Let us assume that your grandfather / father bought a space in South Mumbai or Delhi for Rs. 100,000 way back in 1940s…

Your father’s practice as a surgeon was very successful and he added some more space to that. Now you are 54 years of age and you are also a surgeon – as is your wife. Your son is not interested in medicine and he has gone off  in a completely different branch.

Let us come to the economics. Your practice is good and you make about Rs. 2 crores GROSS annually, and after expenses net about Rs. 1.5 crores. Take away another Rs. 50 lakhs in taxation, and you have about Rs. 1 crore income. Your wife brings in about Rs. 35Lakhs after taxes and expenses. Not bad at all considering that you live a very nice but simple life.

There is only one hassle. A builder has approached you with an offer. He is willing to buy your building for Rs. 35 crores.

Wow. You said it once, and then again.

What do you do? If you took the deal you lose the hospital – but get Rs. 35 crores. When this goes into a bank account, you can retire. You already have a huge (by Mumbai standards!) house – about 4000 sq ft. in South Mumbai, and you do not need anything more than that.

Your financial planner tells you that this Rs. 35 crores will yield enough income for you to meet your expenses and you will be able to make a foreign trip twice a year. No headaches of running the hospital, no strikes, no client backlash, – in short enough time for you to enjoy your hobbies of badminton, photography, and travel. Your son has had a brilliant academic career and is pursuing his MBA at an Ivy league school after finishing his Acturial science degree from Oxford. Absolutely no chance of his wanting to be in India.

You are also sick and tired of dealing with the municipal authorities, tax authorities, service tax, insurance paper work,  and the complaining patients…what should you do?

hey doc, go get a life. Sell of the premises, go on a world tour with your new camera and have fun.

 

 

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  1. amarjit singh kambo

    Though the offer given by builder of 35 crores is very tempting , but will the doctor do with the money?
    He would have earned so much money in last so many years that his basic needs and other needs would have have taken care off It is a professional suicide
    However it depends upon person to person

  2. Aniruddha,

    I am like Bheeshma Pitamaha….people ask me what to do, and then do what they want to do. So it is of no import as to what I told him. I have no clue what he is planning to do.

    As Indians we lack guts to do what we like, we chase what society wants us to chase. Can u imagine the son of a big business tycoon saying ‘I have put all my money in a trust to be run by managers and I am just going to enjoy life’ – ala Paris Hilton? NO. NEVER.

    But they have no qualms about destroying 4 generations of wealth created – aka Yash Birla ….

  3. I think on purely financial terms, its better to sell. 35 crores in FD would fetch much more than 1 crore per annum the doctor is earning. And this would be without any hassle of running hospital.
    However, it is a different matter if doctor doesn’t want to stop his hospital. He can also choose to work for some other hospital for a salary – may be less than what he earns today but with no hassle of dealing with municipality etc and obviously reduced working hours.

  4. Recently I went to USA for business trip and my organization pays the 5 star hotel tariff without asking any bills.I realised even among 5 star, there were different prices and and I booked in one of the expensive one consuming all the given money by the organization and even added little of my own money (2%).

    My seniors & colleagues in the organization looked at me as like a mad guy and rediculed me for opting an expensive one. Told me they never did like this and critisized me whether am born with golden spoon (knowing my humble background).

    Although there is a potential to save big money considering it for 5 days stay and cheaper hotels were available at 20-30% cost, I always preferred full blast and enjoy the life as it comes without penny pinching.

  5. Subra, I agree with @Abhi.

    It’s also possible that the doctor wants to continue with his practice, but without the hassles of running a hospital.

    In such a case, he can choose to
    a. sell off his hospital, take the 35 cr, and work with another hospital as a consultant (assuming that his skills are in demand and he can charge a substantial fee for them).

    b. get a professional administrator to run the hospital, and focus on treating his patients.

    c. tie-up with a professionally run group of hospitals to administer his hospital, and focus on treating his patients.

    In the first case, he would be ‘ditching’ his patients and people in the locality who may have come to depend on him.
    Even if the builder is planning to setup a new hospital in its place, that might hit his patients financially, because the new hospital is unlikely to be as affordable as the old one.

    ~KV

  6. Subra,

    From a financial point of view, a 35crore lumpsum for an annual net practice value of 1 crore is sufficient.

    What are your views at the lumpsum, when you would consider the advice to not make financial sense? At 30 cr? At 25 cr? At 10 cr.

    I understand that the need for the doctor to continue doing what he is doing is a different thing altogether.

  7. I hope the Dr has a few hobbies/ passions to keep his mind busy.

    I believe one of the Premjis has chosen social work through their foundation to managing the business. But not many would, I agree.

  8. I know a doctor in Bengaluru who gave up his practice at age 50 (not sold out, just stopped practicing) and took up his special interests. He had enough assets in land and no liabilities (both sons are not doctors, emigrated and started earning). He also never spent money to impress.

    Initially everyone else ridiculed him, and it looked so dubious. But he is now very happy and lives life in peace. His life looks like some of the guys we see on National Geographic. In past 5 years he has traveled on at least 15 foreign trips.

    Every time I see him, I only admire him for enjoying his life.

    On the other had, I am seeing many people who earn more than him, but who are always stressed out and seem to be going about their jobs as if forced into it.

  9. Srinivas, Do you think farmer should not sell his land and take rest?

    Even in many interior villages, an acre of land is sold for 10Lakhs, but if the farmer cultivates it, he can at best earn 25,000 per year on that.
    If the land is near a town / city, then it will fetch far more. No one can expect the farmer NOT to go for the offers. It’s very lucrative than the one described in this post.

  10. With so much money mis-sellers will follow giving an altogether different kind of stress which the doc may not be able to handle.

    Also the doc will be done with the novelty of nothingness in a short while. Most want to return to the routine to feel worthy.

  11. Subra sir, you are giving about the persons who retired due to inherited real estate, but u never told about any person who retired as he inherited a huge net worth of SHARES 🙂

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