If you have the time, inclination, right tool, knowledge or skills required to manage your money matters efficiently you may not need an Adviser. But managing your Emotions, Behavioural Biases are uphill battle. Biases not inherently bad, and most are natural to human behaviour could negatively impact one’s ability to increase their financial position. The best way to avoid the pitfalls of human emotion is to have an external person called adviser.If you have the time, inclination, right tool, knowledge or skills required to manage your money matters efficiently you may not need an Adviser. But managing your Emotions, Behavioural Biases are uphill battle. Biases not inherently bad, and most are natural to human behaviour could negatively impact one’s ability to increase their financial position. The best way to avoid the pitfalls of human emotion is to have an external person called adviser.“Advisors are those who see the reason for what is to be done and what is not to be done ”.Financial Planning for Doctors & how it’s differentThe medical profession is held in awe and respect across the globe. It is a noble profession as doctors try to heal sickness, diseases, treat physical and mental trauma.
When one doctor or both are doctors:
Many times, both husband and wife are doctors. They are self-employed professionals who earn well but would not have done any financial planning. This could be because they do not keep a check on how much they earn (monthly earnings would be variable) and personal expenses and professional expenses get mixed up. They do not understand investment planning, tax planning etc. and end up making wrong investment choices or evading tax by hiding income. Many are so busy with erratic hours that they don’t have the time or inclination to spend time on managing finances. Such doctor couples need to take the following steps –1. Separate out personal and professional expenses2. Create a budget3. Create an emergency fund4. Get insurance cover for self and family so that personal goals and professional expenses get paid off in case of unfortunate events.5. Make financial goals like children’s education, retirement plans and work towards achieving them by investing properly and reviewing investments regularly.6. They should take the help of a financial planner if they are not comfortable doing this on their own. Some of these product might have been mis-sold to them by agents who know their ignorance about such matters – like child future plans & pension plans. If the doctor does not have the time nor the inclination for financial planning, he should invest in having a good financial planner who can manage his finances and give him sound investment advice as per his needs and goals.Doctors’ lead busy lives but it is important for them to focus on their finances so that they can grow their wealth, manage their taxes and have a healthy and secure financial life. This is important for a good long medical career as well.
The irony is doctors don’t follow the rules that they establish – first diagnose & understand the problem and then prescribe appropriate medication. But when it comes to finance they prefer over-the-counter products. Many of them buy financial products without really understanding them as they are not in touch with this subject and due to lack of time rely on the insurance agent or the financial product seller who claim to take care of your investments but are just looking to increase their sales.
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