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The Coming Bear Market: Part II How to Prepare
Issue #492, October 16, 2017

Some Observations on Cemeteries
Issue #Interim Bulletin #491A, October 12, 2017

The Coming Bear Market: Part I: The Myth of Buy and Hold Forever
Issue #491, October 09, 2017

The Market makes New Highs
Issue #490, October 02, 2017

The Importance of a New High
Issue #489, September 25, 2017

A Little Insurance: Wealth, War and Wisdom
Issue #488, September 18, 2017

Some Observations
Issue #487, September 11, 2017

How to be Successful in Your Career
Issue #486A, September 07, 2017

How NOT to Buy a Home
Issue #486, September 04, 2017

This Week in the Market
Issue #485, August 28, 2017

Is the “Trump Bump” Running Out of Gas?
Issue #484, August 21, 2017

Gold is on the Move
Issue #483, August 14, 2017

The Importance of Estimation
Issue #482, August 07, 2017

Buying Art and Collecting: Part II of II
Issue #481, July 31, 2017

Buying Art and Collecting in General, Part I of II
Issue #480, July 24, 2017

Physicians need to be More Forceful: Follow-up
Issue #479, July 17, 2017

Physicians need to be More Forceful
Issue #478, July 10, 2017

Your First “Real” Investment
Issue #477, July 03, 2017

Leasing a Watch: Don’t
Issue #476, June 26, 2017

The Importance of Your Children having a Job
Issue #475, June 16, 2017

The Problem with Medical Student Debt is—the Med Schools
Issue #474, June 12, 2017

Critters and Varmints in your Home and Yard
Issue #473A, June 07, 2017

Leveraged ETFs
Issue #472, May 29, 2017

Leasing a Vehicle: Don’t!
Issue #471, May 22, 2017

Issue #470, May 15, 2017

More on Buying Jewelry
Issue #469, May 08, 2017

Buying Jewelry: Gold, Diamonds and Pearls
Issue #468, April 30, 2017

Thomas Sowell: Part III of III
Issue #467, April 24, 2017

Thomas Sowell: Pat II of III
Issue #466, April 17, 2017

Live Close to Where You Work
Issue #465, April 10, 2017

Medtronic in Hospital Management
Issue #Interim Bulletin #464A, April 07, 2017

Thomas Sowell: Part I of II
Issue #464, April 03, 2017

A Political Contribution a an Investment: Part II of II
Issue #463, March 27, 2017

A Political Contribution as an Investment: Part I of II
Issue #462, March 20, 2017

Buffett Selling Vacation Home
Issue #461, March 13, 2017

Advanced Placement (AP) ourses
Issue #460, March 06, 2017

The Importance of a Credit History
Issue #459A, March 02, 2017

A Credit Card Scam
Issue #459, February 27, 2017

The Electronic Health Reord
Issue #458, February 20, 2017

Issue #457, February 13, 2017

Platinum and Palladium
Issue #456, February 06, 2017

Economic Outlook for 2017: Part II of II
Issue #455A, February 02, 2017

Economic Outlook for 2017: Part I of II
Issue #455, January 30, 2017

A Story From Vegas
Issue #454A, January 25, 2017

Land Donation Deals and the IRS
Issue #454, January 23, 2017

The Theory of Gambler’s Ruin
Issue #453, January 16, 2017

Student Loans: But Wait, There’s More!
Issue #452, January 13, 2017

A Second Home
Issue #Interim Bulletin #451A, January 04, 2017

The Consumer Confidence Index
Issue #451, January 02, 2017

Social Security
Issue #450, December 26, 2016

My Outlook for 2017: Part II of II
Issue #449, December 19, 2016

My Outlook for 2017: The Market
Issue #448, December 12, 2016

Medicine in 20 Years
Issue #447, December 05, 2016

Higher Interest Rates
Issue #446, November 28, 2016

Trump and the Markets: The Bad and Ugly
Issue #445A, November 23, 2016

Trump and the Markets: The Good
Issue #445, November 21, 2016

Negative Trends: The Suits aren’t Makin’ Steel
Issue #444, November 16, 2016

The New DOJ Fiduciary Rule
Issue #443, November 07, 2016

Barron’s Conference, Part IV of IV
Issue #442, October 31, 2016

Barron’s Conference, Part III of IV
Issue #Interim Bulletin #441A, October 26, 2016

Barron’s Conference, Part II of IV
Issue #441, October 24, 2016

Barron’s Conference, Part I of IV
Issue #440, October 20, 2016

This Newsletter
Issue #439A, October 12, 2016

Memoirs of US Grant: Vol II
Issue #439, October 10, 2016

More Points on Collecting, Investing and the Economy
Issue #Interim Bulletin #438A, October 05, 2016

Personal Memoirs of US Grant
Issue #438, October 03, 2016

Ideas for a High School Part-Time Job
Issue #Interim Bulletin #437A, September 29, 2016

Collecting, Investing, and the Economy
Issue #437, September 26, 2016

Free College
Issue #436A, September 22, 2016

A Military Commitment to Pay for Med School
Issue #436, September 19, 2016

When a CD isn’t a CD
Issue #435, September 12, 2016

I Made a Mistake
Issue #Interim Bulletin #434A, September 07, 2016

What is Your Spare Time Worth?
Issue #434, September 05, 2016

Credit Cards and Bonus/Loyalty Points
Issue #433, August 29, 2016

The Write-off of Student Loans
Issue #Interim Bulletin #432A, August 25, 2016

412 Retirement Plans
Issue #432, August 22, 2016

Join the Club
Issue #Interim Bulletin #431A, August 18, 2016

The Case for Precious Metals and Hard Assets
Issue #431, August 15, 2016

When the US went off the Silver Standard
Issue #430, August 08, 2016

Why NOT to Open a Restaurant
Issue #429, August 01, 2016

Some Tips on Life Insurance
Issue #428, July 25, 2016

More Observations on Negative Interest Rates
Issue #427, July 18, 2016

Issue #426, July 11, 2016

Is a PhD Worth It? Part II of II
Issue #425, July 04, 2016

Is a PhD Worth It? Part I of II
Issue #424, June 27, 2016

Avoid Part-time real Estate Agents
Issue #423, June 20, 2016

Issue #422, June 13, 2016

The Problem with Auction Reserves
Issue #421, June 06, 2016

Make Full Use of Your Capital Investments
Issue #420, May 30, 2016

The Fed’s Announcement
Issue #419, May 23, 2016

Quit While You’re Ahead: A True Story
Issue #418, May 16, 2016

The Precious Metals
Issue #417, May 09, 2016

Negative Secular Trends: Part Ii of II
Issue #416, May 02, 2016

Negative Secular Trends: Part I of II
Issue #415, April 25, 2016

Not Winning is not the same as not Losing
Issue #414, April 19, 2016

Behavioral Economics: Part II: Weaknesses
Issue #413, April 11, 2016

Behavioral Economics: Part I: Valid Points
Issue #412, April 04, 2016

The Most Important Books I’ve Read
Issue #411, March 28, 2016

Secret to Success: Take Risks and do Things Differently
Issue #410, March 21, 2016

The Over-Priced Food Presentation Hustle
Issue #409, March 14, 2016


By Robert M. Doroghazi, M.D., F.A.C.C.

A Second Home

Issue #Interim Bulletin #451A, January 04, 2017

    Diane and I spent the New Year’s weekend at the Lake Ozark condo I purchased in 1996. We had a great time, and it reminded me that I haven’t written about a second home in some time. I think most physicians make enough that some time in your career you should be able to give this serious consideration. This discussion is not about undeveloped land, or land purchased for agriculture and/or hunting or fishing.
    1) Always purchase a “first-tier” property. You want to be right on the shore or the beach or the golf course. These are the most desirable, the most fun, and most importantly, they will hold their value the best. Everybody wants an unobstructed view.
    2) Stand-alone home or condo? There are pros and cons for each. The stand-alone has more appreciation potential because you own the land. But then there is maintenance: a few professionals find doing the maintenance relaxing, but most don’t, so you must either spend your valuable spare time raking the leaves and painting, or hire someone. With a condo, this is included in your fees.
    With a home, you make your own decisions. The larger the condo association, the quicker you will appreciate why our great country was established as a republic rather than a democracy. Some people seem so gooney that you wonder how they accumulated enough money to buy the condo.
    3) Travel time is important. The ideal is about 2 ½ hours or less. That way you can easily drive down on Friday afternoon and back on Sunday to be home for supper. My condo is 1 hr., 10 min. away. It makes no sense to me to live in Chicago or NYC and own a place in the Florida Keys.
    4) Promise yourself you will use it at least once a month. The average place at the Lake of the Ozarks is owned for—-3 years. What a waste. Considering the time cost of money, maintenance and depreciation, it costs 1% of the value of the property per month, 10% per year, to own a residence. If you purchased a place for $200K and find out 3 years later that you planned poorly and decide to sell it, you are out at least $50K.
    Don’t go to a place “cold” and buy. Spend time there first so you are sure you like it and you know what you want.
    5) I would not consider a 2nd home until A) you’ve paid off at least ½ of the mortgage on your primary residence, and 2) you have completely paid off your student loans. Remember, this is a discretionary purchase.
    6) Don’t expect to buy this with 5% down. Banks prefer (require) a down payment of at least 25% on a second home.
    7) Some people purchase these for their personal use only, some are willing to rent part-time. This is up to you. The IRS has very specific rules: check with your accountant. Large recreational areas have agencies that specialize in such rentals. The typical split is 60% for the owner, 40% fee. 
    8) You will generate serious goodwill by letting family or friends use the place. Consider: My condo is 4 BR, 4 bath, 1,900 sq. ft. and would rent for $300 per day during a summer weekend. If they stay a week, they have saved $2K, can fix their own meals, and have a much nicer experience than staying in a hotel. 
    9) Several subscribers have planned very well. They purchased a 2nd home 10 or 20 years ago, and after retirement sold their first home and mover permanently into their previously second home.         
    India has passed the UK as the world’s 5th largest economy.
    RMD comment: put this in perspective. The UK has 63M people, India 1.25B. Thus India has exactly 20x more people than the UK, so the average person in GB makes 20x the average person in India.
    I believe that the strength of a nation is determined by 3 things: 1) wealth, 2) land mass and 3) population. If Modi and those that follow him are successful, India has the potential to be a real power. Note that Indians are currently the most successful immigrant group in the US (average income more than $90K per year), which means that when conditions are favorable, they will prosper.
    I recommend Rogue One. If you like the Star Wars movies, you won’t be disappointed. If you’re not a big Star Wars fan, you’ll still be entertained. There is a scene at the end where Darth Vader literally walks through about 50 rebel soldiers. It shows the true power of a Jedi of the Dark Side. I believe it is one of the 10 most powerful scenes in all of the Star Wars movies.
    Immediately after the election, John Deere (DE) broke out to a new high. It paused for 5 weeks, and has now again broken higher. DE pays a 2.2% dividend. See chart below.

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