Get personal about your finances
You should have short- and long-term goals and know how to achieve them.
Whether new to the profession or near retirement, veterinarians need a financial game plan. Consider these five questions.
1. What is the point of my savings?
Being financially disciplined and saving money is great. Having a goal or multiple goals for your savings is even better. If you are fortunate enough to be able to put money to the side, developing a systematic investment plan can do wonders for your nest egg over time. Consider taking this crucial next step for your financial well-being.
2. Is my goal to buy out another partner or practice?
If you are set on buying a practice or buying out the equity stake of a partner, then you should have a plan to help you reach that goal. Saving blindly is never a bad strategy, but with goals in place you can run simulations to see, with reasonable assumptions, how long it should take you until you are able to own a practice.
3. What should I do with extra money every month?
If you are in the position of being able to add to your nest egg at the end of each month, that is terrific. However, there are endless ways in which you can invest your money. How do you know what is right for you? To start, everything is derived from your risk tolerance. Your portfolio is based on this very important consideration. Have you ever asked yourself what you would do if your portfolio dropped in value by a quarter or half? The answers to these questions help to shape your investment mixture. Again, this is simply a starting point. Your actual investment selection will depend on a multitude of factors.
4. What does my financial/retirement plan look like?
That assumes you have one, right? Regardless of your age, planning for the future is key to financial success. Simply put, it shows you what you have to do today to get where you want to be in the future. Being able to methodically determine what your financial needs, wants and wishes are can highlight what is most important to you. It also allows you to develop a budget, which helps to stop leaky spending, and can help you reach your goals sooner.
5. What does my current investment situation look like in totality?
A veterinarian’s IRA, 401(k) and profit-sharing plan are just some of the various retirement accounts that constitute your investment mix. How do you know what your investments look like in totality if you can’t see your overarching investment picture? Summarizing all your accounts, both company and personal, can help paint the real picture of where your money is at work. Being able to take an overarching view of your investments and the risks that you are taking is a terrific reality check.
There is almost always something that can be improved on when it comes to your investments.
Miles Saunders is the founder of Westport, Connecticut-based MNS Wealth Management. Learn more at www.mnswealthmanagement.com, or email him at [email protected]. His views should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. For a comprehensive review of your personal situation, always consult with a tax or legal adviser.