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Welcome to the latest episode of the Physician Cents Podcast, where we explore complex financial topics tailored specifically for physicians. Whether you're a medical student, resident, fellow, or attending physician, you're going to find valuable insights that can help you increase your financial IQ, further your financial journey, and improve your overall well-being. Hosted by Chad Chubb and Tyler Olson, let’s dive in!
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Managing your own investments can feel empowering. Many physicians start with a DIY approach, diving into research, setting up accounts, and building portfolios. But at some point, the question arises: "Am I missing something? When should I seek professional help?"
Dr. W, a medical resident with an all-equity portfolio, recently posed a similar question (Submit your questions here!). He wondered about the tangible and intangible benefits of hiring a financial advisor, especially when transitioning to a more diversified strategy. It's a recurring theme for physicians balancing busy careers, high incomes, and the desire to optimize their financial futures.
This post unpacks the pros and cons of self-managing investments versus working with an advisor. We’ll tackle costs, tax strategies, emotional pitfalls, and the broader scope of financial planning.
Many physicians start their investing journey solo. Why not? There's a wealth of information online, and platforms like Vanguard and Fidelity make it easy to start with index funds or target-date funds. For those with the time and interest, it's an opportunity to learn the basics.
Dr. W’s approach—to be heavily invested in equities while young—follows a well-trodden path. Equities typically offer high growth potential over time. But as careers and assets grow, so does complexity. Tax implications, portfolio diversification, and long-term planning often become significant considerations. Balancing these factors can push even the most educated investor to rethink the DIY approach.
Physicians often hear about Modern Portfolio Theory (MPT) when researching investments. MPT suggests that a diversified, low-cost portfolio maximizes returns while minimizing risk. It’s a strategy centered on spreading investments across various asset classes, helping cushion market dips without sacrificing growth.
This theory underscores the mantra: Diversified, Low Cost, Control Your Emotions.
With tools like index ETFs and diversified mutual funds, many physicians successfully create portfolios aligned with MPT. Yet, implementing this approach isn’t always as simple as it seems.
Here's the truth: DIY investing works great—until it doesn’t. Life gets busy. Uncertainty creeps in. Complex tax issues start eating into your time. For physicians especially, time is a precious resource, and the cost of errors can climb quickly as portfolios grow.
Here are common signs you might’ve outgrown DIY investing:
These aren’t just investing challenges. They’re comprehensive financial planning issues. That’s where advisors typically step in.
Let’s get one thing out of the way: Hiring a financial advisor isn’t just about picking better investments. If you're following Modern Portfolio Theory, your portfolio should already be optimized. The added value comes from everything beyond that.
Studies like Vanguard’s Advisor Alpha and research from Morningstar suggest that an excellent financial advisor can add 2% to 3% annually to your portfolio’s returns. But how? Let’s break it down:
For high-earning physicians, tax planning is often the biggest value driver. Advisors trained in tax strategies help clients:
Tax filing looks backward, while planning looks ahead. Small changes—like optimizing deductions or planning around retirement account withdrawals—can save tens or even hundreds of thousands over a lifetime.
Think of it as your emotional safety net. When the stock market drops, panic sets in. Selling during a downturn locks in losses, but staying the course can feel almost impossible.
Behavioral coaching is an advisor’s secret weapon. They offer that calm, rational perspective when emotions tell you to act otherwise. Research suggests this alone can prevent costly mistakes, adding up to 2% back to annual returns.
Many physicians overlook this critical step. An advisor works closely with estate attorneys to ensure your wishes are carried out and taxes minimized upon passing wealth to heirs. Even a simple estate plan, structured correctly, can prevent unnecessary costs or family disputes down the road.
Understanding how money moves in and out might sound basic, but it’s a linchpin of financial security. Advisors help optimize spending strategies to match goals, manage savings efficiently, and balance present-day enjoyment with future needs.
This intangible benefit is hard to quantify but deeply felt. If you’re juggling long hospital shifts or running a private practice, the “mental clutter” of money management can be paralyzing. The right advisor takes these worries off your plate so you can focus on your career, family, and personal well-being.
Advisors charge for their expertise in a variety of ways:
Here’s the catch: Paying a higher fee doesn’t always mean receiving better service. Some advisors focus only on managing investments without providing depth in tax planning, estate work, or financial structure. It’s essential to ask questions to understand exactly what you’re paying for.
Finding the right advisor is as much about compatibility as competence. Here are some key questions to ask:
One of the best ways to evaluate fit is through introductory calls with 2–3 advisors. Compare not just their fees but their expertise, communication style, and willingness to answer tough questions.
The decision boils down to time, complexity, and expertise. While DIY investing works well at first, growth and changing priorities often introduce new challenges.
Dr. W represents many in the physician community: smart, well read, and proactive in managing finances. But raising your financial IQ doesn’t mean doing everything solo. Advisors bring value not by picking “better stocks” but by focusing on all the other aspects—taxes, behavior, estate planning, and peace of mind.
Hiring a financial advisor isn’t just about money. It’s about creating clarity and structure in your financial life, so you can focus on what you do best: practicing medicine and enjoying time with family.
If you’re still managing everything yourself, ask this one question: “Is my time better spent elsewhere?” You might already have your answer.
The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don’t expect!) about a sponsor, please let us know. We call it the “best of the best” for a reason, and we will maintain that standard for our listeners & viewers.
This information is for general purposes only. This information is not intended to be a substitute for specific professional financial, tax, or legal advice, as individual circumstances vary. Please see a financial professional, CPA, and/or an attorney in regards to your own individual situation.
Wealthkeel’s Advisory Services and Financial Planning offered through Vicus Capital, Inc., a Federally Registered Investment Advisor. WealthKeel LLC, 615 Channelside Drive, Suite 207, Tampa, FL 33602 -- 267.590.9533.
Olson Consulting LLC, Offering Advisory Services and Financial Planning, is a State-Registered Investment Advisor.
A podcast designed specifically for physicians, offering a breakdown of complex financial topics to help you develop your financial IQ, further your financial journey, and improve your well-being. Whether you're a medical student, resident, fellow, or attending physician, you're sure to learn something new that will benefit your journey.
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Conversations helping graduating medical students to attending physicians build a strong financial foundation
