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Remember during “Star Trek” episodes when Spock would raise his hand, separate his fingers and wish his colleagues an “uneventful trip”? Physicians should set that same goal for themselves when planning their financial future.

That’s the advice of Michigan-based Paul H. Sutherland, president, founder and CIO of Financial & Investment Management Group and manager of Utopia Funds. Sutherland is the author of Physicians’ Guide to Financial Planning, published this year by the American Medical Association.

“That’s the basic goal of money and work, to support us in the life that we want. I think a lot of people forget that … physicians in particular,” said Sutherland, pointing out that physicians are different for several reasons.

First is their “very long cycle of education before they can finally earn their first nickel,” he explained. “They are no longer young adults, they’re mature adults when they finally hang out their shingle or go to work in their profession.” Second, they identify themselves as “being a doctor” rather than working as an engineer or owning a business. In fact, Sutherland dedicates the AMA book “to all those kids that said, “Someday I want to be a doctor!”

While the first two points are psychological, he said, the third is a reality check: Doctors have less time to accumulate significant wealth because they enter the game so late. Add to that the stress of marriage and perhaps children at the same time they’re launching a career. Financial planning could easily take a back seat. Sutherland’s final point is that physicians “are held to a different standard, I honestly think,” he said. “We expect a lot more from physicians, both as professionals and as citizens.” That just adds to the stress.

With four strikes against them, it’s particularly important for doctors to prepare early for the proper management of their future assets – whether they handle their finances themselves or turn to a financial planning professional.

Sutherland emphasized repeatedly that determining what kind of life physicians want is the key to determining a proper financial strategy: “What kind of doctor do I want to be, the doctor who is home at 5 o’clock every day with my kids? Or the doctor who’s home on weekends? Do I even want kids? Do I want a lifestyle that allows me to travel a lot? Or do I want to be the doctor like my dad was, on-call 24 hours a day?”

Balance is something every professional works to strike, Sutherland noted, but quickly added, “For physicians especially, they can get sucked into working a million hours a day really fast – and they’re predisposed to doing that because residency burns them out so fast … they think if they only work 70 hours a week, it was an easy week.”

Sutherland suggests that a physician set a salary goal and use “reverse engineering” to reach that salary. Does that mean seeing 37 patients a day or 50 patients a day with the help of a nurse practitioner? How many hours a day does that mean or how many procedures per week? He noted that more physicians are choosing group practices or hospital work “so they can work with somebody else who’s already made all those mistakes,” he noted.

Doctors may certainly go it alone with it comes to financial planning, but they must be well-versed in the ins and outs of stocks, trusts, insurance options, tax shelters and the like. Sutherland noted that his book does cover those basics, but he cautioned physicians to plan their financial futures independently only if they have the time to do all the research.

Calling a high-school buddy who’s a broker or a neighbor willing to sell high-commissioned life insurance at your kitchen table at 9 p.m. are both scenarios ripe for disaster, he said. If hiring a financial consultant, Sutherland recommended a fee-only professional with a track record of at least 10 years – and clients of at least 10 years who will vouch for them and their results.

“A lot of people are hanging out shingles and saying, ‘Yeah, we specialize in physicians,” when the only thing that says that they specialize in physicians is (printed on) their business card. They’ve had no experience at it, but they think it might be a good market,” Sutherland said. “Don’t risk your career on a newbie.”

Portfolio management is the key, he said, and if the doctor doesn’t have time, find someone who does. “An ideal portfolio is a portfolio constructed out of investments that are perfect today (with) expectations about the future. It is very situational. It has to be dynamic. Everything has to be managed, because the world is dynamic, markets are cyclical,” he said, pointing to investors who held on to tech stocks in the 1990s that were “insanely overvalued. They should have sold … they were speculating.”

Sutherland noted again that investments are tools to accomplish life goals. “The goal is not to own stocksicles, not to own bonds, not to own real estate. The goal is for the investment money to make you money and have it grow,” he said. “People often forget the goal of their career is to support their life, and the goal of investment is to support those long-term goals. Some people think the goal of investing is to go buy something.”

Instead, Sutherland suggested that physicians ask their spouse or others they love, “How can I love you better?” and then together set financial priorities. “It is very easy for a physician to be rich. It is so easy. What’s hard about it is having a good relationship with your spouse and your kids and your colleagues and your family and balancing. The balance is the hard trip. The finances are easy.”



April 2008

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