The choice to pursue a medical profession is typically a personal decision, having more to do with making a contribution to the world than making large amounts of money.

Being a doctor, however, can be a lucrative profession. You need to protect the wealth that you have worked hard to accumulate. As a doctor, there are unique aspects of your profession that make building wealth different from other professions.

Here are some tips specifically for doctors regarding wealth management:

Managing Debt

Becoming a doctor is a lengthy process which requires many years of school and residency. During these years, candidates typically incur a great deal of debt before they even reach their earning years. If you begin your career with debt, then the first step toward building wealth is managing and eliminating your debt.

You can do this by minimizing your spending. When you make large purchases such as homes or cars, make sure that you take not only your earnings into account, but your debt repayment as well.

Debt Goals

Set a goal of repaying your undergrad debt over a certain amount of time with monthly payments that you impose on yourself. While you are repaying the debt that you incurred as an undergrad, don’t make purchases on credit cards and accrue more debt on top of the debt that you already owe.

Though you may be tempted, as you transition from “Underpaid Resident” to “Well Paid Doctor,” to treat yourself to luxurious purchases. This will compound your debt situation and make it difficult to climb out of the hole, even with a substantial salary.

Acquiring Wealth – Avoiding Common Pitfalls for Doctors

Because of the salary associated with being a doctor, it may seem easy for doctors to build wealth. There are some pitfalls for doctors, however, and building wealth is not always as easy as it looks.

Doctors can acrue many expenses like staff salaries, office space, equipment, insurance, and many other expenses that come with running a practice. You need to make sure that you have a handle on all of your numbers, the income and the expenditures, so that you know the total profitability of your practice.

Exit Strategies for Doctors

Another potential pitfall for doctors is the exit strategy. In other types of businesses, the owner can build a valuable business over the course of a career, and then sell it for a large profit to fund retirement. However, much of the value of your practice comes from you.

When you retire, you take your skills with you, taking value from your practice. Selling a medical practice is not the same as selling another type of company, so you will need to plan for this and acquire funds for your retirement in other ways.

Being a doctor can be a lucrative profession, but it is also a career that leaves you with a limited amount of free time. With the time it takes to treat your patients and run your practice, do you have time left over to become an expert on your own wealth management? Is there time to learn about investment avenues, insurance options, protecting your assets and planning for your retirement? Probably not!

Just like you would recommend that sick or injured people seek medical care, you should seek assistance from a wealth management professional if you want to make the most of the money that you earn. You work hard for your compensation, so let an expert help you protect your wealth and keep you financially healthy.

If you would like to further discuss how you can build your wealth through your profession, please contact us and we’ll be happy to discover the right strategies for you.

Disclosures

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the Funds or any stock in particular, nor should it be construed as a recommendation to purchase or sell a security, including futures contracts.

There are risks involved with investing, including loss of principal. Current and future portfolio holdings are subject to risks as well. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Narrowly focused investments and smaller companies typically exhibit higher volatility. Bonds and bond funds will decrease in value as interest rates rise. High-yield bonds involve greater risks of default or downgrade and are more volatile than investment-grade securities, due to the speculative nature of their investments. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume.

Diversification may not protect against market risk. There is no assurance the objectives discussed will be met. Past performance does not guarantee future results Index returns are for illustrative purposes only and do not represent actual portfolio performance. Index returns do not reflect any management fees, transaction costs or expenses. One cannot invest directly in an index.