The common perception is that a career in the health industry is lucrative and there is greater job security as compared to other fields.
However, what most people don’t realize is that financial stability may be elusive even if you find a job as a health professional.
Keep in mind that this means that even if you have a well-paying job, you might still have some way to being financially secure and stable in the long run. So, why does this happen? Let’s look at the factors that affect the financial stability of health professionals:
Extravagant Spending
Doctors and other medical professionals have to really struggle and suffer during their training period. Naturally, you might feel that once you start earning, you can accumulate assets that will help you live it up.
However, some assets may lose their value over time and with each passing year, your depreciation expense will continue to increase. Of course, you might feel you deserve the extravagance but it isn’t good for financial stability.
Unnecessary Credit & Debit
You probably graduated with a huge student loan debt, so you are accustomed to making monthly payments from time to time. Once you become a professional, you will find that credit is readily available to you and all you have to do is apply.
There is a chance that you fall into the trap and start accumulating more debt over time. As a result, a large part of your income will go towards paying off existing debts, rather than helping you secure your future.
Keeping Up Appearances
Being a doctor means you have to dress and look the part. Unfortunately, that means spending a lot of money on items that necessarily don’t offer any real value and only make a dent in your wallet. Buying a house or a new car could mean accruing more debt, and the cycle continues.
Risky Investments
As a qualified medical professional, you might feel you have the brains to assess investment opportunities, and you do, but this also means that some professionals end up making risky investments that don’t pay off.
The good news is though it’s not all is doom and gloom. Here are some tips you can follow to ensure you can secure your financial future.
1. Set Goals
Failure to plan is planning to fail when it comes to finances. Therefore, it is important that you set clear goals for yourself when it comes to your income. Map out a plan which will enable you to save sufficient amounts of money in the future so you can live comfortably and be financially secure.
2. Protect Your Assets
The worst thing you can do, especially when you are just starting out as a professional, is exposing your money to risk. Whatever assets and income you have, make sure you don’t take any undue risks where you might end up losing everything. Therefore, be shrewd with your plans and stick to what you have, rather than aiming high and losing it all.
3. Efficient Debt Management
As mentioned, there is a good chance that you already have a student loan to deal with. Over time, you will use credit as it becomes available. The key is to spend what you can cover. Here, consult a professional regarding debt management. If you can structure your debts in a way that they don’t take up a huge chunk of your disposable income, debt won’t affect you adversely. Focus on paying off your debts faster and look for opportunities to do so.
4. Invest Wisely
It is a good idea to consult an investment professional and start building your investment portfolio. There are plenty of investment opportunities that offer a decent return with relatively little risk. The key is to rely on the experience and expertise of professionals who have been in the field for some time rather than counting on your judgment.
Assess your options and exercise caution before you take the plunge. Keep in mind that it takes only one bad investment for you to lose everything.
These are some tips that will help you ensure financial stability as a health professional. The best part is that following these steps is easier than you might think.
All you really need to do is make a plan and seek advice from an experienced financial professional and you are good to go. You can make the most of your earnings and support your lifestyle while at the same time building for the future.
If you would like a review of your current Wealth & Investment plan then please contact me on 021 283 5065, or book an appointment on my website http://samkodi.co.nz/contact/.