This content is part of a paid partnership with Capital Partners.
Did medical school ever teach you how to build wealth? Probably not.
By David Rossbach
You spent years learning anatomy, histology and biology to become skilled clinicians, but most likely never received a single lesson on how to invest, save, or escape a pay check to pay check cycle. Medical school taught you to diagnose diseases, not compound interest.
This education gap leaves many doctors playing catch-up with wealth creation and establishing financial security, despite their earning potential.
Money isn’t just numbers. It’s personal. Your financial choices, especially about saving and investing, are shaped by your emotions and experiences. Understanding these influences helps us make better decisions and avoid mistakes. For doctors, after years of study and hard work, a secure financial future should be inevitable, but that’s not always how it turns out.
Your financial DNA
We all have a unique relationship with money. It starts with where and when you were born. Someone who grew up during a stock market boom might see investing as an opportunity. Those who lived through economic hardship might view it as risky. These early experiences shape our attitudes towards saving, spending and investing.
We also inherit money attitudes from our families. If your parents were cautious, you might be too. If they took risks, you could see that as normal. These patterns often feel logical, even if they’re not always rational.
Behaviour matters
Financial success isn’t just about knowledge. It’s about behaviour. You could know everything about money and still make poor choices if emotions take over. Fear, greed and overconfidence often lead people astray.
Common investor biases
Overconfidence
Doctors, while experts in their field, can have the tendency to overestimate their expertise in financial markets. This leads to excessive trading, underestimating risk and poor outcomes. This shows up particularly when investing in med or biotech stocks, where doctors tend to go ‘all-in’ on one company or idea in the hope of big returns.
To counter this, invest based on your specific goals and objectives. Review your investment performance regularly and compare it to benchmarks. Diversify your portfolio to spread risk. And if you don’t have the time or inclination to do any of this, then seek guidance from financial professionals.
Loss aversion
We hate losing money more than we enjoy gaining it. In fact, studies show that losses are felt roughly twice as intensely as gains of the same magnitude. This can make us cling to bad investments for far too long or be overly conservative. Doctors used to high-stakes environments might avoid all risks. But this can mean missing out on potential gains. Balance is key.
To mitigate this, focus on your portfolio’s overall performance. Measure performance against your goals, not just the highest return. Consider the opportunity cost of holding onto underperforming investments.
Herd mentality
Humans tend to follow the crowd. If everyone’s investing (or selling) a particular stock, it creates a sense of urgency. For example, the recent launch of DeepSeek’s R1 AI model in January 2025 led to a significant shift in market sentiment, causing a mass short selling of Nvidia stock, and a drop by 17% in one day, the equivalent of $590 billion dollars! So, following the crowd isn’t always wise. Independent, informed decisions are crucial.
Develop a well-thought-out investment plan based on your goals and risk tolerance. Stick to it. Avoid decisions based on market hype.
Recency bias
We often give more weight to recent events when making investment decisions. This leads to short-term thinking. If the stock market’s been doing well, you might assume it’ll continue and invest more aggressively. If it’s been underperforming, you might delay or sell. This ‘buy high – sell low’ strategy diminishes wealth.
Take a long-term view of your investments. Base decisions on comprehensive analysis and historical data, not short-term trends.
Familiarity bias
This is the tendency to invest in what you know, like property. Doctors might prefer investing in healthcare companies, potentially missing out on other profitable sectors.
Educate yourself about different asset classes and industries. Diversify your investments across sectors and geographies.
What this means for you
As a doctor, your expertise is in medicine, but understanding and mitigating investor biases is essential for achieving your financial goals. Recognise these biases and implement strategies to counteract them. This will help you make more rational, informed investment decisions. Seek advice from financial professionals and maintain a diversified portfolio.
True wealth vs being rich
There’s a difference between being rich and being wealthy. Being rich is about having money now — high income, flashy possessions, visible success. Wealth is quieter. It’s about having options, freedom, and security.
True wealth allows you to live life on your terms. You can choose how you spend your time and who you spend it with. This is often more valuable than any material possession.
If you have questions about wealth and investing, get in touch at drossbach@capital-partners.com.au
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