Why Doctors, Young or Old, Take a Back Seat in Managing Personal Finance and the Cost They Pay

When it comes to personal finance, doctors in India—whether young or seasoned—tend to take a back seat. While their expertise in saving lives is unparalleled, managing wealth often becomes an afterthought. This lack of attention to personal financial planning can have significant consequences in both the short and long term.

The Reasons Behind Doctors' Inaction

1. Lack of Time

Doctors have one of the most demanding professions, with long and unpredictable working hours. Whether they’re young interns or experienced specialists, their schedules leave little time to focus on their finances. Emergency calls, surgeries, and patient consultations often take precedence over managing investments, insurance, or retirement planning.

2. Delayed Financial Education

Medical schools in India focus on honing clinical skills, with no formal education on personal finance. As a result, many doctors start earning without an understanding of how to manage their income, save strategically, or invest wisely. This knowledge gap puts them at a disadvantage, especially compared to professionals in other fields who may receive financial training earlier in their careers.

3. Over-Reliance on Income Stability

The general perception is that doctors are financially secure due to their high earning potential. While true to an extent, this sense of security often leads them to postpone financial planning. They assume their stable income will be sufficient in the long run without realizing the impact of inflation, lifestyle inflation, or rising costs of medical equipment and personal needs.

4. Misguided Investments

Many doctors rely on well-meaning friends, family, or unqualified advisors for financial guidance, leading to investments that do not align with their goals. This often results in suboptimal returns or unnecessary risks that could have been avoided with professional advice.

The Cost of Taking a Back Seat

1. Lost Opportunities in Early Investment

For young doctors, the delay in starting investments can be costly. The power of compounding works best when one starts early. Let’s take an example: Dr. Ravi, a 30-year-old doctor, delays investing ?10,000 per month for 5 years. In comparison, his colleague, Dr. Priya, starts investing the same amount immediately at age 30. With a 12% annual return, by age 60, Dr. Ravi would have ?92 lakhs, while Dr. Priya, who started 5 years earlier, would have over ?1.5 crores. This highlights how delaying investments, even by a few years, can make a significant difference to the overall wealth accumulated.

2. Risk of Inadequate Retirement Funds

Older doctors, despite years of practice, often realize too late that they haven’t saved enough for retirement. Dr. Sharma, a senior surgeon in his 50s, only began serious retirement planning in his late 40s. By then, his financial goals—like maintaining his lifestyle and covering medical costs in retirement—were far higher than his savings could handle. Had he started earlier, he could have accumulated a more substantial corpus without the stress of catching up later in life.

3. Increased Financial Burden

Doctors face unique financial pressures—such as student loan repayments, setting up private practices, and acquiring expensive medical equipment. Dr. Meera, a radiologist, took a substantial loan to buy advanced diagnostic tools for her clinic. However, due to poor financial planning, she struggled to manage the debt and the clinic’s operational costs. With structured financial planning, she could have balanced loan repayment with investments, ensuring that her financial obligations didn’t hinder her practice’s growth.