Dentists: Achieving financial freedom is within your reach!
There are several factors to take into consideration if you want to achieve financial freedom. Accomplishing this is within the reach of dentists because they earn a good living. Don't lose any more money on poor investments! Find out how to achieve your goals.
Are you ready to start building wealth rather than just making a living? If you already have a good income, are you ready to get off the high income/no net worth treadmill and start down the road to financial freedom? No matter what financial circumstance you’re in, here’s how you can achieve financial freedom:
1.A mentor in the family, neighborhood, school, public, or in books who can serve as a role model.
2.A marketable skill that can earn money will become gainful employment. A skill that does not earn money will just become a hobby.
3.Delayed gratification priorities. A dollar invested today instead of spent today will add up to many more dollars to spend in the future.
The basic tools you’ll need
1.Real assets and true liabilities—Understand the difference between real assets and true liabilities. An asset, such as a dividend paying stock, interest paying bond, or income producing real estate, will put money into your pocket. A liability, such as a large credit card balance, an expensive car, or a large boat, will take money out of your pocket. Your hard earned money should be working to take you toward financial freedom and not toward increasing your income requirements.
2. Demographic changes—Understand and anticipate the social and economic changes associated with the coming demographic changes. Demography is the statistical data of a population. Spending habits are closely related to age, and group spending determines the direction of the economy. The wave of high spending by baby boomers is rapidly diminishing, and the millennials have a very different set of values that will dictate new spending habits. Demography really is destiny.
3.Economic cycles—Always know where you are in the economic cycle. Financial opportunities are recurring and always present somewhere. There are over a dozen popular economic cycle theories. Check for websites that illustrate the Yield Curve, the Index of Leading Economic Indicators, the Institute of Supply Management Index (ISM), and the Chicago Board of Options Exchange Market Volatility Index (VIX) to see where you are in the financial cycle. Determining the actual inflection points of the peak or trough is nearly impossible. You only need to know which side of the curve (rising or falling) you’re on, which inflection point is coming up next, and approximately how far you are from that inflection point. Invest proactively, not reactively, in the inevitable, cyclical economic changes. You cannot apply linear concepts to non-linear situations. Linear thought can only lead to the belief that the good times will never end and the bad times will never stop. The four words that have cost many investors their fortunes are, “It’s different this time.” One of the greatest of all time hockey players, Wayne Gretzky, explained his success, “I skated to where the puck was going, not to where it was.” Invest to where the economy is going tomorrow, not to where it is today.
Know these critical distinctions
1.Good debt vs. bad debt—Bad debt is debt that requires you to use your work, time, and effort to pay off, and after 10 to 20 years you’re left holding something with little or no value. Examples of bad debt are unnecessary consumer credit card debt, expensive cars, big RVs, and large boats, all purchased with borrowed money. Good debt is debt structured so someone else uses their work, time, and effort to pay it off for you, and they leave you with something that has more value than what you started with. With income-producing real estate, such as affordable rental homes, your tenants will work more than a week each month to pay your mortgage, your property taxes, and your insurance. After 20 years, they will leave you with a debt-free, income-producing asset to fund your retirement.
2.Rich vs. wealthy—Rich is a high income/high expense lifestyle. Rich is usually also a high income/no net worth treadmill that some people are on until the day they die. Wealth is a measure of both time and money. It is how long you can live the lifestyle of your choosing supported solely by your investment income. Wealth is true financial freedom and it does not require a high net worth to achieve.
Consider a financial advisor
Your efforts should be guided by a qualified accountant, tax attorney, estate planner, and financial advisor. Remember, it’s always best to obtain advice from someone who has already accomplished what you’re trying to achieve. Do not expect someone to guide you up the “net worth mountain” if they haven’t been able to do it for themselves. Get your financial advice from those higher on the financial food chain.
The (your name here) economy
Remember, it is your economy, the (your name here) economy that effects you the most. You can only balance your own checkbook, service your own debt, and build your own wealth.
Yes, you really do have the potential to build wealth! Use the basic tools of putting your hard earned money into assets instead of liabilities, be aware of the implications of the coming demographic changes, and always know where you are on the economic cycle.
Dr. Stanley Riggs is the author of Build Wealth & Spend It All, Live the Life You Earned, which shows how almost anyone can use three basic concepts to build wealth regardless of their age. While establishing and managing his private practice, Dr. Riggs developed and managed his own commercial real estate portfolio. With his self-taught knowledge of real assets versus liabilities, economic cycles, and demographics, Dr. Riggs was able to build successful careers in the residential, commercial, industrial, and resort asset classes by staying ahead of the national economic trends. For more information, visit, buildwealthandspenditall.com.