Financial knowhow for doctors: Why it is important

Building a career in medicine is a lengthy affair. Starting immediately after school, it demands years of dedication and unwavering focus to surmount an array of examinations to finally be able to start a decent and respectable practice. Barring the quintessential meritorious lot, for most average aspirants it can take anywhere between 10 to 15 years before one finds any semblance of settlement. Family and social lives bear the brunt. Finally when we budding doctors emerge from our cocoons after getting done with training, our knowledge is limited and restricted strictly within the ambit of medicine. When it comes to any other field, be it literature, politics, social science, our lack of awareness attains miserable proportions. One such field where most of us lack even basic knowhow is money and investments.

Compared to our peers, we invariably start earning late. The first taste of money comes only during internship. Concept of savings and investment at that stage seems alien. More so we tend to believe savings and investments can only be done when we start earning better.

The grind gets even more grueling from there. One either starts to work as junior doctor or pursues higher specializations. No matter how high qualifications we attain, the hike in salary stays meager all these initial years. Surplus income is a never-seen phenomenon for most of us.

By the time our paycheck starts looking decent we are mired in various responsibilities. This is the point when the importance and need of savings dawns on us. Our peers by now discuss their 'investments' or talk of 'equity', 'shares' and 'SIP'; all these zoom past over the head of the average doctor whose coffers have just begun filling. Being oblivious of all such investment and savings opportunities makes us vulnerable to be taken for a ride by crooked investment agents who are constantly on the lookout for unsuspecting clients to mis-sell investment plans.

I was introduced to the world of savings and investments quite late in my career. I lost a few more years trying to understand the nuances. By the time I realized the full potential of good quality investments, I regretted the fact that I wasted a window of a number of years thus missing out on the benefit of compounding and few more years wasted by investing in wrong instruments thus failing to realize the full potential of returns.

There exists a large void with no-one to guide us to manage our finances in order to reap the best returns. Since we take considerable time to hit the bracket of high income, it becomes all the more important to be aware of investment options to ensure the most formidable returns on whatever we manage to save so that our financial targets stay on track. With a pandemic round the corner for the last couple of years, possibility of job loss, pay-cuts or unplanned healthcare expenses might drain us of our savings. So it becomes all the more important to save in a planned way to stay cushioned from such unannounced shocks.

In some cases, parents do try to fill in the void I just mentioned. But that is of no use either. The world of investments and avenues of savings have evolved a lot thus rendering the older concepts adhered to by the previous generation completely obsolete. Digitization of this space has made investing money a matter of few swipes of a smartphone. So all it takes is a little motivation and guidance to stay abreast with the latest developments in this space. It is better to do your own research to gain knowledge of the available instruments which might suit you to reach your targets.

Inflation is on the rise and the money lying in your bank account will not grow at a rate to beat inflation. Without proper planning, inflation will surely eat into your capital. After sustaining on low salary for so many years, we cannot allow inflation to eat into our accumulated corpus however small it might be.

A slew of low income years in the initial part of career of most doctors makes it necessary for us to develop a healthy attitude regarding our money. The habit of saving a little and having the minimum awareness to invest this little amount in fruitful instruments can help us heap a corpus which can be put to better use at the time of need. Ensuring that every penny we save makes money for us even while we are asleep can lead us to financial freedom in the long term. In short, the road to getting rich starts with the first penny saved.