Whitney Etter

Many financial books today are filled with advicethat ends up telling the reader that investingreally just depends on their personal situation orgoals without providing concrete options. Physician-investorsdon't have time to read every book and exploreevery investing option. Luckily, Robert Pagliarini's new book

(St. Martin's; 2006) is filledwith actual advice to implement an investing and savings change. The book is brokeninto chapters for each day of the 6-day makeover. The reader can take a shortquiz at the start of each chapter to decide if they really need that step or whichareas of the chapter to target. Each section then has step-by-step advice for findingthe right insurance, investing for a goal, fiscal planning, retirement, and survivinga financial catastrophe. 

lists the advantages and disadvantagesfor each project outlined, allowing the reader to decide whether theadvice is in their best interest. Supplement blocks throughout the book define keywords and concepts so the book is simple to follow for the financially unaware.Pagliarini adds anecdotes, including "Don't Let This Happen to You" features, whichmake this an easy-to-read reference book for financial direction.

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READINGROOM: The Six-Day Financial Makeover

Physicians are always seeking a simpler and quickerway to understand their finances and investingoptions. Reading through a library of investing andfinancial books is out of the question. Financial consultantand bestselling author Eric Tyson, MBA, has written 

(Wiley Publishing, Inc; 2006) to helpefficiently guide investors through their options. The book is broken into six parts,each taking an in-depth look at an important investing category—including realestate, resources, stocks, and small businesses. The chapters within each sectionexplain the concept basics and utilize charts, graphs, and boxed sections to helpinvestors understand the topic's intricacies. Among Tyson's most important conceptsare: be realistic about returns; diversify; don't expect to beat the stock market;don't bail when things look bleak; and ignore prognosticators. To help reachthese goals, Tyson includes icons throughout the book so readers can skim for tips,warnings, or investing reminders. The book is perfect for physician-investors whowant more than dry and confusing explanations from an investing book. Tyson'schapters are simple to digest with visuals and mathematical explanations for easycomprehension.

READING ROOM: Stock Investing for Dummies

With the housingmarket tumblingand oil prices finallydropping, it's nowonder that manyphysician-investors are looking formore stable investments to help theirportfolios weather the fluctuating markets.An uncertain economy alwaysmakes fixed-income securities a veryattractive option, especially since therisk of losing the value of your money inthis type of vehicle due to inflation wasquelled in 1997 when the first TreasuryInflation-protected Security (TIPS) wasissued. TIPS are government-issued debtsecurities, similar to savings bonds, and,as their name suggests, they are built toprovide inflation protection.

The value of the security is based onthe Consumer Price Index (CPI), whichwill fluctuate according to inflation.The worth of TIPS is elevated by CPIcomputations to match the originalpurchasing power of your investment.Based on that adjusted value of thesecurity, interest payments are calculatedand paid every 6 months.

Since individual TIPS are expensive(ie, purchased in $1000 denominations),buying through mutual fundscan be beneficial in terms of cost anddiversification. If you are able to managethe price tag, however, individualTIPS guarantee you will not losemoney—or your money's final purchasingpower—due to a fickle economywhile the security matures. But beaware that if you decide to sell yourTIPS before maturity, Treasury Directsends out a request for bids and sellsyour TIPS to the highest bidder, whosebuying offer may not equal the valueof your initial investment. You could,therefore, lose money by selling yourTIPS early since the selling price isdetermined by what brokers are willingto spend. This gamble shouldprompt investors to hold onto theirTIPS for the long haul.

Acquiring TIPS is done throughyour broker or through Treasury Directat their Web site (www.treasurydirect.gov/indiv/myaccount/sectdes.htm),by phone (800-722-2678), or throughmail. In order to follow your TIPS, twostatements are sent to you per year:1099-INT, which shows the interestpaid, and a 1099-OID, which showsthe increase or decrease of your investmentdue to the CPI. Treasury Direct'sWeb site even lets you view both formsand an up-to-date record of taxabletransactions, or you can order duplicateforms by calling their 800 number.

As with all investment vehicles, thegood comes with the bad. AlthoughTIPS are exempt from state and localincome taxes, they are subject to yearlyfederal income taxes. With each hike ininflation, the value—and taxes—ofyour TIPS increases. Therefore, it isimportant for TIPS investors to realizethat for each year the TIPS are held, theinvestor is required to pay federal incometaxes on that growth even thoughthey won't receive that money until thesecurity matures.

Because of this obligation, it's best tohold TIPS in a tax-deferred account likean IRA. Keep in mind that since theprincipal, not the interest rate, is adjustedfor inflation, the purchasing poweronly remains constant before taxes.Taxes on the adjusted value diminishthe final purchasing power at maturitybecause tax percentages remain constantwhile money left after taxes hasweakened purchasing power the higherinflation rises. To understand moreabout TIPS and determine if youshould invest, visit the Treasury DirectWeb site or speak with your financialadvisor.

Use Treasury Inflation-protected Securities

For physicians who are considering a working retirementor are looking for a career change that canincrease their income, entrepreneurship may be anoption to consider. Michael Masterson has written 

(John Wiley & Son, Inc; 2006) to helpfast track a new business or sales career into success.Knowing that not all investors have pinched their pennies inanticipation of retirement, his plan involves the active pursuitof profit instead of waiting for money to appreciate. The book also discussesdifferent methods for financial success, including becoming a key sales member ata small company with growth; investing in your own knowledge by becoming aconsulting expert; starting a local business (ie, housecleaner, landscaper, etc); gettinginvolved with a joint-venture deal; and learning the value of back-end sales.Masterson stresses the need for a mentor, so the pitfalls of becoming an entrepreneurcan be avoided by emulating a successful model. The bulk of the book is dedicatedto sharing eight success stories of people who applied Masterson's advice.Through this insider's perspective, readers can understand how Masterson's strategiescan apply to different business ventures.

Whitney Etter

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