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The 7 Mistakes Optometrists Make By Not Investing

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12 min read

In this article, we cover the 7 top mistakes optometrists make by not investing—with a bit of March Madness flavor!

The 7 Mistakes Optometrists Make By Not Investing
In the spirit of March Madness, it’s time to shine a light on how important it is to understand your biggest asset: time. As optometrists, we worked extremely hard starting from the moment we decided to enter optometry school. Now it’s time for that hard work to finally pay off.
So tie up your shoelaces, and let’s begin our journey to a championship!

Mistake #1: Not playing defense

Just like who reaches the NCAA championship has to be physically fit, for an optometrist to reach the goals we have—practice ownership, a house, a comfortable retirement—we need to be financially fit.
In order to have a strong foundation financially, the first step is to protect your most valuable asset: your life and your time!
The way to protect this most valuable asset is, of course, life insurance.
Mike Tyson said it best: “Everyone’s got a plan until they get punched in the mouth.”
It is mandatory for us to have auto and home insurance. However, even though it is 100% guaranteed we are going to die, we can choose whether we want life insurance or not. Yet life insurance protects our time; the time that, when we die, we cannot spend providing for our families.
If we choose incorrectly, when that day ultimately comes and we are no longer here, our loved ones could find themselves begging for money via a GoFundMe account. A smart game plan—life insurance—leaves a legacy for your family members and loved ones in the case that everything goes wrong.
When you do look for life insurance, always look for a term insurance policy and never ever a whole life/variable life policy.
There are two reasons why term insurance is the better option:
  • It is pure insurance.
  • It costs less than whole/variable.
You ideally want every extra dollar you have to be invested in the stock market, as opposed to an insurance company investing your money, since they typically give you lower rates of return.
By having investments and insurance separate, with a term policy, will always win at the life insurance game.

Mistake #2: Not pressing at half court

As mentioned, it is 100% guaranteed that you will die at some point, however, becoming disabled has lower odds. Still, if you are under the age of 35 years old (half the age of retirement), you have a 33% chance of becoming disabled for at least 6 months during the course of your career.
According to the Council for Disability Awareness, 25% of today’s 20-year-olds will become disabled before they retire. This is why it is important to consider disability insurance, just in case something were to occur and you are unable to work in the future.
Another important policy to consider is long-term care insurance. The U.S. Department of Health and Human Services performed a study that found that “70% of Americans who have the luxury of getting to the age of 65 will need some form of long term care”—and the price for that without insurance is not cheap.
The American Optometric Association is one place one can look for more information on different types of insurance policies.

Mistake #3: Not calling a timeout when you need it

The referee finally granted the coach a timeout, and now it’s time to bring it in for a huddle. Coach is ripping into his players for failing on the defense and telling them to get their act together. Once we can stop the bleeding with some defensive stops, it’s time to start making some quick, easy buckets.
The next level to be financially fit is what is called an emergency fund. According to the Federal Reserve’s Report on the Economic Well-Being of U.S. Households, “Three out of ten American adults cannot pay for an unexpected $400 bill without having to carry a balance on their credit card or borrow money from their friends, family, or bank.”
When sitting down with colleagues, I have personally discovered that their “emergency fund” is money just sitting in a bank account. Whenever you have money sitting in a bank account or in a safe located in your house, you are actually losing money every year because of inflation.
Historically, inflation is 3%, which means things cost more every year or money buys less however you want to look at it. As of the time of writing, inflation is at a shocking 7%. In the future, that Starbucks coffee you’re sipping on while reading this will cost more, meaning if you do not get a raise every year at your current practice of at least 3%, you are, essentially, losing money.
A proper emergency fund is 1-6 months of your monthly expenses, and the goal is for the money to stay steady with inflation. This rules out the bank and a safe in your home.

Mistake #4: Not looking at the 24-second shot clock

Just like in defense, you are your most valuable asset. In offense, the clock (time) is either on your side or against you.
As Albert Einstein once said, “Compound interest is the 8th wonder of the world. He who understands it earns it; he who does not, pays for it.”
How does compounding interest work? Let’s go back to the court for a moment.
We have the ball, and the coach calls another timeout with just three seconds left on the clock. During the timeout, the coach gives his players two options. (Remember, there are only three seconds left to come up with an answer!)
  • Option #1: if you hit the shot on the inbound play, each player splits $1 million dollars.
  • Option #2: if you hit the shot on the inbound play each player splits a penny, but the penny gets to compound for 30 days, so at the end of day five you only have 32 cents.
How many of you selected the correct answer with three seconds left on the clock?
The “smart” player would have picked option #1, believing that they would take that $1 million and invest it somewhere else. Unfortunately, most of the time, people who do not know how to manage money well will end up spending large sums all at once.
However, the “wise” player would have picked option #2. With option #2, time is on their side: that penny would ultimately compound into $10,737,418.24 if they waited for just another 25 more days.
The best time to invest is always yesterday—or when the market is down. Please do not attempt to “time” the market. It is almost impossible to do and is more a matter of luck, than skill; it is essentially gambling with your future.
The cardinal rule is always to be in the market rather than trying to time it. The younger you are, the higher the probability of your money compounding at an exponential rate.

Mistake #5: Getting into foul trouble

Penalties can hurt, especially late in the game.
Since we now have a better understanding of how compounding works, it’s time to talk about 401Ks, IRAs, 403Bs/457, and child plans like Coverdell, UTMA/UGMA, or 529 plans. There is short-term and long-term investing.
Ultimately, you want to be able to pay yourself first before you get hit with taxes. A 401K and Traditional IRA will help with pre-tax dollars. Obviously, the best option is when your company offers a match—but if not, I would still make sure to put money into your 401K with every paycheck, because you’re paying yourself. (At the time of writing, the maximum amount you could put in a 401K is $20,500.)
Another account that many people enjoy is the Roth IRA, because of the tax-free incentives.
You need to be careful to not pull from any of these accounts before the age of 59 ½, otherwise, you will get into foul trouble. If someone is in debt they might start to pull from their retirement account. This is a huge no-no and something you want to avoid as much as possible because you just halted compounding. This is why having an emergency fund is important; it keeps you from being tempted to pull from your retirement account or from going into credit card debt.
For the children's accounts, the Coverdell and 529 plans are for future school-related accounts, and the UTMA/UGMA (depending on your state) can be used on any expenses in the future once the child is an adult. It is important to note, you want to put money in your own retirement accounts before you start a child fund. After all, you do not want to have your child funding you when you retire.

Mistake #6: Getting into money problems

Coach has inspired us back into this game and has just taken the lead, but it is coming down to the wire...we can feel the victory and accolades, if we can just hold it down to this one more stop.
Financial management is difficult. Often, when people receive windfalls or increasing success, they find it difficult to live within their means. This is normal. However, it’s not ideal—it leads to compounding student loan interest, credit card debt, and all sorts of other unpleasant things.
Debt consolidators do not care about getting you out of debt. Their goal is convincing you to shift your debt to them, so you'll be paying them (just at a lower interest rate) for however long it takes you to get out. They may seem generous with cash incentives and such, but in the long run, it’s still money in someone else’s pocket.
What you want to do is minimize your debt as quickly as possible. There are two main methods: debt snowballing and debt stacking (also known as the avalanche method).
Debt snowballing is getting rid of the smallest loans amounts first. This has the wonderful psychological effect of building wins: you’ve paid off an entire loan! That motivates you to keep going.
Debt stacking is paying the highest interest rates off first. This can minimize the amount you end up paying over time, but it doesn’t have quite the same hit as the snowball method.
I recommend intertwining both systems with all your debt amounts. Once you are out of debt, you have the ability to create more wealth and, better yet, give back to organizations/charities you care about or spend more time with your loved ones.

Mistake #7: Not protecting your trophy

Congratulations! You are now cutting down the nets and have won the national championship. All your hard work has paid off…but the glory fades after the parade ends. After that, it is time to try to do it all over again.
A will is what will protect your trophies—that is, your assets.
Your will needs to be created professionally by a lawyer. If you follow all the steps to win a championship, you will have accumulated a lot of assets—and the only way to protect your intentions is to have it all set in writing. This important document determines who and what will go to your loved ones; perhaps you want your possessions to go to a specific person in your family, one of your best friends, or maybe a charity of your choice. Regardless, a will makes certain your last requests are carried out in the way you intended.
Without a will, you may be subject to probate depending on the state laws. Always be the one to decide your fate.


To be dominant in a sport—whether that’s basketball, football, or soccer—is to have both ends of the floor or field covered. Always remember: insurance is defense and your investments are offense. They are both important to win this game called life.
I appreciate you taking the time to read this entire article and if you ever need a helping hand I am just an email away!
#TheFinanceOD #PersonalFinanceCoach #DrVitto
Vitto Mena, OD, MS
About Vitto Mena, OD, MS

Dr. Vittorio Mena is the sports vision director at Optical Academy in Clifton, NJ. He also serves as an advanced clinical director for Special Olympics Lions Club International Opening Eyes program for the state of NJ. He graduated from Pennsylvania College of Optometry at Salus University in 2014. Dr. Mena is also on the board of directors for his state association NJSOP. In 2019, he was awarded as the NJ Young Optometrist of the year! In 2020 he received the Public Service Award from his Alma Mater. In 2021 he was announced to the AOA's Sports & Performance Vision Committee.

Vitto Mena, OD, MS
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