As physicians, we are trained to be careful, calculated and alert, especially when it comes to making high-dot decisions. After all, a mistake in the operating room or wrong diagnosis can have serious consequences. But what happens when we bring the same mindset, or worse, when we fail to implement it to invest?

Many times, we feel that we are behind when we talk about investing. Nobody taught us this in a medical school. While the rest of your friends were learning to buy homes in the real world, learn ways to invest and start building your portfolio, you were running around the hospital with a checklist in your white coat or retreated in hours-long cases. (I never want to do this again!)

Like many of you, I really started investing without understanding what I was doing. I made such mistakes, which cost me time, money and opportunities. Over the years, through my own experiences and thousands of physicians I have worked with, I have identified some of the most common investments.

The good news is that these mistakes are avoidable. And when you know what to see, you can start investing with clarity and confidence.

Here are the top five investment mistakes that doctors do, as well as what you can do to avoid them.

1. Investment without any clear or strategy

One of the biggest and most founding mistakes, the physicians are investing without understanding why they are in the first place. Many of us get into investment because we hear that this is a passive income path, or because we are tired of business time for money. But without a clear vision to look like success, we choose investments that are not align with our real goals.

For example, you can hear that having a short -term fares is a great way to generate cash flow, so you buy one. But if your ultimate goal is to spend more time with your children or stay away from clinical work, then the day-to-day management can only make another job.

A physician I know that a short-term rent was purchased and tried to self-management, only to find it more than expected. He spent hours every week to deal with booking, guest issues and turnover. You can consider hiring a professional management company to help you. Yes, the management fee is high, but the time and peace you receive and peace may be worth it.

Before jumping into any investment, ask yourself:

• What do I want what my life looks like?
• What is the purpose of building this income stream?
• How much can I comfortable with control or time commitment?

When you become clear about your “why”, it becomes very easy to say yes to the right opportunities and not for those who do not serve you.

2. Give decisions to invest tax profit

Let’s be real. No one likes to pay more taxes. As high -income professionals, we often find ourselves in search of ways to reduce our taxable income. In fact, it seems that we get a small end of the stick when we talk about taxes: high tax rates, there is very little way to give shelter to these taxes.

However, we have learned through our communities that real estate provides some great tax benefits such as depreciation, cost isolation and 1031 exchanges such as some great tax benefits. These devices are incredibly powerful when used well. But problems arise when tax savings become the main cause of a deal.

I have seen this time and time again, especially near the end of the year. Doctors run to invest to make up for some taxes. Unfortunately, they may ignore the basic principles of the deal, market quality or operator’s track record.

Tax benefits are great, but they should be cherry at the top, not you are buying cakes.

Checking a simple intestine: Do I still want to live in this investment if no tax profit is included? If there is no answer, it probably does not fit the right.

3. Failed to diversify or understand risk

Another common mistake I am seeing is overgrowth. Doctors often get an asset class that they like, whether it is real estate, stock, crypto, or even a friend’s startup, and all go into. At the top of it, we ignore the real level of risk in the investment we are sometimes investing.

For example, syndications are popular in our community, but not everyone understands that these are immoral investment. You are relying on someone else to manage your money for many years, and if your situation changes then you cannot pull it out. This is not naturally bad, it means that you need to balance it with more liquid assets elsewhere.

Diversification is not only about the owner of a mixture of stock and real estate. This also means that spread your investment in various markets, timeframes, operators and risk profiles.

ask yourself:

• What will happen if it does not go according to a deal plan?
• Do I have other assets that can provide stability or liquidity?
• Am I investing on the basis of enthusiasm or based on a clear plan?

Understanding your risk tolerance and balanced your portfolio can protect you from unnecessary instability.

4. Operators or sponsors not well

In private investments such as real estate syndication, funds or private equity, the people behind the deal are equally important if not more than the number. Nevertheless, I have seen that many doctors invest large on operators based on pitch decks or a webinar without appropriate hard work.

There is truth here. A great operator can manage challenges, pives when needed, and clearly communicate with investors. On the other hand, a poor operator can immerse a deal even in a strong market.

Before handing over your capital, take time to ask:

• What is their track record, and do they have experience in this asset class?
• How did they handle the fall of their worst deal or market?
• Are they transparent with updates, reporting and communication?
• Who else do you know that she has already invested with them?

You have been entering a relationship with this team for many years. The estimated return on a slide deck is more trust, capacity and alignment case.

5. Analysis paralysis and inaction

This final mistake can be the most common in all: analysis paralysis. As physicians, we are trained to collect data, avoid uncertainty, and make sure before working. In medicine, it is often necessary. In investment, it can be paralyzed.

I have talked to many doctors who have spent years in reading books, listening to podcasts and doing research on markets, yet have not made their first investment. They want more information, more assurance, or correct deal. Meanwhile, they are missing on time in the market, compound development and valuable education.

Completeness is the enemy of progress. There is no idea like an ideal investment. And most of your education will come.

So what can you do?

• start small. Your first investment does not need to be home runs.
• Set a goal to invest by setting a time limit will force you to learn and reach that location of confidence.

Surround yourself with a reliable community or mentor that can help you take the next step with confidence.

final thoughts

Investment does not need to be heavy. But anything is worth doing, it requires intention, self-awareness and desire to learn. The truth is that, most mistakes doctors make when investment comes from lack of clarity, not lack of intelligence.

If you are one of these mistakes, you are not alone. The good news is, you can do the syllabus. And if you are starting now, now you have a roadmap what to avoid.

To make it even easier, I created a free resource for you:

Doctor’s investment mistake checklist: to avoid 7 expensive errors

This free guide makes you through the five mistakes included in this post, as well as two bonus mistakes that miss most doctors – and how to correct them. It is quick to read, the action is packed with qualified tips, and will now help you assess your investment habits.

Click here to download the checklist

Your best life does not have to wait until retirement. You can start making it now, a smart decision at a time.
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Click here to download “Physician Investment Mistake Checklist: 7 expensive errors to avoid 7,

Peter Kim is the founder of MD Inactive I MDCreator of Passive real estate academyAnd its Monday provides weekly education through Podcast, The Passive Income MD Podcast. But join our community Inactive income doctor Facebook group,

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