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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.

Live Close to Where You Work

Issue #465, April 10, 2017

    On May 18, I give a talk in Youngstown, OH. I’m confident everyone who attends will learn something that can either make or save them money, but I always aim such talks at the med students and House Staff. You have no idea how many people have said “I wish I heard you 20 years ago”. One of the main topics will concern buying a home. In this newsletter I’ll discuss the importance of why you should live close to where you work, from two points of view: 1) the value of your time spent driving back and forth, and 2) the finances of your vehicle.
    Many people have told me I’m the most efficient person they’ve ever met. I’m always thinking about how I can save time (RMD comment: saving time and saving money are the same thing). In Issue #152 (4/11/11), I discussed “What is Your Spare Time Worth”.
    I was originally going to use myself as an example. My routine weekday was 6 AM-6 PM, 12 hours. (This did not include working late, taking call, weekends, etc. My usual work week was 68-70 hours). However, considering the average male physician in the US works 51 hours per week (the average female physician works 44 hours per week), I’ll use 10 hours per day as the norm. Note the more hours you work, the more important it is to live close to where you work.
    There are 24 hours per day. Sleep, grooming, eating, and exercise take a minimum of 9 hours (RMD comment: Everyone should exercise: you are investing in yourself. Many docs say they don’t have time to exercise. The best comeback I’ve heard is “so you have time to be sick?”). This leaves, at most, 5 hours of discretionary time. If you work 12 hours per day, it cuts your discretionary time by 40%, to 3 hours per day.
    The average MD takes home about $100-125 per hour (10 hours per day x 250 work days = $250-300K per year). But they bill for at least $250 per hour. Overhead averages about 50% (an MD in private practice supports about 5 employees). Remember that after overhead is covered, the vast majority of the billing flows straight to the bottom line. Thus a physician’s marginal time is worth more than $250 per hour. Driving is totally non-productive, dead time. You can’t read, you can’t write, you can’t see patients (and it’s frustrating to boot, because you are thinking of all of the work you need to get done). Driving 15 min each way rather than 45 min. saves 1 hour per day, worth a minimum of $250. Remember also that this represents a quarter of your marginal time.
    Consider: by living 1 hr. per day closer to work, you can either A) save 5 hours per week, to spend with your family, go to the ballgame, read, play a musical instrument, or do whatever you want. B) Save 3 hrs, see 2 more consultations, and bill for another $500 per week = $26,000 per year, or 3) see one more consultation per day = $1,250 per week = $62,000 per year.
    Now let’s look at expenses. You drive 10 miles each way rather than 25 miles = 30 miles per day saved. That’s a minimum of 1 gallon of gas = $2.25 (gas is cheaper in Missouri than most other states) = $67.50 per month. Add in the depreciation of your car. 30 miles per day x 25 working days = 750 miles per month = 9,000 miles per year. Considering the average vehicle, that’s at least $4,000 of depreciation per year. Living closer to your job will save you about $5K/year in gasoline and vehicle depreciation.
    You can 1) Buy a home in the suburbs (where you pay someone like my dad and I to maintain your big yard) for $400K and drive 45 min each way, or 2) a home about 15 min each way of equal price about 2/3 the size, and save a lot of time and expenses, or 3) a home of higher price and equal size about 15 min. away, and pay for the difference by seeing 2 or 3 more consults a week with the time saved in the commute. And don’t forget the expenses and depreciation of your vehicle.
    This seems so complex. To the contrary!! It is the exact process some people go through when considering where to live. I moved to Columbia in 1982. Five years later we were looking to move up. An elegant home in an older section of town (see below) came on the market via closed bidding. I asked an appraiser to go through the home for me. He said “Doc, I think the home is worth XXX. But—it is 5 min. door to door to the hospital. Over 20 years, how much time will this save you?”
    RMD comment: Buying this home was one of the 5 best strategic decisions of my life.
Live close to where you work.
    Over the course of your 25 year career, you will save thousands of hours to be used at your discretion, and many thousands of dollars in expenses.
    I will finish up a tribute to Thomas Sowell next week with a review of Wealth, Poverty and Politics: An International Perspective.
    On Friday I put out an Interim Bulletin about how device maker Medtronic (MDT) was getting into the business of managing cardiac cath labs. A major concern of the physicians interviewed for the article, and mine, is that physicians would be pressured into using MDT products.
    This is from a subscriber: “Hospitals already pressure physicians to use devices that better the bottom line. Through buybacks, device recycling programs and contracts with device makers, hospitals get large rebates for preferentially using devices. Hospitals will kick the competing reps out and not stock other devices. Employed physicians are “encouraged to choose wisely”.
    My home was built in 1939 by Mr. and Mrs. S. Woodson Canada at a cost of $25,000, at the time the most expensive home in Columbia. It was the first home in Columbia with central air conditioning. Mr. Canada was the Registrar at the U. of Missouri from 1919-1959. Missouri ex rel. Gaines v. Canada (1939) was the most important civil rights case before the Supreme Court between Plessy vs. Ferguson (1896, which said separate but equal was equal) and Brown vs. Board of Education (1954, which said separate but equal was not equal).
    Gaines was the valedictorian at Vashon HS in St. Louis and an honor student at Lincoln U (a traditionally black college) in Jefferson City (about ½ hour south of Columbia), and was accepted at the U. of Missouri Law School. You can imagine (or probably you can’t) the reaction when Gaines shows up for classes and they realize he is black. I highly recommend Lloyd Gaines and the Fight to End Segregation (Endersby, Horner, U. of Missouri Press, 2016).
    I want to point out. Mr. Canada’s name was on this case only because he was Registrar of the University. I have talked to many people who knew Mr. Canada: he was a nice man. I’ve seen it stated in several sources: Mr. Canada said “If I didn’t deny Gaines admission, I would have lost my job”.     
    Several weeks I dissed some books. I recommend the following.
    1) Hero of the Empire: The Boer War, a Daring Escape, and the Making of Winston Churchill. I’ve read very little about the Boer War or this period of Churchill’s life, and author Candice Millard really knows how to make a story exciting.
    2) A Man for All Markets: from Las Vegas to Wall Street, How I beat the Dealer and the Market. At first I thought about making this the topic of a newsletter, but I think it’s one of the best books of the year, so I want you to read it for yourself. Edward Thorp was an MIT math professor when he pioneered the concept of card counting in blackjack. He then ran a hedge fund that made money 20 years in a row, including 1973 and 1974, when the S&P 500 was down 14.7 and 26.5% respectively. .
    The IQ scale is standard deviations from average. An IQ of 110 is one standard deviation, putting you in the top 68.27%. Two standard deviations, an IQ of 120, puts you in the top 95.45%. The average IQ of physicians is about 130, the top 99.73% (about 2-3 per thousand). About 1 in 450 in the US are physicians.
    I’ve met some smart people, but I don’t believe I’ve ever met anyone as smart as Thorp. He shows up at kindergarten, the youngest in the class because he barely made the age cutoff. Of course, what’s the first thing that happens to the really, really smart kids in public school who are bored out of their mind (he could already read, and add, subtract, multiply and divide numbers of any size))—he gets into trouble, and before the week is out, is sent to the principal’s office. The principal talks to him for about an hour, calls in the parents, and puts Thorp directly into first grade. After another week, his parents are again called in: the principal recommends he be put into 2nd grade. His parents decline, he is small physically, and at barely 5 years of age, would be almost 3 years younger than some students. 

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