8 Wealth-Fulfilling Prophecies

We are so hard on ourselves sometimes that we jam-pack our mind with self-defeating prophecies. Some of us do so before a big, expensive, high-stake standardized exam, prohibiting our hard-earned knowledge and experience to shine through the test questions as deserving high scores.

Some of us do so moment by moment, defeating ourselves in all aspects of our lives, from social, professional, physical, to emotional and financial.

While it is difficult to remove bad foods from our diets cold turkey, it’s frequently a tad easier to replace junk foods with healthy and delicious foods. So let’s say goodbye to wealth-defeating and say hello to wealth-fulfilling prophecies.

  • I never fail. I simply try until I succeed.

 

Robert Kiyosaki says, “Failures defeat losers. Failures inspires winners.” Key to success is to be encouraged and excited about mistakes and failures, as counter-intuitive as it seems. Pick ourselves up exactly where we fall.  Share our defeats openly because they help others too.

  • I work to learn.

 

This is why we went to medical school and went through residency. If we are working for money, we would not have spent our peak learning/productive years getting paid negative money (tuition, fees, interest, and loan origination fees) up to 10+ bucks/ hour.

  • I work to serve.

 

This is why we choose medicine. By a combination of nature and nurture, we gravitates to those in need. Rather than cherry-picking those who can benefit us, we find ways we can benefit others. Not so coincidentally, those who focus on serving others are often the most successful in many areas of their lives, including money matters.

  • Money is a useful tool.

 

We are no above money and money is not too good for us. We need money to take care of our loved ones and ourselves. Money can buy my time, the most precious commodity I have to offer as a human being to worthy causes on this earth. It’s a great tool and I will learn to optimize using it.

  • Money works for me.

 

My or someone else’s money (I borrow at a good rate) are my tireless, vacation-less workers who never complain or want a raise. My dollars work for me when I use them to purchase and amass assets such as index funds holding, rental properties, build my companies.

  • Luck is preparation meets opportunity.

 

We get lucky because we are prepared and seize an opportunity that swings by. So don’t those people who attribute all your successes to random chance. Be happy that you are prepared to utilize the chance, and get prepared for the next chance!

  • The universe is for me.

 

I’m also for the universe. We are social animals. We sleep better at night if we don’t perceive our fellow human beings as prowling tigers at our doorstep. Knock on wood, I’ve always believe in the innate kindness of human beings. Not only do I sleep well at night and feel relaxed in my own skin in the day, but also I keep giving out the same energy I receive/perceive from my surrounding. Sure, I have gotten negative comments in front of me and behind my back, but I’ve never gotten too injured to have faith and to continue giving to people around me.

I usually don’t define anything by what it is not. I was once berated, ridiculed, and humiliated by an attending radiologist while reading out because I didn’t answer his pimp questions correctly. I cried for 30 minutes during read out with 3 medical students sitting behind the reading station and a room full of other fellows and residents on that rotation.

 

I asked everyone I esteemed. They all told me to bite my tongue since this attending is known to be this way with every trainee in the program.

 

Then, in the same room, I overheard him berating, humiliating a fellow, whom I respect for his knowledge and benevolence. I spoke up this time. I said, “Dr. so and so, you are one of the most brilliant doctors I’ve ever came across… [10 minutes later of perfect silence in that great big reading room full of residents/fellows/and medical students]… I don’t believe anyone of us in this room is dumb sh*t. and even if we are, we shouldn’t be treated like one.”

 

Medical hazing is full of abuse, derision, and exhaustion-techniques. Do not internalize such, for they will destroy your chances of success in every aspect of your lives, including, money, marriage, mind, and motherhood (fatherhood.)

 If you like this article, you might enjoy other DWM articles on Personal Finance, Investing, Retirement, Practice Management, & Lifestyle.

All articles by DWM are for informational purposes only and not intended as a substitute for professional advice. Please consult a professional accountant, financial adviser or lawyer, before making financial decisions.

5 Ways to Keep More $

 

  1. Keep $ from Uncle Sam’s claws legally.

Set up a business. What is your hobby? Turn it into a business by submitting some simple documentations to set up a Liability Limited Cooperation (LLC.)

My hobby is to help every day common people like myself build wealth, so I started my blog, contributing to PMD, giving speeches (unpaid), and writing books. With the modest income from this hobby, I set up the DWM LLC, which allows me to deduct business expenses, pay my kid for her work (allowing her to fund her Roth IRA at the tender age of 9 years old).

Sky is the limit once you set up a business; even if your business is net negative like it was for me in early years, it helps with reducing your taxes, effectively allowing to keep more of the money you earn.

Uncle Sam loves businesses, that’s why businesses pay themselves first before paying taxes while every day employees (who work for but do not own the business) pay Uncle Sam first before taking care of themselves.

So join the game! Set up a side business and deduct (legally) away and reduce your taxes.

  1. Keep $ from retailers.

Don’t buy anything full price! Duh. Does the instant gratification of buying something full price/ at a premium bring you lasting happiness? Not for me. Buy all things on sale and buy used whenever possible. Gentler living on the earth is great for your wallet too.

  1. Keep $ from banks.

Strive to be like the big bad banks. They borrow from tax payers at prime rate of 0% (not long ago, currently 0.25%) and they practically predate on ordinary people 30% APR when someone misses a payment or 2. I know the pain the vicious cycle of such a debt, as I picked up 7 odd jobs to help my parents pay their 20k credit card debt at 30% while double majoring at UC Berkeley.

Be selective with where you set your cash. If it is not making you more than 3% annual return/interest, you need to find better opportunities.

I have less than 1k sitting in liquid savings with the banks because they highest interest they’d pay me is 1.11%, deplorably less than rate of inflation.

All my money are working hard for me in the stock market, in low fee index funds at Vanguard. My rainy day fund resides in the endless credit card offers I get, where I can purchase or get emergency cash whenever I need it. And frequently, there’s incentive such as cash back, gift cards, or air mileage to borrow for emergency. Not to mention the sweet 0% APR for 15-21 months depending on the credit card terms.

  1. Keep $ from consumerism.

Whenever you want to buy something, ask yourself:

One, do I need this?

Two, how long does this make me happy?

Three, why does this purchase make me happy?

I hardly find any purchase that warrants legitimate answers from these 3 questions.

The more I buy, the poorer I get. I know what it’s like to be the consuming poor, we are in a nation of ironic and counterintuitively causative rampant consumerism and poverty. Want to reclaim some tax payer dollars from the super-rich? Stop buying stuff from the rich who made the stuff!

  1. Keep $ from your kids.

For those of us who are minimalist and non-material, we find it easy to splurge on our loved ones. The material luxury that never interest us seems perfectly befitting to be bestowed on our loved ones, especially our little princes and princes. Guess what, I learned the hard way!

It is not good to shower our little ones with material luxuries. Excessive materialism (nice looking stuff, new toys) is toxic to all of us, particularly to the young, malleable minds.

I learn that it is ok to spend money on her pilot lessons, but not ok to spend the same hundreds of dollars on clothes, fashion, school supplies, etc. Desire for possessions is a monster with insatiable appetite. While I thought I was giving the best I could to my girl (Mini Wise Money), I really was setting her up for failure in life.

After the sharp U-turn, Mini and I have learned together just because we have $ doesn’t mean we should spend it on how we look or on adding to our possessions. We learn that $ is better spent on experiences that make us better people, or on making someone else’s life better, or simply invested so that our $ works for $, and we are free to work to learn and improve ourselves.

Personal Finance, Investing, Retirement, Lifestyle More articles like this on Physician’s Money Digest.

8 Wealth-Defeating Prophecies

We are the kings and queens of self-defeating prophecies. We place such high internal standards that we failed before we even tried. While everyone around us would be clapping hands at our valiant efforts or excellent performances, we thought our results are subpar, we judged our efforts to be misguided and inefficient.

I had a co-intern 2 years ago who awed me with her presence of mind and her self-confidence. When I’m calculating how I can pay my bills, save for retirement, she just said to me, “I don’t worry about money. I just know that I will be very rich one day. I know it in my heart. I’m generous with giving and it always comes back to me.”

She has 300k+ in student loans but she also has enough in the stock market that she gets a couple thousand dollars in stock dividend every year. She exudes confidence. I know that she will be very wealthy one day as well. She’s the perfect antithesis of (self- and) wealth-defeating prophecies.

  • I will never be rich.

You can be rich or poor. It’s completely up to you, regardless of your professions. I focus more on net-worth to income ratio to evaluate a person’s financial intelligence.

For instance, a janitor with net worth of 1 million and income of 40k a year definitely have greater financial genius than a doctor with a net worth of 1 million and an income of 300k a year.

It’s both how much you make and how much you keep. I’d venture to say that the latter matters more.

Yes, you will and you can pay it off within 2-5 years of finishing residency, as white coat investor urges all of us to do.

You can even pay off your student loans within 2-5 years of finishing medical school. If you have the will, you will find the way. (I paid off my student loans as an intern.)

  • I work for money.

No you don’t. We all need money to survive and we want to thrive with some of our hearts’ desire fulfilled. Working for money is an oppressive and constrictive way of being. We work to learn and to serve, and with those intentions, money follow us.

  • I don’t know how to make money work for me.

Although it is true that we each measure the rest of our world with our own ruler, it is a good idea to check in with reality once in a while.

As much as the financial industries strive to make money matters as murky and as complicated as possible, money matters are stupidly simple compared to medicine.

Doctors, please don’t assume the average financial professionals went to school/training for 23 years (equivalent to shortest residency) to be mange your wealth. That’s what you do to manage your patient’s health.

Pick up an investment book today. Read it. You’ll be amazed how easy it all is. There’s one Harrison in the study of medicine, yet we can be all be Harrisons in the study of money.

  • I will never be good with money.

If you can be good with medicine, you can be good with money. You are not good because you choose to not invest 3 hours to read an investment book and choose to allow someone else to manage your money for you over your life time for 13 million (what average physician pays financial adviser with Asset Under Management fees over 6 decades.) check out PoF’s genius math here.

  • Money matters are too complicated.

Again. BS.

  • Money matters are too boring and tedious.

Once you’ve tried to study money matters, with just 1/1000th of the dedication, diligence, and discipline as you did medicine, then tell me it’s boring and tedious.

Even if it is till boring and tedious, you’ve won 90% the battle, just automate your money matters. Set it up for stupid-simple-success with passive, emotionless, automatic accumulation of assets.

Set it up once correctly, re-evaluate and re-balance every few years. It doesn’t take much time to save yourself 13 million dollars.

  • I’m too good for money.

Everyone is too good to work for money, but no one is too good to let money work for him or her. Think of the time and freedom that you can enjoy with your loved ones the minute you reach financial independence (the point where your money for your to support your lifestyle freeing you to work for anything your heart desires.)

 If you like this article, you might enjoy other DWM articles on Personal Finance, Investing, Retirement, Practice Management, & Lifestyle.

All articles by DWM are for informational purposes only and not intended as a substitute for professional advice. Please consult a professional accountant, financial adviser or lawyer, before making financial decisions.

5 Ways Busy Docs Make Easy $

 

  1. Use credit cards.

Credit cards save me time. I don’t carry or count any cash. I know down to the penny (if I’d like) where my money goes because it’s all charged on 1 credit card.

Credit cards save me $. I get to buy 4k of grocery gift cards at once, taking advantage of the once a year 90 cents on the dollar purchase of Sprouts Farmer’s Market gift card. I don’t 4k of cash, my credit limit allows me to do things I can’t do otherwise.

Credit cards gives me cash! I got 20% cash back from discover card for a 4k purchase. That’s $800. Not a small chunk of money, especially given that I did no work but to buy what I needed anyways….

  1. Stop repeating yourself. YouTube it.

Have you found yourself constantly being consulted or sought after for advice/guidance in a particular subject? I do. I’m sure you do too. You are a doctor! How about saying it ONCE and say it perfectly with a script, recorded as YouTube videos. Refer your patients, friends, and dear family members to the videos!

These videos will make you $ in 2 ways, one save you time (time is $, yet $ can’t buy back your time in repeating yourself the millionth time), and secondly each view of your YouTube video generates I think about 1/1000-1/10000 dollars.

I love to help others, but it is not fun or productive to say the same thing over and over to different people. Kindly refer them to the comprehensive and thorough videos you make. Free yourself to relax, be with your loved ones, pick up a new hobby, anything!

  1. Replicate yourself. Blog it. Publish it on PMD!

Similar idea as YouTube. If you more introverted, just blog your experiences. You’d be amazed how many people find your journey, your trials and tribulations helpful to their own journey. Millions of people can benefit from one post you write, which may only take you a few hours. Not to mention once you’ve served numerous readers, advertisers and sponsors come knocking at your door, offering to pay you for spaces on your website!

  1. Write a book.

This is super simple once you started blogging. Compile your best posts and link them logically with a good flow. Walla you got a book! That’s who White Coat Investor got his best-selling book that generated him 100s of 1000s of dollars while he wasn’t lifting a finger (once the book is published).

  1. Spend less.

It’s true a penny saved is 2 pennies made/earned. I’d venture to add that, a penny saved is a million made. Anything you save and mindfully manage by investing passively with patience and discipline, will follow the rule of 72 and double, quadruple, and octal in due time.

One penny today, if it double every day, at the end of a month of 30 days, will be worth ~ 5 million. That’s why I say a penny saved is a million made!

Personal Finance, Investing, Retirement, Lifestyle More articles like this on Physician’s Money Digest.

5 Doctor-Proof Rules to Wealth

We are our own worst enemies and harshest critics. I find this true frequently of my over-achieving USMLE step students who clearly master the content of medical school curriculum but suffer perpetual test anxiety and disproportionately low performance on standardized tests.

90% of the battle to getting awesome numbers (be it high scores on USMLE or high net worth/wealth) is overcoming the only person that stands in the way of each individual physician’s success: himself or herself.

As a toast to our intelligence, diligence, and discipline dedicated to our profession, I hope these 5 principles will make doctors rich in spite of themselves.

1.       Pay yourself first by never seeing your money in the first place.

Auto deposit into your index funds with every paycheck. Set goals to max out your 401k to get the max company match and stash away the maximum you can. Above and beyond 401k, you can set up back door Roth IRA (by regularly contributing to traditional IRA with the intention to convert to Roth by paying taxes) or Roth IRA (if you are still PGY and have relatively low income compared to attending years.) There are plenty other tax-advantaged saving accounts such as 403B, 457B, , 529, HSA, Childcare related spending accounts. For self-employee doctors, you get to stow away even more into SEP-IRA, Profit-Sharing Plan, Keogh or solo 401k. Beyond the tax-advantaged accounts, there’s still taxable brokerage account where you may also automate paying yourself per check.

There’s no end to paying yourself. Set up a goal and pay yourself automatically, before the money even gets deposited into your bank account.

2.       Be the bank.
Collect interest from others. Invest in assets that will generate more money for you rather than just spend. Especially avoid spending money on liabilities, things that will take money out of your pocket. Before you lend your money away like a bank does, always ask, what is my rate of investment (ROI)?
The higher the ROI, the higher you should prioritize investing in this instrument be it index funds, real estate or other creative ventures you may discover.
And of course, risks you take should be proportional to ROI. Never take unwarranted risks, just like you won’t recommend a treatment where risks greatly outweighs the benefits to a patient, don’t do that to yourself and your loved ones.

3.       Avoid the bank, unless they are lending you negative to 0% interest rate money.
Tomorrow is uncertain. If you can pay down a debt with 6.8% interest rate today and make that guaranteed 6.8% tax free R.O.I., I’d say go for it. Since none of us know for sure we will land a PSLF-eligible job upon finishing training, paying down debt aggressively does feel pretty amazing.
I admire how much Dave Ramsey helped the poor, but I can’t agree with him on paying the smallest debt first. Numerically, always tackle the debt, regardless of size, with the highest interest first. In fact, convert debt with higher interest to lower interest anyway you can, including refinancing, home equity loans, or using credit card resourcefully.

4.       Use your assets to pay for luxuries.
Want that fast car or larger home? They are both liabilities, things that will take money out of your pocket rather than put money into it.
So first invest in assets, which make you money before going for these costly liabilities. Use the income generated from your assets to pay for your splurges.
For instance, instead of buying a 100k car, you bought some index funds. The 100k in index funds grew to 200k in 9 years, you then use the 100k from your 100k investment to buy the car. Sure you waited for 9 years, but you are much better off from the stand point of total wealth.
Not saying you have to delay your gratification. You can certainly find better investment opportunities and make your assets produce money faster for you to get the nice car.

Like my money hero Robert Kiyosaki said, “As a habit, I use my desire to consume to inspire and motivate my financial genius to invest.”

5.       Use other people to pay your liabilities.
You absolutely have to have to large home today? Then rent out 1-2 rooms to help you lower your mortgage liability.
Must have that fast car today, then do the “Air-B&B” for cars and share that fast car with other people who are willing to help pay your monthly car payment to lower the cost of your owning a liability.

Doctors are the worst patients because they are so used to giving orders rather than listening and taking orders. Patient compliance is nearly impossible if the patient himself or herself is a doctor.
Since our biggest weakness and enemy frequently may be ourselves, we need to set up our finances in a doctor-proof manner that we don’t stop ourselves from getting rich!

 If you like this article, you might enjoy other DWM articles on Personal Finance, Investing, Retirement, Practice Management, & Lifestyle.

All articles by DWM are for informational purposes only and not intended as a substitute for professional advice. Please consult a professional accountant, financial adviser or lawyer, before making financial decisions.