Twenty years and counting [Certain Times]

Last month I celebrated my 20th year in practice and my 16th year serving physicians. I also survived a milestone birthday, so I took some time to reflect on the past two decades and plan the impact I want to have on the world in the next twenty years.

I feel fortunate to serve so many good, kind and talented people… physicians with big hearts, strong minds and steady hands, plus a few super-nice non-physician families who found me long before the doctors did. Twenty years ago, I could not have imagined the joy I would have in the work I do. And thankfully, I could not have imagined the effort it takes to build and run a firm like mine.

Today, I serve four dozen families, which might seem like a small number since you see hundreds, maybe even thousands, of patients each year. But for a comprehensive financial advisor, that’s a full complement.

Each family has two or three goals. Each goal subtends somewhere between two and ten accounts. Each account holds up to a dozen positions. And each position has its own unique market behavior and tax characteristics. And that barely scratches the surface, given all the children, insurance policies, estate plans, communication preferences… and the list goes on.

I think that’s why it’s called “personal” finance. It is undeniably personal, and doing it right means taking care of people, one at a time.

While I do manage to keep everything documented and the greater part of it stored somewhere inside my head, I know there is a limit to my own personal reach and I believe I am approaching it.

I remain loyal to the clients who brought me to this point. I want to be certain that the quality of the service my firm renders remains uncompromised by the quantity of families served, so I have decided to hire some help. In the next few months, I hope to bring on someone to lift the administrative burden, freeing me to spend more time with clients.


Asset Class (Proxy)Return*

Foreign Debt (VTIBX)+1.83%

Domestic Debt (VBMFX)+0.14%

Domestic Equity (VTSMX)-0.06%

Foreign Equity (VGTSX)-5.56%

*3-Month Total Return through 9/30/2014

As is often the case, last quarter’s winners were this quarter’s losers. Foreign stocks followed Europe’s decline while foreign bonds gained ground, largely as a result of continued “quantitative easing” by foreign central banks who bought debt securities in order to drive down interest rates. Bonds in the US saw tiny gains as the Federal Reserve continued to discuss discontinuing its bond-buying program. This spooked stock “investors” who sold mildly on fear that the Fed may be getting ready to raise rates... because the economy is improving.

An uber-simple buy-and-hold strategy would have lost about $912 on a hypothetical $100,000 invested equally among all four proxies.

IN THE NEWS Most physicians say a comfortable retirement is their most important financial goal but only six out of ten doctors surveyed in the AMA’s recent Financial Preparedness Report feel like they are on track to reach that goal. The report says that half of physicians are using a financial advisor, and I can’t help but wonder if the “on track” half of respondents are the same physicians who said they are working with an advisor.

Business Insider reminds us that most people are shockingly terrible at investing. Looking back over twenty years of recent results, they find that “the average investor underperformed nearly every asset class” including the 3-month Treasury bill, a common proxy for safe, cash-like investments. The study suggests that timing the market—trying to buy low and sell high—is the culprit, and a fool’s errand.

To keep from making these same mistakes yourself, you should stay in stocks even when the markets are falling. All the news you see is already reflected in the markets, so there's a good chance you will be going the wrong direction at the wrong time if you hop in and out of the action. Remember, your family needs you to focus on long range goals, and it’s pretty tough to reach those goals by stuffing your money under the mattress.

GOOD TO KNOW A Health Savings Account is one of the most powerful tax-saving vehicles physicians can use. The new contribution limits on Health Savings Accounts (HSA’s) will rise to $6,650 for eligible families and $3,350 for individually-covered physicians in 2015 according to the IRS’s recently-released revenue procedure notice.

Tomorrow is the final deadline for getting your taxes done if you filed an extension. With that said, next week is probably the very best week of the year to contact your tax advisor to begin doing your tax planning for the 2014 tax year. Better to get it done now than to get a nasty surprise in April.

Wishing you and your family a fun, safe October.

Disclaimer: This newsletter s for informational purposes only and does not constitute individual advice. Past performance is not a promise of future results. Don't run with scissors.