Common Sense Medicine
Common Sense Medicine
#77 - Why physicians so bad at managing their personal finances?
#77 - Why physicians so bad at managing their personal finances?
A conversation with Dr. Jimmy Turner and a deep dive into physician loan burdens and disability insurance

Welcome back to Common Sense Medicine!

In this episode, we're joined by Dr. Jimmy Turner, an academic anesthesiologist, self-proclaimed money nerd, and host of "Money Meets Medicine" podcast. He's also the author of "The Physician Philosopher's Guide to Personal Finance"

Dr. Turner's mission is to empower doctors to find work-life balance and financial freedom. We delve into his journey from burnout to empowerment and discuss his involvement with Attend, a groundbreaking startup that redefines how physicians navigate financial challenges. For more insightful discussions, be sure to follow him on Twitter (@TPP_MD) and check out his book, and visit Attend's website for valuable resources and support.

Join me as I explore the intersection of medicine and finance and discover practical solutions for physicians seeking a better quality of life.

Again, if you’ve been forwarded this email and are just getting this for the first time— thanks for reading! I publish podcasts monthly and I’d love for you to subscribe using the link below.

Video version

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[0:00] Introduction

[0:34] Jimmy’s story and learning more about the startup world

  • He did anesthesiology residency and fellowship at Wake Forest, and stayed on faculty there

  • Really started getting involved in learning about how to manage his money during fellowship — read the blogs, the books, and dove deep into the podcasts around personal finance

  • He really liked teaching others and he stayed in academic medicine and students, residents, and fellows used to ask his tips about money management

  • He married burnout with financial wellness, and his first business, The Physician’s Philosopher (TPP) was around combating this idea about financial wellness

  • There is an intrinsic link between financial wellness and specialty choice / when you start a family / how you practice

  • He started a couple of podcasts, wrote a book, and became a top 5 name for physician blogger with TPP

  • That led to him starting a business with his co-host for Money Meets Medicine podcast, Dr. Lisha Taylor

  • Attend’s north star - “Legitimately do what’s good for doctors using technology”

  • Jimmy’s mission is trying to put people over profit, and Attend’s mission of being the comprehensive solution which is best for doctor’s financial wellness was too good to pass up and was highly appealing to him

[5:00] How do financial incentives impact physicians?

  • Jimmy would get told not to make a formal curriculum for students and residents around personal finance, both of which he does now

  • Nobody wanted to talk about money because they didn’t want to cause any trouble

  • In fact, higher student loan burdens are linked with lower in-training exam scores. In-training exams in an internal medicine cohort (n = 16,394) showed that scores decreased as educational debt increased, with a mean difference of 5 points (IM-ITEs are scored as a percentage of total questions answered, only 260 out of the 300 items are scored).

    It’s surprising that 5,812 people didn’t have student loans — that’s like 33% of the population
  • This suggested to Jimmy that as a residency program, they should be ethically bound to teach their residents the ins and outs of personal finance wellness

  • Conflicts of interests are important to consider, but physicians already have conflicts when they have relationships with device manufacturers

[07:15] Jimmy’s experience with entrepreneurship and lessons learned

  • There are 2 schools of thought around entrepreneurship — (1) hustle as hard as you can or (2) take some time for yourself and make sure you can have a sustainable life outside of your business

  • He started out on the first camp, and now he’s squarely on the second. He first started out with 60 hours / week with his main job as an anesthesiologist, and 20 hours / week on the business. It transitioned to more hours in the busines and less hours in anesthesiology until he arrived at his current split of 2 days / week as an anesthesiologist and the rest is on the business.

  • By the end of the first year, he hadn’t made any money. By month eighteen, he might have broken even in the $5,000 he put in to make the website

  • He realized that in order to help people, he had to make his business grow, which in turn required revenue

  • He sold the personal finance business of TPP to Attend, where he became the Chief Medical Officer

    Fear is by far and the way the biggest lesson. Doctors are usually afraid of failure, and we haven’t experienced much of it. However, in entrepreneurship, you’re going to have a product, or a service line, which doesn’t bring any profit to you. And you’re going to have to take those learnings and improve.

[11:12] How does Attend make money?

  • Attend makes money on consults for student loans / disability insurance. From their website, they can work with you in defining a plan for you post medical school how to manage your loans and how to pick a good disability insurance

  • Jimmy said that their consults usually cost around $200-500 per consult, and they are framing it as a way to save hundreds of thousands of dollars in the long term with your student loan burden

  • Jimmy mentions that his friend decided to refinance his student loans with a private loan lender, and it cost him $400,000 in student loans because he doesn’t qualify for the public loan forgiveness program (PSLF)

Attend’s value proposition
  • Shree’s research: I found that their products include $199.00 per student loan consult and can split it up over a few months, and they serve as a point person for good insurance disability quotes. I think that they have some sort of relationship with the brokers that they use for disability insurance, to either get a flat fee paid out to be part of their “trusted broker” list or some other revenue sharing arrangement.

  • Jimmy mentions that all of their employees earn a flat salary so they are not incentivized to push any larger policies to earn a larger commission; they are trying to design incentives so they don’t screw people over by preventing them from being eligible for disability insurance

[13:38] Jimmy’s story about disability insurance / his journey to personal finance

  • When Jimmy was a fourth-year medical student, he had his first child, and wanted to get life insurance

  • He sat with a brother of a friend who was an insurance salesman and bought a private disability insurance policy which was fully underwritten and involved a deep dive into his medical history

  • Jimmy takes propranolol for essential tremor and has an ADHD diagnosis which he takes medication for, and this prevented him from getting disability insurance

  • Most residency programs have a Guaranteed Standard Issue (GSI) policy which is available to trainees if they haven’t been denied or haven’t been disabled. If you don’t have an income, this none of the rest of personal finance matters

  • He thinks that disability insurance is the #1 financial task for physicians in residency because you’ll never be more insurable than you are now

  • You have to be able to tell the insurance agent everything, because they can’t go to the medical boards. If they find something in the medical underwriting piece, you’re toast

  • Most insurance agents won’t tell you about the GSI plan

  • GSI plan is only available during training and three months, usually, out of training. It locks in your rate in training and then, when you’re out of training, allows you to buy more insurance as your income increases

  • A fully underwritten policy isn’t bad if you’re healthy, but make sure that you get a benefits rider to make sure your health history is “locked-in” at this current time because most people develop a medical problem during residency

[18:53] What are some financial lessons which residents and students should know as they’re starting their career?

  • When you’re graduating medical school, the name of the game is preventing debt

  • When you get to residency, get disability insurance and make a student loan plan and see how you’re going to join PSLF. Avoid revolving credit card debt like the plague

  • Work on the smaller tasks during residency — make an emergency fund ($1,000 as a resident, 3-6 months of living expenses as an attending physician)

  • Doctors are really bad at backcasting, and don’t reverse engineer when they want to retire

  • The Diderot Effect, AKA lifestyle creep - obtaining a new possession often creates a spiral of consumption which leads you to acquire more new things. As a result, we end up buying things that our previous selves never needed

  • If you have extra money, you will spend that money. You have to know that it is coming as an attending physician

[22:05] Discussion around Roth IRA / 401K and investing

  • You would rather pay the taxes and then invest as a Resident in a Roth IRA, and when you’re in your Peak earning years, you put it in a Pre-tax vehicle (401K) (RR, PP)

  • The only caveat is that as a trainee, in an income-driven repayment program, your loan payments are based on your post-tax income (Adjusted gross income - discretionary income). If you contribute to a 401K, your student loan payments will be smaller

wife: go see if the baby sleeping *walks into baby's room* baby: taxation is legalized theft me: no babe she woke af
Residents when they realize that they can reduce their loan payments by contributing to their 401K
  • If you have a 401K match in residency, then you should definitely use it (“It’s free money!”), but be careful about the vesting period — you don’t want the money that you earned during the match to evaporate if you sign a job offer at a different institution

[26:09] Refinancing student loans — why are doctors so bad at decision making?

  • The savings from Attend are often immediate — long term, there is always a return for these consults

  • When refinancing, you don’t want to do it with a private lender. Jimmy thinks that every single company should have the disclaimer that “If you refinance your student loans, then you can never do PSLF ever!”

  • Every company which recommends a particular lender to refinance with gets a kickback to do so

  • PSLF is public service loan forgiveness program, which is a program which lets you get your loans forgiven tax-free.

  • In order to qualify for this program, you have to be enrolled in an income-driven repayment program (IDR) administered by the federal government, where loan payments are driven by your income

  • The two IDR programs are SAVE (formerly REPAYE) and IBR (income-based repayment). SAVE is a great plan for a majority of people — it allows for a cap on interest for your loans and can exclude your spouse’s income.

  • Right now, there are four IDR programs, but they are consolidating into two (SAVE and IBR) in 15 months and you have to be in one of them to get PSLF

  • You have to make 120 non-consecutive qualifying payments on a federal loan, have to be in an income-driven repayment program (IDR) and work at least 30 hours a week for a qualifying employer (80% of hospitals are qualified state organization, federal organization, non-profits which allow for this) to get your loans forgiven. Residency payments which are low qualify for this program

[33:10] Non-clinical careers — what do you tell people about making the switch?

  • You can still be an entrepreneur in medicine — a private practice doc, etc. Entrepreneurship allows for autonomy and allows Jimmy to control his schedule in a holistic way, more than medicine does

  • Also, burnout is a big problem for physicians and people are tired of it

  • If you can find a coach who can accelerate your journey for what you want to do, it’s easier to achieve your goals. It is an uphill battle to found your own practice, but lean on people who have done the work before

[40:11] Jimmy reflects on the most valuable advice he was given

  • He had a coach walk him through the process of why his business was failing. He wasn’t trained as well to manage a business. The coach mentioned that he didn’t have to do it all by himself

  • He was initially worried about the cost of running a business, but bringing more people into the business was helped him to improve the business

  • The best process improvement that happened during his business-building experience was the onboarding process for customers and building out the customer relationship management (CRM) system

[43:40] What are the biggest failures that you’ve faced?

  • Ryan Holiday’s “Obstacle is the Way” really helped him contextualize the process of failure into a stepping stone rather than a final destination

  • You have to experience the failure in order to learn the lesson

  • He was scared of offending people, and he had to realize that he was going to offend someone when he picked up a mic or typed something on a keyboard

  • Getting over the fear of being perceived as a failure was a big hurdle for him as well, and he was scared of being judged

  • Jimmy thinks that sales is a service, and it’s not sleazy. You’re trying to provide them a service which makes that

[47:29] What’s Jimmy’s favorite car?

  • It would have to have manual transmission, and it would have to have a lot of horsepower

  • There aren’t that many cars left like this: You have the CT4 Blackwing (which he drives), or a CT5, or the M3 / M5 BMWs

[49:23] Which books would you recommend?

Common Sense Medicine

Common Sense Medicine

Join Shree Nadkarni as he goes through life, testing ways to be happier, healthier, and finding his own passion through interviewing interesting people in the world.

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Shree Nadkarni