Why Doctors Need A Financial Doctor
Doctors are known for their exemplary dedication and focus when it comes to their profession. They spend years studying, acquiring knowledge and mastering their profession. But it is this very quality of being knowledgeable and intelligent, that comes in the way when it comes to managing finances. For most doctors, money matters always get bumped down the list of priorities. But this kind of complacency can prove to be financially harmful.
Most doctors we meet tell us they don’t have time to look at their money and investments or they rely on friends and family and take ad hoc money decisions. In fact, 75% of doctors believe in self-medication when it comes to managing their own finances.
So why do doctors love self-medication when it comes to finances?
1. Simply no time – In 90% of the cases when both husband and wife are doctors, due to busy schedules, money management is not a priority. As long they are making some investments, they feel that they have planned their finances.
2. Limited knowledge – With their focus locked in on becoming better doctors, they find themselves lacking the time and/or knowledge to handle their finances. As a result, they either delay taking decisions or take ad hoc decisions.
3. Don’t know who to trust with your money – In the investment space, the friendly insurance agent, CA, Bank relationship manager, stock broker, colleagues, patients, relatives– everyone claims to give the best advice. It’s difficult for anyone to evaluate and know the difference. Most doctors have therefore been taken for a ride in the past and have lost their wealth at the hands of the “experts” who peddle products based on the commissions they receive.
Just like any investor, doctors too are prone to making mistakes. Thus, it’s equally important for them to follow a structured approach to planning their finances. A doctor’s reality is that they start earning later in life, as compared to other professionals, and take time to establish themselves. Thus, in their early 30s when they have just started earning, they might also have increased expenses as they start their life with family.
Unlike other professionals they do not have allowances and pensions and hence, it’s important for them to plan properly for retirement, contingencies and unforeseen events. Additionally, Doctors will need capital for to set up their own practice or purchase, equipment while also considering other financial goals like purchasing a house or a car and providing for their child’s future.
As seen, despite not having time and knowledge, financial responsibilities will always exist. While most doctors claim that they don’t have time and knowledge for financial planning, the irony is that most doctors do financial planning unknowingly and in an unstructured manner. So, if you are making financial decisions, why not do it in a structured manner?
Setting financial goals is the heart of the financial planning process. When you keep in mind your life-cycle and your unique financial requirements in each phase you can plan your finances better. Approaching a financial planner who understands the financial needs and goals of the doctor, and then helps him/her to create is of utmost importance. This way, the likelihood of the doctor meeting his/her goals is much higher.
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