Rich vs. Wealthy – is it the same thing? Well, according to Robert Kiyosaki, “there is a difference between the two: The rich have lots of money but the wealthy don’t worry about money.”
As doctors, we most likely fall into the first category. We may be rich in the sense that our salaries are in the higher economic range, however, because of our expenses (houses, cars, student loan debt, private school tuition, practice overhead, etc.) and sometimes poor decisions, we have a tough time accumulating any real wealth. We’re also handicapped by the fact that we start along this financial journey relatively later in life.
Being wealthy ultimately has more to do with financial freedom. It means you’re not living paycheck to paycheck. It means you’ve either saved enough that you don’t need to work every day to sustain your lifestyle or you’ve built up enough residual, passive income sources that you’re getting paid in your sleep.
I personally don’t care about being seen as rich – I don’t need the fancy house or cars. I just want to know that I can give up some or all work whenever I’d like to, and spend that time with my family without any financial pressure. I remember reading somewhere that “wealth is measured in time, not dollars” – and I believe that to be totally true. If I ever got a tattoo, that phrase would be highly considered to end up somewhere on my body.
How To Become Wealthy
There’s no one right path as some would have you believe. There’s too much unpredictability out there for anyone to be able to project things out perfectly over the next 20-30 years. As I’ve learned, there are things beyond our control which come into play, like when you started saving and when you plan on retiring.
It doesn’t mean we can’t make detailed and smart plans, but I do believe that you can’t put all your eggs in one basket.
Since I’ve been studying this for years now, I can confidently say these are the common themes in achieving wealth, and not just ways to get rich:
- Start saving and investing as early as possible.
- Don’t just work, but hustle. This means taking on gigs outside your full time job. If you’re a physician like me, check out my post of 50+ Physician Side Hustles
- Take advantage of tax-sheltered accounts (401k, IRA, HSA, etc.). Compounding adds up.
- Educate yourself on investing but know that you can’t put all your eggs in one basket.
This is How I Will Become Wealthy (by age 45)
My initial goal when finishing residency was to be financially free by age 55. If you asked me 3 years ago, it was to get there by 50. I’m now pushing to make it by 45, which is in about 5 years. I know it’s ambitious but I’ve learned you have to set your goals higher than you think you can achieve.
This has been my personal gameplan to become wealthy (not just rich!) by age 45:
- I max out every tax-advantaged account available to me (401k, HSA).
- I will continue to work my day job as a physician, but cut back as soon as investments and passive income sources provide sufficient cash flow.
- I have invested and will continue to invest in real estate. I purchase individually but also through real estate crowdfunding (highly recommend)
- I have started businesses (Curbside: Loans for Physicians) as well as this blog. Click here to see How to Make Money with a Blog.
So far, all of this has done pretty well for me as seen in my latest income report (these are exclusively shared with our newsletter subscribers, so be sure to sign up.) I’ve started gradually retiring by cutting back a few shifts at work and that makes me feel wealthy.
My initial goal when finishing residency was to be financially free by age 55. If you asked me 3 years ago, it was to get there by 50. I’m now pushing to make it by 45. That’s in about 5 years. I know it’s ambitious but I’ve learned you have to set your goals higher than you think you can achieve.
What’s your gameplan and when do you expect to make it where you want to be?