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Financial Rule #1 – Don’t Get Divorced

The number one financial mistake that doctors, and almost everyone, can make is getting a divorce.

If you’re not married or in a common-law relationship, please ignore the following post. If you are married, or considering a life-long relationship with someone, this is for you.

I know it sounds facetious to put this as the first rule, but there are good reasons for it.

  1. Divorce and Separation from a spouse is surveyed as the #2 and #3 most stressful life event, only after the death of a spouse.
  2. You can have an extremely high saving rate or large savings, but a divorce will effectively divide up your assets and networth.
  3. A divorce will also affect your income in the future with spousal support / alimony, etc.

Furthermore, whether you’re the richest man in the world¬†(Jeff Bezos) or financially savvy and frugal (Mr. Money Mustache), it seems that divorce can affect anyone.

What can doctors do to avoid a divorce?

The good news is that divorce among physicians are lower than the general population. A survey done by theBMJ,¬† showed the probability of physicians divorcing to be at 24.3%, much lower than the often quoted 40-50%. Furthermore, the divorce rate of dual-physician families tend to be even lower, with estimates around 11%. Having said that, I’ve also heard of residency programs that boast about how hardworking their residents are by their >100% divorce rates (some repeat offenders).

Make the relationship a priority

This takes intention and time, it involves hard work and may be harder than your day job. You have to cultivate and protect it. Read books in the relationship advice section and talk to people who have successful marriages. This might mean working less hours in a week, so you can spend more time building a life together. In the same BMJ article, there was a relationship that more hours worked as a female physician increased the probability of being ever divorced.

Less than a divorce vacations

A preceptor of mine, who was married to a lawyer, went on an extravagant vacation every year. He would make sure it was just the two of them, no kids, and that he would have the best time with his spouse. He had done the math – the expensive vacation in Europe was still much cheaper than the spousal support he would pay each year. He said after the trip, his partner would often forgive him for working late hours and not attending household duties during busy clinical weeks.

Sometimes you have to spend a little, to save a lot.

Outsource the pain points

When I speak to my colleagues about how they spend their money, one of the most consistent responses is how happy they are to have someone do the things they don’t like doing. Scrubbing toilets and bathtubs, mowing the lawn, food preparation, etc. Again, paying to have your time back can eliminate a lot of unnecessary arguments. As physicians we are lucky to have the financial stability to do so.

Sharing finances and professional goals (Be Unselfish)

Finally, it’s good to be transparent with your financial goals. It’s much easier to achieve the happiness when both parties are informed of the money issues.

Similarly, you have to do what’s best for both of you.

In my own life, I have changed jobs to one where I made less money. However, this change also allowed my wife to have her own career. This new job was also had more flexible work hours. Individually, it would seem to have been a demotion in pay, but collectively it was a win-win for us.

Closing Thoughts

Although this is common advice, I believe that setting up a framework for financial independence that includes other non-money aspects is crucial. I know many ophthalmologists, cardiologists and radiologists that make much more than I do. However, I’m not sure there much better off financially as their habits, and divorce(s) have really set them back.

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