Simple Income Protection Methods for Doctors

Income protection is a usual concern for doctors who seek to sort their finances – personally or with professional help. Here are some common income protection methods:

1.       Set up an emergency fund. Emergency funds are separate accounts from your savings and expenditures. These represent at least six months of your salary and are placed on near-cash or easily-converted-to-cash instruments like time deposits.

2.      Purchase an insurance policy. This is a regular way of protecting one's income earning capabilities. Policies are designed to make payments to you or your beneficiaries in case of unemployment, incapacity, or death.

3.      Invest in mutual funds. Unlike insurance policies that have fixed returns, mutual funds can offer higher payout as these rely on the funds' performance. A fund can be managed to invest in bonds, equity, both bonds and equity, or even commodities and foreign exchange (Forex).

4.      Invest in stocks. New players in the stock market can use a method called dollar cost averaging where you would need to invest a certain amount on regular intervals in a stock you think would perform well in the long run. This method helps reduce the impact of volatility on your investment purchases.

5.      Invest in a business. You can also set aside cash you can use to start a business that would bring in extra income for your family's use.

There are more available strategies to protect your income. Qualified financial planners can present you with varied or even combination of options tailored to your needs.

This entry was posted on Wednesday, 28 May 2014 and is filed under ,,. You can follow any responses to this entry through the RSS 2.0. You can leave a response.

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