Daniel: Yeah, so if your buddies you sit around after work, and they're like, oh, work sucks, I'm doing nothing about it, stop hanging out with them. Go. I mean, you could still love them, but you got to the time that's terrible for your mentality. It just rubs off onto you, even if you don't really realize it. I love those action items. They're very good. So where can people find you if they're interested in learning more about your coaching and your services? You got a great podcast too, you get all kinds of stuff. Myrdalis: Thank you. I love my podcast, I have to say. I like it. It’s called Design Your Physician Life. So you can find us on any platform, Apple, Google, Spotify. It comes through Buzzsprout. For those who know Buzzsprout, it's called Design Your Physician Life. And there, you will learn specific tips and you can work right away and try to define what you really want to do. We have alternatives. We have successful physicians for the most part who have done this before. They have nothing different than you have as a physician. We just decided to take action. We decided to learn about ourselves and just decided to go for it so that we can either continue to be servicing our patients or decide on a different pathway as physicians. The other one is the main one, maxAllure. It’s maxallure.com. That's our mastermind, our physician entrepreneur mastermind. Actually, our next cohort is starting at the end of August. We only take 10 people, so we’re please recommend that if you want it, we do 10 people per cohort. It's a six month commitment once a week. We get to really meet each other. We became friends to the point that just last week I was at one of them's wedding and we met online. Daniel: You're involved in it with the mastermind. Myrdalis: Absolutely. I learned the same with everybody. I'm the facilitator of the mastermind. Different from other masterminds is one it’s for physicians. Number two is the small groups and we have one on one coaching with different coaches that you're going to go through one on one with. You get coached privately by me, by a project management expert, you also get coached in front of the group by an expert who has done what you want to do. Once we identify what you want, or something that could help you. We get you a coach that you either want to get, if I can get them I'll get them from you for you, or I know who's going to help you and we bring them and everybody goes that way. At the end, you leave with a blueprint—a specific blueprint of what your next three months can look like after you leave us. By then, you've learned so many opportunities, alternatives that's really mind opening. People are transforming their lives in control. They're not lost. They tell you like I was so lost here and now that I'm doing so much better. So maxallure.com. Come and join one of our webinars that are coming now later in July. Then you can also see us in 2022. Then you can also go through our signup. We start at the end of August 2022. Daniel: Yeah, I'm a big fan of masterminds. The setup of study groups or working with your peers, especially mastermind is great because when you have a facilitator, if you can pair it up with what you're looking to do, you can leverage other people and you know their success and learn from them. A lot of times we try to do things alone. That's not a great way to go. We can only get so far alone. We have to ultimately work with other people. I think that's where it's at, especially intentionally selecting these other people that are right in the wheelhouse. Then there's the accountability of working through that process. For people that are really wanting to move that direction, the mastermind setup is fantastic. Myrdalis: I’ll make you accountable. Every week, we report in front of each other so we have accountability. Every week, we have what we call the minute of accountability. You have a minute to tell us what you've done—exactly what you've done for your business in the last week. Then we have the support of the community. We have the support of all these coaches, and then the coaching itself that happens. You have a curriculum that we've identified based on our previous masterminds, things that people really ask regularly. We have workshops and challenges and our Facebook groups and things that you really have to grow. Daniel: Yeah. I love it. Awesome. Well, it's been fun and I appreciate you coming on today. Myrdalis: Well, thank you very much for having us. Thanks for all you do for us physicians. Thank you for having this podcast. Daniel: Yeah, definitely. Myrdalis: Have a great day. Daniel: As always, thank you so much for joining us today. If you found this valuable, please give us a review on iTunes and share with a friend. Also check out our website at financeforphysicians.co for all sorts of additional content. See you next time. Finance For Physicians is not an investment, tax, legal, or financial advisor. All content included in this podcast is for informational purposes only and should not be considered financial, tax or legal advice.  Material presented is believed to be from reliable sources and no representations are made by Finance For Physicians as to other parties, informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. If you don't have an advisor or like a second opinion, feel free to check out our website for recommended advisors.

What does financial competency look like? What are its fundamentals? Everybody wants to be competent, especially when it comes to competency with money. In this episode of the Finance for Physicians Podcast, Daniel Wrenne talks about the components of and how to gain financial competency. Topics Discussed: What is competency? Ability to do something successfully or efficiently Competency Components: Knowledge, skill, and behavior Competency Challenges: Knowing what you need, but not getting it done Overconfidence: Thinking you’ve gained wealth, but really, you have not Humans are Humans: Ask questions, ask for help, don't be too hard on yourself Warning Signs: Take literacy quiz to understand your relationship with money Links: Financial Capability Study: Take the Financial Literacy Quiz Financial Capability Study: Take the Investor Literacy Quiz What’s Your Relationship With Money? Contact Finance for Physicians Finance for Physicians Full Episode Transcript: Hello, hello. I hope everyone's doing well today. I was reading an article recently about competency, how to gain it, or what the different components of it were. I thought it was really interesting. The article was not about finances, but I thought it would be great to explore financial competency and what that might look like. That's what I wanted to talk about today. Going through what financial competency looks like. I think this is really important as far as fundamentals go. Everybody wants to go in that direction. Most people at least like the idea of competency with money. Exploring this, I think, will be helpful at a minimum as a refresh in some of the concepts. That's what we're going to dig into today and we'll get that going now. For starters, what is competency? That would be, as you might think, the ability to do something successfully or efficiently. This article I was reading was breaking down those components. There are three main components. Number one was knowledge. What is knowledge? Knowledge is what is known of a particular subject. It's kind of theoretical. That’s like the book smarts. The second component is skill. That would be the ability to do something. You're applying that knowledge to a specific situation. It's developed through experience and practice and is very much practical. The third component of competency is behavior. That would be like the way a person acts in response to a particular situation or stimulus, particularly in respect to others. Behavior, skill, and knowledge are all necessary components to gaining competency in any given subject. If you think about people that are highly competent in something, you're going to notice they should be solid in all of these three areas. I thought that was a good order, knowledge first, then skill, then behavior. I think you have to gain that knowledge first or at least some level of it before you start to work on the skill. Then when you get to the final level, it's like fine-tuning those behaviors and being aware of those. You got to learn the subject, you got to do it, then you got to learn those associated behaviors. I think that's a good order to follow for starters. Some people have gained some knowledge but they're definitely not yet competent. Say you're a baseball wiz or something like that, but you can't actually play baseball or maybe you're a baseball wiz and you can play baseball really well. You can hit home runs all day long, but when you actually play a game, this mental block causes you to just shut down completely. The behavioral part is causing problems. Competency is very difficult to achieve, but it can also be very rewarding especially when we're talking about your finances. A lot of you probably know competency with your profession. That's something you worked towards as you train. We're talking about money today. In order to do this, you have to learn to use money competently. That's obviously the goal. As we start to talk about money, let's look at some examples of what it might look like to be competent with your finances. Knowledge, knowing what a backdoor Roth IRA is. The skill will be correctly funding a backdoor Roth IRA. Then the behavior maybe is recognizing you're going to forget it and creating some sort of automation and reminder system so that you're continuing to fund it. Another example is, knowledge will be a financial plan, here's what it looks like and here's why it's important. Skill will be knowing how to create a financial plan for my situation. The behavior will be I have an updated financial plan that I follow to the tee, even when life is crazy. Another example is knowledge will be like this is what a will is or an estate plan. The skill will be these are the steps to create one for my family. The behavior will be I've created a will, it's signed, and even though it's very uncomfortable to do. There are a million examples of this that you can come up with around money. When you look at all three components, it becomes very difficult. Classic examples of the struggle, maybe you know you need to save money, but you're not saving. Maybe you need a will, you're not getting one. Maybe you need a financial plan, but you don't have one. Sometimes you're not even aware of it at all. Knowing that you have an issue is actually better than having an issue and not knowing about it at all. That's probably the most dangerous situation at all. Also, overconfidence can be an issue too in the struggle here. That would be thinking you got it going on and really not. That's a natural tendency for people to not be more confident than they really should be. These are the things to watch out for. Also, maybe you're thinking you made the end goal of becoming rich without realizing it. That struggle can happen where it's all about gaining wealth and that sort of thing. Another thing too that we're always kind of battling on is you have to have some space, I guess, some capacity, to think in this view. When you're just crushing it at work, you don't have any capacity outside of that. It's to go to work and then in the few hours outside of work, it's like family or taking a break. When you don't have any capacity at all, it's difficult to dedicate time to any of these things. That's the thing, all these things of gaining competency in anything is going to require a considerable amount of time and attention. These are the struggles. It's good to be aware of these things. How do you work in these areas? I'll throw out some ideas depending on which of these you want or need to work on. Knowledge, the first component. Obviously, Google, blogs, and you're listening to podcasts right now so that's good. Podcasts on personal finance, reading books, or learning shortcuts from other people, those can all be good things. I think if you're not sure where you're at, maybe take some sort of a quiz. I'll link to a financial literacy quiz. It's pretty good, like a baseline foundational quiz, or I'll link into another one like an investor knowledge quiz that gives you an idea of where you stand there. I've had a few people ask me this question, but ask someone who knows what it looks like to be competent financially for people like you. Ask them how competent you are if they know you. Our clients we work with one-on-one, they've asked us this question before. How am I doing? Am I very financially literate? I don't know if they've ever asked it exactly like am I financially competent? People should word it that way, but people have definitely asked us how I am doing? How is my financial literacy? That sort of thing. Asking someone that knows what it looks like and how you're doing. If they're honest, they can provide some good feedback on what you might need to work on and that sort of thing. Skills are a lot about just practicing and being aware of where you're falling short, learning from mistakes, and not repeating mistakes. Asking for help is always good. When people tell you you made a mistake, listening and actually trusting that. At the end of the day, sometimes people get hung up on the knowledge and never really get into the skills because you want to master the knowledge. I think it's good to have baseline knowledge, but you definitely have to get into the practice of it and work on skills that will complement things. As you experience it, that's where you can really start to get traction there. If you have the knowledge and the skills, yet you're still having problems in terms of feeling good about finances, there's a really good chance it's related to the behavior or the psychology, whatever you want to call it, whether you admit it or not. Typically, if you're still not feeling good or making progress and you do know the knowledge, you do know the skills, and you've verified that it's typically behavioral. Recognizing those warning signs and learning about your relationship with money, understanding what that looks like, and understanding what behavioral finance really is. Behavioral finances are all about the bias and tendencies we all have naturally as humans that can get in the way of us making good financial progress. Just some quick takeaways to think about, as I mentioned, it will be good and helpful to take a financial literacy test especially if you're curious where you stand or ask other people that might know what it looks like to give you some feedback. If you're training or early in practice, some topics to focus on, I would say, in that stage are maybe learning how to make a financial plan or what a financial plan actually is and focusing on student loans, budgeting, insurance, and basics of estate planning. Those are good knowledge-based topics to focus on in an early career. Now let's say you're established, further along, things I would add on would be investing taxes, compensation, and contracts. If you have your own practice like running a business, there's a lot of stuff that comes along with that as well. I think the big thing though is don't throw in the towel on this stuff. It's like small steps. It's one of these lifelong things and there's no shame in asking for help. Ask us. Part of this podcast, the intent of this podcast, is to be something that helps you gain additional competency in personal finances. If you feel like you want to learn about a particular topic, throw it out there, and we'll be happy to cover it. We try to focus on these three areas. I think it's important to focus on all three areas because you have to be solid in all three. No shame in asking for help. If you're working with us one-on-one and you feel concerned about any of these areas, feel free to reach out and ask questions about that or get a little feedback. We're happy to provide it. If you're not working with a planner, we can help shortcut this. As a planner—I can speak from first-hand experience—it's pretty easy from the third-party view to see where people are on these things. If you're talking about financial planners in general,  a lot of them don't actually do this kind of stuff. That's probably good to point out as well. Keep an eye out for that. A lot of financial people are really just zeroing on one particular area or maybe they're selling financial products or that sort of thing. You have to make sure you're talking to a more holistic planner that is working on your interest and broadly looking at your overall financial plan and financial well-being. If you're working with somebody like that, one of their main goals is to help you gain competency and essentially, you're leveraging their competency to help apply to your situation. That's a potential add-on. Not everybody needs help for sure. You all have 100% capability to do stuff on your own. If you can get through medical school, you can completely learn this personal finance stuff, but it's okay to work and see the help. That can be a great thing for some people. Even if you are working with someone to help you, you still have to have some level of competency on your own. Otherwise, you're not going to know how to gauge where you're at in working with that person. Feel free to reach out with questions if you want us to help in certain topics to help you gain competency, whether it be knowledge skills or behavior. We'll be happy to get into that. Ultimately, it's a lifelong thing like I said. That's part of what makes it so complicated. If we just look at the knowledge, for example, it's pretty straightforward. It's like give me the book, I'll read it, I got it. It still requires attention and time, but you all know how to learn a subject and that's straightforward. Then we add skills and it gets a little more complicated. It's like applying the subject can get dicey, less straightforward. When things go off the book like I haven't seen this scenario before. It's easier to get locked up. Then you have the behavior on top of then it can easily become a mess because humans are humans. This is, I think, what makes money so complicated. Just mixing all these things together and it's kind of a lifelong thing. Don't be too hard on yourself. Nobody is doing this perfectly. That's a mirage, we're not going for perfection here. Everybody is going to be making mistakes along the way. It's more about making steady progress on this type of stuff. I think that's the goal. Just by listening to this right now, that shows me you're into making progress. Don't forget to give yourself a pat on the back. Definitely don't be too hard on ourselves either and we'll keep working towards gaining competency in personal finance. As always, I enjoyed chatting with you. We will talk to you next time.

What is the behavioral component and psychology of money? How do you deal with it tactically and practically? Your relationship with money is a big deal and makes a significant impact on your day-to-day decisions.    In this episode of the Finance for Physicians Podcast, Daniel Wrenne talks to Danielle Seurkamp, Certified Financial Planner (CFP®) and founder of Well Spent Wealth Planning. Danielle focuses on the behavioral side of financial planning and personal finance and helps individuals and families to effectively achieve their financial goals. Topics Discussed: Financial Literacy: Ability to use knowledge, skills to manage financial resources Mental and Emotional Errors: Get in the way of ability to use knowledge/skills Financial Flashpoints/Money Scripts: Experiences shape relationship w/ money Financial Memories: Think about your past to identify your own money beliefs Financial Half-truths: Problems and promises can be positive or negative Financial Fears: Money is how you provide yourself food, shelter, and stay alive Financial Patterns: Be aware of reasons you spend money based on behaviors Awareness Exercises: Intentionally notice, track, and document feelings via journaling Make a counter-argument to push against your promises and beliefs Create genogram/chart of your family’s financial history Take money script inventory quiz Gain clarity on your values Financial Therapy: When to seek out help with money and relationships Links: Danielle Seurkamp on LinkedIn Financial Planning & Sustainable Investing - Well Spent Wealth Planning Genograms for Psychotherapy (Guide) - Therapist Aid Start Money Script - Your Mental Wealth Advisory Using a Journal Can Change Your Life - Jim Rohn Personal Values What Is Financial Therapy With Ed Coambs 3 Exercises To Help You Clarify Your Values Contact Finance for Physicians Finance for Physicians Full Episode Transcript: Daniel: What's up everyone? I am excited to have a guest with me today. We're going to be talking about money, of course, but talking about your relationship with money. My guest today is Danielle. Danielle, can you give us a quick intro? Say hello to everyone. Danielle: Everybody, I'm glad to be here with you. My name is Danielle Seurkamp. I'm a CFP. I am the founder of Well Spent Wealth Planning based in Cincinnati. I am fortunate enough to be in a study group with our illustrious host, Daniel. Daniel: Yeah, illustrious. It's good work. Danielle's not given you the full story. She's got an incredible background. She has all these designations and has all sorts of great involvement in our industry. If I was to boil down, Danielle has kind of gravitated towards the behavioral side of financial planning and personal finance. You have certified financial behavior specialists, that's one, and then you have a Master's. Danielle: Right, yup. Actually, my Master's was my first kind of introduction into the psychology of money, and behavioral finance, and the relationship we have with money. I'm really happy that I took those courses, and then that just started my interest in IT. I went from there. I got involved with the financial behavioral specialists, which is through the Financial Psychology Institute. I was able to learn a lot in that program by just going right up to the edge of psychology and bringing in some of that information into the way that we deal with money. It made me move to the practical side. Daniel: Yeah, we're both financial planners by day. Most financial planners you talked to will acknowledge this whole behavioral component and the psychology of money. We have an appreciation for it. We realize it's a big deal, it's something you should be paying attention to, and that sort of thing. For example, for me, when it gets into the tactical aspect of it, or problem solving, or how to work through it. I'm not an expert by any means. That's what's been cool about Danielle. What you're doing is you've dug in more to that aspect. It's a big deal. We're going to talk about it today, what we're talking about as far as behavioral finance and relationships with money. When I think of relationships, I know I think about people. I'm like, what are you talking about, relationship with money? But everybody has a relationship with money. We see it every day in our work with people one-on-one. Danielle has just taken that initiative to really dig into that. It's impactful stuff, because once you understand this, you'll start to realize this is the undercurrent for a lot of the things that we do day-to-day and the decisions we make. Danielle: Absolutely, yeah. I guess maybe just to kind of kick off, what does this even mean? What does the relationship with money even mean? What do we think about it? The way that I think about it is, okay, let's talk about financial literacy. The definition of financial literacy is the ability to use knowledge and skills to manage financial resources for a lifetime of financial well-being. You hear knowledge and skills there, and that's the part that a lot of people focus on. But the part that has more to do with our relationship with money is the ability to use the knowledge and skills. That's the important piece that this relationship with money brings in. When you think about that, you might think of our relationship with food and exercise, just that basic idea of, okay, I know I shouldn't have had doughnuts for breakfast, I know I should have probably got up and worked out. These are the basics of having a healthy body and mind. If I'm feeling crummy, I'm tired, I'm stressed, I'm lonely, whatever it might be, I'm not going to be able to use that knowledge. I'm not going to get up and eat the thing that I should. I'm not going to get up and work out. It's the same way with money. Really when we think about the relationship, you said it was about people, and it is, but it's about our knowledge of ourselves and how we relate to money. Daniel: Yeah. It seems like everybody or the general focus, like you said, tends to start on that knowledge and skill. That's where a lot of people go, and a lot of people stop there in terms of what they focus on. They focus on educating themselves, which is all good stuff. That's important. Learning the skills, and the tactics, and the proper technique and of maxing out accounts and whatever, and making more money. People spend countless hours focused on those sorts of things, and building wealth, and whatever. It's also kind of more of a shiny object. People enjoy, I think, reading about that kind of stuff or understanding that stuff. It seems like this is more of one of the things that has a tendency to be overlooked. People look at how they relate and it's, like we said, super important. We both said it's really important, but why is it so important? If we boil it down, why is this so important to understand? Danielle: I think it comes down to, knowledge is pretty useless if we're not able to apply it. The things that get in the way of our ability to apply it are either the mental biases we have, cognitive biases that are just errors and thinking that apply to everybody. Everybody has these normal things, where our brains just don't necessarily always reflect information the right way. Just as an example, if you've seen three news stories about an airplane crash, you're probably going to think their plane crashes are going up in likelihood or they're happening more often, even if statistically, they're becoming less often. They're just errors and thinking around our brain that all of us experience, but then there are these emotional biases as well that don't apply to everybody the same way, that have a lot more to do with our individualized experiences, our day-to-day well-being. Either one of these things can get in the way of our ability to use good financial knowledge and skills. If we're not able to get over the hurdles of those things, then all of the best financial planning, or all of the reading online, or whatever we do to educate ourselves and try to do the right things, aren't going to be as effective and may not be effective at all, depending on how intense some of those things are. Daniel: Right, yeah. I've seen it in working with families one on one. It seems like it commonly surfaces or comes up. They're articulating these values or priorities. We have given them concrete steps to make progress towards the goals, values, and that sort of thing. In other words, they have the knowledge of what steps to take, but they're continually failing to execute on it over and over again. A lot of times, there are some underlying issues in regards to their relationship with money. Danielle: Absolutely, yeah. I think that one of the themes of being able to hone your relationship with money is noticing things. If you are having an experience where an advisor has told you something to do, and you have felt resistant to do it for whatever reason or you haven't taken action on it, that's actually a really good indication that there might be something around that topic that is causing you to have a little bit of resistance, or hesitancy around implementing those recommendations. Or, you've just been stuck on something that is a good place to start digging in, looking at what's going on there, and what that might be for you. I was going to give you a little story here just to illustrate what we're talking about as we start to explore these emotional biases or these things that come up in our relationship with money, just to give us a framework of a place to start. Does that sound okay? Daniel: Yeah, I always love stories. Danielle: Okay, this is about Billy and Bobby. They were eight years old. Both of them saw a bike that they wanted to buy in the store window. Both of them decided to save money for it. Billy kept his money that he got from birthdays and holidays. He asked his mom to do extra chores if he could make his own lunch, save his lunch money, and even do some things for neighbors and grandparents. Finally, he got enough money to save, and he bought this bike. He loved it, he rode it for years. That's Billy. Now we have Bobby. He also started to save money. He did extra chores and he sold some of the CDs. One day when he went to put some of that money into his little piggy bank, he found that everything was gone. His older brother had taken it from him, and there was no way that he was going to get it back. His brother actually threatened Bobby and said, if you tell anybody, I'm going to make you really sorry. Bobby was afraid to even say anything about it, so he didn't. He just started basically saving again on the side, but hid his money a little bit better. Finally, he gets up enough money to buy the bike. Then less than a week later, the bike was stolen. You have two situations here that are very different. I'm just curious. Daniel, what do you think about when you hear that story? What do you think the impact of Billy and Bobby would be in that situation? Daniel: It developed some skepticism around or at minimum towards other people. Maybe you even put blame on the money. I don't know. Having money causes these problems. You can connect the money to the problem, I think. More money, more problems—the little little kids version. Danielle: Exactly, yeah. Right, the eight-year-old version of this. That's exactly right. Most people are not going to think back to childhood and necessarily think, oh, my whole relationship with money boils down to what happened when I got this bike when I was eight years old. But these are the kinds of experiences that end up shaping how we interact with money. I would say that experience for Billy and Bobby, I would describe that as a financial flashpoint. That basically just means that is a moment in life or something happened that was significant enough to shape your views about money. It can be a one time thing like this. This was an isolated incident around this bike, but it can also be something more just every day.  You saw a parent consistently in debt, overspending, or whatever it might be. It doesn't have to necessarily be a huge deal. But what happens is, then, we have these flash points. We're kids, we're growing up. We don't have the framework to necessarily talk ourselves through the rationale there. We just know, this experience, if you're Bobby, was painful, and I don't want to feel that way again. What happens is we make a promise to ourselves something like you said, Daniel, I'm never going to be stolen from again. I'm not going to be a victim of that again or whatever. You're trying to avoid that feeling of fear, so the behavior that might come out of that is that Bobby might not save money anymore because in his experience saving up money, got his brother steal from him, buying the bike, got someone else to steal from him. He may have a negative feeling about saving money. Going forward, just from that, it could carry through his whole life. That's just one example of how these experiences, these financial flashpoints, can then turn into these promises that we make to ourselves or these beliefs that we have that are sometimes called money scripts, because we replay them over and over in our head. That's just one little example of how you can flow through in the behavior. Daniel: Yeah, I like it. It's basically equating money to painful experiences. Everybody wants to avoid pain in the future. I think the issue is that we often bury it and aren't aware that it's affecting your day-to-day world. Everybody has a past that is affecting their day-to-day world. Sometimes it causes problems and you're burying it. That's where therapy can come into handy and digging into the past. Maybe before we go down that route, what's a good way to start to identify your own flashpoint? Danielle: I would say, first things first is just start to think about your past. In light of hearing how a story about a bike can have that big of an impact on you, start to think back. What are the financial memories that come to mind? What do you remember about money and your childhood? Just to give you a little more of a prompt to think about that, there are a variety of different things that could impact your beliefs about money or these experiences that you've had about money. A few things to look for as you're going back and analyzing your history. Things like gender roles in your family, who was responsible for paying bills? Who was responsible for earning money? Who did those things? Those types of things can carry forward into the future. Even gender norms in our society can affect how we feel about money. There's actually a really interesting study that T. Rowe Price did about boys and girls as kids and the relationship parents had with them. Boys were talked to by parents about investing and in starting businesses. Girls were talked to about money, with paying bills, coupons, and stuff like that. Even little things like that. Again, this doesn't necessarily draw back to one significant event, but it does sometimes shape how we think about ourselves in relation to money. Am I really someone who can start a business? Am I somebody who should be paying the bills? Looking at the professions and education history of your parents and family. What kind of spending behavior did they have? Did anybody have debt? Were they good savers? Even stuff like what were their relational issues in the family, like addiction, enabling, secret keeping, all of this stuff can flow through to how we relate to money. Those are just some thoughts in terms of where to go back into the past and start to think about, where do my money beliefs come from? There might be specific moments in time that relate to these different things. It also just may be the way that you were raised and brought up everything from the socio-economic status of your family to just the individual roles and challenges that parents had as you grew up. Daniel: Yeah. I've done an exercise before. I don't remember what it is called, but draw a visual representation of your youth. I guess you started by thinking back in the past, all the way growing up, and the financial key points, I guess, from your memory. Then you draw a picture about it, and you kind of map it out like a timeline or something along those lines. What are the takeaways, that sort of thing. My parents were very unwell or they had a lot of financial challenges. I think some people come away from that. You get in the cycle of that's how it is, and then other people come away with that. It's like, I have to work really hard to avoid that situation. That completely is part of what has caused me to be how I am financially. It's probably what drove me into the profession I'm in, which is helping people with money. I was basically acting like a financial planner in middle school or something. Looking back at that type of stuff is really helpful. Also you can find underlying issues, like you said, and identify maybe these hurdles that are holding you back in life. Danielle: Yeah. I actually relate a lot with that, Daniel. I had a lot of financial insecurity growing up as well. Those are moments, again, where what comes to my mind is I'm going to make a promise to myself. For me, I can think back to a very specific moment in college where I was going to school full time and working full time, and I was balancing my checkbook, and I had $7 for the next two weeks, and I was just feeling really broke. The stress of that was meaningful for me. The promise in my mind is I'm never going to let myself be broke again. I'm not going to let this happen. It may have been different for you in what kind of thing that you decided on or whatever. What happens from that can be positive or negative, in my case. It sounds like in your case, too, it drove you into a successful profession, made you focus on earning money, all of those things. That's good. But I think that tricky part is, when we make these promises to ourselves, sometimes we only focus on the part of the truth that suits what we've been through. In my case, where, as an example of where this promise to me came into conflict with something that I wanted to do, was I had this feeling of never wanting to be broke again. Then at some point along the way, I started having the urge to have my own business. Those two things do not go together. Giving up a nice, consistent W-2 income to go out on your own, start a business, and take risks around money does not really align with this fear that I had or this promise that I made to never be broke again. This is where we start to run into our own promises that we've made. We have to work on that. It took me a long time of working on that, to be able to go out in my own business and take the risk financially, and be able to tolerate the fear that went along with that. The part of what helped is doing kind of the devil's advocate against your own argument. For me, it was, I don't want to be broke again. If I start a business, I'm going to be broke. I'm going to have financial insecurity again. What sometimes can be helpful is to say, what argument could you make to me about starting my own business where I wouldn't wind up broke? There are plenty of things that you can say to me, like, you may earn more money, you may have more control over your job security. There are lots of arguments you can make on the other side. But when we have this emotional block, we don't make that counter argument. That is another place to start. If you feel really strongly about something financially, just try to play devil's advocate. I call them financial half truths. Another one might be like, all debt is bad. If you really have a bad experience with debt, all debt is bad. But if you don't take debt, you can't go to college. Sometimes, you can't buy your first home. You can't necessarily start a business. There's good debt and there's bad debt. If you have a stuck belief in there somewhere, it helps to kind of make that counter argument to yourself. Daniel: For me, coming out of one of the effects of my childhood is I guess a promise I made. It was like, I'm going to work extremely hard, professionally, or whatever. Like in high school or whatever, manual labor or whatever I could get. Work extremely hard to make sure I never have that financial stress or problem ever again. Fast forward, that inevitably causes problems, because that's not my only value. If I work extremely hard, eventually, and I have a family, three children, and I am not seeing them any, for example, that starts to cause problems. Maybe I already have plenty of resources financially and I'm still working hard. That's where you get into that cycle and all of a sudden, you are having marital problems, maybe you're divorced, or maybe potentially, one of the causes might be that I worked so hard. That was the sole focus, because for me, it was a big, huge focus. I was like, this is a high priority. It has caused problems in my marriage here and there. I'm fortunately still happily married. Fortunately, I married a woman that will bring up problems, raise them to my attention, and that sort of thing. Even me, personally, it could have gone several different ways. This hard work ethic could have been ultimately causing tons of problems in life, especially when I'm not aware of it, or I'm making excuses for it, or that kind of thing. Danielle: Yeah, I think what you're talking about is so common. In our experiences when we're young and we think about it, how can I fix this? How can I fix this problem? I don't want to be financially insecure really, really hard and never feel that way again. Sometimes that works, and you've seen that. You've seen positive things come out of that. You have a successful business, you're able to take care of your family, and all of these things. Eventually, this same solution to this problem can become a hindrance in other areas. What we've been doing doesn't work anymore in the same way that it used to. That is sometimes the time when we become aware of the fact that we've been holding on to belief. I don't want anyone to say that they should throw away the beliefs that they've held. It's not that. There's another side to the story that you need to make to yourself and say that, yes, working hard is important. I will continue to work hard, but there's no point in me working hard if I'm not going to be able to see my kids, my family, have time with them, and that sort of thing. What you're describing is often what happens when we would come up with a system to fix the problem, and then eventually, that system doesn't necessarily work for us in our current situation. Daniel: I think a good place to be is where you're aware of this underlying relationship with money—your background and the cycles of how you believe around money. Then on the other end, having awareness of what you value. I think if you can look at the two of those, your relationship with money on one hand and then your values in life on the other hand, it seems like those two things, together, is where you can really start to make good progress. I find that all of it conflicts with each other. When you're not aware, that's the problem. When you're not aware of either one of those, we're talking about the relationship with money today, but either one of them, when you're not aware of it, that's where it's dangerous. Danielle: Right. Yeah, and I think that part of the reason, a lack of awareness is challenging, is that whatever we believe or whatever we're doing is probably to cope with some kind of feeling that we're having. If you're not aware of that and you're not aware of how you might be using money to cope with that feeling, then you're not able to necessarily understand your own needs, and find another way to cope with it. As an example, you might have a fear around spending money. That's a pretty common one, I think, that we sometimes see in our business. People have saved a lot. They've worked hard. They've pinched pennies and all of that stuff, but then they have a hard time spending that money. A lot of times, it comes back to some of the stuff like we were talking about, financial security and our past, that sort of thing. If you really drill down to that at a deep level, money is how we provide food for ourselves. It's how we provide shelter for ourselves, and it is how we stay alive. To not have money is a huge, huge fear for people. That fear runs pretty deep. It may not necessarily be financial insecurity that you necessarily had that's feeling it, but there are also things like fitting in. We grew up in a certain socio-economic world. That's what feels comfortable to us. Sometimes being wealthier, that doesn't feel comfortable. That gets down to being ostracized from your group. Again, this gets down to survival instinct, where we're doing things in a sense to keep ourselves safe, so we have to find that awareness around that to say, how can I make myself safe in a different way? Just understanding that there is depth there. A lot of times, if you're not spending money or if you are spending money, it can be in response to those deep emotional feelings. But we have to find another way to sort of address them in order for us to make our better choices, financially. Daniel: Yeah. Do you have any suggestions for gaining better awareness? I know, we've thrown out some ideas for people. That's a hard thing to do. It's easy to talk about, but blind spots are hard to see. Danielle: Let me throw out a few. I'll throw out a few examples that may resonate with people. Then we can talk about some ways to work on this if you need to raise awareness or keep digging into this a little bit. Here are some examples. Again, if the feeling that you're having is fear and your behavior is not spending, you might look at things like financial insecurity in your past. That behavior that could come out of that might be not spending money, it might be keeping secrets from somebody, hiding money, that kind of stuff. Look for that sort of thing. If you're feeling sad, stressed, guilty, bored, your behavior might be to spend money. Things you might look at there are spending as a coping mechanism. I spend it when I'm sad. I spend it when I'm bored. I get online and shop. Coping with those feelings is one thing we often do, so look for those patterns there. Look for when we're spending money to fit in and stay safe. This is the Keeping Up with the Joneses thing, but it's at a deeper level. It's like we want to be accepted by the Joneses, so we need to spend money to look like our neighbors and all those things. Looking for the patterns around that can be helpful. Looking for things like status. Like, okay, one of my guilties is I like to give really nice gifts to people, which, okay, does that sound so terrible? No, but I stress out about that. I will probably spend more than I have in my budget, because what someone thinks about me when I give them that gift matters to me. That's a status thing, just like it is to drive a nice car, or have a nice house, or have nice clothes, or whatever. That's a status thing. Maybe that sounds shallow, but really, it's about my self-worth and being accepted from other people. Those are the kinds of things we can look at in terms of reasons why we might spend money. Coping with a negative emotion, trying to fit in and stay safe, trying to demonstrate our worth or fit in with people. It even sometimes can be as simple as like, I deserve this, I worked my butt off, thoughts like that. I know you have a lot of doctors that listen to this, and you struggle through residency and you're broke. Then it's like, okay, I finally got the job, I have the money. The feeling might be that I finally deserve to spend this money. All those kinds of thoughts can get in there. Just paying attention to those a little bit is really helpful and bringing that back to, where is this really coming from? Where is this need in Danielle to give fancy gifts? Like, why do I even care about that? Where does that come from? Just kind of thinking about that a little bit more. Also, keep in mind, none of these behaviors are necessarily problematic, unless they're causing problems in your financial plan or causing problems in relationships. Spending or not spending is not inherently bad or good. It's just, how is it working for you and your situation? Daniel: Yeah. I think that you hit on a couple of good ones that are, I think, a lot of you listening probably have felt the pull of or experienced before. The desire to reward yourself or it's been a long, hard road and I deserve to pat myself on the back, some people take that. First of all, that's not a bad thing, like Danielle was saying. It could be a great thing, but some people take it way farther than other people. It seems like a house decision. A lot of people have that right around that time, too. In my experience, I noticed that a lot of the struggles, physicians, especially, a lot of it comes down to those decisions made in the transition points in time. But what happens is, say it's like the ultimate underlying desire is patting myself on the back, I need to take care of myself a little bit, and maybe they go a little too far on that. It seems like what sometimes happens is that you bury your head in the sand. Some people get it and are like, okay, a mistake or I'm aware and it's causing problems in my plan. But other people are aware of it, but they're not really recognizing that it's causing problems. They just work through it or maybe work more hours to try to make more money. It can cycle down the other direction. Maybe I'm listening and I'm feeling like I'm aware of it. I'm like, I got that. I realized I need to pat myself on the back, and that's what I did. I don't think I took it that far. I don't think I have any problems in my plan, but I'm kind of not saving anything or I hired a financial planner and didn't take their advice. We see that sometimes as if people don't take our advice. It's like, are you working with us? It's hard to self-identify that sometimes. Danielle: Yeah, and I don't know that it happens immediately. I think it's just noticing, noticing, noticing. Practice noticing what you do and when. If you just went through an experience where you did YOLO and went for something, because you really felt like you deserved it, worked hard for it, and that's what happened. You're like, I don't know if that's bad or good, or indifferent, or whatever. You might just pay attention, like, how was I feeling around that time? Maybe you're really tired. You're exhausted from overwork. You're just not feeling the good stuff that you need to feel or you're not balancing something else. Then start to think about, okay, what do I do when I feel like that? When I'm tired, and I just like worked my butt off all week, and I just really don't have the energy to go coupon clip or whatever the thing is, what do I do in that moment when I'm ordering dinner? Do I go shopping online? What do I do in those moments when I feel that same way that might have led me to make that decision? It's really just thinking a little bit more about it. I can give you an example of something that I did if that would be helpful. I had a habit of every time I was invited to a big networking function, where I wasn't going to know a lot of people, I had a habit of going out and buying myself a new outfit. This outfit was super important, because to me, it was my armor going into these events, and I needed to fit in. That was what made me feel okay to fit in to these things that I was going to. I go and shop. Even though I have financial insecurity in my past, and financial security is a big deal to me, that need got subjugated to the need to fit in at this event. Sometimes we even have ones that contradict each other. This is an example for me, where I have things that are contradicting themselves. The need to fit in was more urgent for me at that moment than the need to have financial security, so I went out and I'd shop. I would stress out and walk around the mall. I'd always spend more than I needed to, and it will kind of mess up my budget sometimes. I finally started to just have the negative emotions of like, oh, I'm running through this mall, my feet are killing me. I've worked all day, I'm just trying to find this outfit. Why am I doing this? What I started to do was just say, okay, I'm going to pay attention to what happens to me when I get invited to these kinds of things. What I noticed was I have the urge to go out and get my armor. In those moments, I started to do something differently. I would say to myself, all right, I have a networking event in a week, I'm going to go through my closet and search to pick something out that might feel appropriate for me. Sometimes I would still go out and shop, but I knew what I was doing at that point. I knew I was doing this to make myself feel better. That helped, even when I did it anyway, because I knew what I was doing. That doesn't come up for me as much anymore. But it took me time to figure out that I was doing it, first of all, and then to figure out, why was I doing it? Why was this need so important? And then, how to take care of myself in a different way? It's not just, don't feel like that anymore, Danielle. It's, okay, I'm going to feel this way a little bit. How do I care for myself in a different way that doesn't necessarily mess up my finances the way it would have if I just went out and blew a bunch of money on clothes? Daniel: Yeah. That's just good awareness in general. Like you said, even if you continue doing it, to some extent, awareness is the key. Was this one of the symptoms like, maybe the closet is getting full of the stuff that I'm not wearing? That could be an observation you make. Danielle: For me, it was the negative emotions. I am putting myself through this insane shopping marathon. Why am I doing this? I'm not happy. This is making me unhappy. Again, what I was doing was working for me and making me feel safe, but now it's causing me to stress out, go crazy, and make myself nuts about what I'm wearing. Something will come up, maybe, something that doesn't feel great. That is a time to just dig in and notice a little bit more. There are a number of different exercises and things you can do as well. I'm happy to share any of that if you want. Daniel: Yeah, I would love to. I'll go back to that. I wanted to throw something out there. The career track of medicine is a challenging one and that it takes you through the training, especially. Sometimes the training, rigorous hours carry forward or you get used to it and you just keep doing it. I think the challenge there is, for me at least, when I'm killing it, grinding it out on whatever it might be, like work especially the one that can take over, when it's taken over, it's like I don't even have any capacity to be aware of anything. It's like I get in this zone, I guess. I feel like this type of awareness requires having some space or something. I don't know how to describe it, but I feel like it's much more difficult to get in that mindset when you're so overwhelmed. It might even be something different at work. It might be some challenge, or emotion, or grief. I think when people are going through grief, they just can't. They are totally overtaken by it. Sometimes that's okay, but I just think that's a good thing too—because in training, for example, a lot of times, you do much about that, so you just have to do the best with what you have, and work through it, and don't be too hard on yourself. Has that been your experience, Danielle? Danielle: Yeah, and I think part of what you're talking about is there are moments where we don't have the capacity to be thinking rationally, and be self-analyzing, and all of that. That capacity for that is really important. It's actually why this relationship with money matters, because when we're regulated, calm, and feeling good, our thinking brain is able to make more of our decisions for us. Our thinking brain is the one that understands, like, okay, I need to delay gratification, I need to save for the future, I need to do whatever I need to do for myself rationally. But as soon as we're overtaken with emotion, and whether that's the stress of grinding it out at work, or grief, or whatever it might be, panic about an event you're going to, it is very difficult at that point to use our thinking brains. They go offline. Our emotional brains take over. When our emotional brains take over, and we're trying to protect ourselves, or soothe ourselves, or whatever, it's very, very difficult to make wise choices that are based on the future. Daniel: In any area. Danielle: Yeah, exactly. You can't expect yourself in those moments necessarily to be able to do anything about them, but it's what we do when those moments pass. We reflect on them when we think about what's going to happen, when another moment like that comes, when we can try to decide to do something differently. We do have our wits about us. Daniel: Right. It's like taking a minute. For example, with the training, taking a minute in between training and starting your first job might be a healthy exercise. I've worked with many people that go straight into practice, but taking a month or at least a few weeks. It's going to be chaotic anyway, but give yourself some time to take a silent break or something and observe it. Maybe you look back and you realize this kind of thing in your case, and you're like, oh, that's important to know as I look at future jobs. I don't want to get myself in the exact same situation as I was before, where I got the blinders on and I'm just crushing it at work, but that's it. Danielle: Right, yeah. I think, like what you said earlier, that's a great opportunity to sit with your values for a little while and say, okay, I'm looking for a job, what do I need out of this job? That might be financial security. It could be a certain level of income or whatever, but it might also have these other things. That's a great opportunity to check those decisions in those moments with values and things like that. Daniel: Yeah. I think it's hard in our culture or maybe even professions you choose. Sometimes it's very difficult to just have that space. Everybody's afraid of boredom or with all that stuff going on. You have social media and smartphones—I'm guilty of it. You're looking at your phone when you're bored, and it's difficult. You almost have to be really intentional about allowing for a minute to think about stuff like this, observe awareness, journal, or whatever. It's possible. You can do it, you just have to be intentional. The other thing I wanted to mention was I think it's been helpful for me to listen to other people. Maybe that sounds obvious, but I have been guilty of not listening to other people, kind of warning or raising the red flag. Especially the people that are direct and honest, that you trust. For instance, my wife is super honest and direct. When she says something, it's more than likely very true. It's hard to hear that. I want to not listen, but listen to those people because they'll throw out the warning signs, those people in your life. They'll be hints, I guess. Maybe there's this issue and I think, sometimes, it can tie in to all this stuff. Danielle: Yeah. The other thing is sometimes we find out about some of our struggles from other people, because it's a lot easier for them to see it than it is for ourselves. Even in marriages, a lot of these things come up, a lot of the stuff we've talked about. Imagine if one person is motivated by an intense fear of going back to being poor, and someone else is super motivated by wanting to have nice things and fit in with their crowd. One's going to save, one's going to spend, generalizing, of course. The reason that's so hard to reconcile in a relationship is because the needs are very intense for both of them. It looks like, oh, my God, you're so cheap and, oh, my God, you spend too much money. Really, it's a lot more than that. Even when we hear it from someone else, it's like, oh, you're being cheap. Well, I can't just stop saving money, because that's what keeps him safe. In my mind, that's what keeps me safe. Even sometimes, when we get the message from somebody else, it's hard to reconcile or take it in, because letting go of that behavior feels like letting go of what's keeping you safe. In reality, some of that is keeping you safe and some of that is causing you conflict in your relationship, or in other areas, or whatever it might be. The hard part is then examining that and seeing what you're doing maybe isn't serving you the same way it used to. Daniel: Yeah. Let's go back to some of those exercises. As we wrap up, maybe we can talk about you mentioning some exercises or tactics to kind of help. Danielle: Yup. The basic one is just notice, notice, notice—pay attention. How do you feel? How do you act when you feel that way? Some people will actually do a journal around that and say, I went shopping, because I was feeling stressed about going to an event or whatever, so keeping track. Even journaling around that can be really helpful. Daniel: And writing about your feelings? Danielle: Yes, the horrible thing of paying attention to our feelings. Daniel: I am not very in touch with my feelings. It's important, I think, to clarify that I have to be very intentional if I'm going to write about my feelings and remind myself, because I have journaled for years, and years, and years. If you read my journal, it's probably not very feeling-oriented. It's going to be difficult for you to get an idea of what I was actually feeling, unless I was really intentional about it. Reminder for those of you that are like me, you have to remind yourself to talk about those feelings. Danielle: Yeah, and to think about it. It's hard. A lot of us do avoid our own feelings. Like you're saying, it's easier to get on social media than it is to think about how we feel, because sometimes it's not great how we feel. It's hard to go there. It doesn't have to be a long journal. It could just be what happened, how did I feel, what did I do about it? All it is is just trying to raise that awareness. How will you keep track of it? Is that a work for you? Just paying attention to it can be really helpful. Another thing, we've been talking about these promises we make to ourselves. If there are any promises that you've made yourselves or beliefs that you hold strongly, if you don't think about it as a promise, whatever it might resonate with you, write it down, and then think about how that flows through financial behavior, and then try to make the counter argument. Again, just being devil's advocate in a very intentional way of pushing back against what you consider truths, but might actually be half truths. Daniel: Yeah, even though it goes against every grain of your inner being. That makes absolutely no sense. I'm not going to justify the opposite of my belief. That does not even make any sense to me. But go against that, like the urge, that it makes absolutely no sense to make a counter argument about something you've already made your mind up about completely. I can tell you, it's worthwhile to make a counter argument about something you're already 100,000% committed to or believing in. At a minimum, you can start to gain a little bit of understanding of appreciation or even seeing other people in how they view things, but sometimes it'll surprise you what you come up with. Danielle: Right, exactly. It's a lot easier to argue with ourselves than to have someone else tell us the other side of the argument, because we're pretty much guaranteed to ignore the other. We need to come to run our own, which is hard. Okay, a couple other things. You can do a genogram, which is basically a chart of your family history. Just google genograms. Basically, you would just draw out your family history. There's a lot of detail you can add to it, it's up to you. But if you're really trying to figure out patterns or things that might have been held over from previous generations or upbringing, it can be really helpful to look at something like that just to see what comes up. That's another technique. There is a quiz you can take. It's called a money script inventory. If you google that, you can take a quiz and find out. If you fall into one of the main four kinds of money scripts, avoiding money, seeing money as status, seeing money as the solution to everything, and then being very vigilant about money, those are the big four that you'll fall into. You can kind of see, does any of that resonate? That's another thing you can do to gain awareness. There's also just that value piece. I don't know if you have anything, Daniel, but if there's a miller values exercise out on google that has basically a huge list of all the values that you might hold, and if you're trying to get clarity around what those values are, that can be helpful, and then looking at that against what your current financial behavior. Daniel: Those are good. Coincidentally, I think the episode that's going to come out before this one, I talked about different values exercises. Danielle: Oh, perfect. Daniel: There's a bunch of different ways to dig into that. I'll link to each of these in the show notes so you guys can see that. There's a bunch of different ways to tackle this. The last thing I wanted to ask you or I was thinking about is we talked with your friend, actually, many episodes ago about financial therapy. You know what that is, and we cut into some of this stuff a little bit, too. In your view, at what point do you seek out help specifically for this? Danielle: If you're looking at the situation, and your finances are in trouble, or your relationships are in trouble, and you're just not finding resolution in the things that you're trying, then financial therapy can be really helpful. It's basically just a format or you and your partner to be able to talk about these things with a professional that knows all of the details, that can walk you through some of this more intentionally, and do it in a way that holds space for both people's feelings, and those people's needs, and all of that. They also have the expertise around money to bring into it. That's the unique thing about financial therapy. You get the emotional component, the psychological component, but then you also have the financial component, at least, understanding there to bring that into play as well. The moment that I would seek someone out is if you're really in a situation where there's a problem that you're just not finding resolution toward, and maybe something like this could be helpful. Financial planners are helpful too, financial coaches are helpful too, but definitely financial therapists or certified financial behavioral specialists are going to be the most experienced with these particular issues. We all have them, so don't feel bad. Every single one of us has beliefs about money. It isn't like there's one for all of us. It's so many different ones that make up how we feel about things. Really, it's just about getting to know yourself better. That's sort of the thing with life, right? Daniel: Yup. It's sometimes complicated. Sometimes we don't want to dig into it, but it is worthwhile to dig in at least, especially if it's causing problems. Even if it's not, it's just good awareness, because eventually it can. That's how it's been for me. It's like, oh, some of these issues or past experiences weren't causing issues, and then they were a little bit, and then now they're not. It's a cycle. Danielle: Yeah, absolutely. Sometimes the consequences aren't that easy to see. For me, if I go back to that hole of financial insecurity and wanting to start my business, if I hadn't dealt with that fear that I have, I may never have started my business then. Would that be a problem in my life? Maybe, maybe not. I probably would have been fine in a lot of ways. A problem can also just mean you're not fulfilling something that you want. It can just be a barrier in that sense, too. It doesn't necessarily mean like, oh, your finances are in shambles and you're on the verge of divorce. That's not the only situation where you might need a little bit of extra time here. It can be just when you're trying to take something new on or like you said, in a moment of transition can be helpful things to think about. Daniel: Right. Awesome. Danielle, it's been fun. I enjoy talking about this stuff. We could go on for hours, and hours, and hours. But we both have lots going on. Thank you for coming on. I really appreciate it. Danielle: My pleasure. Good to be with you.

Do you get nervous when the stock market goes bad? Where are good places to invest? Discover the power of diversification to conquer volatility and uncertainty.  In this episode of the Finance for Physicians Podcast, Daniel Wrenne talks about diversification of your portfolio in order to keep more dollars in your pockets. Topics Discussed: What’s diversification? Spread money across investments for risk mitigation Options/Odds: Should you spread eggs into more baskets to grow a nest egg? Benchmark: How to track and measure success with investments in stock market ETF Tickers: What to search for/consider for spread of diversification categories Cryptocurrency: Is it a good way to diversify? Maybe, too new to know for sure Real Estate: Not good way to diversify if actively involved, not passively Links: What is Passive Investing? Investing in Digital Gold Vanguard Funds List Google Finance Morningstar Contact Finance for Physicians Finance for Physicians Full Episode Transcript: Hello, everyone. Hey, I hope you're having a great day. I was talking with a buddy two days ago and a conversation came up. The same sort of conversation happens with me a lot. The gist of the conversation was, "Oh, you're in finance?" (This is the guy talking to me.) "Oh, well, I've been investing in stocks. I have this one that I've been investing in since the stock market went down in the Covid downturn in early 2020." He told me this specific stock—I can't remember now—that he was buying. He wanted to make sure he wasn't making the same mistake that a lot of his family or friends had made and getting nervous when the market was bad, and instead, invested in something that he felt was a good place to invest. He proceeded to tell me about his experience investing in this stock. It did very well a year or so after, but lately it hadn't done as well. That's kind of what brought up (I think) his thought about this stock, is he was asking me about how we're handling the recent market volatility, which is a common dinner party conversation or question people ask me. This stock in particular he was describing, he was sharing, has been doing not so well, but he was still optimistic about it. Over that period of time—March, April, May of 2020, till now—it's still above breakeven, so he's still made some money on it. Overall, he felt pretty good about it, especially given the weak market that we're in now. As I'm recording this, this is close to them. It's early May 2022, and the market's been a little shaky. Given the market uncertainty, he felt pretty good about it. That is a conversation I've had too many times. I can't even remember how many times I've had it with people usually at social events. They're sharing about their experience in investing. Generally, it's a favorable lien. This example I just gave was kind of a little bit of a negativity creeping in but still overall favorable. It wasn't like they were asking my advice or opinion. They were trying to make conversation with me, knowing what profession I was in. I'm sure you all have had similar conversations about your profession as it comes up. After having that conversation and just seeing it come up so many times, I thought it would be good to talk today about diversification and this temptation for the opposite of that, the FOMO temptation or the shiny object. We're all susceptible to it. I don't know. Maybe you've had a better experience. But most people I talked to—including myself—had examples of situations where we probably made a poor decision, went away from diversification, and went after the shiny object. I fortunately learned a lot of those lessons earlier when I was younger, when the dollars weren't as big. I think a lot of the questions normally come up are like, how do I avoid this? I think the key here is—at least from a starting point—is education. Educating yourself, that'll go a long way. It's not everything, but it'll go a long way. Just understanding the basics of how this works and how it plays into the results and your situation, I think that'll get you a long way. What we're going to do today is just talk about some baseline education along the lines of investing, foundational investing, and diversification in particular. Hopefully this will help you keep a little more dollars in your pocket in the end. Okay, so what is diversification? Let's just clear that up real quick. When I say diversification or the definition of diversification would be spreading your money across multiple investments in an effort to reduce volatility and risks. I'm sure you've heard that before, spreading your eggs in different baskets. It's a risk mitigation tactic. Ultimately, the goal is to be more efficient with your investments. Let's assume you had $10,000 and you want to invest in some company stocks. You want to put it to work for you. Hypothetical example, let's just say each company has exactly a 1/3 chance of going completely bankrupt. You got a choice of stocks, each company has 1/3 chance of going bankrupt, and then the remainder of the companies, so 2/3 are going to do really well. But the catch is, you have no idea which one will be which. Option one, maybe you take $10,000 and you buy one stock. You just pick one, I don't know. Since you don't know who's going to do what, you are just flipping a coin, basically. In this scenario, 1/3, obviously, chance of losing it all, 2/3 is the chance of doing really well, which sounds okay (I guess) if we're thinking from a casino kind of viewpoint. It's better than Blackjack. It's better than going to the track or a roulette, but probably not adequate for your retirement. Most of us would agree, I think, that that's probably unreasonable for a nest egg and trying to build it, because a 1/3 chance of losing it all is just too much risk. Let's say option two is you buy $1000, so you spread your eggs in different baskets by 10 stocks, $1000 each. In that scenario, by spreading it out into 10 different stocks, you decrease your chances of losing it all by a ton. I think it's like one in 60,000 or something like that, like one in tens of thousands chance of losing it all. A pretty small chance of losing it all just by spreading it out into 10 different stocks. So that's good. Maybe even option three, you buy $100 and 100 stocks. That makes it incredibly small chance. It's basically pretty close to zero, but there's a tiny chance you're going to lose it all. The concept of diversification is you're spreading out the investment so that you're reducing those chances of having poor outcomes. There are some issues people run into that make it a little harder to diversify, so we'll circle back to that. But that's diversification. I'm sure you've heard the market thrown around, the word the market, and I've probably thrown it around a bunch of times before. I wanted to clarify that since we're going to be digging into this a little bit more. When I say the market, the market is the collective of all companies you can invest in. Anyone can invest in them. They call them public. That means anyone can buy stock in these companies, whether they buy it directly through directly ownership of the stock, or maybe they buy an ETF that has that company stock in it, or maybe even a mutual fund. When you hear the market, that's the collective of all the companies that are able to be purchased by anyone through any of those vehicles. When you look at the market overall and you kind of like smoosh it all together, it's actually a pretty solid investment in itself. At a minimum, it's a good benchmark for how are you doing. Sometimes people struggle with knowing how to measure success in investing, because it's like, well, what's the alternative? One really good example of an alternative or a benchmark to compare would be the market where all stocks that are available. There are a bunch of different measures of the market. There are even stocks that track the market, like the Vanguard Total Stock Market. That's meant to be a pretty good representation of the total US stock market, or the Total World Index or something like that. There are mutual funds and ETFs that track the market. In other words, their intent is to own all the stocks. That's a good kind of benchmark for what are we tracking against for buying stocks. Nowadays, it's pretty easy, or I guess easy and inexpensive to buy the entire market. Or you can buy slices of the market, too. That's where it starts to get complicated. You can buy small companies, you can buy tech stocks, you can buy everything in between—an individual stock and owning the entire market. But when I say the market, I'm talking about owning everything, just owning all the stocks in the market. The other thing I wanted to point out is, with diversification, one of the primary goals is to reduce risk. I think it's good to clarify, there are a couple of different categories of risk. There is systematic risk in investing. That's the stuff you can't get rid of from diversification, the market risk. It doesn't matter how many eggs you have in different baskets. You could own a million stocks or all the stocks in the world, and you're still going to have market risk, either the market itself, inflationary issues or stuff like that. There are some stuff that we just can't diversify away from. Those are just there, that's a baseline. Systematic risk, you can't really get rid of it. It is what it is. This stuff, though, with diversification, we're trying to reduce or even avoid. They call it unsystematic or idiosyncratic risks. This is like the non market risk. This is what you can reduce by diversification. Examples of that would be company-specific risks. Every company has risks, whether it be having a bad CEO that nobody realized, or a lawsuit, or a product that just doesn't work out. Those are things companies cannot always avoid. They're going to always be there. Sometimes they're completely unpredictable. There are industry-specific risks, like big regulatory change related to an industry or just market factors. The pandemic had more negative effects on the entertainment industry. Those types of things are risks, too, but you can diversify to help reduce them. Back to the pandemic, like I was saying, entertainment companies were much more susceptible to that risk. If you had one stock, let's say you had Carnival, all your money was in Carnival, that would be a problem when the pandemic hit, because they're getting crushed. Even if you had all cruise liners, all their stocks, and even all casinos and all the entertainment industry, you're still getting a huge hit when the pandemic hits, like major. What diversification does is you're going to be owning multiple different industries and diversifying away from that risk, so that it's softening the blow, basically. The stock market, when we look at this market, I think it's good to look at history doesn't always repeat itself, but it's really the best thing we have to understand things and how they work. Going back to that market, I'm talking about the market overall. For this example, I'm going to talk about the S&P 500. That's one measure of the market. What that technically represents is this 500 biggest companies in the US. It's definitely not a complete measure of the entire market, but it's a pretty good slice of the market, so S&P 500. We're going to look at this a little bit to understand how this works. Historically, what tends to play out is a pretty small percentage of companies end up influencing the performance of the overall market. In other words, the big winners pull up the rest of everybody else. It's substantial. I found some statistics on this. It was surprising even to me. The statistics were on the S&P 500. From 2000 to 2020, the majority of stocks underperform the S&P 500 returns. The S&P 500, of all those 500 stocks, the majority of them are underperforming basically the collective return of all of them. The percentage of those, some do over outperform, but the percentage that does outperform is 22%. Basically, it's 80/20 roughly, 80% underperform, 20% over outperform over that period of time. Those 20% are basically pulling the weight there. Another view of that is over that same period of time, the S&P 500 gained 322% while the median stock rose by just 63%. Basically, the takeaway there is only 20% of the stocks are really outperforming. Then the average stock, if you just pick a stock, there's a very good shot it's underperforming. Picking stocks randomly has a very high likelihood of underperformance. You might be asking like, well, okay, why not just pick the winners? How hard can it be? It's actually super difficult. The more you dig into this, you'll start to see this. If you look at all the research on this, even for the investing pros or experts, it's extremely difficult for them to pick those winners. We talk a lot about this. I've done some shows in the past on passive investing, so we'll link to those. We dig into that a little bit more. Basically, having the winners or having those stocks that do really well in the past, it's been like Amazon and Apple. Those stocks have killed it. Having them in your portfolio or in your basket of stocks is pretty huge for a long-term success, but they're really, really hard. On the back end, they're easy to pick. But on the front end, they're very difficult to pick, even when you are super smart and do tons of research. Diversification is basically saying, I'm going to buy multiple stocks, many stocks maybe, maybe a ton of stocks, to help reduce my risks of underperforming the market. Now in passive investing, I mentioned that already. Passive investing is not exactly the same thing as diversification. Passive investing is more like a style of investing, approach, or philosophy. Passive investing is like the ultimate of diversification, which I'll link to that. If you're not clear on what that is, you can dig into that. Passive investing is a good example of diversification because it's basically owning everything. Let's look at a market-specific example. You could buy Zoom stock. I was looking at it. I was using Zoom, so it popped into my head. Zoom stock has done really well. Also, people have asked about it or looked into it. If you look at Zoom stock, and I just pulled it up for a year, it's not that you should look at a longer period of time, but the concept I think I wanted to make it'll be good for it. I just pulled up Zoom stock on Google Finance. The one year return as of when I'm looking at it now, which is May 2nd, 2022, and this is on Google Finance, was -67.02%. It's had a rough year or 12 months ending today. I guess this is as of the minute. Google Finance is pretty cool because they have a very good tool to look up stocks, securities, and mutual funds. You can just type in the ticker, or Zoom stock quote, or whatever, and it'll go straight to that. I think it's showing you the return one year as of the most recent quote today, so it's changing. It's already down. It's 66.82% now. It's changing as I'm talking, which is funny. Anyway, it's way down, it's 60%+ down, we'll say, over that one year period of time, which is pretty lousy. Obviously, that's a killer. Now if you look at the Vanguard Information Technology Fund (VGT), that's a good kind of tech sector. It's more of like a big basket of technology stocks. That's a really good example of company diversification, not sector diversification, because you're just buying a tech ETF. It's just a bunch of tech stocks. If we're comparing Zoom stock and we look at a technology sector ETF—I'll use this ETF called QQQ. It's basically a pretty good slice of the technology sector or whatever—it's not nearly as bad. It's down, I guess. As of one year, it's like 6% or so down. When you compare those two, it's much less volatile. Basically, you're owning the entire tech sector. You're diversifying away from that company-specific risk. I'm not sure what's happening with Zoom, but they've had a rough stretch, obviously, since after the pandemic. Before the pandemic, they had a big upturn, but since then, they've had some downturn. Owning a technology sector ETF is going to be a way to diversify away from that company-specific risk. And then you can go further with it. You can say, okay, well, if diversification is helpful, why not own all the different sectors so you can buy the Vanguard Total Stock Market. For investing in the US, that's very well-diversified. Basically, the intent is to own the entire US stock market, so it's going to own all the sectors. Since you're able to diversify not only away from those company-specific risks but also industry-specific risks. It's the best way to reduce that unsystematic risk and ultimately will provide better outcomes. If you're on board with that approach, I think the common question is, how do I actually do this? I think the first thing is to look at what you're investing now. Also, on top of educating yourself on just this, you can dig into this concept a lot more. I'm still scratching the surface. It's good to educate yourself on the topic, especially if you're not familiar with a lot of this stuff. But once you feel good about it, you start to look at your specific situation and understand what your overall percentage of types of investments looks like. They call it asset allocation. What percentage of your total investments are in stocks or bonds? What types of stocks do you have? Do you have technology stocks? Do you have real estate? Do you have whatever? Are they big companies or small companies? That's a simple thing, understand your asset allocation. That's a good small step to see how you're doing on this whole diversification thing. You might be thinking, how do I do that? An easy way to do that, it depends on what you own, but hopefully you own either ETF, a mutual fund, or a stock. If you own a mutual fund, ETF, or stock, it has what's called a ticker. That's a letter abbreviation of the fund. You can google it. That's probably the easiest way. Let's say you own VTI, that's one of the biggest ETFs. You can google VTI. Click into Vanguard and it's going to have pretty good info. Let's do this. I'll show you a good way to do it that'll work for any type of ETF stock or mutual funds. You can go to a website, morningstar.com. Morningstar is nice because it's a free to the public website. Anybody can get on it. Go to Morningstar. At the top, it has search quotes on it. You can type in VTI or if you're not sure what the ticker is, you can type in Vanguard Total Stock Market, and then you just have to pick whether you have an ETF or something else. If you have the Vanguard Total Stock Market ETF, you click that. That's going to pull up their summary of that particular fund. You can click on to portfolio. When you scan down a little bit, you'll see a tab for portfolio. That's the one to look at, I think, if we're talking about how well it's diversified. I'll show you a few helpful things to look at. If you go scan down a touch, you'll see on the left asset allocation, and on the right, stock style. The asset allocation will tell you how much of it is US versus international versus fixed bond–type investments. This investment, the Vanguard Total Stock Market, is basically 100% close to 100% US stocks, which makes sense. Now on the right side, stock style, you can see this map. I like to click weight, switch it to weight. You'll see that's the percentage of each category that you have. I don't know what they call this thing, but it's nine boxes showing which. If you look at the top left, that's basically showing you own 15% large cap value. Those are larger companies that are categorized as value companies. That's one of the things you can categorize by when you're looking at diversification. Then medium is in the middle and small is on the bottom. For diversification purposes, you're looking for a general spread across this. You definitely don't want any one of these categories. That'll show you the size, spread, and the value versus growth spread. Then you can scan down a little bit more. Scan down to exposure on the left and sector. You can see what percentage this particular ETF owns between technology, financial services, real estate. This ETF owns 25% in change of technology stocks, and then it owns 13%, financial services. Then three, almost 4% real estate. A lot of people don't realize they own real estate within their fund. You want this to be spread out. You can look at all this stuff, but the last big thing I typically take a peek at is holdings right below that. You can see equity holdings listed there as of the most recent date. This particular fund as of March 31st, 2022, has 4119 equity holdings. That basically means this fund, when you buy it, you're going to basically own over 4000 individual stocks, which is great. You want a high number there. If you're looking to diversify, you want a big number. Some of these mutual funds have 50 or less stocks. That's much, much less diversified. If you're going for diversification, higher numbers are generally better. It's also interesting. Sometimes, if you're curious more specifically, below it, it'll show the holdings. A lot of people don't realize they own all these stocks, like you're going to own Apple almost 6% in this fund. You can look at each of those funds that you own and see where it's invested. You can do a spreadsheet and say you own four funds, and you have the dollar amount, and then you can plug in which asset class each of them have, and how many securities they have. All those metrics I just pointed out, you could map that out on a spreadsheet, and then pull that all together. There you have it, you're going to have a very good view of how you're invested, how well it's diversified, what your asset allocation is, all those sorts of things. That's a good exercise, especially if you're doing this yourself. This is the way you really want to be. If you're working with a planner or if you're working with us, it's more of making sure that's something that's being addressed and understanding it, or asking questions, or having the education level to know good questions to ask, that sort of thing. Any of you guys that work with us, feel free at anytime, bring this up and we can dig in as much as you'd like. It's good either way, I think, to understand the basics. If you need to make changes, say you go through this and maybe you own three stocks or something, if you own three individual stocks, I think it's obvious. It will probably be a very good idea to diversify, own maybe more than three because you just don't really know. You have to be careful with it in some instances. Don't just sell everything and go buy new stuff. Make sure you're keeping an eye on the tax consequences. That's one thing, especially if you have it in a taxable investment, if it's not in a retirement plan. There can often be tax consequences when you sell things. Just be aware of that. Talk to your accountant or talk to your financial planner before you just go selling stuff. If you're working with those people, lean on them. That's the big thing. It's saying, what does my asset allocation need to look like and am I in line with that? That's really what it comes down to. How well am I diversified? It would be good to see that. Then, what are the categories of how it spread. Is that as efficient as it needs to be? If you need to make changes, you're just making changes over time. A lot of people have anti diversification, I guess. I don't know. At least, maybe they don't say it that way, but a lot of this stuff that's out there is against diversification. Some of the questions we see come up, I wanted to throw out and talk over briefly. I've heard the question posed of, is diversification going to make it harder for me to hit goals? Maybe I'm not going to hit any homeruns, because diversification is hitting a single and a double. It's like a base hit. The question would be, well, maybe I want to go for homeruns because striking out is bad, but if I go to bat enough times, it will eventually work out good. With investing, that's not really true. I'm talking to a group of you all. There's maybe one of you. I'm sure there's someone you've talked to before that hit home runs and just crushed it with not diversifying, like picking winners. But if you look at large numbers of people, even super smart people that know what they're doing, it's incredibly difficult to do well not diversified or just hit a home run. Since I'm talking to a group of you all, no question. Diversification is actually going to make your goals easier to hit. One of you might get lucky, or whatever, or hit that home run, but the bulk of you all will be better off by diversifying, actually. It will make it easier to hit those goals. It's common to hear this from a buddy that just had something good happen. It's like, my buddy just bought Gamestop stock, so I want to try it out, too. Before you go about doing something based on a contact or a friend, consult with the research. Do some homework. Odds are, your buddy doesn't really know what he's doing. He just got lucky. It's not like winning the lottery lucky. If your buddy made some money buying stocks, that's not like going to the track and hitting it big, or winning the Powerball or whatever. It's more like speeding and not getting caught. If you speed enough, you're going to get pulled over, but not everybody. You know the person that just has not gotten caught and you're like, dude, you're going at 50 over. The researchers would all agree that would be luck. A lot of it is luck. There's always going to be that person, though, that hits a home run, even though it is luck. Another question that comes up is, is cryptocurrency a good way to diversify? Cryptocurrency is interesting. It's still so new. We covered it a while ago. I'll link to that in the show notes. It's a very new thing. The verdict is still out as to how that's going to shake out. I guess you could call it maybe a sector, but it's not a traditional investment in the sense of there's no underlying business. You're investing in a currency-ish. It's more in the category of currency or really, I guess, NFTs (non-fungible tokens), those types of investments. It's a very new type of investment. There's a lot of uncertainty. The verdict is still out. I guess it could be a potential new way to diversify because the diversification works really well when you find different things you don't already own and you own them as well. Cryptocurrency could be an additional way to diversify, but I'm not sure of that yet. I think it's really early and I think time will tell. What about diversifying into passive investments like real estate? That's a question that comes up a lot. It's like, I get the whole diversification thing, so let's take it to the next level and let's diversify into my local real estate market. It makes sense on the surface, but in reality, that's actually going the other direction, away from diversification. Most people already own real estate. They don't realize it, but they own real estate in their investment funds, like within their investment funds. Like I was talking about earlier, the Vanguard Total Stock Market owns real estate. Most people already own real estate, they just don't realize it. Most people own it as passively as you can own it, which is just in a fund. What I mean by the other direction, if you're picking one particular market, in one particular city, in one particular type of real estate like long-term rentals, and you're deciding to invest in that, that's the opposite of diversification. That's picking one stock. It's like going all in one specific direction, as opposed to owning all sorts of real estate. The difference between owning real estate like this, like I'm talking about, like directly owning it, is that you are more actively starting to participate in the business. That's a little different. I think the same question comes up sometimes. It's like, what if I'm investing in my business? That's different because you're involved in it. At least in my view, I'm a huge fan of diversification. The exception I give is for my own business, really. That doesn't mean I'm not going to diversify my business, but I am okay not being nearly as diversified in my own business because I'm directly involved in it. I have my finger on the pulse. If I'm going to go away from diversification, it's going to be in something I'm actively involved in, as opposed to just picking a stock that I have no involvement with. All right, that's diversification. I know we can go a lot of different directions with this. I'll leave it up to you guys. If you want to dig into different topics or go different directions on this, feel free to reach out. I appreciate the questions you all been throwing out. I'll continue to take those in, and as they come up we'll cover those topics. All right, as always, good catching up. We'll see you next time.

Tax-loss harvesting is a tax strategy, but how does it actually affect your tax return and are there any limitations?  In this episode of the Finance for Physicians Podcast, Daniel Wrenne talks about tax-loss harvesting—what it is, why it's beneficial, and how it works on your tax return. Topics Discussed: Tax-loss Harvesting: Only beneficial for those with taxable assets What is tax-loss harvesting? Book losses while staying with similar investments Wash-Sale Rule: Why the IRS won’t let you buy the same security back What are the benefits of tax-loss harvesting? Take up to $3,000 a year of capital losses to offset ordinary income Defer or postpone taxes on normally taxed investment account Give it away to a nonprofit or beneficiary to realize step-up in basis How does tax-loss harvesting work on taxes? Form 1040, Line 7, Schedule D Links: Wash-Sale Rule Step-Up in Basis Form 1040 Schedule D Contact Finance for Physicians Finance for Physicians Full Episode Transcript: Hello, everyone. I hope you're having a great day. Today, I was hoping to cover a question that's come up quite a few times in our work with clients one-on-one. One of you brought up the question specifically, so I wanted to make sure and maybe dig into this a little bit more. The question is about tax-loss harvesting, understanding that a little bit more, how it works into your tax return, and some of the specifics of how that works. I'm going to dig in a little bit today and cover that. For any of you guys that are either doing that or interested in it, I think this will be something to check out and hopefully get a little bit of knowledge on this. We'll jump into that now. Like I said, we're going to talk a little bit more specifically about tax-loss harvesting. I'll start out with just a brief summary of what it is and why it's beneficial, and then we'll talk about how it actually comes into play on your tax return. This is a tax strategy, so that's a really good question. It's like, well, how does this actually affect my tax return? We'll talk about that and any limitations around that. For starters, it's important to clarify that tax-loss harvesting is only beneficial for those of you that have taxable assets. That's an investment account in your name. It could be a brokerage account. It could be cryptocurrency. It could be a baseball card. You could buy and sell baseball cards. That's technically a taxable asset. A taxable asset is anything that's invested not in a tax-sheltered account. A tax-sheltered account is like a Roth IRA, 401(k), 529, those kinds of things. Tax-loss harvesting is only beneficial for taxable assets, typically a brokerage account or a joint investment account—sometimes it's called that—an investment account in your name or you and your spouse's name. That's an important clarification. Also, to clarify, the best tax strategy really that there is is to maximize tax-sheltered vehicles first. Tax-loss harvesting is great, but I've seen on multiple occasions where people are looking into tax-loss harvesting and maybe have taxable assets like I just talked about, but they haven't yet maximized those tax shelters. Oftentimes, it's even more efficient to just go ahead and max out all your tax shelters or make sure that you're not missing out on any tax shelters like work retirement plans, Roth IRAs, backdoor Roth IRAs, and that kind of stuff. We've talked about that a lot before in prior episodes, but I just wanted to point that out today. Preferably, you're using those tax shelters first. What often happens for you guys with higher income or good savers is you max out those tax shelters pretty quick and then your backup option is using taxable assets. That's where tax-loss harvesting comes into play. So what is it? I'm going to throw out a pretty basic example just to make sure the concept is clear. Let's say you buy a mutual fund or ETF, same thing. You buy a Vanguard Total Stock Market Mutual Fund for $100 or buy $100 worth of it. Let's say the market tanks and the value of it drops to $50. Now, it's worth 50. Let's say you decide to sell it at $50. At that point in time—you sell it at 50—you basically booked a loss of $50. That's really all a tax loss is. You've booked that loss. But then the question is, well, what do we do with the $50? Most of the time, you don't need the cash, so we need to get it reinvested. We don't want it to just sit around. The back end of the strategy is you're immediately buying similar security. Maybe you buy the Vanguard 500 Index with the proceeds from that sale immediately so that you're never really out of the market for long and you've basically booked that $50 loss. At the end of the day, you still have a very similar investment as before, but you get that $50 tax loss. As we'll talk about, it can come in handy. It can be beneficial for you to go ahead and take that tax loss. Essentially, what the strategy is is you're booking losses while still staying invested. Some of you might be thinking, okay, well, why didn't you just buy the same thing back? What's up with buying something a little different? There are a few rules. The main one you got to watch out for is called the wash-sale rule. There's an IRS guideline that you can't buy the exact same security back. In this example, you can't just go buy back the same Vanguard Total Stock. You can, but they disallow it. In order to get the loss, you can't buy the exact same security back within 30 days. If you want to keep your investments invested, which is typically a good idea, you have to buy something that's not the exact same thing but is somewhat similar. Some people get hung up on this. Basically, just don't buy the exact same security back if you want to do this. I think as a general rule of thumb, a good safe way to play it is to buy something that is slightly different and attracts a different benchmark maybe. That's always safe. I don't know of anyone that's ever been audited for this. I haven't heard of this being a concern of the IRS. I think it's only an issue when you are buying back that same exact security. In that case, the brokerage firms will typically flag it and disallow it. The IRS has a lot of stuff going on. They have bigger fish to fry, so I'm sure this is a pretty low priority for them. As long as you're buying something that's not the exact same thing and relatively similar, that typically works. I think that's a fair approach. At the end of the day, you get the tax loss and it can help you with your taxes. Why is it beneficial? That's an important question. Now, there are a few different potential benefits. The first big benefit is that you can book up to $3000 a year of capital losses and offset them against ordinary income on your tax return. I'll talk about where it comes through on the tax return in a second, but every year, you can take up to $3000 of capital losses, and then that's going to offset some of your normal income on your taxes. Normally, ordinary income has a higher percentage tax rate than capital gains tax rates. When we're talking about taxable assets, those fall under the capital gains tax rules, so your normal income falls under ordinary income tax rules. Ordinary income taxes are typically a higher percentage rate than capital gains tax rates. If you can take a loss on something that's taxed normally—just throwing out an example—at 20% and you can use that loss to offset something that's normally taxed at 30%, that's a win. Taking at least $3000 of capital losses each year is one of the few tax arbitrage routes you can take. It's not a huge number, but it is definitely very beneficial for a lot of people and it's worthwhile to at least get that $3000 a year. That's the first benefit of tax-loss harvesting. As long as you can harvest at least $3000 a year, that's a great thing because you're able to offset it with something that's more heavily taxed than the asset that you're using to do it. The question that you might think about is okay, well, what if I take more than $3000? Say you have $10,000 of tax losses. You've harvested $10,000 throughout the year of tax losses and you're only able to take $3000 against income, so $7000 is still left over from tax losses. What happens is you can basically stockpile those, carry forward them as what they call it, and use them in the future either to offset the $3000 per year that you at least want to do—which we just talked about—or to offset capital gains that you receive in the future. Basically, the more losses you take, you can defer the taxation on that taxable investment account or asset. It's a way to postpone ultimately getting taxes because inevitably, if you do eventually take the money out of the account yourself, there would be some tax implication. By taking these losses, you can push that forward. This is especially a win if you're in a higher tax bracket now than when you ultimately take it out. It can get technical. It depends. There are some scenarios where this is not quite as beneficial, especially when you're in a low bracket now and higher in the future. This is not a benefit for everyone, but it can be a huge benefit. For most higher-income people that are likely in a high tax bracket now, it is typically a concrete benefit. The end effect of that is it just allows you to further defer or postpone taxes on that normally taxed investment account when you ultimately start to take it out. The third big benefit of tax-loss harvesting is definitely the biggest benefit if you go down either one of these paths. It's extremely beneficial if you ultimately either give it away to a nonprofit 501(c)(3) or you pass away with the account fully in your name. In that case, it's extremely beneficial. I'll talk through a scenario to explain this third benefit and why it's beneficial. Going back to Vanguard Total Stock Market—we'll just stick with that example—let's say you bought $50,000 of the Vanguard Total Stock Market and over the years of owning it, it has doubled. It's turned into $100,000. If you've done nothing, you have $50,000 of unrealized or untaxed gains. Now, if you pass away with that Vanguard Total Stock Market, what happens is whoever your beneficiary receives the $100,000 and they get what's called a step-up in basis. That wipes off that unrealized taxable gain. In other words, if you were alive and had $100,000 of this Vanguard Total Stock Market that had started at $50,000 and you sold it all, you'd have to pay tax on the $50,000 of gains because it has grown and it has not been taxed yet. But if you pass away and your heir receives it, they get the full $100,000 and they get the step-up in basis, which basically means like they bought it for $100,000, so they have a zero taxable gain if they sold it all immediately. If they let it grow to $200,000, they have a $100,000 base, so that's a $100,000 gain. When you pass away with taxable assets, that step-up in basis is beneficial. I'll talk about why tax-loss harvesting amplifies this in a second, but the same thing happens when you give it to a 501(c)(3) nonprofit organization. In the same example, if you give that $100,000 away to a 501(c)(3), it's a zero tax situation for you, of course, and the organization that receives it gets a step-up in basis essentially. They're not going to pay tax on receiving that at all either. In either of those two scenarios, it's a way to basically sweep that future tax liability off your balance sheet, your heirs', or whomever. For example, if you're going to pass away with the assets or if you already give money, these sorts of things are great ways to do those things. It's great because you're able to sweep that $50,000 unrealized or future tax obligation off the table. Back to tax-loss harvesting, it's even better if you tax-loss harvest. Let's say over the years, you've used this strategy of selling things when they're lower and then buying something back that's somewhat similar. If you've been tax-loss harvesting over the years, let's say you took $20,000 in losses on that same Vanguard Total Stock Market Fund, you pass it on to your heirs, or give it to a 501(c)(3)—either one of those. You basically are sweeping $70,000. It's worth $100,000, you paid $50,000 for it, but then you took losses of $20,000, so the basis as what they call it is $30,000 and the value of it is $100,000. If you're alive and you just sold it, you would be paying taxes on the $70,000, but if you give it away to a 501(c)(3) or you pass away and they get the step-up in basis, the same thing happens. You're sweeping that $70,000 off your plate and it's a way to avoid the tax on that $70,000 gain. First of all, it's very efficient if you're going to give this security away and if you're going to pass away with assets. This is an efficient asset to pass and it's especially beneficial. If you're going to do that, you're going to give these kinds of things away, or you're going to pass it to your heirs, it's especially beneficial. Basically, the more you can tax-loss harvest, the better because you get to use those tax losses while you're alive. You can use it to offset some other investment that went up and sell it without paying tax, or offset $3000 a year on your tax return. That's like a home run tax-wise for those of you that give some—especially the more you give—or for those of you that want to pass an inheritance. That makes the tax-loss harvesting. The first two things I talked about like taking that $3000 loss a year are nice. It's a little gravy on top. It's well worth it, but it's not a home run. The second benefit of deferring tax on that taxable account is pretty good. It can be really good depending on the situation, especially the longer you do it. The third benefit we just talked about is a home run if it fits into your situation. Basically, you're wiping that big tax obligation off your plate and still getting the benefit of those tax losses prior to that, so that works very well. How does it work on your taxes? When you take these losses each year—let's say you've been tax-loss harvesting, you need to go do your taxes, or you're reviewing your tax return to your accountant to put it together for you—where does it come through? If you look at your tax return—1040 is the form, that's the main form on your tax return—it's usually the first two pages of your tax return. If you look at 1040, the line where this all happens is Line 7. Line 7 is capital gain or loss. It says, attach Schedule D if required. If not required, check here. That's where it all comes through. If you've been rocking it out on tax-loss harvesting and you've not had some other gain that wiped them all out, that line is going to show -$3000 because that's the max. When we're working with clients, especially when we start working with them, it's extremely rare that I see -$3000 on that line even when they have taxable accounts. It's just because not many people are doing this, even advisors. We'll see $5000, zero, or whatever all over the place. When you see -$3000, that's a pretty good sign that that individual has been proactively doing tax-loss harvesting. For my return, even for my own stuff, my goal is for it to stay -$3000 every year. That's where it all comes through on Line 7. It says, refer to Schedule D. Schedule D is where the details come through. If you look at Schedule D, that's where you'll see all this spelled out—how much realized capital gains, how much realized capital losses, whether it was short-term or long-term, those offsets, and then this final number is basically the net of all the capital gains and losses. That's what comes through in Section 7. Schedule D is where the details go. Section 7 on the main page is where you're going to see the final number. Now, if you're taking a lot of losses, sometimes, what people will ask or wonder is how long can I just keep stockpiling these things? All of these I'm throwing out there would be good to talk to your accountant about because first of all, this stuff changes. I'm not an accountant. This is my disclaimer section. Talk to your account and refer to them for tax advice. This stuff changes. Also, your circumstances are also important to take into consideration, but as of now, under the current tax laws, these tax losses are indefinite. You can stockpile as many as you want and defer them as long as you want. That's how it works, which is nice. There is one big exception where this strategy, I would stay away from it. It can almost be like you should do the reverse. If you're in a low enough tax bracket, capital gains tax rates actually go to 0%. In some rare cases when your income is low enough—say you're in training and you happen to have a taxable investment account—it's actually better to harvest gains on these kinds of accounts up to a certain level because it's like, shoot, if I'm going to get taxed 0% on the gain, then I'll take it. But this is pretty rare. I've seen it several times before, but it's not the most common situation. Normally, in that situation, when income is lower, it's going to be much better to max out tax shelters. Those are plenty. They will typically do the job on what you want to save. If you're in that situation where you happen to have that taxable investment account and you happen to have low income for one year or multiple years, it might be that it's actually better to call it a tax-gain harvest. Take those gains if you're up to the point where they're in the 0% tax rate. That works out even better. Like I said before, anytime we're talking about tax, it's always good to talk to your advisor or your tax professional because all these things tie into your circumstances and it's important to incorporate that. That's tax-loss harvesting. There's definitely a lot to it. It's somewhat straightforward, but there are a lot of concerns about the IRS, the part about what they require. That wash-sale rule is a little concerning for people. That's probably the number one concern we see with people. It's like, how do I avoid this wash-sale thing? I don't think that should be a huge concern. I think the bigger thing is making sure you incorporate your situation and really understand the cost-benefit of it. For a lot of people, it might not be worth the headache to even mess with that. A lot of people are better off just maxing out these tax shelters that are already available and don't even have to mess with this. In other cases, like I said, maybe you need to tax-gain harvest. But for the right situation—for a lot of you probably—higher income and you already maxed everything out, it can work really well. Kudos to you if you've made it this far. It's good to educate yourself especially on the basics of how this thing works. It's good to know how that works. It'll allow you to better navigate this particular strategy. I hope it's been beneficial. I enjoyed chatting with you as always. We'll look forward to talking next time.

Are you on auto-pilot and susceptible to routines and the rest of the world’s values? What’s most important to you in your life? There are solid steps or ways that you can take to clarify (or re-clarify) your true values.  In this episode of the Finance for Physicians Podcast, Daniel Wrenne talks about three specific exercises to help you clarify and align your values. Topics Discussed: What are values? Undercurrent or true driver to measuring happiness Values Awareness: Day-to-day actions in alignment with what’s most important Results: Better decisions, confidence, happier, and feeling more purpose-driven Symptoms: Feeling lost, lack of confidence in decision making, and stress Value of Values: Believe in, maintain, and reinforce awareness of your values Exercise #1: Values Clarification (highlight/prioritize/summarize what’s important) Exercise #2: Life Map (Reflect on past; visually pointing out life’s ups and downs) Exercise #3: 80th Birthday: Focus on future and purpose (who/what’s important) Links: Values Clarification (List of Values) Jason Waller - Executive Coaching Contact Finance for Physicians Finance for Physicians Full Episode Transcript: Hey, everyone. Today, I wanted to talk about values and throw out some ideas for how to clarify values. I think this is a super important thing, especially for us today; we're all just so busy. Sometimes it's just helpful to have a concrete, quick exercise to take your time out and think through some of these really important things. We'll jump into that and go through that. Hopefully, the takeaway here is you have some concrete steps or exercises you can take to start to either clarify for the first time or reclarify what’s really most important in your life. Before I jump into the exercises, I just want to clarify. I know we’ve covered this before, but values are like the undercurrent or the true driver to measuring happiness and how you're doing. In regards to finances, in an ideal world, you're using your finances and all the decisions around them to propel you towards your values and get you more in alignment with those values. I think values are more important than goals. Or maybe not more important. Maybe that's not the right word. I think values should be the underlying driver to your goals. Values, clarification, or understanding of your values I would consider the most important step before you start to get into financial planning and making decisions in life, especially the big ones, at anything. But for the purpose of our conversation, it's typically finances. Anyway, values are super important. I think the key here is awareness; being aware of your values. Over time, we have a tendency to get into routines and gravitate towards autopilot or sleepwalking, or just doing the thing, and that's where you start to lose touch with values, because values, being aware of them, you have to take your time out and be intentional. The further you go away from it, you get into that autopilot world and that's where you're susceptible to the pool of the world's values which can often be surface-level material, and are very likely not in alignment with your true values. We're going for values awareness and what that looks like is your actions day-to-day, especially with big things, are in better alignment with what's really most important. It requires understanding (first of all) what's most important because it kind of seems like you would know that, but a lot of times people aren't just clear on that. The results of having a good awareness of your values will just lead to better decisions, confidence moving towards happiness, feeling more purpose-driven. I would say some of the symptoms of not being aware of values would be feeling on autopilot, not as confident decisions, stress, keeping up with the Joneses, those sorts of things. Feeling kind of lost will typically be the result of pulling away from your values. I'm going to talk through some exercises like I said. There are some general ways to become more aware of your values. First of all, you have to believe in the importance of being aware of your values and maybe admit that you're not aware. That's important. That's part of my hope here is to just kind of reinforce that belief of a value, I guess the value of values, so that's important. You have to be intentional about it. You have to put your mind to it. You have to dedicate time for a lot of this stuff. There are some easy things that you can do like meditation, prayer, reflecting, journaling. Those are always good exercises to get into the habit of doing to help you maintain awareness of values or be more in touch with those. Those are good general habits, but what I want to talk about mainly today is some specific exercises. Before I go through these, I think it's important (ideally) to do these with at least another person. You don't have to do them—you can do them solo—but I think it helps to do them especially if you're married, have a spouse, or partner, someone you really trust. It can be very helpful to include them in this exercise. Or sometimes, people do these in small groups and that sort of thing. I think that helps. As I said, you can completely do this solo and that's fine too. It's just a lot of times, these kind of have to tie things together when you're married. First exercise. This is the most practical foundation exercise. If you've never done any of this stuff, it's probably a good starting point. If you're very logically-oriented, this is a good one to do. The focus on this is just clarifying your values as they say at the end of the day. A lot of people in therapy use this approach. Basically, we'll call it a values clarification exercise. I'll link to a list of values. The first step is you don't want to go with a blank sheet of paper. That makes it pretty hard, at least for me. I like doing it with a prewritten list of all sorts of values. Like I said, I'll link to one. The idea is to skim through the list of all these values and maybe you even write in some that are not listed because everybody's going to have different values. The goal here is to highlight those that potentially would be important to you. First thing is to highlight those top values for you. Before you do this—I should have said this in the beginning—you need to have silence. It has to be quiet. Turn the other stuff off. Put your phone somewhere else. Turn the notifications off. You have to get your mind chilled out. As best as you can turn off the other craziness that's going on in your head. Get in the right mind space. That's important for all of these. You have to focus. Turn off the distractions, lock the kids in the room—just kidding. Get a babysitter or do it on date night. Maybe this doesn't sound cool on date night, but it is helpful. It can be fun with your spouse. You have to get in the right mindset. You're just going to skim through the list and highlight those that are your top values, then just take some time to think about each of them, and think through why this is a value to you. Maybe think about how are you doing following them. Maybe think about which one of those you would like to work on. It seems like for me, when I've done this, there are the ones that are really valuable, important values for me that I'm doing a good job with, and then there are the ones where I'm not doing a good job on. That's a different thing. It's good to take note of all that. Most of the time maybe you're going to have ten or quite a few. I would try to narrow it down to maybe the top five or something and prioritize them. That's important, to prioritize them. It's not that easy to prioritize. It's usually pretty difficult because they're all important. But you want to really drill down what is the most important and then rank them. That's going to be key for applying this in life. I'll circle back on that. Once you prioritize them, ideally summarize what they mean to you, like a description. This is where you can write out your value statement. I think it's good to write this down or put it on a piece of paper to make a visual. Maybe you have a list of your top five values in order, and you have a one-sentence summary of your description of why it's important to you. Then a list of actions that would be in alignment with that particular value. That makes it easier in the future to just glance at it and be okay, that's an example. Maybe family is number one so the description might be it's extremely important for me to spend time and really connect relationally with my family and love my family, that kind of thing. Then specific actions might be like saying no to another commitment because that's taking away from my family, or working too many hours. The action will be saying no to working too many hours. Or attending my kid's sporting events, or for me, it's making time to have one-on-one for each of my kids. You can list those actions for each of these top values. Ideally, you have this takeaway here with a sheet of paper. You don't want to get too intense with this stuff. Keep it to one piece of paper. Ideally, you have one piece of paper that you can take away from this. It lists 3–5 values in priority order, you have a summary of what it means to you and why it is important, and then a handful of actions that would be in alignment with it. You print it out and use that. Sometimes, maybe if it's new to you, you can put it in a place where you see it regularly. I have something like this at my desk at work or I'll tuck it in my notebook I use for stuff or journal. I think it's good to have it there visually. Use it and refer to it. That's the key. That's where it starts. Doing these exercises will help you be a little more aware in itself. The key is when you go into life and these decisions come up, especially the big ones, you should be referring to this list. Say you're taking a new job, or maybe there are some sketchy financial opportunities that you have to navigate, or maybe you're feeling you need to upgrade homes, all those sorts of things. The new job is maybe a lot better pay, so your values might be like the classic—family is number one, maybe professional is number three, then wealth is number five. If you're not careful, the world will tell you that a higher-paying job is always better, but you have to pull out those values and remind yourself that family is number one to me. By taking this job, I'm actually going to derail or pull out the rug under my family. They’ve gotten established, so I'm totally going to cause some pain to my family by taking this job. If I'm honest with myself, the only reason I'm doing it is to get more money. If I really look at it, this job actually has a little bit more work commitment which is more hours away from my family, so that's an obvious no. If you're not careful in this, you can get in that autopilot mode and the world is pulling you in that direction. It's so tempting to take more money in a job offer. They maybe are not as obvious as that. There are all kinds of things that come up in life and it's going to be helpful. Some of them are, when you get into the gray zone, they're the ones that are the most helpful. That's why we often make bad decisions as we go with something that is of value but is not really our most important thing. That's pulling us in the wrong direction. That's the first exercise. The second exercise, I'll give credit to Jason Waller. He wrote about this in an article and I think he's a business coach kind of guy. The exercise is called the Life Map Exercise. This is more of a reflection on the past, which can also be a good way to understand how you got where you are today, why, and what's most important. This is pretty simple. You just have a blank sheet of paper and draw out your life from birth to now, life's ups and downs in the journey and you just identify these points in time that we consider the low points and the high points, and that's it. There are some things that we can kind of work on or avoid. Ideally, you're using some visual pictures or illustrations and you're limiting the words. You don't want to write a novel. Ideally, you do a picture of, like a kid playing baseball or something, a dollar bill. Whatever drawing you draw represents maybe one word. An example is a lot of people do a chart of up, down, up, down. They have points and each point is in chronological order like a life experience, maybe draw a picture and put a word. It just needs to be enough to prompt you or remind you what that is about. You want to avoid words and bullet points. You don't want all that stuff. It needs to be visual. With this exercise, you want to stay outside of the future. This is all about the past. Once you're done with that, it's a good thing to tuck away in the journal, sit, and think about it. Before you tuck it away, I think it's good to go through some questions and thought exercises to pull out some stuff from that. Maybe look at different points you've identified and say, why is that so meaningful to me? How does this experience make me who I am today? Another big question to ask is what did I learn from the lows and the highs? Sometimes we have low points that actually end up being huge take-off points, but it's easy to forget that happened, especially the more time that goes on, so thinking about it. Or maybe the reverse. This highpoint actually wasn't as great as I thought it would be. It was the catalyst for bad stuff to start happening because I was getting off-track. The idea here is to start to see these things like maybe, for example, I was not in alignment with values or this is maybe what has gotten me to a point of where I am today and the values I have. I think that is a good exercise for reflection. Reflection is always a good thing to do every once in a while. The next exercise is kind of more a future-oriented exercise. The exercise is called the 80th Birthday Party Exercise. I'm sure you are trying to guess what this might be. This one comes from the same guy, Jason Waller. He wrote this down pretty solidly in his article. We're focused on the future, we're focused on purpose. With this exercise, as with all these, you're going to take a time out and just get relaxed, be quiet, and you have to be focused. The first thing is once you're all chilled out, really try to start to imagine you're arriving at your 80th birthday party. You're walking in and within your imaginary visualization take a minute to look around, where are you at? What does it look like? What does your life look like? What do you look like? Let that soak in. The next thing is to think through or imagine you're writing a table and it's got all the people in your life that are most important. Imagine the people and take a second to look at each person, thank them for being there, and show a little appreciation. Also, think that they came there to be with you because they care about you. For each person, listen as each person shares gratitude and maybe talks about some of the differences you made in their life, and take in those stories and emotions with each of these people that are most important. Take some time to reflect on what all this meant for you. Let it soak in. As you come back to the real world after you've thought about it for a minute, I think it's good to write it all down, document some of your thoughts, and some of the things in addition to some of the takeaways and maybe who was there. You can list whatever you feel is important, but some of the questions you might document would be like what was it like to be in that experience? What did your guest say about you? Was there a common theme that you took away from that exercise? The goal is to get a little closer to your ideal life, what you want and need to get there. What this exercise, the idea is to envision yourself in that future ideal life. As you see that, it starts to give you that picture of what that looks like. You can start to think about, what do I need to do to get there? Maybe these people were saying you were there for me at the hard point, or your family and you were always supportive and whatnot. The takeaway from this is you really start to see that game changer super important stuff. Sometimes you're going to be I need to get on it. I'm not exactly doing what I needed to do to get there. Other times, in this area I am doing a good job and give yourself a pat in the back. That's the last exercise I wanted to go to. There are a bunch of these out there. There are hundreds of them. You can google it all day long. I think the key is to take a time out and spend 20 minutes or so. Work through something like this and take note of it, start to refer back to it over time, and then adjust it over time because things change. You realize maybe something you thought was important is not as important. It will be adjusted over time. That's where you start moving the needle. When you do this exercise upfront, it will be kind of cool to clarify and maybe emotional. You'll feel good about it. There's not any change instantaneously, but over time, by having that greater awareness and by referring back to it, that's where the change happens. You'll start to slowly move the needle and that's what we are after. That is all I have for today. As always, I hope you enjoyed it, and we’ll look forward to talking to you next time.

Go with eyes wide open or be in for a major financial surprise when your children start college. In this episode of the Finance for Physicians Podcast, Daniel Wrenne talks about you or your children funding their education.  Topics Discussed: Who should pay for college? You, your children, student loans, or scholarships What has changed? Tuition costs, direct student loan cap, and responsibility Little to No Financial Aid: Based on physician’s above-average income Other Options: 529 Plan, investments/cash accounts, income, student loans Links: Net Price Calculator for University of Florida How Much Student Loan Can I Get (NerdWallet) How To Help Your Children Maximize Their College Education Are You Saving Enough For Education Contact Finance for Physicians Finance for Physicians

Are you looking for another job, or are recruiters seeking you out for opportunities? If you were offered a different job, would you think about taking it? Why, or why not? There’s a lot to consider. In this episode of the Finance for Physicians Podcast, Daniel Wrenne talks about whether to accept another job. It can be difficult to make a decision and navigate your priorities as an in-practice physician.  Topics Discussed: Temptations: Financial aspect—try to not first look at the money/compensation Values and Goals: What’s most important? Family, work/life balance, pay? Coworkers: Who will you work with and for? What kind of lives do they live? Position: Is it a job you enjoy? Are the pay/benefits decent? What are the hours? Student Aid: Confirm if the employer is Public Service Loan Forgiveness qualified Insurance Coverage: Are malpractice insurance and tail coverage provided? Employment Law: Hire a consultant or employment attorney to review contracts Links: PSLF Customer Reviews on iTunes Contact Finance for Physicians Finance for Physicians