The Physician's Cash Flow Manifesto: Master Your Monthly Cash Flow to Create Life-Changing Wealth

By Josh B. Skibba

Turbocharge your paycheck to build wealth month after month!

When I completed my medical training, I found myself in a situation familiar to many recent graduates-armed with a medical degree yet weighed down by six-figure medical school debt. In other words, I was broke!

• Language: English
• Publisher: Simple Doc Finance Press
• Release date: Jan 30, 2024
• ISBN: 9798218365479

Book preview

The Physician's Cash Flow Manifesto

Josh B. Skibba MD, AAMS

THE PHYSICIAN’S CASH FLOW MANIFESTO

Copyright © 2024 by Josh B. Skibba

All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law.

This book is a work of nonfiction. The author has made every effort to ensure the accuracy of the information herein. However, the author and publisher assume no responsibility for errors, omissions, or damages caused by the use of the information contained herein. Nothing within this book should be construed as financial advice. The author is not a professional or licensed financial advisor, tax advisor, or investment consultant. The information provided is based on personal experience and should not replace the expert guidance of financial professionals. This book is for informational purposes only.

Ebook ISBN: 979-8-218-36547-9

Paperback ISBN: 979-8-218-35998-0

Printed in the United States

Published by Simple Doc Finance Press

Cover images: iStock/NosUA, iStock/alexsl, iStock/blnlk

For questions, contact: [e-mail]

Contents

Dedication

Preface

Introduction

1.Getting Off the Starting Line

2.You are the CEO!

3.Rising Out of a Great Crash

4.Accounting 101 for Physicians

5.Keeping Score

6.Growing Your Balance Sheet

7.Networking

8.Paying This Month’s Bills with Last Month’s Dollars

9.Guess what? You are also the CFO!

10.Debt Freedom, One Step at a Time

11.Eventually, It Always Rains

12.A Few Closing Thoughts

About the Author

Dedication

This book is for my parents,

whom I deeply admire for what they have been able to accomplish together

and whom I hold in great love and affection.

Thank you.

Preface

Lots of people struggle to manage their finances. In fact, most people face difficulties with money, and physicians are no exception. My journey to becoming a cardiologist spanned sixteen years of rigorous medical education. Surprisingly, throughout all that training, I never received a single introductory class in personal finance. When I finally finished training and signed my first employment contract, I was well prepared to treat a heart attack but poorly equipped to manage an impending surge in monthly income. I made quite a few financial missteps right out of the gate, though fortunately, none of them proved to be catastrophic. Regrettably, my experience is far from unique, as most physicians receive no formal education in financial literacy.

The principles outlined in this book apply to a broad audience. My sincere intent, however, was to create a resource specifically tailored to help medical students and early-career physicians avoid common financial pitfalls relating to their day-to-day finances. I wanted to emphasize the notion that mastery of personal finance begins with absolute control over one’s monthly cash flow.

With that objective in mind, I aspired to offer a comprehensive, step-by-step blueprint that enables physicians to retain more of their hard-earned income, directing it toward future investments and wealth building.

Recognizing the demanding nature of the medical profession, I knew this book and its strategies needed to be user-friendly, requiring minimal time commitment. It’s imperative that the information is accessible without adding to the burdens of those already immersed in demanding careers.

This book was born from a deep interest in personal finance and began as a labor of love in March 2020. The COVID-19 pandemic disrupted nearly all non-emergent medical services. Strangely, against the backdrop of a global health crisis, many physicians found themselves with idle time on their hands. It was then that I decided to try something new: writing a book.

Having refined the financial strategies within this book for more than a decade and experiencing personal success with them, I wanted to share this knowledge with others. This endeavor, however, proved to be more challenging than I had initially anticipated. It took me nearly four years to complete this book, working as I found pockets of free time. Transforming my thoughts and insights from concepts in my head into written words on a computer was hard. Indeed, the true test of one’s expertise in a subject is his or her capacity to effectively impart that knowledge to someone else.

I hope the reader discovers that I've created a valuable resource to aid them on their financial journey.

Introduction

Many Americans experience stress related to their money. A study from 2018 found that 53 percent of Americans experience anxiety when thinking about their finances, and 44 percent reported palpitations when discussing their finances. ¹ Unfortunately, the anxiety and racing heartbeats are frequently warranted. The same study also found that 19 percent of mortgages had been delinquent during the prior year, 42 percent of student loans had been delinquent, and 23 percent of Americans had past-due medical bills. A third of respondents reported they could not immediately raise $2,000 to cover unexpected expenses.

Doctors are not necessarily an exception to those study findings. The idea that all physicians are wealthy is a misconception. In reality, many physicians face the same financial struggles as the rest of the general population. MD does not stand for Millionaire Doctor. In fact, according to a Medscape survey from 2019, most physicians under the age of fifty are not millionaires. ² The same is true for about a quarter of all physicians over sixty. That is not entirely unexpected. Most physicians overcome significant financial hurdles to accumulate wealth. A medical degree garners tremendous earning potential, but most physicians will graduate medical school with a substantial six-figure burden of student loan debt. According to the Association of American Medical Colleges, the median medical school debt per graduate in 2021 was $200,000. ³ That didn’t even include any prior debt from undergraduate education.

Most physicians begin their careers working long, demanding hours serving as resident plebs. The work is rewarding, but the pay is meager. Despite starting from a relatively humble financial position, many young physicians naturally aspire to indulge in luxury items akin to their successful peers in different fields—luxury automobiles, lavish vacations, designer clothes, and even expensive watches. After all, they have also worked hard and deserve those rewards, too, right? I venture to say that society even expects physicians to exude a certain appearance of financial success.

Furthermore, many young physicians have reached an age where they sense a readiness to settle down, buy a house, and start building a family. With their steady income and a willingness to borrow, they are appealing prospects for banks. Regrettably, it doesn’t take long before many young physicians find themselves obligated to bill collectors. It happens slowly at first and then suddenly snowballs. Their desire to serve humanity through their medical profession quickly becomes a financial obligation.

A survey of physicians in 2018 found that over 50 percent suffered from depression or burnout, with job-related stress as the leading cause. ⁴ Financial stress was a close second. Financial stress negatively affects our mental and physical well-being. Sadly, physicians have the highest rate of suicide of any profession. ⁵ One physician dies by suicide daily, and 22 percent of physicians know a colleague who has committed suicide. ⁶

Money shouldn’t be a matter of life and death. Money should provide security, not stress. It should enhance our lives, not take them. Physicians shoulder immense responsibility. People’s lives are at stake. Healthcare is inherently stressful, but financial stress related to money is avoidable.

A scene in the movie The Gambler brilliantly depicts how money creates additional stress or security depending on one’s decisions. ⁷ The protagonist, Jim Bennett, played by Mark Wahlberg, is a professional gambler who quickly needs a bankroll from a loan shark named Frank, played by John Goodman. Jim admits he was up two and a half million dollars but lost it all. Frank could not believe the stupidity.

He moans, Any asshole would have known what to do with that kind of money. You buy a house and a reliable car, don’t drink too much, and put the rest into solid investments. That’s your fucking fortress of solitude. From there, you can live life on your terms!

Frank is right on the money. Jim should be standing on solid financial footing worth 2.5 million dollars. Instead, he sells his soul to loan sharks and has a reckless gambling addiction.

Like Jim, most physicians eventually face a similar financial fork in the road. A highly compensated physician may increase his or her salary ten times upon completion of post-graduate training. Many will sign multi-year contracts worth seven figures. That is a tremendous financial opportunity. Unfortunately, medical schools fail to teach financial literacy. I sincerely hope this book can, in a small way, help solve that problem. Although the strategies outlined within this book can work for anyone, it aims to help young physicians at the beginning of their careers. I want to help them avoid the same mistakes Jim made and some that I have made.

I have been practicing medicine long enough to recognize that most physicians will eventually reach a time when they seek to reduce or even retire from their medical practice. When such a day comes, and physicians have not been diligent savers and investors, their lack of financial foresight haunts them. But that is not something we have to worry about. This book provides all the required tools and building blocks to build a solid financial fortress.

I want to measure the success of this book by one metric. I hope it helps readers find at least $1,000 extra monthly from their current salary to invest toward their future. Consider it like awarding yourself an instant raise. Over twenty-five years, an additional $1,000 per month could conceivably compound to an extra $1,000,000! ⁸ However, this book is not about investing, per se. There are no investment tips. You will not learn how to pick stocks. This book is about cash flow! This book teaches the crucial skills required to manage each hard-earned, wealth-building dollar. While it may not seem exciting and glamorous, generating