Your financial life is a function of 4 important steps that you should (or your financial planner should do along with you) – Examine (collect all your financial papers), Diagnose (educated examination), Prescribe (suggest suitable action), Do it, and Monitor.
Doctors who can understand these steps in their profession – should realize that all actions remain the same whether it is health or wealth. The above steps are as crucial for your own financial well being. And, please get it done in a well reputed place by an experienced finance professional. I am sure doctors will be the first to realize the importance of each of these steps. I am sure you will also accept that the professional should be appropriately qualified. You do not want your dentist to be examining your cardiac condition – or the reverse. If you CA handles your accounting, it does not mean he/she has to handle your investing. After all your dentist and cardiologists are both doctors, right?
Your financial life is a lot about attitude too. You must have heard of books like “Think and Be Rich” or “If you think you will have it” etc. Attitude is just the way you view things – emotionally, and mentally. It is clear that positive thinkers have more energy and love to do things – and generally have a healthier and wealthier life.
How your parents (in a joint family grandparents, uncles, aunts too) behaved with money, and how you view your life and financial matters specifically, will influence your success. How you earn, how much you earn, how and where you save, your attitude towards risk, investing, etc. will decide how much wealth you have in your life. Yes, money too is about attitude.
For example if you are a 43 year old doctor working in a hospital and wondering whether to set up a hospital on your own you have to answer the following questions:
- are you willing to take on more debt?
- are you willing to work much harder ?
- remember – no vacations, holidays, foreign trips, etc. – for a few years at least
- will you be happy earning more money?
- are you willing to give up your social life, hobbies, etc for some time?
- do you want the headache of dealing with Municipal authorities and others?
- HR, finance, administration – right now you are not handling any of that stuff. Do you want to?
- do you have a plan B?
- what if you fall ill, enter into coma, or somehow have dramatically low earning? plan c?
Now take your FINANCIAL PULSE:
Do you have well defined (written down) financial plan? (yes, no, I do not know are the 3 options for all the questions)
Do you look forward to life with enthusiasm?
Do you know your net worth?
Do you save money regularly? do you invest it regularly?
Do you have investments in 80C deduction assets?
Do you have loans? Credit cards? do you use the credit function of the CC?
Do you have sufficient term insurance?
Do you have a will?
Are all your nominations in the right names?
Do you distinguish between spending, saving and investing?
Do you have a CA to file your tax return?
Do you take full responsibility for your current financial status?
Do you fight with your family about money?
Do you talk to your family about money?
Will your spouse or children be able to handle your money, if you drop dead NOW?
Do you have a retirement plan in place?
- the answer to such questions are difficult, but hey doc, i am sure you understand the need for Examination, Diagnose, and then prescribe!! and then of course make sure that the person does it, and YOU monitor it.
Exactly same in wealth….
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