Don't Take An Investment Tip From Your Doctor

Why should so many doctors, even though they are the most highly paid of all professionals in the United States, have relatively low satisfaction with their wealth? One possibility is that doctors are trained to think of themselves as smarter than you. To get into medical school, they had to have extremely good grades in their university coursework. They ranked at the top of their classes. They have to be utterly confident when your life is on the life, for example, on the operating table. They carry this attitude over into making investment decisions and get hoodwinked. 

 

In 2014, about one in five doctors in the US reported serious financial problems. In the 2015 compensation survey, however, three in four doctors, about 75 percent reported they had made bad financial decisions. 

 

 

What kinds of financial decisions cost doctors their hard-earned money?

Doctors in certain specialities are more likely to make investment mistakes than others. Anesthesiologists (40 percent) reported making the greatest percentage of bad choices in business and stock investments among all medical specialists. Ophthalmologists and urologists (both 39 percent ) and radiologists and orthopedists (both 37 percent) were next in line. Orthopedists (22 percent) reported the highest percentage of bad real estate investments, followed by anesthesiologists (19 percent ), and urologists and plastic surgeons (both 18 percent). 

 

A major financial risk for any doctor, of course, is having to pay a malpractice settlement. Court awards of medical negligence by surgeons (typically in cases tried in federal, rather than state, courts) can run over $10 million. Doctors carry insurance against malpractice awards, but their premiums reflect their experience. Even being accused of malpractice can be quite costly.

 

The medical specialties that result in the largest total malpractice cost, however, are not general surgery and anesthesiology, which can suffer huge awards, but more specifically orthopedic surgeons, allergists, plastic surgeons, ophthalmologists, and urologists, who have to deal with multiple small claims. A urologist is three and one-half times more likely to have to defend against a malpractice claim than an intensivist, who supervises patients in the ICU. Of course, the intensivist's patients are more likely simply to die, and therefore not to sue, and the urologist's patients are more likely to be unhappy with their sex lives after treatment, and have plenty of energy to sue. Sometimes the less damage a doctor does, the more likely is legal action.

 

The major bugaboo in managing nearly any doctor's financial portfolio, however, is paying off loans for medical school in a timely fashion. 

 

A significant number of doctors surveyed were still paying off their student loans after the age of 50. The first priority of a young doctor finally earning a salary, usually in his or her early thirties, is to provide for spouse and family, understandably so, but at the cost of long-term financial progress.

READ Can You Keep Your Doctor After You Go On Medicare?

When you see your doctor in the USA, remember that even if a checkup costs you $500, you may still be better financially off than your doctor even though you earn a lot less. No amount of money is likely to make every doctor happy, but you can at least avoid sore topics of conversation when you are in the office for your health needs.