That is the advice more than one mentor gave me as I graduated. The key leader of the group in those days and my college president was the iconic, chiropractic patriarch Dr. Sid Williams who said, “Be debt-free, with one million dollars in the bank, 8 years after graduation.”
This was the “Golden goal.” I’m goal-oriented and like to stay ahead of the curve, so I did it in 6 years. Like all breakthrough levels of growth, I certainly didn’t do it on my own. I went to any proven, leading-edge practice growth or financial training I could find, went back and got an additional college education in business, trained under historically successful doctors, and surrounded myself with people that were millionaires, 100 millionaires, and even a couple of billionaires.
That was more than 25 years ago and haven’t stopped learning or generating that next partnership with key leaders. Unfortunately, most doctors do not go through enough of the right business and financial training and have to worry about finances throughout their entire career rather than be able to put money behind them in the 8 or 6 years – or even sooner.
WHERE TO BEGIN?
While more complex than this newsletter, there’s some simple math that doctors (AND EVERYONE) miss:
If your overhead is 40%, then you only keep 60% of what you make. On the other hand, you keep 100% of every dollar you don’t spend in overhead.
The right and easiest way to become a (true) millionaire is to increase investable income by managing consumption. As an example, my friends and I use a special service to buy our family’s cars through an auction. A good friend, with millions in the bank, bought a car this weekend for under $20,000.
Why, if he’s so rich, did he only buy an inexpensive car? Because cars are a huge waste of money and the opposite of a smart investment. Rather, he’s going to use that other $10-50,000 others spend on cars – often with a loan that loses them even more money – and turn what he didn’t spend into literally 100s of 1000s of more dollars over the next few years. How? The same way he and I made became multi-millionaires in the first place, by investing 100% of what he didn’t spend in overhead.
When money you didn’t spend goes in accounts where they can earn compound interest, the returns are shocking.
In 40 years, a waiter, waitress, cashier, or landscaper can become a true millionaire. Yet, just a handful of doctors become what I’d call true millionaires.
WHAT IS A “TRUE MILLIONAIRE”
A true millionaire has little to no debt that isn’t providing a multiple return, has earnings from their investment returns well in excess of their personal overhead, and has a million or more in stable and growing investments that can sustain market fluctuations.
If you have a million dollars with house, car, and other debt, high overhead, and investments that don’t provide enough to pay your bills – then you’re not really a millionaire. There’s money on paper, but no security, stable future, and truly less than a million in real net-worth.
A monthly investment of $381/month turns into 1 million dollars in 40 years at a 7% interest rate compounding. With the right portfolio that can also include some simple real estate that anyone could get into, 7% is not hard to establish and maintain.
- Note: real estate is a complex industry and many doctors jump in and lose money. I’ve seen far more doctors lose money or even go completely bankrupt than make money. Get the right help before you invest. Doctors of all kinds are world-famous for losing money in real estate – or at best getting distracted by something that provided little return based on the sub-par deals they’ve chosen in the end.
NEXT STEPS
Again, there’s complexity – practice growth, increasing capacity, the right investment practices, and other layers. A good step one, however, is managing consumption; you keep 100% of what you don’t spend in overhead.
Your 3 reports: You need a business budget, a home budget, and a cash-flow statement. It’s not real sexy at first until you realize that every $381/month that you save conservatively turns into 1 million dollars.
As critical as this is, doctors don’t possess these 3 reports – it costs them sleep, joy, security, and the golden goal of being able to forget about the money and just focus on helping other people.
Want help in finally achieving the peace and prosperity you desire so you can relax and focus on saving lives? Let me know how I can help.
Have fun saving the world
Dr. Ben
