- Develop a Wealth Mindset
- Get a Rich Education Mindset
- Know The Rules of The Game
- Understand Money, Inflation, and Hard Assets
- Get In the Game
- Make Money Work for You
- Cash Flow Is King
- The Magic of Leverage
- Protect Your Stuff
- Keep More of Your Money
- Fundamentals and Guidelines
- Choosing Your Vehicle
- Build A Pipeline to Your Dreams
Improving your mindset can grow your wealth. How you think affects how you act.
Too many doctors refuse to change their knowledge or thinking.
You may like working as a doctor, but would you like more security, more
time, and more freedom to practice medicine on your terms?
I recently enjoyed reading “Why Doctors Don’t Get Rich” by Tom
Burns MD. Dr. Burns recently retired as an orthopedic surgeon. He continued to
work because he enjoyed it. He indeed could have retired long ago because of
his financial success in real estate. Instead, he’s sharing his knowledge and
experience with the rest of us in this phase of life with books, presentations,
and investment options.
His book can help you with the tools and mindset to turn your salary into
lifelong passive income.
Dr. Burns read one of the first copies of Robert Kiyosaki’s Rich Dad Poor Dad.
He immediately put Kiyosaki’s lessons into real-life practice as a physician
over 20 years ago. It has proven successful. Despite its tremendous success
with selling over 40 million copies, plenty of critics say it’s nonsense. However,
cases like Tom Burns show that implementing the ideas of Rich Dad Poor Dad can
be done even as a practicing physician.
Many physicians feel trapped in a profession they love but a business they
hate. We have noticed physicians’ reimbursement, adjusted for inflation,
declines over the years. At the same time, our expenses are increasing with
inflation. There is currently a high level of dissatisfaction in medicine. Many
doctors feel powerless like cogs in a giant healthcare machine.
As a doctor who is less dependent on income from medicine, you will have
more latitude and more control.
Dr. Burns is a kindred spirit of mine who is a passionate educator with a
wealth of resources. I have not personally invested with him but would have no
hesitation in doing so.
Dr. Burns feels a wealthy doctor is financially educated, enjoys the freedom
of choice, and lives life with purpose, passion, and service. After training,
he decided he did not want to become stressed and unhappy like so many doctors
he had been exposed to. Eventually, he found his way into real estate investing
and understood the benefits of passive income, tax advantages, and hedging
against inflation. He did his real estate investing part-time while continuing a
As you continue to grow your passive income streams your salary becomes less
necessary. However, he continued to attend seminars, read books, and practice
medicine and real estate investing.
He sees pillars to developing passive income and financial freedom,
including Mindset, Education, Financial intelligence, Hard assets, Action, Cash
flow, Leverage, Legal, & Taxes.
Tom realizes he enjoys traveling, as does his wife. He wanted the money and
free time to be able to travel whenever and wherever he wanted. He noticed
early in his career he was able to live well on only 30% of his income. But
then he got cocky. Soon he was living on 100% of his income. He noted that
there are physicians making $600,000 and could not pay their income tax. So overspending
is a huge problem.
Eventually, he learned to eliminate debt and live frugally. It’s a great
place to start, but it won’t make it rich.
True wealth isn’t created by living within your means; it’s produced by
expanding your means.
Financial wealth is owning assets that produce money whether you work or
Money that’s left after expenses and leisure activities provide freedom. If
all that money is from a job, someone else has control over you, and you’re not
truly free. Freedom means you can stop working today and still pay all your
expenses. Money should work for you. One measure of wealth is how many days you
can survive without working. This concept came from Buckminster Fuller and
influenced Robert Kiyosaki, who influenced Tom Burns.
You need assets. Assets produce positive cash flow. Freedom to better
control your life will result.
“Expenses will rise to meet income.” -Parkinson’s law paraphrased
This is what many doctors do. The more money we make, the more we
spend. This forms “golden handcuffs, “which chain us to our Jobs. The
high income causes a false sense of wealth and security when we have neither.
If you have enough passive income to cover all your expenses, you have
freedom. Freedom to choose how to spend your day without a boss or
administrative agenda. Otherwise, you’re simply a highly paid poor person. If
you’re unable to work and your income stops, and you can’t cover your expenses,
you are not wealthy.
Wealth is a state of mind. It provides freedom to make choices without
financial considerations. Ironically, focusing on money will allow you to make
choices not driven by money. At that point, you can practice medicine because
you love it. Practice how you want to practice.
Develop a Wealth Mindset
To paraphrase Mahatma Gandhi. Thoughts are powerful. Their beliefs become
your thoughts which become your words. Your words become your actions which
become habits. Your habits become your values which become your destiny.
If we can improve our mindset, we can tap potential inside of us. We need to
learn how to make money our servant and not our master.
We must have a certain amount of humility. Even though we are highly
educated and intelligent, we do not know much. If we think we know all we need
to know, we will never improve. You cannot learn what you think you already
know. It takes humility to be open to new opportunities to ask questions, learn,
If we can’t learn from others and work as a team, we will have limited
Many people are turned off by the “woo-woo” “hippie-speak”
on positive mindset and possibility thinking. However, it all starts with our
thoughts. Reading inspiring books like Think & Grow Rich can help.
Getting a coach to understand how to implement a thought model can also help. Getting
our goals and values straight and our thoughts and feelings aligned will result
in the actions needed to create the external circumstances we desire. Too many
of us start with external events and work backward, but it is ineffective. We
also need to learn the mindset of those who’ve developed wealth.
Examples of this include knowing how to manage risk and learning how to make
things work. Learn the benefits of cash flow. Build a team and be a continuous
Wealthy people create good habits, and they have the discipline to
persevere. Many of those best habits are shared among the rich and successful.
Those include lifelong education, honesty, meditation, focus, early rising, and
delegation. These are often referred to as “success habits. “
We need to set goals because those will give us direction and motivation to
overcome adversity. Hardships and barriers are inevitable. The question is how
we respond when we run into those. We need to learn how to set big goals that
seem initially unachievable. It will stretch our abilities and help us grow.
This is how we become the person we need to reach the goal. We are changed in
Other inspiring books along this vein include The Seven Habits of Highly
Effective People, The Magic of Thinking Big, and The Science of Getting Rich.
Of course, it helps if we can develop perpetual optimism, although it comes
easier to some.
Get a Rich Education Mindset
Our success depends on the knowledge we seek. We’ve been taught to heal, not
to get rich. We are educated enough to work under supervision but not enough to
“Formal education will make you a living. Self-education will make you
a fortune.” -Jim Rohn
Some of us know how to make money but then don’t know what to do with it. We
need teachers to explain to us. Unfortunately, most of us have not run across
those teachings in our medical training. We need wealth education.
Other than finding mentors, we can read books. How To Win Friends &
Influence People, Multiple Streams of Income, Rich Dad Poor Dad, etc.,
return enormous dividends.
One of Tom Burns’ early investments did not go well, but he learned from it.
He bought an apartment complex around the year 2000. He blindly trusted people
who turned out to be either incompetent or crooks. But it was partly his fault
since he did not check the numbers. This taught him lessons. Those who succeed
the most have also failed most. He has found guidance through Ryan Holiday,
emphasizing stoicism as illustrated in his book The Obstacle Is the Way.
Tom feels obstacles are an integral part of true success. We learn from failure
In medical school, we don’t get exposure to how to sell effectively,
advertise, or network or build a team. Yet, somehow, we need to gain the
Know The Rules of The Game
How will you develop your financial intelligence? First, we need to see
opportunities and avoid calamity. We need to make decisions rapidly but with
certainty. Third, we need to master the rules of making money. Part of that is
understanding financial statements through financial education. Learn what an
income statement is. Learn what a balance sheet is. Learn some accounting so that
if you learn some accounting, you can understand the “language of business.
Tom explains the difference between owning a business, self-employed,
employment, or investing. Robert Kiyosaki calls these the four quadrants. The
more you understand and use all these, your finances will improve.
Tom explains that buying assets instead of buying a fancy car, country club
membership, and private school tuition that’s slightly beyond your reach.
Buying assets produce cash flow that can be used for the other things you want
Tom became a self-employed physician. He saw other doctors working longer
hours to maintain their lifestyle. They worked harder and longer to make more.
There are different ways to make money than working more hours. Decide to
become an investor.
Beware of financial advisors. Their primary duty is to make money for their
firm, not for you. As a result, Tom became wary of stocks and management fees
that he could not control.
He thinks doctors should be cautious about investing just because others do.
Bernie Madoff and Enron stock had great reputations until it became apparent
that they were undeserved. Realize that physicians are often targeted because
of their income and inexperience.
“Young physicians are relentlessly pursued by
financial product salespeople who often don’t have doctors’ best interest at
heart.” -Yuval Bar-Or
There’s a general guide to keep in mind: the prettier the brochure, the worse
the deal. We come across salespeople pitching real estate deals who cannot
answer basic questions about the financial structure. You must know what you’re
Understand Money, Inflation, and Hard Assets
The purchasing power of the consumer dollar has declined steadily since
1913. Tom is concerned because this has been a “Fiat currency” since
going off the gold standard in 1971. As a result, politicians find it easy to
print more money, creating more problems such as declining purchasing power (inflation)
and unsustainable debt loads.
He suggests that we should focus on significant assets such as businesses.
Build a team and produce jobs and capital.
Another asset is a commodity they can keep ahead of inflation. He’s wary of “paper
assets “with their associated valuation of Wall Street. Lastly, real
estate can be residential, commercial, hospitality, or industrial in this arena,
education and experience count. Real estate offers appreciation, cash flow, tax
incentives, and leverage benefits. Tom has been investing primarily in these “hard
assets “of real estate for the last 25 years. I have done the same with
Get In the Game
“Education is great but becomes most powerful when combined with
action.” -The Real Estate Guys
Tom suggests getting knowledge first. Then start with baby steps. Find a
niche that appeals to you. Then later put more capital at risk. Find a mentor
and find partners. Successful investing, particularly in real estate, is a team
sport. Build your team.
Make Money Work for You
Early in his career, Tom met a doctor who never had a chance to watch his
children grow up or develop close relationships with them. As a result, Tom
decided never to put money in front of his family. He would not trade his life to
make more money. Instead, he chose to build passive income. Income that
continues to flow whether working or not.
He remembers talking about an investment that required $100,000 with no
initial return but would later produce $1000 per month in perpetuity. A surgeon
dismissed him, saying that a thousand dollars a month is not much money, and he
could make that working just one day in the emergency room. He did not
understand the need to work every month. He’s trading his time for money and
failed to grasp the incredible power of passive income. Money works 24/7
whether you’re there or not.
Tom grasped this idea which he learned from Rich Dad Poor Dad. This
magic formula of passive income became his “one thing” he focused on.
How can I develop my passive income? There are ways for physicians to make
extra money, such as being a consultant, medical reviewer, testimony, but realize
increasing your income requires spare time, and it’s all too easy to spend that
money. So consider instead putting that extra time and income into developing
opportunities for passive income streams.
Explore assets to acquire. Options include real estate, oil properties, dividend-paying
stocks, and businesses. You’ll have both wealth preservation and assets with
multiple streams of income. If you focus on this, you’ll find many books,
blogs, podcasts, and YouTube channels to help you reach this superb goal.
Working hard is normal, and it will take hard work to build streams initially,
but once you’ve created passive income streams, it will be liberating. Cash
flow continues even if you want to slow down. Far too many doctors think
working 12-hour days, weekends, holidays, evenings are the only way they can
Cash Flow Is King
Do not confuse revenue with cash flow. Do not confuse net worth with cash
flow. You can’t pay for a family trip to Disney with a balance sheet. You need
to convert assets into cash flow. Stocks do this through dividends. One of the
many benefits of building businesses is capturing capital gains taxed at a
lower level. You can often choose the timing of when to pay that tax.
“Cash flow is the lifeblood of the
business.” – Richard Branson
With real estate, rent automatically produces cash flow.
Tom cautions us to avoid real estate with negative cash flow. Don’t just
hope for appreciation. Look for cash now when you buy property.
Increasing amounts of cash cover expenses and expands in times of inflation.
Consider making cash flow a priority.
Eliminate your reliance on working income. Free yourself financially. You
won’t need to look forward to retirement day. Instead, you may want to continue
doing what you love.
The Magic of Leverage
The leverage of debt can be a double-edged sword. If you use it to buy
things that make the rich richer, it can destroy you. Or it can liberate you if
you use it to leverage investments and grow cash flow. Proper use of leverage can
allow you to compress your goals and build passive income faster. You can
accelerate your path to financial independence by increasing the velocity of
your money. If you understand how to use it properly, it can set you free. If
not, it can form prison walls around you.
“Good debt “is used to put money in your pocket and leverage your
financial success instead of “bad debt,” which comes with ongoing
Dr. Burns also described other leverage such as time leverage with
outsourcing help, knowledge leverage, experience leverage, relationship
leverage, and technology leverage. Creating a team can use many of these
various types of leverage. Tapping into a syndication model of investing in
real estate is an example of tapping into those multiple types of power.
Protect Your Stuff
You do not need to become an attorney or even pay for complex legal
protection, but it is vital to know the basics of insurance and asset protection.
One key that Dr. Burns explains is separating your assets. This could be a
simple LLC in which you place real estate investments. Also, insurance policies
can be part of an asset protection program. It’s essential to have control but
not necessarily direct ownership to “toxic assets “like rental
Keep More of Your Money
There are ways to reduce your taxes legally. The US government has put tax
benefits into law to encourage people to use them. The rules incentivize
homeownership, business ownership, and real estate investing. Phantom losses
from businesses or real estate depreciation can reduce your tax bill. Taxes are
likely your most significant annual expense, so it is essential to minimize
that expense burden.
Physicians tend to be highly compensated as employees, with much of their
money coming through salary on a W-2. That money is considered “ordinary
income “and is taxed at the highest levels. Also, at a physician’s income,
you are nearing the upper marginal tax brackets. Creating additional income
streams can add on top of that high marginal tax unless you have a strategic
plan to reduce your overall tax burden. Real estate is an excellent way to
assist with that goal.
Fundamentals and Guidelines
In the book, he illustrates several examples of active versus passive
Dr. Burns knows plenty of doctors who have created large income streams, and
many of those are passive investments. He gives an example of one surgeon he
knows who’s invested exclusively with one group specializing in apartment complexes.
Over ten years, it has produced enough passive cash flow to match his surgical
income. He has done this while practicing medicine full-time.
Dr. Burns has been more involved in active real estate projects and
management of group investments, but he knows that isn’t required for a practicing
physician. Many physicians can tap into syndications passively to partially -or
entirely- replace their dependence on physician salaries.
He explains how sponsors or general partners work and how they divide the
expenses and profits with the limited partners or passive investors. The
passive investors could be full-time clinicians. He describes how to find an
excellent general partner/sponsor and how to do due diligence.
Choosing Your Vehicle
Tom Burns uses real estate in his examples. That has worked well for him and
me. However, he does acknowledge that it is not the only path to passive income
and financial freedom.
He spoke of the four pillars of real estate which make the option so
enticing: cash flow, appreciation, depreciation, and amortization.
Other options include business ownership or ‘paper assets’ like stocks,
bonds, commodities, or real estate investment trusts (REITs). Gold, oil and
gas, agriculture, insurance, art, and collectibles are other options depending
on your interest or knowledge. Finally, although he did not mention cryptocurrencies,
I think that is an up-and-coming vehicle for many young, forward-thinking
Build A Pipeline to Your Dreams
Tom Burns recently attended a medical conference dinner when he met an 80-year-old
orthopedic surgeon. He assumed that this man must love his work. Unfortunately,
he learned the work was out of necessity. They needed his income to pay the
bills. He worked because he was in a financially insecure position even after
more than 50 years of surgical practice. Taking a few steps to learn and grow
can avoid that situation for you. Enjoy the benefits of financial freedom.
It’s essential to gain basic accounting, finance, and investing knowledge.
But it is even more critical to build your team and act. So the next step for
you may very well be to order Tom Burns’s book to guide and inspire you to
achieve your financial success.
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