This is not the first time that I am doing such a post. However in a recent interaction with a doctor she asked me to list the top     Financial Mistakes of a doctor in general..so here it is I said…

1. Not thinking about money: No clue about which world doctors live in, but they refuse to think about their money on a regular basis. I find this difficult to explain this. However, this is clearly the first (and perhaps biggest) financial mistake.
2. Leads us to the obviously next point – no planning – in the professional finance and in professional life. I think the first one leads to the second.
3. Over confident about earning “well”. Most doctors cannot define “earning well” or “rich” or “wealthy”. However when they get a salary of say Rs. 1-2 lakhs they think that they are ‘earning well’ – and go and get the expensive toys.
4. Falling for sales pitches – Most of their Investments are the products which was ‘sold’ to them. So it has to have ulip, endowment plans, real estate, etc…without a clue on what is suitable for them.
5. Spending too much too early! A doctor takes a long time to earn money, so as soon as he/she earns money, there is tendency to let go. However the younger doctors have to see how much of educational loans they have. If you or your parents have spent Rs. 2 crores on your education, remember Rs. 20,00,000 is interest ALONE per annum.
6. Saving too less: If you are saving less than 30% of your income, remember, you are way below the Indian average. Most of them have no clue about how much they earn, tax that they pay, savings and of course investing.
7. Not having enough insurance: term life insurance, medical insurance, and indemnity insurance – all all very important for professionals. However CA, architect, etc. indemnity insurance is not so critical. So go and review your documentation and insurance.
8. Underestimating the need for a financial adviser – either because they think that it is an expensive service, or not knowing what an adviser can do for them. The main response I have got is “do not know where to find the adviser”.
9. Investing in direct equities – either they lose money or it does nothing for them over long periods of time. Sometimes they put big amounts, but in most cases, the crime is they put too LITTLE money in TOO MANY scrips and the portfolio does nothing for them over long periods of time.
10. Thinking “I am earning so well so I do not need to plan”. This is the WORST form of not planning. You do not even know that you need to plan.
11. Gambling on businesses that they have no clue at all. Too dangerous and too low down..maybe it should be MISTAKE no. 1.
12. Dealing with friends and relatives for their accounting, investing, renting….and even worse giving loans to friends – and not understanding that guarantees are as bad as loans.

I think more than this…and I would have the doctors angst…