Sep 20, 2018

How to Become a Decamillionaire Doctor, Part II

Written By: Nate Williams

In last week’s blog post, I discussed the first two essential phases of becoming a decamillionaire doctor, which are:

  1. Become a clinical expert
  2. Learn to make money with your clinical expertise by:
    1. Learning to lead
    2. Establishing systems in your business
    3. Learning to sell
    4. Doing your work fast

This week I’d like to discuss the third phase of this process:

3. Learn to manage your money like a decamillionaire

One of the key takeaways with phases 1 and 2 is that you will be far more successful with good help. The most successful practice owners get professional help from consultants to learn how to run their practices in addition to the daily help they get from their staff.

In our complicated world, it is virtually impossible to know everything you need to know about every area of life for the decisions you need to make. For example, in your practice do you know how to run payroll? Are you also an expert on search engine optimization? Do you also know all the employment laws in your state and are you 100% in compliance with those? If your goal is to succeed in your practice (and in life), you need help from those more skilled than you in that area of expertise. To do this, you’ll need to find good, trustworthy help.

Likewise, when it comes to managing your money, you need help. Can you increase your financial intelligence by reading books on the topic? Absolutely, and you should. I will never say that someone will fail if they DIY their finances; but I do say – and will say again – that you will have a much greater probability of success with good help.

Year after year, I am surprised at how few doctors are good at this critical part of the process. Why is this? How can people who are so good at making money (I’ll assume that you’ve mastered steps 1 and 2 if you’re still reading), be so bad at keeping it? There are a lot of reasons for this answer. I’m going to highlight three main problems you face as to why it will be difficult to hang onto your money and get it working for you.

Problem #1 – You. Yes, you, are the problem.

The very attributes you possess that make you good at earning money work against you when it comes to investing your money. Let me say that in another way: the better you are at making money, the worse you likely are as an investor.

Consider these personal attributes that most successful, high-income earning doctors have in common:

  • They are proactive
  • They have an extremely high level of personal responsibility and like to be in control
  • They are intelligent, even the “smartest guy in the room”

These attributes are shared by almost every successful person on earth. The problem is that they work against you when it comes to saving and investing your money. Why? Let’s look at each a little closer.


Don’t just stand there, do something! This is the mantra of the doctor. Save lives. Fix teeth. Run tests. Take x-rays. Diagnose. Perform treatment.

But when it comes to investing, the mantra should be: “Don’t just do something, stand there!” Investing is a lot like planting grass and watching it grow (I planted grass a few years ago and it is painfully slow). Or better yet, like planting a fruit or shade tree—it takes years to bear fruit, and decades to provide shade. To quote the best investor ever, “Somebody is sitting in the shade today because someone planted a tree a long time ago” (Warren Buffett).

Successful investors are patient, even lazy (don’t believe me? Google: “lazy investor”). For more on this topic about lazy investors, check out this post titled: “What if Rip Van Winkle Invested in the U.S. Stock Market?” Most doctors are trained to produce results now; they give a treatment, then follow up in a month or so. On the contrary with an investment portfolio; you build the portfolio, then follow up in a decade or so.

In July of this year, I met with a client who had begun investing with our firm in April of this same year. After just under 3 months, he wanted to talk about the performance of his investment portfolio and what we were doing, including what changes we should make, to improve the returns. I kindly tried to tell him that this would be like unearthing a recently planted sapling to check the roots, asking, “where is the fruit?”

The best investors are lazy; this doesn’t come naturally to you.

In Control & Ultra-High Personal Responsibility (aka, “Type A” personality)

To be an exceptional doctor, having a “Type A” personality can be a big asset. As a patient, I want someone who will do everything in his power to help fix my problems. However, this strength, if not checked, can be a major weakness when it comes to building wealth. Why? If passive income is your goal, then the investment itself implies that you give up your cash and yield control. In our experience, this proves to be very difficult for most “Type A” doctors to do.

For example, consider this statement we hear a lot: “I want to invest in real estate. That way, no matter what happens, at least I can go down and kick the dirt on my land.” In translation, this statement could mean: “I don’t really trust anyone or anything but myself, so I’d rather be poor (dirt doesn’t sell for much) and in control than anything else.”

Another application of this personality trait is the doctor who wants to stay in control by hoarding large amounts of cash. I understand that having cash feels good, but holding cash is like pulling your money out of the game and sitting it on the bench. Again, if your goal is passive income, then your cash needs to be in the game working for you.

The best investors give up control; if your name is Dr. ___________, this likely doesn’t come naturally to you.


Doctors are typically the smartest person in the room among any crowd. This keen intellect is critical for the work they perform but it frequently works against them when they step outside of the operating room. The smart doctor naturally thinks, “I’m smart, shouldn’t I be able to figure this investing thing out?” Or: “Why would I take advice from that guy, I’m smarter than him?”

But does your high intelligence in one area automatically transfer to all other areas? Consider these thoughts:

    • When it comes to finances, most doctors learn enough to become dangerous to themselves. Yes, you can research mutual funds, look at historic data, and pick a few funds to go into a portfolio. But does your intellect directly translate into having the insight and the understanding of the nuances to manage your comprehensive financial plan including identifying the appropriate market risk factors, addressing the tax efficiency of your portfolio, managing the practical implications of a multi-account investment portfolio including proper asset location? Not to mention, are you qualified to address the myriad of financial planning issues such as debt planning, cash flow management in your practice, estate planning, retirement planning including the optimum use of qualified retirement plans, etc.?
    • Having the knowledge to design a plan is one thing, successfully executing that plan is another, which involves more than just sheer intellect. For example, could you learn everything you need to know about health by reading a cheap diet-and-exercise book? Perhaps. But will reading the book cause you to execute the health plan and achieve your optimum weight, cardiovascular efficiency, and body-fat quotient you’re hoping for?

In short this is a classic case of “you don’t know what you don’t know” about investing. And even if you learn, you still have the hurdle of successfully executing your plan.

If not checked with the help of a trusted advisor, the very attributes you possess that make you good at earning money will cause you to underperform your financial potential when it comes to keeping your money and putting that money to work (i.e. building wealth and being a successful investor).


Problem #2 – The entire world is out to get your money, literally.

Consider for a minute the goal of almost every commercial, billboard, or magazine ad. They’re trying to sell you something. Why? They want your money. These marketing and human behavior experts will stop at nothing. They promise fame, comfort, ease, sex, popularity, fun – whatever it takes – to persuade you to do one thing: transfer your hard-earned money out of your account and into theirs.

Additionally, in our modern computer age, these wealth-transferring geniuses have devised ways to make this transfer easier and more convenient than ever. Amazon is the best among them. Consider these “conveniences”:

  • “Alexa, order me a pepperoni pizza.”
  • Free 2-day shipping to your doorstep, if you’re in the cool club (a Prime member) – or free shipping over a certain amount of dollars spent even if not a Prime member
  • “Buy Now with One-Click”
  • Setup recurring delivery through subscriptions (I did this with a protein shake and in 6 months needed to remodel my pantry just to hold all the powder!)

All of this can also be done with a few touches of a handheld-device; touch-touch-spend, touch-touch-spend, touch-touch-transfer wealth to them. At PFG we’re not against conveniences. But if you’re going to become wealthy (which means having financial freedom), you need to figure out a way to immunize yourself from the materialism and spending craze that is plaguing our society. For starters, take the Amazon app off your phone.

Problem #3 – You’re comparing yourself to others yet blindfolded from the truth.

Most of us determine how we’re doing in life by comparing ourselves to others. These comparisons are usually incomplete, unfounded, and can be dangerous. Comparisons about money are especially risky because we almost never see the full financial picture; additionally, in our society the “positive” financial indicators that we’re conditioned to look for (e.g. fancy cars) are actually negative indicators of real wealth.

When it comes to assessing financial success, most Americans are cultured to make this determination by external indicators of spending, i.e. cars, homes, clothing, and jewelry. Ironically, these assumptions we make about wealth are the exact opposite of reality. Recently, a wealthy client of ours (who drives a Honda) said to me upon returning from a trip to Southern California: “Everyone down there has so much money. We saw so many Mercedes, Porsches, BMWs, etc.”

What would you think about someone’s finances if they were driving a brand new, shiny Range Rover? Are they wealthy? Most people are trained to think yes: fancy car = wealth.

However, the exact opposite is more often true. Assuming that someone is wealthy because they drive an expensive car is like assuming that someone is in good health because they’re eating a bacon cheeseburger for dinner. “Man, that guy ordered the triple stack with extra bacon and cheese fries…he must be in great shape with amazing abs!”

Two other false indicators of wealth for dentists are the number of practices a doctor owns and the size of their building. Most doctors are conditioned to think this:

  • More practices => higher income => more wealth
  • Bigger office => higher income => more wealth

Contrary to these cultural expectations, the reverse is most often true:

  • More practices => higher overhead and therefore lower income => less wealth
  • Bigger office => higher debt and expense => less wealth

Don’t be fooled. As you make decisions about what to do, what to buy, etc., be careful to not base your expectations on what you see from others because you rarely know the truth behind the scenes. In addition, the external factors we naturally connect with financial success (spending lots of money) are totally false. The sad truth is that most people are laden with debt and very far from financial independence (at the time of this writing, the average consumer debt per US citizen is $58,140 –


Remember, to become a decamillionaire doctor, you need to become successful in these three areas:

  • Become a clinical expert
  • Learn to convert your expertise into money
  • Learn to manage your money like a decamillionaire.

Yes, you can DIY any one of these three critical phases, but you have so much to gain or lose. Because of the big stakes involved, we recommend getting good professional help in each area as appropriate.

Stay up to date! Receive a Weekly Message with Financial Tips & Advice for Dental Professionals.