Being a physician doesn’t immunise one from financial complications. By the time a physician opens his own practice, he already has to deal with the debts for his medical studies. They remain preoccupied with their demanding studies during their educational and training tenure and therefore are sketchy managers of their finances.

Therefore, these disadvantages makes the issue delicate, so physicians should actively seek for an expert financial advisor to overcome the burden of debts and meet the challenges in finance management pertaining to familial and practice environments.

These are the five most common mistakes your practice should avoid:


Firstly, working in the higher risk specialty makes the physician’s practice prone to lawsuit cases. Litigations are not very uncommon to be found even for the physicians involved in a low risk specialty practice. A recent study published in NEJM on October 28, 2013 proposed that 75% of the physicians at age 65, working in the low-risk practice, had already coped with malpractice claims.

Secondly, if your insurance exceeds the limit of liability, it puts your personal assets at a risk, even if registered under the names of family members. However, some of the strategies which can protect you from costly litigations are;

  • Looking for an expanded liability coverage like, umbrella insurance policies
  • Exploring Ownership strategies and related Trusts
  • Strategies involving advanced risk management
  • Diversification of investments


Hunting for a good financial advisor is as important as selecting a specialty for practice. Despite the fact that there is no shortage of financial advisors, finding a good financial advisor may get very hectic. It is imperative to get an answer to some of the questions regarding to the financial advisor before taking any step further;

  • What is the mode of payment?
  • How much are they paid?
  •  Is the payment justifiable?

Not getting a satisfactory answer to these questions may put your assets, investments and accounts at risk. A better financial advisor can give you a good view of how your financial matter can be dealt with.


One of the biggest mistake which any physician can make is to neglect the importance of long term financial planning. If you keep on spending money with increase in your income, without having to have a planned saving strategy, can put you in trouble. Failing to save income for hard times can cause inconveniences to the extent of embarrassment.


Imagine yourself to encounter an inevitable natural disaster, leaving you in a debilitating condition and no income support. How devastating it would be for you and your family, should you find yourself not protected by family or disability insurance in such grim circumstances?

Many young physicians, even if they realise the importance of disability insurance, are inclined to procrastinate and therefore, may end up in the same scenario. Family and disability insurance makes sure that the family is protected and is sustained throughout the period of disability.


Investing in to the market, without having to seek a professional guidance, can be assumed equivalent to throwing money in the well. Overconfidence can jeopardize your financial situation in a matter of no time. Investing, with the aim to achieve practically successful gains, needs a professional expert with an insight into the vicissitudes of rising and declining market values.

Therefore, the vitality of a financial manager in the life of a physician cannot be emphasized more. Although, there could be innumerable mistakes in terms of financial management to be avoided, however, these are the most commonly neglected with serious consequences. We hope you found the solutions suitably actionable.