How to Be Financially Successful Using Medicine

I have been very fortunate to have found a career in Radiology. Out of all the medical specialties, I think my personality and temperament meshes best with Radiology. I get great satisfaction when I can apply a concept or skill used in the realm of medicine (and especially Radiology) and translate it to benefit my financial realm. It is multi-purposing at its finest.

So here are some of the following concepts I have gleaned from being a radiologist/physician and how I apply them in my everyday financial world:

Radiology Concept 1: Seeing the Forest for the Trees

One would think that the closer you looked at an imaging study, such as a chest X-ray, the better you are able to pick out abnormalities.

One would be wrong.

There are many times when I have been staring at a particular study, inches from my nose, and find a lesion suddenly become conspicuous when I backed away from the screen. The lesion was there all along, but because I had narrowly focused on a smaller field of view, it was hidden among the background noise.

By increasing the distance from my eyes to the screen, I broadened my field of view to analyze and take in the bigger picture — seeing the forest for the individual trees. A similar phenomena happens to our pathologist colleagues who routinely have to shift between various powers of magnification under the microscope to truly get a feel for what is on the slide.

Financial Take

It is very easy to become ultra-focused on one part of the investing process and ignore larger concepts that can lead to financial peril.

Those who are Bogleheads have effectively leveraged low-cost index funds (i.e., passive investing) over actively managed funds. I wholeheartedly believe in this philosophy and have the majority of my market holdings in passive index funds, which have a low expense ratio.

So what happens if you become obsessed with reducing investing costs? If a low expense ratio is good, is not a zero expense ratio even better?

Not so fast. 

When Fidelity introduced no-fee index funds, there was a lot of discussion about whether an investor should abandon the Vanguard ship (the first company with low expense ratio index funds) to take advantage of this new offering. Given that the expense ratio was already incredibly low (at the time of creating this post, the expense ratio for Vanguard was 0.04%), some investors were ignoring the forest and only concentrating on the tree.

Trying to minimize the expense ratio even further may actually backfire financially on these unsuspecting investors.

Imagine this scenario. An investor has a taxable brokerage account with a large holding in Vanguard showing significant gains. This is not an unusual situation, given the long bull run we have had. Solely driven to keep expenses low, this investor decides to liquidate the Vanguard shares to "take advantage" of the no-fee Fidelity index funds. By doing so, the investor unintentionally creates a substantial taxable event via capital gains. This would wipe out any potential savings the 0.04% gain would have provided over the long run.

This focuses too much on the trees and not enough on the forest.

Radiology Concept 2: The Train Wreck

"Train wreck" is used in radiology to describe a situation where a particularly large study (typically a CT scan) has every abnormality imaginable.

After an especially grueling day (or in residency, nearing the end of an overnight call), the last thing anyone wants to have to read is a train wreck case. Everywhere your eyes scan, there is a reportable finding.

For me, I am mentally calculating the time it’ll take to analyze this particular study and the length of my dictation report, making me feel disheartened. Sometimes it is difficult to know where to start when faced with the sheer enormity of possible findings.

The best way to approach these cases is to follow the teachings of a popular saying, "How do you eat an elephant? One bite at a time." 

Once I have resolved to start interpreting the case, I make it more digestible by indeed taking it one bite at a time. I turn to the fundamentals ingrained in me from my residency training. I use a personal algorithm and attack each system one by one. Lo and behold, before I know it, I have completed the study and, almost always, it was not as bad as I initially anticipated.

Financial Take

Sometimes we get bogged down in too many minutiae that happens when we over-analyze a potential investment. We can then have what is called "analysis paralysis" and not invest in anything at all in the face of limitless opportunities.

This is precisely what you do NOT want to do.

The main benefit of investing is that you are actually investing. Sitting on the sidelines with cash because you are paralyzed to act will have an overall detrimental effect on your finances — due to the erosive effect that inflation has in regards to purchasing power. What seems like a daunting task with a myriad of options can be broken down into more manageable components.

My advice is to start with an Investing Policy Statement if you are just beginning your financial journey.

Radiology Concept 3: The Scout View

When a patient undergoes a CT, the performing technologist completes a preliminary scan of the patient to localize relevant anatomy for the true dedicated study. The image obtained is called the scout or localizer view. This scout view, often appearing like a low-quality X-ray, is included with the actual images sent to the radiologist for interpretation.

You may think a scout view is not needed when there are hundreds of higher quality images to view.

You would be wrong.

There have been many instances when I have picked up on an unsuspected mass that was included on the scout view but not on the actual CT component. One of my favorite radiology wins was when I picked up a subtle mass next to the heart, which happened to be included on the scout view but not on the abdomen CT images. If I had chosen not to look at this lower quality image, I would have never known that a mass was lurking (and neither would the ordering clinician) until, perhaps, it was too late.

That particular patient then underwent a dedicated chest CT, which confirmed that there was indeed a pulmonary neoplasm.

Financial Take

Do not dismiss a potential source of information that can aid in the decision-making process based on perceived bias.

There is a segment of investors who do not acknowledge any information unless it comes from a financial advisor with a string of initials behind his or her name.

We have been conditioned by society that the more you pay, the better it is. Paying for financial advice, by this line of reasoning, should always be better than information freely obtained on the internet. Gleaning information from a financial blog, for instance, would be beneath these individuals, and they tend to ignore it completely.

I, personally, have made some of the best investment decisions from information I read from blog posts and the very informative discussions that often follow in the comment section.

Radiology Concept 4: The Lawyer Danger Zone

During my residency training, one of my attendings told me to pay particular attention to certain locations in a study, as these were the areas that pathology was known to hide and could be missed if not careful, setting us up for malpractice suits. 

We were always instructed to scrutinize "all four corners of the film" because these areas tend to be omitted in a routine search pattern. Pulmonary nodules hiding in the very last images of the lung bases on a CT scan is a "lawyer danger zone," as he put it.

Reading up on cases of malpractice in your particular specialty may uncover certain trends that can help you identify specialty-specific lawyer danger zones to be aware of in your own practice.

These seemingly innocuous components of a particular study can have drastic financial implications down the road if you choose to ignore them.

Financial Take

In addition to avoiding the financial impact of having a medical malpractice suit on your hand, this concept has emphasized the importance of looking closely in areas that tend to get glossed over.

Most investors are led astray by the seemingly minuscule numbers that firms charge for advising clients. A 1% account under management fee, for example, does not seem to be all that onerous at face value. However, this can lead to tens, if not hundreds, of thousands of dollars in management fees over the lifetime of a portfolio. These fees can be insidious and can rightfully create a financial danger zone that takes away from your financial success.

A lot of concepts that make us great and successful physicians can also be implemented to make us successful in the financial world. The key is to open your mind and embrace these concepts in all aspects of your life.

More from Op-Med