Money myths in veterinary medicine

In this preview of a recent episode of dvm360’s Vet Watch series, Tom Seeko, CExP, and CJ Burnett, CExP, cofounders of Florida Veterinary Advisors, take listeners into the world of finances to educate veterinary professionals on how to make smarter moves with their money.

Below is a partial transcript of the episode, in which Burnett and Seeko explain to host Christopher Lee, DVM, MPH, DACVPM, DACVM (Parasitology), some common money myths veterinary professionals have and whether they are holding professionals back.

Transcript

Lee: What are some of the common money myths that you hear from veterinarians, and how do those beliefs hold them back?

Seeko: Well, I will say that there is the idea that money works like math. And what I mean by that [is]…[take] the stock market, for instance: People invest money, put it into the market, [and] the market is going to give them 6% to 8% returns. At the end of the rainbow, there's this big pot of gold that's sitting there, and everything's going to work out gloriously. In reality, that's not typically how most people's lives unfold. There is inconsistent savings that people do. They go after this one opportunity or another. So when it comes to saving, most people save a very little amount of money. The national average right now is roughly 5%, and then they're showing all of these different returns. If you get a 6%, an 8%, or 10% return, your money is going to be this perfect little curving line that's going to go up, and then everything going to be great. And as we know, life doesn't happen that way. People often are very inconsistent with what they save.

I find it very fascinating. At times, when we talk with people, [they say], “I've got it under control.” And they're like, “Well, let us do a financial MRI of your life and look a little bit closer on what's actually happening.” And then we start analyzing—”Hey, I'm saving 15% of my income.” But in reality, they're only saving 7% or 5%. And then their plan isn't actually [working out]; they're not getting the returns that they thought they were going to get. And then life actually unfolds. And…people get to the latter part of their career and say, “I'm never going to retire,” or, “I'm going to be in the spot where I'm going to have to work forever.”

Burnett: To add on to that, people oftentimes believe that they're going to save whatever's left over of their income after their living expenses are paid. [But] the reality of it is those have to be flipped. We have to save first and then spend. So I think that one of the biggest money myths is: OK, I'll just have an income, and then I'll pay all my bills, and then whatever's left over is what I'll save. The truth of the matter is [that] we are human beings, and we eat every bite of food that's on our plate. And if we don't have the proper boundaries on how we save money, then it's always going to be that 5% [or] 6% savings rate as opposed to the more appropriate [and] more helpful, 15% to 20% of someone's gross income.

I think another myth out there is [that], typically, people check off the box as far as insurances… I got auto insurance, check the box. Oh, I got homeowners insurance, check the box. Oh, I got disability insurance, check the box. As opposed to taking a moment and just thinking, “Why do I have to pay for this? What am I actually paying for?” There's so many veterinarians out there [who] are paying for disability insurance…. One in 3 people are disabled for longer than 90 days before the age of 65, so a lot of people will find out what their disability insurance contract covers after they get disabled. And sometimes they go to make a claim with a disability insurance company, and they get denied because they're not disabled enough.

I think there's a huge myth around disability insurance and how it works, and veterinarians are unaware that there are companies out there that offer specialty language, not just the total own occupation language. There are companies out there that have better language for veterinarians, or even partial disability. There are companies out there that have more stringent partial disability definitions. So I think that insurance in general—it's a massive, massive miss as far as the financial service industry educating veterinarians on exactly what they're owning. But truth of the matter is [that] there aren't a lot of property and casualty insurance agencies or life insurance companies out there really talking about different things. I think the biggest problem is most people are relegated to having to go to Google or the financial entertainers on TikTok and Facebook in order to get any real information. And even then, it falls woefully short, because those people are not talking to veterinarians. They're talking to the 90% of America that makes less than $200,000 in household income per year.

Lee: I love going back to one of the other things that you said: “Don't wait to just see what's left over.” When I first graduated, I remember my dad said, “When you get your paycheck, pay yourself first. That goes into savings, and then everything else is where you take everything else from.”

Want to hear the rest of the conversation? Check out the full episode here!