5 Myths About Educating Private Finance
Teaching personal finance is often considered a taboo subject. Why? Here are five common myths and how they fail to reason.
Today’s classic is being republished by The doctor philosopher. You can see the original Here.
When I work with residents, I often ask them if there is anything they particularly want to learn or discuss. Some residents stare like deer in the headlights and casually offer, “Whatever you want to discuss is fine with me.” These residents often receive one of my canned regional anesthesia or general operating theater lectures, which are recorded on a sheet of paper in the operating room.
However, most residents have a few subjects that come to mind. And nowadays, one of the topics that is almost always on the lesson list is a personal finance issue – usually whether to refinance student loans or an investment issue.
After teaching my residents about personal finance for three years, I understood that the reason this is so common is because I turn the discussion of what is usually considered a taboo subject like money into an open and welcoming conversation have made.
Today I want to dispel some of the common myths about discussing money with trainees in order to encourage more attending physicians to discuss this important topic as well.
Myth # 1) I’ve made too many financial mistakes!
Failure can be a great master or a great teacher; It is up to us to decide which one it will be.
Many doctors shy away from discussing money with their trainees because they feel they have made too many financial mistakes. You feel like a terrible example. Who should they advise financially?
Over and over again I have heard people tell me that some of their preferred personal financial contributions include those where we admit our financial mistakes.
“Oh, you bought life insurance and gave it up after realizing that it wasn’t good for you? What do you mean, it was a terrible idea not to fill your 401K until you were 10 years before your workout? You cannot take out disability insurance because you applied when you shouldn’t have?!?!? “
These conversations can be challenging for doctors in the practice because they have to admit mistakes. However, this should not prevent us from teaching money. In fact, it should encourage us to embrace this difficult subject.
Myth # 2) I don’t know enough
When I started having financial talks, I had a severe case of Fraud Syndrome. Surely someone would ask me a question that explored the depths of my knowledge only to find out that I was a scam.
It turns out that this is extremely rare.
The truth is that doctors and doctors in training usually have very little financial knowledge. Most of the people I speak to don’t even understand the difference between a stock and a bond.
While you might expect someone to ask you about the pros and cons of harvesting tax losses or the propensity for small / value factors, you are more likely to get a question about whether they are (obviously) paying back or investing their credit card at 19% interest supposed to make money in the market.
If you read this website, you probably know a lot more than you think. Try to only teach the basics and refer your learners to others if necessary. They will appreciate both your honesty and your humility.
Myth # 3) It’s not my job
This is my favorite. Some attending physicians think that it is not their job to talk about financial issues. Here are two arguments against this way of thinking.
First, we know that stress outside of work can lead to poor understanding and poor performance at work. According to the American Psychological Association, money is the leading cause of stress in American households.
“Regardless of the economic climate, money and finance have remained the main stressor since we began our survey in 2007. Additionally, this year’s survey shows that stress related to financial problems can have a significant impact on the health and wellbeing of Americans,” said APA Norman B. Anderson, PhD, CEO and Executive Vice President, said.
Learning medicine is infinitely more complicated than learning money. However, if our residents are constantly worrying about whether they can afford their next credit card bill or student loan, how much medicine do you think they will learn?
Second, ACGME’s common program requirements for anesthesiology now require that practice management topics – such as contract negotiation and tax administration – be taught in training. Debt management and brokering personal finance won’t be far behind.
Myth # 4) That’s what a financial advisor is for!
Can we be honest for a moment? Most people in the financial industry don’t pay attention to you. Do not you believe me? Read this.
In my own life I have met several insurance agent financial advisors who work exclusively with doctors but don’t know what a Backdoor Roth IRA is or that all life insurance is terrible for someone who hasn’t paid back their student loans and isn’t maximizing their retirement accounts. It is essentially financial misconduct to sell Whole Life to someone who is not using all of their pre-tax retirement space.
These paid insurance agents, masquerading as financial advisors, earn a commission on the products they sell to you. This is known as a financial conflict of interest. However, fee-based models of financial advice make up over 90% of financial advisors.
Whether or not you use a financial advisor, it is your responsibility to know what is going on with your personal finances. It is also your responsibility to teach our trainees how to find a good financial advisor. Learning how to fight fair with the financial industry is a big part of teaching in personal finance.
If you are lazy, I will save you the trouble. Just point them to this list of Verified Physician Financial Advisers who really are the “good guys.”
In any case, I would not trust a large majority of financial advisors to advise my trainees financially. Hard? Perhaps. It is also the truth.
Myth # 5) Residents don’t want to learn about personal finance
Most treating doctors won’t even talk about how much money they make as doctors. This despite the fact that in just a few years the resident they speak to may be offered a contract to become their peers. What information do you save them from by avoiding discussing something as stupid as a salary?
However, if you open this jar of worms, you will find great interest. When you take out student loans, invest, or seek financial advice, you will find that your residents are more than interested. Often times you won’t be able to stop them from asking questions.
At least that’s my experience with every single financial talk I’ve ever given.
Take Home: Teaching Personal Finance
Now that the myths are out of the way, let’s get real for a moment. Our trainees need to be open and honest when it comes to teaching personal finance.
If you are established in this post, I recommend asking tough questions to your treating physicians. Ask them if there is anything negotiable in an academic contract. Ask them about the performance of their employer or group. Perhaps you could even ask them if they have any advice on how to repay your student loans.
For the doctor in the practice, I dare you to open up personal financial issues to your students and residents. Share some of your stories to open up the subject. Maybe a previous financial mistake or success you had? “Can you believe that? I finally paid off my student loan. It feels good!”
If you’re brave enough to venture into the world of personal financial education, you’ll find that it can be both rewarding and fulfilling as you help future generations of doctors live with a little less stress. You may also find that they can better focus on your other teachings.
Did you talk about personal finances in the training? Who could you talk to openly about such a taboo subject? How did you facilitate the discussion? Leave a comment below.