DocOnomics utilizes a proprietary framework that allows physicians to quickly grasp the dynamics of wealth management. There are 4 elements to this framework and they are easily remembered by using the AARP acronym.
ACCUMULATE
Accumulate begins with the discipline of spending less than what one earns and acquiring the skills to grow the surplus. In real time physician wealth management, the ability to accumulate invokes a very challenging series of tasks and often starts with revenue and expense management within the professional practice. Outside assistance often is required to audit and improve the dynamics of both business and personal cash flows yet far too many individuals are reluctant to take these steps because they require a certain level of discipline. This core element is critical in areas such as investment management for capital accumulation and retirement planning for physicians.
ALLOCATE
Allocate pertains to time and money. Each physician will choose to allocate their time in a unique way. It is a matter of personal choice. When it comes to the allocation of money, there is less personal discretion. The allocation of one’s assets is a crucial determinant of long-term success or failure in the accumulation and preservation of wealth. In this regard, allocate means moving assets into strategic locations on the investment board, minimizing losses along the way and devoting sufficient time to the maintenance of strategies, whether those are for general investing or retirement planning. To allocate prudently, it is essential to be a student of politics, economics and history so that trends can be interpreted correctly.
REACT
React involves making timely changes to protect against income and investment losses, not to mention changes in Federal and state tax laws that can affect everything from one's investment strategy to one's legacy planning. Conversely, react can mean pursuing opportunities for physician income and investment growth. Some reactions can be made in anticipation of events while others must be made in the aftermath of unanticipated events. The foundation of react rests on one’s ability to remain adequately informed about pending or current events that will better enable one to accumulate and protect.
PROTECT
The motivation to protect wealth arises from an array of perceived risks. Essentially, one looks to protect assets from catastrophic losses (e.g., natural and man-made disasters), investment losses (e.g., adverse political and economic events, acts of fraud and errors in analysis and judgment), confiscation by the government (e.g., income taxes, estate taxes and inflation of the money supply) and adverse rulings by the court system (e.g., legal judgments). In addition, one seeks to protect income by owning disability insurance. Protect is an integral part of the ongoing wealth management effort and requires a commitment to being personally informed and advised by professionals in the insurance, tax, investment and legal fields.