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Why You Should Never Get Financial Advice From The Doctor’s Lounge
September 2014
“A stockbroker is one who invests other people’s money until it’s all gone.”
— Woody Allen
There are two really bad places to seek financial advice. Church is probably the worst and the doctor’s lounge in a hospital is practically as bad.
Regular churchgoers are bombarded regularly by well meaning losers whose opening line is, “What are you and the wife doing Tuesday night? My wife and I would like to share a wonderful business plan with you. Can we come over at about 7:00?”
The first few times this happened to me I was too polite to ask if he was into the well-known multi-level soap scheme. Tuesday night, the guy and his wife showed up all decked out in formal attire with the little woman wearing a fur coat even though it was summer.
My self-appointed advisor then put up an easel and drew a big circle called “your circle of dreams.” He followed this with a scripted, sincere, high-pressure sales pitch to get me to become one of his downline associates. In other words, from whatever I sold, a percentage of the profit would go to him. Then, when I recruited all my family and friends, a percentage of their profit would come to me. Then voilà, my circle of dreams would be fulfilled.
After about two hours of this, I went to the phone and called my pager number. The beeper sounded. I read my message and announced that I had been called to the hospital for an emergency matrixectomy. I dashed out of the house and told my wife I may be all night.
I parked a block away and when the soap guy and his wife drove off, I went back to my house. The advisor left me a motivational tape, which I had loads of fun editing and re-recording, and recirculating. I wondered if I was committing a sin since this guy was a fellow churchman. When his revised tape began to circulate through the congregation, I hoped God had a sense of humor.
It was not long before these multi-level marketing guys would not come near me but friends would loan me their tapes for revision.
The doctor’s lounge is another place to avoid well-meaning financial advice. Doctors have an inborn belief that it is better to be definitive than it is to be correct. This is what makes us marginal airplane pilots and terrible managers of personal finance. The doctor’s lounge is where most of the damage was done.
All of the financial sectors enjoyed a rapid expansion from 2003 to 2009. The doctors who scored big on the stock market and real estate were quick to advise others to get into the game.
Our doctor’s lounge had two computer workstations for our personal use. A young internist was a day trader on the stock market. He bought into the market at 6:30 in the morning (Pacific time) and sold out completely at 8:00 a.m. During the years of rapid market expansion, he got rich.
The internist hogged one terminal during his trading time. A surgeon who was buying and selling construction equipment hogged the other terminal. He would find a buyer online, locate a seller, then buy the equipment and sell it to the buyer. This worked extremely well unless he got called into surgery and some fool walked in and closed his site. The guy had a real temper. He did retire early to pursue his love of diesel machinery.
When the internist closed out at 8 a.m., an anesthesiologist who was flipping houses took over the workstation. Flipping houses works well in an expanding market. You buy a house with practically nothing down and then refinance when the value goes up. You would then use the equity to buy another house. The anesthesiologist was becoming very wealthy on paper.
In 2009, the bottom fell out of the economy. My wealthy doctor friends were despondent. They realized that their dreams of pulling out on top and retiring at 50 were illusions. The reality of working past the age of 70 was a topic of many conversations in the doctor’s lounge where the workstations had been altered to filter online trading.
I opened my retirement portfolio on one of the workstations just before I retired on the last day of 2008. A young doctor snuck up to have a peek and asked how I grew such a nest egg. I told him to compile all of the advice he got from other doctors on finance and do the opposite.
Dr. McCord retired from practice in 2008 at the Centralia Medical Center in Centralia, Wash.
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