Ex-Ibanker now resident AMA

[Tigerhawk77]

I worked in finance, made the switch to MD, now PGY-2. Happy to talk about career change, finance, existential crisises, etc.

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[Amygdala23]

Doctors have this reputation of being not very smart with their money. Do you have any advice about making investments, assets, retirement,..? (presumably for someone with no debt)

 

[Gurby]

How did your experience in i-banking shape your mindset, approach to medical school, choice of specialty, and ranking of residency programs?

 

[Stagg737]

What was the hardest thing about transitioning from finance into medicine? Have you been happy with the switch? If you could do it all again, what would you do different? Go straight into medicine? Stay with I-Banking? Something else?

 

[Tigerhawk77]

How did your experience in i-banking shape your mindset, approach to medical school, choice of specialty, and ranking of residency programs?

It gave me a good work ethic and attention to detail. Believe it or not, I was expected to have much greater detail attention in banking than medicine. So much scrutinizing punctuation and color palates. I suppose that was due to my not being a senior banker making larger decisions. Or maybe medicine detail comes more naturally to me. Those guys see a company as a living, breathing entity the way that doctors see human physiology.

Also, I became very burnout conscious in medical school. I didn’t want to change careers twice. I focused on learning things in ways that interested me rather than cramming everything in. I worked on my relationships more. I was totally comfortable graduating in the middle of my class. I chose a lifestyle specialty with little prestige as I cared less about what people thought of me. I exercised a lot, played intramural sports, traveled and saw friends. I felt much less compelled to make big bucks or live in a particular city. When it came to residency, I interviewed at all the big name places in my field. But ultimately ranked the place that provided an incredible quality of life, ample opportunities for outdoor fun.

 

[Tigerhawk77]

What was the hardest thing about transitioning from finance into medicine? Have you been happy with the switch? If you could do it all again, what would you do different? Go straight into medicine? Stay with I-Banking? Something else?

Hardest transition: Getting into medical school! That was a daily grind of course work, getting letters, MCAT. I loved the switch once I got into medical school. My worst intern year days on MICU with 30 hours shifts were still better than most banking days. I would have taken a few more science courses early in my undergraduate to make getting the pre-requisites easier.

I would have done this path over again. I worked at arguable the most prestigious and selective firm and it was still miserable. So I realized that the same would apply in medicine: the most prestigious and selective specialty / institution would not make me happy. That opened me up to less prestigious specialties, institutions, and chase what I was interested in. Had I not learned this lesson, I think I'd be currently grinding it out in a specialty / hospital rather than loving my life. I'm married to an incredible woman, I live in one of the greatest outdoor recreation cities, I love my work. None of that was by accident, I'd made enough mistakes previously to know how to position my life better.

 

[Tigerhawk77]

Doctors have this reputation of being not very smart with their money. Do you have any advice about making investments, assets, retirement,..? (presumably for someone with no debt)

I feel very strongly about this. Doctors think their expertise translates to expert-level finance ability. When I worked on Wall Street, I regularly met with Private Equity Firms, High-Frequency Traders, and the rating agencies that were in bed with the firms. The game is so fixed, and where it isn't fixed, it's dominated by people working surgeon's hours on their craft. You don't stand a chance. So many of my colleagues are investing in Apple stock options, giant houses while in debt, or day trades. I wouldn't touch any of that. I also go nuts when residents explain to me that if their investment makes 10%, their debt is 5.6% interest, and they are making a great spread. They never account for risk. They never account for the chance that they don't work for awhile. And they don't realize the freedom a debt-free person has to walk away from a bad job or toward a good new job.

I work a very tight budget, married a woman who believes the same. I find Dave Ramsey to be one of the few credible personal finance authors. According to his principals, I prioritized debt payment before all else. Rent / mortgage as no more than 1/4 take-home pay. No purchasing house until out of debt. Car insurance, life insurance (term), disability insurance even if you are in debt. No retirement until out of debt. Beater car while in debt, cash purchase when out of debt. Once out of debt, growth stock mutual funds or local real estate.

 

[FlowRate]

disability insurance even if you are in debt.

Do you plan on shifting to self-insured at some point? I know everyone has a different risk tolerance, but disability ins is also really expensive...

 

[colbgw02]

Are there any rules, or do you have any advice, for physicians with respect to how much of one's retirement savings should be in post-tax vs. pre-tax accounts?

 

[ItsSurgicallyComplicated]

I worked in finance, made the switch to MD, now PGY-2. Happy to talk about career change, finance, existential crisises, etc.

What residency are you doing?
What would you say are the biggest similarities and biggest differences between a high prestigious firm and high prestigious speciality position?

 

[Merely]

How much did you make as a banker? On average, do bankers or docs make
More?

 

[Tigerhawk77]

How much did you make as a banker? On average, do bankers or docs make
More?

90k. 40k bonus. First year with only undergraduate degree. Not sure what banking pays now many years later.

Doc vs. banker: I don’t know how it averages out. Average lower quartile physicians definitely make more. Average upper quartile bankers definitely make more.

 

[marble30]

How many years did you spend in finance before deciding to change careers?

 

[Tigerhawk77]

How many years did you spend in finance before deciding to change careers?

2

 

[Tigerhawk77]

Are there any rules, or do you have any advice, for physicians with respect to how much of one's retirement savings should be in post-tax vs. pre-tax accounts?

No comment, I did much more large-scale complex finance. I'd hate to give you bad personal finance advice.

 

[Tigerhawk77]

What residency are you doing?
What would you say are the biggest similarities and biggest differences between a high prestigious firm and high prestigious speciality position?

A lifestyle, low prestige field. Think psychiatry, pathology, PM&R, FP, etc.

I can speak to high prestige firm. I can't speak to high prestige specialty beyond what I saw as a medical student.

 

[Tigerhawk77]

Do you plan on shifting to self-insured at some point? I know everyone has a different risk tolerance, but disability ins is also really expensive...

I will self-insure as soon as I can.

 

[Obnoxious Dad]

No retirement until out of debt. .

I agree with you on all counts except the retirement set aside. When you are an attending and you are making $250K or more, you ought to max out your 401k, 401 a or 403b even if you are paying off student debt. This will lower your state and federal tax burden and you will begin to take advantage of compounding interest and dividends. Furthermore, some employers will make matching contributions that would be lost forever if you don't kick in. As I understand it in some 401a plans you have to elect to make contributions when you start employment and if you fail to make that election you can't make it later.

 

[pathslides]

How many hours did you work on avg during the week in banking ?

 

[Tigerhawk77]

How many hours did you work on avg during the week in banking ?

90-100

 

[Stagg737]

I agree with you on all counts except the retirement set aside. When you are an attending and you are making $250K or more, you ought to max out your 401k, 401 a or 403b even if you are paying off student debt. This will lower your state and federal tax burden and you will begin to take advantage of compounding interest and dividends. Furthermore, some employers will make matching contributions that would be lost forever if you don't kick in. As I understand it in some 401a plans you have to elect to make contributions when you start employment and if you fail to make that election you can't make it later.

Eh, depends on a lot of factors, interest rate on debt, interest rate of retirement investments, company match rate (if there's is one), loan forgiveness utilization, etc. Generally speaking paying down school debt first is a good decision right now due to high interest rates and massive total debt, but it will vary from situation to situation.

 

[pathslides]

90-100

Dang

 

[BobBarker]

Some employers offer included disability insurance in their standard packages. My employer gives all physicians $8000/month coverage. So I have that, social security, and with some income generating investments there is no need to purchase additional insurance.

 

[mercaptovizadeh]

Very good thread, addresses questions that many of us struggle with when we reflect on the sacrifices involved in the medical career and the "what if I had just done business" questions. Grass is always greener....

 

[AdmiralChz]

Very good thread, addresses questions that many of us struggle with when we reflect on the sacrifices involved in the medical career and the "what if I had just done business" questions. Grass is always greener....

We see it more in some of the subspecialty forums - something like, "I'm so smart, I easily could have done Wall Street" or the equivalent. Perhaps it's true, but working 90+ hours a week including most weekends AND constantly looking over your shoulder knowing you can be replaced with a snap Thanos-style is pretty stressful to my friends in the biz. The most successful ones know how to kiss a$$ and become indispensable... not easy!

 

[Tigerhawk77]

Happy to help everyone. In return: does anyone know a lot about stark laws?

 

[Oh_Gee]

Happy to help everyone. In return: does anyone know a lot about stark laws?

i saw it on a test once and all i could think of was iron man

 

[Obnoxious Dad]

Happy to help everyone. In return: does anyone know a lot about stark laws?

I happen to be afflicted with a legal education and I audited a health law class two years ago for fun at a tier 1 law school. I would have to say that the Stark Law, as implemented, is one of the most confusing pieces of legislation ever and I have spent the last 30 years doing tax work. Pete Stark, the Congressman who introduced the original bill, now regrets his involvement in the whole thing. The purpose of the Stark law is to prevent physicians from referring patients to medical services such as X-ray, MRI, blood drawers etc. when the physician owns a piece of the service provider. The principle behind the law is analogous to the anti-kickback statute. In the abstract these laws appear rational because they serve to prevent conflicts of interest. However, with group practices now being closely affiliated with hospitals, HMOs etc. it is a bear to apply these laws. There are traps everywhere.

Here is a link which you may find helpful:
15 things to know about Stark Law

Here is another:
Fraud & Abuse Laws | Physician Roadmap | Compliance | Office of Inspector General | U.S. Department of Health and Human Services

Excuse my shyster prejudice, but this is not an area of the law for dabbling amateurs. If you think you have an issue with the Stark Law or the anti-kickback statute, you need to see an experienced attorney.

 

[Lawpy]

It gave me a good work ethic and attention to detail. Believe it or not, I was expected to have much greater detail attention in banking than medicine. So much scrutinizing punctuation and color palates. I suppose that was due to my not being a senior banker making larger decisions. Or maybe medicine detail comes more naturally to me. Those guys see a company as a living, breathing entity the way that doctors see human physiology.

And that’s essential. Too many companies have collapsed due to horrible management and leadership.

What are your thoughts on financial engineering? How do you weigh the pros vs cons and how do you personally feel about it?

 

[Tigerhawk77]

And that’s essential. Too many companies have collapsed due to horrible management and leadership.

What are your thoughts on financial engineering? How do you weigh the pros vs cons and how do you personally feel about it?

Not sure what you’re asking. Financial engineering is a large term encompassing regulation, quantitative analysis, risk management, etc. It’s like asking me what I think of biology.

Is there something more specific you’re interested in?

 

[Lawpy]

Not sure what you’re asking. Financial engineering is a large term encompassing regulation, quantitative analysis, risk management, etc. It’s like asking me what I think of biology.

Is there something more specific you’re interested in?

There are complaints that CEOs focusing on financial engineering are endangering the company they lead and ultimately driving them into bankruptcy.

Sears is a recent example. https://sites.law.berkeley.edu/then...gineering-failure-sears-files-for-bankruptcy/

What are your thoughts?

 

[AdmiralChz]

There are complaints that CEOs focusing on financial engineering are endangering the company they lead and ultimately driving them into bankruptcy.

Sears is a recent example. https://sites.law.berkeley.edu/then...gineering-failure-sears-files-for-bankruptcy/

What are your thoughts?

Sears is in trouble not because of "financial engineering" but because it failed to change with the consumer demand. You can do fuzzy financial stuff all day but if people aren't buying your products or you have an outdated business platform you're doomed.