Many upwards only unlike stock market which can go

Many dentists and doctors
in India
invest in real estate for investment after setting up their practice and
earning handsomely. We tend to be invested much overweight in real estate which
is usually not a good idea. A part of that thinking goes on to believe that
real estate is a safe bet as it will grow upwards only unlike stock market
which can go downwards anytime and secondly, it can be withdrawn as and when
needed with no time based bond like a few mutual funds, market linked
securities and debentures. We have to understand real estate is one of the
asset classes and there will be periods of exacerbations & remissions
(meaning over-performance and under-performance. The real problem is sometimes,
when husband and wife, both are dentists/doctors; let us assume practicing in
separate outlets. A typical example of self-employed professionals earning well
but just well oiled earning machines only, that is where the buck stops as they
usually won’t be doing any financial
planning. Because of an overtly busy schedule, they usually won’t be keeping a
check on how much they earn because of variability in the monthly earnings
(nothing is fixed in a private practice) and because of this usually, personal
and professional expenses get muddled up. They do not have time for investment
planning, tax planning etc. and end up making wrong investment choices at the
fag end of financial year in March on just a verbal advice, hearsay or free
advice or even worse, evade tax by hiding income. Many are so busy with erratic
working hours that they don’t have the time or inclination to spend time on
managing finances. Such medico/dental couples need to take certain drastic
steps like separating out personal and professional expenses, creating a budget
with a high insurance cover for both and kids so that personal goals and
professional expenses are taken care off in case of unfortunate events. Certain
realistic financial goals like children’s education, retirement plans have to
be worked out with the help of a financial
planner, if not by themselves and then have to realistically stride towards
achieving the same by investing properly and reviewing their investments
regularly. They have to take stern decisions of investment via financial
advisor if they are not comfortable doing this on their own.

Do’s and Don’ts for us – The Dentists / Doctors

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We, the health
professionals are fond of giving instructions to our patients as doctors or
dentists, but when it comes to finance, we ourselves have to follow a few do’s
and don’ts or saying it other way, a taste of our own medicine in matters of
finance. We have to follow a few cardinal rules to ensure that our finances remain
in a healthy condition (similar to what we expect in our patients):

1.     The temptation to splurge
should be curbed big time once we start earning the big bucks. This urge
basically stems from the so called ‘exile’ period we have spent in our so many
spent years as a junior student first, then as a senior student and then career
struggling etc. when we feel, we missed out on opportunities to have fun as we
started to earn well much later in life than our school, college or other
friends. The urge spills on to fancy vacations, new cars, eating out every
alternate day etc. This juncture is very important to keep a check on our
expenditure and concentrate on savings and investments. This doesn’t mean that
we totally limit ourselves to the above, but drawing a decent line somewhere
down the line does help a lot.

2.     Prime importance is to be
given to have good amount of life cover and disability insurance cover so that
financial needs of family and profession are taken care of in case of unforeseen
and unfortunate events.

In this era of ‘consumer is king’, when there is a patient
knocking on the doors of consumer court every minute, a good indemnity cover is
also a must. 

4.     For most of us, our
private practice is our biggest investment, so we have to know to nurture,
grow, save & ring fence the same.

5.     We all have a very busy
schedule and we work manyatimes post our fixed hours as well to attend to
various emergencies. On top of that, we have our family, health and social
engagements etc. also to look forward to. A healthy life wise fitness schedule
is a must for each one of us. We have to eat just the right and ado a regular exercise
to remain in a good physical shape. We have to be associated with some passion
which can be a game, a brain challenging activity which makes us switch off
from our work for some time and pursue the same so that we continually get a
kick in our life to stay mentally fit as well and this is important for our sound
financial health also.

6.     Our financial plan has to
be firm and proper after a thorough and proper research with primary and
secondary financial goals listed and it should be deftly executed to achieve
those goals. If there is no time to research and make a plan, outsource the
same by hiring the services of a good financial planner who should have a proper
investment plan investing in a variety of assets including equity, mutual funds and debt so that the investment
portfolio is diversified and the returns are optimum and are appreciated long-term
capital wise. It’s high time that we understand the importance of such
financial professionals. The loans and debts should not go beyond our ways and

We should
pay off our education loans first and only then go for home loan or loans for
buying property to set up our own clinic. We should ensure that we understand
the investments and performance of the investments rather than blindly
following the advice of the financial planner. 


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