#148 5 Financial Mistakes You Need To Avoid In 2023
Yes, even doctors make mistakes when it comes to their career and personal life. Mistakes can often become costly and so we try to avoid them at all costs. Although, no matter how careful we are, mistakes are inevitable…especially in our personal lives. The key is to minimize those issues by being conscious in those areas, and be deliberate to avoid those mistakes.
In this episode, Dr. Peter Kim discusses the five financial mistakes that you need to avoid this year as you strive to achieve financial freedom.
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Episode Highlights
Now, let’s look at what we discussed in this episode:
- Mistake #1 – Not diversifying your portfolio
- Mistake #2 – Not having the proper disability insurance
- Mistake #3 – Not understand how you can take advantage of the tax code
- Mistake #4 – Not to make investments in things you don’t understand
- Mistake #5 – Not to invest in your own education
Here’s a breakdown of how this episode unfolds.
Episode Breakdown
Mistake #1 – Not diversifying your portfolio
Evaluate your portfolio of what works well in today’s market. Don’t just invest in your medical practice. Medicine is not immune to technology, and things are changing every day. If all of your income is tied up in your day job, index funds, or your 401K then you are not as diversified as you need to be. If you don’t have investments moving in both directions, then your portfolio is not diversified. Is your portfolio stable? Is it still creating income for you in an investing winter season? Does it give you freedom? If not, then perhaps it is time to consider adding other investments to your portfolio.
Mistake #2 – Not having the proper disability insurance
The unexpected happens, health changes. When you pick up disability insurance when you are a resident it’s a just in case type thing. Individual health does change, and not being able to perform the duties of your job when you are not healthy is what you are protecting against. You need to protect your assets, being able to create a large income as a physician. Talk to an independent broker, and review your policy.
Mistake #3 – Not understand how you can take advantage of the tax code
The government incentivizes doing good for society, owning a business, having employees. There are tax breaks as a physician that you should pay attention to in order to minimize your taxes. You need to speak to a tax professional specialist who understands you and your goals. For example, find a tax specialist to help you with real-estate tax breaks. Create a win-win for you, and a win-win for the government. Consider finding the right CPA.
Mistake #4 – Not to make investments in things you don’t understand
You are often seen by others as an investment opportunity for them. Don’t operate from FOMO when it comes to investing options. By doing the proper due diligence will help you make the wise decision and mitigate risk. Reducing the downside and increase the upside is the holy grail of investing.
Mistake #5 – Not to invest in your own education
Even when the economy is on a downturn, it’s important to invest in your own education and in your future. Actually, there is no better time to invest in you, keep investing in your future, to stay ahead of things by going to conferences, reading books, and joining communities. Investing in yourself with your time and money will pay off for you in the long run. Now is the time for great opportunities by planting those seeds today.
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