Doctor, your Finances might need a Check-up!
Amar is a CFA Charterholder and CFP, having over 20 years of experience in IT and Financial Services. He is very passionate about spreading financial literacy and has authored four bestselling books on Personal Finance.
09 Feb, 2018
Mr. Shetty finally got himself to the doctor after having dealt with a terrible cough, high fever and constant body pain. It’s not like he didn’t try to cure himself in the meantime. He absolutely did, but just used Dr. Google instead of an actual doctor. Upon examination, the doctor at once realized what the problem was and set Mr. Shetty on the right course of treatment. He also exhorted that an actual medical degree should NEVER be confused with a Google search and explained the importance of avoiding self-medication due to its possible side effects.
And Mr. Shetty isn’t alone in exhibiting this behaviour. Most people prefer to self-medicate instead of consulting a qualified doctor. Self-medication by relying on a web search can have detrimental effects, but that doesn’t stop most of us from indulging in it. This is because the perils of ‘self-medication’ often pale in comparison to the comfort and ease of getting this ‘so-called medical advice’ in the confines of one’s own home.
Coming from a doctor, a request to avoid self-medication doesn’t seem all that odd. But when you consider that these doctors themselves indulge in self-medication when it comes to an extremely important area of their lives, the irony is hard to miss. Research has shown that 75% of doctors believe in self-medicating when managing their own finances.
So, are doctors exempt from the advice that they dispense to their patients? Well, they shouldn’t be, because the trap of self-medicating one’s finances can have adverse effects on a doctor’s overall financial situation. The most common mistakes doctors make include:
- Making investments in a combination of schemes that might not necessarily go together, simply because they seem relatively profitable.
- Having limited knowledge about the field of finance, causing them to become a victim of mis-selling.
- Relying on the advice of family, friends, peers and CAs while making financial decisions.
- Delaying the investment process due to believing that they don’t have enough money to make substantial investments at an early age.
- Not having adequate Insurance for Disability or Professional Risk.
- Over-concentration in real estate, which is an illiquid asset.
But all these mistakes can be avoided if doctors follow the same procedure they use while diagnosing a patient and prescribing medication. Traditionally, doctors get a full history of the patient prior to prescribing any medication. But they fail to apply the same precision when it comes to diagnosing their own financial situation. It is not like doctors don’t think about their finances at all. Simply put, doctors just don’t have too much time to dedicate to understanding the intricacies of financial planning. But complacency, when it comes to one’s finances, can prove to be very harmful.
So, how should doctors go about making (profitable) investments?
- Well, for starters, a doctor’s financial journey must begin by going against his/her own instincts to “playing doctor”, in a bid to improve the situation.
- The second step is understanding that there is never a wrong time to begin investing. Investing, even later on in life, is much more profitable than not investing at all.
- The third and most important step would be to find the RIGHT PARTNER, one who would understand all your financial needs and goals and create a plan to ensure that you achieve those goals.
When trying to create a profitable portfolio, paying to get advice might not be everyone’s first choice. And doctors are no different. But, getting advice from someone who might be more knowledgeable in the field of finance might be a good starting point. This is because they will give you the right advice you need for protecting and growing your finances. So, just in the way you would approach a doctor for any physical malaise, for help with your finances, get in touch with a trusted financial advisor.