LANDMINE #1: Contrast Kills:
Certain groups or even whole professions can limit themselves by drawing comparisons to the people around them or by modest benchmarks found throughout the global community as a whole.
By contrast to professional benchmarks, I was doing extremely well in my first practice as it was doing over a million each year. In comparison to my peers, I was at the top.
Thankfully I wasn’t fortunate enough to be surrounded by a handful of very wealthy muti-millionaires and even a billionaire and chose to compare myself to them. In contrast to these people, I was at the bottom of the economic ladder. This pushed me to grow, learn, and develop new skills rather than think I was so great or had really arrived.
LANDMINE #2: The “Surround yourself with great people cliché’.
I don’t just go to meetings with those more skilled and advanced in key areas than I am, but partner with them in business as well.
LANDMINE #3. Playing the revenue game over the asset game:
There is a BIG misunderstanding between the revenue game and what is required to generate financial security and wealth. Rather than go into a long explanation, Here is a quick snapshot with rough numbers:
PERSON A: Collects a salary of $100K/year. They’ll likely fall into the 25% tax bracket or take home $75K/year. Simply put, they clear $750,000 after 10 years.
PERSON B: Doesn’t focus on a salary. Instead, they open up 3 businesses and leverage the bank to own the building each of these businesses reside in. Conservatively, we’ll say the real estate is worth 1 million. In 10 years, it’s safe to say those businesses would be worth $300,000 each and the real estate would have appreciated to 1.4 million.
At that 10-year point, if you sell it all off, you’d net $900,000 on the businesses and $400,000 on the real estate. Long term capital gains tax is 10-15% (Instead of 25% on your salary). That’s approximately 1,144,000 in 10 years, without taking any salary, or a difference of about $400,000 from salary only.
Note: the person taking the salary would have appeared much more well off during that 10 year period, but actually falling behind $40,000/year+.
For doctors, a 4th landmine is that for all of the right reasons, you’re busy being a doctor and as a result, not giving enough attention to managing finances. The vast majority of doctors of all kinds wake up a decade or decades into practice and sadly realize that this lack of economic oversight has cost them millions and the chance to relax and have more choices for retirement.
Practice is no fun when you have to do it for money. It steals your time with your family and leaves you without the freedom to do, buy, or go wherever you want. No one went to school and spent that kind of money—on loan—only to lose their freedom. You deliver the most valuable health care service in the world and deserve to feel satisfied, secure, and financially well off because of it. But you have to learn the rules and avoid stepping on the landmines!
