But I’m not a wealthy doctor! Your services aren’t for me?

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You’re a colleague, a fellow physician or other busy professional. Chances are, despite success in your career or success in other areas of your life, you’re here because of some interest or issue with money, investing, or wealth.

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It is no accident we chose the word WEALTHY – colleagues who have negative emotional reactions to this word often have subconscious issues that prevent them from achieving the level of wealth and prosperity that they deserve.  Doctors are often taught to be givers, and not to be greedy or selfish. This subconscious resistance to this idea of greed can lead to self sabotage of any efforts to formulating an effective financial goal or plan. Money is such an emotional topic: for instance, the most common source of argument in a marriage is about money.  It is also true that arguments about money are never, at their core, about the money.

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Wealth is nothing more than a description of financial health.

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We are an institute that helps you deal with financial problems on multiple levels.  You will have access to tools and resources that may increase your chances of becoming wealthy.

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Who is the Wealthy Doctor Institute LLC?

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The Wealthy Doctor Institute LLC is a privately held Registered Investment Advisory specializing in providing education and portfolio management services to individuals, families and small businesses.  As a fee-only RIA, our revenue is solely derived from subscription fees and fees assessed on assets under our management. As portfolio managers, we do well only if your portfolios do well. We do not earn commissions of any kind. We are fiduciaries, which mean we are obligated to act in the best interests of our clients.

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Why should I invest with you?

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As a physician myself, I often get solicited by money managers offering to manage my wealth for me. But I’ve always invested for myself, and developed my own systems.  So when a money manager solicits my business, I ask hard hitting, detailed and practical questions about their investment strategies.  Many would say they would not share their strategies, citing the proprietary nature of their strategies, despite me offering to sign a nondisclosure agreement. The few who did share, I would find weaknesses in their strategies.

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When I semi-retired and had colleagues express interest in having me manage their accounts for them, I vowed to build the kind of investment advisory service I wished I could have had:  an advisory service that is transparent -

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1. We hold no secrets, and in fact we’re willing to teach you exactly how our strategies work. We love what we do, we love talking about what we do, and we love answering any questions you may have.

2.  To help you reach your financial goals and destiny, one size does not fit all. Thus, we offer several levels of service:

   1. Some people only need to read my book to develop and improve their own investing skills.

   2. Others would benefit from following along with our monthly update videos.

   3. Still others realize they need coaching – despite knowing what to do, we often start out with certain cognitive or emotional blocks, such as confusion, insecurity, and fear, that prevent us from properly executing our plan.

   4. And then there are people who would rather let us invest for them. If you invest with us, we will keep you in the loop and work with your unique situation, and will work with you to make sure you understand whatever action we ultimately agree to do on your behalf.

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What’s unique about your systems?

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Our systems modify the typical buy-hold-and-diversify investing systems that are commonly taught.  Although buy-hold-and-diversify models have their strengths, they also have weaknesses that did little to protect against large market losses in 2000 and 2007.

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Our systems modify the typical buy-hold-and-diversify models, by proactively attempting to identify large losses while they’re still small. Our systems are based on algorithms that take emotional fear and greed out of the decision making process. Any physician who has run a code red, knows that code algorithms, although not perfect, increases the survival chances of the patient while taking out the guesswork in determining next steps. These investment systems are explained in more detail in my book The Busy Doctor’s Investment Guide.

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Is this complicated?

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When I first started sharing what I do, I was perhaps naïve to think this is simple; after all, my workhorse investment systems take only minutes each month to implement.

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Several years ago, I was hanging out with a surgeon colleague of mine, who casually remarked to me “even a simple appendectomy seems god-like to a patient.” “Simple?” Even as a radiologist, no matter how well trained, I would feel extremely uncomfortable standing in an OR holding a scalpel looking at a prepped abdominal wall unless a well trained surgeon was at my side. I imagine that same surgeon friend would feel the same way looking at a “simple” CT scan.

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Systematic investing is complicated, in the same way that driving is complicated. Initially you need to familiarize yourself with the controls, know where you’re going and how to anticipate obstacles to decrease likelihood of crashing. Eventually, with practice and market feedback, investing becomes second nature.

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This is why I founded the Wealthy Doctor Institute LLC. There are colleagues who would rather learn how to invest for themselves like I do, and would love to personally learn how to invest, until investing and managing investment risk becomes second nature.  The skills are definitely learnable. However, I have also found that many more colleagues have neither the time nor desire to learn these skills, no matter how ‘simple’ these skills may be.  If you’re one of these people, we have services that may help you define and achieve your financial goals as painlessly as possible. Schedule a consultation with us to determine how we may more optimally help you.

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Have you proven your systems?

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Every system, including the popular buy-hold-and-diversify systems, has strengths and weaknesses. No system is perfect. And past performance does not guarantee future results. With the markets, nothing is guaranteed.

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It is also true that there are many investment systems out there. Many systems that seem intuitively to work, fail backtesting.  If a system cannot even pass backtesting, that system is unlikely to work in the future.  We backtest our systems and continue to monitor and refine our systems in the face of changing market conditions.  And we recognize that backtesting success does not imply continued future success, thus we utilize several systems with different risk mitigation strategies, and diversify our investing by systems rather than by asset class. We find that our mechanical models reduce emotionally stressful second guessing, and can be reasonably implemented even by a busy physician

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What type of investments do you use?

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Although we have access to the entire universe of investment options available in the global marketplace, we currently focus on the following instruments (including but not limited to):

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• Exchange Traded Funds and Exchange Traded Notes (ETF’s and ETN’s)

• Individual stocks

• Income producing assets, including, but not limited to, bonds, REITs, no load mutual funds

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As a fee-only advisor, we are held to the highest fiduciary standards. Our focus is not only on continuing to research and optimize our systems, but also to implement our systems utilizing the most cost efficient manner for our clients. The actual composition of an individual’s portfolio can differ depending on the system utilized and their unique financial situation.

 

Are my accounts managed separately? Or are funds pooled or comingled?

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We do not accept funds directly from our clients. Your account will be held in your name through a third party custodian.  Your assets will never be commingled with another client’s assets, as in a mutual fund or hedge fund.  Management of your accounts will be tailored to your individual situation.

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How often do you trade my account?

 

Our core investment models produce trading signals less than once per month, however, we tailor our investment models to your individual situation. As a fee-only investment advisory, we do not accept commissions, and in fact whenever possible will attempt to optimize your particular portfolios with commission - free ETF's available through your custodian.  

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How often do you review my investments?

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We review all of our core model investment systems at least monthly. We have found that frequent monitoring introduces extraneous noise to our trading signals, however, less frequent monitoring may not catch or avoid major bear markets as quickly or as timely as our monthly models.    

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Will you consult me prior to making trades?

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Our models require timely adjustments when adjustment signals are generated. To do so in your accounts, you would need to grant us Limited Power of Attorney to manage your accounts. We generally do not consult you when making trades.  Your custodian will generate trade confirmations immediately following our transactions and you may view these electronically, or receive hard copy confirmations and monthly statements. You will also receive monthly video updates from us detailing how signals were calculated, and whether adjustment criteria were met or triggered.

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In general, when we first begin working together, we will likely have much more personal interaction than later in the relationship when a greater level of comfort exists.  We welcome any and all questions about your accounts and the strategies we implement for you, and in turn, we would thoroughly comprehend your investment objectives and tolerance for risk. 

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What is Limited Power of Attorney?

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When you grant us Limited Power of Attorney, you agree to give our firm the ability to buy and sell securities on your behalf in the designated custodial account, in accordance with mutually determined investment guidelines.  Limited Power of Attorney grants us no right to put money in your account or take money out of your account (with the exception of our approved quarterly management fees).  

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We can utilize block trading, which allows you to participate in average price execution when we trade a large number of shares for our clients. This practice is referred to as having discretionary authority.

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May I trade in the account(s) you manage?

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We generally suggest you do not trade in our managed accounts, since your trades may conflict with overall strategies, complicate our block trading allocations, and obfuscate performance metrics. We do, however, commend your willingness to learn to be self-sufficient, learn, and grow, through placing your own trades. If and when you feel confident enough to assume the liabilities and potential rewards of placing your own trades, we will be happy to assist you in opening a separate account at your custodian where you can execute your own personal trades.  We do offer a separate coaching service. This coaching service, however, does not offer specific investing advice or recommendations.

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How often will we meet?

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A new client would typically meet more frequently in the early stages of our working relationship. We recommend that we meet at least annually, and more frequently depending on the complexity of your situation, or when major life changes such as marriage, job change or retirement occur. If you anticipate one of these major life changes, please talk to us sooner, rather than waiting until after the life event has occurred.  Because our core strategies require monthly monitoring, it is not uncommon for clients to want to meet at least monthly when we first begin working together, until a greater level of comfort exists.  We welcome any and all questions about your accounts and the strategies we implement for you.  We would typically start with a series of consultations over the phone and/or in person, both for you to understand our investment strategies, risks, benefits, and alternatives, as well as for us to more thoroughly comprehend your investment objectives and tolerance for risk, before we complete the necessary documents, to ensure our relationship begins smoothly. 

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Can you coordinate with my accountant or lawyer?

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Yes, with your written permission, we will share your portfolio information with your tax or legal advisors.

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Please note that we do not render legal or accounting advice, but can help refer you to a reputable professional upon request.

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What information do you provide for tax purposes?

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Your custodian will provide you with monthly statements and tax forms.  

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How is The Wealthy Doctor Institute compensated?

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As a fee-only Registered Investment Advisor, we are compensated by advisory fees assessed on the money we manage.  We charge an annual percentage fee, based on the value of clients’ portfolios.   We do not receive fees from commissions or other hidden fees from sales of high load mutual funds, and as your fiduciary, will utilize no-load funds or low expense, commission free ETFs whenever possible.

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WDI also offers separate fee-based subscription and coaching services, however, these services are free to clients with portfolios under management.

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How and when am I billed for advisory fees?

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Wealthy Doctor Institute LLC bills our clients quarterly, on the calendar quarter.  We mark your portfolio to market and value the portfolio as of the close of the last business day of the prior quarter, and bill for services rendered for that quarter according to our standard fee schedule.  

Our clients typically authorize direct payment to us from their custodian, although we can be flexible. For instance, if a client has both tax qualified (tax advantaged retirement accounts) and taxable accounts, we could arrange payments to be made from the taxable accounts, to minimize impact on the tax qualified accounts.

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Note that advisory fees may be a tax-deductible expense for many clients.

 

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How much money do I need to begin investing?

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This will depend on what vehicle you prefer to use to invest: mutual funds, or exchange traded funds. Each vehicle has different factors to consider, such as minimum purchase amount per fund prospectus, knowing the effects of commissions on smaller accounts, and other risks of smaller accounts. This answer will depend on the resources that are available to you, and your particular financial custodian. Realistically speaking, $50,000 would be the minimum for any one strategy, $250,000 would be more ideal when adequately diversifying between systems.

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If you need to ask this question, then an even more important question would be, are you financially stable enough to take on the risks of investing? With investing, we focus on safety first, so each system we have developed focuses on different ways to deal with market risk. In your life, we also need to consider safety first.  Think of the advertising disclaimers we read all the time “Check with your doctor before starting this exercise program,” and realize you may have varying needs for an emergency fund, life, property, disability and/or casualty insurance, estate planning, and other tools to protect against at least the more common non-controllable risks to your financial health before you would even want to consider investing.  Just like how, as physicians, we cannot write prescriptions for patients without performing a history, physical and possible lab tests, we cannot answer this question for you before examining your particular financial situation. Contact us to discuss your situation.

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How do I protect my downside?

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If you are asking this question, congratulations, you are ahead of most retail investors. We get questions all the time: “What do you think about [insert asset or asset class here]? It’s already dropped so much!” to which I would ask “What was your original plan when you bought that asset?”

 We cannot avoid all downsides. There are, however, ways to decrease the likelihood or degree of at least the larger losses. One way would be to use rules or systems that will generate specific criteria to take action. Ideally, the best time to decide when to get out is before even getting in. Once real money is involved when you buy an asset, real emotions take over, emotions such as fear and greed will tempt you to deviate from your plan, assuming you had a plan to begin with.  We use emotionless rules-based investment systems to help protect against the devastating effects of our emotions.  These systems include tools such as trailing stops, indicators, and sector rotation tools that are described in my book.

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You mention ‘coaching’.  What’s that?

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A coach is a partner, whose purpose is to empower you to attain the results you desire. In order to achieve the results you deserve, you must follow through on commitments you make to yourself. Coaching is not therapy; therapy we define as dealing with the past.  Our focus on coaching is on getting results in both the present and in the future.

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When learning how to invest, a certain amount of confusion is expected initially during the learning process. Current beliefs about money may be based on misconceptions or lack of adequate references. Concepts can be counterintuitive. We offer coaching as a way to teach you how to invest, help you understand financial concepts,  point out financial blind spots, as well as identify misconceptions or emotional fears and roadblocks.  Finances are emotional topics. Stress can devastate your financial situation, despite having a solid investment plan, by making you deviate from your financial plan.

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Schedule a consultation, and we can determine what level of support would best suit you and your situation.