1) INTRODUCTION – THE SHOEMAKER’S CHILDREN SYNDROME
The old adage that “the cobbler’s children have no shoes” too often is so true for many Medical Professionals. They are typically so busy caring for others that they, like the proverbial shoemaker, neglect their own welfare.
This paper is intended to be a prescription for the financial well being of Medical Professionals at large — in particular Physicians, Dentists, Chiropractors and Pharmacists. You may be practising, retired or navigating on how to get there successfully — never too early or late to start!
We will cover why your investment strategy should include a healthy dose of private real estate investing. It’s all about the holy trinity of real estate investing:
It is a hard permanent asset;
It can provide predictable returns;
It will balance out any wild fluctuations in the public securities markets.
Medical Professionals all too well know the hazards of overwork, burnout, stress, depression, difficult patients and colleagues — on and on.
The last thing you need is needlessly to pile on the stress of financial planning and the challenges (and sometimes headaches) that go with it. The good news is that there are some simple tactics you can use to ensure your financial success.
Younger Medical Professionals are often starting behind the eight-ball (those who play billiards know that is not especially favourable!). Earning your credentials and licence to practise took several years of hard work and sacrifice, often resulting in sizable student loans and a late start to saving.
Some, but not all, more established Medical Professionals may already own homes and cottages, have management corporations and traditional investment portfolios, which many times are underperforming.
Yet, there is a good chance both the fresh faced and veteran Medical Professionals are too busy and undereducated in the fine tuning of finances to take the initiatives on their own that are so vital to guaranteeing financial well being for them and their families.
The anecdotal record suggests that Medical Professionals are not always astute investors and often are the targets and victims of nefarious promoters and highly questionable schemes. Investopedia quotes Dr. Jim Dahle, a hockey playing emergency room doctor and blogger at the White Coat Investor, who says that the common reasons that most people struggle with money apply to doctors. These include “a lack of financial literacy, poor financial discipline and a lack of long-term perspective.” “In addition, there is a bit of a culture within academic medicine where you don’t talk about financial topics,” he says.
And so, if you are financially literate or not, read on to learn about a simple framework that anyone can adopt to achieve better returns than mutual funds and the like.
3) DIAGNOSIS — THE IMPERATIVE OF A PERSONAL WEALTH PLAN
Of course, we all need sufficient capital to support our desired lifestyles, now and in the future, and in many cases that of our loved ones. These are the so-called “necessaries of life”, the levels of which will be as varied as there are different Medical Professionals.
Someone said, “The best thing money can buy is financial freedom” — Easily said, not so easily accomplished. Financial security is not automatic. Its achievement necessitates careful planning and personal discipline.
Now that you have the benefit of a secure and steady flow of patients and customers with the prospect of solid earnings and some discretionary capital, what’s next?
Creating an investment portfolio that mimics your practice! A rich capital base that produces a steady flow of income with a future prospect of growth and surplus capital to spend! Real estate is the cornerstone of any such portfolio.
Coming up with a sensible plan designed, not only to maintain your lifestyle and wealth, but grow it for your future that includes the critical element of real estate, will take a large number of Medical Professionals into some unfamiliar territory.
Nevertheless, it is all important to your financial health to adopt a personal wealth blueprint to build your fortune and future.
This, no doubt, is the time to seek the wise counsel of your lawyer, accountant, and/or independent investment manager, but before you do so, let me give you some food for thought about why your wealth plan must embrace a significant commitment to direct real estate investment.
4) REAL ESTATE — A GOOD IDEA
Most of us find it axiomatic that real estate is a good idea.
After all, Mark Twain, the late famed American author, long ago advised us to “Buy land, they’re not making it anymore”. This was repeated in spirit by Louis Glickman, the famed real estate investor and philanthropist, when he said “The best investment on earth is earth.”
From the moment we stopped being nomads and “staked” claim to property, we began trading real estate. It began with lands used for agricultural purposes where the intrinsic value of the asset was realized (“Hey, we can stop wandering, grow food, get strong, and beat off the nomads!”), to housing, to commercial uses. A good idea does not die and real estate investment has been around almost as long as we have!
It’s not hard to appreciate why owning an income-producing building will give you secure and superior returns. For example, internal rates of returns often can be in the 10 to 12% range — not hard to forecast how you can double your money over and over again.