By Abdul Ahmed MUGISS
Frustrated about finding inspiration for my investment article, I put my work aside. A few days later, a friend shared a story that gave me the breakthrough I needed. He had boarded an “Okada” – the popular motorcycle taxi – only to realize that the driver was also a well-known kebab seller in the neighborhood.
Surprised, my friend complimented the driver on his side hustle, to which the driver replied, “I wasn’t born to do just one thing.” This statement resonated deeply with me, as it highlighted a key financial principle: the importance of diversifying income streams, especially in Ghana’s ever-changing economy. This lesson is particularly relevant to medical practitioners, who often rely heavily on a single source of income – their medical practice.
Take our fictional Dr. Akua Mensah, for example, a renowned surgeon in Kumasi. After dedicating over 30 years to saving lives, she enjoyed a comfortable lifestyle supported by her medical career and modest savings. But as retirement neared, she realized the majority of her wealth was tied solely to her practice. Without diverse investments, her financial future felt uncertain and exposed to economic instability.
So, I ask you: Are you relying solely on your medical practice for financial security? What would happen if that primary income source suddenly disappeared? How prepared are you for the unexpected? The story of the kebab-seller turned Okada driver reminds us all of the importance of building multiple streams of income to secure long-term financial stability.
Medical practitioners in Ghana face unique challenges that can make investment difficult. The demanding workload and high stress levels of the healthcare system often leave little time for personal financial planning. Moreover, medical training typically focuses on clinical skills, leaving many practitioners without the financial literacy needed to make informed investment decisions.
In a volatile economy marked by inflation and currency fluctuations, the need for a diversified investment strategy is more critical than ever. For many, the high cost of living in urban areas consumes much of their income, leaving little room for savings or investments.
It’s time to rethink the future and start exploring ways to diversify financial portfolios – so that no matter what challenges arise, financial security remains within reach. This article explores some investment strategies people in the medical field can take advantage as they prepare for a financially stable future.
Investing strategies
Protecting Wealth from Death, Disability, and Divorce (Plan and Protect)
Protecting your assets from unexpected events like death, disability, and divorce is crucial for long-term financial security, especially for professionals in Ghana. Here are some key considerations:
Life Insurance: Life insurance is essential to safeguard your loved ones in case of your untimely death. Opt for a comprehensive life insurance policy that ensures your income is replaced, debts are settled, and future expenses, such as education for your children, are covered.
Disability Insurance: Disability insurance protects your income if you become unable to work due to injury or illness. For professionals like doctors or business owners in Ghana, this is particularly important. Look for a policy that covers your specific profession, has a strong definition of disability, and offers substantial benefits.
Prenuptial and Postnuptial Agreements: If you are married or planning to marry, consider a prenuptial or postnuptial agreement to define the division of assets and liabilities in case of divorce or separation. While these agreements may not seem romantic, they can protect your resources and ensure a fair distribution of assets. In Ghana, consult with a legal professional to draft these agreements according to local laws.
Estate Planning: Estate planning ensures your assets are distributed according to your wishes. Create a comprehensive estate plan including a will, healthcare directives, power of attorney, and potentially trusts. Regularly review and update your estate plan to reflect changes in your circumstances.
Building Passive Income Streams and Deliberate savings (Save and invest).
Another way is to create passive income streams. This can significantly enhance your wealth and provide financial freedom. Here are some effective strategies:
Real Estate Rental Properties: Investing in rental properties can offer a steady income. Purchase residential or commercial properties in Ghana’s growing cities, like Accra or Kumasi, and rent them out to generate monthly income. An example is buying a residential property in Accra’s bustling neighborhoods, such as East Legon or Labone, and lease it to tenants.
The rental income can help cover your mortgage payments while the property appreciates in value. Alternatively buy properties at developing areas like Oyarifa, Aburi, Santor, Oyibi, Damfa, Kpone Katamanso, East Legon Hills, Pokuase, Ablekuma and Dawhenya and this will appreciate within a short time due to the population growth and pace of development in these areas these achievable through financing assistance such as vacant land finance, home purchase, equity release, developer construction and home improvement solutions.
Dividend-Paying Stocks: Invest in stocks of companies listed on the Ghana Stock Exchange (GSE) that pay regular dividends. Dividends provide a passive income stream through cash payments to shareholders. Research companies like MTN Ghana or FanMilk, for example, that have a history of paying dividends. Invest in their stocks to receive regular dividend payments.
Create and Sell Digital Products: Develop digital products such as e-books, online courses, or software, and sell them online. Once created, these products can generate passive income through sales. Writing an e-book about your profession and sell it on platforms like Amazon Kindle and earn royalties from each sale is an example.
It is important to be very intentional about savings and investments for little drops of water makes a mighty ocean. Medical Doctors do overtime work popularly known as Locum, where doctors temporarily fill the gap of their Doctor Rosters, either at other Hospitals or Group Practice to earn extra income. These extra income can shore up your savings through special investment accounts. Again, make time to educate yourself to be financially fit and explore avenues for the creation of wealth.
Entrepreneurship and Business Ventures
Entrepreneurship offers substantial opportunities for wealth creation. One can do this by first identifying a profitable niche through conducting market research to find gaps or opportunities in Ghana’s market.
Focus on niches where you can offer unique products or services. After the gap has been identified, you develop a solid business plan: A well-crafted business plan serves as a roadmap for success. Outline your objectives, target market, competitive advantages, marketing strategies, and financial projections. The next step is to seek funding. Depending on your business’s scale, you may need external funding. Explore options like bank loans such as medical, venture capital, angel investors, or crowdfunding.
When you have secured the necessary funding, you build a strong team by assembling persons whose skills complements yours and share your vision. Delegate tasks and empower your team to drive business growth.
The last step is to continuously innovate and adapt: The business environment is ever-changing. Stay ahead by embracing innovation, adapting to market conditions, and improving your products or services. Access to group practice financing facilities allows you to realize the dream of investing in your private Hospital, growing and managing your finances effectively.
Diversifying your income streams is essential for financial security and long-term wealth creation, particularly in Ghana’s challenging economic environment. To protect your assets, consider insurance options; to build passive income and be intentional about savings, invest in real estate and dividend stocks, explore new opportunities, look into entrepreneurship.
By adopting these strategies, you can safeguard against uncertainties and improve your financial stability, ensuring a more secure and prosperous future beyond your primary profession.
The writer is the Manager Business Development, Affluent Clients, Stanbic Bank Ghana
