Six Reasons A Financial Coach May Be Your Best Investment

July 2023 ISSUE By Liam Fitzgerald, CFP® July 1, 2023
Investments General/Other
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By: Liam Fitzgerald, CFP®*

While ChatGPT can provide a wealth of financial information, there are many tasks it can’t perform, as discussed last month. Given the increasingly competitive dental practice environment, constantly changing tax laws, and volatile investment climate, most doctors need professional assistance from an actual human advisor to reach their financial goals. Below are six ways a financial coach can add value and help you reach your financial goals much faster.

  1. Provide customized financial information – We’ve known many doctors who were excellent clinicians, but totally uninformed when it came to their finances. A financial coach can provide a customized education for you and your spouse so you can better understand your personal and practice finances and make better money management decisions.
  2. Promote marital financial harmony – In many cases, the doctor and spouse are stuck in a financial rut due to long simmering problems and can’t get out on their own. The doctor often accuses the spouse of overspending, while the spouse asserts that their finances would be in much better shape if not for the doctor’s bad investment decisions. This stalemate not only stymies the couple’s financial progress, but also promotes increased marital discord.

An effective financial coach can serve as a “lightning rod” to help break the stalemate and move the couple forward in a positive direction. Rather than focusing on each spouse’s prior financial shortcomings, an effective coach can help them develop a mutually agreed-upon, written financial game plan for improvement, including a spending plan and savings budget. It’s amazing how fast marital relations improve once the couple is focused on their goals (financial success) and starts celebrating their ongoing progress together.

  1. Help implement approved changes – While many doctors know and understand what financial changes they need to make, many fail to implement them, stifling their financial progress. A good financial coach can help you implement the changes necessary to jumpstart your financial progress, such as setting up retirement and investment accounts and establishing automatic savings drafts.
  2. Provide accountability – Our advisors schedule follow-up phone/zoom calls to answer client questions, assist in implementation, and monitor progress. What a difference this has made! When doctors know that someone is checking their “financial homework,” they get it done, even if it involves making hard decisions they would’ve otherwise never made. As a result, doctors’ financial progress has dramatically improved, with our clients averaging a 46% increase in their net worth annually!
  3. Avoid huge mistakes – We’ve seen numerous, highly intelligent doctors make huge financial mistakes based on decisions that seemed perfectly logical to them at the time. For example, some have lost hundreds of thousands of dollars by trying to time the stock market, selling on the way down, and missing out on the resulting gains from a later stock market rally. Others decided to bring on an associate for the wrong reasons, increase participation in profit-robbing managed care (PPO) programs, or pay excessive prices for new office space when they were operating below full capacity. Wrong decisions like these can result in huge losses that can take a decade or more of your life to recover from. A financial coach can provide objective analysis and advice to maximize your progress, help keep you on track, and prevent you from making costly financial mistakes, providing real peace of mind.
  4. Make you “eat your vegetables” – An effective financial coach can also help you make sound but unappetizing decisions you’d otherwise have never made. This includes the need to rebalance your investment portfolio on a regular basis following a stock market rally by selling stocks and taking some profits off the table and investing them in bonds, updating your insurance coverages, revising your estate plan, and educating your family about financial matters by implementing a family limited partnership (FLP) or family limited liability company (LLC).

Ask For Help

Many doctors don’t think twice about hiring a personal trainer or golf coach. They know an expert can help them improve in those aspects of their lives. The same applies to your financial situation. Your expertise is in dentistry. Make sure you work with someone who is an expert in personal and practice finances to help you achieve a tremendous financial payoff with less stress.

*For more information on the Tax and Business Planning program, contact 704.424.9780 or connect online.

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