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By ctonrick
November 2, 2009

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This means my time horizon is infinite and I am investing not to support myself in retirement but to become rich enough to make my dreams of becoming a philanthropist a reality.

I don't post much on these boards, but I came across this post and felt compelled to respond. I admire your "dreams of becoming a philanthropist." And I'm glad that you have an opportunity to get paid while getting your education. I sincerely hope it all works out as you have planned. Whether you ever reach your dream or not, you have the opportunity as a physician to make a difference in people's lives--for better or worse--that few will have. And you will have that opportunity on an every day basis.

That being said, I thought I would share a couple thoughts/personal experiences that might change your thinking about your investing approach and your thought that you will "literally never need a dime" of your savings.

The first is about a young man who, like you, had everything figured out. He had just finished medical school. He was now in residency and getting paid to finish his education. Yeah, he had some loans to pay off, but that was in the future and wouldn't be an issue until he was done with residency and making enough that it wouldn't be a problem. Life was good. What could go wrong?

He hadn't planned on MS. It hit him in residency, and despite treatment, it was so severe he had to drop out. Loans came due, and he was unemployed, then bankrupt. He was too sick to get out of bed, much less work. As an ER doc, I took care of him many times over several years, and literally watched him get whittled down to a stump. Then I just never saw him again.

My grandfather discovered uranium in southern Utah in the 1960's. Like you, he wanted to be a philanthropist, and gave LARGE sums of money--and lots of his time and other resources--to organizations and individuals that he believed in. While doing volunteer work in a foreign country, he got sick. Local doctors tried to treat him, but in the process, miscalculated a medication dose. He ended up with aplastic anemia. That was in the late 1970s, as I recall, and the only treatment available at the time was repeated transfusions. He used up every bit of insurance (public and private) that he had. And then spent a whole bunch of his own resources looking for a cure (from both traditional and nontraditional sources) and getting treatment. By then, oil prices had fallen, disarmament happened, and uranium wasn't such a hot commodity. When he died, my grandmother had enough left over to live a comfortable life, but not much more.

My point is not to tell you how to live your life or what to do with your money. That's your business for sure. Nor is it that better investment decisions would have saved either my patient or my grandfather from their ultimate fate. The point is that life happens. Things change, and so do we. You never know what your needs will ultimately be--or the time frame. I have friends, partners, and colleagues who take unnecessary financial risks all the time for causes that range from the good and noble to downright selfish and stupid. They think that they are somehow immune. Or if something happens, they have so much "earning potential" that they can dig themselves out of any hole they fall into. They have it all figured out. Most of them get away with it most of the time. But I have seen some of them lose homes, go bankrupt, get addicted, commit suicide, lose their families, and all the rest.

I'm an aggressive investor with a relatively long time horizon and a much greater than average risk tolerance--and a bit of an adrenaline junkie to boot. So I get it. But if you truly dream of having the means to positively impact your fellow human beings through your wealth, why take unnecessary risk with your capital? Although I have been investing in small caps for a long time, my biggest winners so far have actually been mostly mid caps. Mike has detailed in this thread why some other investments might make sense right now--with less risk than small caps. Fooldom is filled with lots of other smart folks who give lots of other reasons why you might want to adjust your approach. Ultimately it's obviously your call.

Whatever you decide to do, I wish you all the best both in your investing and in your medical education/career. As a physician I know of is fond of saying to his colleagues, "What you do matters!" Although he is always referring to the treatment of patients, I have come to realize that it applies to all of life.

Good luck.