I get asked the ETF question often from newly practicing doctors.
When I’m building a plan with a client, one of the things I really appreciate is when they stop and ask me a question that’s been bugging them. Recently, one of my clients who is setting up her practice asked me just such a question. We were having coffee in an excellent local coffee shop.
“Adrian, what do you really think about ETFs? I see them being talked about in the Facebook group for doctors, and I’m curious what your thoughts are on them?” Sarah asked.
I could almost see the slight tension in her shoulders. She was bracing herself, expecting me to launch into a full-blown defense of managed investments, to explain why her DIY strategy is a misguided venture, and why she should stick strictly to what “we” do here.
But I always surprise my newly practicing doctors with this response.
I took a sip of my coffee.
“Sarah, that’s a great question. In fact, it’s one of the most common ones I’m asked. And my answer usually catches people off guard: I’m not in competition with ETFs. Actually, I like them.”
Her eyebrows went up, a hint of genuine surprise.
“Really? I didn’t expect that! Why, if you don’t mind me asking? Don’t you do investments?”
“Absolutely, and we’ve got a long track record of fantastic results and I can connect you with many of my clients who are happy to share their experiences over the years.
As your advisor, there are three things ultimately I’m responsible for and that I keep your plan focused on: creation, implementation, and maintenance of your plan to how your life unfolds.
My role isn’t about trying to convince you one is better than the other; it’s about creating a plan we agree will tackle your four key elements: save it, spend it, pay it down and protect it.”
She nodded, interested to hear where this was going!
Pay it down.
“First, we figure out ‘Pay it down.’ This is how much of your income we want to direct toward your debt repayment strategies that balance freeing up cash flow and saving interest against the taxes to pay to do so.”
Spend it.
This is the fun one! We make sure you have enough income allocated to actually enjoy the life you want to live right now balanced against your future goals to enjoy then as well. Seriously, what’s the point of all your hard work if you’re not living a fulfilling, enjoyable life along the way?”
Protect it.
“We determine how much you need to set aside for insurance and other critical safeguards. This is about protecting you, your family, and everything you’ve worked so hard to build against the unexpected twists and turns life can throw your way.”
Save it.
“This is where we allocate what’s needed toward your short, medium and long-term savings goals from your income that’s not yet been allocated.”
Sarah nodded more, absorbing it all. Then came the key question.
She asked,
“Okay, I follow all of that. But where do the ETFs come in then? Is that something you just… don’t do?”
I smiled.
“For my doctors, those four key elements to their success rarely require all of their income, leaving them a fair amount of income they can direct however they wish. This is where I encourage my clients to invest how they want, and I tell them I hope they’ll kick my butt in their returns!” I said.
That startled her. “You want my returns to beat your returns?”
I laughed. “Of course! I genuinely hope your ETF investments beat mine, Sarah. Why on Earth wouldn’t I want you to do extremely well and grow your wealth in every way possible? I’m here to help you succeed, and that includes celebrating your wins!”
I want your money to follow your planning,
and not the other way around with your planning REACTING to your money.
“But here’s the thing. You’ve now got the best of both worlds. If your additional investments do really well, that just accelerates your planning. But with the investments you have with me, we’ve got your back from the shocks of the market.
I can ensure your planning remains solid through whatever comes in the future which is my primary responsibility to you – the maintenance of your planning. I want your money to follow your planning, and not the other way around with your planning REACTING to your money.”
Sarah sighed with relief and then grinned! She could have a solid plan that’s professionally maintained covering all her bases, AND still do some investments she’d heard about from her colleagues. Definitely the best of both worlds!
We continued to finish her planning, creating a rock solid foundation to her financial success. She won’t have to change her retirement date, panic-sell, or stress sleepless nights.
See? It always pays to ask whatever financial question is on your mind. Especially over great coffee!
I Help You Find The Balance Between Your Head And Your Heart
My clients have often heard me say there’s rarely an all-right or all-wrong decision in financial planning. It’s about finding their own unique balance between their head and their heart. Creating and funding a resilient plan ensures their future is protected, while giving them the freedom to do other things on their own terms.
The key, as always, is creating, implementing and maintaining your individual plan that focuses on finding your balance across the four key elements of save it, spend it, pay it down or protect it.
Enjoyed this article? I’d love to hear from you! I’m always interested in hearing about the unique financial situations doctors have. Send me a note! And please check out my newest book, Retire-ish: What Doctors Need To Know Before They (Sort Of) Retire
