Doctors often end up spending more than a decade to complete a college education, medical school, and then residency followed by fellowships in many cases. By the end of their educational journey, many young physicians are burdened with massive student loan debt. Thanks to the serious debt and also late entry into the professional field as opposed to other career paths, doctors encounter unique financial challenges.
Some Unique Financial Challenges
Doctors encounter many financial issues and they must avail special tools for planning their financial future effectively. With a substantial student loan debt in addition to starting a professional life later than the rest, doctors are often in a financial tight spot. Moreover, there are some lifestyle and wealth expectations attached to the medical profession in general, and so many doctors experience some amount of stress to live up to all those expectations.
Some experienced doctors are of the opinion that as compared to other highly educated professionals, doctors have never been taught about the intricacies of finances or anything remotely related to money while they are being trained. Moreover, the medical profession is regarded as a noble profession that should be dedicated to the service of mankind so young medical students are never encouraged to talk about money or discuss financial issues. Therefore, these young professionals, when they make a delayed entry into the job circuit, they invariably end up splurging and do not pay much attention to savings, retirement benefits or the consequences of delayed investment.
Many doctors are brimming with self-confidence and that is a great virtue while they are treating their patients as they would be able to take smart effective decisions for their patients. However, overconfidence may prove to be extremely damaging to their financial health. Doctors are often quite casual about securing their future financial status as they are confident that they are well-equipped and fully-qualified in medicine to earn a secured future automatically. They often make the mistake of relying on a tip from another doctor, instead of doing relevant research or consulting a professional financial advisor.
If you are a physician, it is worth hiring the services of a qualified financial advisor who specializes in physician financial planning and would be guiding you every step of the way to financial security and freedom.
Key Components of a Doctor’s Financial Success
Most professional financial consultants suggest that doctors must consider putting certain plans and protections strategically in place to boost their chances of future financial security and success. Here are a few key components of a doctor’s successful financial plan.
Medical Malpractice Insurance
If you are a qualified doctor then there is at least one in five cases chance of being sued for medical malpractice. Even though a majority of those claims are dropped or dismissed, they would be costing the physicians good money. As the medical profession is regarded as a lucrative business, doctors are automatically far more susceptible to lawsuits. In order to minimize and eliminate risks, doctors must make it a point to be insured practically in all allied areas and that may include a considerable umbrella policy.
All qualified doctors must consider investing in disability insurance for safeguarding their financial future. You must keep in mind that private medical practice would be building very little or practically, no equity over time. Expert financial consultants point out that the actual value or worth of his future income is actually a young doctor’s biggest asset. As per past experiences, often doctors would need to retire prematurely. Things would become pretty tough without disability insurance.
An Estate Plan
Financial experts believe that it is critical to chalk out an effective estate plan for doctors. All qualified physicians must ensure that they have their will, living will, trust, and also, the power of attorney associated with healthcare and property in place.
A physician’s finances could be impacting his patient care. Financial crises could be ruining his career and practice. Financial stress could be culminating in high burn out rates, high stress, and less to no job satisfaction. If you wish to reap the fruits of your education and income, you must consult a qualified and experienced financial advisor and do not forget to pay attention to the above-discussed key components of your financial planning.