Page 5 - Mecklenburg_Medicine_March-2020

President’s Letter
What Is Your Net Worth?
FBy John R. Allbert, MD
orty years ago, when my dad started his own business, his
first employee declined to participate in the 401K plan,
explaining his father was a doctor and he would be fine
without it. Today, he is still working at age 68 because his
parents are still living. He clearly counted his chickens before the eggs
hatched. That story likely is why I was so mesmerized about 20 years
ago when I saw a personal finance magazine in the airport with the
cover story, “Die Broke: Spoil your kids with education and travel.”
Since then I have not hesitated to take my kids on great trips around
the world, and we have tried to provide them with a great education.
I have warned them that because of all this spending now, they
shouldn’t count on much inheritance.
During my residency, it bothered me that so many physicians were
working after age 65, not because they wanted to but because they
had to. I remember one physician who was 67 and was trying to
downsize to a smaller home. He was in a bind because he had found
a great new home but could not sell his current one that still had
a large mortgage. Having a mortgage that late in life went against
what I was taught. Seeing financial distress at a time in life when all
your financial worries should be behind you inspired me to seek the
advice of physicians and other businessmen who had planned well. I
wanted to know how to save for retirement and still enjoy life now.
As I am near the end of my career, I will share the advice I
received and have found to serve me well:
• Try to save 20 percent of your income. However, by fully participating
in your company retirement plan (401K, 403B, etc.), you will have
enough. The magic of compounding interest is beautiful to watch.
• Insure your most important asset by buying the maximum amount
of disability insurance allowed. (I know four obstetricians in this
area who needed it.)
• Pay off debt as fast as possible.
• If you can save money on your own, buy term life insurance and
invest in low-cost index funds what you would have paid in whole
life insurance premiums. If you are incapable of saving money,
buy whole life insurance.
• Buy the most expensive home you can afford (i.e., monthly
payment less than 28 percent of your monthly net income) and
the least expensive car you can tolerate.
• Plan to have your mortgage paid off by age 65.
• If you have children, invest in 529 college savings plans.
• Invest in experiences with your children. You’ll never regret a
dollar spent on any trip you take with them or their education.
• Be generous. Pick a number that hurts a little in January and set aside
a portion each month. Ten percent of your income is a wonderful goal,
but it is not for everyone. Just start small and keep going up each year.
It’s like a good workout … it hurts at first but you are glad you did it.
Gordon Gekko was wrong, greed is not good. To get into medical
school, you had to work hard, but you also had to be lucky in the gene
lottery. There are a lot of people who worked just as hard, or harder,
than you and did not get accepted. With the benefit of that luck and
hard work, hopefully you are making a good living. You are in the top
5 percent if you make more than $165,000 and in the top 1 percent
if you make more than $465,000 per year. If you earn that kind of
income and can’t be generous, who can be? An accountant told me
that I would be amazed at the number of successful physicians who
deduct only a few thousand dollars a year for charitable donations. I
also have been told by people who are involved in the nonprofit world
that physicians in Charlotte are the least generous of the professional
groups. I know we can change this reputation, because I personally
have found that many of my colleagues are very generous, and I know
others would like to give back either with service or financial gifts but
don’t know where to start.
One of the priorities of our Medical Society is to make it easier to give
back by donating time and money to causes that improve the health of
our less fortunate citizens. There are some fundraising events physicians
have organized (see list at bottom of page), and I hope this year you will
consider attending at least one of them. There also are several free clinics
that would love to have new volunteers. Please visit the MCMS website to
find more information on where you can volunteer.
Greed or the constant fixation on money is detrimental to mental
and physical health. I think Rev. Dr. Joe Clifford, had it right when
he said, “By being generous, you are constantly reminding yourself
that money is really not that important.”
I read once that a person’s true net worth is what is left over after
subtracting all financial assets from total assets: Your reputation,
family, friends and the knowledge of how you make the world a
better place to live. What is your net worth?
Respectfully yours,
n Physicians Impact Fund Songwriters Concert
at Spirit Square
April 24
n Fighting for Women With Fashion
October (date to be determined)
n March of Dimes Chefs Auction
November 7
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