As a physician, chances are, your professional life and financial security will have gotten off to a later start.
Due to the intensity and length of training, it goes without saying that qualified physicians need to make sure they are investing their money as well as possible to maximise their return and protect their income for the future.
Income protection
Have you considered what would happen if your income was cut or ceased due to injury or illness?
We don’t know what will happen from one day to the next with all the best will in the world.
Ensuring you have adequate income protection will help you in the event of you being unable to work and earn an income, as will having disability insurance for physicians.
Buy into a practice
Buying into a practice can often be a great investment for medical professionals.
Developing a successful practice can turn into a valuable asset that can boost your retirement nest egg for later in life.
In more immediate terms, you can benefit from making more during your career, and as an owner, you don’t have to worry about money being carved out for the third party as you would via a management group or employer.
To buy into a new practice, physicians usually expect to put up a financial contribution or a buy-in with sweat equity.
Own a medical business
Another viable investment for physicians is to own a medical business.
This option could run alongside a medical practice that you own.
Options include:
- Dialysis centres
- Labs
- Dental labs
- Endoscopy labs
- Urgent care
If your medical business is related to your practice, you may find that your separate business brings in more money over time.
If you do choose this route, make sure you are aware of Stark Law that prohibits specific referrals.
Real estate
Not strictly reserved for physicians alone, but real estate continues to be a great investment for all professionals.
Whether you are using the property to rent out to create an income stream you can save, or use to pay back student loans or further your career.
There is money that can be made, and how much depends on how you approach the investment.
A high income can make it easier to invest your money and get credit, making it easier for you to buy and flip houses for a quick resale to fund your next venture, or to rent out for the long-term.
Alternatively, you can choose to join a syndicate, meaning you can invest your funds in more than one venture, further diversifying your return on the initial investment.
In reality, physicians often start building wealth and savings later on in life and are almost always near their 30s before they manage to build up a healthy financial relationship due to time spent in education and student loan payments.
Another way to help you build your wealth quicker is to put everything you can into paying off your student loans faster to free up your income later in life and wipe out the debt accrued through the years of education.