The Best Financial Investments for Medical Residents
Apr 23, 2021
Published by Kathrin O'Neill
Being employed as a medical resident does not mean you can spend your money endlessly as if you have an unlimited source of cash. You must also think of your future and invest in the right things to make sure you will live a comfortable lifestyle for the rest of your life. Here are a few things you must consider investing in.
Nothing is more stressful than being obliged to pay your student loan upon employment. Once you receive your first paycheck, this is your first priority aside from the payment of your bills, rent, and grocery expenses. Get rid of your student loan as soon as possible so that you can move on to build a financially secured life.
Healthcare is something that is inevitable and an industry that is continuously increasing. You know that more than anyone. This is why healthcare stocks are a good investment. This could either be pharmaceutical stocks, biotech stocks, drug stocks, medical device stocks, payer stocks, or healthcare provider stocks.
Pharmaceutical stock is a giant industry and could provide many opportunities although there might be some risks involved but is generally favored by long term investors. Meanwhile, biotech stocks are like investing in new scientific advances in treating and preventing diseases. Health insurance stocks have the potential to bring in excellent long-term returns as it is a business that works in strong economies and also during recessions. Drug stocks are all about the advancements in developing drugs for treating diseases.
Medical device stocks involve companies that make devices that are used in the care of patients. This industry is also broad as it produces devices that include thermometers, disposable gloves, robotic surgical tools and systems, and artificial heart valves.
Payer stocks involve health insurance stocks and pharmacy benefits managers. The difference between the two is that insurance companies charge premiums on employers and individuals for healthcare costs while the former is in-charge of prescription drug benefits for employers and health plans that are very important in the healthcare system as payers. These two payers play very important roles in the healthcare system thus it could be a good investment option.
Healthcare provider stocks involve you as a healthcare provider together with the hospital, home health companies, and long-term care facilities so, it can be said that you take part in its success and profitability. Since everybody needs healthcare at any point in their life then there is a big opportunity for investors.
Though looking at the company’s history does not always predict its future, it is most likely that if it did not perform well in its past, it probably will not in the future. You can acquire this information by looking at the company’s investor presentations on their website. Check out how big their potential market is, how effective their strategies are, and how well their competitors do. You can also find them in the Securities and Exchange Commission (SEC).
SEC also provides financial statements of companies that can help you determine the financial strength of the company you are prospecting. Determine if the company is profiting and if not, how fast it could be profitable and how. Also, check the company’s free flow cash (FCF). This is a gauge of how much cash is left after all expenses are paid. A high cash position of the company means a solid or stable financial situation.
The most common way of seeing how much you will earn for every dollar that you invest is the price-to-earnings (P/E) ratio. It is also important to look over the projected earning growth rates by knowing its price-to-earnings-to-growth (PEG) ratio.
Dividends can increase the return from your investments so check out companies that provide this additional bonus.
Any investment is coupled with risks. The same is through with healthcare stocks that are greatly influenced by factors such as government policies. This is why you should always stay updated on current trends.
As a whole, healthcare stocks are great long-term investments because healthcare is an industry that covers all types of people in all agents so it cannot be eliminated from our society.
A good quality watch and real jewelry are not only important accessories but can be a good investment. You can also resell it if you need an emergency source of cash. To determine what kind of watch or jewelry to buy, research online on what models of watches or kind of jewelry that have value in the future. However, when buying, it is best that you go to the physical store so that you can take a better look at the items.
Investing early while being a medical resident is the key to financial freedom. This is a way of making sure that your hard-earned money will be put to good use. It allows you to generate additional income that may ensure your present and future financial security.
