Often, physicians ask me the “one thing” they need to know to be successful in investing. I think usually they are waiting to hear something about cash flow, making money when you buy, juicy ROIs, choosing the proper location, great operators, etc. While all of these are super important, the true “one thing” I feel is imperative to be a successful investor has more to do with what’s between the ears rather than what’s contained in a proforma.
Abundance or Scarcity
The proper mindset is the first tool to sharpen when building your investment portfolio. There are generally two types of mindset camps where people pitch their tents. Abundance or scarcity. Scarcity thinkers believe they have to accumulate as much as they can, as fast as they can, and hope they don’t run out of funds before they die. Abundance folks are intentional with their investing, look to add value, and believe a rising tide will raise all ships, not just their own. I think you know by now which campfire I roast my marshmallows. Our mindset can accelerate or hold us back more than any job, circumstance, or income level ever could.
How can you change from a scarcity to an abundance mindset? I adopted the mantra “be generous first” many years ago, which has served me very well. As physicians, we are generous with our time, talents, and skills every day when dealing with patients, but we often have a scarcity mentality when it comes to investments and finances. Do we think the world is running out of money? No worries, our government will always print more…I digress.
Investing can be a win, win, win, win…The seller wins, the buyer wins, the bank wins, the tenants win, the company being invested in wins, and everyone can win. Investing isn’t a zero-sum game where there are decided winners and losers. This is a myth our financial system and those who profit from it tend to propagate. They would rather us invest with fearful obedience so they can continue to profit off of the scarcity mentality and our faulty thinking.
What’s the answer? I think it’s to change our mindset.
Be generous with your time
Every physician I know thinks they are the busiest person on the planet. It’s true, there are demands on our time, but we are also guilty of misappropriating time slots on our schedules as well. We’re tired when we get home from a long day. I get it. But time is the most precious resource we have and our next breath is not promised.
When it comes to investing, many physicians take the “let the experts deal with that” mentality. This does a massive disservice to you and those in your closest circle. We spend our time learning countless medical facts, procedures, algorithms, and treatment plans, but when it comes to finances, we do the equivalent of turfing it to another team. That’s lazy on our part.
Financial problems are one of the most common reasons for divorce. Don’t get me wrong, having financial security doesn’t solve your marriage problems, but it definitely helps in solving financial problems. Wouldn’t figuring out how to properly invest your resources be a good use of your time? I know you’re tired and maybe even a little burned out, but being generous with your time in this area may well create that time and margin in the near future to help with that very problem.
When we have true financial education, we can pass this along to our kids, and those in our closest circle, and begin to share it with wider audiences. It all starts with being unselfish with our time to explore alternative strategies to using our income to create financial freedom for our family and the next generation.
Be generous with your funds
Physicians work hard and reimbursement has been stagnant, but we still bring in a very nice income. What are you doing with the money you are bringing home? So many times, we tell ourselves we “deserve” nice things because we have worked so long and hard to get where we are and delayed financial gratification. We then go out and take on liabilities (Mortgage) to buy an expense (Second Home) that will likely only be used 4-5 times per year. You then feel compelled to get down to the second home whenever possible because, after all, you’re paying for it, and it becomes more of an obligation than a joy.
Meanwhile, there are organizations and interests we believe in and would love to give financial resources to that go unfunded because that money is going into an expense that doesn’t cash flow. How could we better use our funds to be generous? By changing our mindset to “how can we add value” with our income rather than “what can we accumulate” would be a great start. Things don’t give us joy. Purpose gives us joy. If we acquire the same second home but make it an asset by turning it into a short-term vacation rental, it becomes a cash-flowing asset that adds value to countless families that will use it and bring them joy. We, in turn, can use these funds to be generous to the organizations and causes we believe in bringing us purpose and joy as well. Those that die with the most toys do not win, their family simply has a larger estate sale. By thinking about how you can add value with your funds rather than what you can accumulate, it can create cash flow, allowing you to live a life of generosity, purpose, and joy.
Be generous with your knowledge
Why do we have the tendency to take what we know and treat it like Gollum did “my precious?” Hoarding what we know is definitely a symptom of a scarcity mindset.
My goal is for every physician, healthcare professional, and entrepreneur to know everything I do about the investable universe. I try to put out as much content as possible because I believe the more value I add, the more valuable I become to my network. In turn, my network will add value back and my knowledge will grow from them. It’s a virtuous cycle.
Someone has to “be generous first” though, right? Well…be that person in your circle. Work hard to add value to those around you and lead by example. You will grow in your knowledge, investing acumen, network, and deal flow. That will draw like-minded people. You may not think you know a lot, but I guarantee you are further down the path than some. Just by reading this, you’re open to the possibility of an alternative way of investing. Simply sharing this blog post with someone may send them on a journey they never knew was possible. Be generous with your knowledge.
Purpose doesn’t come from having the most money, it comes from adding value to the lives of those around us. Most of us went into medicine for that very reason, yet we lose the mindset in the cynical world of seeing more patients, RVUs, the EMR abyss, and the litigious nature of society. What if we remembered where true purpose comes from and started there? By our very nature, physicians are giving people. Let’s remember to have a generous mindset when it comes to our investing as well. It can change everything.
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Here’s to winning your time back!