Tasked with saving and improving lives, doctors undoubtedly play an important role in our society. The medical practitioners are engaged in one of the toughest kinds of jobs where they work round the clock and dedicate most of their time not only in curing illnesses but also preventing it. To achieve such expertise, they dedicate their lives initially in gaining extensive knowledge and the remaining life in treating patients. In this entire process, doctors often become unaware and ignore one of the most crucial things in life i.e., financial planning.
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Medical practitioners start their careers quite late unlike other professionals like engineers who start their careers early. Due to a late start, they often lag behind many of their contemporaries in achieving their financial goals on time. After a long training period and internship, doctors often rise to the peak of their careers at their mid-30s to 40s.
Various other factors affect the financial life of doctors like poor financial habits and lack of knowledge about financial instruments like equities, mutual funds etc. Medical practitioners in their pursuit to save lives often forget to focus on financial planning. Firstly, the strenuous job of a doctor along with erratic work hours renders very little time for them to focus on financial planning. Secondly, most of the doctors have the burden to pay off education loans. Thirdly, doctors have very little understanding of financial planning and often lack the expertise in financial matters.
Medical practitioners must consider financial planning an important way to build a sizeable corpus to meet their family obligations and financial goals and to create a comfortable sum for retirement.
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Firstly, identify your professional ambitions and then chalk out a way to accomplish it. Your financial planning is the guide that helps you reach your destination within a given time. This will allow you to remain focused and save you from being misled. Plan for the long term and ask certain important questions to yourself:
Once you know what you want to do, it will be easier to work towards achieving these goals.
Start saving money right from the time you enter the professional world. There is no good time to start saving money. Initially, you can create a good corpus by investing in low-risk financial instruments like FDs and RDs. Once you make a comfortable contingency fund, you can start to explore some of the riskier options like mutual funds and equities. Most importantly, you must secure your health and family by availing adequate term and health insurance plans. By doing so, you can create a diversified investment portfolio by investing only 20% of your total monthly income.
Mapping your cash flows will allow you to establish a budget. To accomplish this, you need to consider all your sources of income and compare it against the expenditures, and make investments according to your personal and financial goals. To map out your cash flows you need to focus on these 5 components – income, taxes, necessary expenditures, savings and debt. You can create successful cash flow by constantly monitoring your plan, whether it is working or not and changing it from time to time if necessary.
Most of the medical practitioners incur a loan and remain under the burden of education loan during the start of their careers. Try to pay your education loan early instead of investing your income on risky options like equities or mutual funds. Start by paying your loan from the time of your internship. This will allow you to steadily pay off your loan in the initial stage of your career. However, always make sure to keep a contingency fund and set it aside to meet unexpected financial situations. Paying off your loans will have a positive impact on your CIBIL score, and it will allow you to get loans easily when you want to set-up your own clinic or start private practice.
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