How Do Doctors Invest?
Doctors are high income but low net worth group of people. This is because of their bad spending habits and lack of knowledge about Investments. And because of this lack of Financial Education, they can’t properly manage their money and can’t build much wealth.
Most of the Doctors Invest for Capital Gains and that’s why they can’t accumulate much wealth. While Investing for Cashflow is a better Investment Strategy in the Long run.
The problem with today’s world is that, Almost every Financial product available in the market is based on Capital Gains Investment Strategy. Say for Example, Stocks, Bonds, Mutual Funds, Pension Plans. Investing for Capital Gains means “Buy, Hold & Pray” Strategy.
Here you buy some asset and hoping for it’s price going up. At first look, it seems that Capital Gain will make you very rich in very less time. But the reality is that, Capital Gain is a risky Investment Strategy.
Smart Investors Invest for Cashflow and that’s why they become and stay wealthy over the time. The main advantage of Investing for Cashflow that, once you acquire that asset, you don’t need to worry about it’s price ups and downs because as long as you control that asset, You will be benefited by a steady and growing cashflow.
Say for Example, Rental Properties. If you buy a property for Cashflow than you don’t have to worry about the real estate prices. This is because if you are investing for cashflow than you will have a steady rental income (Cashflow) as long as you hold that property.
Thus, I advise to doctors that Invest for Cashflow and not for Capital Gains if you want to become Financially Free.