Choosing a financial advisor is one of the most important career decisions that a doctor will make, but rarely is this approached in an intelligent, informed way.
Most professionals are simply too busy to take an active role in their investment planning and leave the majority of such decisions up to their financial advisor.
You’ve probably heard it many times: doctors are notoriously bad investors. If you’re an MD who objects to this stereotype, think about how often you’ve heard colleagues talking about picking the next hot stocks or buying into “sure thing” investment opportunities. Why do you think doctors are prime targets for unscrupulous salespeople, brokers and insurance agents?
Even if you ignore the “you gotta get in on this one…” conversations in the doctor’s lounge, there is more to being financially healthy than avoiding bad investments. Achieving long-term financial health requires setting goals, then creating, implementing, monitoring, and sticking with a plan to achieve them. Unfortunately, doctors frequently stumble on the path to financial well being by making some easily preventable mistakes.
Making good money doesn’t mean you’re saving enough money. Many M.D.s procrastinate when it comes to saving, focusing on having enough money to buy what they want today. Saving becomes an afterthought; something to do with whatever money is leftover after you’ve spent what you want to spend. A “pay as you go” mentality only works if you view saving for big-ticket items, such as kids’ college educations and your retirement, as expenses you have to pay for now, along with your rent or mortgage, utilities and groceries. As doctors make more money, their standard of living tends to creep up (luxury cars, club memberships, nice vacations), so the idea that there will be more money available for saving as your income increases simply isn’t the case for many.
Doctors would never consider going without adequate malpractice insurance. However, even though the financial impact on your family if you died prematurely could be as devastating as a large malpractice judgment, physicians often fail to consider how much life insurance they need. As a doctor who makes a nice living, your family is accustomed to living a certain lifestyle. If the worst happened – and M.D.s are just as vulnerable to that risk as the average non-M.D. – you would want your family to be able to live in the same house, attend the same schools and have money for college. The amount of life insurance offered as an employee benefit may not be enough, nor is it portable should you leave your job.
Avoid Financial Planning Mistakes with the Help of An Expert
It is ironic that many of the perks of being a physician – respect, knowledge, high income, prestige – seem to work against doctors when it comes to seeking out financial planning advice. Since physicians are so often viewed as knowledgeable authority figures, doctors can fall into the trap of thinking they can handle almost anything without “outside help”. Also, since most doctors make good money they may think financial security will just “happen”, but it won’t. You need to set goals, and create, implement and stick with an action plan, to be adjusted as your life and your needs change. If you think that sounds like work, you’re right, it is – but it’s not in your area of expertise, it’s ours. Just as a doctor’s guiding principle is to help others achieve good physical health, ours is guiding people toward a financially healthy life.
Mintco Financial – Office in Tampa Florida
Phone 813- 964- 7100