Podcast Episode 6 | Financial Pressures Influencing Physicians

With Dr. Sanjiv Lakhia: Board Certified Physiatrist at Carolina Neurosurgery & Spine Associates

About the WCW Podcast

The White Coat Wellness podcast by Spaugh Dameron Tenny highlights real-life stories from doctors and dentist to encourage and inspire listeners through discussions of professional successes and failures in addition to personal stories and financial wellness advice.

Shane Tenny, CFP® is our podcast host and Partner at SDT. He has lectured numerous times for hospitals and physician groups and, most importantly, helped hundreds of clients develop strategies to navigate through turbulent times toward their financial goals.

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Intro: 00:02 From Spaugh Dameron Tenny, it's White Coat Wellness, a show for doctors who are ready to improve their financial wellness. We know you work hard to help your patients, but you can't be at your best if you don't have your own finances in order. In White Coat Wellness, we highlight real-life stories from physicians and dentists to educate, encourage, and inspire you to personal, professional, and financial wellness.

Intro: 00:25 Now, from Spaugh Dameron Tenny, please welcome your host, Shane Tenny.

Shane Tenny: 00:31 This episode of White Coat Wellness brought to you by CommonBond, simpler, smarter student loans for a brighter future, at commonbond.co.

Shane Tenny: 00:43 So a couple of months ago, I was having lunch with my good friend, today's guest, who I'll introduce to you in a minute, and a topic of financial decision-making came up. And in particular, what we know is that docs and dentists face all kinds of unique pressures when it comes to financial decisions, from the pent-up demand of being in training for over a decade, to the social pressure of being a high income earner. There's unique opportunities with your money, like buying into a practice or a medical building. There's the phenomenon that we'll talk about in a little bit called the bias towards complexity.

Shane Tenny: 01:17 At any rate, I realized that you would be well-served to be part of the conversation that I got to have with my dear friend, today's guest, Dr. Sanjiv Lakhia. Dr. Lakhia is a physician with Carolina Neurosurgery and Spine in Charlotte, North Carolina and is joining us today to talk about making money decisions as a doctor.

Shane Tenny: 01:35 So Sanjiv, thanks for being here.

Sanjiv Lakhia: 01:36 Thanks for having me, Shane.

Shane Tenny: 01:37 Now, when we were together a couple months ago and when I came up with a harebrained idea to do this podcast together, we both got excited about the idea, I think you brought up, of maybe writing a book or doing a talk together about health and wealth for physicians. And I just was wondering if you might start by kind of expounding on what you've seen or experienced in your career that makes you think there's a need for some resources on this topic.

Sanjiv Lakhia: 02:05 Well, I think they're very important topics, not just for physicians, but all the patients that I see on a daily basis. Number one, you cannot function at an optimal level, you cannot have a high quality of life if you don't feel good, if you don't live a healthy lifestyle. And that involves the ability to eat healthy food, make good choices with stress management and with exercise. And sometimes the freedom to make those healthy choices will come from the stability of your financial house. So the two are definitely linked together. And I think making good decisions with what you purchase, trying to minimize your bad debt, can have a profound effect on your ability to feel well and stay healthy, and live a high quality of life with good relationships, and be connected with people.

Shane Tenny: 02:50 And how did those two topics, this health and wealth for physicians, how has that concept kind of trickled down to your profession?

Sanjiv Lakhia: 02:58 Well, it's very essential to consider these. Physicians have limited time, we're extremely busy in the office. And making good decisions and good choices with our time management and with our financial management can create the freedom to maintain a healthy lifestyle, not just physical health, but ... me quite well, Shane, and I'm a big proponent of holistic health and wellness. And creating space to have good emotional health, lower your stress, it's essential. And a lot of that starts with the financial decisions that you make.

Shane Tenny: 03:30 In your life over the last decade-plus as a physician, have you felt the, I don't know, the financial peer pressure that is prevalent within the doctor community?

Sanjiv Lakhia: 03:45 Yeah. It's definitely there to an extent. Some of that is reasonable. I mean, you spend a long time in school, and you defer, defer, defer, and at times, I would see my college friends enter their corporate careers much earlier than I would. And you can get caught up. You can see them going on vacations, and getting houses and new cars. And once you get your first job as a practicing doc and you get your contract and your salary, there's an urge, a tendency, to ramp up your lifestyle real quick, and whether it's a new shiny car, big house, or what have you. So that's definitely there.

Sanjiv Lakhia: 04:22 There's a stigma in society about physicians and wealth, but what you have to learn is, all those things come in good time. And if you surround yourself with the proper team and get your priorities straight, you can accomplish all of that and keep yourself on track with your financial goals, versus making poor decisions early in your career that put unnecessary stress on your financial decision-making.

Shane Tenny: 04:45 What was the transition for you like from residency into practice, in terms of kind of this financial stress or the expectations that you were alluding to?

Sanjiv Lakhia: 04:57 It's challenging. When you're at residency, your sole focus is on learning how to be a good physician, learning how to take care of patients properly. And I was very fortunate. I had terrific teachers and mentors during my residency. But very quickly, once you go into clinical practice, my first position was in Cincinnati, and I joined a large multi-specialty group, and I recall our very first department meeting lasted about two hours. There wasn't a single thing talked about patient care and their entire conversation was focused on business metrics. So it's like you're learning a new language. You go from vital signs of heart rate, blood pressure, temperature, to vital signs of RVUs, collections, charges. And there's a big learning gap.

Sanjiv Lakhia: 05:40 Now, fortunately, I was able to collaborate with you and your team during residency and begin to expand my knowledge with regards to medical economics. So I had a little bit of knowledge going in. But it can be rather abrupt and difficult to swallow as you start to transition into a clinical practice.

Shane Tenny: 06:00 And is there a peer pressure element that surfaces when you're in the doctor's lounge and-

Sanjiv Lakhia: 06:08 Yes.

Shane Tenny: 06:08 ... talking about decisions and choices and things like that?

Sanjiv Lakhia: 06:11 Yes. If physicians are honest with themself, particularly if they're in, what we call a "productivity model," where the more you do, the more you make, yeah, those that are perceived as bringing in more revenue are thought of as the hard workers, and those who maybe are at the bottom of the tier are thought as potentially not as hard workers. So now you're taking financial metrics and you're applying that to a label of someone's integrity and work ethic. And that's challenging. It takes a lot of personal integrity to take your eyes off of that and just continue to focus on doing what's right for the patient.

Shane Tenny: 06:49 So for you, you've got a good money vocabulary and a natural acumen, just from knowing you for these many years. Did you come by that naturally? Was that your own curiosity? Were you taught a lot about money as a child? How do you not feel overwhelmed by this topic?

Sanjiv Lakhia: 07:07 Well, I think I've made a lot of mistakes with money. And making mistakes, that's the best learning experience. So it's somewhat a self-imposed education. And I've been surrounded in my life by people who knew a lot more than me, so I've been able to absorb that. And I just find the topic stimulating and interesting because, for myself personally, establishing freedom in my life to pursue my goals and dreams is very important. And a large part of that is establishing how you manage your money, personally, and within a relationship, and for your family.

Shane Tenny: 07:41 You mentioned you made a lot of mistakes. Is there one that comes to mind that you might be willing to share to help keep one of our listeners out of the ditch?

Sanjiv Lakhia: 07:50 Well, I think the first mistake is to assume that just because I'm a physician, that I know what I'm talking about with money. I see that quite a bit. And I know how to manage spine care, and if I get out of my lane, sometimes I can't see it. So I've made mistakes. And one that comes to mind is real estate investing. It sounds extremely glamorous. It's a a path to financial freedom. Be your own boss. More billionaires are made off of real estate than any other asset class. I've read it all, Rich Dad, Poor Dad, but when you get into the nitty-gritty, it is not a passive income source. There's a lot of work.

Sanjiv Lakhia: 08:28 And for me personally, in my experience with attempting to get into investment real estate, I found it to be overwhelming at times. Take your eye off the ball, and all the details matter. So it didn't fit with my lifestyle and my career demands and personal demands. So I would just caution anyone who's getting into that, it certainly can be done and done well, but it takes a lot of education, a lot of research, and a lot of time and dedication.

Shane Tenny: 08:51 Would you elaborate? Can you tell the story at all, a little bit about one of the-

Sanjiv Lakhia: 08:54 Sure. Yeah. We invested in an office condominium space in Cincinnati, it was a small 1,200 square-foot unit, as a potential play on asset appreciation, and maybe late in the career, a little place to have a private practice when I was in Ohio. And it all started great. We had a tenant on a five-year triple-net lease, which, I mean, that covered the taxes and the rent. And everything is great until the tenant leaves, and then I had a vacancy, and that was right in the middle of the real estate downturn where there was basically tumbleweeds going through the parking lots of these commercial buildings.

Sanjiv Lakhia: 09:30 So you would think having an empty unit was no problem, except I was so busy in my clinical career that some basic things like keeping utilities on and just monitoring things came back to bite me. I think we had the pipes freeze. They busted. It caused a flood. It was a real disaster. Fortunately, I had taken some steps to protect myself. I had insurance in place. But frankly, it did cause some grief for some other tenants, and I really felt bad about it. But it just reminded me that everything takes work and effort if you're going to do it well.

Shane Tenny: 10:01 It makes me think, as you tell the story, I think you used the phrase just kind of "staying in your lane," there's that phrase that, "You just don't know what you don't know."

Sanjiv Lakhia: 10:08 That is correct, yes. That is correct. There was nothing in Robert Kiyosaki's textbooks that emphasized to me that in Cincinnati during the winter, don't forget the pipes freeze.

Shane Tenny: 10:18 Well, I'll tell you what, I know you've got some more to share from the role you play serving in your practice.

Sanjiv Lakhia: 10:24 Sure.

Shane Tenny: 10:25 And I want to hear about that right after this break.

Will Koster: 10:31 I'm Will Koster, and on this episode's White Coat Wisdom, sponsored by CommonBond, we're talking about student loans, specifically paying back your student loans. You worked hard for your degrees. And chances are, you're one of the many physicians or dentists that had to borrow quite a bit to get through school. My question for you is, when is the last time you thought about your repayment strategy? If you're not pursuing public service loan forgiveness or on an income-driven repayment plan, then you should really consider reducing your interest rates through student loan refinancing. In fact, our team at Spaugh Dameron Tenny has partnered with CommonBond to offer our clients discounted rates that you can't find anywhere else, because we know it's an important part of your finances.

Will Koster: 11:13 CommonBond has helped thousands of physicians and dentists save money and get out of debt quicker. The honest truth, in my own experience, is that they offer simply amazing customer service. They also have borrower protections, like up to 24 months of forbearance, just in case you run into any financial difficulties and need to press pause on your monthly payments. Also, if you're still in training but you have your job lined up, you can refinance now and keep payments on hold until you start working. This is a great way to start saving on interest sooner and build some cash before you transition into practice.

Will Koster: 11:47 If you're interested to see if refinancing is the right repayment strategy for you, you can head to cbpartner.co/sdt, or you can reach out to our team at Spaugh Dameron Tenny directly. Again, that link is cbpartner.co/sdt.

Shane Tenny: 12:06 So Sanjiv, you sit on the finance committee with your practice. And in that role, I understand you often get to hear about a wide range of different options that are available to the group, investment opportunities, business dealings, things like that. I'm curious, from that experience, what's the due diligence that your committee brings or that you personally kind of bring to evaluating those sorts of opportunities?

Sanjiv Lakhia: 12:34 Well, you have to be deliberate in your evaluations. There's a lot of investigation in terms of talking to people through your connections. It's always better to find out about an experience through someone you know and trust than to read pro formas, which at times can be slanted or factually incorrect. There's a lot of deliberation internally amongst, do certain opportunities fit our cultural values? And do those opportunities fit your personal values? So the biggest thing that I've learned is not to rush into decision-making with investments.

Shane Tenny: 13:12 Now, you've brought up something that I just have to ask you to elaborate on, and that is the holy grail of investment propositions to doctors groups, which is the pro forma.

Sanjiv Lakhia: 13:25 Sure.

Shane Tenny: 13:26 In your experience, could you explain, how reliable are pro formas?

Sanjiv Lakhia: 13:30 I view pro formas as propaganda.

Shane Tenny: 13:33 First of all, explain, in case there's someone listening who's not familiar with the term, what's a pro forma?

Sanjiv Lakhia: 13:37 A pro forma is basically a projection, a kind of ... It's a created model in terms of what type of revenue, what type of expenses, what type of net return you might be able to obtain at a one, three, five or 10-year mark on a certain type of investment, whether it's a product that's being created or a real estate building. And it's kind of like a best guess, but it's created by the people that are trying to sell you on it. So it's not totally useless, it's just a starting point, but if you accept that totally, without questioning and doing your own due diligence, you're setting yourself up for failure.

Shane Tenny: 14:13 Yeah, I think it's such an important point. When you brought up the word, I hear it so often in the phone calls that I sometimes get from physicians, say, "I just heard about this opportunity. Can I email you the pro forma? I think this could be a great way to diversify," or whatever the case is. And often, it's, "Do you understand this is really just an Excel spreadsheet with numbers somebody made up?" So yeah.

Sanjiv Lakhia: 14:42 That is correct, yeah. That is correct.

Shane Tenny: 14:44 Now, several years ago, Daniel Kahneman wrote a really popular book called Thinking, Fast and Slow, which really helped highlight the growing area of study that is called behavioral finance. And this is really just the study, this behavioral finance is the study of the influence of psychology on the behavior of investors or financial analysts. And it focuses on the fact that investors are not always rational, believe it or not, and have limits to their own self-control, and are influenced by their own biases.

Shane Tenny: 15:19 You mentioned earlier about ... or I mentioned about not knowing what you don't know. There's a variety of things that just go into the decision-makings that we make, that maybe you and your colleagues make on the finance committee, and so there's a number of biases that I think you and I have talked about, that often I read or hear about. And I wondered if you would kind of elaborate a little bit on the overconfidence bias, which I think you've obtusely referred ... or obliquely referred to earlier. And talk a little bit about that tendency that we have to kind of hold a false or misleading assessment of our own skills and abilities.

Sanjiv Lakhia: 15:56 Some of that's natural, especially as physicians, where we've gone through extensive educational training, a tremendous amount of problem solving. I think it's natural to have some confidence in your ability to evaluate, not just medical decisions, but most decisions in life. So that in and of itself is a tendency you have to resist. And that's where I think it really becomes valuable to surround yourself with a good team. And that's friends and family and consultants that you trust, but also that aren't afraid to look you in the eye and question your decision-making.

Sanjiv Lakhia: 16:28 So for me, again, sometimes in life, mistakes are the best lessons. And you have to have the ability to be honest with yourself and learn from your mistakes. But it is. As physicians, we're making hundreds and hundreds of decisions a week. So it almost comes natural for us to be able to look at something that's maybe not medical and be able to break it down, we think, internally, and come to the right conclusion. And oftentimes, we certainly can. I'm not trying to denigrate my own profession. But I do think it is worth our while to bring in other members in our circle to help evaluate, particularly big decisions.

Shane Tenny: 17:02 And that is a nice segue to, I think one of the other biases that has gained increased awareness just through this conversation, or the study of behavioral finance, and that is confirmation bias, where we tend to just seek out information that confirms what we already know. Is there a scenario you can think of where that's been present in your own decision-making through something, or a scenario that you can remember?

Sanjiv Lakhia: 17:26 Oh, sure. I mean, I'll come back to the real estate investment. You get an idea, hear an idea on a podcast, and you go read all the books, and all the books confirm how great the idea is. And then you try and seek mentors who have done it well, and they tell you how great it is. And you don't really learn about the other side of things until there's a problem. So on the one hand, finding people who have like opinions, it makes you feel good, it makes you feel like you're on the right track and that you're kind of in the flow. And then when people come up with conflicting views, you feel a little bit of resistance internally, and you want to kind of move away from that. So it's always easier in life to go with the flow than swim upstream. And that doesn't always lead you to a good place though.

Shane Tenny: 18:05 And what about, if I could ask your opinion on, I think one of the biases that I opened our session with today, which is the bias towards complexity. I'm curious if you might talk about that both in terms of how it affects ... if that shows up in the clinical world as a practicing physician, or where the bias towards complexity shows up in financial decisions.

Sanjiv Lakhia: 18:28 Yeah. As a physician, we are often presented with investment opportunities. And the more complex they are, the more exciting they seem. And you kind of can have this feeling like, "Wow, I'm in this exclusive club," and that only certain people get these offerings. And it does make you feel good. It's a little bit of an injection of adrenaline for your pride. But what I've learned is, sometimes if you just can't understand it and explain it in a simple way, you probably should stay away from it. It's not exciting to get wealthy collecting dividend checks from Walmart stock, but it sure is easy to understand, and you can probably stay out of trouble doing that.

Sanjiv Lakhia: 19:07 So it's just something, again, where you're really talking about, not necessarily your financial knowledge or skill set, a lot of these decisions come down to, how do you manage your emotions? And how do you keep your eyes focused on your goals for yourself and your family? And that tends to keep you more along the path that you're looking for.

Shane Tenny: 19:25 I know we started the conversation and we started our lunch a couple months ago talking about this idea of health and wealth, and doing a book or a podcast-

Sanjiv Lakhia: 19:35 Sure.

Shane Tenny: 19:35 ... which maybe we're now doing. Physician burnout is getting a lot of attention these days, stress, anxiety. I know the clinical pressures are an enormous, or probably the most significant factor in that. But what role do you think personal decision-making, financial decision-making plays in kind of this stress and burnout discussion?

Sanjiv Lakhia: 19:58 It plays a lot. You want to be able to separate the pressures you have financially from your clinical decision-making. And I mentioned this earlier, and fortunately for me, I'm in a group where we are laser-focused on putting patients first. And we have a model that supports that. And I work with terrific partners who value that above everything else. But there are situations where, if your financial house isn't in order, you can feel a little added pressure to see more patients, do more procedures.

Sanjiv Lakhia: 20:30 And that in and of itself, just as a numbers game, can burn you out. Because even though we see hundreds of patients a week, we're still in the need of restorative aspects of our life, of being able to have space for our families, space for our spiritual life, and just space to breathe. So if you have the added stress of trying to sustain a lifestyle that puts a huge financial pressure on yourself, that can really flow over into your career and work life. And that's where the two can become intertwined.

Shane Tenny: 21:04 As we get ready to wrap up, I'm wondering if you could think with me of two different people that might be listening to our podcast. There's undoubtedly somebody here, somebody listening to us, who's early in their career, maybe finishing a fellowship or a residency, or just starting out, and thinking, "Wow, that doc sounds really sharp. He sounds really like he's made a lot of good decisions." What's the tip or the suggestion that you would have for them? And then I'm thinking there's somebody else listening who's thinking, "I wish I'd taken a little dose of Sanjiv's medicine a decade ago. And I don't feel like I've got as much financial wellness in my life as I wish I had." What would be your thought for that?

Sanjiv Lakhia: 21:46 I am really not that sharp when it comes to finances. Again, all I've done in my career is paid attention to the results of decisions, and at least I've had a flexible approach. So I think that's number one is, be willing to be self-critical and accept the criticism of others in your decision-making. And predominantly, if you're in a relationship with your spouse, I think that's super important. I've been blessed to be supported by my wife, Teresa, who's extremely sharp. And she's an accountant, as you know.

Sanjiv Lakhia: 22:15 But I think get involved early. Don't keep your head in the sand. If you're a resident, if you're coming into a new practice, a new career, you can't just focus on your clinical studies, or else you're going to get left behind. And you might get taken advantage of. So subscribe to the journals in medical economics, listen to the podcast, and make the investment early with a financial team. We've been blessed to be supported by Spaugh Dameron Tenny for my entire clinical career.

Sanjiv Lakhia: 22:39 And there's a lot of debate about, is it worth the potential fee, the 1%? And I've read books out there, even from gurus like Tony Robbins, about, that 1% can add up to hundreds of thousand dollars over the course of your life that you're missing out on. But I would make the argument that you could lose just as much, if not more, by making bad decisions. And it's really priceless to have someone by your side who can be a part of your family and your career, and help you stay on track with your financial goals, and make sure they align with your personal goals.

Sanjiv Lakhia: 23:12 So number one, educate yourself. Number two, surround yourself with people smarter than who you are. And number three, be a good listener and be self-critical. And those three things will carry you a long way.

Shane Tenny: 23:22 Couldn't have said it better myself. Thanks, Sanjiv.

Sanjiv Lakhia: 23:25 Thank you.

Shane Tenny: 23:25 Thanks so much for being here today.

Sanjiv Lakhia: 23:26 And I appreciate it. Thank you

Will Koster: 23:31 I'm Will Koster, and on this episode's White Coat Achievements, a segment that highlights noteworthy achievements by your friends and colleagues, we're highlighting a resident who is currently serving on a medical mission trip in Honduras. Dr. Aaron Brandt is a chief orthopedic surgery resident at Atrium Health in Charlotte, North Carolina. He is currently serving alongside our guest from episode three, Dr. Joseph Hsu, at Hospital Escuela in Honduras. To put the work that they're doing in context, our busiest trauma centers in the United States see about seven to 8,000 trauma admissions a year. At Hospital Escuela in Honduras, they see about 15,000 trauma admissions a year. That's almost two times busier than the busiest US trauma center. So you can imagine the impact they make on a medical mission trip is quite profound.

Will Koster: 24:20 Dr. Brandt is serving with the RESTORE team, which stands for Reconstructive Surgery and Transmission of Operative Resources and Education. Dr. Brandt is the second resident civilian to have the opportunity to travel to Honduras through this program and learn from the local surgeons there. Spaugh Dameron Tenny is thrilled to support Dr. Brandt on his medical mission trip and to be a small part of the impact these surgeons have on the Honduran community.

Will Koster: 24:46 Upon completion of residency, Dr. Brandt is pursuing a pediatric orthopedic fellowship at the University of Colorado in Denver. If you'd like to learn more about the RESTORE effort or Spaugh Dameron Tenny's Go to Grow Scholarship, you'll find the links in the show notes.

Will Koster: 25:01 As always, if you know someone who is wearing a white coat and is achieving something noteworthy, please drop us a line. We'd love to hear about it, and might even feature them on a future episode. But again, this episode's White Coat Achievement goes to Dr. Aaron Brandt.

Shane Tenny: 25:18 Thanks so much for listening to this episode of White Coat Wellness. You can stay in touch with other colleagues, dentists, and physicians interested in financial wellness through our White Coat Wellness Facebook group. You can also follow me on Twitter. You can email me with any ideas, suggestions for future episodes at shane@whitecoatwell.com. All the information is down in the show notes below. Thanks so much. We'll see you here next time.

Outro: 25:45 This episode of White Coat Wellness is over, but you're not alone on your journey toward financial wellness. Spaugh Dameron Tenny has been helping physicians and dentists with their financial planning for over 60 years, and we'd love to answer any questions that would be of help to you. Visit sdtplanning.com today and take your financial wellness to new levels. Once again, that's sdtplanning.com. And we'll see you on the next episode of White Coat Wellness.