Doctors as the Human Resources – There Money Management

The first question that may strike a reader can be that are the doctors some what different or do they require some special kind of the financial planning? The reply can be yes at times and even no at some other times depending on the different types of the situations. The doctors are also the human beings and hence they also behave like their patients in most of the cases which is one of the most solid reasons they should look out for a structured approach in the management of the money. Yes there are some specific challenges in the life of the doctor so at that times, they will need a specific and some what more of the attention. The doctors generally start earning in the late 20s unlike the other professions like that of the engineering or the C As because of the reason of the pattern of the studies towards the various types of the specialisations. Getting the degree of the doctor is a result of the hard work that is done for the several years in the field of the academics followed by the many years of the training and then spending the huge sum of the money. The M B B S, the post graduation, the specialisation etc., all of this takes quite of the time of their youth and the initial money compounding years.

This list is not over yet as all this includes the always changing scenario that they need to stay relevant and then up dated by the attending of the conferences, participating and then reading the various researches and all this further demands all lot of their time and the money as well. After the basic studies, the next decision that comes in the front of them is to join a job or to start the own practice. In the initial years, the most of the doctors prefer to work in the some of the hospital as starting with the own practice has its own demands in terms of the money and the time as well, unless they have the running practice of their parents and some of the infra structure is already in the place. The peak earning age band for the doctors is 35 to 55 and more or less the life goes smooth for them at least as per their assumption and now the story starts. The smooth and the regular type of the flows of the cash expose them to many types of the financial risks which usually makes them commit many of the financial mistakes in there life span. The cash flow of the doctors with the least risk of the loss of the job or of the slow down of the practice, usually makes them the very first choice in the case of the lenders, they are lured with many of the credit cards that are having high credit limits comparatively, the car loans, the home loans with the less document work, which further makes them preferred choice for the sellers of the property. As a result of this, they usually go in high for the real estate and the other types of the loans. When having the most of the earnings in the cash, the real estate becomes the only type of the asset where one can invest in to. They do not realise the risks of going over board on a single asset class and also the risks of the health and the life, which can further aggravate this very sensitive type of the issue.

As there is much type of the constraints in the life of the doctors, they are very much exposed to the many type of the miss sellers as many of the doctors have a lot of the insurance policies with them but still they are under insured. Many have a lot of the mutual funds with no targeted goals attached to them. Many also invest in the P M S with out any type of the knowledge of how it actually works. They oblige every one from the bankers, the friends, the relatives and end up with a much skewed port folio that is having no clear cut structure and the direction. The doctors actually recommend the patients to consult only the professionals for the medical help and also get the advice from the registered doctors only but when it comes to the point of their own financial health, they themselves take the advice from the sellers and the various types of the unregistered distributors and the agents. Besides this some also have the behavioural issues of the self investment just like their patients do the self medication. The doctors spend so much of the time with their patients diagnosing the real problem, advice some of the blood tests in order to gauge the root cause of the issue of the health but do not spend enough of the time to improve their financial health. They do not invest for their goals but actually ask for only the investments in order to make the money fast just like their patients want only the medicine and get cured very fast. If said in the language of the doctor, the two types of the major diagnostic tests in a financial health check are the cash flow analysis and the net worth analysis. The analysis of the cash flow is just like a lipid profile that at times let a planner diagnose the liquidity issues, the loans and the savings situation in a profile and then ultimately figure out how the investible surplus is to be used in order to improve the over all financial health. The net worth analysis lets to diagnose the financial assets and the liabilities structure, the investment asset allocation and how well a person is able to survive the various types of the critical situations that may come in to the way.

The profiling of the risk is another diagnostic test that results in the sensitivity of the doctors to the different financial risks and then manages the expectations on the returns that are obtained. The challenge with the doctors or the professionals in the general point of the view is that they are not aware about their flows of the cash. They might be aware of their earnings as they pay the tax on that but hardly any thing on where they are spending in the general. They do not find this exercise worth giving time to. The practising doctors might have some of the business loans running and have no demarcation between the personal and the practice expenses. When these doctors need the money for the personal use, they use it from the business account and vice versa, which is totally the wrong way to manage the financial affairs. To live a healthy financial life, it is very important to hold on to the cash flows which give the under standing on one’s life style and which are the expenses or the investments that are very much unnecessary and can be curtailed. It is very much necessary and also very important to have the investments as per the goals of the life. The allocation of the asset should always be according to the profile of the risk of an individual and also to have the necessary liquidity in order to manage the financial and the emergency requirements as one should always deal only with the registered and the regulated financial advisers and one can always check the web site of the S E B I in order to get the latest list of the advisers in your area. The goal based investments give a very clear picture or an idea on the investment horizon that further plays a very help full part in the selection of the suitable products. A very proper financial planning structure always helps in the management of the money in a much better way. The life and the health are uncertain so the target should be to generate a comfortable passive income and not just to collect the illiquid assets.