Investing and wealth creation can be really simple and yet very efficient and successful.
However, many doctors and dentists, and their advisers in particular, complicate matters with no real benefit, and think too short-term.
Here is an excellent article that highlights the benefits of long-term investment thinking: Lessons from the Market
If you don’t have time to read it, here are the two things you need to know:
1) “Time is very much one of the best weapons investors have.”
It reinforces the point I have made in other articles, that doctors and dentists should start investing as soon as practical, even if it is in small increments. This is because of the power of compounding.
2) “There are two things you can control: the cost and how much you save. In the current environment with low return expectations, it’s more important than ever to question whether you’re saving enough.”
Indeed, there are two simple ways in which you can optimise your return:
– Costs and fees matter, and highly influence your net return, so it makes sense to minimise them;
– Even more important is your asset allocation, as it drives over 90% of your return: think carefully about how you invest your money
Finally, if the returns are expected to be below par due to the economic environment, you need to be prepared to increase your contributions. Again though, the sooner you start investing, the lower your ongoing contributions will need to be.
If you would like to learn more about investing, then please download my Principles of Successful Investing ebook. Click HERE to get it now.
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