Not sure whether to call this commandments, fatwas, or rules..but some advice for doctors. This is based on my interaction with doctors and investing coaching that I do for people in general:

  1. Personal Financial Management is more than choosing which share to buy or which mutual fund to invest in. Share trading / investing is a very small portion of financial management.
  2. Doctors do not have a second job, none of them have a pension, and India has no social security. If your money does not work for you, you will work till the age of 91 if you have to live till 93.
  3. Continuing Medical Education is fine, you desperately need Continuing Financial Education, start today.
  4. Please kill your ego. BFSI has an amazing ability to separate you from your wealth. As of today banks are winning hands down.
  5. Thou shalt save 20% of your income once you hit 30 years of age. Ok, ok, one year after you start practice you will do this! For the general population this is about 10% of one’s income. However doctors start late, spend more on lifestyle, need to invest in their profession hence this 20% figure for docs.
  6. Repeat point no. 3. Once you know what is finance and how it works, you will not buy a life insurance product which has an element of investment too. This is simply because the way the product is structured and the huge costs built in. So stay away from Endowment, ULIP, Classic Insurance, Annuity, Pension…Just say NO.
  7. Thou shalt increase your investments in mutual funds, direct equities, etc. as your income increases. Auto increase too is possible, opt for that.
  8. Insure against all kind of risks that we understand NOW – life insurance, medical insurance, malpractice insurance, disability insurance, etc. Also remember that this is a dynamic concept – so keep reviewing your insurance regularly at least once in 3 years if not on a yearly basis.
  9. You will not invest in direct equities (unless your parent, kid, sibling or spouse is a qualified professional in that field and doing it for you), you will stay away from Ulips, Reits, PMS, real estate pms, car financing schemes, peer to peer lending…etc. Thou shalt only invest in mutual funds – and if you do not have a competent adviser – stick to a big index fund , do a SIP, and have a 10+ year view while putting in money into the fund.
  10. Thou shalt hire ONLY competent financial advisors for your Income tax, business advisory, and investment advisory. Go to a person your age, reasonably successful, and a guy who will stand up to you and say “hey Doc what you just said is WRONG’. Young CAs may get intimidated by you and he/she may not be calm enough to give you sane advice.
  11. Though shalt minimize expenses and defer taxes as much as possible. Deferring taxes is not something even good CAs do – so learn about it and tell them to transfer current income to a future capital gain.
  12. Thou shalt know the difference between Debt for Growth and debt for Expenses. Debt for Expenses should be nil always! However if you have borrowed try repaying ASAP.
  13. Protect your assets, insure against catastrophe, write your will, and document your assets properly and do it NOW.

MORE a little later perhaps….after docs give some feedback…

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  1. Forteenth fatwa from my side

    “Stop fleecing your patient for god sake they are poor human beings”

  2. umang

    you have a choice go to a different doc. Why crib? India is a free can change your doc, medicine, hospital, ….do not crib.

  3. Hi sir,
    I personally believe that a higher proportion of income must be in non attachable assets due to increased litigation compensation. Your views please.

  4. I wonder what else the experts should be discussing apart from the above in the Investor Education camps, for which perhaps fat fee is charged.

  5. Dr. Basudev Tewari

    Thanks sir for the wonderful financial ‘do and avoid’ summaries. Perhaps 3 things need to be added:
    1 Decrease your love for real estate
    2 Do not try to pile up black money and pay tax
    3 Minimise your ego as much as possible regarding ‘I know everything about finance management’ as well as ‘leading upper class lifestyle’

  6. Subra: It’s not as easy as you said to change doctor! That’s possible in a case of common cold or viral fever only. Most of the patients do not have time to think about which doctor is honest and then join their family member in the hospital. Accidents, emergencies, reachability all play vital role.

  7. look Sreekanth it is a free market. So you can have Tea in the footpath for Rs. 10 a cup or in the Taj Hotel @ Rs.800 a cup. You cannot have a cup of tea in the Taj for Rs. 10 – that combination does not work. If you are so lazy that you will not do research on the doc or on the hospital, it is fair that you pay a higher price than the guy who did research. That is exactly how the free market works. It rewards efforts.

  8. Hi Subra, Although you are right that this is a free market. It’s difficult when you spend 5-6Lacks and then think of changing doctor. Seeing someone suffer from a distance & then experiencing are two different things. Also most people do not have resources to keep up that pace. Unless salaries are 2 crores etc.

  9. @subra
    free market or not – there is no denying the fact that most doctors are extremely unethical – they fleece patients at every conceivable opportunity, and they have amazing ability at creating those opportunities.
    There is a good reason that hardly anybody who have interacted with doctors as patients look at doctors with empathy/sympathy/good faith.
    Unfortunately, almost all doctors are nothing but salesmen of pharma companies – and like most salesmen, they DO NOT have the best interest of the buyer/patient.

  10. Subra Sir, the most imp fatwa is … never forget to read Subramoney … because this is like – subra’s post (apple) a day keeps financial illness away?

  11. Doctors fleece? what about the Sales Head of a Life insurance company on a salary of Rs. 1 crore + esop? Is he creating value by mis-selling ULIP?

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