As a doctor, my first “oh shit” moment related to the COVID-19 pandemic should have happened upon seeing or hearing news related to deaths, crowded hospitals, or transmission rates.
I have a confession. My COVID “oh shit” moment was about finances. It happened on March 16th. The S&P 500 made yet another plunge after having already dropped by more than 15% in the prior weeks as a result of economic turmoil associated with the pandemic. A quick look at my Mint account verified that my net worth was suddenly far less than it was a few days prior.
Because I tend to catastrophize, I began envisioning highly unlikely scenarios, such as:
- The stock market continuing to plummet all the way to zero
- Having to work until the age of 85 or 90
My thoughts progressed to how I could decrease my household expenses, whether I should update my resume, and so on.
Less than three months later, I received a copy of The Doctors Guide to Navigating a Financial Crisis, by Dr. Cory S. Fawcett. The timing was excellent. Though I’m thankful to not be personally experiencing a financial crisis right now, I certainly have been worrying about it. Excessive worry and anxiety can sometimes be caused by a lack of knowledge, so I dug right into this book.
Here are some takeaways, highlights, and musings. The book is available on Amazon and you can read more about Dr. Fawcett and the other books in his Doctors Guide series on his site, Financial Success MD.
Learn how to navigate a financial crisis before you’re experiencing a financial crisis
It struck me that there are likely two buckets of readers for this book:
- Those who are in the midst of a financial crisis, and
- Those who are not.
As I mentioned above, I’m fortunate to be in the second bucket. I’m also glad that I got this book in my hands while in the second bucket, rather than the first.
When Dr. Fawcett says “financial crisis,” he truly means crisis. This book is not about a dramatized “crisis” like having to take a small pay cut when moving to a different city or having to swap out your $200/mo CrossFit membership for a $10/mo Planet Fitness membership so you can make your student loan payments. No, this book is about a true financial crisis.
Dr. Fawcett delves into how to effectively use up your emergency fund, tap into retirement accounts, and file for bankruptcy. These are the things that make financially-stable doctors tremble.
I would hate to be reading this book for the first time while in a situation in which I needed to follow through with some of these actions. For readers who, like myself, are not in crisis, here is my recommended approach to getting the most from this book:
- Don’t wait until you’re in a true crisis to buy it.
- Read through it once now, and then stash it away.
- If you do encounter financial struggles, you’ll already be familiar with the steps you need to take. Pull the book back out and re-read the relevant sections in more depth
I hope you never need to pull the book back out. However, if you do, having already familiarized yourself with how to navigate a financial crisis will help you respond to it more quickly and successfully.
Doctors have a major advantage when our finances are stretched thin
This book covers what I’d call “last resort” options for doctors in a financial bind. These include selling personal belongings (eg, collectibles, jewelry), asking family members for a loan, and earning money through work that is completely unrelated to medicine (eg, driving for Uber, becoming a handyman).
If you’ve spent much time reading through my other blog posts, you know that I’m a huge proponent of using your skills and knowledge as a doctor in creative and unconventional ways.
When you lose your job or your medical practice flops, you have an array of options that pay well, offer benefits, utilize your hard-earned degree, and help you advance your career. It’s a rare situation in which any doctor should have to rummage through her closet for stuff to sell on Ebay or mow the neighbor’s lawn for some extra cash.
I’m not saying that such a situation never happens; however, any physician considering these drastic responses to a financial crisis should take a second (or third or fourth) close look at his or her medical and scientific skills and search for relevant jobs or consulting work.
Doctors are at an advantage when it comes to finding work. Our skills are in demand and employers are typically willing to compensate well for our expertise. Moreover, our work doesn’t have to involve caring for patients or even be in a hospital or a clinic. We can offer value in many different industries whose products and services impact healthcare delivery.
Dr. Fawcett touches on this in his book, and it seems his views resonate with my own. In fact, another book in his series – Smart Career Alternatives and Retirement – covers the topic of unconventional careers for physicians. In fact, that book and my new book, 50 Nonclinical Careers for Physicians, are currently listed as “Frequently bought together” on Amazon.
Key takeaways from Navigating a Financial Crisis
Here are my key takeaways from this book. I expect that most other doctors who are reading the book proactively (ie, not currently navigating a financial crisis in their own lives) will have similar takeaways.
On ounce of prevention…
I’m a preventive medicine specialist, so I live and breathe prevention as a means to good health in the long-term. But I also believe that is holds true for a doctor’s financial situation. I feel even more strongly about this after reading Dr. Fawcett’s book. We can mitigate (or even avoid) a financial crisis by educating ourselves about personal finance principles, by learning how to respond to a financial crisis before we actually face one, and by taking timely and deliberate action when crisis sets in.
Ignoring the initial signs of a financial crisis or being in denial about a crisis will only make things worse and make it more difficult to reach financial stability again.
Be aggressive at creating income
“Be aggressive at creating income” is the title of one of the book chapters. I couldn’t agree more with this advice. It’s something I recommend frequently here on Look for Zebras, though usually in the context of pursuing financial independence. It’s important to remember that this mindset isn’t only appropriate when vying for FI, it’s also necessary when finances are tight.
A financial setback isn’t an excuse to say we’ve been unlucky. It’s an opportunity to get aggressive in how we market ourselves and revive our bank accounts.
Anxiety is worsened by the wrong perspective and a lack of knowledge
For me, a large part of the anxiety caused by my “oh shit” moment when the stock market dropped several months ago was due to not putting things into perspective and lacking the necessary knowledge about what I’d actually do if disaster struck my financial situation. The personal stories and examples in Dr. Fawcett’s book are helpful to understand how the book’s advice comes into play in real-life situations.
So, regardless of where your finances stand at the moment, I recommend learning how to effectively navigate a financial crisis now.