How to climb your own mountain [Certain Times]

When I was a college kid, I spent time climbing Enchanted Rock, an exfoliated granite pluton that juts from the ground about a hundred miles southeast of the Texas A&M campus. So when Tommy Caldwell and Kevin Jorgeson reached the top of El Capitan last week using nothing but their bare hands, I was awestruck.

The Dawn Wall—the “crux” or the hard part of the climb—is about 2,000 feet off the ground. It’s one of the steepest, tallest, blankest sections of what has been called “America’s biggest rock”.

This 3,000 foot monolith reminds me of the epic climb that you and every other physician must make: the long slog up Mount Retirement.

For most physicians, Mount Retirement is about $5 million “tall”. And when you see it mapped out for the first time, it’s scary.

After all, Mount Retirement is riddled with difficult tax moves, exposed to unpredictable economic storms, and occasioned by stock market landslides that obliterate impatient investors. And we have all heard stories of physicians who have taken the fall.

If you’re a young physician starting out at sea level (or worse, one starting “under water” with a small mountain of debt to climb first), it may seem impossible.

But I assure you, it is totally do-able.

In fact, the first step on your approach to the summit is so simple… so easy… that you may overlook it altogether.

So what is your first step?

Is it “getting organized”?

Is it reading some books?

Is it asking your colleagues how they are doing it?

Sure, all of that is part of getting started. But none of that is the key to beginning.

So what is it?

With any worthwhile goal, whether it’s climbing El Capitan or scaling Mount Retirement, the first step is always the same. You must make a commitment to get started.

After that, it’s just a matter of figuring out what to do… and doing it.


Asset Class (Proxy) Return*
Domestic Equity (VTSMX) 5.21%
Foreign Debt (VTIBX) 2.49%
Domestic Debt (VBMFX) 1.69%
Foreign Equity (VGTSX) -4.18%

*3-Month Total Return through 12/31/2014

The fourth quarter of 2014 looked a lot like the rest of the year. US equities continued their climb, bolstered by a strengthening labor market and lower energy prices. Foreign markets continued to lose ground as Europe remains mired in recession while growth slowed in the emerging markets, even as the rising US dollar put a dent in their returns for US-based investors. Bonds overseas responded well to declining interest rates, while rates here in the US also declined slightly, pushing up prices on US bonds.

The big story in 2014 was plunging commodities prices, and oil prices in particular. West Texas Intermediate Crude, a widely-watched benchmark for oil prices, fell more than 45% last year, and hovers now at around $45 per barrel. The decline in commodities prices had an adverse impact on major emerging markets like Russia, Brazil and Mexico, which make up a substantial chunk of the average emerging market stock fund.

A simplistic buy-and-hold strategy would have garnered a $1,300 return on a hypothetical $100,000 invested equally among all four proxies during the quarter, and would have gained about $5,700 for the year.

IN THE NEWS In “The Folklore of Finance: Beliefs That Contribute to Investors’ Failure”, the NY Times carried a nice article that summarizes a new study on dangerous investor beliefs, finding that the way individual and “professional” investors make investment decisions can be so skewed that achieving both high returns and long-term objectives is nearly impossible.

The Wall Street Journal ran an article about how index funds and other passively managed funds trounced the actively-managed funds that are captained by “expert” stockpickers but I didn’t include a link here since (a) the article sits behind their pay wall and (b) this “news” is so well known by now it’s scarcely worth a click.

GOOD TO KNOW Now is a good time to update the choices you make in your retirement accounts. In fact, the IRS released some new contribution limits you need to know about. The new Health Savings Account limit is $6,650 for those with family plans (and $7,650 for physicians 55 and older). The new limit on 401k and 403b contributions rose to $18,.000 ($24,000 for those aged 50 and older).

the limit did not change for IRA contributions. It remains at $5,500 ($6,500 for physicians aged 50 and older).

Remember, if you are GOING to turn 50 this year, you can bump up your contributions NOW. You don’t have to wait until you actually turn 50.

Finally, you need to know that most retirement plans will not automatically increase your savings from year to year. You must notify your 401k plan or your benefits administrator in order to make the change.

Wishing you and your family my best.

W. Ben Utley CFP® Physician Family Financial Advisors Inc. Call: 541-463-0899 Be certain.™

PS: If El Capitan were $5 million tall instead of 3000 feet tall, every inch of the rock face could be valued at $138.89. When you are ready to take that first step toward your goal, contact me to get started.