Speaker 1 (00:03.532)
Welcome to the Physician Family Financial Advisors Podcast, where we turn today's worries about taxes, investing, and extra money into a comfortable feeling of financial security to last a lifetime. I'm Ben Utley.
And I'm Nate Rennecke. Today's question is, which doctors should not use a financial advisor? Many people in the financial services industry describe themselves as financial advisors, but Ben, you and I know they're not all the same.
No, not all. So.
What is a financial advisor like? What are they supposed to do?
Yeah, well, I think financial advisors have something in common with physicians in that we're misunderstood. So people think of doctors as pill pushers, right? You get sick, you go to the doctor, you expect a pill. I think people think of financial advisors as stock pickers or stock jobbers. Like you want some kind of investment, so you go buy one from a financial advisor. But really a good financial advisor is
Speaker 1 (01:03.306)
a It's a guide who helps you make decisions where you wind up with a better life. And in a certain sense, it's similar to what physicians do. It's just that the decisions that we help people make, financial decisions, are a little bit different.
Hmm. Okay. What makes a good one? Like, you're guiding them to good financial decisions, but like what differentiates a good advisor from a bad advisor?
Yeah, well, I think again, it's, it's, it's kind of similar to what you would see in medicine. So if we think about the making of physician, first you have to have good grades in school, then you go off to college and then you go where you get your, knowledge. So first you have your, you go to med school to get your knowledge about medicine. After that, you're just, you're a quote unquote doctor, but you're dangerous. Right? So then you go for your training and in training, you adopt the skills that make you an effective physician.
And then after that, you're just about ready to be a great doctor, but you need some experience. So you know when to treat and when not to treat and how things might turn out with someone over the longer haul. And finally, to be a good doc, you need to have the energy to be able to practice medicine. And I think the thing that makes a good or a great financial advisor are the same four things. That they're knowledgeable, that they have skills, that they have experience, and that they have an energy for the field that they like to help people make better decisions with money.
Okay, so knowledge, skills, experience, energy. Right. So if you have those, you don't need an advisor? Is that what I'm hearing you say?
Speaker 1 (02:43.608)
That's right. Yeah, if you have those, you don't need a financial advisor. Woohoo! Nobody to pay, nobody to answer to. No worries about privacy. You don't need a financial advisor if you've got all four of those.
Right, all right. But those are big. let me ask you about each one of those. What do you mean by knowledge? What's knowledge when it comes to personal finance?
Well, it's a, it's the same thing that you would find in a textbook. You know, it's a, it's a basic understanding of, of how things work, the theory behind things. So, most financial advisors pick up their knowledge in, the CFP program, certified financial planner program, and they, they carry the CFP designation, which is the result of a self study program that basically says that you, you know, the
the goodies that go into the world of financial planning. maybe that's, you know, it's, you understand something about insurance and retirement and estates and taxes and certainly investing, maybe college funding, a little bit about debt is taught there. So you get the basics of the brass tax.
Yeah, you do. We're all CFPs, but I also know that I only needed like two years experience to stamp that CFP, get that stamp of approval. So there's more to this. So what does it look like in personal finance to have skills?
Speaker 1 (04:13.368)
Well, let me tell you what it's not first. I think there's a perception that skill has to do with the ability to select an investment or maybe be able to beat the market. It's not really about that. The skill that a good financial advisor has that a physician would need to do this on their own is the ability to kind of bring everything together toward a common goal, something that is a high level view, which usually involves planning, right?
The first thing in planning we do is we begin by setting a goal. And the goal really comes down to what do want to accomplish with money? So what are you trying to do? Why do you want to do it? What happens if something gets in the way of that? How do you know if you're on track? What do the roadblocks look like? How do you get around that? And once you have the goal in place, so maybe your goal is to...
retire when you're 55 years old with X thousand dollars a month and income plus the ability to travel. Beyond that having, having a goal, really comes down to a plan and taking action. So with your action, you begin to ask and ask questions like, okay, so where am I going to invest? Which company am I going to choose to hold my money? What kind of account am I going to use? how much am I going to put in that account? Am I going to put it all in one chunk? Am I going to put it in, in monthly chunks?
uh... you know i got my stocks are bonds are mutual funds are a combination of those things are having help us crypto i mean what's gonna go in the account beyond that we begin to get into uh... another form of skill which is what i call discipline so discipline is being able to stay the course and stick to your plan so things change you know we get about inflation or the market collapses or you change your job or
something else happens, a new round in the tax code. I mean, do you sell your stuff? Do you buy more stuff? Do you hold off? Like, what do you do to be able to wrap your plan around the new thing that's happening out there? And so it has a lot to do with kind of how you put your plan together. But let's imagine for a moment that you have the knowledge and you've got some of these skills that you have a goal.
Speaker 1 (06:29.612)
You know what to do, you know how to put things together. Maybe you talked with your buddies about this and you got the self-discipline to stick to your plan. Now here's the question. How do you explain this to your spouse? How do you get them to be on board with your plan? How do you get them to sit down and look at the spreadsheets that you've carefully crafted? How do you get them to understand this?
maze of accounts that you may have put together that are spread across three different places. How do you get them to engage in an understanding of the tax code? How do you get them to even save the way that you want to save? mean, maybe you want to save some money and they want to spend some money. Maybe you want to hunker down. Maybe they want to travel. So I guess the question is, do you have the communications and the counseling skills to bring your spouse on board to buy into your grand plan? Right. So there's some skill in that as well.
Yeah, so that was, there was a lot there obviously. And the, what's going through my mind is let's say you can kind of cobble this together and over time learn from maybe some mistakes or learn from friends, but how much does it cost to make a mistake? You know, how, how do you even define that? How do you know how much it's going to cost to make a mistake?
Right. hard to say, you know, I think that when I see people making mistakes, it's not obvious that they're making them. Right? It's like, if I'm, if I'm looking at a mistake that you're making that Nate's making and you're making this mistake, it's obvious to me that you don't know that you're making it because if you did, you would have seen it already. So hard to quantify mistakes, hard to know that you're making them. And I think that that really comes down to the, the
the third of four things that one needs in, handling their own finances, which is experience. So if you make a mistake in terms of skill, you know, you might miss a contribution to an account that saves you some taxes, but experience is the been there, done that-ness of anything of surgery, of personal finance, of flying an airplane, of being a parent. It's, it's been there, done that. It's that developed intuition that causes you to realize
Speaker 1 (08:39.829)
that a mistake is in the making and it's a big mistake. The mistakes that one catches with experience that build confidence are typically the big mistakes that take years or decades to unfold. And really there's just no substitute for that experience because if you picked the right stock, but you botched the taxes, that's no big deal. That's recoverable. But if you're headed in the wrong direction for a decade or two, you're just screwed. So I think that there's a level of confidence that comes from
from having experience of watching people attempt things and make mistakes and recover.
Yeah, that's the tough one to get around for even advisors in this world because you can get your CFP, you can have the right answers, but experience comes with just that, know, lots and lots of, you know, experience doing this thing. And kind of the balance tends to be the people with a ton of experience may not have the next one, which is a lot of energy and then vice versa. So,
talk a little bit about energy, you know, how do you find an advisor that has the energy to, to, you know, get you where you need to go.
Well, you know, in this case, we're, trying to talk about who should not be using a financial advisor. I'm going to, I'm going to stick to our stick to our guns here. We're, enabling if we can. So I think energy is sometimes people think about time, you know, like I don't have time for that. Well, you get the same 24 hours a day that I do. Maybe something's not a priority for you. Maybe something else is a higher priority.
Speaker 1 (10:16.234)
I know at the end of the day, I'm not much on home improvement. You know, I don't want to sit down and fix a broken sink. I want to call somebody to do that. So I don't have the energy for that, but I do have the energy to sit down and play with my kids, or I do have the energy to spend time with my wife. It's really what you want to do. And I think that kind of the defining factor about which physician should handle their own finances comes down to energy. you know, the test of energy is do you like something?
If you like medicine, you have the energy to get up and go to work. If you like parenting, you have the energy to be able to slog it all night, right? With a kid who's not sleeping. I think it's whether or not you really like it. And if a physician likes personal finance and that's how they want to invest their energy, then I think, I think it makes sense because if you have the energy to put in the knowledge, to develop the knowledge, to read the time for that,
If you have the skill, which is where you talk with colleagues or you have a friend who's into personal finance and you figure out the skills, and then you're pretty confident that you're not making a lifelong mistake, you have the knowledge, skills and experience plus energy, then you have what it takes to not ever have to have a financial advisor to stand on your own to be completely independent on this. And I think that for folks who have all four of those or maybe most of them, including the energy, it is a big mistake.
to look for a financial advisor thinking that they know more than you do or think that they have greater skills than you do or thinking that they have access to some product or some kind of investment that you don't. I think it's a mistake because if you keep looking for that person, you're going to find someone who looks like that person, but it's probably a charlatan. So I think in that case, it's really just time to, to buck up and realize, yeah, you can actually go this alone, you know, and, you'll have those skills to last you for
the rest of your life. But if you insist on having a financial advisor, or maybe your spouse goes you into having a financial advisor, what I've seen when people like that come in is it's, they experience a lot of frustration. it's a waste of their time. It's a waste of their money. So I think you just really have to know yourself and understand what it comes down to for you as to whether or you would, you would get value from a financial advisor. And some people don't, and I'm happy to see those folks because, well, I'll tell you my story. So.
Speaker 1 (12:43.426)
I guess it was about 30 years ago, I was in a half basement apartment and I remember it was a little mildewy cause we're here in Oregon. And I remember looking one day at the, the curtains were half open and I saw this cat walk by and first I was looking at the undercarriage of car. And then I was looking at the undercarriage of a cat and I was like, man, this is a low place to be. But then, you know, I was kind of thinking like, okay, how do I get out of this place? How do I, how do I make more money? What do need to do? And then it dawned on me that I needed to become like financially responsible.
And I didn't know anything about it because I was, you know, I was getting my chemistry degree at the time. So I went to the library one day and this is back when A, people went to the library and B, they had things in the library that were physical. And I pulled out this gigantic stack of Money Magazine and Kiplinger's Magazine. This is back when they kept magazines in the stacks. I got a two year supply of both of those. And on a Saturday afternoon, I sat down and read through everything that was in those two years worth of Kiplinger's and Money Magazine that interested me.
And that was the foundation of my knowledge in personal finance. And I think today you can do that by, you know, following blog posts, you know, downloading audible books. Keplinger's and Money are certainly still out there. So there's a world of information out there about personal finance where you can get your knowledge. In terms of skill, I think it comes down to being kind of clubby, you know, having, having friends that are, that are into personal finance. So I had some buddies that were into personal finance that I spoke with.
I was on the board of directors of community credit counseling service and I knew bankers and I knew people like that. And so I learned from them. Beyond that, in terms of experience, gosh, I have done so many dumb things in my time as a person who had money. I played the options market. I've leveraged to invest. I borrowed on a credit card to buy a junk bond fund.
I lent money on a house that was going to be flipped and almost had to take those people into court to, to recover, to foreclose. You know, I've made some parenting mistakes with money. I've made some investing mistakes with money. I've timed the market. mean, I've done all of those stupid things to get my experience and really, you know, ultimately it all came from energy because it's something that I'm interested in. I'm passionate about it. And I feel like it was something I really needed to know to be able to help my
Speaker 1 (15:09.164)
my family make it. But at the time I got into it there, this thought of fiduciary was barely in existence. Fee only was non-existent practically. I was the first fee only financial advisor in Eugene. you know, there wasn't really a place for me to go to, learn or to even seek out a good financial advisor. And so I realized I was on my own. And so I built up my own knowledge, skills, and experience. And ultimately I enjoyed it so much that I wound up
starting this firm and growing it to where it is today where we serve almost almost two hundred physicians there total five or six of us and i just really enjoyed it's the thing that you know people say open we can retire mike i don't think i'm ever gonna retire because i really like this is not so much the like of money it is really the enjoyment of of people and and seeing them do better as a result of making better decisions
Mm-hmm. Yeah, I mean, I think it's sometimes it can be pretty obvious with the, you know, knowledge and skills. You've pointed out a lot of things that aren't so obvious, but you can hear that and understand it at some level. The energy sometimes can get you into trouble. have energy to go at this thing that is kind of a marathon. And sometimes when you sprint in the beginning of the marathon, you don't make it to the end.
And it's finding someone with the energy for the right things and you just nailed it. The right thing in this industry is for people and it's not for your pocketbook really. So where can people ask us questions about this stuff? mean, we got the energy for people, we wanna hear from people. Can you tell them where they can get in touch with us?
Well, Nate, it's funny you should ask. Well, we've been getting some questions via the avenues to reach us. So one way to reach us is podcast at physicianfamily.com. I really deeply appreciate the listener questions that we've gotten. We have a little gift that we send out to folks that are asking us questions that way. I won't reveal it yet, but we're working on something. The other way to reach us is to go to physicianfamilypodcast.com. And the best way, the way that we really love is to hear your voice.
Speaker 1 (17:20.91)
And that's to call us on the Physician Family Answer Line, which is basically voicemail where you leave us a question and you can call in to 503-308-8733. Again, it's 503-308-8733. Keep your questions coming. We'd love to hear from you. Thank you for listening to the Physician Family Financial Advice. Is there a question you would like answered on our next show? Go to physicianfamily.com.
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