Money Meets Medicine Podcast
MMM 81: The Most Important Numbers in Physician Finance
Editor’s Note: The Alpha Coaching Experience (ACE) is opening up for the upcoming Fall session in just a few weeks, but the waitlist is open now! Join hundreds of other physicians as they reach freedom- practicing medicine because they want to and not because they have to.

The personal finance space is full of rules. Things you should be doing with your money and things you should stop doing with your money. Certain numbers you should be aiming for at specific points in your life. But do you really need to follow every single money rule out there when it comes to personal finance? That is the question we are addressing today on Money Meets Medicine. Which personal finance rules and numbers are most important and which ones might not matter at all.
Arbitrary Goals
Pickleball is one of my new passions. As Ryan Inman likes to point out, I “played college soccer as a goalkeeper, but is a mediocre pickleball player at best.” I have dropped some money on it (I just got some new shoes I am excited to wear). But something funny about Pickleball that made me think about arbitrary numbers is that the score in Pickleball is pretty confusing when you start playing. People are yelling out numbers like “4-3-2” and it seems completely random. It made me think about the arbitrary numbers that physicians follow in the personal finance space.
As a coach I see people set arbitrary goals and pick arbitrary number goals all the time. Then their brains latch onto that as fact or truth, seemingly limiting their options.
For example in the Alpha Coaching Experience, I often have conversations like this:
ACE Member: “Man, I am just so trapped in medicine. I am so burned out. I am not happy. I want to make a change.”
Me: “Why don’t you?”
ACE Member: “Well, I can’t.”
Me: “Why can’t you?”
ACE Member: “I want to be financially independent by age 50.”
Me: “So, what’s the problem?”
ACE Member: “If I change jobs it might delay my financial independence by 2 years.”
Me: “Well why is it 50? Why isn’t it 48 or 52?”
And then they realize that this is an arbitrary goal. They set the goal and they can change the goal. Even if it delays your retirement by 5 years, would you rather be working in a job you love for 5 years or a job you hate for 25 years?
The comparison to this in medicine is that, “yeah, I know there are studies and evidence out there, but I want to practice anecdotal medicine and go with my gut.” Then they save so much more than they need to, experience stress, etc.
Staying Stuck Because Of Arbitrary Goals
We see people get stuck in this arbitrary thought process all the time because the personal finance space is full of rules. Things you should be doing with your money and things you should stop doing with your money. Certain numbers you should be aiming for at specific points in your life.
But do you really need to follow every single money rule out there when it comes to personal finance?
If you have a goal to save a certain amount of money at a certain age, etc., we just want you to question these goals with the question, “how did I get here?” If you don’t know how you figured out this goal, then there is a chance that it is a completely arbitrary goal which means that it is entirely up to you.
And I think this is an excellent thing, actually.
Arbitrary Goals In The Personal Finance Space
Within the personal finance space there are a lot of numbers floating around out there. I am going to run through the most popular categories for arbitrary number goals in finance and I want you to continually ask yourself a few questions:
- What is my goal?
- Why do I have this goal and how did I get to it?
- Is this an arbitrary goal?
- If yes, what is my real goal and what does that number look like?
Arbitrary Goal #1: Debt-Free By A Certain Age
This isn’t true. If you can clarify this more to say something like, “I want to be student debt free by X age,” then that can be true. But if you are sacrificing so much to reach that goal, is the arbitrary age you picked worth it?
Now we do endorse SMART goals, the T being for time. But we just want you to recognize the arbitrary nature of it. When life throws you a curve ball you can reset and relook your arbitrary goal. That is okay and we encourage you to do this. Don’t create a negative situation for yourself based on an arbitrary goal.
Arbitrary Goal #2: How Much Life Insurance You Need
This is another major one. So many people are over insured because an insurance agent told them they needed all different types of life insurance. Ryan will often ask the question, “Do you like wasting money? Because there are more enjoyable things you can waste money on than life insurance.” When you are choosing a number for your life insurance ask yourself why do you need this, what will it need to cover? Know your own why.
Arbitrary Goal #3: How Much You Need to Retire
This is a really popular one. At what age do I want to retire and how much do I need? Physicians tend to not only pick an arbitrary age, they pick an arbitrary financial retirement goal as well.
Again, ask yourself all of the why questions. Have you thought through these goals? You don’t know with 100% certainty where you want to live, what your health will be, if you want to keep working, maybe travel more. You just don’t know what is going to happen 5 years from now even, let alone 20-30 years.
When Ryan meets with people about their retirement he will give some estimates and put a plan together, but really focus on what we are going to do in the next 2-3 years from now because that is the most controllable.
The main point here is that the future is unknown, so to tie yourself so tightly to a retirement number at this point in your life isn’t worth the stress.
Arbitrary Goal #4: How Much A Financial Advisor/Planner Should Cost
I often hear you shouldn’t spend more than $10,000 on a financial advisor. This is just such a convenient, arbitrary number. Why did someone pick this number? It really comes back to being realistic. Focus on the value you are getting to reach your “why” goal.
Arbitrary Goal #5: Net Worth Numbers
Ryan, as a financial planner, often sees physicians choosing arbitrary financial net worth numbers. These are smart people that have done some research and personal education on financial planning. They understand the top level, but not necessarily all of the layers below that.
For example, he had a pediatric physician as a client that thought they needed $9 million dollars in net worth in retirement. And this number was really causing a lot of stress and anxiety. They were not sure how to get there, giving up things in life now that they enjoyed, and more. When they really dug into the number this client had taken an arbitrary number that someone else had mentioned, tried to factor in aging parents, lifestyle, college for the kids, etc. and came to the conclusion that the number was $9 million. But the truth was that they were living on $100,000 now and by no means needed a net worth of $9 million for their future. But these arbitrary number goals were keeping them spinning. It just doesn’t make sense.
Arbitrary Goal #6: Dollar Amount To Save For College
So many say, “I want to pay for college.” But they then pick a random number that they just guess is how much they are going to cost. You have to do the research to make sure you (1) picked the right number or (2) you saved too much and put too much money in the college fund. (Disclaimer: Don’t forget to save for your retirement first!)
Stop Stressing About Arbitrary Goals
So I really don’t want you to stress about arbitrary numbers that either you don’t have real control over or don’t know why you have that goal.
So the one main take away I have for you is this:
If you have a specific financial goal, just ask yourself the question, “how did I get to this goal and why do I have this goal?”
If you don’t know how you figured out this goal or why you have it then there is a chance that it is a completely arbitrary goal and you can reset it to figure out what matters to you.
You might also be interested in…
Show Me the Money (In the Financial Industry)
The personal finance industry is meant to help you manage your assets, but particularly for doctors, many questions remain around what that kind of support actually means.
Does your financial advisor have your best interest at heart? Do you know how they get paid? Are they transparent in their disclosures about how their company actually works? Where are the conflicts of interest?
Because you can rest assured there are conflicts of interest. It’s just a matter of how they show up. And once you can say “Show me the money” and find them, that’s when you can make intentional, informed decisions regarding your personal finance.
In tackling this topic, we wanted to acknowledge the two main reasons you may be considering your options for charitable giving, especially as a high-earning physician.
One is that you may have religious convictions that make you feel more inclined to give. Even if you don’t hold to the same belief system that we do – specifically around tithing and the historical background of that concept – giving to your community is very valuable. Not just for the recipient, but for you, the giver.
This leads us into reason two, which is that giving money (or other valuable resources) and helping others has been shown to increase long-term satisfaction and fulfillment in your life.
There’s also a practical side of financial charitable giving to consider, which are the tax advantages you can use to create the most bang for your buck – literally.
Charitable Giving for Physicians
Does tithing or charitable giving play a part in your personal finances? Should it? As usual, we’re not shying away from taking a deep dive into a very personal topic. Personal finance is personal, maybe never more so than when it comes to deciding how you want to give back.
In tackling this topic, we wanted to acknowledge the two main reasons you may be considering your options for charitable giving, especially as a high-earning physician.
One is that you may have religious convictions that make you feel more inclined to give. Even if you don’t hold to the same belief system that we do – specifically around tithing and the historical background of that concept – giving to your community is very valuable. Not just for the recipient, but for you, the giver.
This leads us into reason two, which is that giving money (or other valuable resources) and helping others has been shown to increase long-term satisfaction and fulfillment in your life.
There’s also a practical side of financial charitable giving to consider, which are the tax advantages you can use to create the most bang for your buck – literally.
Making the Most of Your Paycheck
You’ve done it – your training is complete and now you’re finally getting a paycheck fit for an attending physician. You think, “I’ve arrived! I’m going to start making so much more money.”
Famous last words. If you’re not prepared, that is.
Seemingly unassuming, everyday expenses still have the potential to wreck your new paycheck and your budget. I’ve seen it many times over the years: you try to be careful, but you (understandably) want to enjoy your hard-earned money. Costs creep up on you, things snowball. Suddenly, your post-tax paycheck is no different than it was in residency.
You thought you knew how to spend money wisely, but now you wonder, “What was the point of all my hard work to get here?”
Don’t worry. You can still enjoy the money you make while being aware of five main money traps that a high-income earner like you could be susceptible to if you’re not paying attention.
Are you ready to live a life you love?
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