Table Of ContentThe Physician’s Guide to Investing
Second Edition
The Physician’s Guide
to Investing
A Practical Approach to Building Wealth
Second Edition
By
Robert M. Doroghazi, ,
MD FACC
Columbia, MO
RobertM.Doroghazi,MD,FACC
115BinghamRd.
Columbia,MO65203
USA
[email protected]
ISBN978-1-60327-543-9 e-ISBN978-1-60761-134-9
DOI10.1007/978-1-60761-134-9
SpringerDordrechtHeidelbergLondonNewYork
LibraryofCongressControlNumber:2009927126
#HumanaPress,apartofSpringerScienceþBusinessMedia,LLC2005,2009
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providedshouldnotbeinterpretedaspersonalizedorindividualizedtothereadersspecificportfolio
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Dedication
Tomyparentsandgrandparents
whotaughtmethevalueofadollar
andtomysonsJohnandMichael
twofineyoungmen
v
Comments on the first edition of
The Physician’s Guide to Investing:
A Practical Approach to Building Wealth
‘‘You’ve really done a first-class job of telling your fellow
doctors what to do in their financial life. In fact, your book
should be required reading at med schools.’’
Warren E. Buffett, Chairman
Berkshire Hathaway
‘‘This book should be a must read for every young physician
finishing training and beginning a career’’.
George Meyer, M.D.
Practical Gastroenterology
‘‘Dr. Doroghazi is a credentialed physician, a respected
cardiologist, and a gifted writer addressing a crucial issue on
the finances of physicians ...this book should be on the same
shelf with Gray’s Anatomy, Robbins and Cotran’s Pathological
BasisofDisease,andGoodmanandGilman’sThePharmacological
Basis of Therapeutics.’’
Edward T. Creagan, M.D.
Mayo Clinic Proceedings
vii
Foreword
As editorof The American Journal of Cardiology I am sent each
yearanumberofbookstoreview.In2005,BobDoroghazi’sfirst
book The Physician’s Guide to Investing: A Practical Approach
to Building Wealth appeared on my desk. I read the whole 228
pages the first night and was so intrigued that I purchased 5
other copies for friends. I learned that Bob Doroghazi had
workedhiswaythroughbothcollegeandmedicalschoolgrad-
uatingwith high honorsfromeach (PhiBeta Kappaand Alpha
Omega Alpha). His internship and residency was at the
Massachusetts General Hospital in Boston and his cardiology
trainingwasatBarnesHospitalinSt.Louis.Hewasapracticing
cardiologist in Columbia, Missouri, from 1982 until his retire-
ment from medicine in 2005.
His first book was intended for physicians but it should not
have been limited. This new book expands the first one. It tells
us how to obtain our financial goals, how to avoid the pitfalls
preventing this attainment, which specific assets are most
worthy of our investments, and even comments on the impor-
tance of charity. Since 2006, Dr. Doroghazi has produced a
monthly financial letter that I find extremely helpful. His new
book incorporates some of the advice produced in these
monthly letters. Although I found his first book highly useful,
thisnewoneisaltogetheramajorstepabovethefirstone.Iam
glad that Dr. Doroghazi no longer practices cardiology and
that he concentrates now fulltime on helping us all — not just
physicians — achieve our financial goals.
William C. Roberts, MD
Editor in Chief, The American Journal of Cardiology
and
Executive Director, Baylor Heart and Vascular Institute,
Baylor University Medical Center
Dallas, Texas
ix
Introduction
This book is unique. Although directed to physicians (and
other high-income professionals such as dentists, veterinarians,
athletes,artistsandentertainers),itprovidescommonsenseand
practicaladviceyouwillfindnowhereelseandthatIbelievewill
beprofitabletoallinvestors.Itellyouhowtoavoid‘‘TheDoctor
Discount’’ and being ‘‘The Mark’’, how to spot a con man, who
you can and cannot trust, how to choose a piece of recreational
property,whynottoopenarestaurant,andhowtodealwithreal
estate agents andbankerson yourterms rather than theirs.
Onereviewofthefirsteditionsuggestedthesubtitle‘‘Howto
Avoid Making Dumb Mistakes’’ [1]. Quite true, and certainly
very important, but this book is much more than that. I review
general aspects of investing such as the power of thrift, the
magnificence of compound interest, the malevolence of debt,
the concept of risk, how to recognize real opportunities and
when to buy and sell. I also review the topic of financial plan-
ningincludingtheimportanceofpayingoffthemortgageearly,
howtofundyourchildren’seducationandyourretirementand
determine your insurance needs.
This book will not tell you how to get ‘‘rich’’ because that
shouldneverbeyourgoal.Noonecandefinerich,andsomeone
will always have more. But I do provide practical, common
sense advice on how to attain your long-term goal of financial
security,tobeabletoretirewhenyouwishratherthancontinue
toworkbecauseyoumust,andhopefullybeabletoaffordafew
of the finer things of life along the way.
Lack of financial instruction is the greatest deficiency of the
medical establishment in our country, and I believe is indefen-
sible. US medical school graduates, arguably the most compe-
tent,highly-trainedprofessionalsintheworld,finishtrainingin
their 30s burdened with a six-figure debt and utterly defense-
less in the real financial world. This can have a negative effect
on their personal lives and adversely affect patient care.
xi
xii Introduction
This second edition is about a third longer than the first. My
goalistoprovidemoredetailsandinsights,yetkeepthebookof
apracticallengthtobeeasilyreadoveraweekendorlongplane
flight. I suggest your spouse read this book. I have also added
more anecdotes and personal observations in hopes of making
thisbookmoreinterestingthanarun-of-the-millfinancialtome.
I was a successful physician. I graduated with honors and
trained at superior institutions. I am also a successful investor.
Although I certainly made mistakes along the way, I did well
enough in my personal money management to pay my own
way through college and medical school, to own my home,
vacation condominium, recreational property, various art
work and collectibles and all of my personal belongings free
and clear of debt, to fund my children’s education, make sig-
nificant charitable donations and accumulate sufficient assets
that I was able to retire at age 54.
I am ‘‘second-generation American’’, all of my grandparents
emigrated from Hungary between 1900 and 1921. Although I
was born in 1951, I consider myself ‘‘first-generation Depres-
sion’’.Thepainfulresidualofthattimewasever-presentinour
home.‘‘Don’tgointodebtandsaveyourmoneyforarainyday.
We want you to have it better than we did(I do)’’. As this book
goes to press early in 2009, it has clearly started to rain. The
advice I provide in this book and in The Physician Investor
Newsletter (see my website www.thephysicianinvestor.com;
to sign up for a free 4 month subscription) should help keep
you warm and dry.
Robert M. Doroghazi, MD, FACC
Columbia, MO
REFERENCE
1. MeyerG.BookReviews:ThePhysician’sGuidetoInvesting:
A Practical Approach to Building Wealth. Practical Gastro-
enterology 29: 63, 2006.
Acknowledgments
Iwouldliketoacknowledge RichardLansingatSpringerfor
recognizingthepotentialofthisworkandhishelpandsupport
on both editions.
I would like to thank Scott Orr, Advisory Director of Jones-
burg State Bank, Jonesburg, MO, for answering my questions
and providing advice on banking-related issues.
I would also like to thank John John of ReMax-Boone Realty
for answering my questions and providing advice on selected
real estate issues.
xiii
