Financial planning for private practice professionals begins with running a practice efficiently to generate the maximum income for investment in future prosperity, says P. Christopher Music, author of What Every Private Practice Physical Therapist Needs to Know About His or Her Financial Future. However running a private practice properly and making income is only one step toward financial security. It is what private practice professionals do with the income that determines sound financial planning.
According to recent studies in the news, 87 percent of working professionals make a respectable income and then fail to manage it properly after the income is earned. The main problem is what they do with the money after it enters their household. According to P. Christopher Music, many private practice professionals fail to set up rules for how the money is going to be spent after it reaches the household. This is a crucial part of continuing the efforts that physical therapists put into learning how to run a business that will produce respectable income.
Music says if you are going to take the time to learn how to run a private practice efficiently then you should follow through by running your household like a business. If you do not have a plan for household finances the money will most certainly be spent which is as predictable as the sun coming up. People spend all of the money they make when there is no plan for regulating income allocation. This is why Music believes physical therapists should treat their household like a business.
Music says a household is a business because it has income, expenses, assets, liabilities, and it has a tax ID number called a social security number. A household is a business as well as the practice that a physical therapist owns. All of the investments owned by a private practice professional are all held by the household and flow into the household which is similar to how corporations work. Therefore it is necessary to have policies and procedures in place for handling finances just as they would be handled for a private practice. The household policy is an agreement on how you are going to handle things and the procedure is the plan laid out to achieve the objectives, according to Mr. Music. Simple but effective.
About P. Christopher Music:
After 18-plus years of being a financial planner, P. Christopher Music decided there had to be a better way. Witnessing financial debacles of big industry and government-driven economies caused Christopher to take action, developing an instrument that measures the success of any financial plan. The Financial Prosperity IndexTM (FPI) is the back bone of Music’s firm, Wealth Advisory Associates (WAA). WAA is a financial planning firm focused on helping private-practice physical therapists understand and implement the most effective strategies to achieving financial success and security. Visit www.wealthadvisoryassociates.com
