Those following me on FB, Twitter, or reading my blog know that I meet a lot of doctors!
I do have some more friends and relatives who are doctors too! And I have some clients who are doctors too…and here are some of the smart questions that they have asked me…
- Is there anything to optimize my tax return? I have to explain to them that I am ex Chartered Accountant and operationally it is their CA who should be doing it….’but these following things can be done’. I rarely have any great inputs on the Income and expenditure of the PnL account. However deferring some depreciation, buying some more assets at the beginning of the year to claim depreciation etc. are some suggestions possible at most times!
- What Incomes of mine can I defer? Many doctors have a lot of rent income, and interest on fixed deposit. I do change some rental properties to high deposit (which can be invested) and pay less tax on the rental income. Recently I must have transferred about Rs. 30-40 crores from bank fixed deposits to income/hybrid/equity funds. Mostly doctors.
- I want a Consulting Session with YOU and my CA: Most CAs are good in Audit and taxation, but most of them are poor in investing consulting. So they keep saying ‘bank deposits are safer’ or ‘ppf is the best’ …etc is what they parrot. So sometimes I need to say ‘borrowing is not necessary if you have your own money’. Borrowing to buy a house is stupid tax planning, etc. It is tougher to teach the CA basic accounting than a doctor! It is common for some clients to remind me to charge them for the consulting session. (I always charge for consulting!) Most doctors don’t want a free conversation. They want a deep analysis of their situation. Some even come armed with handwritten notes they want covered. Some send an email of the agenda – this is serious business. A 5k consulting can put Rs. 100,000 or more in the pocket of the doc! Sometimes I mean!! That is a good return on the investment and the smart doctors know that!
- Should I make this investment?
There are 4 smart doctors who call me before they do ANYTHING financial. Whether it is investing, buying a house, furnishing the clinic, giving guarantees for a friend’s clinic buying. This makes it much easier for me – and I do not have to say ‘I told you so’ . If I feel strongly I make sure that they do not do it. If I am fine 50:50 I reduce the size of the transaction, if it is a good deal, I push them along! A stitch in time saves nine? Prevention is better than cure, eh doctors?
- What is my Net worth? Most of the doctors who are in touch with me have access to a Net Worth calculator but they like me to see their net worth. The NW is one good number to track on a regular basis – one doc does lumpsum investing based on his net worth. In a market that is down when he sees his net worth has slipped he would just shift money from debt instruments to equity investments. From his age of 42 to his age of 50 he has dramatically increased his net worth by changing his asset allocation, and of course this long bull run. He is ready for a 38% fall in his equity portfolio – even then he will enough money to retire at 55 – his original retirement target age!’
- Is this expense wise and can I really afford it? Many doctors struggle with decisions on expenses like children’s foreign education, marriage expenses, buying a car costing upwards of Rs. 50L, etc. and they need somebody who will give them honest feedback. So sometimes I have to say ‘hey you will be fine’ to ‘a little struggle perhaps, but if you feel strongly go ahead’ to ‘you got to be joking – you have no clue what you are talking’. Most doctors value strong, blunt, precise comments. Sometimes I need to involve his spouse too. Lady doctors are easier -at least with money and investment. However one doc did something and said ‘If I had asked you, you would have said no’ so I did not ask. That’s fine! Hey I am a financial consultant, not a life consultant.
- Can we go for a meeting together? Some doctors are comfortable if I go along to meet a builder or seller when they are buying Real Estate. I am myself not so comfortable, but sometimes I do play along. I encourage doctors to take along some friend or spouse BUT never go alone for a big negotiation. You need a buddy. Sometimes its me!
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