Since this is so crucial, my next post will shed some light on the financial advisor business and how to evaluate financial advisors. If you do not have the inclination to do 3, you should delegate that to a highly educated, trust-worthy financial advisor. Stanley has found that people who do that are far more likely to be PAW. Dedicate at least one hour per month to family finances. John Bowen, my practice coach, likes to say: “Focus on bringing home the big check.” 3. Focus on what you do best and delegate the rest. If you can make the following adjustments, substantial wealth is not beyond your reach.ġ. However, 2 through 4 are within a doctor’s control. Numbers 1 and 5 are impossible to overcome they are the nature of the beast. Unlike successful entrepreneurs, they can’t sell their practices for good money. They think they can do it all by themselves. After work and family, they have no time left to take care of finances. Most of the country’s millionaires don’t look the part, or, at least, they dont look like we imagine they do. They have to live a lifestyle that befits a doctor, which usually means big houses and luxury cars. The main premise of The Millionaire Next Door can be found right in its title - the average millionaire could be anyone’s next door neighbor. By the time they can practice on their own, they are in their late 30s, while their C+ classmates who went into sales have been making money for 10 years. The book was written out of the research the authors did on the profiles of. The book was written in 1996, and 1 million may not be as much as it used to be, but the concepts in the book still ring true.
Medical school takes years and a lot of money after that, there is residency. One of the most important books I’ve read in my life is The Millionaire Next Door by Thomas J Stanley. They start making good money later in life. Here are the top five reasons I think physicians don’t accumulate substantial wealth:ġ. My wealth management practice focuses on physicians, so I’ve seen this happen firsthand. This finding is not at all surprising to me. This leads him to conclude that among all high-income groups, doctors have the least tendency to accumulate substantial wealth. What Stanley found that should serve as an alarm to all doctors is this: For every one doctor in the PAW group, there are two in the UAW. Now you can do the exercise yourself and determine if you are a UAW or PAW.
If your total net worth is twice X, you are a PAW. If your total net worth is less than half of X, you are a UAW. Take your income from all sources, multiple by your age, and divide by 10. Thomas Stanley, the author of "The Millionaire Next Door," coined two terms: Prodigious Accumulator of Wealth (PAW) and Under Accumulator of Wealth (UAW).