The chance of loss for private practice professionals is a liability that most have little knowledge of and therefore little structure for managing risk, says P. Christopher Music. In his publication, What Every Private Practice Physical Therapist Needs to Know About His or Her Financial Future, he says that the structure for risk management begins with the parent company which is the household. The household is supported by profit centers which include the private practice, real estate, investments, and other assets. These are all of the components that create risk for private practice physical therapists and the chance of loss.
Music says private practice professionals must learn how to deal with managing risk which comes in many different forms. Some of the risks for a private practice professional can include stock market risk. A professional might say, “Hey, I invested my money and it depreciated in value.” This is a risk. Another type of risk would be litigation against the private practice. There are life risks such as early death, loss of a business partner, or becoming incapacitated. Unexpected inflation is a risk. A private practice may have a risk of not being viable. Physical therapists may hire an employee that turns out to be an expensive proposition in the future. There is also government regulation risk and the risk of increased taxation and so on and so on.
When dealing with the management of risk a private practice professional is actually dealing with their personal economics. Music further reiterates that private practice professionals must learn how to structure risk management both in their business and in their finances. They must plan for financial loss as well as other losses associated with their practice.
When a private practice physical therapists invest money with a financial advisor they diversify the risks with the pot of money that is invested. Music says that private practice owners must also structure risk management to include every asset in the entire household including the practice. Only then will physical therapists have a sound base for financial planning when they include risk management into the scope of the plan.
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. With rampant misinformation and immorality on the subject of money in today’s world, Mr. Music’s system has been described as “easy to understand,” allowing a professional to do what he does best – his profession. Visit www.wealthadvisoryassociates.com
