Surgical Investing

by | Nov 17, 2006 | Cash Flow, Personal Notes, Weekly Column

Listen to Rick’s column here: Download surgical_investing.mp3

I learned a few months ago that I needed shoulder surgery to repair a torn rotator cuff. My best guess is that I injured my shoulder over two years ago doing “power yoga.” So much for the idea that yoga is a gentle, passive activity.

In preparation for the surgery, I spent a lot of time researching on the Internet, talking with people who had undergone the procedure, and asking questions of several physicians and a physical therapist.

Amid all this research, there was one question I never asked. How much would it cost?

I wasn’t totally ignorant about the possible cost. I knew I had insurance, I knew the deductible was $2,500, and I knew I would pay 20% of the cost over that amount. Yet cost didn’t even factor into my decision to have the operation.

I find this interesting, especially for a financially conscious guy like myself whose work is helping people assess the financial costs of decisions. It’s also interesting that not once did my surgeon offer to tell me the cost of the operation, ask me how I was going to pay for it, or indicate that he even considered the cost of the procedure and its effect on my pocketbook. By the way, my surgery, MRI, and physical therapy ended up costing around $15,000.

My mindset was that I needed the operation, regardless of the cost. I had been told that the tear would only get worse, it would never heal on its own, and my pain would continue to increase. Eventually, the physical and emotional cost of putting off the operation would exceed the cost of having it done now. My response was to hire the best surgeon in the region and get the operation done. Even with only a vague idea of what it would cost, I assumed the results would be worth that cost.

So far, I have no reason to question my assumption. With the help of time and physical therapy, my shoulder is healing well. I’m even back doing yoga—minus the “power” part for now.

It recently occurred to me that part of my work with clients is similar to the whole process of my surgery. One of several specialties of my practice is doing intensive work to help high-income overspenders change their destructive financial patterns. When such potential clients call me, they usually have two questions. Can I help them? And how much will it cost?

My answer to the first question is a comfortable “yes.” I can’t guarantee success, of course, any more than the surgeon could guarantee success with my shoulder. Yet, like him, I can assure them the process I use is clinically proven to work and has a high success rate.

It’s the second question I have trouble with. I’m still uncomfortable asking clients to spend more money to help them stop overspending. Yet the process to help these clients involves three professionals working with them for one to four days. The cost, ranging from $10,000 to $30,000, is similar to the cost of a surgical procedure.

The benefits to the clients are also similar to the benefits of such surgery. Given the incredible transformations that I’ve seen in our work, I know logically that this process is worth every penny it costs. For example, if I can help someone reduce their spending by $20,000 a year, for a one-time cost of $10,000, the return on that investment is pretty darn good.

The value of such changes can’t be measured only in terms of dollars and cents. To remind myself of that, all I need to do is raise my arm. A pain-free shoulder? Priceless.

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