The healthcare professionals that seek our advice share one principal lifestyle goal: to not feel any financial pressures by their mid-50’s and to be able to make lifestyle-professional choices.
They see their older peers having to continue to work because of financial necessity, and do not wish to find themselves in the same position 20 years down the track.
So what are some of the key ingredients you need to focus on, to achieve that goal?
- Control Debt
The number one financial pressure you might feel is having to repay debt…most people don’t like it. As such, one of your primary goals in pursuit of financial freedom should be to ensure that you are debt-free by your mid-50’s.
How to achieve this? Well, put simply:
Don’t borrow too much for your house, cars, etc.
Before you take on any loans, work out what your repayment timeframe and strategy is. There are plenty of online calculators to help you with this.
It is easy to establish what your repayments need to be to extinguish a loan in a certain timeframe – if this doesn’t suit your budget, then think again and borrow less.
- Manage cash flow
You need to get hands-on with your cash flow.
I don’t mean that you should count every dollar, but you need to have a good understanding of what your savings capacity is, and what it should be, if you are to achieve your debt repayment (see above) and wealth creation (see below) targets.
I find that the number one thing you need for effective cash flow management, is a solid structure. You need to create a system whereby you automate savings and naturally restrict your expenditure.
Without good cash flow management, you have already lost the battle.
- Create wealth
In order to achieve financial freedom or security, you will need access to investment capital and/or passive/investment income.
Compounding is your friend, so the earlier you start investing, the more your capital will work for you.
You need to make smart investment decisions, buy quality assets and remain disciplined, and to do this you will need to educate yourself.
- Educate yourself
You don’t need to become a financial guru or investment expert, but you do need to understand basic financial concepts and investment principles, to avoid costly mistakes.
You can find free education on my website, blogs, podcasts and videos, and there are so many other resources out there.
While these four ingredients are a good starting point, I find that many doctors and dentists want expert advice, to help them distil that information in a personalised plan.
I would love to help you with your journey towards financial independence, so feel free to contact me via Yves@affluenceprivate.com.au or 0432 885 295.
As I understand your time is extremely valuable and scarce, I am able to offer flexible meetings times, including outside business hours and during the weekend. I can even come and meet you somewhere convenient, or talk via videoconference on Skype.
My first consultation is free. I allocate up to 90 minutes to discuss your personal circumstances and to establish how I may best assist you. Where you already have an existing adviser, I would be happy to offer a second opinion. I always quote a fixed dollar fee before we start working together.
Please contact me on email@example.com or call me direct on 0432 885 295. You can follow me on Twitter @YvesSchoof or connect with me on LinkedIn to receive new articles.
Yves Schoof and Affluence Private Wealth are Authorised Representatives of Synchron, AFS Licence No. 243313.
The information posted is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs.
Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making a decision.