Oct. 18, 2016

Q&A with Dr. Michael Silber

Dr. Michael Silber grew to become the co-founder of Western NY’s largest and most successful radiology practice through smarts, grit, and a willingness to take calculated risks. In 2003, Dr. Silber recognized an opportunity to build a world-class radiology practice in the growing Buffalo market. With five partners, he arranged to acquire an existing practice, which would serve as the foundation for their growth plans. Over the ensuing 13 years, Dr. Silber and his partners have grown Great Lakes Medical Imaging (GLMI) to assume the leadership position in expertise and market share in the western NY region. GLMI now boasts 40 physicians, including 19 partners, and five PA’s. With total employment at 87, GLMI is still growing in size and dominance.

Dr. Silber is no stranger to hard work — his typical day is 12-16 hours long. The work ethic and discipline for which he is known today are consistent with his former life as a high school football player and wrestler. Prior to medicine, Dr. Silber recalls fondly the odd jobs he worked to fund his education, including busting suds as a dishwasher in a local restaurant. But he is most proud of his work in a tuxedo rental shop. “My job was to measure our clients for tuxedo fittings. No, it wasn’t glamorous – but I never had a single client return because of a mismeasurement…!” His intolerance for mistakes and his discipline, characteristics he honed early in his life, are the Q&A with Dr. Michael Silber hallmarks of his approach to radiology. We recently sat with Dr. Silber to learn more about what this goal-oriented radiologist does outside of medicine.

WNYP: We understand that you are an avid golfer – our inside sources report that you have an entirely un-coachable and unorthodox, but effective, swing and that you play about as fast as most people can power walk. What are you working on outside of medicine and golf?
MS: [Laughs] Yes, golf is a great diversion — a completely maddening game that can abuse you for 80 shots and grants you one perfect shot that brings you back again the next time. But I can’t tolerate a slow pace of play – if my group can’t walk 18 holes in less than 2 . hours, then I start to crawl out of my skin! I have always been entrepreneurially inclined, but for the first chapter of my career in medicine, I was totally focused on growing our practice. More recently, AfterHours Photo: Stephen Rosenbloom, MD 18 I VOLUME 2 I 2016 WNYPHYSICIAN.COM I have been able to dedicate more time and energy to finding opportunities for managing my investible assets more intelligently.

WNYP: What is the conventional wisdom and what are your concerns with that advice?
MS: Investment and financial planning professionals advise that income (from investments) in retirement be derived from some mix of bonds, dividend-yielding stocks, and perhaps annuities. But dividend yields on stocks are only 2.5 – 2.8%. This means that if I need, say, $250,000/yr to support my lifestyle in retirement, I would need to invest $10,000,000 to achieve the income goal. Not every physician has saved that much by retirement, and of those who have, very few are likely to be comfortable with that degree of exposure to equities and their attendant volatility during retirement.

WNYP: What about Bonds?
MS: Bonds present their own challenges. First, they’ve just enjoyed a 40-yr run, so you are acquiring them at the highest prices in decades. Second, interest rates are at historical lows, which means that they will be rising at some point in the future. Rising interest rates push bond prices down. Finally, and more to my point, coupons on high-grade corporates are less than 3.5%. Even if you weren’t concerned about the downside risk in bonds in a rising interest rate environment and you needed to generate $250,000/yr in income during retirement from bonds, then you would need to have over $7,100,000 invested in bonds alone.

Even for a doctor who has been successful in his/ her career and been a fairly diligent saver – not all accumulate $10,000,000 to $20,000,000. So, I’m wondering how they will accommodate their lifestyles without finding asset classes that generate more income per dollar invested.

WNYP: So, what types of opportunities have you been researching?
MS : I have begun working with a group that’s been investing in other asset classes — outside of stocks and bonds to find comparable stability as bonds with 2-3 times the income-producing power. This group has been investing in various real estate categories for many years, especially commercial and multi-family assets. Investing in these asset classes requires incredible commitments of time and expertise to undertake adequate due diligence as well as the discipline to walk away from deals that don’t fit your model. I’m fortunate to be partnered with them because I have neither the time nor the expertise. It is proving to be very successful – we’ve been generating income up to three times what we would be generating with bonds, with several times the growth potential. So instead of needing $7-10 million to achieve my income goal< I only need $2-3 million – a huge difference!

WNYP : So, what’s next?

MS: Continue to grow both my practice and investments. While my goal is not necessarily to produce all of my retirement income from these asset classes, I would like to diversify my income sources substantially from stocks and bonds, maintain a comparable or lower degree of risk, and commit less capital in the process. The entire process very much appeals to the analytical side of my brain and my competitiveness. So, when the time comes for me to begin to reduce my time in medicine, I could envision taking a deeper role in this. Without access to these types of investment alternatives, I honestly don’t know how most doctors are going to support their retirement lifestyles. I’m fortunate to have met the right people who have helped educate me on how to achieve greater income and capital appreciation with less risk, while diversifying both my assets and income-producing sources. It is truly transforming my future for me and my family. Several of my partners have participated and been very happy with the income-generating power of these asset classes.

Photo: Stephen Rosenbloom, MD