Issue link: https://viewer.e-digitaledition.com/i/520989
P HYSICIANS ARE ATTRACTED to investing as a means to provide for their families, secure their current lifestyle well into retire- ment or achieve a range of other fi nancial objectives. However, the path to reaching those goals can be perilous. "Physicians possess a deadly triple com- bination that makes them targets for [both] dishonest and honest investment advisers," says James M. Dahle, MD, FACEP, founder of The White Coat Investor website and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing. "They have little fi nancial and business knowledge, move rapidly out of training and into relatively high income, and tend to be very trusting of other professionals. This trust comes from learning to trust other colleagues in other specialties." Unlike the extensive education uni- formly required of physicians, fi nancial training can vary broadly. For example, retirement advisers need only pass an exam, whereas accredited estate plan- ners must have fi ve years of experience before consulting with clients. Carolyn McClanahan, MD, CFP, President of Life Planning Partners, Inc., recommends physicians turn to legal fi duciaries for fi nancial guidance. "By law, a fi duciary is required to protect the client's interests fi rst and foremost," says Dr. McClanahan. "A great place to fi nd such an adviser is through the National Association of Personal Financial Advisors. All of the advisers who belong to this organization are 'fee-only,' which means they do not sell any products and they are required to act as a legal fi duciary." Sussing Out Sneaky Schemes Medical professionals can fall prey to all sorts of schemes. Steven D. Podnos, MD, MBA, CFP, Principal at Wealth Care LLC, lists the sale of inappropriate whole-life insurance and advertisements for inves- tors to participate in business schemes as recurring issues. Dr. McClanahan fi nds physicians also tend to become involved in "risk-free" funds and Ponzi schemes. "With Ponzi schemes, the perpetrator uses new investor money to pay old inves- tors, while skimming money all along," she says. "With high-return investments that are 'risk-free,' the perpetrator has the client invest in instruments such as certifi cates of deposit that don't actually exist." By Rachel Stewart "IF IT SOUNDS TOO GOOD TO BE TRUE, IT PROBABLY IS." THAT SOLID ADVICE FOR ANY INVESTOR IS NO LESS RELEVANT FOR MEDICAL PROFESSIONALS. Three Tips for Success Drs. McClanahan and Dahle express hope that medical schools will ramp up financial education. Meanwhile: + Consult before buying any product. Dr. Podnos advises talking with a fee-only fiducia r y adviser before purchasing any financial product. + Extend your residency lifestyle. Fresh out of school? Continue living frugally now to build savings. "Live like a resident for the fi rst few years after residency," Dr. Dahle says. "That will allow doctors to pay off their student loans rapidly [and] catch up to their non-medical peers with regard to retirement savings." + Skip sexy investments. Sometimes b or i n g i s b e t t er — a nd s a fer. Dr. McClanahan recommends tra- ditional proper asset allocation and low-cost indexing for equities. ■ Investor +++++++++++++++ + +++ + +++ +++++++++++++++ FINANCE ❯ 2 6 | Long Island MD NEWS ■ M D N E W S . CO M