Although every physician’s path to their profession is unique, almost all physicians share common experiences. As an example, for most, the pursuit of a medical career started in high school. Most of us, are overachievers and were even spurred on by their high schools.
High schools – both public and private – compete for the prestige of being catalysts for getting their best and brightest to pursue a career in medicine.
How many school profiles have you read in the local news about the number of doctors, lawyers, engineers, etc. that a particular high school produces?
These are the kinds of accolades that schools compete for.
They promote medical school as a noble and prestigious destiny for their best and brightest – particularly those who make for a good story like those who came from such and such renowned local family or those who also excelled in sports, student government, music, etc.
This collective effort of prestige hunting by high school administration, faculty, and counselors also tends to spawn a particular breed of multi-tasking, confident, relentless overachievers – and that’s just in high school.
These overachievers then choose prestigious undergraduate colleges and universities – the type that will prepare them for medical school. Of course, none of this is easy.
To get into a good medical school, these aspiring doctors fight to stand out as an undergrad, then realize that once they get into medical school, the challenge of academics has just begun.
Medical school is demanding and rigorous and does not relent – even into residency, where it continues to be the survival of the fittest.
Aspiring physicians sacrifice years of their lives, putting off high incomes, personal growth, and even family until they emerge as an attending.
It is at that point that they’re still dedicating obscene, high-stress hours of their lives in pursuit of their careers – trading hours in the classroom and doing homework early on for hours on the job as residents and fellows later on in their training.
High school diploma, undergraduate degree, residency – the pursuit doesn’t end there. Once qualified, the next goal is the specialist diploma and board certification. Then what?
There’s always the prestigious professorial chair or department head of state boards or hospitals.
Yes, the work is personal and eventually financially rewarding; however, the cost of finally arriving at a medical career is often underestimated, and many physicians know this. They also know that they have the power, the knowledge, and ability to save lives or hold the quality of life literally in the palm of their hands. Not many other professions can claim this.
What they do is specialized, especially for surgeons. They’ve gotten this far, and they’re confident – some would say overconfident to the point of being egotistical.
Some physicians enjoy the power they wield. For patients, it may come off the wrong way, but this ego also serves a purpose. Don’t you want somebody who’s about to cut into your chest to be confident?
A confident ego may serve a purpose in the practice of medicine, but a large ego or extreme confidence may be counterproductive when it comes to investing.
Think about it; as physicians, we have been goal-oriented their entire lives – the pursuit to be tops in their high schools, undergraduate and medical school classes, then the pursuit of being attending residents, later to be tops among their peers.
As a physician, you have worked hard to get to where they’re at, so you reward yourself and your families with substantial houses, nice cars, private schools for our kids, and memberships in private clubs.
With this being said, not just any boring investment will do. We may seek out investments that are new and the topic of conversation at the cigar bar.
Unfortunately, these new investments aren’t the investments that will ensure wealth. Instead, they may ensure that physicians will be working into old age to sustain their lifestyles.
The reality is, to build real wealth – the kind that will endure for generations – requires suppressing ego.
The types of investments that will build wealth are not sexy – some would even say boring. These investments are weathered and proven.
Investments like private equity in growth companies, commercial real estate, agriculture, commodities, and energy all have the puzzle pieces for generating wealth – cash flow, appreciation, and security through a tangible asset.
Institutional and ultra-wealthy investors have shied away from shiny Wall Street stock and IPOs for decades – preferring to allocate their investable assets in income-producing investments instead.
The goal of successful investors is wealth – not prestige.
This brings us to another reality check for physicians pursuing true wealth: Investing for wealth will require physicians to suppress their egos in another way – by relying on the expertise of others.
Physicians are used to having patients and staff rely on their expertise, but to achieve true wealth, we need to recognize that they can not go it alone.
Investing in passive companies and assets requires reliance on experts who have the expertise, experience and a team in their respective investment segments.
If physicians can learn to lean on the expertise of others, this will open a world of possibilities, and the rewards could be limitless.
That’s because by leveraging the expertise of others, physicians will be able to pick and choose from the best of the best in terms of management, asset classes, and geographic locations to maximize gains on their investments.
Passive private investments allow investors to diversify across a variety of attributes, including:
- Alternative Class
- Stage of Development
- Security Type
- Type of Return
- Holding Period
- Geographic Location
As Physicians, we have stressful, demanding jobs.
One day most would like to retire early to spend more time with their families, enjoy time pursuing their hobbies, and giving to their favorite causes and charities.
Doing so will require us to put aside our egos. We may need to rely on an unsexy asset class – and one that will provide additional streams of income through both economic expansions and recessions, appreciate over time, and give the security of being backed by a tangible asset.
Don’t let your ego take over your investment decisions. As a physician, you will achieve something far more valuable than prestige – multigenerational wealth, wealth that will last several lifetimes.
By sticking to the following guidelines, physicians will be able to find investments that build portfolios.
- Invest in assets and companies you understand.
- Choose investments and assets which you have some knowledge of and it is relatively simple in concept.
- Avoid new markets that have not been proven.
- Invest based on returns that can be defined and are consistent.
- If you need certainty, chose investments with a defined exit.