Certain financial attitudes can be detrimental to you financial health, but one can catapult you ahead of your peers. Which attitude do you have?
Over the years I’ve reviewed retirement portfolios and personal finances for many physicians, and on an ongoing basis I manage portfolios and provide personal financial planning services for a number of physician households throughout the country.
In that time, I’ve noticed there are 3 different types of attitudes physicians have when it comes to their knowledge about investing and financial planning.
A few of these can be detrimental to your financial health, but there’s one attitude that can really get you ahead and catapult you way ahead of your peers and leave them in the dust.
So which of these attitudes do you have?
1. You think you know everything about investing and financial planning
This attitude is dangerous. There’s no way you or anyone else can know everything there is to know about insurance, investments, retirement, estate planning, and everything else in personal finance.
Sort of like there’s no way you can know everything about practicing medicine.
But many physicians think just because they went to medical school and have put in 10-plus years of education, somehow that makes them experts in managing their retirement portfolios.
I have met a few physicians—very few—who have a pretty good grasp of what they’re doing. But most think they know what they’re doing without realizing they really don’t. Unfortunately, these doctors also tend to be the ones who are not open to new ideas and dismiss any criticism.
These are the types that can’t be helped and will continue to make the same investing mistakes over and over again. Many will continue to struggle for years and wonder why they still have to work full time at age 60.
These also tend to be the ones who complain about fees and see fees only as costs not investments even when they are offered good financial and investment advice.
2. You know nothing about investing and financial planning
This may sound odd, but this attitude is actually better than the first one.
The downside to this attitude is financial advisors can take advantage of you.
You’ll never know whether the insurance products or mutual funds your financial advisor sold you are for your best interests. You’ll never know what fees you’re paying and how your financial advisor is compensated.
You won’t know whether the investment philosophy makes any sense and whether it’s grounded in academics and financial science.
But the glimmer of hope is that you don’t have the biases of physicians with the first attitude.
3. You know you don’t know everything about investing and financial planning.
These physicians have the best chance of having a successful long-term investment experience and really taking control of their finances.
These are the ones who realize they don’t know everything about investing and finances and at the same time they “know that they don’t know.” Contrast that with the first attitude, which is that they think they know, but they really don’t.
If you have this attitude, you are open to new ideas and willing to learn about what it takes to be financially successful.
And you will seek the help that you need to make that happen. This may be from educating yourself (though you must be very careful about which sources you use to do this since much investment “advice” on the internet is financial porn), or it may be by working with a financial planner and investment advisor who resonates with you.
You view that help not as a cost but an investment in yourself—sort of like when you spent the time to college and medical school and paid those tuition dollars—because you know there is going to be a payoff down the road.
These are the physicians who see value in working with a financial planner who acts in their best interests, walks in their shoes, takes the time to educate them, and works as their partner to maximize their chance of success.
So which type of attitude do you have?
Do you have the attitude that increases your chance of being financially successful, or do you have the attitude that minimizes it?