The Curious Case of a Doctor’s Finances

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There are more than 8.4 million doctors in India today, contributing to annual growth of a phenomenal 16-17% of the hospital industry. If the spends on healthcare are increasing, so are the earnings. But while the doctors take care of our physical health and fitness, they need to ensure the fitness and good health of their finances too!

Not an assumption, but these have been the foremost observations when consulting some of our clients who are medical professionals. Most doctors start their careers later than most of us because they are studying when we have already started earning. Moreover, most of the doctors begin their careers quite debt-laden due to education loans. They then dive straight into long hour shifts and very hectic schedules. Where is the time to check the anatomy of their finances?

keeping up with finances

Please file our observations under our great regard for the doctors but with an absence of financial training, a lot of doctor’s struggle with keeping up with their finances. Here, we tackle the most common investing mistakes made by the doctors-

Going Traditional

Traditional Investments

Dr. X was working so hard at the hospital that he did not have a clue of what to do with his income that was piling up in his bank account. As are a lot of other doctors, Dr. X jumped at the first opportunity available and invested his money in fixed deposits, recurring deposits, low yielding insurance products or even real estate. But here is the question that he did not ask. Will the returns gathered from his investment be able to beat the expected inflation and create wealth? Mostly, no.

Due to lack of further knowledge, a lot of doctors end up investing in not-so-profitable investment vehicles. There are better avenues of investment available in Mutual Funds that give you much higher returns.

Mutual Funds/Insurance Products with the unfavorable partners

misselling of financial instruments

Dr. J had a different kind of a problem. A friend of a friend’s relative offered to manage his money for him. Turns out, he was a product distributor and only suggested insurance products and mutual funds that earned him more commissions with very little focus on Dr J’s requirements and investment suitability.

What investment advisory requires is an unbiased approach to your money. A lot of doctors indulge in insurance products and mutual funds but with bank relationship executives or distributors who earn from commissions. This causes a conflict of interest and hence the products that are pitched might not be the perfect fit for your investment objective. Moreover, there is very little time spent by the traditional distributors on reviewing and monitoring the existing investment as the focus is more on meeting monthly sales target.

Regular Check-ups

Financial Health Checkup

Dr C was wise enough to derive at a portfolio at the beginning of his career and continued to make investment in it. Life happened and his goals and priorities changed. Today much closer to his retirement, he has figured his money was invested in the wrong kind of funds with minimal returns. Changing market dynamics also deteriorated fundamentals of the investments which were good in the beginning. Too late to make amends now. Along with the time in the market, there are other parameters like investment fundamentals, price and asset allocation to keep in focus to ensure successful investment outcome.
Perhaps due to lack of time, doctors invest in vehicles and with advisors who do not indulge in active portfolio review and tactical re-balancing with rapidly changing investment dynamics. However, just like our bodies need regular check-ups to ensure that it is functioning as per expectation, so do your finances. Similarly, just like a body can be vulnerable to diseases and require a doctor’s consultation; your individual life situations and changes in investment dynamics might also affect your finances adversely thereby needing regular consultation from an expert investment advisor.

Why you must have Truemind as your financial consultant?

You require an entirely reliable & unbiased end-to-end approach to financial planning which is provided by our highly qualified professional advisors at TrueMind Capital. We ensure that your finances forever stay in the pink of health! Our advisors do a thorough diagnosis of your risk and return profile and help you with your goal setting. Our job is not over with your portfolio being created but actually begins with regular reviewing, monitoring & rebalancing of asset allocation with changing market dynamics and your personal situations.

Being a SEBI Registered Investment Advisor (only 1,200 all over India), we don’t earn from commissions and just like the doctors, charge a fee for value-added investment management services. We work in only one discipline and that is to minimize your risks and maximizing your gains. We manage your investments only in the zero-commission Direct Plans of mutual funds. These plans differ from the traditional regular plans in only one major aspect i.e. lower cost structure due to the absence of commission component from the cost structure. Hence, direct plans generate higher returns of up to 1.50% per annum over regular plans. Also, no commission revenue model ensures that there is no conflict of interest in the investment decision making and a transparent fee payment model results in higher accountability towards investment objectives. Combination of all these factors leads to higher risk adjusted returns in the long term.
Apart from a healthy mind and body, a peaceful life also requires healthy finances. Leave that part to our professional experts while you go ahead and do where your expertise lies!

Contact us at 9999505324 or drop an email at connect@truemindcapital.com for a preliminary chat and let us work on this together!

Also read: 5 Most Avoidable Mistakes when Planning Personal Finance

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