The Advisor

An Online Newsletter for Medical Professionals

March, 2011


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With a growing physician shortage, with healthcare reform swelling the ranks of patients, with rising malpractice premiums, shrinking revenues and growing government regulation, it has never been more important that a physician or nursing professional make the right choice when considering a career change.

 

MD Preferred understands that a job search involves far more than resumes and interviews. That is why MD Preferred has selected the nation's leading service professionals and recognized them with the MD Preferred Service Medallion. As you will discover, MD Preferred offers access to award winning professionals in: Real Estate/Relocation, Mortgage Services, Private Banking Services, Legal Services, Accounting Services and Financial Planning.

 

To find a service provider in your area visit our national networks or call 800-260-8366 Ext 702 for a referral

 

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Paging Dr. Treadmill

By Anthony J. Ogorek, Ed.D., CFP

 

The Chinese curse "may you live in interesting times" seems an appropriate description for how many medical professionals feel about their lives. Over the past couple of decades, physicians have had to work harder, not to make more money, but just to stay in place economically. Many are older and working harder than ever, yet find the lifestyle that they have enjoyed in the past gradually eroding.

 

There are many reasons for the "treadmill syndrome." However, what is most frightening is not the obvious economic fallout, but the lifestyle compromises that many physicians are not even aware of until, unfortunately, it may be too late. Let's take a look at how the rising costs of educating children are materially contributing to more years worked with a potentially diminishing level of satisfaction.

 

Most physicians place a high value on education. Unfortunately, at exactly the time that their reimbursements are being reduced by the government, as well as third party payers, institutions of higher education have decided to engage in a facilities "arms race" that is driving the cost of a private college education through the ceiling, as well as the roof. This is just part of the story. With "education inflation" continuing to rage, it is often necessary for a family to support a child through a master's program, or a professional school before they can be financially independent.

 

In our practice we have seen a number of physicians choose to continue working, long past the time that they thought they would be retired, due to the weak domestic job market for their children. Years ago the mantra was 'I want to work until the last one is through college.' Today it is all that plus 'until they can get a decent job and no longer require my financial support.' In a weak economy, the alternative to supplement a child's income is piling debt on a child that may take decades to retire.

 

Physicians with younger children are faced with trying to strike a balance between limiting the amount of debt their children will graduate with, and funding their own retirement plan. In our experience, physicians who are caught in the emotional crossfire, often times set themselves up for additional years on the treadmill.

 

So what can a physician do? It is imperative to have a financial plan that models a variety of scenarios that attempt to balance your need for economic security, while not putting your children in an economic hole. The earlier you embark on this process the better.

 

Anthony J. Ogorek, Ed.D, CFP is a fee-only financial advisor and owner of Ogorek Wealth Management LLC. Mr. Ogorek has been a Certified Financial Planner licensee and Registered Investment Advisor in Buffalo, New York since 1983. He can be reached at [email protected] or visit ogorek.com.     


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The Difference Between Three and Four is One Great Financial Future

by Brian Picariello CPA/PFS, CFA, Traust Sollus Wealth Management

609-779-6700, [email protected]

 

You have chosen to open your own practice because you know that running a business of your own is the way to build your personal fortune. You are prepared to put in the time and take the business risks, because you know the rewards will come.

 

As a good doctor, you probably put in long days taking care of your patients, and then want to spend time with your family as well. Although revenue is coming in and you're taking home a good paycheck, do you know how to take to maximize the value of your business and use it to grow your own personal wealth?

This year choose to find the time to take the four steps that will help your reach your personal financial goals.

 

Rx: Clear Goals and a Financial Road Map

First, in order to build your personal wealth through your practice you need the structure of a financial plan for yourself as an individual and you need one for your business. Easy enough. However, as a financial planner I've found that in many cases what gets in the way of creating workable plans are what I call practical obstacles.

Let me help you identify the practical obstacles standing between you and your successful financial planning. The good news is, there are only three of them. Once you know what they are you will have a clearer path to achieving your personal financial goals.

 

The Three Practical Obstacles Against Financial Success

1) Lack of goals and numbers

Building your wealth is a journey, but it should not be an adventure. For those who lack specific goals and numbers, the journey is often aimless and there is a great risk that you will not arrive at your destination - that you will have to retire later than you wanted, that you will not have as much money when you retire as you wanted. To build an effective financial plan you first need to decide where you want to head and know where you are now.

 

Here are some questions to ask yourself that will help you define your goals and enable your financial planner crunch the numbers relevant to you and your practice.

  • How do I visualize my future desired lifestyle?
  • Specifically, how much money will I need to support it per year?
  • Exactly how much wealth will I have to accumulate to live the lifestyle I want in retirement?
  • How many more years do I have to work?
  • To achieve my desired wealth, how much of this money could reasonably come from my business income or salary and how much from investments?
  • What do I plan to do with my business?
  • What is my business exit strategy?

By answering these questions you can start to construct a truly useful plan, and insure your odds of success for achieving your specific financial goals. Even medical professionals on salary can use some of these same questions to give their financial houses a good foundation.

 

2) No written financial plan

Do you have personal and business financial plans that are written down? Or do they exist only as ideas floating around in your head? It is important that you actually see your numbers and their relationships to each other. A written plan will give you a much better chance of achieving your dreams. Here is something that should get you very pumped up: Years ago, a famous HarvardBusinessSchool study found that only 3% of the population puts their goals in writing. Another 14% have goals, but don't write them down; 83% do not even have clearly defined goals. Which group do you think clocked in as having the greatest earning power? That's right, the 3% who have a written financial plan were found to earn an astounding ten times that of the 83% group. I don't know about you, but when I can stack those kinds of odds in my favor, the effort is well worth it.

 

3) No Road Map

How close am I to financial independence and what should my action plan be for getting there? These are two common questions I'm asked by new clients at my financial planning firm. When you lack a road map for building your wealth, you can't answer either question.

 

Do you know how close you are to achieving financial independence? Are you a quarter of the way there? Ninety percent there? Are you taking the most direct route? If you were planning a trip from New York City to Washington, D.C. you'd recognize that going through Ohio would not be an effective route. You need to select a sensible path to your financial goals, too. Unfortunately, that's not as simple as going to Mapquest.com.

 

Working with your financial planner - who should also be a CPA - map out exactly how far along you are on the road to financial independence. Together, you should identify and write down what actions you need to complete to build your wealth. These should be steps that are specific to both your personal financial situation and to that of your business. Your action plan should include counsel from your financial planner about what things you need to look out for - at home and at work - that may be a drain on your financial future. A competent planner should counsel you on how to plug these drains on your wealth.

 

The Four Steps to Financial Success

To recap, here are four steps to put you on a clear road toward financial planning success:

  • Establish goals and determine your specific numbers.
  • Put your financial plan in writing.
  • Create a timetable to complete the action steps necessary for the business to achieve your needed numbers.
  • Construct a road map in your financial plan that guides your wealth building journey and tracks your progress.

 

And there you have it, three practical obstacles knocked over the head by four easy-to-follow steps. By using these steps you won't get stumped by practical financial planning obstacles. Instead, you'll be able to focus your time and attention on the strategies and tactics at your business and at home that will help you build your wealth.


MD Preferred 

Career Services  

 

With a growing physician shortage, with healthcare reform swelling the ranks of patients, with rising malpractice premiums, shrinking revenues and growing government regulation, it has never been more important that a physician or nursing professional make the right choice when considering a career change.

 

MD Preferred offers the only medical job board with top tier job listings and access to award winning, doctor friendly professionals in: Real Estate/Relocation, Mortgage Services, Private Banking Services, Legal Services, Accounting Services and Financial Planning.

 

Medical professionals requiring discrete professional representation during their job search can call 800-260-8366 to speak with a personal search associate. 

 

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Rural Hospitals

 

As recently as 1975 rural community hospitals outnumbered urban community hospitals in the United States. In the intervening years, however, urban hospitals have increased steadily to 3,011 of 5,008 community hospitals nationwide as the number of rural hospitals has slowly shrunk to 1,997. Hospital size is often an indicator as 73 percent of hospitals with 6 to 24 beds are rural, and 86 percent of hospitals with 200+ beds are urban.  At 100+ beds the majority shifts from mainly rural to predominantly urban (68 percent). Still, there are three 500+ bed rural hospitals in the United States. 

2011 edition of AHA Hospital Statistics.

In This Issue
Professional Services
Paging Dr. Treadmill
Medical Directories
The Difference Between Three & Four
Career Services
Hospital Factoid
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