I have found this book invaluable as a starting point in my understanding of taxes and financial planning from a medical perspective. It was one of the first books I read specifically targeted at Australian doctors and I still find it very relevant today.

 

It’s written by Melbourne accountant Terry McMaster who initially ran a GP focussed accounting and financial planning business before achieving fame by fainting during the Royal Commission hearing into his Dover Financial Planning business. It’s available free from his website below. The copy I’m reviewing is dated Feb 2014. I have no relationship with the business and receive no benefits from my review.

 

The overall message can be condensed into four simple rules, which the author reiterates throughout

  • Keep it simple
  • Never trust anyone with your money
  • Never give up control
  • Never invest in anything that pays anyone a commission

I loved these rules when I first read the book, and I still feel their clear and simple message should be a cornerstone of any financial strategy. This is especially the case if one is seeking professional financial or insurance advice, as too many professionals view junior doctors as marks, sheep, or fools who can be easily parted from their money.

 

The first rule of “Keep it simple” pairs very nicely with another of my favourite rules from Warren Buffett, that you should “never invest in a business you cannot understand”. The book expands this rule from not only investing, but to all financial products. In the later parts of the book it discusses the benefits of life insurance through super and commission-free income protection insurance, which I agree are an important additional safety net.

 

The book has a large focus on buying a house as a primary wealth creation strategy. The combination of negative-gearing to reduce income tax and forced savings to pay off the loan leads is presented as a simple and foolproof strategy to grow wealth. I think investment property should be part of a balanced portfolio, but I disagree with the book’s portrayal of property investing as risk-free. Home ownership is a different game, and should be viewed as an expense that makes you happy.  One of the examples given shows a 20% increase in property prices, and of course any investment will look good if it goes up 20%.

 

Have a read and tell us what you think. I’m enabling comments for this post.

 

Financial Planning for General Practice Registrars

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