Your Fears Are Naked

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It’s easy to imagine that reading this blog, a reader might become confused.

Since I spend so much bandwidth writing about money, and how to save it, and how to avoid paying taxes on it, and how to spend it wisely, the natural tendency might be to assume that I am inherently inclined to be a “money person.”

You know the kind of guy of I’m talking about: The type who always saves his money. The type who started investing at a young age. The type who just naturally budgets.

But the fact of the matter is this: I only became interested in money recently, once I made the connection between money and freedom, once I realized that wasting money was equivalent to wasting my time and to wasting my own independence.

And in the period prior to this renaissance I made plenty of financial mistakes.

I carried credit card debt.

I opted not to pay med school debt during my internship, residency, and fellowship.

I forgot to renew a deferral on my med school loans when going from residency to fellowship. (And suffered a black mark on my credit report for seven years.)

I borrowed against my 403B account.

I used interest-bearing loans to buy cars.

I borrowed money from family, with interest, in order to make a down payment on my house.

And the reason why I bring up all of these foibles actually has nothing to do with me.

You see, I had a conversation a few weeks ago with one of my young non-physician coworkers.

She was saying how much she hated thinking about money, and that she didn’t have any clue how to clean up her dismal financial situation.

Over the course of our Conversation I gathered the following information.

  • She takes home about $4500 a month.
  • She has about $18,000 worth of high interest credit card debt.
  • She has some student loan debt at a 6% interest rate.
  • Her housing expenses are about $1000 a month.
  • She eats out and goes out for drinks a lot.
  • She contributes nothing to her 403B account, not even up to the matching amount by our employer.
  • She really has no idea where the non-housing portion of her paycheck goes.
  • She owns two powerful blenders, a Vitamix, and A “magic bullet” blender, and recently purchased a second magic bullet blender, when her first one broke!
  • She often finances travel on her credit card.

From which I concluded the following.

  • She has a great salary, and should be able to climb out of this hole very quickly.
  • Her credit card debt is an emergency, And one that can be dealt with at minimal cost in 15 months by transferring her debt to zero interest credit card and paying it down fast.
  • She should make minimum payments on her student loan debt for now, and look into loan forgiveness opportunities.
  • Her housing costs are very reasonable for her level of salary.
  • There is no room in her budget for nonessential items like eating out or buying bar liquor when there is an ongoing credit card emergency. (Though there will room be soon enough if she takes decisive action now.)
  • She is not in a position to say no to free money, as in our companies match.
  • She would do well to start paying attention to her spending.
  • Having more than one blender is overkill for anyone, let alone someone in a financial emergency.
  • If she gets her act together, she can start playing the miles game and travel to more and better places for free.

So needless to say, I found this very exciting.

I often wistfully think back to the financial mistakes that I made earlier on in my life. And I find myself wishing I could have given young Miles a good talking to.


Fire up the flux capacitors.  I’ve got a loan deferral to fill out…

Here then was my chance to help someone else right their own financial ship.

So I sent her an email with a couple of links including a link to a good 0% APR transfer credit card, and offered to sit down with her and come up with a plan that would have her on solid ground within two years.

She said she was interested, but I didn’t hear back from her for a couple of weeks.

When I talked to her again the other day, I casually asked how everything was going with the financial plan. And she said something along the lines of:

“I’m just so afraid of what I’m going to see when I start looking at my financial situation, that I can’t even make myself look.”

And almost immediately I realized that I have this same sort of aversion to things that aren’t going well in my life. (And I told her as much.)

On a similar note, I don’t think it’s coincidence that I became so interested in budgeting and money at a time when I had more of it.

But this is not to say that being more conscious of it wouldn’t have helped me tremendously in my younger years.

It is human nature to turn away from that which makes us uncomfortable.

But the sad fact of the matter is that the things that make us most uncomfortable, are exactly what we should be focusing on.

That’s where we can get the most bang for our buck.

If you are obese, you should be thinking about what and how much you eat and how much you exercise (which will be the hardest things for you to think about.)

If you’re short of breath and a smoker, you should be thinking about quitting cigarettes (which will be the hardest thing for you to think about.)

And if you are in a situation where you find yourself in more and more debt, you should be thinking about how to better spend and save your money (even if it is the hardest thing for you to think about.)

Because the solution is right there in front of you.

And it almost never starts with an act of great heroism or strength or luck.

What it does tend to start with is an act of courage.  Courage and organization in equal measures.

The solution starts by simply facing reality and recording it. And if you are in debt, it starts with paying attention to where the money goes. And then paying attention to how much you’re saving. And then paying attention to how much interest you are paying.  And finally when the debt is under control, how you invest your surplus.

And after the accounting begins, in my experience, the fear starts to go away. It is demystified. And the only thing you’re left with are simple daily decisions whose effects you can soon measure as progress.

And it almost becomes a big fun game. At which point you can’t really help but keep on playing it some more (and winning.)

It’s as if the maleficent emperor has been shown to be wearing no clothes. The sense of dread and doom that you once associated with your debt becomes an emotionless score in a game. And you are obviously catching up.

In this way your debt is demystified and made manageable.

Most importantly there becomes an obvious relationship between your new spending patterns and the shrinking size of your obligations.

You are in control.

Which raises the question: What are you afraid to face? And would taking an honest accounting of it help you to overcome this obstacle?

Please leave comments below.

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8 Responses to “Your Fears Are Naked”

  1. Med Stud Ry June 21, 2014 at 9:25 am #

    Friend 1: His coworker was telling him not to contribute to the company’s 401k, because he thought that if the broker went broke, you lost all your investments…

    Friend 2: FINANCE MAJOR: He is putting away over 100k a year in savings (>75% savings rate). He had no clue what a backdoor IRA was. He argued with me for days that an IRA would not help him in any way… Finally got through to him.

    Friend 3: Was maxing out his IRA for 6 years. I asked him what he was invested in. “An IRA”. He had just put money in and left it there. No stocks, no mutual funds, nothing. Just cash earning .1%.

    Friend 4: TAX ACCOUNTANT: thought they had a401k and a ROTH IRA, actually had a 401k and a Roth 401k. Not too bad, but didn’t know there was actually a difference.

    I have more. Its a full time job fixing your friend’s finances!

    • Miles Dividend M.D. June 21, 2014 at 10:16 am #

      Med Stud,

      Thanks for your comment.

      Your friends are lucky to have you as a resource.

      Talking about money is a huge taboo. Financial education is non existent for the most part. And our culture relentlessly tells us to consume, consume, consume.

      What a destructive mix of factors this is. Is it any wonder that we tend to make such irrational financial decisions?


  2. sam June 22, 2014 at 8:58 am #

    Dr. Miles,

    This is an absolutely brilliant post! It touches on many natural reactions that we have to the chaos in our lives.

    Brilliantly said, it does not take an act of heroism rather it takes an act of courage to jump into the deep end and truly experience and understand what is going on.

    As creatures of comfort, we naturally build our little utopia to encompass all that our life contains at that local point in time, and we are not willing to willing to open the door to accommodate or incorporate the new issues in our life( A picture of a single cell amoeba engulfing another object/food comes to mind). Rather, we put a ‘band-aid’ over them and hope they go away.

    When introduced to manufactured spend, my initial reaction was that I wouldn’t be able to successfully earn miles without getting screwed. All it took to truly understand (i.e. jump in the deep end) was the willingness to start off with one card and working my way up.

    Obviously there is a lot more to say about the human condition :-), but I think it is out of the scope of this forum.

    just wanted to say thank you for sharing you insights, and I want to ask you to please continue to CARE.


    • Miles Dividend M.D. June 22, 2014 at 10:51 pm #


      Thank you for your kind comments.

      I think you are really on to something there with your reflections about manufactured spending. It seems that slow changes are the ones that are most likely to stick. And giving yourself time to make a change really seems to take the pressure off.


  3. Kat J June 22, 2014 at 8:58 pm #


    Like Sam said above — Brilliant! I am going to share this with a select few of my friends and my offspring. It echoes closely with what I’ve been saying to my roommate for the last 6 weeks as I help him to understand money and debt and the moment to moment choice whether to buy your friends another round of beer at $8.00 a pint or to pick one of your credit cards or loans to make more than a minimum payment to —- gadzooks

    Your simple, effective and very wise words should be taught in high school to everyone (including all the teachers – haha)

    Also, I mentioned earlier I was going to pass through your area this summer, but last week I accepted a job offer that I’m particularly excited about and therefore I won’t be traveling to the U.S. this summer.

    And, by the way, Happy Solstice and Summer to you!

    • Miles Dividend M.D. June 22, 2014 at 10:53 pm #



      That’s great news about your job, Though disappointing news about this summer. In any case I’m sure our paths will cross soon enough.


  4. Robert June 26, 2014 at 7:01 am #

    Great post! If you ever find the secret for getting through, let us know. Or patent it and retire early! Seriously, I have gotten discouraged trying to help people around me on various issues, most of which you touched on. Money. Diet. Education. Exercise. etc. If they come to me and really want to change, I am happy to help. But otherwise I am reluctant to get involved. So many have reactions similar to your coworker’s. And if I push, then it is “my fault” if it doesn’t work out. Or they may become dependent on me in an unhealthy and unsustainable way. Yet, the same people are vulnerable to the snake oil salesmen that sell a quick fix to their problems.

  5. Miles Dividend M.D. June 26, 2014 at 11:20 pm #

    It’s a tricky thing. That’s for sure.

    It’s all going well with my friend though. She’s already made excel spread sheets and come up with a business plan.

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