Running a medical practice in Canada requires more than clinical precision. It demands financial resilience.
One of the most overlooked — yet essential — tools for physicians is a properly structured emergency fund. This isn’t excess cash. It’s operational protection.
Unexpected staffing gaps, delayed provincial billings, rent increases, or equipment failures can quickly strain cash flow. Without liquidity, small disruptions become expensive problems.
How Much Should You Set Aside
A disciplined benchmark:
Three to six months of core operating expenses.
This includes:
- Lease or mortgage payments
- Staff payroll
- Insurance
- Utilities
- Equipment leases and recurring contracts
If your clinic carries higher fixed costs, lean toward six months or more.
Example:
If monthly overhead is $20,000, your reserve should range between $60,000 and $120,000.
Also assess your personal situation — dependents, dual income, and separate savings all influence how much cushion is appropriate.
Where Should It Be Held
Your emergency fund should be:
- Accessible
- Separate from your operating account
- Protected from market risk
Appropriate options include:
- A high-interest business savings account
- A short-term GIC with flexible access
This capital is for liquidity — not growth. Avoid equities or long-term investments.
Start Strategically
If the target feels substantial, automate contributions monthly. Even $1,000 per month builds $12,000 annually. Discipline creates stability.
Why It Matters
An emergency reserve is not optional for medical professionals. It safeguards:
- Practice continuity
- Financial confidence
- Patient care stability
With proper structuring, you can build liquidity without compromising long-term wealth growth.
Ready to Strengthen Your Financial Foundation
Imperial Lifestyle Management works exclusively with medical professionals to design tax-efficient, resilient financial strategies.
If your practice lacks a structured emergency reserve — or you’re unsure if it’s adequate — let’s build it properly.
Secure your liquidity. Protect your practice. Focus on medicine. Contact a financial advisor today.
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