Financial planning for doctors: Start early to ensure a successful future

The correlation between a high-income occupation and net worth is not inherently a positive one. When I think about this truism, I am reminded of medical practice, one of the noblest professions in the world. The concepts of finance and accounting are alien for many doctors, since you of course go to medical school to learn medicine—not business.

“This is about planning for a second stream of income during your golden years, so that you work because you want to and not because you have to.”
-Yogin Sabnis, CFP, managing director at VSK Financial Consultancy Services Pvt. Ltd., Mumbai, India

Many doctors are majorly focused on investments and have a product-centric approach rather than managing their personal finances holistically. That’s where an expert financial planner can help (more on this in my previous mdCurrent-India article at:

Key Point: Ensuring a secure financial future starts with early planning. It’s important to limit the amount of debt you accumulate at one time, invest in equity mutual funds during the early working years, plan for retirement, prepare for contingencies, and buy adequate life, health, and indemnity insurance.

Here is some advice that is especially helpful for physicians in order to achieve financial freedom and security:
1. Do not pile up huge debt. If you’re like many doctors, you had or have educational loans to repay during your early working years. Then you require a home loan as you start your family. You may also require a commercial property loan for setting up a clinic/nursing home for a private practice. Do not make the mistake of taking out too many loans at once.

What you can do is borrow for one purpose at a time. For instance, focus on repaying your outstanding educational loan. Then take a home loan for your residential property and rent a commercial property for your practice. Once you have cleared off a major portion of your home loan, you can consider borrowing to set up a clinic.

2. Save and invest in equity mutual funds for the long term during your early working years. It’s important to get into the habit of investing in a savings and investment plan in your early working years irrespective of your loan liabilities. It is important to adopt an attitude of earn-invest-spend rather than earn-spend-invest. Invest small chunks of your savings portion regularly in equity mutual funds in the form of systematic investment plans (SIPs) for long-term wealth creation. They are the best asset class to beat inflation.

Adopt a goal-based investing approach for items such as your children’s education, their marriage, your annual vacations, etc. Defining the target amount and the...

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This entry was posted in Business of Medicine, Practice Management and tagged , , , , , , . Volume: .


  1. dr suresh chhatwani
    Posted Jan 2013 at 12:16 pm | Permalink


  2. Dr Vinod Uplaonkar
    Posted Feb 2013 at 7:09 pm | Permalink

    Sir if we start what r the most attractive policy which one to go for

    • mdCurrent-India staff
      Posted Feb 2013 at 7:39 pm | Permalink

      Dr. Uplaonkar,

      We have asked Mr. Sabnis your question, and he replied as follows:

      The best insurance product is the “Term Insurance”. It is devoid of any investment element and hence enables you to buy as much insurance as you need.
      The next step is to shop around and select a company which will quote the lowest premium.
      This is the best way to go about getting yourself insured.

      If you need more information specific to your situation, you can also contact him through his email ID at the bottom of the article.

  3. yogesh khanse
    Posted Jun 2013 at 7:09 am | Permalink

    read the article was very informative………….
    Would appreciate if could have a few insights on how to manage the cash flow and get the maximum output from the existing cash flow

  4. suyash bhandekar
    Posted Jun 2015 at 7:00 am | Permalink

    Really good info…

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