There’s no ignoring it – the global pandemic has shifted our way of life permanently. So, now is the time for doctors to be proactive and adapt their wealth strategy early on to make the most of our ‘new normal’.
Review your current wealth strategy, finances, investments and goals, both short and long term. What do you still have, and what have you lost? No matter how dire the situation may be, it’s important you’re honest with yourself and accept any pitfalls you’ve faced. The only way you can grow and move forward is by knowing exactly where you’re at now.
But don’t just review your current position. Consider your expected cashflow, investment movements, expenses and financial problems you’re likely to face in the short term future. Based on this, will you need to adjust your goals or create new ones? Is there more than one scenario that could play out, depending on your business or what happens with the global pandemic?
2. Take stock of what you’ve learned
What lessons have you learnt these past few months, both about yourself and your strategy? Perhaps the crisis has exposed a lack of tolerance towards risks you previously thought you had, or revealed an alternative pathway towards achieving your goals.
Now is the perfect time to look at what’s worked and what hasn’t in these difficult times and make the appropriate adjustments for the future.
3. Change your mindset
We can only dwell on the past and remain in a state of fear for so long. The world keeps going, and so must you.
Find ways to transition from a fixed, ‘fearful’ mindset to a growth mindset – one that embraces the mistakes and setbacks, and takes every opportunities to learn and thrive amid adversity.
Try to avoid triggers for these fears, such as media commentary or even conversations with family and friends. Instead, look towards accurate and reliable information sources, including advice from the professionals.
4. Lighten the load
It’s easier to adapt and be flexible when you’re not carrying so much baggage. So, what debts and other financial burdens can you erase? What can you do without?
Firstly, tackle the major drains on your time and resources, such as your home loans, car loans or credit card debt. Can you find a better deal somewhere else? Or perhaps is it time to refinance?
Then, you can filter through the smaller spending habits, such as unnecessary gym memberships or streaming service subscriptions. Particularly avoid services like Afterpay and Zip Pay, and do not fall into further debt unless it’s absolutely necessary.
With your investments, you may find taking on less risk frees you of stress and anxiety in volatile times.
5. Identify the opportunities
As a doctor on the frontline you will often see trends in the industry before most, which could open up investment opportunities and allow you to jump onboard early before everyone else. We’re already seeing plenty of openings already in companies involved in the medical industry, pharmaceuticals, technology, hygiene and more. Which of these areas can you capitalise on? This also applies to your current investments, where opportunities to sell or lease may come up.
There are also plenty of opportunities beyond investments. After reviewing your expenditures, is there a spending habit you can eliminate? Where else are there opportunities to cut costs? Once you start making these savings, can you redirect them to your outstanding debts or investment portfolio?
Finally, do you have the capacity for a backup income, whether it’s through a second job or side business?
6. Prepare for the worst
If the global pandemic has taught us anything, it’s to always prepare for the worst. Assess your risk management and risk tolerance within your strategy, and the steps you’ll take when faced with another crisis. Review all your insurances and make sure they’re providing complete coverage and still relevant. Most importantly, continue to build up your emergency fund so you have a safety net to fall back on.
7. Play the long game
Don’t jump at shadows. Circumstances will always change, but more often than not a long-term plan will pay off. So, be patient, stay resilient and always have a logical and strategic outlook, as opposed to making decisions based on your emotions.
8. Seek advice
Unsure on how to adapt your wealth strategy? Talk to a specialised medical accountant and wealth expert who understands the most effective strategies and latest trends in the industry.
Contact DocWealth, specialists in accounting, financial planning, investment and finance, investment and business for medical professionals. We operate in Adelaide, Sydney, Melbourne and throughout Australia. Managing partner Kym Nitschke is available for a free initial discussion about your situation. Call us on (08) 8379 9950 or send me an email.
– Kym Nitschke
The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
Taxation, legal and other matters referred to on this website are of a general nature only and are based on DocWealth’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
DocWealth specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.