I was recently talking to a group of doctors and some of them were cribbing about how they do not have enough cash flow. For a layman this might come as a shock because they feel overcharged every time they step into a clinic…Here are the reasons some which the docs said, some mine:

1. Doctors start earning late: Absolutely no doubt about this! It takes a long time to do your MBBS, then you specialize further…well you are almost 32 by the time you start earning.

2. Doctors have a higher spending need: Doctors have to live like doctors, don’t they? So they spend more on clothes, car, the places they visit are expensive….so they have a lesser amount to save or invest.

3. Repaying educational loans: Not a very Indian concept, but people do borrow money to pay fees – and it has to be repaid.

4. Doctors are, well, for a better word, negligent! Like all professionals they think ‘Investing / personal finance is easy, I do not need help. Well they are wrong. Their syllabus does not prepare them for anything in finance. Even worse they trust their banker. He takes them to the cleaners. So they have no clue whom to trust and whom to ignore. Suddenly at 55 they realize that they have no money!! Well no investment money, they have EARNED money of course.

5. They are busy even when they start earning – they neglect their finances. (the fact that they neglect their own health is a matter of another story!)

6. They have no business sense – they do not know their costs, their variable costs, marginal costs, taxation, other revenues, etc. This puts them in a great stress – and largely have no clue about how to handle it.

7. They do not know how to sell their practice – running or otherwise!

Well there are many more reasons, some of which I have covered in my book for doctors. If you read carefully, most of these reasons come from a lack of knowledge of finance. Imagine asking doctors to attend a workshop on ‘Practice management’ or ‘Personal Finance’ – their immediate reaction is ‘We are not in it for money’ – well I think we are all in it for money, right?

If  99% of us work for money, how come only 1% of us make our money work for us?

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  1. the 1% could be those who are not addicted to instant gratification and the other 99% overestimate their ability to sustain earnings and perhaps suffer from cognitive bias syndrome!

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