The Physician's guide to investing: A practical approach to building wealth

Abstract

I have learned a great deal from writing this book. It has forced me to critically evaluate my own investment style. I have already admitted that my greatest weakness is impatience. Investments must be viewed in the context of years, not minutes, days, weeks, or sometimes even months. There are some areas in which I have always done well, such as thrift and controlling debt. I have learned many lessons along the way in my investment career, usually the hard way. My greatest investment failures have been when I invested outside my area of knowledge and expertise or when my ego was involved or I got greedy. Invest in what you know. I have learned to trust my own judgment and avoid as much as possible the advice of "experts." I have learned the importance of dealing with bankers on my terms, not theirs. I have become much better in recognizing real opportunities when they do arise. I had never appreciated the magnificence of compound interest. Its capacity to build wealth is astounding. My greatest revelation, though, relates to fees. They are everywhere. Do not underestimate the capacity of fees to sap your wealth. Fees are a financial fourletter word. Minimizing fees is much easier than you think and is a basic tool in the accumulation of wealth. Fees are either money in your pocket or in someone else's pocket. I have repeatedly emphasized the importance of making you own decisions, of selfreliance, of not being overly influenced, or even influenced at all, by the advice of "experts." If this is the case, why should you follow my advice? The answer is fairly straightforward. You should not uncritically follow my advice or anyone else's. I am a physician with a reasonable amount of financial acumen who has had a reasonable degree of success along the way. I have also experienced my share of failures and what I have learned from these failures has provided some insight that I may hopefully pass along to help other physicians avoid such mistakes. My goal has been to provide a basic framework from which you can make you own decisions. Hopefully most of the advice I have provided here is correct. I am sure some is not correct and some probably just does not apply to you. Please take this book in that context. I have two short lists. The first are the factors that I feel are most important and helpful in attaining your ultimate goal of financial security. I am convinced the first two factors are in appropriate order. After that, determine what is most important for you. 1. Thrift. 2. Compound interest. 3. Patience. 4. Discipline. 5. Invest in what you know. And now for the five most important factors that destroy wealth, and potentially your life: 1. Greed. 2. Debt. 3. Fees. 4. Trusting everyone. 5. Not making your own decisions. Good Luck! © 2006 Humana Press Inc.