What are some of the biggest mistakes you need to overcome to create wealth, achieve financial security and enable you enjoy your life more?
Below is a list of some of the key mistakes Doctors make with their wealth creation:
- Poor choice of investment strategy
- Not remaining disciplined and managing their emotions
In Part 1 we considered the first of the biggest wealth creation mistakes Doctors make: Procrastination.
Now let’s consider the second:
Poor choice of investment strategy
Would you ever rush in to treat a patient within the first few seconds of their initial presentation, without observing the patient, asking questions, performing tests or speaking to other medical professionals they may have consulted?
The same principle applies to your investment strategy. However, it is a wealth creation mistake that Doctors so commonly make.
Whilst the list below is certainly not exhaustive, here are a few good examples:
- Rushing into making an investment without developing a well-defined plan based around what’s most important to you and what you want out of life.
“If you don’t know where you are going, you’ll end up someplace else.”
One size does not fit all, so not starting with this can be very costly, frustrating, stressful and impact on your work, your health, your relationships and general happiness.
- Not being honest with yourself and whether you can tolerate the risk associated with the investment.
You could make the best investment in the world, but if you are stressed out and can’t sleep at night this is no way to live.
Conversely, if you are investing too conservatively, will you still be able to achieve the life you want?
- Not having a clear understanding of how your current and future finances will look like, and how this investment fits in, especially if your personal circumstances change, market conditions change or the government changes the rules.
Without crunching some numbers and some future projections, how can you make an informed decision whether this is the right investment for you?
- Not considering the most appropriate ownership of the investment
Without due consideration of this initially, unnecessary issues can arise such as: $10,000’s of extra tax payable or the loss of a great investment if you are sued.
- Not buying good long term investments at a reasonable price.
If you don’t do this, how will you achieve investment success and the life you really want?
Paraphrasing Warren Buffet: it’s far better to buy a wonderful investment at a fair price, than a fair company at a wonderful price.
- Not diversifying
Diversification helps reduce risks, gives you a smoother ride and gives you a greater chance of achieving your investment goals.
- Speculating rather than investing.
Make your wealth creation boring and the rest of your life exciting – and not the other way around!
“Calling someone who trades actively in the market an investor is like calling someone who repeatedly engages in one-night stands a romantic.”
- Not factoring in the wealth creation enemy of inflation
Inflation is the hidden insidious ‘tax’ we often forget about it. You need to make sure this works for you and not against you!
We can advise and guide you to ensure your investment strategy is well-considered and enables you to live your best life and achieve financial freedom – which is what it’s really all about.
So if you can get past the first big wealth creation mistake of Procrastination, we can help make this easy for you!