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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

Escheat
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

Contracts
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

Embezzlement
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

The VIX
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

The War on Cash
Issue #408, March 07, 2016

Precious Metals: Don’t Jump in Yet
Issue #407, February 29, 2016

The Bear is Growling
Issue #406, February 22, 2016

The Importance of Showing Respect
Issue #405, February 15, 2016

The 80-20 Rule of Thumb Pareto Principle
Issue #404, February 08, 2016

Some Tips on Commercial Real Estate
Issue #403, February 01, 2016

Economic Outlook for 2016
Issue #402, January 25, 2016

Selling Short: Part II of II
Issue #401, January 18, 2016

Short-Selling. Part I. How it Works
Issue #400, January 11, 2016

Who Can You Trust, and How to Spot a Con Man
Issue #399, January 04, 2016

Outlook for 2016: Part II of II
Issue #398, December 28, 2015

My Outlook for 2016, Part I of II
Issue #397, December 21, 2015

Want to Live a Long Time?
Issue #396, December 14, 2015

Some Tips on Retirement
Issue #395, December 04, 2015

Negative Interest Rates
Issue #394, November 30, 2015

What if the US Dollar Breaks to New Highs
Issue #393, November 23, 2015

How to Decrease Student Debt by 25%
Issue #392, November 16, 2015

The Importance of Buying Life Insurance when you are Young
Issue #391, November 09, 2015

Barron’s Conference, Part II of II
Issue #390, November 02, 2015

THE PHYSICIAN INVESTOR NEWSLETTER

HELPING PHYSICIANS ATTAIN FINANCIAL SECURITY
By Robert M. Doroghazi, M.D., F.A.C.C.

The Importance of a Credit History

Issue #459A, March 02, 2017

The Importance of a Credit History
    This Issue is aimed at your 12-20 year old children and grandchildren.
    I have shopped at the same grocery store, a branch of a regional chain out of St. Louis, since arriving in Columbia in 1982. It has been 20 years since I wrote a check for groceries. I always pay cash. I never use a credit card at the grocery store. I tell myself if I have to go into debt to eat, I’m in bad shape.
    Last week I ran out of cash. I had not been to the bank for several weeks following my eye surgery. I wrote a check for an amount greater than the bill to get some cash back, a procedure they allow. The computer would not take the check: “new customer”. The checkout clerk, who has been there as long as I have, had to call over the assistant manager (probably the only person in the store who I’ve not met and who didn’t know me). He didn’t have the responsibility to sign off on this, so they paged the manager. I said “forget it” and used my credit card.
    In 2004, younger son Mike purchased a cell phone. Because he had never taken out or paid on a loan or credit card, and thus had no credit history, an additional $150 deposit was required. I said in the first edition of The Physician’s Guide to Investing (came out in 2005) “The deposit will be returned after one year (hopefully). In the 2nd edition (published in 2009), I said “I got that one right. It is 2008 and my son still has not gotten his money back, and I assure you he has tried”. It’s now 2017, and Mike has just written it off.
    RMD comment: Kids in their teens should have a credit card to start a credit history. Certainly when someone turns 16 and starts to drive, they should have one in case of an emergency. A credit card will not encourage or allow them to waste money: either they are careful with their money or they aren’t.
More Wisdom from Warren Buffett
    Buffett was interviewed on CNBC on Monday. (I am paraphrasing).
    “It baffles me who would buy a 30-year bond, to lock up your money for 3% for 30 years. The 10-year Treasury pays 2.5% interest. That’s a P/E of 40 (100/2.5). Furthermore, those earnings will never increase: you’ll get 2.5% for 10 years.
    I would bet my life that over 30 years, stocks will out-perform a 30-year bond. I’d almost bet my life that stocks will out-perform a 10-year bond”. Buffett noted that an 86-year old can confidently make any 30 year bet. He quickly added that the point he wanted to make was if he were 30 years old, he would make the bet.
    RMD comment: I have never owned a bond or invested in a bond fund. Minimize your bond investments. To quote Peter Lynch “It’s better to own the company than lend it money”. All prudent investors should hold at least 5-10% cash, which I keep in CDs at the local bank (Nothing gives you influence at a bank like having deposits there).
    Buffett made more comments about how the people who make the money are the investment managers, while investors rarely get value for the often exorbitant management fees. As mentioned in a recent newsletter, 9 years ago Buffett offered a bet that a passive S&P 500 Index Fund would outperform a group of hedge funds. He noted that not a one hedge fund manager, who might make tens or hundreds of millions or even billions of dollars a year in fees, would bet $500,000 on themselves.
    RMD comment: That is a major-league dis.
    I finished The General vs. the President: MacArthur and Truman at the Brink of Nuclear War (Brands, Doubleday) in 2 ½ days. The last sentence of the book sums it up. “The courage of Truman’s decision (to relieve MacArthur) had never been in question: six decades later, its wisdom was apparent as well”.   

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