“The Myth of the Rich Doctor” was a podcast by Perth based financial planner and principal of affluenceprivate.com.au Yves Schoof, who works with surgeons and medical specialists. The podcast has been transcribed below. You can listen to the podcast here.

Kris: Hi Yves.

Yves: Hi Kris, how are you?

Kris: Good thanks. I’ve been afraid to bring this topic to the table though, the one about the perception that doctors are rich.

Yves: Yes it is definitely an interesting topic.

Kris: It is. A lot of it is perception, a lot of it links back to high incomes that are linked to doctors, surgeons, specialists, anyone who calls themselves a doctor actually.

Yves: Yes but it is interesting, Kris, that a lot of that perception is really just a myth.

Kris: Okay what would you say that?

Yves: I read an interesting article the other day on LinkedIn, it was an American article but I still think it’s relevant for Australian doctors as well. In the US they call doctors physicians, and the article highlights that high incomes don’t reliably translate into high net worth.

Kris: You would assume though that those two are directly connected right?

Yves: You wouldn’t but in reality they aren’t. Apparently in the US nine of the top ten earners are doctors, and that is what the US Bureau of labor statistics tells us. But then other data shows that doctors fail to actually build wealth. A recent survey in the US shows that half of them are actually behind where they would like to be in retirement planning.

Kris: Okay so we have highly intelligent people with a high income who seem to lack some knowledge in that area, is that fair to say?

Yves: It’s not really that simple Kris. There’s a couple of solid reasons why doctors or physicians in this article that I’m referring to are not building wealth. The list contains things like debt for example when paying for medical school, and then also the fact that they started making money later in their lives compared to their peers. There’s also the failure to protect assets against risks, poor tax planning, and then there’s obviously getting investment advice from the wrong people.

Kris: So those are the reasons brought forward by the article. What does Yves Schoof say about all this?

Yves: Well look, there is some truth in all of that, but I believe doctors can make a big difference when they analyse the relationship that they have with money. Often it’s a bit dysfunctional. Obviously, doctors are highly intelligent people and sometimes you may overestimate your ability to manage money and the time you can commit to it, and underestimate the challenges. Sometimes it’s simply a lack of insight about what you don’t know and what you should know, and then often perhaps you might use money to solve other things like the lack of time that you have to spend with family. You may for example go on expensive holidays.

Kris: So when they do something with the family they overspend, is that what happens?

Yves: Typically yes I guess because there’s a lot of pressure there as well between doctors, and obviously things like homes and cars and holidays are there for everyone to see.

Kris: It sounds to me like these US physicians, but also the Australian doctors here, they should probably spend some time and money talking to an expert like you.

Yves: Well that would definitely help, but there are some barriers there. The whole culture of medicine trains doctors to really avoid conversations about money, and then there’s also the lack of education on financial matters, the fact that doctors have to master massive amounts of medical information, and then on top of that doctors see themselves as potential victims to bad investments and bad deals. Lots of people contact doctors simply because they are known to have a high income and so doctors try and protect their vulnerability.

Kris: So imagine I’m a doctor, I get all this, I’m clever, understand this and I’m willing to have the conversation, is there like a miracle three steps to help doctors achieve financial control, financial freedom?

Yves: Well let’s have a look at that. Number one, I would say that doctors need a coach, they need an objective source of information so that they are better informed when they are making financial decisions. Secondly, I would say doctors should really explore the forces that drive their spending and their spending behavior, like for example making all these sacrifices. So I should really deserve a better car or go on expensive holidays or have a nicer house. You know, there’s things like I’m highly intelligent, I save people’s lives, so I should be able to manage my own money. And that’s just some thoughts that doctors perhaps nurture, and they really can do themselves a favor by re-examining those habits and those thoughts.

Kris: And there’s another one, there’s replacing their belief systems by getting rid of this concept if I just do it all myself. Does that mean it would be a good idea to just call you and ask for help?

Yves: Well I wasn’t going to say that but obviously that’s a good idea. Look, I just wanted to say these are just some thoughts and my own interpretation of the very interesting article I read on LinkedIn published by Vicki Ragnar who is based in the US.

Kris: Very interesting thoughts, and thank you for sharing that Yves, talk to you in the next episode.

Yves: Thanks Kris.

Yves Schoof is an award-winning financial adviser. He specialises in working with Surgeons and Medical Specialists. You can download his free book for doctors at www.affluenceprivate.com.au/free. Yves and Affluence Private Wealth are Authorised Representatives of Synchron, AFS License No. 243313.

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