Fight Burnout with Both Saving and Spending – The White Coat Investor – Investing & Personal Finance for Doctors

July 4, 2020 Cesar Skaff

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The White Coat Investor Network [Editor’s Note: Today’s WCI Network post is from Physician on FIRE and is an important topic made even more acute in the current COVID-19 state of medicine. You’ve got to love it when the guy who encourages you to have a savings rate of 50%+ tells you to go spend some money!]

Career burnout is becoming increasingly common and is a hot topic lately, particularly for physicians and other healthcare workers.

The causes are many. Increased demands. Decreased reimbursement and recognition. Longer hours and lower benefits. The feeling that you’re just another wheel in the cog.

In medicine, it’s the ever-thickening red tape. Clumsy electronic health records (EHRs). Prior authorizations. In-baskets that fill up with dozens or hundreds of messages any time you’re away for more than a few days. The corporatization of medicine.

While numerous strategies are being employed by both employers and employees to fight burnout, I don’t hear many strategies involving personal finance. I believe there is a role for prodigious saving and targeted spending to help keep burnout at bay. While these two strategies may appear to be at odds with one another, let’s examine how saving and spending can both play a role in decreasing burnout.

Fight Burnout with Both Saving and Spending

Efforts to combat burnout don’t seem to be stemming the tide. I welcome the existence of Chief Wellness Officers, resiliency programs, and the like, but I have yet to see significant progress in the burnout data.

It may be that we’re more willing to admit we’re feeling burned out when we know about half of our colleagues have reported feeling that way. Studies and surveys on burnout vary in how burnout is defined, but most that I’ve come across show increasing rates that approach or exceed 50%.

A 2015 Mayo Clinic study found that 54% of physicians showed at least one symptom of burnout, a rate nearly double that of the 28% rate from 2011. More recently, the 2018 Medscape Burnout & Depression Report reported a 42% burnout rate among physicians, a decrease from the 51% rate found in 2017, but it’s hard to draw any firm conclusions from a voluntary survey as much as I’d like to hope the recent focus on burnout is having a positive impact.

Interestingly, the Mayo study reported that men and women were happy outside of work at a rate of 69% and 67% respectively, while only 45% of men and 39% of women report being happy at work. I’ve said many times that my interest in early retirement is not due to hating my job. I often like it, but I’ve always preferred my days off.

Clearly, I am not alone in my assessment. Most physicians, and I would bet most people, are happier spending their time as they please away from their job than they are while on the clock.

Burnout prevention can and should begin at the highest levels. Many of our frustrations stem from regulatory burdens put in place by certifying bodies, insurance companies, and governmental programs. Our hospitals, clinics, and health systems often create additional systems that only increase the demands on our time and patience.

Removing some of the barriers to effective patient care and restoring some physician autonomy could go a long way towards reducing burnout.

On an individual level, efforts are primarily focused on maintaining or improving both our physical and mental health. Many programs focus on improving physician resilience, which is pretty comical when you consider how resilient one must be to make it through the rigors of medical school education and the multi-year gauntlet that is residency.

These efforts are laudable, but we should also consider how our finances play a role in career burnout.

How Saving Money Can Reduce Burnout

It’s faint, but it’s there. Far, far in the distance is a sliver of light. It’s the light at the end of a long, dark tunnel. The tunnel walls are built of student loan debt, societal expectations, peer pressure to look rich, and even our own desires.

At the end of the tunnel is financial independence and a bright, sunny sky. On your way, you vanquish the student loan debt and the walls start to crumble. Some light shines in and you can better see things for what they are.

Those societal expectations to look the part of a successful professional were based more upon what you imagined would be expected of you. It turns out no one’s keeping score nearly as closely as you. Other people are too focused on themselves and what they think other people think of them to actually pay much attention to you.

The peer pressure you felt to have the grandest home or the most opulent vacations starts to wane as you realize those that chase those items aren’t seeing any light at the end of their tunnel. They’re making little progress on the debts that are holding them back, and in some cases, they’re only adding to them.

As you defeat your debts and grow your net worth and passive income streams, you can see that you have career options. If burnout creeps its way into your life, you are not stuck doing what you’re doing indefinitely.

On firm financial footing, you can afford to drop the parts of your job you don’t enjoy or find a new job altogether. You may be able to work the same job at a slower pace. You may appreciate the job more when you’re not putting in 60+ hours a week 48 weeks a year.

What would having every Friday off do for the burnout you’re experiencing? Could you stop taking call or working night shifts? Are there procedures you just don’t want to do anymore? Could you take that teaching position you’ve always wanted but never thought you could afford? How about a one-year sabbatical?

Depending on your specialty and work arrangement, some of these choices may not be sensible or available to you, but having substantial savings and the ability to walk away for an extended period of time is a valuable bargaining chip.

How do you earn that chip? Simply widen the gap between your earning and spending. Earn more, spend less, or both. Live on half your takehome pay, and you’ll go from broke to retirement-ready in about fifteen years.

It’s true. Consult a compound savings calculator. If you spend about $100,000 a year and invest about $100,000 a year, in 15 years you’ll have $2.5 Million with a rate of return between 6% and 7%. Earn a paltry 2% on your investments and it will take about 20 years.

Once you’ve met or exceeded retirement savings of 25 years worth of expenses, you’ve got an excellent chance of your money outlasting you if you never worked another day in your life based on an initial withdrawal rate of 4% or less.

The knowledge that you can walk away or create the job of your dreams is some serious burnout-fighting power.

How Spending Money Can Reduce Burnout

The more you spend, the less you save. So how can spending money fight burnout?

You’ve got to be smart about how you spend. Putting a little extra money in the right places while saving money on the biggest-ticket items (housing, automobiles, dining out) can help stave off burnout in a variety of ways.

You’ve heard that time is money. The inverse is also true. Money can buy time, and a lack of personal time is a frequent factor in career burnout.

You can outsource some of the more painful parts of your away-from-work life. Lawn maintenance, house cleaning, and handyman tasks are among the most common. Sure you can do them yourself (and I do two out of those three), but if someone can do it for $25 an hour in half the time it would take you, you’ve bought yourself 8 hours of free time for $100. That’s a burnout-beating bargain.

Consider grocery pickup or delivery services. The money spent on the service will likely be offset by the decrease in impulse purchases.

Take a vacation. You don’t have to stay at a five-star resort to have a wonderful time. A year ago, we spent three weeks with our children in Mexico at a total cost of about $1,000 a week. It was one of our best trips ever, and we’ve taken many.

Before you head out, pay the $100 for five years of Global Entry which also gets you into the TSA Pre✓ line. Trust me; it’s so worth it. You’ll save both time and hassle.

Better yet, let Chase reimburse you for the $100 Global Entry fee as one of the benefits of their Sapphire Reserve card or United Explorer card (but never, ever keep a balance on a credit card).

A $15 Uber ride might get you across town in ten minutes whereas the $3 public transportation option would take closer to an hour. A $15 an hour babysitter buys you more time for restorative date nights.

Stanford has recognized the benefit of time-saving and task-saving services. Their “time bank” rewards physicians for what might otherwise be unrecognized teaching, service, and clinical activities with credits good for housecleaning, laundry, and meal services or academic support work such as grant-writing, lab management, or speech coaching.

In a clinical practice, a little money spent can go a long way towards improving efficiency and morale. Scribes who tackle most of the documentation work while the physician focuses on the patient can be a Godsend. Updated computer hardware or a more user-friendly EHR may cost money but can make life much easier.

Small investments in something as simple as weekly donuts (is it Thursday yet?) and holiday parties or summertime picnics can boost morale and help foster a more collegial work atmosphere. Burnout is less prevalent when the workplace culture is supportive and people work well together.