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Strange Things in the Precious Metals
Issue #531, July 17, 2018

Buying Years of Retirement
Issue #530, July 09, 2018

Rent-A-Kid for Retirement
Issue #529, July 02, 2018

The Dark Side of Student Loans
Issue #528, June 25, 2018

The Cost of Out-sourcing Convenience
Issue #527, June 18, 2018

Social Security: 66 or 70?
Issue #526, June 11, 2018

Student Loans: There’s (Unfortunately) a Lot More!
Issue #525, June 04, 2018

Co-signing a Note
Issue #524A, May 31, 2018

The Knight Frank Luxury Index and Collectables
Issue #524, May 28, 2018

The Importance of Diversification: The Myth of Diversification
Issue #523, May 21, 2018

How to Save Thousands on Your Food Bill
Issue #522, May 14, 2018

MoviePass and Other Things
Issue #521A, May 10, 2018

Degree Inflation, Long Training Periods, and “Certification”  Part III
Issue #521, May 07, 2018

Degree Inflation, Long Training Periods, and Certification” Part II of III
Issue #520, April 30, 2018

Follow-up on Several Things
Issue #519A, April 25, 2018

Degree Inflation, Long Training Periods, and “Certification”: Part I of II
Issue #519, April 23, 2018

The Kids Birthday Party Hustle
Issue #518A, April 18, 2018

A Pension Question: Part II of II
Issue #518, April 16, 2018

A Physician is an Executive
Issue #517A, April 11, 2018

A Pension Question: Part I of II
Issue #517, April 09, 2018

Is the Correction Over?
Issue #516A, April 05, 2018

Used Car Dealers, Student Loans, the Chinese, and Uncle George’s Rule
Issue #516, April 02, 2018

Starter Homes
Issue #515, March 26, 2018

Redecorating: Beware!
Issue #514, March 19, 2018

NASDAQ Closes at Record High
Issue #513, March 12, 2018

A 40% Chance
Issue #512, March 05, 2018

Several Things
Issue #511, February 27, 2018

Human Capital, Education and Wealth
Issue #510, February 19, 2018

Another Stock Market Update
Issue #509A, February 18, 2018

Some Thoughts on Savings
Issue #509, February 12, 2018

A Stock Market Upfate
Issue #508S, February 10, 2018

Who Can You Trust? Part II of II
Issue #508, February 05, 2018

The Christmas Decoration Pre-worn Jeans Hustle
Issue #Interim Bulletin #507A, February 03, 2018

2018 Outlook for Financial Markets
Issue #507, January 29, 2018

Who Can You Trust? Part I of II
Issue #506, January 22, 2018

Life Insurance Settlements
Issue #505, January 15, 2018

Commodities and Buying the Breakout
Issue #504, January 08, 2018

Buffett Wins His Bet
Issue #503A, January 04, 2018

Practice Real Estate and Free Agency
Issue #503, January 01, 2018

Outlook for 2018: Part III: Stocks and Bonds
Issue #502, December 25, 2017

My Outlook for 2018: Part Ii: Precious Metals
Issue #501A, December 21, 2017

Outlook for 2018: Hard Assets: Part I of III
Issue #501, December 18, 2017

More Thoughts on Bitcoin
Issue #500A, December 14, 2017

Fees and Good Relations with Bankers
Issue #500, December 11, 2017

Salvator Mundi
Issue #499A, December 07, 2017

Should You Rent or Own a Home?
Issue #499, December 04, 2017

A Gift Subscription
Issue #Interim Bulletin #498A, December 02, 2017

Stocks vs Real Estate: Asset Allocation: Part II of II
Issue #498, November 27, 2017

When Good Enough is Fine
Issue #497A, November 22, 2017

Stocks vs Real Estate: Asset Allocation. Part I of II
Issue #497, November 20, 2017

The Saudi Arrests and the Perils of Foreign Investing
Issue #496, November 13, 2017

Gambling and Las Vegas
Issue #495, November 06, 2017

Some Tips on Auto Insurance
Issue #494, October 31, 2017

Bitcoin and the Digital (Crypto) Currencies
Issue #493, October 23, 2017

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


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

Fees and Good Relations with Bankers

Issue #500, December 11, 2017

    Ask a physician what their business involves, and most will say taking care of patients. Ask a banker what their business involves, and they will sum it up in one word: relationships. Just as at some time in their life all people need a physician, at some time in a physician’s life, you will be in a pickle and need the help of a banker. The key is that the relationship be on your terms, not theirs. If you are in hock up to your eyeballs, you go in to the bank hat in hand, beholden to them. If you are in a solid financial position, they want your business even more, because they want your deposits, and they know if you take out a loan, it will be paid back, in full, and on time.
    I believe young physicians don’t realize how desirable a client they are. You run $20-30K or more through your personal checking account every month, and if you are in a group practice, they run hundreds of thousands of dollars every month through the account. Use this to minimize fees and receive any possible perks. Even an invitation to their holiday party will introduce you to potential patients, patients with money and influence, the kind you want to see you when they are sick (You’ll also have a good time. Bankers know how to party). I try to keep deposits at most of the banks in town. I guarantee you that any banker worth their salt knows how much you have at their bank.
    Fees are a financial 4-letter word. Say it costs either $5 or $10 to make a stock trade. The transaction is completed: the only difference is $5, which goes into your pocket or theirs. Which do you prefer?
    When I came to Columbia in 1982, the realtor introduced me to one of the banks. I received great service. A few years later, I bounced a 4-figure check. The Exec VP called me and said “Bob, your account is overdrawn. However, we know you, and we paid the check. We would appreciate if you could come down at your earliest convenience and take care of things”. I was there that afternoon and straightened it out. That is great service. I realized and appreciated what they did for me, and told them so.
    Over the next few years, this bank was taken over by another bank, which was taken over by another bank, which was taken over by another to become the 2 largest bank by deposits in the US. I bounced another check (I admit, my fault). This time the treatment was totally different. They bounced 6 checks before they notified me, and charged me $20 for each check (RMD comment: I read that this bank was one of the few banks that, in this situation, would post the largest check first to make your account overdrawn, so they could charge fees for the other checks). I had 6-figures on deposit at the bank. I went down and had all of the fees removed. Then over the next several years, as my CDs matured, I quietly removed all of my money from their bank, and have not dealt with them since (RMD comment: I have a good friend who still banks with these guys. They haven’t changed their MO, and my friend is transferring her business elsewhere).
    I write on this now because a bank that I have been very happy with, and keep multiple accounts, just added a $5 per month “paper processing fee” to a business checking account (RMD comment: They were already sending me paper statements, so this represented no additional cost for them). I wrote a letter to the bank President asking them “respectfully” to remove the fee from this account, and told them it reminded me of the other bank (that touched a nerve). The day they received my letter, I was called by a customer service rep. The fee was removed, and no such subsequent fees will be charged. The President called me a few days later to follow up and make sure everything was taken care of to my satisfaction.
    This is service, the kind of service a physician (or anyone) who has built up a long relationship, based on mutual respect, should be able to expect. All you have to do is ask. Physicians are desirable customers: use this clout to minimize fees. It is important to have a good relationship with the bankers. This is also why I avoid the Internet and do all of my banking in person. It’s far easier to straighten out the occasional mistake when the people know you personally.
    I have mentioned this since the beginning of my financial writing. I compliment the bankers in that they will always address you as “Doctor”. No matter how young a physician you are, and how senior they are, it is always “Doctor”. You never go wrong showing people respect. 
    From WW II into the 90s, the savings rate in the US was about 10%. It is now about 3%, attributed to the “wealth effect” from the stock market and low unemployment. The net worth of Americans is $97T, up 72% from the depths of the financial crisis.
    RMD comment: What’s wrong with this picture? How much time you got, buddy?
    1) Savings creates wealth, debt destroys wealth. No matter how much you make, if you spend it all, you’ll have no savings. Read about the immigration to the US from Eastern Europe between 1880-WWI. The family sent over an able-bodied young man first. They worked six 12-hour days for $1 per day (if they were lucky) and lived in totally crappy conditions, with 5 or more guys in a room. They saved at least half of what they made, sent it back to the “old country”, and in a couple of years another sib would come over. In 10 years, the whole family was in the US.
    2) One reason savings is so low here is because of our safety net. In China, where there is no Social Security, Medicare, etc., the savings rate is 40%.
    3) People should be saving money now, when times are good, for the inevitable rainy day. In their book Scarcity: Why Having Too Little Means so Much (Times Books, 2013), Mullainatan and Shafir note that an important cause of scarcity is that people rarely save enough during times of plenty. 
    4) About 53% of people in the US own stocks. That means 47% don’t, so how are they profiting from the “wealth effect”?
    5) Bottom line: no matter where you are in life, you should be saving at least 10% of what you make. For someone making 6-figures, it should be 20%. For a high-earning physician, I believe it should be 50% of your after-tax income. Basically: 1/3 taxes, 1/3 living expenses (including your mortgage) and 1/3 savings. I did it, and I know there are physician subscribers who do it. If you can’t live on $300K, you can’t live on $400K.
    Looking for a unique Christmas gift? Last week I purchased a first edition, first printing, blue cover copy of Huckleberry Finn from Schilb Antiquarian here in Columbia. They are one of the hundred largest rare book dealers in the world. If interested, contact Scott Schilb at   .(JavaScript must be enabled to view this email address)  Note: I receive nothing for this recommendation. Scott is a reputable guy, with prices far lower than book dealers in the big cities (see Issue #385, 8/28/15, “Collectibles: Books”). 
    Another great idea for a unique Christmas present is a gift subscription to this newsletter. See below for details.
    Although this is Issue #500, counting Interim Bulletins, I have put out more than 600 newsletters since November, 2006. More later.
    The next 2 issues will be “My Outlook for 2018”. I’ll explain in detail why I believe this bull market in stocks is at least 4-6 months from the final top.
A Gift Subscription
    Many magazines, such as Forbes, provide the opportunity to give a gift subscription. From now through the end of the year, you can give a one-year subscription to this newsletter as a gift for $50, and I will extend your subscription for one year.
    I have always provided discounts to students and physicians-in-training. For $50, you can give 5 students or 2 physicians-in-training a one-year subscription, and I will extend your subscription one year. 
    This would be a perfect gift for your personal physician. If you are a physician, it would be a great gift for a new associate, or another physician. I’m sure all of you know at least one person who would appreciate this newsletter.
    Consider a gift subscription to your financial advisor. If you have a $1,000,000 net worth and this subscription can increase your return merely 0.1%, that’s $1,000, enough to pay for the newsletter as long as we are both around.
    Reality check: after writing this newsletter for 12 years, I can (unfortunately) assure you that the people who need this advice the most are the least likely to take it. Give the gift to someone who needs it, and will appreciate it, and read the newsletters.
    For many years I have allowed subscribers to let relatives “piggy-back” on their subscription for $25 per year, which many of you do. This is a reminder that is available.
    For new subscriptions, I need their mailing address and email. Please tell them I will be contacting them. Use my email and address listed above.
    Thank you, and have a Happy Holidays.


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