Several members of our firm had the pleasure of meeting with Michael Clancy, the on-staff financial planner for Drexel University's medical school students.
Michael told us a bit about what his days are like and shared some of his methods for trying to make a positive impact on the financial lives of future doctors.
It was incredibly refreshing to witness his clear passion for helping students at a particular juncture in their lives. Michael clearly loves the work he does.
If you're a med student, you will soon achieve an earning power that is the envy of almost everyone. But there are some adverse conditions that can lead to the perfect (financial) storm for the physician just starting out in practice.
According to the National Center for Education Statistics, the average debt per borrower for the college graduation class of 2014 was close to $35,000. For graduating physicians, on the other hand, the average debt was $175,000, according to the American Association of Medical Colleges. Many med students feel overwhelmed by what they owe.
Your Late Start
Most graduates in other professions begin earning in their mid-to-late-twenties. The average physcian isn't ready to do that unitl their mid-thirties. The power of time when it comes to growing money cannot be over stressed.
You will be a doctor, after all, and that comes with society's (and perhaps your own) lifestyle expectations. Couple that with years of literally "living like a resident," and it's easy to see how the new physcian might welcome more than a little luxury.
As a new physician, your financial situation may seem daunting, especially when many of life's big decisions are intersecting all at once. But balancing large debt with substantial income is more doable, as long as it is approached with discipline from the outset.
David and Jim recently were invited to spend a few moments with The Physician Financial Success podcast hosted by Josh Mettle.
In his show, Josh interviews professionals and doctors in the hope to help physicians avoid financial landmines. We're thrilled that our message is getting out there and check back soon for the podcast!
The stock market has seen heightened volatility recently, with the S&P 500 down 1.5% one day, up 1.8% the next, and down 2.1% the day after that. In general, investors are well-served by ignoring this kind of short-term volatility, and instead focusing on the long-term.
But speaking of the long-term: We've been saying for a while now that stocks, particularly US stocks, are overvalued. In fact, last summer we made the decision to move a fraction of our clients' stock positions to cash. When you look at the ratio between the current price of stocks to companies' past 10 years of earnings, you see that Mr. Market is asking investors to pay more for those earnings than it has at all but a few times in history. And, when you pay too much for stocks, returns over the next decade tend to be less than amazing.*
Is the recent volatility a sign that stocks are about to return to lower valuations? We have no idea (heck, the S&P is now up 2.9% the past three days). But, in the meantime, we're comfortable giving up some potential gains in case they do.
*Please remember that past performance may not be indicative of future results.
During the summer I attended the Exponential Conference conference in NYC. There was lots of buzz about medical technology just on the horizon: artificial intelligence that can instantly summarize hundreds of pages of electronic records. DNA sequencing that's affordable for everyone, and systems that diagnose certain diseases more accurately than humans currently can. There was also talk of nanobots and uploading oneself to the cloud...but I can only take so much future.
October 11th and 12th were magical days!!! I participated in the Ride to Conquer Cancer, a 2-day event traveling 150 miles in support of the Abramson Cancer Center. What a privilege it was to ride alongside cancer suvivors and the scientists who are eradicating cancer. We left Philadelphia at 7:00 and continued for 69 miles in pouring rain, but it didn't matter. What mattered was that we were collectively taking time out to remember those who had died of cancer, celebrating those who were living with cancer, and raising funds to find a cure.
When my mom picked a bank, she looked for the one with the closest branch. When I picked my bank, I browsed the web to find which one had the best app.
Most banks got that and have massively invested in their tech capablities. Let's be honest, most wealth management practices haven't (often for valid reasons: a good part of the industry's clients are 50+, and only a few of these firms have the financial capacity to meaningully invest in technology).
A bunch of us spent most of our week down in Florida for a conference held by Raymond James (our primary custodian). In addition to wonderful weather and the joy of spending time with our peers, we also learned a lot. My main take: how much everyone is (finally!) investing in technology. Raymond James announced very exciting new toys that I can't wait to get my hands on; but more importantly, they announced a lot of new capabilities for our clients that will really make a difference!