Each week I run into a few articles that I feel are especially valuable. Every Monday I would like to share some of the best with you, my readers. I hope you find them helpful.
This week’s favorites include are private equity firms just another predator introduced into the medical ecosystem, a clever way to get a step up in basis and avoid taxes, in some lawsuits only the lawyers win, do young healthy doctors really need life insurance, and the danger of bloggers using the read about one-teach one, mentality.
There are many changes happening in the business of medicine. Since history repeats itself, I have seen some of these changes before. Dr. Jane Zhu from OHSU, my alma mater, and Dr. Daniel Polsky from Johns Hopkins University penned an article on Private Equity and Physician Medical Practices—Navigating a Changing Ecosystem. It appeared in the New England Journal of Medicine. They discuss the similarities between how private equity is injecting itself into the practice of medicine and the introduction of a new predator into a stable ecosystem. If you knew that private equity was a predator, would you let them move into your neighborhood?
We all want to reduce our tax bill. Unfortunately, our tax system preferentially benefits those who are savvy of the tax rules. If the rules were easy to follow everyone would be getting the benefits, not just those in the know. FI Physician lays out a clever plan to get a step up in basis that you normally would not have which avoids extra taxes. He calls it Gifting Gains. There are several ways he proposes to get these gifting gains, but one interesting option is to gift something with a huge gain to your elderly parents. When they die, you inherit it back at the new step up in basis. Cleaver. FI Physician is on my list of Recommended Flat Fee Financial Advisors if you need some additional help.
People are way too eager to jump on the lawsuit bandwagon. Often someone asks a question on social media about a difficult situation or a contract dispute and many people jump in with “call a lawyer and sue them.” I have found that this is rarely the right answer. The majority of lawsuits are not worth the effort. Too little pay out in exchange for too much of your wellbeing and time. I remember being in a group lawsuit, I was the only member in the group that said we should just forget it and move on as it’s not worth the trouble. Everyone else wanted “justice.” We won the lawsuit. The judge ordered the defendant to pay us $1 in damages. Both sides were out $100k+ in attorney fees fighting over something worth a little more than their attorney fee. Xrayvsn tells the story of A Lawsuit Where Only the Lawyers Win. Have you ever been in a suit that turned out to be a great waste of time for everyone except the attorneys?
When coaching young doctors in my financial makeover program, as we discuss insurance, they often ask if they really need life insurance. Young people feel invincible. Dying is what old people do, so why do I need life insurance? The White Coat Investor addresses this issue with his article, Do Healthy Young Docs Really Need Life Insurance? Many young people die, just fewer than old ones. I have a guest post from a wife whose husband died young and expectantly that can read here. Once you decide to get life insurance you will need to decide how much is enough, here is an article to help you.
There are many new bloggers teaching on topics they don’t fully understand. I frequently read things like the following: “I just went into escrow with my first rental real estate purchase and so I’ve developed a $1,997 course on getting rich in real estate.” “I’ve just decided on my 28th birthday that I want to FIRE by age 35. Get my new book, Quick FIRE.” My Quiet FI calls them out in Young FIRE Bloggers Remind Me of Good Will Hunting. People who have actually retired can see right through the inexperienced “expert.” I see a lot of that with ‘content creators’ who submit “high quality content that your readers will love,” who are asking me to publish their article as a guest post. If I can read between the lines that they don’t have the experience to write about their subject, I can’t publish it on my site. Beware of people teaching on topics they have yet to accomplish, but have read about; or keynote speakers who don’t actually know the topic, but have a big following; or anonymous bloggers when you really don’t know what experience they have. Buyers beware. I remember conversing with an experienced financial blogger about a recent article we both had read. His comment to me was, “his ideas show a lack of experience, but he does have a really big following.”
I hope you enjoy these articles as much as I did. I look forward to updating you again next week with a few more articles I find especially interesting. If you read an especially good article, send me the link so I can share it with others.