The Millionaire Next Door is a famous personal finance book written in 1996. The key message in the books is very relevant for doctors and dentists in Australia: (in the US, but I would hazard to guess also in Australia) there are disproportionately more millionaires in middle-class and blue collar suburbs as opposed to in white-collar communities.
The reason is simple, as the authors found that high-income white-collar professions are more likely to devote their income to luxury goods and lifestyle, thus neglecting savings and investments. So really, it is not about how much you earn, but rather how much you can save.
So is this true in Australia as well?
Well, in my 10 years in working with dentists and doctors I have witnessed time and time again that healthcare professionals are chronic underachievers when it comes to accumulating personal financial wealth.
Further research following on from The Millionaire Next Door, unearthed that there were 6 key reasons why some people were so much more financially successful than others.
And in this article I wanted to share those 6 key factors with you, so that you can implement them and enhance your chances of becoming the Millionaire Medico next door…
1) Planning and Monitoring
Can you set goals and effectively monitor your progress towards achieving them?
In my experience not many medical professionals actually set personal financial goals, let alone that they track them…
Do you have the discipline to avoid distractions and stay on track to your goals?
This has a lot to do with your goal setting: are your goals so important that you maintain a steely discipline? Or are they a bit ‘wishy washy’?
Your willingness and ability to spend below your means;
This one is obvious…
to what extent do you believe you have control over your financial [and other] outcomes, versus whether they are externally determined;
You cannot control the external environment, the economy, the sharemarket, but you do have absolute control over your own finances and how you can optimise them – yet many people choose to focus on things they cannot control and end up going round in circles.
Do you have the confidence to believe you are capable of improving your situation
Are you perhaps overwhelmed or stressed by your finances? Do you lack time to manage your money? Then you may need to think about outsourcing the management of your financial affairs. This is the number one intangible benefit our clients report – having peace of mind and feeling confident and in control again.
6) Social Indifference
do you feel a need to spend to display social status, or are you socially indifferent to the spending habits of others?
Again, very obvious…
Combined together, these Wealth Factors help to reveal who is more or less likely to actually convert their income into wealth.
So let me summarise that in really simple terms for you:
To increase your chances of becoming financially successful, do you have a plan? And if so does that plan: a. include very specific personal goals? b. establish strategies to deliberately save? c. allow you to take control of your own destiny, and largely ignore external circumstances?
Finally, is the plan regularly reviewed and monitored?
Simple right? But where do you start?
If you would like to take that first step to growing your wealth and optimising your finances, please contact us, as we would be happy to offer you a free strategy session, where we can identify the areas you will need to focus on.
Call 08 6160 5918 or email me directly at Yves@affluenceprivate.com.au. We look forward to talking to you.