“Typical Money Mistakes by Young Doctors” was a podcast by Perth based financial planner and principal of affluenceprivate.com.au Yves Schoof, who works with surgeons and medical specialists. The podcast has been transcribed below. You can listen to the podcast here.

“Today we will open a can of worms. We will talk about young doctors because there are typical money related mistakes that young doctors make. Which one, Yves, is at the top of your list?

Yves: Well it won’t really surprise you, Kris, but you know the one at the top is obviously spending too much on your own home, at a time when you’ve got other debts like a car loan perhaps and student loans. And the second mistake would be to not plan for the future, not realising that you are starting really with a big disadvantage compared to your peers.

Kris: You mean a disadvantage compared to peers who are not doctors?

Yves: Correct, because people the same age as yourself might have been working and earning a decent income for a few years, which means they have been building superannuation and paying off their mortgage.

Kris: I always think that young doctors can’t really change that can they?

Yves: No you can’t obviously, so what you need to be aware of is the time factor that is required in building wealth, which is what we call compounding. So when you start your career later, you start working and building your super later, and you may need to put some extra money away when you’re younger just to make up for the lost time.

Kris: So not being aware of the ticking clock is one of the mistakes young doctors make. Is there anything else you have identified in your work with doctors, particularly young doctors?

Yves: It would tie in with buying expensive homes and I often refer to it as lifestyle creep.

Kris: Lifestyle creep. It almost sounds like a bit of medical term, like a disease.

Yves: Yeah, lifestyle creep can cause problems. It’s when everything you do has one thing in common, it’s all expensive. You start buying more expensive cars, you book your holidays in more expensive resorts, you spend more on your hobbies and your passions, you just end up spending more on almost everything you do.

Kris: They are just living the dream actually.

Yves: Well yes, but the dream can turn into a nightmare. I can tell you the other day for example I met a young doctor and he told me that as soon as he got into the specialty of his choice he was planning on rewarding himself with a luxury car, and when you do that at the start of your career with that sort of money behavior, I can guarantee that you will struggle financially for the rest of your life, regardless of how much you earn.

Kris: Not sure about you as a listener, but I heard a serious warning there. Yves is there anything else you’d like to warn young doctors for?

Yves: Yes it would be the failure to organise your personal insurance and your estate planning which is something that I see very often as well. This is really about protecting your loved ones and your young family.

Kris: So Yves if I get you correctly it all boils down to spending your money wisely as a young doctor right?

Yves: Yeah it absolutely does. But that’s exactly the kind of overused advice that young doctors probably don’t want to hear. So the way I prefer to call it is just creating clarity and control over their finances so you still live a good life, but you also think about the long-term goals at the same time.

Kris: All clear now. Thank you Yves talk to you in our next episode, and just a reminder there’s plenty of video and audio content as well as other great blog articles on the affluence website. affluenceprivate.com.au.”

Yves Schoof is an award-winning financial adviser. He specialises in working with Surgeons and Medical Specialists. You can download his free book for doctors at www.affluenceprivate.com.au/free. Yves and Affluence Private Wealth are Authorised Representatives of Synchron, AFS License No. 243313.

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