Winning Championships and Becoming the GOAT!

Too many doctors obsess about growth. Many times I’ve met with clients who will post two amazing years back to back, but the income is the same in both years. As I’m looking for a celebratory high five, they tell me in somber tone, “we didn’t grow at all last year.”

This obsession over “growth” – that the numbers need to be constantly bigger year over year, is a problem. Let me offer you a different measurement of success.

If you interview any athlete or coach in any sport, at anytime, anywhere, and ask them what the goal of the season is, you’ll hear this singular answer: to win a championship. In sports, that is the goal, and it is objectively measured. And if a team wins the “chip” this year, they try to win it again next year. They do NOT try to win more than one championship next year, just one per year.

The greatest teams of all time—“Dynasties,” we call them—win many championships over and over again. They don’t just win, they win consistently.

Part of the problem I see in dentistry is that there isn’t a clearly defined “championship” to win. Without this goal in place, doctors will shoot for the goal of growth, for growth’s sake. “I don’t know what else I’m doing this for, so I’ll shoot for growth!”

For the past several years, I have been defining a different goal for my clients. A championship.

How does this work? With the client, we determine the annual INCOME level (collections – overhead) of the practice that constitutes championship level for that doctor. That income level becomes their personal “championship.”

If she can “win the championship” in one year, the next year she tries to do it again!

What income level in your practice (collections – overhead) would mean a championship for you?

“GOAT” client case study

At PFG we work with many exceptional doctors. But there can only be one GOAT. Let me share the operating income results for this client for the years 2013 – 2023:

If the primary goal of this client were “growth,” then rather than recognize that he is our single wealthiest client, he might view himself as a failure for not even keeping up with inflation!

However, early on in his career we devised this concept of “winning a championship” and agreed that this would be the goal of the practice. This doctor set the “championship level” of operating income at $1.0M. A fool would look at this practice and say, “it hasn’t grown much.” But what it has done is consistently performed at a championship level!

Consider the rough graph below, which shows this client’s lifetime work, so far, and what this individual has done with the surplus profits over the last 10 years:

Following this pattern, and investing the surplus cash from the practice, let me show you what has grown!:

How many doctors do you know who have $8.5M of invested assets in their mid-40s?

Intentionally, this doctor has not grown his collections beyond the sweet spot of the practice and a pace he can sustain. But during this time, here are some things that have grown and that really matter!

• The number of people he has helped with their dental problems/pain
• The time growing his education and skill as a clinician
• The time spent with his family
• The number of wedding anniversaries he and his wife have celebrated
• His net worth, including the passive investments he owns

Those are the financial results from “the GOAT” (I’m using the metric, Total Investments accumulated per year, starting at age 30; “Total investments / (Dr. age – 30)). With what he’s accomplished, he could stop investing now and will have over $39 million by the time he’s 65 (assuming an average 8% return).

Summary

After many years advising doctors – including many who have achieved amazing results – here are some of the lessons we’ve learned that we’d recommend to you:

• Get up to “pace” in your practice and set an annual operating income goal that would constitute a “championship” for you.
• Try to hit that goal year after year. If you do, celebrate!
• Don’t focus on working faster and faster, growing bigger and bigger – just hit the goal!
• Live beneath your means and aggressively invest the surplus in equity mutual funds that you don’t manage (the single best way to own businesses that you don’t manage).

This is what the GOATs do. They don’t always go faster, they’re more consistent and go farther!