Few investments are open to the public, while others are only available to physicians. Given their late, often highly indebted beginning to their professional and investment careers, they should reap the benefits of as many of these opportunities as possible to accelerate their financial progress. Each of these ideas of investment for doctors generates good returns and is not too risky. Although some of them aren’t especially well-diversified, they can all provide excellent long-term returns.
Starting a Practice or Joining a Partnership
Our first investment is aimed solely at physicians. It could include starting a dental practice, joining a hospital-based doctor, or joining another doctor to take over the practice eventually. Sometimes it’s a matter of sweat equity, and other times it’s a matter of money.
If money is tight, doctors must either save a lot of money or seek funding from a third party or new partners. Creating and strengthening a practice will turn it into a profitable asset that can be sold at the end of your career to supplement your retirement fund. And in a hospital-based physician relationship, there is typically a buy-out equal to a few months’ worths of accounts receivable.
Rental Properties with Reasonable Leverage
Although everyone can directly invest in equity real estate, doctors have the cash flow and creditworthiness to make the process go more smoothly. There are elements of a second job here; one can reduce them by creating good processes and recruiting good management. Even if a property is paid off, it will have stock-like returns, but projected returns will hit double digits with a sufficient amount of leverage. It’s always good to have advice from age-old private equity real estate firms like MarketSpace Capital in this matter.
Real Estate Syndication
Although this is not a physician-specific fund, it is limited to affluent or have a high income and can qualify as accredited investors. If selecting and maintaining your assets is too time-consuming, consider hiring it out. When you invest in syndicated real estate, you join forces with hundreds of other investors to purchase a property that you couldn’t afford on your own.
Index funds are available to everyone, but that does not make them a poor investment. Great index funds now have such low-cost ratios that they effectively have competent management, regular liquidity, market-matching returns, and strong diversification for free.
Given the prevalence of skilled trading on Wall Street and extensive research of publicly traded stocks, the data clearly shows that index funds are a much easier way to invest in the world’s most successful companies than trying to find a talented active fund manager, let alone picking winning stocks yourself.
Doctors may not eventually build wealth until their 30s, and they often begin with a significantly negative net worth. The above point can be the best reason for investing in doctors. They can also create wealth and find financial stability by taking advantage of great investments. It will enable them to be great buddies, parents, and doctors.