Physicians spend years completing studies and residency to become doctors. Then, they spend much more time growing a successful practice. Many physicians neglect to manage their finances because of their busy schedules. Building a solid investment portfolio takes a concerted effort, and many physicians do not have the time to devote to these measures. Just like any other professional, you must plan for your future with retirement planning. Learning the essential steps to build a portfolio can help you make wise financial decisions. 

Realize Your Financial Goals

You should identify your financial goals before building your investment portfolio and seeking services from 25 Financial. Ask yourself these questions:

• What would you like your investments to achieve? 
• What are your goals for wealth preservation?
• How do you plan to spend your retirement?
• How will you fund significant life events like buying a home or investing in your child's college fund?

Most people seeking investment portfolio services want to plan for retirement, preserve their wealth, accumulate wealth, or manage their debt. Understanding their goals will help them pursue the right investment portfolio services, including diversification. 

Determine Your Risk Comfort

As a physician, you likely face unique financial stressors, including high student loan debt. Physicians also are often late in gathering wealth because of the extended transition from beginning their education to gaining a successful practice. Late wealth accumulation can lead to increased struggles in preparing for retirement. 

Your risk comfort can significantly impact your financial decisions. Are you a conservative, moderate, or aggressive investor? Conservative investors prefer to keep things simple and take few risks. Moderate investors are willing to take some investment risks but do not want to go too far. Aggressive investors are comfortable with higher risks and will invest in a variety of stocks, bonds, and real estate. 

Portfolio Diversification

Diversifying your portfolio is an essential step in helping it grow. Spreading your investments across multiple avenues means you will not lose it all in one catastrophic event. Most physicians try to invest in various portfolio investments, including stocks, bonds, real estate, and mutual funds. Those with higher risk tolerances also invest in alternative investments like hedge funds and commodities. 

Focus on Tax-Efficiency Investments

If you are in a higher tax bracket, making the correct investment decisions becomes crucial. There are strategies you can use to reduce your tax burden and increase your returns, including the following:

Tax-Deferred Accounts

Tax-deferred accounts like IRAs, 401(k)s, and HSAs allow you to invest tax-free or tax-deferred, depending on the account type. These accounts are an excellent way to invest without paying so much in taxes. 

Tax-Efficient Funds

ETFs are tax-efficient funds with lower turnover rates that can help you decrease your capital gains taxes. Capital gains taxes are the taxes you pay on profits from the sale of stocks or bonds. 

Municipal Bonds

Income from municipal bonds is usually exempt from federal taxes. In some cases, you can also avoid state taxes. These are attractive investments for high-net-worth individuals like physicians in high tax brackets. 

Harvest Tax Losses

You can sell your underperforming investments to offset capital gains on more profitable ones. This strategy, called tax-loss harvesting, can help reduce your taxable income. 

Consider Professional Help

Consider getting professional financial services to implement all these ideas. These professionals can help you adopt a profitable investment strategy to build your portfolio and protect your wealth.