Fellow panelists, we are here today to considerthe case of Dr. Louis Constan. Who is this guyand how did he come to be the successful doctor,writer, and advice columnist he is today?What shaped his life in ways that allowed him to live fordecades below his means, allowing him to save and investfor an eventual happy retirement? Is his current comfortablelife the result of a quick financial analysis by a financialadvisor or a lifetime of personal soul searching? Tofind the answers, we must go back to the beginning.
Dr. Constan, we see that your father died suddenlywhen you were only 2 years old, leaving your motherwith three small children and few prospects for financialsecurity. For 2 years, your family teetered on the brink ofpoverty. This was, of course, bad for your financial future.Fortunately, things improved the following decade.
In the fifties, your mother remarried. Her new husbandhad a steady job that provided a decent income.This was good for your financial future. Unfortunately,she also started producing children—seven more overthe next 15 years. This was bad for your financial future.And although your stepfather had a good job, he alsoliked to drink and gamble. This was bad for your financialfuture, or so it seemed at the time.
Out of necessity, your family practiced being frugal—no car, no vacations, no nice clothes, and noextracurricular activities. In fact, the family barely hadenough money for food and shelter. So you started yourlife with low expectations, which, in the long run, wasgood for your financial future. You could never beextravagant with your money.
It was during the fifties that you learned you were verysmart. You excelled in school and spent the decade withyour nose in books, becoming enamored with words andideas. Of course, words and ideas were interesting, stimulating,and didn't cost anything, which was good for yourfinancial future. This set the stage for the sixties.
In the sixties, your academic career accelerated. Youwere accepted to the University of Chicago and later tothe University of Chicago's Medical School. Becauseyour family had no money, you were given several scholarships.It amazed you that people would give you largeamounts of money for your education, and you resolvedto give back when you could. During this time, youmade education and career decisions that catapulted youto levels of achievement far above what anyone in yourfamily had achieved.
You also met and married a wonderful woman whosepersonal skills and belief in you filled the gaps in your life.After spending 2 decades with your nose in books, youknew very little about relationships and how to deal withpeople in the real world. Despite your intelligence, withouther loving guidance you would have crashed andburned, becoming one of those introverted and eccentricold men who people stare at and don't understand.
These were heady times for you. You realized thatsuccess in life would be based on you and your wife'sshared merit, skill, knowledge, and hard work. Whilethis was good for your financial future, your financiallife didn't really begin until the seventies.
This was the decade when your career opened up.You chose family practice as your medical specialty,guaranteeing that you couldn't become rich simply bybeing a doctor. The low reimbursements and high costsof family practice meant that you had to watch everypenny. Unfortunately, you soon discovered that many ofyour scholarships were converted to loans when yougraduated. At this point, you knew you had to worksmart, save compulsively, and invest wisely early in yourcareer—and you did.
You immediately started saving despite hefty personalexpenses. During this decade your wife gave birth totwo children, which effectively removed hundreds ofthousands of dollars from the money you had availableto save and invest. Fortunately, your wise wife spent thedecade cutting coupons and teaching the children to befrugal. This enabled you to start managing the increasingsums of money you had to handle during the eighties.
In the eighties, you were faced with two realizations.You realized that your children were going to require alot of money for their education, which they deserved,and that you were not going to be able to work forever.You would have to start putting away serious amountsof money if you were going to provide your childrenwith an education and eventually retire. You started savingfor retirement and college at the same time.
You knew you wouldn't be able to meet this challengewithout cranking up your frugality to a new level.So you only bought items that were on sale, took chargeof home maintenance responsibilities, lived in a modesthome in a middle class neighborhood, drove economycars, and successfully resisted the prevailing mentality ofMichiganians that you were nothing if you didn't own aboat, motor home, and a nice place on the lake.
Your wife did persuade you to take vacations,though. She realized that with your busy schedule youwould never get to know your children if you didn't occasionallyget out of town with them. To this day, you canremember little about their childhood that didn't involvea trip to Disney World or Fort Myers Beach, Fla.
This was also the decade when you started your writingcareer. Remembering how you wanted to give back,you got involved with the St. Luke's Hospital medicalstaff leadership, the Saginaw County Medical Society,and the Michigan Academy of Family Physicians. Theyall needed people to write for their publications and youvolunteered. It was amazing how writing three articles amonth for a decade helped you hone your skills as awriter. And fortunately for you, the modest investmentsyou were able to make did well. But little did you knowhow things would heat up in the following decade.
You were blessed early in the nineties when your sonwon a full scholarship to college, saving you over$100,000. Two years later, however, you reeled whenyour daughter entered an expensive art prep school. Ofcourse, after prep school she had to attend college—anIvy League college—taking the repeated trips to Romethat are obligatory for one seriously pursing a career inart. The total cost exceeded $200,000.
Fortunately, by this time you were in your primeyears of practice productivity. Naturally, you continuedto be frugal with spending and aggressive with saving.You benefited from the good performance of the stockmarket in the nineties. And your conservative approachto investing prevented your portfolio from failing asmuch as other investors' portfolios during the stock marketcrash that would eventually occur.
Your Life Today
Since historians tell us not to analyze recent eventsbefore the judgment of history has had time to work, wewill leave out any discussion of your financial historyduring this decade, Dr. Constan. We noticed, though,how introspective you have become.
What Should I Do withMy Life?
You just read Po Bronson's (Random House; 2002), which is an interestingcollection of stories about people who spent decadessearching for their true calling. These people often gaveup lucrative careers to pursue their dreams. This got youthinking about how fortunate you were to have a careerwhere you could pursue your dreams and have a comfortableincome at the same time.
Our conclusion, Dr. Constan, is that you have handledthe challenges life has thrown at you quite well andwill continue to do so in the future. Therefore, your conservativeinvestment style and frugal lifestyle are trulygood for your financial future.
Louis L. Constan, a family practice physician inSaginaw, Mich, is the editor of the Saginaw County Medical Society Bulletin and Michigan Family Practice. He welcomes questions or comments at3350 Shattuck Road, Saginaw, MI 48603; 989-792-1899; or firstname.lastname@example.org.