As a practicing doctor, especially one at the start of your career you are probably spending long hours attending to your patients and their health concerns. But have you looked at the health of your finances recently?
Generally, a doctor’s prime earning years start later than most other professions on account of the lengthy training years as well as the high gestation period required to establish oneself as a trusted practitioner. This is the first indication that you may need to plan your finances a bit differently than your peers in other professions.
Today, we are bringing you some key aspects to consider and do differently as a doctor to get your finances in good shape.
Know your goals
The key to good financial planning is to understand your financial goals. As a doctor identify your specific priorities, both short term goals such as clearing off medical student loans, upgrading your medical knowledge as well as long term goals such as starting your own practice.
Clear your student loans
Student loans may carry higher interest rates, so look to clear these off faster to avoid heavy interest payments. Increase your loan payment allocations towards your student loans. Discuss with your bank the possibility of pre-paying these loans especially for when your earning multiplier increases.
Medical knowledge up gradation
As a doctor unlike most other professions you need to invest a lot of effort into constant up gradation of knowledge. You may need to take regular courses and trainings during your working years. Consider putting away money through systematic investment plans to fund these expenses. Choose debt or equity products based on your risk appetite considering your other responsibilities and priorities.
Long term capital expenses
If you plan to start your own clinic or practice, then identify your envisioned time frame for this and look at plans that can offer you good long term returns to fund the investment needed for this. You may also consider real estate as a possible investment avenue as it could help in setting up your own clinic.
Several companies offer loans at special reduced rates for doctors, seek these out and take advantage of them while raising finances to set up your practice.
Build a contingency fund
As a doctor, your earnings are highly dependent on your skill set and unless you work on a salary, your earnings are likely to depend on how much time you can dedicate to your medical profession. So, it would be best to build a good contingency fund so that you have a backup to rely on in case you are temporarily not equipped to practice.
The advantage you have is that there is no real retirement age for a doctor. You can continue to earn till the time you choose to keep consulting. Still, begin putting together a retirement fund in your prime earning years to help maintain your current lifestyle in your later years of life when you may want to slow down on your work.
Seek professional advice
Just as you would advise your patients to never self-medicate, as a doctor you can also seek out professional help to plan out your finances especially if your hectic profession does not allow you to do it optimally yourself.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.