Greetings To Our Readers!
Today is National Doctors day! People all over the country are sending good wishes and thank you notes to our brave heroes who stood by us without taking a break, throughout the pandemic and still are there. We salute them for their selfless service to keep us healthy and happy!
When it comes to starting an earning career, doctors start it a bit late from other professionals, well thank the lengthy qualification process for doctors in India. It is estimated that by the time doctor start to earn they either cross 30 or are much near to their 30’s. That means doctors start planning saving and investing for their future goals 5-7 years late than their peers. And obviously starting so late means they have to save big in their first decade of professional work to make up for the lost time.
However, most of the doctors have already some plans scheduled for their initial earning phase, like paying off educational loans, starting a family, and setting up a practice.
Now here is where a doctor finds it much difficult to plan their finances in the most appropriate way, plus their long erratic working hours make it hard for them to take out time for their personal finances. So how should a doctor basically plan his finances?
Let us see!
Get an Indemnity Cover!
As soon as the doctor starts his/her practice, the first thing they should get is an adequate ‘Indemnity Cover’. An Indemnity cover or indemnity insurance helps protect a doctor against any legal liabilities that may occur due to a doctor’s negligence, malpractice, or mistakes. When a doctor is protected by an indemnity cover, he basically saves himself against negligence, malpractice, or mistakes
There are some insurers in India, that do provide professional indemnity policies or medical indemnity insurance covers to doctors.
Settle Down Your Loans On Time!
Most of the doctors start their career with education and the only reason behind is the expensive medical education. The loan story does not end up here, in fact, doctors take loans further in their career for multiple purposes, some for setting up their practice or clinic, while some take loans to enhance eth equipment in their clinic.
Well, it is advisable for doctors while they apply for loans they must ensure that their debts are not beyond their means. They must have a financial plan in place with defined goals.
In fact, I suggest, doctors once they start their earning career, plan, and pay out their education loan debt, and prevent further taking loans. If you are planning to set up a clinic instead of taking a loan, plan, save and invest for it. When you will have a good corpus created, you would require to take a much smaller loan. Further, banks offer special interest rates—10.3 to 12.3%—to doctors on loans to buy equipment and set up a clinic. One should take advantage of the lower rates instead of opting for expensive personal loans.
Plan Investments for Other Major Life Goals!
Other than setting up their own clinic or practice, a doctor has many other professionals plus personal goals like education to upgrade his skills, financial responsibility towards spouse and child, buying a car or home, or arranging the best education for his child, planning for a happy retirement and others.
Thus, a doctor needs to calculate all his monthly income, his monthly expenses, and monthly saving and finally direct his saving in different financial securities where they can grow to help the doctor achieve different financial goals of his life.
Investing in a different class of mutual funds can help them create a good corpus for their financial goals. They can invest in equity mutual funds for their big and long-term goals, like for their retirement, child’s education, education, and many. For their small and short-term goals, like buying a car, or buying new equipment for their clinic, they can invest in debt mutual funds.
Doctor’s Retirement Planning!
As doctors tend to keep on working till they are physically able to, there is no such thing as retirement age. Hence, most doctors don’t need a huge retirement corpus. What they need is an investment strategy to preserve wealth after crossing the age of 60 instead of taking aggressive investment decisions. They should have a contingency fund equivalent to a year’s household expenses with adequate health covers for themselves and their spouse.
As they do not have to create much big corpus for their retirement, they can start planning for their retirement a bit late, that is after their 40’s or 50’s. They must look towards investing in equity mutual funds for their retirement money.
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For any kind of query you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).