Common Financial Mistakes Doctors Make

(and How to Solve Them)

Medical professionals in Australia share common ground when it comes to financial challenges despite their diverse specialisations and career paths. Drawing from our experience providing financial planning for medical professionals, ActOn Wealth explores the recurring financial pitfalls that often affect healthcare professionals and how to avoid or solve them. 

Lacking Any Budget and Cashflow Management 

Financial details often take a back seat when you focus on patient care. Moreover, you’re earning very good money—why worry about cashflow and budget? This mindset, while understandable, can lead to financial vulnerability.

Medical professionals often find themselves with ready access to credit, as lenders view them as low-risk borrowers. This easy-access finance, along with lifestyle inflation and PAYG tax obligations, can create unexpected financial pressure despite significant earnings.

The Budget and Cashflow Solution 

ActOn Wealth takes time to understand your complete financial picture, including income streams and financial goals. We develop practical cashflow strategies that support your desired lifestyle while budgeting for long-term financial security. Our approach ensures you maintain control of your finances and build for the future without compromising your focus on medical practice.

Neglecting Superannuation 

As a medical professional in Australia, you earn good money. This, in turn, affords you a very comfortable lifestyle that undoubtedly includes travel, entertainment, recreation, and asset accumulation.  

If you’re self-employed, your superannuation contributions are voluntary. Instead of investing in retirement, it may seem more enticing to maximise your spending now and purchase bigger-ticket items than to invest in retirement. While this can make for a very attractive present life, it can be problematic in retirement.

For instance, if you expect to retire by your 60s on $70K a year, you will need at least $1M in today’s dollars, or you risk outliving your retirement savings. Based on these estimates, you would need to begin significant contributions by your early 30s at the latest. 

The Superannuation Solution 

As superannuation specialists, ActOn Wealth financial advisers analyse potential scenarios based on your target retirement age and desired income. 

Our fastidious product researchers assess your current super fund to determine if it is the best option for you. Although we are not affiliated with any third-party institutions, we will recommend alternative super funds if we believe they are premium performers and better suited to your financial success. 

Failing to Make Your Medical Private Practice Tax-Efficient

How have you structured your business? Establishing yourself as a sole trader, partnership, trust, or company has inherent pros and cons. Specialist accountants can help determine the most tax-efficient business set-up and avoid excessive payments to the ATO.

The Taxation Solution 

Once accountants have determined the best business structure, our Melbourne tax advisers can provide long-term strategic planning that exposes all possible tax deductions for doctors, maximises your return, maintains compliance, and reduces the risk of accounting errors. 

Not Separating Business from Personal Finance

It can be easy to blur the lines between your business and personal finances, especially if you are self-employed and running your own medical practice. Potential mistakes include: 

• Not separating practice from personal tax obligations 
• Using practice revenue to finance personal expenses 
• Combining personal and practice debt obligations 
• Using personal assets as security for business loans 
• Not delineating between personal wealth and practice growth 

The above could lead to complicated tax challenges that fail to optimise all your opportunities, challenges in accurately valuing the business and your net worth, increased personal liability, succession planning obstacles, and more.

The Business and Personal Finance Solution 

ActOn Wealth financial planners can help you create clear boundaries between your business and personal finances, establish separate banking structures, develop specific and distinct budgets and investment strategies, and advise on the best ways to protect your personal assets.

Not Getting the Right Financial Advice for Medical Professionals 

Medical professionals excel by focusing their expertise on patient care. Just as patients benefit from your specialised medical knowledge, your financial future benefits from our dedicated financial expertise. Partnering with financial specialists lets you focus on running your medical practice while ensuring your wealth grows strategically.

The Right Financial Advice Solution

ActOn Wealth financial planners are highly experienced in optimising complex investment structures, tax strategies, and retirement planning. Our comprehensive financial services in Melbourne Australia take a holistic view of your finances and goals and provide a bespoke and achievable pathway forward. 

Avoid Common Financial Mistakes – Contact Us

Taking control of your financial future early in your medical career creates the strongest base for long-term wealth and retirement security. If you recognise any of these common financial mistakes doctors make, let’s address them together. Contact us to arrange a complimentary initial consultation (either virtual or in-person) and discover how an ActOn Wealth financial advisor in Melbourne can help you achieve strong financial health and reach retirement goals.