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The 7 Finance Tips Every Doctor and Dentist Needs To Know

For this weeks’ article I got my inspiration from the Humble Dollar blog.

I have condensed the ideas and tips with some comments of my own. I hope you find value in it.

  1. Don’t overextend yourself financially when buying a home, or it will determine the rest of your life. As a guideline, make sure you can pay off the mortgage in approximately 10 years. If it takes much longer, it will cost you a lot of stress, interest and delays with reaching financial independence.

  1. Trying to time the market and actively managing your portfolio doesn’t improve performance. It is a huge waste of time, and you should be focusing your attention on income-producing activities instead.

  1. 30 years from now, you’ll wish you’d invested more in shares. Yes, over five or even 10 years, there’s some chance you’ll lose money in the share market. But over 30 years? It’s highly likely you’ll be sitting on some significant gains. However, make sure you’re broadly diversified and are a disciplined investor, adding to your portfolio in good times and bad.

  1. Don’t put off saving for retirement. The earlier you start, the less you need to save, and the more compounding will work its magic for you. Consider this: if you start investing at 30, your investments would likely have doubled twice already by the time you are 50. Start at 50, and they can probably only double once by the time you reach 60. That is a multiple of 8 versus 2 on our original investment.

  1. Don’t waste your money on buying more stuff – in the end it will mean nothing to you. Focus your expenditure on experiences and creating lifelong memories.

  1. Will our future self approve? As we make decisions today, we should consider the long term consequences. When we opt not to save today, we’re expecting our future self to make up the shortfall. When we take on debt, we’re expecting our future self to repay the money borrowed. When we buy things today of lasting value, we’re expecting our future self to like what we purchase.

  1. Relax, and trust in the process. Life is full of uncertainty, but if you regularly take the right steps—work hard, focus on financial discipline and resist the siren song of get-rich-quick schemes—things should work out. There are no guarantees, but it’s highly likely. Just focus more on doing the right things each and every day.

If you want to make smarter financial decisions and educate yourself, why not download a free copy of my book, Your Financial Health Matters?

It has helped over 1,000 Australian healthcare professionals become financially confident and organised.

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