Roughly half of physicians consider themselves on track when it comes to retirement savings. If that's the case, doctors should consider their options and look to build wealth.
Studies show about half of all physicians are behind in their retirement savings. The other half generally fall into one of three categories:
1. They don’t know where they stand regarding their retirement savings.
2. They are right on target to where they should be.
3. They are ahead of where they should be.
If you're in the first category, you really need to get a financial checkup and discover where you are. It's like a patient who hasn’t seen a physician in years. Just like a full medical checkup, a financial checkup will help ensure that, going forward, you are on the right track.
For those who are right on target to where you should be, keep doing what you are doing. If there’s money left over to invest, stay with me here while I talk about the third category.
For those of you who are ahead of where you feel you should be: This is where you begin to build wealth. It is at this point where it is suitable for you to take a certain amount of risk. How much risk should you take? The answer is that it all depends on you and what risk level you are comfortable with. Always keep in mind, never risk more than you can afford to lose. And even though you can afford to lose the money, you should always look to limit and mitigate risk whenever you can.
The purpose of investing is to make money, not lose it. If you wish to invest in mutual funds or stocks, so be it. Real estate is very often a sound financial investment. There is even something called a self-directed IRA, where you can put your IRA money into real estate.
Another way to invest in real estate is to become part of a group of investors that lends money for real estate deals. I personally like it for busy physicians, because it doesn’t take up your time and the profits can be very attractive. The point is, now that you are in a very exclusive group of people whose retirement is already secure, your investment options are huge.
In any investment opportunity you want to know the upside, and just as important, you want to know the downside. By that I mean, what’s the worst that could happen.
If you have questions, send me an email to David@TheAlemianFile.com. Check out my website PhysiciansRetirementPlan.com. Follow me on Twitter, connect with me on LinkedIn, and absolutely make sure you come back here next week to Physicians Money Digest for another edition of The Alemian File.