How To Become Wealthy – Doctor’s 3 Step Guide

How To Become Wealthy – Doctor’s 3 Step Guide

It seems as if “good news” is hard to come by these days so I thought I’d start off by spreading some: “If you’re a doctor or other high-income professional wanting to learn how to become wealthy….GOOD NEWS!”

It’s MUCH easier than you may realize. Why? It all starts with your income….

High Income/Negative Net Worth

As doctors, I feel that we make more than enough money to become “wealthy”.

Take a look at our income vs the rest of the country:

• Median household income in the U.S. is $65,000
• Average physician income is close to $300,000
• Average dentist income is roughly $225,000

Here’s a further breakdown:

Physician salary

Here’s the latest stats from Medscape:

Dental salary

According to U.S. News, dental specialists made the following in 2018:

• Oral and Maxillofacial Surgeons made $242,370
• Prosthodontists made $191,400

High debt

Unfortunately, not only do most doctors start off with a negative net worth (due to high student loan debt), they also continue to stay in this category throughout most of their careers.

Why might you ask? Simple.

They don’t practice Lesson #2 found in the book, The Richest Man In Babylon…which states to “live below your means“.

It’s not an unfamiliar concept. It’s also not that hard to accomplish but too many excuses are made such as:

• “It’s hard because the more we make, the more our expenses grow.”
• “My spouse pays the bills and I’m not sure what’s happening with our money each month.”
• “It seems like every time I try to get ahead, something comes up that I need to pay for such as college, weddings or a new vehicle.”

Most millionaires state that finance is 80% behavior and 20% knowledge.

What this means is that even though you’re a doctor, you don’t have to become one to get rich. The key is to simply adopt and apply good money habits.

Hope that’s good news for you too.

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Do You Have To Give Up Your Latte Though?

Even though I’m not a coffee drinker, I do understand what it’s like to drink a “favorite” beverage each day.

I love iced tea. Especially from Sonic.

Now before you get onto me about being a periodontist and drinking tea….I like UNsweet tea (not sweet). 🙂

Occasionally you’ll hear how in order to get rich, you must give up your favorite drink (latte, tea, etc) and invest that money instead.

David Bach

One such “financial guru” that most of his teachings are based off of this idea is David Bach.

He’s known for top selling books such as:

• The Automatic Millionaire
• Smart Women Finish Rich
• Start Late Finish Rich
• Smart Couples Finish Rich

His latest book, The Latte Factor, discusses how someone can transform their financial future by simply saving a little bit of money each week by forgoing their favorite latte.

One example in the book stated that if someone only saved $5 a day and earned 10% interest, they’d have:

• 1 year   =   $1,885
• 2 years  =   $3,967
• 5 years  =   $11,616
• 10 years =   $30,727
• 15 years =   $62,171
• 30 years =   $339,073
• 40 years =   $948,611

This chart shows just how powerful compound interest can be.

Let’s get another point of view regarding the lattes….

Grant Cardone

Real estate guru Grant Cardone has a different take on the situation.

Actually, he’s the complete opposite on what Bach and others like him teach.

Cardone states that “it’s ridiculous (stupid) to think that you’re going to get rich by passing on your latte.”

He claims that skipping the daily lattes may save you roughly $10,000 over the next five years.

But if you think that amount of money is going to be life-changing then think again.

Cardone recommends that instead of focusing on scrimping our extra lattes, turn our attention to increasing our incomes in order to be able to save something substantial.

Remember, there’s always more than one way to skin a cat.

I get that there’s multiple ways that doctors can become wealthy, but what I’d like to do for you is focus on the 5 main ways that I think are best.

Doctor’s 3 Steps – How To Become Wealthy

#1 Change the way you think about money

It’s amazing how powerful our mindset can be. When I was teaching our youngest son how to shoot free throws, he quickly became discouraged.

After multiple attempts, he stated, “I’ll never be able to make a free throw. It’s just too hard.”

I knew that I had to quickly change his mindset about his ability to make a foul shot.

After offering him a few words of encouragement and breaking the shot down into easily digestible steps, he began to quickly improve to the point that he eventually started to make them.

Your mindset about how you think about different things in life is no different, including wealth.

Your attitude about your money situation guides you on a daily basis about such things as:

• how much money you can earn
• how much you should spend
• how much you should invest
• how much you give away

This mindset drives how you make key financial decisions each day which can impact your ability to achieve your goals.

In T. Harv Eker’s book, Secrets Of The Millionaire Mind, he states:

Rich people believe “I create my life.”  Poor people believe “Life happens to me.”

If you want to be wealthy, you MUST realize that you and only you are in control especially with your financial life.

Related Article: Scarcity vs Abundance Mindset – Which Do You Have?

#2 Invest in yourself

You’ve probably heard the phrase, “The BEST investment you can make is in yourself.” Mark Cuban recommended this advice to a 20 year old recently on Shark Tank after he didn’t get a deal.

It’s true.

Successful people invest time, energy, and money in improving themselves.

• “Invest in yourself to get the best interest.” ― Debasish Mridha
• “The most important investment you can make is in yourself.” – Warren Buffett
• “Growth is the great separator between those who succeed and those who do not. When I see a person beginning to separate themselves from the pack, it’s almost always due to personal growth.” ― John C. Maxwell

How much were you taught in dental/medical school about wealth?

Probably not much.

Now if you’re NOT taught about it but want to continue to learn then it’s up to YOU to take action.

I understand that you went through a lot of training to get to where you are and the LAST thing you want to do is more schooling.

I’m not telling you what you have to do. But since you’re reading this, I figure you want to obtain wealth.

Here’s a handful of ways that I personally study wealth daily:

a. Read

Why try to re-invent the wheel? Study what other successful people do and emulate them. If you’re a coach, study other coaches that know how to win. Why make things difficult?

In study after study, most millionaires and billionaires are avid readers. Focus on books about:

• growth mindset
• wealth building
• stock market
• investing in general
• real estate
• health
• entrepreneurship

b. Listen to podcasts

Podcasts are great especially for those of us constantly on the go. Focus on the areas that you’re lacking the most in.

Perfect times to listen are during your commute, at the gym, before bed etc.

Here’s a few podcasts to get you started.

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#3 Build passive income ASAP

What is passive income?

If I had to use one word to sum up what passive income means to me, it’d have to be “freedom“.

Freedom? Yes, freedom.

The best way I can describe it takes me back to my childhood. Do you remember yours?

We never wanted for anything as my hard working blue collar dad always provided for our family.

I earned a decent income for a teenage kid operating a lawn service but never worried about money.

Both my brother and I were free to do whatever we wanted to with our friends (as long as homework was completed) and money never factored into the equation.

Some of my happiest and most memorable times happened while not having to worry or stress about money.

Why Build Passive Income?

Are you starting to realize what passive income can do for you? It gives you options to do what you want without having to worry about your active income.

As a side note, I never would have thought that so many MDs would begin losing their jobs or having their hours severely cut back until the pandemic struck.

Crispy Doc details his personal experience about this in his recent article: COVID-19 and Physician Burnout

If you want to work because you love your job then passive income allows you too. If you want to donate more time to your church or favorite charity then again, having income from other sources besides your job makes this possible.

As a doctor, your greatest wealth-building tool is your INCOME which is another reason why you should continue to invest in YOURSELF.

Get into the habit of saving money into an earmarked “passive income” account. We do this on a weekly basis and also add in the syndication distributions. Once this account grows to the point where we can invest in a new deal, we start searching until we find one that’s right for us.

Passive income benefits

If you want firsthand experience regarding how to become wealthy, then start building passive income which allows you to:

• accelerate your wealth-building plan
• retire early
• help protect from potential loss of active income
• give more

Real Estate

I realize that there’s multiple ways to build streams of passive income. For us, we learned how to become wealthy from others that already accomplished what we were shooting for.

The vast majority were investing in passive real estate syndications while working their 9-5 jobs.

Not only does real estate offer extra income streams, but the tax benefits can be incredible.

Cost segregation studies and 1031 exchanges are only two of several ways that high income earners can greatly reduce large tax bills.

The Bottom Line: Don’t Worry

As a father of two teenagers, I’ve already been through several different life stages.

My current state now is to spend as much time with our boys before they move out. Do you remember what you used to want to do as a teen? Hang out with friends, right?

It’s amazing how kids can want to spend every waking moment with you one day to only wanting to be around their friends the next day.

It’s a tough pill to swallow but it’s life. Teenage boys love to eat so most of our time now is spent eating out, hunting or fishing.

Passive income has allowed me these opportunities to spend with our boys as I realize it won’t last too much longer.

Are you ready to learn how to become wealthy?

If you’re ready to start learning how we’ve been adding multiple residual passive income streams to our household, consider joining us over in the Passive Investors Circle.