Dumb Doctor

[radtek2112]

A doctor I work with said his wife is LEASING a Nissan Armada (>$40,000 vehicle). He probably makes around 300K per year since he's a radiologist. Gotta live large I guess?

[dragoncar]

A doctor I work with said his wife is LEASING a Nissan Armada (>$40,000 vehicle). He probably makes around 300K per year since he's a radiologist. Gotta live large I guess?

I'm guessing his peers consider him a tightwad.

[LowER]

Years ago doc's parking lots were fairly gaudy.  Now, I can't tell the difference between patient parking lots and doc lots except for the signs, and an occasional Porsche or brand new Range Rover.  With the oncoming astronomic rise in student loan burdens and probability of reductions in docs' incomes, I see a lot of bikes in the doc lots' futures.

Nothing like a good divorce to teach a doc about buying super expensive goodies for the soon to be ex.  The courts will try to maintain that standard of living, and guess who gets to pay; it's usually the doc.

I usually park next to an old beater that can't be worth more than about $800 and a moped.  After the kids have moved on, I too will get a beater and watch my savings grow!

[EMP]

A doctor I work with said his wife is LEASING a Nissan Armada (>$40,000 vehicle). He probably makes around 300K per year since he's a radiologist. Gotta live large I guess?

I'm guessing his peers consider him a tightwad.

Lol

[Peanut Butter]

Now, I can't tell the difference between patient parking lots and doc lots except for the signs, and an occasional Porsche or brand new Range Rover.  With the oncoming astronomic rise in student loan burdens and probability of reductions in docs' incomes, I see a lot of bikes in the doc lots' futures.

Someone saw me rolling into work the other night and thought I was a doctor, because the ancillary staff have newer bikes, the MDs have classics. I was riding my '87 Schwinn Tempo that day.

[ChicagoGirl]

My friend is an emergency room doctor and when he would drive his 1997 Honda Accord to work, other doctors would tease him about the car. Then his boss told him that he should seriously think about upgrading his vehicle to keep up appearances that he was a reputable doctor. WTF?  Since when do patients ask doctors what kind of car they drive to determine if they are reputable or not? Especially in the ER...

[Kazimieras]

A doctor I work with said his wife is LEASING a Nissan Armada (>$40,000 vehicle). He probably makes around 300K per year since he's a radiologist. Gotta live large I guess?

In his case it may be better to lease than buy. Don't forget you can get some very good tax deductions (especially as a doctor) if you lease the vehicle, rather than own it. They are likely coming out ahead because of the lease.

Now the for question of taste and spending that much on a vehicle... well... that one is too easy :)

[Spork]

They're not all like that.   I know one that still drives his 1985 GMC Jimmy.  Not the most mustacian car on MPG, but he's certainly gotten his money out of the depreciation side of it.

[Hunny156]

We met a young couple on a cruise last year, and while they are both super nice, I tend to stay away from them.  They remind me of MMM's post of spendy friends.

He's a Dr. and she now runs his spa.  Actually, I think he made her a co-owner when they got engaged.  They both are bright and have a strong work ethic, but OMG do they spend $$!

He has a Boxter, he bought her a BMW, and a few weeks ago, while getting the beemer detailed at the dealer, they bought an SUV.  All new vehicles of course.  The need for the SUV was so they could have a car to drive their two (tiny) dogs around!

The one time they picked a restaurant to go have LUNCH at, it was an amazing Italian restaurant.  But the total bill for 4 people was about $200.  Sorry, but I can take that hundred and have a whole lot more fun for a lot longer time!

I won't even get into the constant FB posts about flowers, meals out, the big wedding plans, designer purses, watches, wardrobe, etc.  She's also quite hurt b/c her friends have mostly abandoned her.  I think I know why they feel the way that they do...

[LowER]

Yes, there are many not-so-financially-smart docs out there.  Just read The Millionaire Next Door to see some sociologic "proof" of that; they are quite typically UAWs, as I was for a while.  It took a series of Rock-em Sock-em Robot face punches to pull me out of it.  Try to have some compassion: they are like POWs arising from WWII POW/internment/concentration camps with new access to food who died in 4 days of hypophosphatemia caused by their well-meaning rescuers who gave them unlimited access to food and unwittingly caused their deaths, ie: refeeding syndrome.  Moreover, 99% of docs have zero financial savvy and close to zero desire to attain any.  I do feel sorry for them, and for the younger version of me.  Just smile and walk on, pretty much none of them will listen to your well-intentioned advice, until they meet the real life financial Rock-em Sock-em Robot who kicks their unwitting ass, which will happen to about half of them, usually through divorce.  It's sad.

Again, compassion and interpretation of circumstances with good intention goes a long way.  They just don't know any better.

I show an inordinate amount of compassion for my patients, whether or not their disease was self induced.  I'm not saying that you are not, and I appreciate the highlighting of something I consider short sighted and downright stupid, and something to laugh at, and something I've done, I am just asking for compassion because we all do stupid things, just in different ways.

[LowER]

Don't get me wrong, I did and do enjoy your post, and welcome more dumb doctor posts. I sincerely wish I could get the word out to fellow docs, like whitecoatinvestor is doing, but on a larger scale.  Deer in the headlights is a cliche that comes to mind.

Thanks again for your post; it does give warm fuzzies that I have FINALLY figured it out. 

[BlueMR2]

One of the sad things I've seen during all my exposure to the medical field (via work and relatives) is how poorly prepared many of the doctors are coming out of school.  They've spent vast amounts of time and energy learning their trade/skill, but have little/no business/financial training.  I was surprised how specialized the pre-med tracks are already at that stage.  Those that don't seek out knowledge from other areas on their own may not even realize they're missing out.

So, they come out of school feeling super confident and smart, and many choose to open their own practice.  Well, a practice is a business...  With no business knowledge the typical doctor struggles along for awhile digging a larger hole (above and beyond school debt).  Ultimately they typically realize it and hire a practice manager.  However, having no business/management training the choice of practice manager resembles more a random selection than an informed choice.  If you can't succeed in management elsewhere, go into practice management, some sucker there will hire you basically.

Those that choose to work for others may be in a more stable position (as in, they won't sink under the weight of business debt), but there's still an overall lack of being informed about finances in general.  The easy solution is to just do what the peers are doing.  Unfortunately, that's not all that great of a choice...

[grantmeaname]

An MBA from a mid-tier school like mine doesn't add that much debt to an MD. I don't know why more doctors don't pursue the joint program.

[Undecided]

An MBA from a mid-tier school like mine doesn't add that much debt to an MD. I don't know why more doctors don't pursue the joint program.

Because they're not interested in business and they're already putting a huge number of years into higher education?

[grantmeaname]

I understand why the students who aren't interested in business don't. I don't understand why more of the doctors planning on opening their own practice don't get an MBA, or put effort in other ways to learn what it takes to run a business.

[Hamster]

I understand why the students who aren't interested in business don't. I don't understand why more of the doctors planning on opening their own practice don't get an MBA, or put effort in other ways to learn what it takes to run a business.

Physician owned practices are an endangered species.
In 2002, over 70% of practices were physician-owned. By 2008, over 50% were hospital owned.
http://www.nytimes.com/2010/03/26/health/policy/26docs.html?pagewanted=all&_r=0
There are many reasons, but one of the biggest is economics. Hospital-owned groups charge more to insurers because they have more power to negotiate than a small group of physcians. They can also often charge facility fees in addition to the professional fees when you see the doctor. And, hospitals are consolidating and trying to shore up internal referrals to their specialists, hospitalists, imaging, lab services, etc - so they want to own the source of referrals.
As for the docs, not that many want to be owners coming out of residency, often with a ton of debt, into an uncertain market where their peers are leaving private practice to become employees. And, usually as an employed physician, you get better benefits.
I have often fantasized about having a private practice, because I think I could provide much better service if I could get around some of the bureacracy of the institution I work for. But, the risk of going solo, or with a small group doc-owned practice is too high right now.

[grantmeaname]

Interesting, thanks for that perspective.

[chesebert]

Would you be okay from a FI perspective with their spending if they said they were saving 50% of their take home?

We met a young couple on a cruise last year, and while they are both super nice, I tend to stay away from them.  They remind me of MMM's post of spendy friends.

He's a Dr. and she now runs his spa.  Actually, I think he made her a co-owner when they got engaged.  They both are bright and have a strong work ethic, but OMG do they spend $$!

He has a Boxter, he bought her a BMW, and a few weeks ago, while getting the beemer detailed at the dealer, they bought an SUV.  All new vehicles of course.  The need for the SUV was so they could have a car to drive their two (tiny) dogs around!

The one time they picked a restaurant to go have LUNCH at, it was an amazing Italian restaurant.  But the total bill for 4 people was about $200.  Sorry, but I can take that hundred and have a whole lot more fun for a lot longer time!

I won't even get into the constant FB posts about flowers, meals out, the big wedding plans, designer purses, watches, wardrobe, etc.  She's also quite hurt b/c her friends have mostly abandoned her.  I think I know why they feel the way that they do...

[Hunny156]

I know that's not the case here (she confided in me that they aren't even saving enough to finance the wedding), but I can't say I care one way or another from a FI perspective.  That's my goal, and clearly not theirs.  I hope their cash inflows always exceed the monthly payments they need to make.

Would you be okay from a FI perspective with their spending if they said they were saving 50% of their take home?

We met a young couple on a cruise last year, and while they are both super nice, I tend to stay away from them.  They remind me of MMM's post of spendy friends.

He's a Dr. and she now runs his spa.  Actually, I think he made her a co-owner when they got engaged.  They both are bright and have a strong work ethic, but OMG do they spend $$!

He has a Boxter, he bought her a BMW, and a few weeks ago, while getting the beemer detailed at the dealer, they bought an SUV.  All new vehicles of course.  The need for the SUV was so they could have a car to drive their two (tiny) dogs around!

The one time they picked a restaurant to go have LUNCH at, it was an amazing Italian restaurant.  But the total bill for 4 people was about $200.  Sorry, but I can take that hundred and have a whole lot more fun for a lot longer time!

I won't even get into the constant FB posts about flowers, meals out, the big wedding plans, designer purses, watches, wardrobe, etc.  She's also quite hurt b/c her friends have mostly abandoned her.  I think I know why they feel the way that they do...

[Abe]

During medical school, it was surprising how little my classmates knew about personal finance. We eventually convinced the school to organize a few short classes on it, which was eye-opening for a lot of them. Now I'm trying to teach my co-residents; we are "prey" for people trying to rope us into financial products that gain big commissions for the sellers. Through the magic of Excel, I've convinced them at least that the amount of return from index funds is more than they will ever need, and to stay away from gimmicks. 

For the record, I have a 11 year old honda accord with no mechanical issues ever. I plan to keep it indefinitely (my commute should drop to bicycle range for emergencies after residency).