Doctors main

Doctors' Economic Life Cycle

Start-up Phase [26 to 35 years]
Earning phase [Age 36 to 55 years]
Cooling-off Period [56 to 65 years]

    Due to early-year costs, doctor’s expenses tend to be larger towards the conclusion of the startup period. Due to their income suddenly not expanding, most physicians’ families feel the pain if costs are particularly high. Doctors need to carefully manage their income and spending in case of family and future planning by following steps,

    1. Rent a practice space if feasible and save on decor.
    2. Keep debt payments at 30% of gross revenue. Be frugal in your spending.
    3. Save money throughout your early years of being single.
    4. Prepare for occurrences like parenting.
    5. Be cautious not to overspend now and lose all your funds.

    Make a sound balance sheet and income statement even if it means paying more taxes. This enables financial institutions to recommend expansion ideas.

    This is a phase where a doctor’s income scales to new highs and it is in this phase, that doctors create wealth. However, a large income may also mean higher lifestyle costs, which if not handled well can cause problems. A doctor’s practice is undeniably one of his greatest advantages. Because time is limited and no one can work for more than a certain number of hours without harming health and quality of diagnosis and treatment, this is frequently a limiting issue. Why are most Doctors unable to Capitalize During this Period? Let’s look at Dr. Girish Joshi’s cash flow and current situation to get an idea of where things go wrong. Dr. Girish Joshi is a dentist with a mature practice of 18 years.
    Sr. No. 2021-2022 Dr. Girish Joshi ₹ Annual
    1 Cash inflows
    2 Practice income {post clinic expenses &taxes} 1800000
    3 Total cash inflows 1800000
    4 Cash outflows
    5 Mandatory outflows
    6 Equipment loan EMI annualized 200000
    7 Home loan EMI annualized 450000
    8 Car loan EMI annualized 250000
    9 Insurance premiums annualized 200000
    10 Children’s education expenses annualized 100000
    11 Lifestyle expenses annualized 500000
    12 Voluntary expenses
    13 Entertainment / vacation 200000
    14 Total cash outflows 1900000
    15 Current surplus/[deficit] -100000

    This may be the most enjoyable time of the Doctor’s life. Successful physicians take it easy and work for a few hours each day so they can spend more quality time with their families, friends, charities, and leisure activities.

    Dr. Mehta is ready for that life now that his life is stress-free and peaceful.

    Summary: start investing at the right time and enjoy 

    1. Reduce your working hours and devote more time to activities like travel [if you love it], exercise, and leisure.
    2. You will be able to reduce your working hours even if you do not have enough money. Working till 65 to 70 instead of 60 may be beneficial.
    3. Only invest extra money not required in equity in the next 10-15 years  
    4. Do not take on new debt at this time preserve yourself debt-free

    What is the Importance of Financial Planning for Doctors?

    A decision that you take about money and that has an impact on your overall financial situation is financial planning.

    “Financial planning is the process of maximizing the use of your financial resources to meet your financial objectives.”

    1. Cash flow and debt management 
    2. Risk management and insurance planning
    3. Asset allocation and investment planning
    4. Taxes planning
    5. Retirement planning
    6. Estate planning (Transfer of Wealth, Will creation, Power of attorneys, and Trusts)

    What is a financial objective, you may ask?

    An individual or family’s financial aim is a well-defined, quantifiable, and time-bound objective. Purchasing a home is a goal, but purchasing a home for around Rs. 1 crore by March 2010 is a well-stated financial objective.

    See a chartered accountant as a specialist in taxes and a banker as an expert in global banking. However, the general public often seeks investment and financial planning advice from chartered accountants, bankers, or insurance agents. Why not delegate financial planning to professionals?

    Swaraj FinPro thinks that just as any poor or rich person wants medical care from a specialist, any poor or affluent doctor deserves financial planning from qualified professionals.


    Doctors especially require financial planning Because:

    1. They have a lot of money to spend. The requirement for smart cash flow and debt management is critical.
    2. Because they do not have social security, they must prepare ahead for retirement, eventualities, and unanticipated catastrophes.
    3. They must practice financial discipline in their dealings with money.
    4. They must invest excess cash flows by their overall aim and financial objectives.
    5. Estate planning is seldom neglected

    Why don’t doctors think ahead in financial matters?

    1. Time poverty: Financial planning requires a concentrated effort. To set aside time and speak with someone who can assist you in achieving your goal Even if a doctor is capable of performing it alone, he does not have the time.
    2. Taking advice from other than an advisor: The majority of physicians do not understand comprehensive financial planning and mistake it for investment or tax planning. They believe they are already doing everything since they are investing in real estate, insurance policies, and PPF.
    3. The myth of no money or enough money: some doctors believe that they do not have sufficient money to plan

    When a patient goes to a doctor,

    The doctor firstly Diagnoses the patient, understands the problem, and then prescribes appropriate medications?

    Identically financial Doctor first understands your needs and then recommends plans, ensuring that your money is spent on the finest product.

    Think about it…

    Please Answer the following questions yourself.

    1. How do you plan your finances?
    2. How much time do you devote to it?
    3. Do you buy insurance and investments in an ad-hoc fashion?
    4. Do you have a written financial strategy?

    If you don’t have an answer to these questions, come to us for unbiased guidance, and we will help you with financial planning as per your need and dreams.


    Not having a written financial plan equals “FAIL TO PLAN – PLAN TO FAIL”

    Sn Mostly doctors mistake during the financial planning What they can do for their financial planning
    1 What financial goals a doctor has? Get written financial goal
    2 Inappropriate Investment toward Financial goals A financial advisor (Doctor) can recommend investments for your future goals.
    3 Mostly the doctors take loans and think it is an easy way to accumulate assets. There is no need to take loans as investment returns can complete all of your future goals.
    4 Paying too much and inappropriate interest cannot lead you to a worry-free life. If your money is invested in planning then there is no need for you to pay interest.
    5 Am I paying too much premium on life insurance? Life cover is important, so the premium will be by it if you choose a high life cover.
    6 The financial risk me and my family face If you choose the appropriate life insurance cover for yourself and your family, you will be risk-free financially.
    7 Address professional risks as liabilities and lawsuits adequately. Take appropriate Professional Indemnity Cover during practicing years.
    8 Do I have enough life insurance for my family to fall back on to maintain? With the help of an expert, you can decide how much Life Insurance cover is required to secure your family financially.
    9 How will my investment cover up the liabilities? You must take good investment plans with the help of professional advice in your early income phase, and the return from it will surely cover up all of your liabilities.
    10 How many returns do I need to achieve my financial goals? You are required to follow the process of financial planning just as the Doctor recommends a patient to follow the treatment plan. Then returns on investments will be immaterial.
    11 Too much or too – little tax-paying? Taxes are completely dependent on your income. Try to pay the appropriate Tax with the help of a Tax Expert. An investment planner will help you choose the appropriate investment product as per your need.
    12 Does my spouse know where all investment papers are kept? Swaraj FinPro provides you with a Swaraj FinPro Mobile App facility to punch your family’s financial investment details and see if you and your family are permitted with single login details.
    13 What is my net worth today and what should my net worth be for me to retire safely? You can see it in the Swaraj FinPro Mobile App and plan your retirements around it.

    When you reach your prime earning years and have a healthy income, now is the time to begin investments for your future.

    One of the most often asked questions is “how to start our investment and how to determine how much we need to invest for future demands? We at Swaraj FinPro usually recommend that you first do some financial planning to figure out what your ambitions are and what you want to accomplish in the future. Then start investing with the help of a professional Investment Advisor. We strongly recommend that you answer the question “Why?” before starting an investment. If your answer is appropriate, your investment will follow it.

    To begin with, ensure that your service provider is knowledgeable.

    “Two of the biggest mistakes in the investment arena are not poor product selection and performance of investments, but not having a plan and not knowing what to do in various market situations,” 

    Do most doctors have the same financial aspirations in mind?

    1. My willingness to take a chance?
    2. Timeframe of investment?
    3. My liquidity requirements?
    4. What’s my asset mix?
    5. Is it appropriate for my risk profile?
    6. When purchasing and selling, what is the unemotional rule?
    7. Do I have adequate insurance coverage?

    “At the same time, one of the greatest and most significant expenditures in a doctor’s profession.”

    Before you answer your question, ask yourself,

    1. What are my short-term, medium-term, and long-term goals?
    2. How much money will I need to finance these practice objectives?
    3. How do I intend to obtain the finances needed to achieve my objectives?

    Sometimes physicians just read newspapers and periodicals and make financial decisions based on their findings.

    Some physicians will be fortunate, but not all…

    We advise you to first design your financial strategy with the help of a professional just like a doctor strategizes a treatment of a serious patient. Then choose investment products and assess if your products and investments are meeting your objectives.

    Interesting SIMILE

    Working with doctor fraternities for a long, we understand a doctor’s concerns and we found certain simile between our profession and doctors’ profession. You would certainly love to read it.

    1. A doctor never recommends that a patient should take OTC drugs for treatment, the same way we at Swaraj FinPro never recommend a doctor to go to Direct selling platforms to invest without advice. It is hazardous for both patients and investors.
    2. A patient asks a futile question to the Medical Shop owner, “Can you please give me the best drug available in your shop?” The shop owner will reply without having a second thought, “I have all the best medicines in my shop, please take a prescription from a Professional / Qualified doctor, only then I can be able to give you drugs.” Then why a doctor asks a financial product distributor, “please give me the best plan to invest for from your product basket.” Let an advisor do his practice while recommending the best financial products for you.

    3. On the operation table, when a patient asks a surgeon, “Doctor, what are the chances of my survival after this operation?” the Doctor smiles and replies, “Don’t worry dear, I am here for the best treatment of yours.” The doctor tries to control a patient’s emotions on the operation table. His job is half done. In the same way, whenever share markets fluctuate, a professional advisor’s job begins with a smile by saying “Don’t worry, I am looking after your portfolio, Corrections are temporary and growth is permanent.” Both doctors and professional financial advisors help their patients to control emotions in the events of panic and euphoria.

    4. So, the job of a doctor and financial advisor is nowhere different when it comes to the physical health and financial health of its clients.

    5. When it’s time to save the patient’s life a doctor has to prescribe bitter medicines and even an operation to cut off an organ (amputation) without emotions, the same way a professional financial advisor has to restructure his clients’ portfolio without emotions to save his future financial life.

    6. Whenever a patient gets rid of a serious illness and approaches a doctor with a smile and thankfulness, the doctor’s face is worth seeing. In the same way as an Investor, a doctor approaches a financial advisor saying I have achieved my financial goal , the advisor’s face glows.

    7. After a successful operation, the doctor smiles and says to the attendants that “I have done my job, rest is on God. We have to wait for a response. Just the same way a Financial Planner also says “I have done best of Financial planning for you, let us wait for it to succeed.”

    8. After prescribing medication for 7 days to patients, the doctor says “take medicines on time and within a week, you will be OK otherwise revisit me after one week. A financial Doctor says the same kind of wordings to revisit the financial plan at regular intervals and make changes if needed.

    9. You want your patient to believe in you 100% (and he has no other way), the same way a financial doctor also wants you to believe him 100%.

    10. I believe you would not love to see a patient treating himself by googling instead you will suggest him to go to a professional doctor then why does a doctor want to become a financial doctor too by googling?

    11. Do you want to travel in a plane with a pilot and relax or do you want to learn (By googling) how a pilot runs the plane?

    A doctor must respect the job of a financial advisor the same way he expects respect from other professionals.

    Why you should prepare plan B when your plan A is strong enough.

    Money is Important even for Doctors

    Money will bring you

    1. Financial Security: of your future, your child’s dream, the financial demands of your family, retirements, and your health
    2. Freedom to Education: this allows you to educate your kid according to their needs and interests.
    3. Freedom to Power: the power of liquidity and transparency over your money and way of life.
    4. Freedom to enjoy life, entertainment, pleasure, and vacations with the family.
    5. Freedom to Charity: philanthropy
    6. Freedom to Luxury: A lifestyle and living level of luxury…
    7. Freedom to Travel: travel freely across India and overseas. The return on your small investment will allow your pocket to fulfill all of your dreams, needs, and lifestyle, maintaining living standards without any EMI burden.

    Sample Financial Goals for Doctors (amounts are in today’s INR) (For sure it is different for all individuals)

    Financial goals Amount Distinct Goal
    Buying practice property 50 lakh June 2022
    Buy a house 75 lakh August 2023
    Daughter us education 50 lakh October 2025
    Daughter marriage 25 lakh The year 2030
    Retirement income 2 lakh / month January 1, 2032
    Vacation house in goa 50 lakh The year 2035
    Build a HOSPITAL 20 crores The year 2037

    Here you need to define whether any of your financial goals are short-term to long-term.

     You can take the help of a professional Financial Advisor from our team.

    What are your specific financial goals?

    Write down in a separate diary before approaching to Financial Advisor.

      Very short term- 0 to 90 days

      Short term – 91 to 365 days 

      Medium-term – 1year to 3 years

      Long term – 3year to 10 years

      Very long term – 10year or more

      Basic Financial Planning concept and How Swaraj Finpro has done for Doctors

      We have very varied and long experience working for the financial well-being of the doctor fraternity. With our experiences we have created a Sample cash flow statement of a doctor (Figures given here are for illustration purposes only, actual figures will vary from doctor to doctor): –

      2010-2021 Dr. DEBASHISH Mohanty Dr. Richa Mohanty Total family monthly Rs. Total family annual Rs
      Monthly CASH INFLOWS        
      Avg PRACTICE INCOME 5,50,000 3,30,000 8,80,000 1,05,60,000
      INCOME FROM CONSULTING 1,00,000 230000 1,00,000 12,00,000
      INCOME FROM visiting 200000 100000
      INTEREST ON BONDS 20,000 20,000 2,40,000
      TOTAL CASH INFLOWS 8,50,000 3,50,000 10,00,000 1,20,00,000
      Monthly CASH OUTFLOWS
      EQUIPMENT LOAN EMI 40,000 40,000 4,80,000
      SALARIES 1,00,000 100000 200000 2400000
      PRACTICE PROPERTY LOAN OR RENT 1,00,000 1,00,000 2,00,000 24,00,000
      UTILITY BILLS 10,000 10,000 1,20,000
      STAFF WELFARE 5000 5000 60,000
      PUBLIC OROVIDENT FUND* 70,000 70,000   1,40,000
      INSURANCE PREMIUM 6,00,000 4,00,000   10,00,000
      HOME LOAN EMI 50,000 50,000 1,00,000 12,00,000
      CAR LOAN EMI        
      CHILDREN’S EDUCATION EXPENSES 5,000 5,000 10,000 1,20,000
      GROCERIES 10,000 10,000 20,000 2,40,000
      TRANSPORTATION 10,000 10,000 20,000 2,40,000
      UTILITY BILLS 5,000 5,000 10,000 1,20,000
      TAX 10,00,000 5,00,000   15,00,000
      CLOTHING & PERSONAL CARE 10,000 10,000 20,000 2,40,000
      OTHER [HOME/CARE REPAIR]        
      ENTERTAINMENT/VACATION 5,00,000 5,00,000   10,00,000




      SAVING ACCOUNT 10,00,000 10,00,000 20,00,000
      BANK FD 10,00,000 30,00,000 40,00,000
      STOCK 1,00,000 50,000 1,50,000
      EQUITY MUTUAL FUNDS 5,00,000 3,50,000 8,50,000
      BOND [RBI]
      PPF 10,00,000 10,00,000 20,00,000
      GOLD 1,50,000 1,50,000
      REAL STATE 1,50,00,000 1,50,00,000 3,00,00,000
      LIFE INSURANCE CASH VALUE 25,00,000 15,00,000 40,00,000
      RESIDENTAL HOUSE 1,50,00,000 1,50,00,000 3,00,00,000
      CAR 15,00,000 12,00,000 27,00,000
      JEWELLERY 19,00,000 19,00,000
      HOME LOAN 45,00,000 45,00,000 90,00,000
      CAR LOAN
      EQUIPMENT LOAN 15,00,000 15,00,000
      PERSONAL LOAN 70,00,000 70,00,000 1,40,00,000

      Budget for spending or budget for saving A doctor must have a savings budget as one of his or her responsibilities.

      Compound interest time value of money

      The story of the Persian Emperor may provide light on the magnitude of compounding.

      One of the Persian emperor’s court members lost a bet. “Ask for anything you want,” the emperor said arrogantly to the court member, who happened to be a mathematician. “All I ask for, my lord, is one grain of rice for the first square of the chessboard and then double the grain of rice for each subsequent square,” he added.

      The emperor believed the mathematician was insane for asking for such a little prize when he might have asked for more. The emperor awarded the mathematician one grain of rice for the first square on the day of the prize, in front of the whole court. After that, the emperor handed him another grain of rice for the second square. “My lord, you were to double the quantities for every consecutive square,” the mathematician remarked. “Oh okay, here you go,” the emperor replied.

      Inflation is a money killer that goes unnoticed. It depreciates your money over time, and in a high-inflation climate, you’ll spend less each month for the same amount of cash. A cinema ticket, for example, cost roughly Rs. 50 in the late 1990s. Is it possible to acquire a ticket for the same price today, or would Rs. 50 even get you a ticket today? Unless you attend the early Sunday morning program.

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