In the most comprehensive, revealing study about true wealth in America, Dr. Thomas J. Stanley, PhD profiles the real millionaires in our country. In this landmark book, the majority of the people he profiles have a net worth (total assets – liabilities) of $1 – 10 million. They are also first-generation millionaires. Our clients—hard working dentists—are this group of people. This book was written for you.
After reading dozens of books on the topic of personal finance, this is the book I come back to time and again to refresh my perspective on how these millionaires build wealth. After my most recent reading, I am inspired again to refine these principles in my own life and to recommend them to you.
Please read the book. If you prefer to listen, Audible.com has an abridged version that is fantastic. Then read it again. And digest and implement the principles he teaches. In effort to further guide you to greater levels of financial independence, I will address some of the key takeaways I gleaned from my most recent reading of “The Millionaire Next Door.”
In the book Dr. Stanley explains, after years of study, the chief attributes and behaviors of wealthy individuals. For our doctor clients I have slightly modified the list as follows:
- They live well beneath their means. They are frugal, and so is their spouse.
- They allocate time, energy and money efficiently in ways conducive to building wealth (see “Converted to the Value of Time” here). They work hard and
- They believe financial independence is more important that displaying high social status (see “The What and Why of Financial Independence” here)
- They strive towards excellence in the business side of dentistry, as well as the clinical side.
- They establish systems to build wealth, like automatic savings plans.
- They stay married to the same person.
- Their parents did not provide economic outpatient care, meaning, their parents did not subsidize a higher standard of living then they could support on their own.
- Their adult children are economically self-sufficient. Those with younger children are more concerned with educating and preparing their children than paying for college (and the two are very different).
After working with over 200 different doctors in the past 8 years, I can attest that the behaviors above are paramount in the successful pursuit and sustainment of wealth. It is very, very difficult to build any significant amount of wealth as a dentist while simultaneously violating one or more of the practices above. Please notice although high levels of production help, that alone will not produce financial independence. Just like a championship team needs to play offense AND defense, a wealthy doctor must be a producer and a saver.
Additionally, and more importantly, in my time of working with doctors in the pursuit of wealth, I have rarely seen or heard of a doctor who does not achieve his or her financial goals because of economic forces outside of his or her control. On the contrary, I have seen many, many doctors fall short because of personal decisions, which were in clear violation of one of the principles above.
The bad news is that if you want to become wealthy – financially free – you’re likely going to have to change some bad behaviors. The good news is that if you want to become financially free, you can change some behaviors and get there!