The other day one of my colleagues said “Smart people should have a long term plan.” This struck me as quite simple but also true. A long term plan leads to success. No plan equals less success. He was not talking about finances, but it definitely applies. Without a goal or roadmap it is unlikely you will make it to financial independence.
So why is it that so many smart people do not have long term plans?
I am not sure why so many physicians are poor planners. They are likely intelligent or at least good test takers. Somehow they were able to make it through college, med school, and residency. Why don't they just take a few minutes to learn about finances? Most earn way more then the average American. All they need to do is pay attention to their retirement options and make sure they are not overspending.
Here are some reasons they may not have long-term financial plans:
- They figure their time and mental energy is better served in medicine. Basically they are saying money management is below them. That it is a service industry, much like mowing the lawn or cleaning a home.
- They are fickle. They enjoy being on top and feel like they are smart enough to know what is best. Instead of sticking to a long-term, slow-growth plan with index fund investing they decide to buy a hot stock or a piece of real estate. They are sure they will hit it big as they are the smartest people in the room. Some probably do, but most likely loose large amounts of money in the process.
- They make so much money that they think they don't have to worry about it. Medicine, after all, is a great field. Who wouldn't want to do it until they were 70. Especially if you are making $300 to 400K a year. While some people may want to work until they are in their late 60's, physician burn out is on the rise and I suspect our career life spans are much shorter than our predecessors.
- Plus, they have that 401k match at work. Surely the $18K they are putting a way, the $6000- 18,000 match their employer is giving them, and Social Security will be enough to cover their retirement expenses. This is probably not true if they are spending $100K plus a year and plan on living into their 80s.
- Docs are too busy to come up with a plan. They are working too hard and too many hours and just forget about financial planning.
Whatever the reason, they may be smart but they do not have a financial plan.
Be smart and have a long term plan
So what can we do to plan for the future? A few simple steps.
- Take the time to read some books and blogs. I recommend The White Coat Investor, Physician on Fire, and Financial Samurai as just a few of the great personal finance blogs out there. Also consider reading a few books such as The White Coat Investor, Boggleheads Guide to Investing, and The Millionaire Next Door to get started. (Note, if you click on above book link and buy it from Amazon, I make some money).
- Get your financial house in order as I discuss here or click here to start getting things on the right track. It is a step by step approach as to what you need to form a long term plan.
As a smart person (I am assuming you are smart since you are reading this site!), please make sure you have a long term game plan. Don't just focus on the present, but also where you want to be in 5 or 10 years.
I am Eiman Jahangir and I am a dad, husband, and cardiologist. I grew up in the South, trained in the Northeast, moved out West, and now am happily back home in the South. My wife and I have seen our fair share of ups and downs, from the pain of dealing with infertility and losing everything in a matter of hours in the Tubb’s Wildfire, to the joys of having our son and finally finding a medical practice that is right for me. It hasn’t always been easy, but I am grateful and continue to move forward in positive steps.
I write to help people looking to improve their lives. I have written my thoughts and experiences on a wide arrange of topics from parenting to finances to mindfulness. While some of my posts are more useful for doctors and other high earners, most are for everyone.