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Financial Health for Doctors

Nov 03 | 1:30 PM

Doctors graduate from medical school with tremendous earning potential, but the road to financial independence for doctors can be long and winding. It all begins with defining the goals. It will be difficult to maintain the discipline necessary to reach your goals if you do not understand why you should make certain financial decisions.Join us as Dr. Rohan Desai discusses investing and insurance, as well as how to pick the perfect one for you.

[Music] good evening doctors team netflix welcomes you to another exciting session team netflix would also like to wish every one of you a very happy diwali i hope you all stay safe and enjoy this diwali well today's session we would be having dr rohan desai is an mbbs and an iim ahmedabad is also the founder and ceo of plexus md the topic of discussion would be financial health for doctors so now i would like to give it all to dr rohan so please i'll i'll stop my presentation let's hear what's what does financial health mean for doctors thanks for sharing good evening dear friends welcome to this session on netflix i think this week we don't have too many sessions lined up this is a festival week and uh expectedly doctors would be pretty busy so we just thought of keeping this week light but we wanted to do this one session on financial health some of you would have attended the session by uh rajna on sunday and this has similar themes uh some similarities some differences uh we wanted to do this yesterday but then uh then there's is a day when a lot of people have puja so we thought let's shift it by a day on the eve of diwali uh i really hope you uh take away something from the session today some of you might find it a little uh basic and uh we will see the idea of this club money matters is to uh sensitize everybody to so many uh issues around finance and how to improve your net wealth over time and uh we have to start somewhere so we'll start with covering some low hanging fruit so there are a lot of ways in which we can very quickly and easily repair our financial health and gradually over the next few weeks and months we'll start touching upon various topics in more detail like take mutual funds for example so do one whole session on mutual funds do one whole session on credit cards and so on so but today the idea is to cover some low hanging fruit and i didn't want to clutter this stock with 30 30 tips or 30 takeaways i really want to focus on three or four things which are super super important these these three or four things probably make up 80 to 90 of the financial advice which any good financial advisor will give you so uh so therefore uh staying light so that we do justice to the three or four things we'll talk about uh just a brief background i studied mbbs from nhl uh gujarat university uh after that went to amam the birth to do my mba spent a few years in consulting uh mostly in healthcare and then started plex assembly in 2014 and recently we started netflix so this has been the journey the the place obviously where i learned a little bit about finance was ima and then uh throughout the last 10 12 years of uh being a professional i've picked up a few more things about personal financial management so that's the that's the background uh this slide also serves as a disclaimer that i'm not there's nothing on the cv which says i'm a finance expert my mba was a general mba uh take everything we discussed is a slight pinch of salt and anyway i'm not going to give any tips so to say so i don't have to uh disclaim about that right so uh broadly two things on the agenda today i will finish my talk in about 20 minutes or max 25 minutes we'll uh we'll have time for q a i'm available so please put your questions in the comment box i will try and answer them if i can otherwise we'll keep the questions and get them answered by the best person we can find and then share them with you so uh two uh two focus areas today investments and insurance let's start with investments so we'll we'll talk about the number one superpower of investing first this is a this is a story some of you would have heard he if if you would have bought 100 shares of wipro in 1980 when the shares were 100 rupees each which means you had invested 10 000 rupees uh some some time back when many of us would probably not even have been gone but let's assume uh what would be the worth of this investment today just just put down your guesses in the comment box and run wild dr patel is somewhat close so it's not 10 lakhs it's not 50 to 60 lakhs it's not one crore it's not 120 crores uh it would have been worth 600 crores today uh so so that's uh that's that's just insane uh this represents a six crore percentage growth uh a six crore percentage growth is an absurd number you can't even make sense of it uh i can understand ten percent growth twenty percent growth two hundred percent growth two hundred percent means something tripled right uh not doubled something tripled is 200 growth uh but what is six crore percentage growth uh in similar terms it is 38 annual return over 40 years that makes more sense uh 38 so the the money that you put in 10 000 rupees just grew at 38 every year for the last 40 years and that's the that's the number one superpower of investing which is the power of compounding whenever you will go for some financial uh session or financial education it cannot start without or end without a discussion on the power of compounding some of you would have seen warren buffet's documentary on netflix and it's a very interesting story uh and there's a whole segment dedicated on this as his golden rule so if there is one rule which he would tell you it is that stay invested so the power of compounding in simpler terms i'll just go back to the previous slide so the power of compounding in simpler terms is just staying invested being in there for the long run you the 10 000 rupees did not actually grow at 38 every year some years it grew at three percent some years it declined at three percent some years it grew at 300 and then for a decade it grew at 100 year on year on year for that whole decade and then for a whole decade it went into a slum so many things affect your investments the macro the macro economic factors the company related factors multiple things the currency related factors so it's it's only in the long run that you will actually make money so the most important thing is this and here there are two things so one is the whole duration the duration meaning intraday trading versus month on month trading versus putting your money and investing it for 10 years so one is duration the second is consistency so you cannot try and be a long term investor and try and time the market it's very very difficult to time the market uh more often than not most often than not you'll actually get it wrong because again uh it's it's a very well spoken about rule that sell when everybody is buying and buy when everybody is selling but how do you do that it takes tremendous guts to actually do that i simply cannot want to sell when everybody is buying because when everybody is buying there's an upper circuit every day there's 10 20 your share is growing every day who will have the guts to sell it so it's very very difficult to time it um and most pundits will tell you there's no point of trying to time it and which is where sips come in uh which is systematic investment plans the sap is just a complicated word but it just means putting in some money every month that's it and what rashna was saying on sunday is there's also a way to do this weekly rather than monthly so instead of putting in 30 000 rupees every month towards a mutual fund or any any any asset and will come to assets a little later if you can even start doing it weekly you're even smoothening the curve more uh so so that's it i think uh i want to make one point here when we talk about the wipro story um it is sheer luck if somebody actually put 10 000 rupees in wipro that day in 1980 and that person has 600 crores today 99 out of 100 times he or she is not a brilliant investor uh 99 out of 100 times it's your luck so we should never discount the huge role that luck plays in investing in wealth creation in life in general but uh that's something i think we have to be very cognizant of the reason you need to understand and appreciate the role of luck is sometimes you do the right thing and the outcome is not right sometimes you make a good investment decision and nature or life doesn't give you the right result and there's no need to reassess it and look back at your decision and say you know this was a bad decision a good decision is always a good decision irrespective of the outcome so i think it's very very important to give yourself some leeway when you've made a good decision and the outcome is not good and at the same time just because you invested in a random script it grew 3x in three months don't start thinking of yourself as a stock market jar you will end up burning all of that 3x before you will even realize so i think it's very very important to assess the outcomes uh sometimes they are your skill uh sometimes they are not your skill in this case who would have known vipre was making oil in 1980 herroid you know there's no way that somebody could have guessed uh this will become this 10 000 rupees will become 600 crores and wipro will be a massive conglomerate at that time so it's your luck other than probably the promoter family who probably had some sense of what they want to do um so yeah so let's let's move forward to uh the power of compounding this is a very simple formula we learned this i think in about 600 uh this is the formula for compound interest when our teacher would tell you that the formula for simple interest is a is equal to p into one plus r and the rate of interest will multiply every year you will get the same rate of interest every year and compound interest is a is equal to p into 1 plus r raised to n so this is compound interest this is not a complicated formula this is something we've seen but but this is the true power of compounding that raised to n that exponential uh your interest keeps accumulating more and more interest and and before before we know it that becomes massive your principle is become a really tiny part of the whole wealth you've created so two important factors here r and n um n is under our control r sometimes not on our control uh we we'd all like to control r but a lot of times it's not in our control but most asset classes that you will do so take so she so rashna was talking about index funds on sunday now if you if you believe in the overall india story if you think that indian uh you know in india has multiple things going in its favor uh the demographic dividend as they talk about saying you know a great age group and a lot of consumption is going to start and happen here etc etc uh i think you know that overall india is going to keep growing uh over the next decade two decades three decades and everything is cyclical so maybe there will be a time when this will reverse but at least in the foreseeable couple of decades or decade india is expected to keep growing so and which is the uh index uh of india is this sensex and this is nifty so insects and nifty are not a collection of random scripts they are a collection of the scripts which so the sensex 30 uh or the nifty uh is a collection of those 30 or 100 500 scripts which actually have solid fundamentals uh you can't make it to these index indices uh uh very easily so just invest in index fund you will be guaranteed that r is not going to be negative as long as r is positive compounding will work so uh otherwise compounding will work negatively so compounding will always work uh so that's that's on the power of compounding now let's move to the next next topic of discussion which is asset allocation so let's let's talk about what are the kind of assets and asset basically means an avenue of investment so which are the uh avenues of investment available to you uh please put some uh some examples in comments and we'll take it forward from there so where can you invest your money i i'll get you started so uh shares which is the stock market uh mutual funds gold real estate bonds land land is real estate so these are uh and i'm waiting for the c word yeah there you have so uh so these are all uh asset options and uh i'll i'll talk about a very important asset which which all of us always miss uh but but before that so uh let's talk about debt and equity so any asset option uh which is relatively safe uh which is backed by a sovereign sovereign meaning a national government kind of a support is generally classified as a debt uh debt option and uh debt is also regularly interest paying it has a coupon so if if you buy bonds or if you buy a fixed deposit if you buy the national savings certificate uh these are all uh debt uh options where you'll get a certain interest rate uh the interest rate may be five percent seven percent eight percent twelve percent and so on generally debt is safe debt is very safe there is very very low chance of you losing your capital so when we say safe we always talk about losing your capital in that there is a close to zero chance of losing your capital and that's why they did not save your principal you will not end up losing your principle now uh the equity is not safe uh in the sense that it's risky uh you could actually uh lose your entire money so if i buy 10 000 rupees worth of a share which i have no knowledge of a friend told me is going to do really well in the next months and which is the commonest story you will come across there is a healthy chance that you might actually lose your equity and not the whole of it but you might lose 30 percent of it 50 of it and in the worst case scenario all of it uh even in equity the good thing is that your losses are kept at the money you put in so i put in 10 000 rupees in vipro the worst case scenario would have been i would have lost 10 000 rupees that's that's the good thing about uh the the riskiness now you enter an asset class called futures and options and uh there actually may not be a uh it may not be guaranteed how much you may lose you may actually lose more so uh it's it's and these are called derivative options so derivatives are asset classes which are derived from another asset class so a future is derived from a share price so future is the next level of equity and it's double or you know exponentially more volatility exponentially more exposure we'll not talk about futures and options today we'll have a separate session on it uh sometime but uh coming back to debt inequity so the commonest example of debt uh is fd and the second common example of a debt type of investment is ppf uh all of us in india generally have a ppf account the public provident fund and there are good things about vpn so so the good thing about ppf is it is won backed by the government so it's very safe very unlikely to lose your capital it gives you a decent rate of return it it doesn't match the kind of returns which have come from uh equity markets but it is uh eee as uh dr thawker is saying it is exempt exempt exempt it is exempt on investment it is the interest you earn out of it is exempt from tax and when you withdraw your money it is exempt now i'll just spend a minute here so a lot of places when you get interest out of it it is taxed like dividends dividends are taxable in your hands or in the company's hands or both depending on various things uh a lot of times when you take money out so you put money in a flat you buy a flat for 10 lakh rupees and you sell it for 15 lakh rupees the profit you make 5 lakh rupees if taxable in the case of ppf uh it is the the interest that you get every year is not taxed and when you take the money out it's not taxed moreover uh there is this section atc in your income tax and atc has a limit of 1.5 and all of this 1.5 lakh rupees can be invested in ppf uh which means your taxable income goes down by 1.5 lakh rupees assuming you are in the highest tax bracket this is saving off money you are saving 50 000 rupees a year purely by paying less tax legally and second on that 1.5 lakh rupees you'll make some say seven eight percent uh interest which is another twelve thousand rupees so you've actually made twelve thousand and this twelve thousand is tax free so you've actually made twelve thousand and you've saved fifty thousand rupees so ppf is a great great tool to maximize purely because of the adc deduction more than anything else advantage of ppf uh liquid you there are there are various rules around e-liquid means it's not easy to encash it there are unlike shares um so shares are very very liquid from the moment you want to start selling your real estate it will be probably a month two months three months depending on the time uh before it gets sold and ppf is very very good in the sense that there are many i was saying it's very difficult to give advice to anybody on saying x percent of your money should go into mutual funds gold real estate and so on but it's easier relatively to talk about the percentage of your allocation into debt and percentage of your allocation into equity and we're saying debt is safe but debt is lower low rate of return and equity is risky but equity is also high rate of return and a very very good thumb rule to divide your money investable money is take your age and put that age percentage into into debt so if you are 25 years old put 25 percent of your investable income into debt and the balance into equity which is 75 so uh the the logic here is that you're young and you can take more risk uh you have a very good working life even if you end up losing a bit of your wealth you can always recover it and as 2575 changes and as you become 75 year old you should probably put 75 percent of your money so it's just a basic simple thumb rule uh more than anything else i think what you need to understand is your personal risk profile if your risk evers invest in fds and ppfs and national savings certificates and so on and if you're happy to take risk then invest in any any risky asset classes um mutual funds are obviously equity uh uh mostly uh equity fund so most people invest in mutual funds uh equity mutual fund but they're also debt mutual funds so uh mutual funds are fundamentally a combination of investments so you want a manager to take this decision for you you don't want to spend too much time regularly tracking different equity options different debt options and you want a manager to take that hassle for you and you are happy to give one percent two percent uh asset management fees in return uh mutual funds are great for busy professionals so moving on um one one very important uh asset class which nobody mentioned was your own business and this happens when we talk about investments we generally think of shares mutual funds gold real estate i think the number one consideration should be your own business uh because you are in the driver's seat over there uh risk is best known to you returns are in your control and you're presumably going to be in for the long run so n is taken care of um for for people who are in salary jobs obviously this uh is not relevant but for anyone who has his own private practice or runs a hospital or nursing home or or any other business venture there are a lot of doctors who actually have side ventures uh your own business is obviously a place you want to consider uh when making an investment i just thought about uh discussing three or four concepts uh under this head this is because because everyone's business would be very different so it's very difficult to have a discussion which will make sense to everyone but these four concepts are actually concepts which are likely to be common to most businesses the first concept is of payback period or break-even analysis this comes into the picture when you are thinking about making an investment into a new center a new device a new machine sometimes even a very expensive uh higher so uh but but let's talk about this more in the concept of a machine so how do you decide whether you should buy this new whatever 64 slice 128 slice ct scan or not so a very simple analysis will at least get some clarity on this and the way you do this analysis is you take the cost of that machine and this is very simplistic there will be more complication and once but just for a conceptual framework you take the cost you take the life you project volume over that life you project pricing over that life you think about your cost uh variable cost now um i i should have actually uh put this down in a slide but let me explain this there are three four concepts which worth understanding um so the first we said uh life so let's take this example of ct scan um let's say the machine costs three crore rupees uh this is refurbished something you are getting now you're going to put three crew rupees and you guess that this will be handy to you for five years after which this machine legal either demand too much maintenance or the technology gets outdated and therefore you have to sell it for scrap um so the first thing you do is uh project your volumes in the five years and it's it's a good idea to do this on a quarterly basis or at the max on a yearly basis so let's say you assume that in my first year i am going to get uh 10 or 20 uh 20 ct scans a day 20 uh 20 scans a day which increases to 25 30 35 and there has to be some logic to this assumption the logic could be the center next door is doing x volume or average centers in my city are doing x volume or my current center is my current machine is already full capacity and i easily expect x volume whatever so so do that uh project volumes multiply it into pricing so take average pricing there will be there will be ct abdomen ct thorax ct brain there will be contrast all of that will be there so take average pricing and this is called realization so when you take average across multiple categories it's called realization average realization so take average realization average realization may not be a single price point so your price points might be three thousand seven thousand ten thousand but you take a weighted average that i am going to sell 10 scans of 3000 5 cans of 7000 and 3 scans of 10 000 so my weighted average comes at around 5200 rupees let's say so 5200 is your average realization uh 3 000 scans a year is my expected volume for year one thirty five hundred for year two and so on so go to year five now calculate how much cost you will incur in providing each scan so average realization is fifty two hundred but what's going to be the cost of each scan and here there are two kinds of costs so there are fixed costs and variable costs fixed costs are the cost of the technician uh that's a fixed cost the the space of the room where you actually put this machine or you may actually rent a new facility to put this machine that's a the rental for that is fixed cost electricity is a variable cost electricity will only incur if you will run the machine otherwise you will not incur it but technician cost will also incur if there is a lane season or if there's a peak season so fixed cost is something which does not rise in the same ratio as your revenue rises variable cost is something which rises in the same ratio that your revenue rises so when you deduct your revenue when you deduct your variable cost and uh uh so that you will have maintenance cost which is also a fixed cost so there will be lot of fixed cost there will be very few variable costs in the case of a ct but if you take some other examples so if you take for example angioplasties as an example overall then the cost of stent becomes a variable cost in the angioplasty cost so uh because for every angioplasty incur i put a stent and therefore if i charge three lakh rupees for an angioplasty then i am going to incur x cost uh for the stent so there that but in the case of uh ct scan the variable cost is actually very low it it's just the electricity cost and some contrast cost and and some change over cost etc so you can safely assume that only 5 or 10 of the 5200 rupees is going to be your variable cost so you deduct that 5 or 10 percent so you say 5200 measure remove 700 rupees on the safer side so 4500 rupees per scan is your contribution okay contribution is what you get when you remove revenue minus variable cost vc so revenue minus vc is contribution contribution is your real earning uh variable cost is not even earning so contribution is your real earning you have to calculate the entire contribution over five years and add all the fixed cost to your initial three crore investment and then you figure out at which point in at which month in in the next five year period is your contribution going uh is your uh is your three crore plus fixed cost going to be recovered so always do this uh this might sound a little difficult but if you just search for break-even analysis or just search for contribution uh or payback period uh i think you will get a very easy way of doing this uh and and just start doing this back of envelope don't try to make very complicated excels or anything it's okay to be uh it's okay to be fairly uh light on this but it's important to do this it's important to have a sense of break even analysis second is opportunity cost and uh this is one of the most missed concepts uh especially among self-employed people so opportunity cost is the cost you incur in something when you don't think about what else that something could have got you now i'll give you two examples so when you start your when you want to start your private practice and you will you will figure out the cost of clinic the interiors the receptionist cost etc etc will not think about your salary if you are working at a corporate hospital apollo 4 center for side wherever you would have made yourself three lakh rupees a month you need to consider this three lakh rupees i am not saying you need to be obsessed with it i am not saying you should not do something else because but you have to keep that in the formula somewhere you cannot ignore opportunity cost opportunity cost is most frequently missed in three cases your personal opportunity cost what could i have made if i was somewhere else is a very important question to answer second what could my the second opportunity cost you miss is the rental cost so a lot of times doctors buy clinics they don't rent clinics the the reasons for buying are many uh it starts with emotional uh it starts with insecurity saying what if i rent it and i build it out and i it starts doing really well and the landlord asked me to make it so there are many reasons and i understand the reasons why people would want to buy a lot of times you have that excess money which you want to deploy and therefore you buy but when you buy a clinic and then when you start doing break-even analysis or profitability analysis or figuring out when you start making money or start celebrating so in in 15 months you celebrate saying you know in 15 months i have now broken even and i'm profitable you should also consider what would you have made if this place had been rented out to a bank the bank would have been giving you one lakh rupees and what if you were somewhere else assume you were not on the second floor where you have actually bought it and you gave it out to a restaurant and the restaurant is giving you one lakh rupees a month in rent and you just move one floor up to the third floor now are you going to pay the same rent in a different building in a different location a kilometer down the line a lot of times the rent you can make is something which is missed out in our calculations you should always think about the rent that your place could have made if that place was put somewhere else the third opportunity cost you miss is the cost of your capital so when you put three crore rupees in that ct scan you should start thinking that you know in the worst case the three crore rupees would have made me 30 lakh rupees a year not the worst case but an average case 10 is what we all expect to make right so when you start doing your profitability analysis i think it's very important to think about opportunity cost of various kinds so always and i think the word is quite uh self-explanatory which is the cost of oper the cost of missed opportunity is the way to think about it uh moving to the third concept on some cost the easiest way to explain this is uh through a proverb which we learnt in school uh there is no point crying over spilled milk is the proverb so spilled milk is sunk cost you you opened a new center in in a very upcoming locality of your city and for various reasons the center didn't work after three years now this is spilled milk the the wise decision is to shut down the center uh but we will put good money after bad and we will stay invested here it's very very important to think about some cost some cost is in some ways the opposite of opportunity cost you have to realize that there is no way in the world that you will recover the money you've lost the only thing you can do is make some money now and and that's the hope but trying to recover money which you've lost is futile that money cannot come back you know uh so unless something has changed unless there is a reason uh you invested in an equipment you thought a certain service will work uh so you expanded from uh being say a guy next center to an ivf center and the ivf demand didn't pick up the logical thing to do is to shut it down uh after you've realized that the demand isn't there the pricing isn't there there's too much competition you're not able to attract a good embryologist whatever is the reason but hanging on too much to a bad decision is basically what compounds on cost and these are these are very uh deep deeply researched and deeply discussed concepts of economics so if you'll just search for suncoast you'll find lot of good articles and and good cases and good literature so do that and finally the buyer rent which i discussed earlier when we talked about buying a clinic uh for reasons which we understand it's it's more comfortable to buy property uh most corporate chains however uh generally do not buy property they rent and if large hospitals can get built if 300 bed hospitals can get built on rented property your clinic also can get built on rented property so it's not really necessary to worry too much about your landlord asking you to make it there are reasonable uh social and legal uh provisions and you should get into a longer lease in the first place and you should get into that understanding with the landlord that i'm going to be here for 20 years 10 years 30 years so rental is good because um a lot of times the the argument behind buying is that my capital will anyway get appreciated uh and there is safety and everything else but the argument against it uh is that a lot of times the place to do business is not the same or the best place to do business is not the same as the best place to earn appreciation on your property so if i am in ahmedabad then i can give you an ambabad example and you can relate it with your city so in ahmedabad the best place to open a hospital today uh would probably be sg road or probably be center of the city the best place to put your two crore rupees into a property will probably be the outskirts um somewhere around somewhere 10 kilometers outside of s zero where appreciation is happening very fast but you can't build a clinic there because no patients will come there so it's it's not completely non-sensible to say that i am going to take my two crore rupees and put it in a place where the money will grow faster and i might send it out on a rent and here i am taking a clinic somewhere in the center of the city and i'm paying rent for it it it's good it's it's not a wrong idea to think about it like that having said that there are many personal considerations so this is not about saying always rent but it's just saying that consider renting at least so on insurance just want to talk about one topic today there are many types of insurance uh there is health there is life there's general this car uh there's property there's so many things uh let's talk about life insurance and and specifically term insurance inside life insurance term insurance is also called pure cover the reason it is called pure cover is it only covers your life it does nothing else for you so uh a typical term insurance is a plan which will insure you for anywhere between seven to ten times of your annual income so if say for example your annual income is 20 lakh rupees uh you should go and take term insurance for two crore rupees and uh the premium for this uh ballpark will be 20 000 rupees 25 000 rupees depending on your age if you are young it will be 20 25 000 rupees as you grow older the premium will grow older the policy will cover you till 70 75 80 years and if at any point before the policy termination 70 75 80 years let's say in an unfortunate event you know you know more your family gets that entire summer sure no questions asked the only thing you need to provide to the company is the death certificate it doesn't matter how you died it doesn't matter whether it was an illness an accident uh even suicide is covered after the first year so term insurance is a very very important product which every single person should have every earning person should have term insurance because term insurance ensures your family's source of income it doesn't ensure you term insurance cannot make sure that i will not die term insurance will just make sure that if i die my family's liabilities will be covered because my family was depending on my 20 lakh rupees a year my 20 lakh rupees post tax would be 14 lakh rupees so my family was depending on this 14 lakh rupees or various things tuition school etc health care everything now suddenly you are no more where does this 20 lakh come from and this comes from the 10x cover so the the insurance company will pay you 2 crore rupees 2 crore rupees put in a good fd will give you 20 lakh rupees a year so the the person cannot be replaced but at least the income stream can be replaced now this comes at a cost this comes at a cost of twenty thousand twenty five thousand rupees it's best to get into term insurance as early as you can uh maybe at the age of 20 25 30 35 because the earlier you get into term insurance the cheaper the plans are and the good thing about uh term is uh your emi or your annual uh annual premium is the same throughout your life even at the age of 80 you will be only paying 20 000 rupees as your premium so uh the the commonest problem that people have with term insurance is what if i don't die by 70. it's it's a good thing you didn't die by 70 because you survived your entire period of livelihood you while you were uh while your family was depending on you you survived and that's a great thing you don't have to get money back from everything the problem with uh schemes which give you money back at the end of your term uh at the end of your policy period is that there are two problems uh one they cannot give you a two crore cover so let's assume that the premium is the same let's assume that premium is the same 20 000 rupees a policy which will give you money back in some form cannot give you two crore cover it will give you 10 lakh or 20 lakh rupees insurance 20 lakh rupees insurance when you die after 10 years will not be enough for your family it will be hardly 6 months of or 12 months of running money for your family it's it's not the same as 2 crore rupees and the second problem is the money you will actually get back after the policy is over at 70 or 75 is peanuts imagine getting back 10 000 rupees today from your wipro investment what would 10 000 rupees be worth to you today so that's the problem so at the age of 70 you will get back your two lakh rupees what will you do with two lakh rupees that you put in so there's a uh there's a huge uh problem with insurance and it's best summarized in this slide uh there are certain things which should never be mixed and insurance and investment are two such things both are important but do them individually do them in the best possible place the best possible way to ensure yourself is term insurance the best possible way to invest is up to you depending on your risk profile and how you assess uh things so i think i'll just summarize uh with that wealth and income are separate wealth is what we create over time if we deploy our income well uh wealth builds over time compounding is the most powerful law of finance if you know we can't do anything else if we can just get into an sip and put 10 000 rupees or 5000 rupees every week or every month we will definitely generate wealth risk should be reduced with age generally as a rule uh never forget to invest in your business get yourself a term insurance and do not mix insurance and investment i i'll end my presentation with that and uh please write to us with what topics you would like a deep dive on so we discussed many things and we didn't discuss many things whatever you want to deep dive on please write to us and we'll make sure we have a very competent person uh from that sector we have lot of associates in crypto in mutual funds in credit cards in business loans everywhere we will get the best people to present on it so with that i'll end my uh session and let me take some questions thank you so much sir for the educational presentation i am sure many of them have cleared their basics we also have a very interactive audience today there are there are some doctors who have really given some good quotes says that compounding is the eighth wonder i said by albert einstein after she is saying that bad decision is better than an indecision so it's really good that people are interacting with us and also there are a few questions i would also like to state to the audience doctors if you want to come on stage and ask any question you may please click the raise hand on the right side of the screen okay there are a few questions i can take them so there is a question on are private insurance companies honoring the claims um so dr jesus the uh irdai uh is a fairly uh uh fairly strict watchdog on the insurance sector and apart from what they would probably be doing to make sure that uh the claims are honored uh the one thing is that a lot of this data is public on irdi website so you can look at all term plan companies uh on uh iida website and you can see their claim settlement ratio um and and that will give you a very good idea about the percentage of claims that that particular plan is uh that particular company or insurer is actually honoring it's a very good question uh there is no need to assume that once you take a term plan uh you should sleep in peace um there will be uh you know a spectrum of uh ethics in every industry and insurance is no different so uh there might be companies which are habitually rejecting claims i think it's a good idea to check the claim settlement ratio or at least ask for the same settlement ratio on the website um the next question is when do you close all investments and consolidate what is the right age to do this uh i think dr ravi the right thing to do is to uh move more and more towards safer investments as you age but there cannot be a right i mean there isn't really a lakshman uh it very much depends on what doctor narayan has also mentioned the number of financially dependent people on you uh the more people are dependent on you the more important for you to safeguard your investments the lesser the dependency the more the risk riskiness uh i think i i can only answer this for myself uh it's very difficult to answer this for as a general rule uh but i think once i have set aside what i think has enough money for my my my close family and close family is not often your just your immediate family a lot of your extended family members actually will will expect you to help so i think the moment you have enough money in today's terms it might be maybe a few crore rupees because some of the costliest uh health care interventions can be really expensive uh we've all heard about this spinal uh sma drugs costing 10 crores plus uh but but if even if that's a very rare thing even normal uh renal liver transplants etc or or some of the leukemia etc the cost will run into a crore plus so i'm i'm assuming you know a few crore rupees will be necessary in today's terms to put aside but this number will only keep growing with uh with time dr vasudha would like to ask what are the investment options for medical interns i mean uh medical interns uh i'm assuming the reason you're asking this question is that the investable corpus is small if that's the reason you're asking the question because otherwise interns are no different from anyone else but probably the question is that uh where can you put in uh if you have 5 10 000 rupees uh uh or to invest after expenditure um most of the cases uh dr vasudha the investment asset is not really a function of the money you have uh i mean real estate is an example where you probably can't get into with that kind of uh ticket size but uh you could buy mutual funds you could buy shares uh you could buy i mean you've seen the crypto ads you can also buy crypto for 10 000 rupees so it's not so much a function of the money you have to invest it's more a function of your personal risk profile what you like uh and it would be really wrong for me to uh give any one answer here because uh nobody knows right nobody knows the best thing somebody asked about uh crypto also uh and i think the question was that will it keep growing um okay let me before that a recurring deposit the same as compounding yes it is so recurring deposit uh means that uh so in fixed deposit after the tenure is over the money comes out in a recurring deposit the whole money along with interest gets reinvested [Music] investment option in medical field i uh agree if you could make it little more specific because are you asking as a as a financial investor then the answer would be different yeah residents earning around 60k how much should be invested every month uh almost all of it should be invested uh you know early on uh with with minimum possible liabilities uh just just take out bare minimum for your day-to-day expenses and put all of it in some class you'll you'll be able to start your own practice sooner you'll be able to buy your house sooner um so yeah the answer is going to be as much as possible is crypto gonna grow uh nobody knows dramascan so uh i think crypto is a very very difficult asset class it's been extremely volatile it's been up and up and then it's had near-death experiences multiple times you know generally you should invest in asset classes which you understand crypto is something which very very few people actually understand and therefore uh it's it's very very risky having said that risky doesn't mean bad uh it it just means that you need to understand that there is a real chance that you might lose this money if if there can be a two percent five percent of your money which can be put in crypto it can be put in crypto uh if you must put in crypto then uh i would always suggest going for some of the older cryptos uh which have been established now for a really long time and which have a lot of uh volume rather than some of the newer cryptos which have more uh which are growing more crazily many of the newer cryptos will survive and will give crazy returns but 100 times more of them will actually not survive and will lose your money and the problem is you will not not know which are those 10 which will survive so that's the problem uh in in hunting for uh the right crypto so uh the the best is if if you can just put two five percent of your allocation into some established crypto the question however is wrong uh is it going to continuously grow nobody knows uh you when you when you do crypto you know you're speculating that's the important thing uh it may grow it may not grow uh if if there is a guaranteed answer then the whole world is putting money in there right so if you do it please do it with the understanding that it actually might uh wipe it out completely and therefore just put two percent five percent of your uh money there even in the worst case in the best case that two percent or five percent will become hundred percent uh and in the worst case you lose that two percent five percent so um yeah okay uh dr hardik uh that's i mean i i'll skip that question because it's more a business question than a financial question uh there will be a lot of uh case specific risk you'll you'll have to think about so uh for example what if you buy that equipment so his question is uh can we he's just giving an example of business uh investments in the field of healthcare the logic is that we as doctors understand healthcare well and over and above our own professional practice is there some other area where we can deploy some money and probably uh and as an example he said for example if you have the capital so you buy that ct scan and then or seriously may not be the right idea but something and you rent it out to people uh who probably don't have the capital uh it's a it's a financing business uh dr hardik and uh the problem with the financing business is uh the underwriting risk right so uh if if that particular thing loses demand or becomes obsolescent uh from a tech perspective then you're you're stranded with something you don't understand uh and you can't do anything about so i mean uh it's it's very difficult to give a i mean i there are no top of mind uh things but if you're very uh focused or keen on healthcare then investing in some healthcare stocks uh either in diagnostics or pharma uh or hospitals might be a better idea uh because it's at least a space if you will read their annual reports it'll at least make sense to you compared to a cement annual report which probably might not make too much sense to you uh diagnostics as we all know has grown really well uh over the last year or two and that growth is expected to continue in terms of the demand growth i'm saying not the share price growth the demand growth is expected to continue because the sensitization of that whole diagnostics role of diagnostics has happened in the public's mind so super i think uh will then it sits exactly eight o'clock uh on the dot so uh we'll just wish everyone a very happy diwali and call it today for now good evening sir i am yes hi you're doing a fantastic thank you so much sir very kind of you sir [Music] actually i just wanted to like let you know that i'll be happy if you can arrange for a session on income tax yes yes absolute house noted noted i think it's a very broadcast yeah definitely and i was just expecting a few questions uh in that quiz today but we have only one yes okay thank you sir that's all i wanted to say thank you okay uh yes uh that'll be it thank you so much everyone good night thank you everyone so hello today we learned along with mental health and physical health to maintain both of them require financial health so i think it was a very good session so we will just end the session thank you all very much

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dr. Rohan Desai

Dr. Rohan Desai

Founder & CEO, Medflix

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dr. Rohan Desai

Dr. Rohan Desai

Founder & CEO, Medflix

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