- Plan before you act.
As a doctor, you are equipped with the skills you need to give your patients the best treatment. But stellar medical treatment alone, does not guarantee financial success. For that, you need a vision of how to achieve both professional and financial success. Start by articulating your goals on paper. Financially successful doctors set their goals and implement them promptly. What are your most pressing goals right now? Paying off debt? Purchasing a family home? Financially, where do you want to be five, ten and fifteen years from now? Writing down give you a visual image and help motivate you to stay true to what you want to accomplish.
- Execute: if not now, then when?
Writing lists and posting notes is one thing; getting the job done is another. Execution is the Achilles heel of financial planning because it requires you to overcome the common affliction known as procrastination. So rather than just talking about your goals, get cracking.
Start early! With their long years of education, many doctors do not start their careers until after age thirty. And although doctors’ incomes increase substantially once their career begins, a significant portion is usually needed to pay off a sizeable student debt. This means doctors will have lost many years in which they could have compounded savings. High net-worth doctors typically become serious about investing money at the beginning of their careers, not at age 50 like so many others in their profession.
- Monitor your progress
As you begin to reach your objectives, you’ll need a mechanism to monitor your progress. If you plan to save $5,000 each month, for example, you should prepare a monthly income and expense statement that compares your budgeted figures to actual figures. If you are falling short of savings, you can analyze the reasons for the shortfall and take remedial action.
A net worth statement is an excellent monitoring tool you can use to track your wealth-building efforts. By subtracting your debts from the market value of your assets, it is possible to determine your equity, or net worth.
- Be disciplined: learn to say “No”
Nobody cares more about your money than you do. So why would you give a broker carte blanche to invest the money as he or she sees fit? By doing so, you abdicate your responsibility for your own investments. It is worth your time to take an interest in how your money is invested.
- Live frugally
There is a saying that, “rich people buy assets and poor people buy liabilities.” It’s amazing how many doctors don’t know the difference between the two. An asset is an investment, which generates income, but items such as boats, sports cars, and vacation properties are liabilities because they require a cash outflow to maintain them. You can enjoy a great lifestyle without having to surround yourself with the newest toys on the market or living luxuriously. Delay life’s luxuries until you can afford to pay for them.
