Over the last six months, we have been discussing the implementation of a new business of medicine curriculum for our residents, which would include teaching personal finance topics. There has been a lot of support for the idea. There has also been some concern over conflicts of interest and the possibility of leading learners astray.
Though those with concerns have every intention of trying to do the right thing for the residents, it became clear to me that there were several misconceptions about teaching personal finance.
Today, we will discuss some of the common misconceptions about teaching personal finance, and why they just don’t hold any water when the rubber meets the road.
Misconception 1: Leading People Astray
“The residents might get bad advice! What if they come back years later disappointed in what we taught them?”
This is probably the most common concern from academic physicians who are worried about teaching personal finance. And I get it.
While leading people astray sounds like a problem, I am here to tell you that – even if it is a problem – it is the lesser of two evils.
The evil of leading people astray happens when we attempt to teach personal finance topics the right way, and yet we make a few mistakes along the way.
For example, maybe we tell someone that the max amount of money they can put into an IRA is $5,500, because we didn’t realize the recent change for 2019 allows us to put $6,000 away each year.
Or maybe we are asked about paying down debt versus investing, and we discuss both options and the resident decides to pay down the debt. Later, they may regret paying the debt down if they (retrospectively) look back and realize that they would have had better returns in the market. [For the record, I don’t view this as a mistake – no one can predict the future].
While mistakes can be made while teaching personal finance, the problems caused by this kind of “evil” pails in comparison to the alternative evil – letting our residents get fleeced by the financial industry.
Let’s be real for a moment.
We may not like to admit it, but we all know that there are both good and bad professionals in any industry – including medicine. Similarly, there are also good financial advisors and bad financial advisors.
The same goes for insurance sales people. We know some that are doing insurance the right way, and some who are not.
Failing to arm our trainees with the requisite knowledge on how to interact with the financial industry is a much more devastating fail than trying to teach personal finance and making an unintentional mistake along the way.
Misconception 2: Teaching Personal Finance is Different than Teaching Medicine!
“Everyone thinks that they are the expert at their own finances. Teaching residents about money is too personal. We should just stick to teaching them medicine.”
Some people think that personal finance is a leprous topic that, as academic attending physicians, we shouldn’t touch with a ten foot poll. People who hold to this logic argue that we all think so differently about money. This is why people say that personal finance is “personal,” right?
Well, my friends, I’ve said it before and I’ll say it again. It’s time for academic attending physicians to stop making excuses. It is our job to equip our trainees for life after residency and fellowship. This includes preparing them as people, because a financially secure doctor is a better physician.
Here is what I have to say to this argument:
Yes, everyone views and interacts with money differently. That is true. It shouldn’t surprise anyone, though, that each physician practices medicine differently, too.
I know that I picked up various tips and tricks in anesthesiology from different attendings. That’s one of the reasons we don’t keep the same attending with the same resident for the duration of their training.
Obviously, when it comes to learning medicine we view this as a strength (learning different ways to “skin the cat” from different attending physicians). Yet, when it comes to money this is now viewed as a deficit.
Why should teaching personal finance be any different? It can be taught just like any other topic.
Yes, there will be different perspectives – and that should be viewed as a strength for our residents and students! It is not to their detriment.
Misconception 3: We Shouldn’t Give Personal Financial Advice!
“Everyone’s situation is different. You can lecture on this stuff, but they are going to ask questions. What if they ask questions!?!?!?”
I think there is an inherent problem with this line of thinking. Too many people view resident physicians and medical students like children looking for a silver spoon.
These are highly intelligent people who – when armed with the appropriate information – will usually make the right decision. Just like you and me.
The problem is that people are too afraid to introduce them to the topic.
I cannot think of a time where I gave one of my residents personal financial advice. And, trust me, it’s not because they don’t ask for financial help.
How do I avoid giving individual advice? I let them get to the answer on their own. The reason is that everyone’s situation is different.
So, when I give two different residents the options to get a “guaranteed return” on any student loan debt that they pay down versus “hoping to do better in the market” with any money they invest – each resident may choose something different.
And, they should! Because each person is different.
After arming them with the information from both sides of the debate, they can better handle making the autonomous decision themselves. I don’t need to make personal financial decisions for them. They can do it themselves.
Misconception Number 4: Personal Finance Should be Left to the Professionals!
“We aren’t trained to teach about money and personal finance. We should leave this to the financial professionals who do this for a living!”
Right. That makes sense…
Except for one tiny little fact: The vast majority of our residents do not have the requisite knowledge to choose the right financial professional.
Which advisor should they ask? What is the difference between fee-based and fee-only financial advising? How are Assets Under Management and flat-fee models different? Should they buy insurance from their financial advisor? Do they need to work with a fiduciary? What IS a fiduciary? What is an independent insurance agent?
Wait, we didn’t teach them the answers to this stuff?
The point is this.
If we do not teach our trainees about the financial industry, you can rest assured that many of them will keep their low financial literacy while they fill up the pockets of the closest financial advisor or insurance sales person after attending a steak dinner.
“Leaving personal finance to the professionals” is the sort of thinking that prevents me from being able to get personal disability insurance to this day. It’s also what led me to make a bunch of financial mistakes in medical school and residency.
Our residents deserve better than this.
Choosing “to do nothing” when it comes to teaching personal finance is infinitely more dangerous than trying to do the right thing and miss-stepping occasionally.
We wouldn’t take that sort of “let them figure it out on their own” stance towards teaching physiology and pharmacology. And, we shouldn’t do it with money either.
If our residents decide that they do not want to be Do-It-Yourself investors, then at the bare minimum we have to teach them about where and how to get financial advice.
Misconception 5: Physicians Aren’t Qualified to Teach Personal Finance!
“As physicians, we have not been trained in personal finance topics. So, we should not be teaching something we weren’t trained to teach.”
This one is my favorite. It’s a self-perpetuating argument. We were never taught this stuff, and so we shouldn’t teach it either!
That’s exactly why we need to fix the problem.
I equate this line of reasoning to my thoughts on parenting.
One parent might say, “I walked up-hill both ways in the snow and so my kid should have to do the same! If it happened to me, then it should happen to them.”
Another parent with a different perspective might say, “I want my child to prosper and to be better off than I was. If there are mistakes that I’ve made, I want them to learn from it. There is no sense in my kids repeating my mistakes.”
When it comes to my philosophy on both parenting and teaching my medical trainees – I want to be the second person. Learners should not have to repeat our mistakes, and we should be happy for them when they are better off for it.
In a curriculum, I’ve got no problem with letting financial professionals (with the least possible conflict of interest) do the teaching, but it needs to occur with physicians present who also know something about personal finance.
Otherwise, we – as a profession – will continue to have the wool pulled over our eyes when it comes to managing money. I’ve taken the wool from my eyes, and we should prevent it from happening to our residents in the future.
Starting any new curriculum, including teaching personal finance, can prove challenging. There will be mishaps, failures, and stumbling blocks.
Still, it is a noble goal to help our residents have a better educational experience than we had by equipping them to be whole people – and not just doctors left to fend for themselves outside the work place.
Soon, people will come to recognize that this topic impacts doctors’ ability to practice medicine. When that occurs – and we are more comfortable with personal finance as a profession – we will realize that teaching about the business of medicine is just like teaching about phys and pharm.
What do you think? Are you concerned about teaching personal finance to trainees? What misconceptions have you heard? Leave a comment below.