Financial Planning 2025: Doctor’s Guide to a Wealthy Future

Hello,

This will be a different blog today. It will be a complete financial guide for doctors who want to manage their finances well.

Let us start with my story. After 10th grade, I chose the biology stream and wanted to be a doctor.

However, I was destined to do something else.

I understand that medical professionals like you have intensive studies and training. Doctors start earning mostly after their 30s and manage their practice, job, hospital, and family. So, you don’t have time to manage your finances.

But if you don’t manage their finances well then, you will be devoid of :

● Maintaining your lavish lifestyle

● Achieving your retirement goals

● Expanding your practice and building a hospital

● Leaving a legacy for your children

● Achieving other goals?

Now, let’s understand what keeps you from achieving financial well-being because if you know the enemy and know yourself you need not fear the result of a hundred battles.

?Following financial mistakes keeps you from achieving financial freedom:

1. You take advice from unqualified people such as friends, relatives, fellow doctors, bankers, or worst insurance agents.

2. You buy the wrong insurance like ULIPs, traditional plans, money-back policies, etc.

3. You take unnecessary loans like a car, marriage, personal loans, etc.

4. You start stock trading without proper knowledge or experience.

5. You make unnecessary investments like real estate, gold, and FD

But worry not, here is a systematic approach to planning your finances

Emergency planning/contingency planning : Doctors like you would have taken, education loans to fund their education. You have a family to look after. Who will look after them if you lose your job or something, happens to you? So, before everything you should plan for emergencies. Set up an emergency fund and get term and family health insurance. Another crucial aspect is to plan against legal liabilities. You should get a professional indemnity cover to protect against claims compensation or damages.

Debt management : Once you plan for emergencies don’t hop on to investment yet.

You need to clear out debt as soon as possible. However, if comfortable pay EMIs and SIPs in parallel.

Furthermore, don’t take a high-interest personal loan, car loan, or credit card loan., Instead, you can save and invest for your goals.?

● Make a monthly budget : The first step to keep yourself financially fit is tracking your, spending.

By making a monthly budget you don’t overspend and have enough money to save and invest.

As a rule of thumb you can spend 50% of your budget on needs 30% on wants and 20% on savings and investments.

● Investment : Doctors have high exposure to real estate due to high disposable income.

Apart from home and clinic, they usually have more exposure to real estate than other, professionals.

If their wives manage their finances, they would have exposure to Gold, FD, or RD.

Doctors should diversify their investments in multiple asset classes including equity, debt, gold, real estate etc. according to the risks and rewards.

● Tax saving : Doctors can set up the HUF to save taxes. HUF or Hindu Undivided Family, is a separate identity from its members for tax purposes.

It has independent taxation thus reducing the taxable income of the members. Tax exemptions like section 80C can be claimed by the members and HUF separately.

● Saving for family goals: Your financial goals can be:

○ Children Education

○ Children Marriage

○ Retirement

○ Vacations

○ Car/house

These goals can be short-term, medium-term and long-term. Based on the goals, you, be a conservative, moderate, or aggressive investor.

● Retirement planning : Finally, with the right retirement plan you can retire at the required age with a regular monthly income.

Yes, mutual fund investment particularly SIP and SWP can help you retire comfortably on your own terms.

● Get professional help : You can also get in touch with a financial expert to help you in, every step of your financial planning.

Just like common people need a medical doctor for their physical treatment.?Doctors need finance professionals for their financial treatment.

You can get in touch with Swaraj Finpro, an AMFI-registered mutual fund distribution company. We have an experience of over 20 years helping investors achieve their financial goals.