Raising financially savvy kids: tips from a physician parent [PODCAST]

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In this episode, we explore the intersection of education and finance with guest Michele Cho-Dorado, a pediatric gastroenterologist. As physicians, we often prioritize academic excellence and lifelong learning, but one critical aspect of education that is often overlooked is financial literacy.

In this episode, Michele shares her personal journey of discovering the importance of money management in her mid to late 30s and how she is now teaching her young children about budgeting, saving, investing, and giving. She believes that introducing good financial habits early on can prevent financial hardship and debt later in life.

By becoming financially literate, children can develop a sense of responsibility, independence, and social consciousness. Financial education also promotes critical thinking and problem-solving skills, essential for personal finance and many other aspects of life.

Join us as we delve into the benefits of financial literacy, the importance of teaching children about money management, and how this life skill can lead to a brighter future.

Michele Cho-Dorado is a pediatric gastroenterologist.

She shares her story and discusses her KevinMD article, “From pennies to attending salaries: Why physicians should teach their kids financial literacy.”

The Podcast by KevinMD is brought to you by the Nuance Dragon Ambient eXperience.

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Transcript

Kevin Pho: Hi, and welcome to the show. Subscribe at KevinMD.com/podcast and get CME for this episode by clicking on the CME link in the show notes. Today we welcome Michele Cho-Dorado. She’s a pediatric gastroenterologist. Her KevinMD article is titled “From pennies to attending salaries: Why physicians should teach their kids financial literacy.” Michele, welcome to the show.

Michele Cho-Dorado: Hi, thank you for having me.

Kevin Pho: So we’ll get into your article in a little bit, but first off, just briefly share your story and journey to where you are today.

Michele Cho-Dorado: Yeah, so I am a pediatric gastroenterologist by training, and I was about eight years into practice when I made some major pivots in my life. Up until that point, I had always been taught to, you know, work hard, work hard to get into a good residency and then fellowship and get a good job. And then, you know how it is from there, you just continue to work to save up for retirement. I just assumed that I would work until I’m 60, maybe even 70, because that’s just all I knew. It’s what I was surrounded by, and, you know, up until that point, again, I just didn’t know any better, I guess.

In that time frame, I had gotten married and had kids, and at some point I just realized that I didn’t really know how to manage my money. I had mentioned in the article that doctors go from making so little money in training to suddenly making, depending on your specialty, anywhere from five to 10 times what you made, and I would say that we’re very poorly equipped to deal with that change, because we’re not taught any financial education.

So around that time frame, I came across a forum of some doctors who were talking about finances openly, and I just realized that I wasn’t the only physician who felt financially illiterate. It was somewhat refreshing, but a little bit disturbing at the same time. And aside from just talking finances, there was talk about investment strategies and making passive income, and it was the first time that I was exposed to those types of discussions. That really led me on an educational journey. I just started reading a ton about personal finance and mindset and growth, and then real estate investing and tax strategies.

It was the first time where my husband and I were able to be more intentional with the way we manage our finances and start thinking about investment strategies. This is something I had never even thought about, or that was on my radar. So we had young kids, and we just knew that we wanted them to learn these things early on. At the time, my kids were one and three, so very young, and there just weren’t a lot of resources out there for that young age group. So I ended up writing a book, a children’s book, just introducing basic financial concepts for younger kids, and then developing a platform to share that information. So that’s just kind of the back story of how I got to where I am.

Kevin Pho: You mentioned that when you became an attending, you didn’t have a lot of financial education at that point, and you suddenly came into a salary that’s five to 10 times that of, say, a resident. Would you say that’s common for a lot of physicians, to be in that situation?

Michele Cho-Dorado: You know, it’s funny, because I would say yes. I think that doctors are typically high earners, and I think many people would be surprised to know how many doctors live paycheck to paycheck. And I think it’s because, again, you’re not taught to manage your money. And also, you go so long without making any money that when you finally have even a little bit extra to spend, you feel like, “You know what? I’ve had no money for so long. I finally have something. I want to spend it.” And you don’t want to feel guilty about spending what you have, and you shouldn’t.

But I think that there are smarter ways to have some strategy in terms of what you’re going to do with your money: invest some money, save, give. All these things, again, just weren’t really anything I was thinking about, aside from just making and spending and maybe saving. So it was just very basic, I would say, for me.

Kevin Pho: So there was none of that during your residency and fellowship, and you didn’t have any guest financial speakers talk about things like 401(k)s or IRAs or anything in terms of retirement and education?

Michele Cho-Dorado: There was literally zero of that. Financial advisors would be invited to come, if I’m remembering correctly, towards the end of residency, when you’re about to be an attending. In hindsight, I think I recognize that because doctors know so little about managing their own money, financial advisors want to work with doctors to manage their money for them, because they’re the perfect clients. They don’t know much about money.

And, you know, maybe we can talk about this later too, but I was just always so focused on medicine and following this path that’s just so narrow. Everything’s always laid out for you, what the next thing to do is. And I just started to believe that I just don’t know about money, like, that’s just not my thing. You know, “I don’t know how to manage finances. I don’t know about finances. I don’t know about business.” And I think that’s just the story I told myself for so long, because that’s just what I believed.

Kevin Pho: All right, so let’s talk more about your KevinMD article, and we’ll talk a little bit more about your journey. It’s titled “From pennies to attending salaries: Why physicians should teach their kids financial literacy.” Now, you talked a little bit about the back story of this article, but go on further. What compelled you to write it and share that on KevinMD?

Michele Cho-Dorado: Yeah, so, you know, I think having financial literacy in this world is just such a vital skill, and it’s just not something that’s traditionally taught in school. So when I was having all these realizations myself, I just realized, you know what, if we’re not teaching our kids as parents, then they’re either not going to learn it at school, or they’ll learn it maybe not in the way that you want them to, you know, from watching TV or seeing other people who may not be the best examples or role models that you want for them.

And even beyond just managing money appropriately, I think having financial literacy has so many benefits. I think that it really can build confidence and promote good decision-making, and with confidence, I think it builds leadership. And then when you’re teaching children all the different facets of budgeting money, and in particular saving and giving, I think it also promotes a sense of social responsibility. So I do think that it’s good for financial stability, but I also think it makes a well-rounded, you know, person, child, adult.

Kevin Pho: Yeah, so we have a lot of new attendings, residents, interns, and medical students who listen to the podcast, and, you know, they’re hearing about money talked about so explicitly, perhaps for the first time. You mentioned terms like financial literacy, which is kind of a nebulous term. So tell us, what exactly does financial literacy mean to you?

Michele Cho-Dorado: So I think it’s even just learning about money words, you know? I come from an Asian household where we didn’t really talk about money growing up. It’s just being transparent about how you spend money and what things cost, and what things are needs versus wants, and all the basics. I think if you’re breaking it down for kids, just at that basic level, exposing them early on is always a good thing.

But yeah, by financial literacy, I mean learning what it means to save, what it means to invest, what the different types of investments are, what the different ways to save are, and different ways to get, I mean, just, you know, all the things that I guess I didn’t learn growing up.

Kevin Pho: What would be an example of a story of how you would teach your kids, or how we could teach our kids, about financial literacy? So tell us a story about how you would do that.

Michele Cho-Dorado: Yeah, so I know now, my kids are three and five, and we’re just transparent about the things that we do. When we spend money, we talk about what we’re spending money on, why this might be necessary, or why we need this, or why we don’t need this, or why this is something that’s extra. We talk about our investments. You know, we invest in real estate, so when we go to the homes that we own, we have some short-term rentals, we tell them that this is our investment house and that people are coming to stay in it. And so, I mean, my five-year-old talks about her investment house, you know?

Kevin Pho: OK, so when you talk to your three- and five-year-old about your investment house, what’s their response? What’s the reaction? What exactly do you tell them, other than the fact that this is your investment house?

Michele Cho-Dorado: Yeah, so, I mean, some of that goes over their heads, to be quite honest, but I think the point is that they know the words. I didn’t know what an investment was. I mean, that’s not a word that was ever in my household, you know? And so we try to explain to them that an investment is something where you put money into it and you hope that money will grow. The more you hear it, hopefully the more it sinks in. They may not comprehend it now, but hopefully, over time, they hear it enough that they start to understand what that means.

Kevin Pho: All right, so what’s the path forward? You mentioned that they’re three and five now. What are some of the next financial literacy steps for them?

Michele Cho-Dorado: Yeah, so, I mean, right now, again, they’re young, and so I feel like I’m going on this journey with everybody else who has kids this age. I think it’s just really being open with them and teaching them, you know, to be good stewards of their money. We do focus a lot on giving too. I think kids at this age are just very selfish, and, you know, they’re not wanting to give up anything, and so we try to teach them different ways to give. It doesn’t have to just be money. It could be time. It could be, you know, gifts, toys, talents, things like that. But I think it’s just exposing them at this age to different parts of what it means to be good stewards of your money.

Kevin Pho: And what kind of resources can you recommend to parents who want to introduce financial literacy tools to their kids?

Michele Cho-Dorado: So if they’re at an age where they can play certain games, I think games are always good for kids. I think it helps to make it visual.

Kevin Pho: Are we talking about things like Monopoly, or is there anything specific?

Michele Cho-Dorado: Monopoly, or Cashflow Quadrant, I know Robert Kiyosaki has that. And I think there’s even a game called Catan, so that’s another one. Yeah, again, if they’re at the age where they’re able to comprehend playing games, I think that’s helpful. I think books, too. That’s kind of the thought behind the picture book that I wrote: just to make it a fun story but expose them to the words so that they hear them.

Kevin Pho: How about some red flags? What are some things that physician parents, or just parents in general, what are some things that you’ve seen that perhaps they should avoid or not do when it comes to teaching their kids financial literacy?

Michele Cho-Dorado: I would say a red flag may be if they feel embarrassed and do not talk about it. I mean, I don’t know if that would necessarily be a red flag, but I would say that something not to do is avoid the conversation.

I think also, you know, if they see something on TV, I mean, if kids are watching TV or whatever, you know, I would point out ways not to spend money. Again, there’s just so much consumerism on TV. There are so many commercials, and nowadays everything’s about immediate gratification, and I think it just kind of primes kids to be impulsive, you know, impulsive with their money and things like that. So I think it’s every opportunity to try to teach them, you know, what’s good and what’s bad. Not that there are even right answers all the time, but, you know, I guess everyone needs to model for themselves how they want their children to learn and what their priorities are.

Kevin Pho: Now, if you were to redo your residency training again, and you wanted to become more financially literate coming out, what would have been some things that you would do differently?

Michele Cho-Dorado: Now, I wish I knew about making investments earlier on.

Kevin Pho: And what do you mean by that? There are so many investments that are out there. Of course, there’s, you know, the stock market; there’s, you know, real estate and syndications. Yeah, there are a lot of options. So when you say investment, what do you mean by that?

Michele Cho-Dorado: Well, all of that. Our investment of choice currently is real estate, so I do wish that I had had some more strategy and had learned more about that earlier on, because, you know, obviously it’s best to have invested 10 years ago, which would have been better than five years ago, which is better than yesterday, and then now.

I also wish I didn’t believe what I told myself, that I didn’t know about money, so I just stayed away from it. You know, I think I just assumed, “Well, I’m not making that much, and it’s not like I have much to use anyway, so I just won’t think about it.” It was kind of my out-of-sight, out-of-mind kind of thing. Yeah, I wish I had educated myself earlier on. I mean, even stocks and mutual funds and all that stuff, I didn’t know any of that. And I wish I had read books just to even be familiar with what they are. Even if I wasn’t going to invest at the time, I wish I had just known to read about it so that I could be familiar with it. But obviously, yes, I do wish I would have made some real estate investments much sooner.

Kevin Pho: Now, for those physicians who really have no interest in money, who just want to focus, like you said, on the medicine and seeing patients, and they just want to go with that mindset, “I just want someone else to take care of my money,” is there anything wrong with that line of thinking? Is it important for them to know a little bit about the basics of money regardless, even though they have zero interest in doing that?

Michele Cho-Dorado: I mean, I can’t say that it’s wrong. It’s so hard, because residency and fellowship training is such a difficult time. I think many people are just trying to stay afloat, you know, making it day to day. But if there’s any way to even listen to podcasts or whatever little you can do, if it’s five minutes a day or 10 minutes a day to read a financial blog, I think any little bit would help. And I don’t think you necessarily need to take action and do all these amazing things early on, but I think just being aware that there is more out there, and that there are things that you can do with your money, I think that would be helpful for anybody.

So, yeah, I get it that time is very difficult, and many times your brain’s so fried that you, you know, don’t want to read another thing when you get home from work. But even if it’s a couple of minutes, five or 10 minutes a day of something, I think that that adds up, and I think it would be helpful.

Kevin Pho: Any books that you can recommend, or blogs or podcasts that you can recommend, for these busy physicians in training?

Michele Cho-Dorado: So The Simple Path to Wealth was one of the first books I read, and I thought that that was a very good introduction to just learning about the stock market and putting money away that way. It’s an easy read, and that for me was very helpful as a beginner book. Rich Dad Poor Dad, I think everyone, you know, loves that book, and that’s one of those things that really changes your mindset. And I think for me, the biggest thing that allowed me to make major pivots was changing my mindset. So I would say Rich Dad Poor Dad is another good one.

Kevin Pho: What do you mean by changing your mindset? How did you change your mindset?

Michele Cho-Dorado: Well, I think I kind of alluded to this earlier, but I think, you know, doctors are so in a box. You go from residency to fellowship to an attending job, and then even once you start a job, it’s, you know, either start building programs or start being published. There’s just really no room to think outside the box. And I think doctors are afraid to try new things because they’re afraid of failure, you know? I think failure in medicine is not seen as positive.

And so, you know, you may have heard that quote, “I have not failed. I’ve just found 10,000 ways that won’t work.” And I think when you change your relationship with failure and rejection, it really can be a game changer. So when I say changing your mindset, I mean just being able to think differently, to get past limiting beliefs that you may have. For me, I think it was all those things I mentioned earlier: that I’m not good with money, that I’m not good at business, that I’m not creative. And then once I was able to get past those things, you know, I wrote a children’s book. I never imagined I’d be able to do something like that, and become an entrepreneur, and do these things that I never would have imagined even two years ago. And I think changing your mindset really is a game changer.

Kevin Pho: Yeah. We’re talking to Michele Cho-Dorado. She’s a pediatric gastroenterologist. Her KevinMD article is titled “From pennies to attending salaries: Why physicians should teach their kids financial literacy.” Michele, tell us some of your take-home messages that you want to leave with the KevinMD audience.

Michele Cho-Dorado: Yeah, so I would say two things. With respect to the topic of finance and kids, I would say it’s never too young to start teaching your kids about money and finances. Like I said earlier, just be transparent about how you spend your money, what you do with the money at home. I would, you know, just allow your kids to even be involved in decision-making, if possible. And then I would say be a role model. Obviously, kids will learn from watching their parents.

And then the second thing I would say is, you know, for anyone who’s afraid to try something new and to think outside the box, I would say, you know what, you just need to go for it. Another good quote I like is, “Only those who dare to fail greatly can ever achieve greatly.” And I think that, kind of like what I alluded to before, if you’re able to change your perception and your relationship with failure, or with what it means to, you know, be rejected, I think that you can do more than you might have imagined.

Kevin Pho: Michele, thank you so much for sharing your story, time, and insight. Thanks again for being on the show.

Michele Cho-Dorado: Thank you so much.

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