Burnout isn’t only about autonomy, it’s about your bank account [PODCAST]

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Physicians stay in jobs they cannot afford to leave. The wellness conversation talks about resilience and meaning, and never about what is in your bank account. Stanley Liu, cardiologist, financial planner, and founder of DocEmpowered, returns with a concept traditional financial planning does not have. This episode is based on his article “Unlocking career flexibility with a Courage Fund,” published on KevinMD. You will hear what separates a courage fund from an emergency fund, and why the difference is intent rather than structure. You will hear how to size one in months rather than dollars, and why a big non-compete or a thin local job market calls for a bigger number. You will hear why this is leverage your employer cannot see, since they may know about your mortgage but not your accounts. And you will hear where it belongs against student loans, retirement, and everything else competing for the same dollar. Press play for the one question he asks before any of the math, which has nothing to do with money.

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Transcript

Kevin Pho: Hi, and welcome to the show. Subscribe at KevinMD.com/podcast. Today, we welcome back Stanley Liu. He’s a cardiologist, financial planner, and founder of DocEmpowered. Today’s KevinMD article is “Unlocking career flexibility with a courage fund.” Stanley, welcome back to the show.

Stanley Liu: Hey, thanks for having me back on.

Kevin Pho: All right, so tell us exactly what a courage fund is and why you decided to write this article on KevinMD.

Stanley Liu: Yeah, I wanted to introduce this concept because in traditional financial planning, this concept doesn’t really exist. When I model out financial plans for physicians, all the software in the financial planning world assumes that we work 9 to 5 for 30 years. There are only minor variations in income, inflation adjustments, that kind of thing. And then we go from 60 miles an hour to zero at a certain age, and that’s it. That’s really not the reality that a lot of clinicians seek these days. More and more now, we really prize career autonomy and flexibility. And when you talk to a financial planner about that, they kind of scratch their heads, because they don’t really have the tools to model something that unstructured.

So one of the ways I wanted to bridge this concept is by introducing something called the courage fund. The idea is that this is part of short-term planning that can allow a clinician to afford more career flexibility and autonomy in the short run, as part of a larger, more traditional financial plan.

Kevin Pho: And to be clear, this is different from an emergency fund that a lot of wealth managers suggest just in case something unexpected happens, correct?

Stanley Liu: Yes. Now, structurally, they’re very similar. I know you are very financially savvy, Dr. Pho. I’m just going to back up and talk about what that emergency fund means, if that’s OK.

What we’re talking about is a short-term reserve that’s designed to keep you from having to go into debt if something unexpected happens. Let’s say an oak tree falls on your minivan and totals it unexpectedly. Suddenly you’re out a minivan, and you have to pay for that. If you don’t have any cash flow reserve, then you may need to cut into expenses or take out another car loan, basically getting into more debt for that. Whereas if you have a short-term reserve fund, you can pay cash for that minivan, make car payments to yourself to replenish that emergency fund, and avoid having to go into more debt. So it gives you some resilience.

Generally speaking, financial planners recommend that we have anywhere between three and six months’ worth of expenses as an emergency fund, depending on your situation. So that’s just some background information regarding what you said.

Now, to answer your question, the courage fund is different from the emergency fund, not in terms of structure, but in intent. With an emergency fund, we want to keep it in something short-term and safe, like a money market fund, an online savings account, or something like that, where you don’t have to worry about the value going down to zero when you need it. The courage fund works the same way. You could do the same thing and put it in a similar type of vehicle, like an online savings account or money market fund. But the difference is intent. This is not meant to be a defensive measure, as the emergency fund is. This is designed to let you go on offense.

Let’s say, for example, that you are about to have a negotiation where you want to present the possibility of going part time or taking Fridays off, or something like that. There are a lot of forces, which I don’t need to explain, that try to keep physicians working as hard and as long as possible. So if you want to do something that’s a little bit more autonomous or has some flexibility, you have to be prepared for them to say no.

The idea of the courage fund is to get over the fear of that. Let’s say you have three months’ worth of expenses in a courage fund. That means that in the worst-case scenario, if you got fired, or let’s say you took a sabbatical, you’d be fine for three months. And that can give you a lot more strength going into a negotiating position when you’re trying to get a nice win-win that’s sustainable, one that allows you the flexibility and autonomy you want, because you know you have a backup plan. Worst-case scenario, you have two or three months to find something else.

And one of the things I love about it is that, unlike other things you bring to the negotiation table, this can be quiet and completely private. No one needs to know about it. Your employers may know that you have a noncompete or that you have a mortgage on your house, and they may use that against you, but they don’t know what’s in your accounts. And if you have built yourself a courage fund, it does give you some leeway to make some short-term changes that can pay major financial and nonfinancial dividends for the rest of your career.

Kevin Pho: I love how you frame this, defense versus offense. One of the things that we’ve talked about on this show is that one of the reasons physicians are so burned out is not only a lack of autonomy, but the fact that they’re financially tied to whatever job is making them miserable or leading to their burnout. So having a separate fund, like the courage fund, where the intent is to strengthen your negotiating position when you’re talking to administration, when you’re talking to employers, is, I think, certainly very novel and something that all physicians should consider.

Stanley Liu: Yeah, and for me, this is not theoretical. This is something I had to do when I was leaving a full-time position that had a significant noncompete, and I know you and I have spoken about that on this podcast before. I personally, and I think many physicians, tend to be naturally risk-averse, and we are taught to follow a very clearly defined career path. When we step off the moving walkway, that can be really scary, especially if there’s no guarantee of stability on the other side. And lots of times others are depending on us financially, so that’s really risky.

So for me, this courage fund helped counterbalance that risk by providing the short-term stability that my family and I needed, so that I could make the short-term change that led to much better long-term benefits. And I think when physicians are introduced to this concept, whenever I talk to people about it, a light bulb goes off in their heads, and they realize, “Whoa, I have this power to create this buffer against this scary risk in the hopes of something better.” And that can be really empowering.

Kevin Pho: So you are obviously a financial planner, and there are so many buckets that physicians and their families need to save in, right? You have retirement, you have education, some have to pay off student loans, there’s the emergency fund, and now we’re talking about this courage fund. So specific to the courage fund, where does it play a role among all the buckets we just mentioned, in terms of prioritizing?

Stanley Liu: It’s a great question, and there is not going to be a one-size-fits-all answer to it. I think at one extreme, you’re really burning out. You’re considering just quitting altogether with no plan, or you are not in a good place from a mental health standpoint. This actually might be pretty short term. I mean, this kind of is an emergency. And that may be one situation where we say, “You know what? Let’s just get you out of this unsustainable environment first, and then we’ll figure it out. Let’s buy us some time. Save this money in this courage fund that can do that.” That’s one extreme.

Most clinicians, thankfully, are not in such dire straits. And when that is the case, when I talk to a physician, I really want to put things in perspective. Do they have $800,000 in student loans? Obviously, that would take priority over a courage fund. So it really depends on the individual situation. But what I really try to think about is both physician wellness and sustainability, and framing everything from that standpoint. Then it becomes clear which financial priorities are the more urgent ones to address and which can wait.

Kevin Pho: Now, when we talk about an emergency fund, I believe it’s calculated as some multiple of your monthly expenses. When talking specifically about the courage fund, how does one think about how much to contribute to the fund?

Stanley Liu: Yeah, actually, the math is exactly the same. You’re right. I think of it in terms of months. How many months of flexibility can you afford, where if your income went to zero, you would still be fine? That’s how I would think about it.

And there are different factors, I think, that would impact how much you think you need. Let’s say, for example, you are in a very high-demand specialty. There are plenty of job options around you. It’s a hot job market. You have no noncompete. Everyone’s already recruiting you. Maybe people have already given you an offer. In that case, you may not need much of a courage fund at all, because you have many backups. On the other hand, if you are in a situation where you have a big noncompete, there are not many options around, and you are going to need to spend some time hunting to find something potentially sustainable, that is where you probably want to have a larger courage fund.

To give an example from my own experience, you and I have talked about how I rode out an 18-month, 20-mile noncompete. My courage fund was 12 months’ worth of expenses because I have two young children, and that’s what it took for me to sleep at night, to jump ship and figure out something on my own. So it’s going to be a very personal decision based on objective as well as subjective and psychological factors.

Kevin Pho: Now, you’re one of the rare people who is both a cardiologist and, of course, a financial planner, and I’m going to assume that you have a lot of physician clients. You said earlier that a light bulb seemed to go off whenever you introduced the paradigm of the courage fund to your physician clients. Just taking a step back, what does that tell you about the mindset physicians currently have, or have always had, about mixing money and medicine together? What does that tell you about how resistant some physicians are to realizing that money issues can sometimes lead to issues that directly correlate with physician burnout?

Stanley Liu: That’s a really insightful question, and I think there are two themes that it illustrates. One is that there seems to be this learned helplessness that a lot of physicians have when they’re stuck in an unsustainable situation. They see that everyone around them is in the same situation, and they just assume that’s kind of it, right? Stick it out on the moving walkway. Keep grinding it out. So part of it is not having any examples to follow of people who think outside the box.

The second is the tendency for physicians to not want to touch finances or money, to even consider it dirty. When you look at the physician wellness space, when people are talking about physician wellness, we talk about things like mindfulness, resilience, finding balance, finding meaning in what you do, finding purpose. But no one’s ever talking about what’s in your bank account or what your short-term cash reserves are, which can really make a difference.

And at the end of the day, money is a tool. It may not be inside the box of what you think of as a tool for crafting your career and life, but it is such a powerful one. It is amoral. How you use it really reflects your values. So if you consider it one of the many tools you can use to live out your values, it can be not only very positive, but a powerful force for physician wellness. And I think that idea is very novel to many physicians.

Kevin Pho: Now, from what I’m hearing, you’re saying that there is still a stigma attached to money, especially during medical training and in how physicians see it. I know when I was training in medicine 20 or 25 years ago, money was completely divorced from what I learned, right? Only after I got out and started looking at blogs and listening to podcasts did I realize how much of a role money plays in what I do professionally as a physician. How can we get over that stigma? How can we get over that learned helplessness when it comes to physician finance?

Stanley Liu: I think it takes role models, people like you, who understand this, who have a wide audience and can share it with a lot of people and show by example what they’ve done. When trainees or early-career physicians have role models who can show this to them, then they realize what’s possible. We choose our specialties based on maybe one or two role models who have an outsized influence on the rest of our lives, when we think about it, right? I think the same thing is true for finances in medicine. If people don’t know that it’s possible, and they haven’t seen people they trust do the same thing, it may never occur to them as a possibility in their lifestyle that personal finance can be a tool to not only empower and enrich your own life, but that of others, and to really align what you do with your values.

Kevin Pho: So let’s get back to the courage fund. A physician is listening to you right now and is inspired by what you’re doing and what you say. After they finish listening to this podcast, tell us the next steps they should take if they want to pursue a courage fund, and the exact questions they need to be asking themselves.

Stanley Liu: I think the first question to ask is not a financial one at all. It’s this: What is the gap between the life and career that you have right now and the ideal one that you would like to have right now? Not 20 years from now, but right now. Where does that gap lie, and what would need to happen for that transition to happen?

Most of the time, when I talk to a physician and ask them that question, the reaction is trepidation. It’s terrifying, right? They would say, “I would have to uproot a lot of things. I would have to change a lot of things, and gosh, I might have to go X number of weeks or months without pay.” That’s usually what bubbles up. And others might say, “Actually, it’s not that big of a deal.”

Depending on your response to that question, that’s when you can start getting an idea of how important a courage fund is in your particular case. Is this something you’re going to need to build up so that not just you, but also your family members, can feel secure that the change you want to bravely advocate for, the change that you deserve in your life and career, is one you can feel confident advocating for because you have some backup? That’s how I would look at it.

So that’s the first question I would ask: What’s your gap between where you are now and where you want to be? Then we can work backward and figure out how significant a courage fund is in your life and where that gap fits.

Kevin Pho: We’re talking to Stanley Liu, cardiologist, financial planner, and founder of DocEmpowered. Today’s KevinMD article is “Unlocking career flexibility with a courage fund.” Stanley, as always, let’s end with your take-home messages to the KevinMD audience.

Stanley Liu: Thank you so much. So let’s just review. A courage fund is a short-term cash reserve that’s designed to create career flexibility by reducing your immediate dependence on your employer. It’s very similar to an emergency fund, but an emergency fund is defensive, and this is offensive. It gives you leverage to negotiate, go part time, or leave an unsustainable job without immediate financial pressure, and that is the whole point. So building a courage fund should be part of a broader financial plan that ensures you can not only create career flexibility, but also sustain it.

Kevin Pho: Stanley, thank you again for sharing your perspective and insight. Thanks for coming back on the show.

Stanley Liu: Thank you again for having me.

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