When health practitioners start their own practice or develop working careers, they do so primarily to provide best-in-class healthcare. However, the practice/career is also a business that will ultimately be the nest egg for when they reach retirent or decide to explore another opportunity.Work/Life phasesIn order to nurture a developing nest egg, we need to analyse the most appropriate times when accumulated funds may be optimised and pathways established to achieve financial goals.Generally, health practitioners’ career paths span three distinct work/life phases, each of which is related to wealth creation timing opportunities in differing ways:
- Early (1–10 years) – high income, debts (possibly to fund start-up venture), practice or family;
- Mid (10–16 years) – highest earnings, reducing debts, increasing cash flow, maturing practices, better quality personal assets/lifestyle;
- Pre-Transition (16 years on) – wind down, retirent; some who elect to perform surgery move to consulting, while most choices include focus on maximising wealth approaching retirent.
Often practitioners reach the ‘pre-transition’ stage having neglected their finances and must consider alternative retirent plans. This may involve working longer or spending post-retirent years living without comforts or luxuries they hoped for.{{quote-A:R-W:450-Q: Often, the fear of losing money results in safe, low risk low return investments that miss opportunities to fund future lifestyles. }}Practitioners invariably have, and should, focus on their careers – their very raison d’etre – as financial planning hardly deserves as much attention as delicate operations that result in the gift of sight. Patient care is the core objective of training, ongoing education and continuous skills development over many years!However, at some stage a practitioner will want to stop working, or work less, and spend more time on other activities. But that is only possible if there are sufficient, accumulated funds to support the expected lifestyle.It’s not just about building financial assets for future benefit; important non-financial matters such as estate planning or making a will are often deferred while dealing with pressing career matters. Just as ill patients seek the expertise of experienced health practitioners, the solution lies in seeking the expertise of an experienced finance adviser.A good financial adviser can assist you to prepare and implent a ‘financial care plan’ affording practitioners more time to execute their patient ‘healthcare plans’.Blinkered approachMany practitioners believe a successful practice/career will automatically cater for personal finances, and this assumption can result in complacency and/or an unwillingness to heed expert advice.{{image3-a:l-w:400}}On the otherhand, some people elect to handle their own investments independently by acquiring financial managent skills. A worthy aspiration, but one that may be fraught with risk and invariably requires much time and attention.Often, the fear of losing money results in safe, low risk low return investments that miss opportunities to fund future lifestyles. To avoid losses, some deny thselves the opportunity to increase wealth – not always a sound philosophy for building financial futures.Alternatively, when investments do not perform to expectations, some ‘switch’ praturely. Creating wealth takes time. Of course there are a fortunate few who made a ‘bundle’ buying and selling before the dotcom crash but more lost money from trendy, ‘intuitive’ investments held too long.Financial care planA comprehensive plan includes:
- Seeking help: Enlist an adviser and develop a trusting relationship;
- Analysis & Objective setting: Assess current worth, goals, risk preferences;
- Saving Plan: Use practice generated funds to build investments for current/ retirent lifestyle;
- Estate/Succession Planning: Prepare a will – you decide your wealth distribution;
- Insurance: Ensure cover for dependents in case you can no longer work, or die;
- Retirent Funds: We live longer and need more to finance extra years;
- Wealth managent: Asset protection, tax minimisation, dependent on career lifecycle;
- Review & Oversight: Planned investment portfolios and regular reviews to achieve goals.
Which one are you?Invariably, smart planners focus on both short and long term goals, and critically, they also review th regularly.Smart planners progressively accumulate wealth through shrewd investments, rather than assuming regular savings will meet later needs. And, smart planners seek professional assistance, monitor their investments and take care of the personal, non-financial aspects of wealth creation such as estate planning.Plan your exit strategies now so you are better positioned to determine your future work-life plan.
