#42: What To Do When Your Time is Devalued

Foreign. Welcome to the Passive Income MD Podcast where we talk about creating your ideal life through multiple streams of income. I'm your host, Peter Kim. If you enjoy hearing about this stuff, make sure to hit subscribe so I can bring it to you every week. Now let's get on with the show. Hey everyone. Hope you've had a great week. This week we're going to be talking about a situation that you may not have found yourself in yet, but there's a good chance it might happen to you in the future. Especially with everything happening with the pandemic right now. I think it's revealed some things about the leverage that physicians have in this time. So let's think about the situation. Imagine yourself in this moment. You're sitting at home one day and you get an email from work. You just happen to open it and. And you find that your annual or hourly pay has just been drastically cut. In fact, you've been told that you're expected to work the same amount each week, but you'll now be paid 30% less. And you have basically two choices. Either comply or you can find another job. Now, I know this sounds pretty unlikely for physicians, especially when people outside of our world might hear about this. I mean, it might sound crazy or far fetched, but if you've ever listened to any of my previous episodes or read any of my blogs, I talk about how security or job security in medicine, it's not quite the same as it used to be, especially financial security. So many might think that this scenario might be impossible for a doctor, but I think that is absolutely wrong. Not only could it happen, but it has been happening even before the pandemic, but especially during this time. For example, take the following situations. These have been experienced by doctors I know personally. Here's an example. A private equity firm might buy your anesthesia practice. Now, you're told that they will be changing the entire staffing model. So expect a 30% decrease in pay and the possibility that your position in the group could be eliminated altogether. That's one scenario. Number two, your health system has been having some financial trouble. So out of the blue, you receive an email stating that you'll be receiving a drastic pay cut or will be asked to take a furlough. This happened, right? Number three, the reimbursement for the type of procedure that you specialize in has been significantly reduced by all commonly accepted insurance providers. Or this procedure is no longer billable at all when you pair it with another procedure. Does that sound familiar to some of you? Now, even if Your finances and lifestyle could handle that kind of reduction in pay. The real issue is, is that your time has been devalued. You're expected to put in the same amount of time and effort, but your compensation for it has been drastically decreased. I mean, to me that is the ultimate defeat. I mean, your time, and we've talked about it so much, is the most valuable thing in the world. You can't get it back and there's a limited supply of it. And your goal, at least my goal is to maximize the amount of value that you get for your time. In fact, so many things I do, like hire virtual assistants, delegate these kind of things, it's really to maximize the value of my time and do the things that are important to me. So if this happens to you or happened to you, or let's say it happens to you in the future, what should you do? Or what can you do? I know that the natural reaction, it's to get upset, right? I mean, that's normal. I have when that happened to me, I know it's happened to my friends. That initial frustration, I mean, it isn't necessarily all bad. I mean, I found that sometimes when you're frustrated, when you're upset, you know, that can actually spur you to action. Now if you perseverate on that and that's all you focus on, I mean, that quickly can become nonproductive. It helps to recognize that emotions like this, it's a sign that your expectations are not being met and some sort of change needs to happen. So see it as a chance to kind of step back, reassess, shift your focus to what you can control. For example, let's say you've been informed that you're getting a 30% pay cut. I mean, after that initial wave of emotion passes, it's time to get to work and figure out some things out that will help you through the situation. So I came up with a little bit of a step by step process that might help you if you find yourself in such a situation. Number one, the first thing to do is figure out where you're at. It means assess, do a quick review of your financial situation. Do you know what your assets are, your liabilities, what's liquid? Meaning how much cash do you have in your bank accounts? What are your expenses each month? Do you have any reserves, any cash reserves? Or like an emergency fund? Like what's your overall net worth? And then what are your other sources of income? Now if you haven't, all these things should be written down somewhere, whether it's in a notebook or on a file online. I mean, you need to have a clear idea of where you're at so that you know where you need to go or what steps to take to move forward. And this will definitely help you make better decisions. Now, once that's done, it's time to move on to the next step. The next step is to cut. Yeah. Unfortunately, if you're going to get a pay cut, you probably have to cut out some other things. Think about cutting your discretionary expenses. Now, what I mean by that is that, you know, if there are things in your daily life that you don't absolutely need, you may temporarily at least have to cut back on some of those things. If you're in a situation where you're living paycheck to paycheck, which unfortunately, many doctors are, especially if you're in that situation, you have to figure out what you can live without. Now, the discretionary expenses that I like to talk about, I don't like to necessarily talk about cutting out, like, the daily coffee or that sort of thing. And I understand that can add up over time, but I look for, like, the big ticket items, like maybe a huge vacation that you were thinking about planning. Maybe it's your country club membership or like a big gym membership. Maybe you can scale back on some of the things for a little while and that'll make a bigger impact than your, like those daily kind of like coffee and these kind of things that probably help you get through your day. Now just think about how you can kind of put those things on hold. Maybe can you restructure some of that to hold off on it while you figure out what you need to do? And the key way to figure out whether this is a discretionary expense is to really ask yourself one question. Do I want this or do I need this? And so this is a good time to trim some of those monthly expenses. And it gives you a chance to truly see what kind of situation you can actually live with at the bare minimum. And then once you figure that out, you know what your base amount is to basically survive and to live at a base, at least lifestyle. The next step I call assess, negotiate, then consider, and I'll talk a little bit more about this. I mean, at this point, you should assess what this current job does for you, both financially and in terms of fulfillment. Both are absolutely important, whether it meets your needs financially. It's a simple way of doing everything that we've done before. You know, what are your expenses? How do you. How much do you make where are you at financially and that sort of thing, you know, whether it provides fulfillment, now that's a personal decision. So if the current job meets your needs in every single way, first determine if there's a potential for you to negotiate the terms of the job or even transition to another within the same organization. I mean, for this process, the general rule of thumb is that the more value you provide, the more income you can command. And that seems to be, you know, normal across all jobs. That's typically why I recommend for especially people in the physician world to do fellowships if they have adoption and it makes sense for them because oftentimes you can bring more value to a situation and ultimately, you know, you do have a little bit more leverage. Now, for me, when I was told recently that my pay per hour, my current position would be cut, I mean, I did a quick assessment. Luckily and thankfully, because of my current income streams or other income streams, I knew I'd be fine financially. And I knew that the job still provided a ton of fulfillment for me. It gave me a bunch of flexibility to pursue my other ventures, keep my current lifestyle. So for me, even though financially I would be taking a hit, it still provided a good amount of fulfillment. And there was really no reason for me to think about moving on elsewhere. And unfortunately, I didn't really have much situation to leverage or in terms of leverage to negotiate. So I knew that I'd be staying at the same out and it worked for me. So I decided to stick around. But for some other people, if the situation isn't sustainable, both financially and definitely in terms of fulfillment, consider this an opportunity to take a step back and think about how you want to shape your life moving forward for yourself and for your family. And now the next step is to set new goals. I mean, most of us get the jobs we want, at least we get to become an attending. And then we forget to set any further goals for all of us. I mean, we set goals to become a med student, get into med school, get into residency, fellowship, these kind of things. We're just setting these goals and just knocking them all down. We get the job and then like I mentioned, we stop setting goals. And we tend not to grow from that point unless we're really forced to. So situation like this where they might, you know, you devalue your time, this might force you to actually re examine and grow. And that's not necessarily a bad thing. So let's think about some questions that you should be asking to help you set some new goals. Like you can Ask yourself, what does a fulfilling job look like for you? I mean, how much do you want to make from your ideal job? What are you willing to negotiate for? Like, what else is important to you? Like flexibility, you know, is the location very important for you? Is it time to even think about moving to a different area and a different market? I know it can really be a tough thought to actually uproot your family, but maybe there's a place that might be better for you and a better situation. Maybe it's time to pivot altogether. Maybe you should be considering different ways of making money both in and outside of medicine. And then you should be hopefully writing all these things down. And then maybe think about some time goals. This is your chance. Where do you want to be in a week? Like, what kind of situation do you want to be in? How about in a month? Maybe go to a year, five years, 10 years? And then really think about what your life looks like at those points. Having those really well defined written goals to me really helps you actually achieve them. I mean, for most of us, again, we don't even know what our goals are anymore. I don't know if you're like that. I knew I was like that until, you know, somebody actually forced me to actually reexamine and do those goals again. But whatever you decide, realize that your current situation, when you're dealing with these kind of things, it's temporary. Just like when you've had problems in the past, issues in the past, that situation is temporary. And there are always alternatives. You can make decisions to get yourself out of it. You just have to learn how to get creative, to get resourceful at this time, to make it ultimately happen. And then the last step for me, and this is something that follows the theme of my blog and podcast, it's to create multiple streams of income. So whether you've decided to stay with your current job, move on to another one, realize that this thing can happen to you again, this whole devaluing of your time. And to be honest with you, it's going to happen again. I mean, let's face it, that's where medicine is going, you know, with the growing trend that physicians have less autonomy. And in some ways we are more like technicians. Sometimes we lose leverage, we've lost a good amount of leverage, and we really fall further under other people's decisions and control. So really, the only way to protect ourselves is from that whole devaluing like phenomenon is by controlling our income streams. And to me, that means diversifying and relying less on our physician Incomes and then relying on the physician job more for that fulfillment aspect. So how do you actually create some of these other streams of income? Now we talk about all the time. I always say it, you know, to create these income streams, it takes some amount of what I call method or mets, you know, met money, energy or effort and time. Now if you have all three of those things, money, energy, effort and time, then that's amazing. But at the very least, you gotta put in one of those to create other streams of income. Look at what other people are doing, find out who seems to have it under control. Find mentors in this space. Determine, you know, how much of each of those things, either money, energy or time that you're willing to devote to creating these things. Read books, listen to podcasts, read blogs. For inspiration again, go to a meeting that might be outside of your current profession. I used to go to real estate investor meetings. Cause I used to learn and just see what other people are doing. There's so many different things that you can do. Hopefully you've gotten some inspiration from this blog and podcast. You know, if you're part of our communities, passive income docs on Facebook, there are some so many people there that can help and support you along this journey. Ultimately, the one solution I don't believe in, in this whole situation is to simply buckle down, like grit your teeth and work harder. In fact, that's what they expect you to do. I mean, that's the normal thing that we're used to doing. We're used to working for our goals and just kind of putting our head down and working. The problem is that you're just setting yourself up for, I'd say, future pain. You just getting your, the hamster wheels going faster and it's harder for you to get off, you know, and you end up working harder for the same amount of benefit. And to me, that's a situation where you're even more trapped. And I think at some point it's not sustainable. And everyone knows that, we've heard about it. It hasn't been sustainable for a lot of people. And I don't know what that point will be for you. But I promise you, at some point, if that's what you're doing, you probably hit it at some point. I hope it doesn't come that way, you know, and you can change that. I mean, that old cliche, it really rings true. Work smarter, not harder. Your salary does matter, but I believe your quality of life comes from how much time and energy you have at the end of the day. And it matters how much you have to put into getting that salary. It matters that that formula. So really, it's important to understand your true worth. How much is your time worth? We've talked about that in other podcasts. If not, we'll talk about it again. And the most valuable thing you have is is the choice of how you spend your time. Hopefully a situation like this can actually help you achieve your ideal life, get you to where you want to be. And I hope this is helpful in some way. Hope you've had a great week again. Stay safe and we'll talk to you next time. See you make it happen. Enjoy the show. Let me know by dropping a review in the podcast app you're listening to us at. And if you haven't already, make sure to hit subscribe. Are you part of our community yet? Join thousands of physicians who are also on this journey to creating their ideal lives through multiple streams of income. You can join us on our Facebook group Passive Income Docs, and you can always learn more at our website passiveincomemd.com thanks again for allowing me to be a part of your journey. See you next time.