Why is Stealth Wealth Particularly Relevant for Physicians?
By virtue of their education, vocation, and income potential, MDs often find themselves in the spotlight more so than other professionals. Society tends to have certain expectations of them, assuming they will lead a lavish lifestyle commensurate with a ‘work hard, play hard’ mentality. However, there are several reasons why stealth wealth is especially applicable for physicians:
1. Protecting privacy: MDs deal with sensitive patient information daily and maintaining a lower public profile can help protect their privacy and potential security risks.
2. Managing expectations: Public perception of doctors includes substantial wealth, which can lead to pressure to overspend or overcommit financially. Even early in their career, many MDs are approached by family, friends, and others with requests for gifts or loans like they are a bank.
3. Reducing stress: In keeping with goals of wellness, living below your means, and avoiding the stress of excessive debt can lead to better mental and emotional well-being.
4. Preparing for the future: Physicians can have unique financial needs, including managing large student loans and lack of a pension or benefits. Stealth wealth can help manage these goals.
How to Implement Stealth Wealth?
1. Live below your means: After many years of deprivation during medical school and residency, you need to resist the temptation to over-inflate your lifestyle after becoming a staff physician. Prioritize saving and investing for your future over frequent indulgences.
2. Automate your savings: Set up automatic transfers to your savings and investment accounts. This ensure that you consistently allocate part of your income towards wealth building without having to think about it.
3. Limit debt: Strive to minimize then eliminate high-interest debts, especially credit cards. Living with less financial baggage reduces stress and frees up resources for saving.
4. Diversify investments: Having multiple asset classes like stocks, bonds, real estate and GICs reduces risk and ultimately enhances long-term growth.
5. Avoid impulse purchases: Take the time to thoroughly evaluate big ticket items like vehicles. For day-to-day splurges, sometimes just leaving it in the online shopping cart overnight will make the desire to finalize the purchase disappear.
6. Prioritize financial education: Keep yourself informed about investment strategies and tax optimization. There are useful physician financial planning groups on social media like Facebook. Seek professional advice from a professional financial advisor who understands the unique needs of you and your family.
7. Privacy and security: Speaking of social media, be careful about what you share on it. Protect your personal information to safeguard against potential threats. Consider discreetly supporting charitable causes anonymously.
8. Estate planning: Protect your wealth for future generations by consulting an estate planning attorney. Teach kids financial literacy to maintain your legacy.
9. Downplay materialism: Research shows that lasting happiness comes more from experiences and personal growth than the accumulation of trinkets1. Shift your perspective from “what you have” to “who you are”.
Stealth wealth is not about hiding your success but about finding a balance between enjoying the rewards of your hard work and maintaining financial security and privacy. With this concept, you can find peace of mind and financial freedom without succumbing to the pressures of maintaining appearances.
Author: Dr. Krishna Sharma, Chief Medical Officer, Specialty Medical Partners
References:
1. A wonderful life: experiential consumption and the pursuit of happiness. Gilovich T, et al. Journal of Consumer Psychology 2015; 25(1): 152-165.
