Herm Edwards' 5 Personal Finance Rules for Doctors

I love exploring the parallels between professional athletes and doctors. There are a ton. Both are performance based professionals. Both are highly paid. And both hold a prominent place in public opinion. More over, in both professional sports and medicine, mentors play a huge role. In this post, I’m going to share some key personal finance rules for doctors that originally came from a football coach, Herm Edwards.

And by the way, if you ever wondered if it’s better to be a professional athlete or a doctor, I did the math…and it might surprise you…

But anyway…

Who is Herm Edwards?

Now 70, Herm Edwards is a former professional football player and coach.

As a player, Herm played primarily for the Philadelphia Eagles. He even was responsible for one of the most famous plays in NFL history, The Miracle at the Meadowlands.

After playing, he stayed in the sport as a scout and then as a coach, serving as the head coach of my New York Jets from 2001-2005. Especially during his tenure with the Jets, he became known as an amazing motivator and speaker.

His most famous speech came in a post-game pressor in 2002 when the Jets were really struggling. It became known at the “Play to win the game” speech.

In it, he said: “The greatest thing about sports is you play to win the game. Play to win the game. You don’t play to just play it. That’s the great thing about sports. You play to win and I don’t care you don’t have any wins. You go play to win. When you start telling me it doesn’t matter, then retire. Get out. Does it matter?”

After that, the Jets rolled to the playoffs. A great lesson and message in and out of sports.

Anyway, he coached in the NFL until 2008, after which he started broadcasting for ESPN.

Where does personal finance come into this?

Every year, about 250 college football players are drafted onto NFL teams. Additional college athletes sign as undrafted free agents.

And every year, the NFL Players’ Association hosts a “Business of Football” meeting for all of the rookies to help them acclimate to their new life as a professional athlete.

In 2011, Herm Edwards spoke to the players about a range of topics. This included emphasizing the famous “nothing good happens after midnight” rule as well as learning to focus on what you can control, not what you can’t.

Good lessons again for all walks of life.

After that, he started to share his tips for personal finance. And while they are good for NFL players, they might be even better for doctors…

Herm Edwards’ 5 personal finance rules for doctors

Watch a bit of the speech here so you can imagine me talking in his voice when you read below.

1. You only need 1 of everything

In life, you only need one of everything. When you get your first pay check, go buy:

1 car
1 house
1 piece of jewelry
And you just get to have one significant other.

That’s it.

Now, this is probably the simplest but best piece of financial advice that a graduating resident could receive. Doctors notoriously have tons of pent up depute gratification that manifests itself upon graduation with tons of expensive purchases that eventually put that doctor in golden handcuffs…working paycheck to paycheck despite their high income.

That doesn’t happen if you just have one of everything.

I can talk until I’m blue in the face about intentional spending and how to practice it successfully. But this simple principle gets the point across so much better.

2. It starts with a struggle

A great quote here from Herm: “Everybody wants to go to heaven, but nobody wants to die.”

What he’s saying is that to achieve success, you must first struggle. That the struggle should be expected. And embraced. Not avoided and cursed at.

In his speech, Herm is talking about success on the football field. But this applies to success in personal finance as well. Everyone wants to be financially free. Everyone wants to be wealthy. But few people want to do what is necessary to get to that point.

You need to budget. You need to create a sizable savings rate. And you need to invest wisely. Sometimes, this means paying off loans instead of buying the luxury car right away. Other times it means saving for a down payment on a new rental property instead of a down payment on a vacation home.

I’ll tell you what though, those sacrifices are temporary. And financial freedom is, be definition, forever. Once you have enough nest egg and/or passive income to cover your expenses, that doesn’t go away.

But if you place yourself in those golden handcuffs right away, the pleasure will be temporary and the stress/financial strain will follow you from there on.

Make the right choices. Develop the simple habits necessary for financial freedom.

3. Ignore distractions

Herm is talking about distractions like girls, drugs, and fame here.

I’m talking about other distractions in your financial life. Things like crypto, SPACs, and other “too good to be true” investments like these.

I’m also talking about anything that isn’t part of your written financial plan. Remember, your written financial plan is your personalized guide to reaching financial freedom. Once you design it, all you need to do to reach financial freedom is to follow that plan.

And each of our plans will be different. For instance, this is my entire updated written financial plan.

What that means is that each of us needs to ignore financial forms of distractions and temptations that are not part of our financial life. We don’t get extra credit for completing side quests in our road to financial freedom.

Design your plan. Stick to your plan. Ignore distractions. Reach financial freedom.

4. It’s not about an opponent

This is a quick one here. But I see a lot of doctors start to get FOMO around personal finance. They feel that others are in a better position. Even if they themselves are meeting their own financial goals.

The bottom line is this: In personal finance, you set your own goal posts. You only compete against yourself to reach your own goals.

Where other doctors’ financial goals fall along the spectrum matters not one iota. So don’t worry about it.

5. Understand how the game should be played

Not the game of football. But the game of financial freedom.

This is a huge problem for doctors. Just like athletes, we think that because we have a big paycheck that makes us wealthy or guarantees financial freedom.

Wrong!

We need to learn how the rules of wealth work. We need to understand cash flow. And net worth. Compound interest.

We need at least a basic understanding of personal finance. And only we are responsible for our financial education. The education system in the US and within medicine does not address it. That is a problem. But until it is fixed, it’s our responsibility.

A perfect example is how a simple understanding of how net worth was calculated allowed me to start making moves to increase my wealth, going from -$500,000 to over $1 million in less than 5 years!

And if you need to start your personal finance education, here are 3 great responses to get started:

Watch my Masterclass Webinar on The 12 Steps to Financial Freedom for Physicians here
Check out my best-selling book, Money Matters in Medicine!
Or for a more hands-on approach, sign up for my flagship course, Graduating to Success!

Wrapping up our 5 personal finance rules for doctors

It’s true that these 5 personal finance rules from Herm Edwards weren’t even all about personal finance, or for doctors.

But that doesn’t stop them from being sound advice. I am a K.I.S.S. person, the simpler something can be explained or demonstrated, the more power it has. And that’s exactly what I loved about Herm Edwards as a football coach and now as a speaker.

Personal finance is simple. But that doesn’t mean it’s easy. It takes knowledge, application, action, courage, and discipline.

But the good news is that you don’t have to do it alone! Just like these NFL rookies had Herm Edwards, we all have mentors in medicine to help us reach financial freedom. That’s why I started this blog and am honored to share my journey to financial freedom.

And it’s not just about you. Financial freedom makes us better doctors, about to practice medicine on our own terms. And a nation of financially free doctors will change healthcare in unimaginably positive ways!

As you continue on your path to financial freedom, wherever you are in the process, these posts will help you optimize your journey:

What do you think? Do you have any personal finance rules for doctors to add? What is a simple habit that you need to reach financial freedom? Let me know in the comments below!