Non-Clinical Support » Personal Finance

Top Ten Tips for Doctors

• Start early - the sooner you invest, the more your money will have to grow. Even a small amount is better than nothing. If you delay, you will almost certainly have to invest much more to achieve a similar result.
• Keep some cash aside - It is always a good idea to have some money in savings and short term deposit account for emergencies.
• Ask yourself how much risk you can take - There is no point having a stock market investment if you are going to loose sleep every time share prices go through a rough patch. It is always better to divide your portfolio into 3 categories, high risk, medium risk and low risk.
• Bear in mind that inflation will eat into your savings - Return on risk-free cash investments may sound good, but when you subtract the current rate of inflation you may not be so impressed. For long term growth you need to make investments which generate much higher returns than the inflation rate.
• Think carefully about how long you will be investing for - Look at the stock market if you are prepared to put your money for minimum 3 to 5 years. Never invest in stock markets for short term period.
• Spread your investments - Do not put all your eggs in one basket. Depending on your goal and needs, spread your hard earned money across different types of investments - equities, bonds, cash, real estate, insurance, etc.
• Choose your investments carefully - You should select your investments on the basis of your personal requirements and goals. Check the past performance of the scheme, their promoters, track records and do not go by the rumours in the market.
• Invest regularly - By investing regularly you can build a very good investment portfolio and benefit from the rupee cost averaging. For example invest in equity mutual funds through Systematic Invest Plans (SIP).
• Review your investments - A portfolio that is right for you in 2006 may not be suitable few years later. Review your portfolio regularly and switch your investments as per your personal requirements.
• Book Profits - Do not be greedy. Set your targets and exit as soon as you achieve your target returns.