Seven Reasons That I was a Terrible Investor

Dec 3, 2022

Have you ever made a bad investment decision or realized that you’re just not as good at investing as you are at your chosen profession?

I didn’t realize it at the time, but I used to be a terrible investor. Looking back, it’s embarrassing how uninformed I was when trying to make investing decisions. And while my past ignorance doesn’t represent everyone in my profession, it’s fair to say that most physicians and other white-collar professionals aren’t savvy investors!

Here are seven reasons that I used to be a terrible investor and what you can do to avoid them.

1. I had no finance or investing education

Physicians, dentists, engineers, attorneys, IT experts, and other white-collar professionals all spend many years in formal education mastering their trade, but very few of them get training in finance/investing. I spent four years in college, four years in medical school, five years in residency, and one year in fellowship training, and never once had training on how to invest or manage my money once I started in practice. I could balance a checkbook and create a budget but had no idea how to grow wealth or create financial freedom.

My life was transformed when I learned the power of self-education and began to study finance and investing. We’re conditioned to think we must go to college to gain expertise on a topic, but reading books, taking courses, and getting coaches is much more enjoyable and efficient than going back to get another degree!

Books are a great starting point for increasing your finance and investing knowledge. As your education goes up, your risk as an investor goes down.

Here are some must-read books if you’re just getting started in your self-education.

    1. Rich Dad Poor Dad – Robert Kiyosaki
    2. Tax-free wealth – Tom Wheelwright
    3. 401 k’aos – Andy Tanner
    4. Wealth can’t wait – David Osborne
    5. Cash flow quadrant – Robert Kiyosaki
    6. Entrusted, Building a Legacy that Lasts – Andrew Howell

2. I gave total control of my investing to a certified financial advisor

I had no education in finance, I was too busy with orthopedics to figure it out, AND at the time, I didn’t find investing that interesting. For these reasons, I turned over my investing strategy and decisions to a certified financial planner.

Don’t get me wrong, he was an upstanding person, knowledgeable in retirement plans, insurance, annuities, and mutual funds. He just didn’t have knowledge and experience in alternative investing (real estate, oil/gas, ATMs…). His plan was to help me accumulate a “nest egg” and “retire” someday, NOT to help me create financial freedom with passive income.

I was thirteen years into my practice before I got motivated to take control of my finance and investing journey. I had been on financial autopilot to that point and hadn’t learned a thing about investing. I also didn’t have a single dollar of passive income coming in – all of my money was in traditional stock market securities. Having a financial planner had given me a false sense of financial security and I’d gotten comfortable not knowing much about finance.

Whether you’re just starting the financial freedom journey, or, like me, several years into your practice when you start, there’s still a place for having a financial planner in your life. We now work with a group of planners that understand and utilize real estate as part of the wealth-building strategy. They are also versed in creating integrated financial strategies, coordinating with your financial team (CPA and asset attorney), whole life insurance, and helping you with any traditional financial securities you may currently have.

3. Everyone around me was just like me

They say you’re the average of the five people you’re around most often. They also say your net worth is a result of your network. Undoubtedly, we are influenced by those we surround ourselves with. But this can work for us or against us!

Although my physician colleagues were great people and doctors, they weren’t great investors. Most of them didn’t know any more than I did about finance and investing. They were all on the traditional “retirement path” and simply funding their 401k and putting money into the stock market. None of them had created passive income or financial freedom.

We had to go find a new crowd who understood the difference between retirement and financial freedom and had already created financial freedom in their own lives. We learned from them and followed in their footsteps to create passive income in our own lives.

It’s easy to get comfortable doing what everyone around you is doing. But if you’re going to follow the crowd, make sure they’re going in the right direction!

4. I had a lot of money to invest but not a lot of investing knowledge

Having extra money to invest was a good problem to have, but without education, experience, mentors, or a plan, it put me at risk of making ill-advised investment decisions. Because I had no real understanding of finance or investing, I would consider every investment opportunity – start-up companies, gold mines, restaurants, real estate, etc. I was open to looking at anything.

And because I didn’t know anything about any of these asset classes, I took every investment opportunity to my financial planner and asked him to help me decide. The problem was that he was an expert in financial securities (annuities, mutual funds, insurance), not in alternative investments. At the time, I didn’t know the difference.

If your income affords you the discretionary income to invest each year, make sure you spend some time learning about what you’re going to invest in. You don’t have to know it all, but you should at least learn the basics and then surround yourself by experts in your chosen investment vehicle.

5. I didn’t understand the difference between speculative investing and cash-flow investing

I know from experience that most docs don’t understand the difference between speculative and cash flow investing. I had never heard these terms discussed before I got on the path to financial freedom.

I now understand that speculative investments may or may not create cash flow someday in the future (a start-up company, a new restaurant, a gold mind…) and that cash-flow investments are already cash-flowing when you buy them.

There’s a place for both types of investing, but if you want to create financial freedom, make sure that 80-90% of your money is in cash-flow investments before you put any money into speculative investments that may never produce cash-flow or a gain. I had it backward when I started out and learned this the hard way!

6. I didn’t have a specific investment strategy or financial target

They say if you fail to plan, you’re planning to fail. This especially holds true if you are investing without a strategy,

I considered anything and everything that came my way – gold mines, real estate deals I didn’t understand, start-up companies, etc. I would consider everything because I didn’t understand anything. I had a classic case of the “shiny object syndrome” – I got excited about whatever was reportedly earning big returns.

Our mentor Tom Wheelwright says that if you are already wealthy, diversify your investments to protect your wealth, but if you’re trying to create financial freedom, get super focused and become an expert investor in only one asset class! He also advocates creating a specific strategy before you invest any money! This keeps you focused, safe, and consistent! It also happens to be the best way to create recurrent tax-advantaged income!

7. I was working for retirement instead of financial freedom

The idea of retirement is the financial foundation of our culture. It’s what everyone learns from their teachers, their parents, and their employers (who encourage retirement savings plans). Work until you’re 65 or 70, put your money in a tax-deferred retirement plan along the way, and hope to live off the nest egg when you get done. This is actually a terrible plan, but I didn’t know any better. I didn’t know there was a better way.

It was easy to put all of my money into a 401k and mutual funds. I didn’t have to know anything about investing and I didn’t have to learn anything new, but that made me a terrible investor.

If you want something different than a traditional retirement “nest egg” when you’re 65, you’ll have to do something different than what I was doing. You’ll have to learn ways to create recurring passive income – income that will continue when you’re no longer working!


I used to be a terrible investor and many white-collar professionals are in the same boat! But there’s no reason we have to stay that way! By taking ownership of our financial future, self-educating, surrounding ourselves with the right people and creating and sticking to a specific investing strategy, we can all create financial freedom and take back control of our lives!



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