There seem to be a lot of books being written lately about a unique class of people. This group has the distinction of having at least $1 million in assets. I have seen books referring to your rich neighbors "next door," and books that call attention to the wealth of a particular gender. Some books have even taken it one step further and are dealing with the offspring of these people. It will be interesting to see how far they take this: As they do in the film industry, will we see "Millionaire 3"? The operating philosophy is that when you have a good idea, ride it as long as you can.
I am sure that some of you have seen these books; perhaps you even have one or two in your bookcase or sitting on your bedside table. They do make for interesting reading, and quite a few doctors have called me to see if I have read them. This surprises me, since these doctors don't have to buy these books or even "spy" on their next-door neighbors. All they have to do to see a millionaire is look in the mirror. That's right. The millionaire next door is old hat. To see a real millionaire, just take a good look in your mirror.
Each and every one of you reading this article has the potential to be a millionaire. Each and every one of you will earn in excess of $5 million in your lifetime. That, believe it or not, is the easy part! The tough part is trying to hold on to enough of that $5 million to become a millionaire. By the way, the $5 million figure is low, since it only assumes that you will earn $150,000 per year for 30 years. Many will surpass that figure, and some will work for more than 30 years. Again, the key is not how much you earn, but how much you keep.
There are some substantial hurdles that you face along the way to becoming a millionaire. One is overhead, which can take a good "gross" income and make it a poor "net" income. Never forget this: What you get to take home and spend is your net, not your gross. I have seen many doctors lose sight of that and get into a lot of trouble.
Taxes are another hurdle we face on the long road to fame and fortune. Depending on where you live, you could pay not only federal taxes, but state and local taxes as well. The total could exceed 50 percent. I am always shocked when I see some doctors who are not taking full advantage of the tax breaks that the law allows, yet still complain about how much taxes they pay.
Inflation also takes its toll on your money. If you have money invested and your earnings are lower than the inflation rate, you are slowly going backward. Many never see this as a potential hazard until it is too late.
The biggest problem I see is that most do not have a plan that they follow, and they feel that they must first pay off all of their debt before starting a savings and retirement plan. Their goal is to become "debt-free." That usually means they are also on the road to becoming "asset-free," too! The longer you wait to start a plan, the less time you have to allow compound interest to work for you, instead of against you.
I have met many who say that they love what they do and will never retire. I am not sure how many say this because they don't have a choice. They have worked hard and long, and can stand up and say that they are "debt-free," but other than the value in their home and practice, and a few thousand in an IRA, they are asset-free as well. So as they say in the game of Monopoly, "Do not pass go," go directly back to work!
Now that I have painted this dismal picture of your chances of becoming a millionaire, what can you do? First of all, it doesn't matter if you are 25 or 55 years old, you still have a chance to reach that goal. Start by taking a good look at where you are right now. What is your overhead, both professional and personal? Are there some areas that need to be trimmed or eliminated completely? Above all, be honest with yourself.
I know that you complain about how much you pay in taxes, but what have you really done about it? Maybe it is time to see what can be done to lower your tax bill. Don't be shortsighted here. In other words, don't put off a few dollars in taxes now to face an even larger tax burden later. I see that in quite a few of the people who come to me for help.
Debt-free - is that your mantra? Is that the only plan you have? If so, you really need to do some soul-searching and see if that is the best plan for you. Maybe it is time to remember the "golden rule": He who has gold, rules! It's time to think about accumulating assets - including assets that you can get to without selling your home and living in a pup tent!
Want to wear the hat that says, "I'm a millionaire?" Then it is time to get to work and make it happen. Remember what I said at the beginning of this article: $5 million. I am not sure where you are on the scale right now. You may have already reached or exceeded it, or you may have just reached the $1.98 stage! It doesn't matter. What does matter is that you start now! Go take a look in your mirror right now and ask yourself where you are. If you follow some of the advice I have given you in this article, maybe in a few years you will take another look in that mirror and have a big smile on your face!
Stanley Greenfield, RHU
1829 Green Heron Court
Jacksonville Beach, Florida 32250
(800) 585-1555
fax: (904) 247-1266
stan@stanleygreenfield.com
