As you may know by now, being a doctor is no longer a golden ticket to a wealthy retirement.
Changes to legislation, increases to insurance, business acumen, lack of a wealth investment plan and even the economy is seeing an increased number of doctors finding it hard to have a happy and wealthy retirement.
The good news is, we will reveal the secrets behind developing a multi-million investment portfolio for doctors in this article.
We’ll show you how others have done it, and how you can do it too!
Here are the essential elements in every wealthy doctor’s portfolio:
1. Don’t spend all your income!
I know, this sounds flipping boring but unfortunately it is the key to your success. As a doctor, the good news is your average income is higher than most other professions.
On the flipside, the problem is if you don’t allocate and budget what you do with that income, you could be in for lots of PAIN down the track.
To keep it simple, make sure you budget at least 15%-20% of your annual income into savings and investment.
Remember, your income earning as a doctor is generally starts later than most other professions. So be sure to allocate a portion of that money into savings and investments, and live on the rest.
2. The ‘4 Investment Buckets’ Formula to Wealth
All doctors that retire rich have a very good plan on how to allocate their investments. They spread it across different asset classes.
The ones who don’t retire rich generally tend to keep their money in one asset class. They would keep all their money in cash or mutual funds. Cash is secure but the returns on holding cash are extremely poor. Mutual funds are good to get a decent return, but what happens when the stock market tanks?
So you need a good balanced allocation. This is how most doctors who retire rich allocate their savings and investments:
10% – High Risk, High Growth Investment Bucket.
Good examples are junior mining companies, new technology startups. If you pick the right one, you could get 10-50 times return on your money. But this is money you are willing to lose. It’s best not to invest all of your risk capital into one company.
30% – The Cash Bucket
Ok this is the necessary but boring bucket of investments: Cash, government bonds and term deposits…things that have very low risk and very little growth. You need to allocate around 30% of your savings in this bucket to make sure that you have a cushion. Ideally you would want to have 2 years’ worth of living expenses covered by this bucket.
30% – Growth Bucket
This 30% you are looking for something that will grow in value over time, but yet at the same time, offers you a good level of security. Assets that fall into this bucket would include: blue chip shares and prime residential properties.
30% – Income Bucket
For this final bucket, you are looking to invest to generate income to one day replace your current working income. Assets that fall under this category include: corporate Bonds, mutual funds, commercial properties and high dividend shares. In some cases, certain residential property can fall under this category too.
3. An investment plan
Most people spend more time planning their year-end vacation than they ever do planning their investments. It’s crazy but that’s why most people, and many doctors, don’t end up retiring rich.
A proper investment plan should do the following:
-Analyse your current financial situation
-Take into account a balanced portfolio based on your retirement objectives.
-Create an roadmap to get there
-Introduce you to the right people and investment vehicles to get there
I’ll be honest, I’m not an expert in shares, bonds or investing in businesses. However I have quite extensive experience in property and helping my clients build a strong property portfolio.
The problem with property is that most novice investors make some common mistakes that could end up costing them millions in the long term.
My hope for you is that you will be able to avoid these mistakes.
That’s why I have compiled a FREE checklist for you that you can refer to each time you are considering a property to invest. I call it the “10 Biggest Mistakes to Avoid when Buying a Property Investment.”
I’d like to share this with you as a special thank you for visiting and reading my blog post.
You can get hold of your free copy by clicking the image below. Happy investing!