As with every professional, effective management of finances is important for doctors as well. A planned and disciplined approach to their finances can make the difference between prosperity and debt for doctors. What’s more, financial security provides peace of mind, leading to a less stressful life. That in turn makes for a better doctor.
1. Live on a Budget
It is important for doctors to create a budget and stick to it. Doctors should make sure to not use more than half their income for their basic necessities. They need to be able to save at least 50%-60% of their income, if they are to build a good retirement corpus. With this, they will be able to retire early, reduce their workload, or even change careers, when they start to find their lifestyle too stressful.
2. Save Well for Goals
Like other individuals, doctors too have short and long-term goals. While short term goals encompass home renovation, going on a vacation, long term goals constitute buying a home, saving for the education of children and their wedding along with retirement. A wide range of lending products like personal, home, loan against property and business loans for doctors are available in the market to address their personal and professional needs.
3. Invest Carefully
Doctors need to be careful where they invest their money. They need to seek advice from a financial planner and make a solid investment plan. Starting early with investment will allow the power of compounding to add to a doctor’s corpus. They can start with investing only 2% of their income, and then gradually increase the amount with time. Moreover, they need to be clear about their risk appetite and choose their investment products accordingly like equity, debt or or fixed deposits.
4. Insure Against Financial Catastrophe
Doctors need to be careful about the insurance they buy. Term life, health, disability, and personal liability insurance are all good choices. In fact, a combination of all the above would be ideal. In addition to this, doctors need to have a sufficient professional indemnity cover as well, to protect them and their family from the financial and legal consequences of a professional accident/ mistake.
5. Pay Off High Interest Debts Early
Doctors often start their career with student loans to pay off. It is important to schedule the repayment of such loans while availing others, such as, Business Loan for Doctors, to start and grow their practice. What’s more, if you pay off the high interest loans early, you’ll save a lot more in the long run.
Thus, the above 5 tips will help doctors be more financially sound, and live less stressful lives.
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