Physician Legal and Financial Planning: 'Sins' to Avoid

The “Seven Deadly Sins” easily represent human nature, business, and spending issues you must overcome as a healthcare executive and practice owner.

GREED and GLUTTONY
In a business context they are two sides of the same coin. This “sin” takes many forms, but for physicians it often represents the habit of lavish spending on non-essential assets. We all have subjective ideals of the lifestyle we want to lead, but given the current state of the economy, medical compensation and overhead issues spending carefully and limiting your wants in favor of your needs is more important than ever. We’ve covered specifics like being over-extended on your home in several recent articles here but that is merely the beginning. Delaying gratification on items like cars, jewelry, time shares, travel and even dining out is often the key differentiating factor between doctors who “live rich” and those who stay that way.

ENVY
A sister to the sin of greed is often the sin of envy, in most cases in trying to emulate the lifestyles and spending habits of others. I’m all for you having ambition and setting specific goals and personal milestones but when that becomes a race or a contest it can be financially fatal. Make sure your milestones are your own and realize that every family and every business is different and that long-term wealth requires that you live well, but well within your means, as opposed to at the limits of them.

SLOTH
In a business context, consider sloth as apathy. Don’t fall into the trap of letting your practice as usual, especially when you’ve successfully been in business for any period of time. This apathy can range from not taking steps to find the caliber of advisors you need to not aggressively marketing your practice or improving the service you deliver as a healthcare provider. Think of yourself as a service provider and look at issues that attract or repel those you wish to serve in the same context you qualify those you choose in your personal business relationships. Would you measure up?

PRIDE
Physicians often tell me they do their own accounting, legal research, and investment management. Some do an adequate job, most don’t, and their planning is tended to at the mercy of their personal and professional schedules. Needing an expert’s help is not a sign of weakness or a personal intellectual failing, it’s a fact of life. Many doctors and business owners who would never dream of remodeling their own house, replacing their own transmission, or building their own pool make legal and financial decisions without the counsel of experts that have potentially far more permanent results. Don’t let your ego and access to the internet replace the experience of specialists that fix these problems every day.

LUST
One of the biggest financial and legal exposures many doctors will face in their lifetime is the specter of divorce. If we assume for a moment that doctors are a subset of the general population and that general statistics apply, at least half the married physicians reading this will be divorced at least once. Some articles put this number higher, in fact one cites physicians among “The Top 7 Professions with High Divorce Rates.” Long hours, time away from family and high stress levels are cited as contributing factors but what ever the reasons the results and costs of infidelity are the same. I have had to introduce too many physicians to divorce counsel, often unwillingly, when a “slip” of their fidelity has been discovered. Many of these folks never dreamed that their actions would change their family life and finances forever. If I had a nickel for every sad client that, “used to have a beach house before my divorce, when my kids still talked to me…,” I’d have an extra beach house myself.

WRATH
Having a short fuse or an anger management issue is common to many high stress executives including doctors. Whether dealing with employees, patients or partners, remember that your “bedside manner” will control the effectiveness of your communications and implement the “golden rule.” People are less likely to sue, steal from, or otherwise hurt those they like. I can also tell you that many legal disputes start with small slights that leads to hurt feelings which lead to a lawyer’s office. Circumscribe your passions and pay attention to both what you say and how you say it and learn to communicate in the most effective and generous way.

Find out more about Ike Devji and our other Practice Notes bloggers.