By Dr. James M. Dahle, WCI Founder
Most of the time my blogging focus is entirely directed at physicians who are and plan to continue making the vast majority of their money from the practice of medicine. I want those docs to stay in practice to take care of me when I get sick or injured but I also want them to get a fair shake from the financial services industry. However, from time to time I try to write a post that might just lift up the curtain on an entirely different world out there- the world of entrepreneurship and the somewhat related concept of passive income.
In some ways, just owning your own practice is becoming so rare that it is somewhat entrepreneurial. But I'm really talking about doing something different from that. Somewhere along the line most of us were told or came to believe that “doctors are rich” and if you become a doctor you'll be one of the more wealthy people you know. In some ways, that's true. Your income will certainly place you into the top 5%, and for many, in the top 1%. If you are smart and carve out a large chunk of that income and use it to build wealth, your net worth will also eventually be in the top 1-5%. By the way, if you're not familiar with the data, an income of a little over $200K gets you into the top 5% and an income of $500K gets you into the top 1%. Those figures aren't too hard for docs to get to. The net worth figures are tougher. A net worth of $2 Million gets you into the top 5% and a net worth of $8 Million gets you into the top 1%. But if you make $200K and save 20% of it a year for 30 years and make 5% real on it, you'll get to $2.6M. The doc making $500K, saving 20% of it a year for 30 years and making 5% real on it will get to $6.6M.
Is There an Upper Limit on My Income and Net Worth?
Many times I've run the numbers and seen what I could get to from a physician income. After a while, the exercise bothered me a little bit. It wasn't that it wasn't “enough,” because it certainly is. It took me a while to put my finger on what bothered me, but what it turned out to be was that I felt capped. As an emergency doc, I love the fact that I have no idea what I'll be doing at work on my next shift. The suspense of not knowing the future is exciting to me. So you can imagine that being able to predict my financial future relatively accurately given my income, savings rate, and return took a lot of fun out of this little financial game. I mean, it's cool the first couple of times you do it. But after doing it a few more times, you realize the answer isn't going to change, and you get a little bored. Nothing wrong with that. You can go focus on those areas of your life that are more interesting- your patients, your family, your hobbies, your skills as a clinician etc. Investing is supposed to be boring, right? But then along comes this idea into my mind that maybe I don't have to be capped. Maybe there really isn't an upper limit on my income or net worth. This is America, right?
Trading Time for Money
Who says my models don't earn their money? It took four hours to get to this location and 2 minutes to coax her into opening her eyes!
I'm no fan of Kiyosaki's writings, but he gets a few things right. One of these is that if the only way for you to make money is to trade time for money, there will be a limit on your income and net worth because you only have so much time. This applies even if you are able to trade your time for money at a very high rate as high-income professionals like physicians, dentists, and attorneys can do. The professions just don't scale well. You can only do so many operations a day. You can only see so many patients a day. You can only bill so many hours a day. Sure, you can hire a few associates and slice off a little bit of what they generate, but in general, you're pretty limited.
But some things in life do scale. There is no practical limit to how many shares of a stock, bond, or mutual fund you can own. The more of them you own, the more income you get and the higher your net worth becomes. Likewise with rental properties. Once you have the systems in place to manage 10 doors, it is not a huge jump to get to 100 doors or 1000 doors. Books scale. No limit. Websites do too. The more pageviews you have, the more value the website has. How about if you design a fancy medical widget? If it is really practice changing, there is no practical limit. You can eventually scale up your manufacturing to make as many as the market will buy.
Aside from scaling, it is also exciting to realize you can make money even when you aren't working. You can make money while you're eating, sleeping, working at another job, or even while on vacation. You can even make money from the work of others. If you are lazy like me, that idea is very enticing. This concept is generally referred to as “passive income.”
Passive Income
Passive income has a technical IRS definition. Basically, the IRS views earned income as active and investment income as passive and allows you to not pay payroll taxes on passive income. But you can't go strictly by the IRS definition. For example, most would consider book royalties to be passive income, but the IRS doesn't. It's earned.
Passive income generally comes in two flavors. The first is capitalism, i.e. your capital (or money) goes to work instead of you. Your money can work in lots of different ways. You can buy stocks, bonds, mutual funds, investment properties, a franchise, an oil well, part of a friend's business and many other things. Then you go back to doing whatever you want to do, and from time to time the investment sends you some money. If things go well, it also appreciates in value so you can eventually sell it for more than you bought it for.
The second flavor is perhaps best exemplified by a book royalty. You put in a bunch of time and work up front to write, publish and market a book and then it continues to pay you a stream of income afterward. Many blog posts are like this. You write them and place some ad-serving code on them. Then, over years, that post makes a little bit of money every day or week. Get enough of those posts, and get enough eyeballs on them, and after a while, the income can add up to something significant.
Passive income is awesome, even if the amount of it pales in comparison to your active income. It's not just awesome because you can be lazy and still get it either. It's awesome because of what it allows you to do. Imagine a doc making $200K a year. Now she figures out a way to get $20K a year in passive income. What can be done with that? Well, if this doc were following my 20% savings rate recommendation, she was saving $40K before. Now she can save $60K a year. Plus she needs less from her retirement portfolio. She moved her financial independence date from 30 years away to 21 years away. Now, what if she came up with $40K a year of reliable passive income? Knock another 6 years off. Now she's only 15 years away. Or perhaps she loves her work and doesn't want to retire early. Instead, she can take her family to Europe each year. Or buy a new car every 2 years. Or start a scholarship fund. Or make major donations to local charities. Or cut back to 3/4 time. Lots of options. You don't have quite as many options as if you were already financially independent, but you have a lot more than what you had before!
There Is No Formula
Every few weeks someone contacts me and asks me how to build a successful business (usually a blog.) They seem to think there is a formula or a prescription they can follow to ensure success. While in any business field there may be some “best practices,” there is no formula that leads to entrepreneurial success. Successful entrepreneurs either do something that has never been done before, or they do it better or cheaper than the existing companies doing it. But this isn't flying a plane or even taking out a gallbladder. You can't just go down a checklist and be sure that when you're done, as long as you followed all the steps, that you'll get to where you wanted to go. It's risky and turbulent and the truth is that most people fail. They fail because the idea was a bad one in the first place, because they ran out of money before they could start making money, because they lacked sales skills, or simply because they found a better use for their time. Doctors in particular fall into this trap because of the way our career path is set up. If you get into the pipeline, and keep your head down and work hard for a decade, you are nearly guaranteed to come out the other side of the training pipeline with a job that will pay you hundreds of thousands of dollars. That sort of guarantee doesn't exist for most fields and certainly not for entrepreneurs.
If you are a physician or other high-income professional and wish to feed your entrepreneurial spirit, here are a few recommendations:
#1 Don't Quit Your Day Job
The biggest issue with an entrepreneurial pursuit is that it fails most of the time. The best way to make sure it doesn't fail is to give it enough time and money to allow it to succeed. Where do you get money? You can either get it from investors (who want to see a return on their investment sooner rather than later) or you get it from work. What would make you run out of time? Mostly it occurs because you run out of the money you need to live and keep your family happy. But if you still have a very good job paying you a very high income, you can use that income for any financial needs a business of pretty decent size may have and you don't have to worry about where the eating money is going to come from. You can stick with it far longer than someone else who doesn't have a good day job, increasing your chances of success.
#2 Minimize Cash Outlay
The less your business costs, the more likely you are to make enough to cover those costs and turn a decent profit. If you can run it out of your home, at least for a while, great! Not only do you get to avoid a major rent expense, but you might even be able to claim the home office deduction if you use that space exclusively and regularly for your business. Sweat equity has an opportunity cost, but at least you can pay it with pre-tax dollars. Many things are far less expensive than you might think- publishing books, starting a website, or registering a business. Bootstrap that business!
#3 Minimize Your Time Outlay
Most successful businesses were started with a lot of blood, sweat, and tears. But be on the constant lookout to make sure you're using your time in the way that is most profitable. For a high-income professional, there is always a high opportunity cost. You can't afford to do stuff that won't eventually have a pay-off, especially if it isn't so fun you would do it for free.
#4 Find Resources for Entrepreneurs
There are Society Of Physician Entrepreneur (SOPE) groups all over the country. Many towns have “incubators” that will provide you office space and mentors to help you succeed. Angel investors provide not only money but experience. The business world is one of connections. Start making some!
#5 Throw Stuff Against the Wall
Throw stuff against the wall and see what sticks. Run it up the flagpole and see who salutes. Throw it in the well and see how big a splash it makes. This is one of the best parts of being an entrepreneur. Sometimes you have no idea what your business will look like in a year or five years. When I started WCI, I really had no idea how I was going to make any money. So I tried to make money in A LOT of different ways. Guess what? Most of them didn't work well. What were once my two biggest revenue sources now account for < 5% of my revenue. The next decent one that came along is also now a tiny contributor to WCI income. Almost none of the things I tried worked well enough to justify taking time away from a profitable practice to do them. But I just kept throwing new stuff against the wall. And eventually, maybe once a year or so, something would stick. A light would pop on and I'd be off to the races with that income source. A year later, I would have another financial win. But in between, there might have been ten things that didn't work. If it doesn't cost too much time or money, give it a try!
What do you think? Do you think doctors should embrace their entrepreneurial spirit? Why or why not? What percentage of doctors do you think have what it takes to start a business? Tell us about your entrepreneurial successes and failures. Comment below!
Before I started my physician finance blog, I developed iPhone apps, which made pretty good money in the early years of the iPhone App Store when it was less competitive. Now it’s near impossible to make money in that space unless you’re a professional programmer (which I am not).
I think most physicians aren’t particularly interested in being entrepreneurial. The formula for becoming a physician and being financially successful on a physician salary is so clear that few physicians have the desire to form side businesses unless it’s something they are very passionate about.
Wall Street Physician,
Interesting that you got out of the App Development space. We have been developing apps since the beginning of the app store as well. Although it is much more competitive with multi-million dollar companies getting in the space, I have found that first mover advantage has helped us maintain our footing.
The expectation of free has pushed down the price of apps but newer models of monetization are out there and developers are still successful.
We still haven’t made enough money to replace our physician income but it does make enough to help keep my wife home with our children.
I found your last sentence interesting. It makes me kind of sad that your physician income alone isn’t “enough to help keep [your] wife home with [your] children.” I bet if you really examine that, it probably isn’t true.
point noted: inserting “our” for “my”. Staying at home is her choice and I am happy to be able for her to have the option.
I should be a little more careful using pronouns when writing online. When people don’t know you personally they can be quick to make assumptions.
As for the physician income, we make a personal choice and spend over 50k/year on private school for our children. Not a game changer but once the 401k, 457, Roth are maxed out, mortgage and insurances are paid we are not exactly living beyond our means. The side income helps with treats in life like ski boats, vacations, etc.. I am sure you understand since you side income helps do the same for you.
Fair enough. So the two of you are making a conscious decision to value some things (private school, vacations, retirement etc) more than having a spouse at home.
That is one great thing about a side income- it’s like having a THIRD spouse with an income contributed to the household. And yes, I do understand that wakeboat in the driveway and the fancy new car in the garage were paid for by WCI, LLC. I could have bought them (still for cash) solely out of my physician income, but it would have required putting less into retirement accounts that year.
We keep one spouse at home, that’s the motivation for trying to grow the side business. We have joked that we may swap spots if I could ever get the side income up enough not to have to head out to the hospital at 0600 5 days a week.
Being outnumbered 3 to 1 is no picknick in my book.
On a side note. Great job sticking with it, like most overnight success stories you have been working at it for close to a decade.
Most passive Income success stories I have seen were anything but passive in the beginning. But if you stay in the game and keep swinging the bat, eventually you have a chance at that home run.
Dr to developer,
Do you have a way I can contact you via e-mail? I have an idea for an app/ gadget and am wondering if I can pick your brain on resources to learn how to code to create an app. I have no experience coding at all but I don’t think the app would be particularly complicated to make, it seems to me like a simple idea.
Strider_91
Two important items to consider:
First, have you tested your concept/idea? There might not be a market, if there are similar apps on the store, that is usually a good sign. Someone has validated the idea and market for you. Are the apps up to date and well designed?
Second, do you have a revenue model in mind? The reason Wall Street Physician likely got out of the app development game is that there was a giant race to the bottom regarding pricing for apps. Today, most people won’t even consider downloading an app if they have to pay for it. If you look at the store, the most successful apps are conduits for other services, supported by other revenue models. It’s hard to get enough downloads of a paid app just to pay a developer to keep the app updated for the annual iOS improvements by Apple, and we haven’t even started to talk about developing for Android yet.
Sadly, like blogging, owning rental properties and most of the other forms of passive income, the term passive is very misleading when it comes to building apps.
Honestly, the reason we still develop apps 8-9 years later is that we build apps we use ourselves.
If you were to compare the revenue models for building apps to running a website, I would say running a website such as WCI has done here is a better long term model. Here is a quick comparison:
Website: it’s like owning your own house: you own the domain and can do what you want. You make improvements over time and it gradually gets better. Sure there is some maintenance or it gets dated but overall it’s an asset that is worth more over time as you improve it.
Apps: are like owning a car. They wear out rather rapidly and you constantly need to put money into them to keep them working well. They look great and are fun to drive/develop but the thrill wears off quick.
The major difference is that when building apps, you are dependent on the developer agreements of Apple and Google. They can and will change the rules. We had to pull and completely redevelop two of our most popular apps because Apple changed their developer agreements. Apps that were approved and ok for years all of sudden would not be approved due to the new agreements.
Hope this helps. head over to my website and contact me there if you want more info.
It’s easy to become enamored with the idea of passive income. Who doesn’t want to get paid while they sleep and play?
The truth is that most passive income streams require a fair amount of active work on the front end before they become passive. Real estate, websites, books, etc… all require a lot of homework and time, and sometimes a fair amount of risk. Even owning dividend paying stocks and funds requires you to earn the money to purchase them in the first place.
Once you have the income stream flowing, you may be able to back away and take a less active role, but you can’t ignore the time, work, and knowledge that went into creating the income source.
Best,
-PoF
Agreed. I have put in 10-16 hours a week on my blog (likely more) and the pay out has been low (but positive) thus far. Is it rewarding. Oh Yeah! To be able to do something outside of medicine (and successfully, though maybe not widely yet), but my income per time thus far is lower. That may change in 3, 5, or even 10 years and hopefully I will still be at it.
What is’low’ less than 10k a year, 25-50k/year other?
My thoughts align with PoFs. I almost didn’t comment because he said what I was thinking. 🙂 Very few “passive income” streams are truly passive. Most take some level of effort. Honestly, when I’ve looked into the topic before, I think buy-and-hold investing might be the only true passive income option. Even then though some people will do a little work with rebalancing and such.
As for entrepreneurship… definitely not passive in my experience but a GREAT way to build toward your future. It’s a ton of work but work you can structure around your own schedule and priorities. I started a business in 96, ran it for 18 years (working crazy long hours), then sold it in 14 for a decent exit. I love that even though I worked my butt off, I was able to align personal priorities to spend time with family, travel (often “working travel”), etc.
I’ll also say that #1 is HUGE. Even though I started a business in 96, I didn’t stop my other full-time job until 2001. In fact, I was employee #3 at my own company! If you can pull off an overlap like this, it’s a great way to minimize risk. Starting something new is always risky so anything you can do to improve your odds is worth considering.
Buying and holding dividend generating stocks is the classic low effort way of achieving passive income. Others include pensions, royalty payments, interest on private loans, trust funds and similar financial arrangements where delivering a product or service aren’t involved. On a larger scale, buying a small company and managing it largely hands-off is probably the “easiest” for someone who isn’t really interested in becoming a hard-core entrepreneur.
All of it requires active upfront work and some amount of ongoing management though. Nothing comes free.
I think it is a good idea for most physicians to look for other sources of income besides medicine.
Especially if you are in a specialty where it is hard to own a money making part of the practice such as emergency medicine or anesthesia, those docs should look for other ways to earn income without trading time for money.
This helps diversify risk and not depend on future retirement from only medicine and the performance of the stock market.
Your point about minimizing up front costs is a good one.
You shouldn’t go all in on a restaurant or the latest tech gadget if you don’t know anything about those businesses.
Using some blood, sweat, and tears to build up other streams of income not dependent on trading time for money can enable you to accomplish some goals outside of medicine like travel/ time off earlier in life.
Tom @ HIP
Passive income should be everyones goal. My passive income is now larger than my work income. Of course I only work 3 days per week now. I have found that I have accumulated a large enough taxable account that I can live off the dividend and interest stream with no problem (150-200k/year). My husband has some interesting passive income streams as well. He owns the publishing rights to a mediumly successful country music song, book royalties from a book he wrote, and cattle. He started a hobby country music booking agency for formerly successful country acts that brings in more than his day job. He started this business in his 60s. Very low overhead.
Thats very cool. IP is very interesting as a pursuit. Much harder than it used to be. Amazing what can happen with it over time though.
One thing I’ve focused on in my entrepreneurial side gigs are areas that I have a built in advantage (primarily due to my profession). While I don’t consider this a “business” one example is that I have control over splitting the direct deposit from my day job however I want (via computer – I don’t have to talk to HR). This is perfect for getting checking account bonuses – if I had a different day job I probably wouldn’t bother, but I have a built in advantage that allows me to receive thousands of dollars in checking account bonuses every year in what cumulatively is only a few hours of work (over the whole year). So basically I try to exploit the ways that I am different from the average joe so that I don’t have to play on a level playing field with everyone else.
Great post. I think the biggest barrier for physicians is that the entrepreneurial path is not linear. We have been trained to follow the rules and if you do, you will be rewarded as an attending. As you noted, with passive income and entrepreneurship, the rules are not as well defined and you have to take some chances. Given the changes in society and healthcare, many are realizing that a stable “job” is not enough. Not just financially, but mentally. Hopefully more of our colleagues will explore the options passive income with entrepreneurship. I for one am trying. #notjustasurgeon
This is one of those much easier said then done. It is easy to see something after the fact and say I could have done that. You hear about all the big successes that were started in garages, but for each success how many failures do you think there have been. Also many of these ideas don’t pan out for years. Amazon, Home Depot, McDonalds, etc… to years of blood sweat and tears before the initial employees and investors saw any profits.
Those are some MONSTER companies you are talking ’bout. Most docs would be happy with passive income that doubles their salary (probably even less). Not sure you’re comparing apples to apples.
And I would argue it is easy – with time invested. Remember Residency? 80+ hour weeks? 30+ hour stretches?
Spend 2-4 hours a night M-F on your side hustle and give it a year.
JustSayin
Sure, who doesn’t want more money? But I don’t have 2-4hrs a night to spend on (frankly I don’t know what) those hours are my family time and without family who cares about money?
Perhaps age has something to do with it – for instance I’m no longer keen on working overnight shifts – I did one recently for 1.5x pay, but was mangled for longer than I’d like afterwards. But for me I find time – currently 4 AM. I’ll spend 2 hours on finishing some consulting reports. I also work about 2 hours a night after family has gone to bed.
On what? Turn a hobby into a business, write an e-book, start a blog (just not a financial one – WCI would probably thank me for that recommendation). So many ways to earn more, enjoy the process all the while win at being a great family member.
Right WCI?
There is always time – quit watching House of Cards! (as Gary Vaynerchuk would say)
As always Just Sayin’
Yes, if you watch television, you still have time to spare.
That said, it’s not like just being an average physician earner and putting 20% of it away for retirement each year doesn’t work. It certainly does. Entrepreneurship is entirely optional.
I really enjoyed reading this post. Can you dive deeper into point #5 – the details of what worked and what didn’t work for your website? That might require another post 🙂
There is actually a fair amount of demand for that information, particularly from those whose businesses may compete in some ways with mine. At any rate, I’ve been made a “featured speaker” (I think that means I speak in the big room) at FinCon 17, so if you’d like that information, I’ll see you there with the other 500 people!
https://finconexpo.com/
See you there!
Interesting. Why share this then? What are tangible benefits to WCI LLC ? More copy catters who’ll come to the forums boosting this sites “SEO” or just giving back to the “community”
A great deal of what I do with WCI, LLC has zero tangible benefits to me or the business. Making money is only one of its three missions, and certainly not the first one.
Another excellent discussion of an important topic! If I had to guess at a the number of physicians interested in entrepreneurship I would say it’s around 5%. I agree completely that one of the big factors is that physicians have one of the last “clear pipeline” jobs where once you get accepted to medical school all you have to do is jump through hoops for 7-12 years and you are guaranteed a high wage position afterwards.
I think education about options and helping physicians better understand their financial situation is the key to this. One of the major contributors to the death of the once ubiquitous solo private practice (the original default physician entrepreneur option) is the rise of huge student debts. You’ve mentioned this before in other posts. Another publication I’m working on shows that as debt rises med school grads are significantly less likely to look at opening their own practice, opting for employee jobs instead with a guaranteed paycheck.
Student loans change mindsets and expectations for physicians, and I bet part of the reason you probably get so many emails is that people want there to be a guarantee somewhere. Heck, the interview you did with the one financially independent doc specifically stated that she took the highest guarantee she could at every job, trading potential upside for the sure thing. That is the opposite of the mindset required for building a business.
I know that I personally wouldn’t have even though about entrepreneurial opportunities if it hadn’t have been for this website.
Looking forward to that pub, but curious if you can prove causation. At the same time we saw large medical centers gobble up small practices in recent decades during an arms race for market share. Larger market share = larger referral base. Also scoops up specialists that perform expensive procedures. I’d add – salary from a large medical center, while a steady paycheck, across the country is far lower than the average practice (caveat being that the practice is well run and doesn’t have very high overhead). So why would high debt scare a doc away from hanging a shingle if they can make more doing so? By the way many hospitals simply don’t give admitting privileges to those not directly employed by the hospital – unfair, though common practice.
Do share your pub when it is accepted
JustSayin’
I heard a presentation last year from Eric Toone, former Chair of Duke’s Innovation and Entrepreneurship Initiative, and he gave the following stats:
100% have an idea
60% discuss the idea with an acquaintance
40% research existing products/ businesses
25% consult with a friend in target market
21% write a business plan
20% make a sale
19% build a business website
18% seek independent market expertise
13% explore financing options
10% test demand
9% design a prototype
These numbers are quite high, probably reflecting more of a business/entrepreneur’s community. I don’t think this reflects stats for physicians. But, it provides food for thought.
Great post. I’m curious if you believe it’s all work ethic or if there’s a constitutional component to those physicians who thrive as entrepreneurs. I imagine Tim Ferriss’ ostensible 4 hour work week is anything but limited to 4 hours, because as a constant tinkerer and optimizer, his mind never stops generating new ideas to throw at the wall and see what sticks. Where most docs would give up after a high denominator of failed attempts, those successful physician-entrepreneurs I’ve met seem either oblivious to defeat (failure is not a deterrent, just another chance to tweak my business until I reach success) or the challenge is fascinating enough that the rewards go well beyond the financial remuneration – it’s a pathology with utility. Income or page views are a metric of that success rather than the primary driver. My wife has an entrepreneurial side business, and we joke that her business is our third child – a huge time sink, a ton of work at inopportune moments, and one of her most meaningful creations.
I tend to think of my “passive income” as coming from investments that I don’t have to work on. I have managed to acquire a great deal of that fortunately. Then there is “active income” that I get for my clinical and admin work. What I’m working more on now is what I think of as “residual income”. Where you work once (actively) but are paid again and again. I have some of that, but not enough. An example would be WCI’s book. It took him a lot of work, but now he just gets income deposited for years after. #Beautiful thing.
This post obviously really hits home for me. I think the biggest reason I’ve pursued different passive income sources is not because of the cap on my medical income, but it’s knowing that I have a hedge against changes that are happening in medicine. There’s some freedom in knowing that you have other options; and freedom plays a large part in overall happiness.
All your recommendations are great, but #5 is huge! Most people put all this pressure on every venture expecting it to be a home run every time. It actually keeps people from trying different things and taking small risks. I’m with you, if you feel a desire to pursue something, go for it. If it’s not going to work, it’s not going to work. But if it does work…
The freedom aspect of a side income becomes less important as you hit financial independence. Then you’re free to quit any time anyway.
Good post. I’m a CFP that helps more than 700 physician clients, and my spouse is a physician, which gives me a unique perspective on an entrepreneurial vs. physician career path…as well as an understanding of how physicians view those in business and financial services. With all due respect to the great info on this blog, the overwhelming feeling is that, compared to medicine, I’ve chosen an easy “job” built upon passive income and overcharging clients. I know firsthand that most advisors lack a combination of ethics, knowledge, and volume…I’m not asking for you to respect them. But, for those who’ve built our practices the right way and are blessed to survive, there is far more uncertainty and risk-taking required in our line of work. I know firsthand how hard physicians work and train, and few professions can really relate. However, there is a known formula to medicine. The formula is always evolving but as long as you study very diligently and work your ass off, you can be successful financially. While those ingredients are similar in any endeavor, there is no such formula in creating a successful practice from scratch. I didn’t get into finance to make the most money possible…I did it to be an entrepreneur in a field where I can really make a difference in clients’ lives. And yes, I am blessed and grateful to have residual income from my business, but 99.9% of advisors never get to my level of success + value provided. I respect all physicians because I know what it takes. They should also learn to respect entrepreneurs, including advisors, who create their success from scratch.
No need to be defensive. I respect your success. 🙂
I don’t have enough time or energy. Is it just me?
If you’re in a medical or surgical sub-specialty, or general IM or surgery, do you have enough time and energy to take on entrepreneurial projects? If so, how many hours/week do you work and how much call do you take?
I’ve always considered myself a hard worker, but maybe I’m a slacker with no self-awareness. 🙂
No, it’s not you. Medicine is an incredibly demanding profession. I have been reminded of that lately as I study this summer for my 10 year board recertification exam while trying to get my shifts in, continue to travel, and run the WCI Empire. I can’t believe how much more I have to know to be a doc than to do all this other stuff. Last night’s stump question was about how to distinguish Tetraology of Fallot from Truncus Arteriosus and Transposition of the Great Arteries on physical exam when practically speaking these kids (if they ever wandered into my community ED) would all get exactly the same care, and wouldn’t spend very long there!
Just getting to the end of the “doctor pipeline” is a huge accomplishment and most docs I know accomplish more good in a week than most other people do in a year.
If I didn’t have a plethora of weekday mornings off with my kids in school and my friends at work WCI would have never gotten off the ground.
My condolences (on upcoming recertification).
I’m working my way through CME questions in the ACC Self-Assessment Program 9 today (between reading blog posts), but it’s very slow going because I’m still dead from last week. Two of my associates were on vacation and work was awful.
Shift work is an advantage. Still, the evidence suggests you have more energy than me. 🙂 Congrats.
Wish I could bottle my son’s energy and sell it.
My fingers are still crossed that the ABIM changes certification before I’m due in 2019.
Agree that being 10 years younger with fewer distractions is helpful, but there is time.
You pack into a day far more than most are willing to.
Simple advice for my younger self would have been to work 30-50% more in my first 5+ year out to accelerate nest egg and reduce time to FIRE.
True passive income is certainly the holy grail. Rental properties are tempting, but not exactly passive. Writing a book or starting a business is certainly exciting and appealing, but never guaranteed to actually bring in any money. One of my dreams is to be able to live purely off the dividends and interest from my taxable investments. Essentially 100% passive income. If we live on $60,000 per year, then assuming a 2% dividend/interest payout per year, this would require a $3 million taxable account. It will take a LOT of actively earned income to get there.
Especially if you preferentially use retirement accounts as you should. But income from a taxable account certainly doesn’t hurt.
That feeling of being capped as a doctor has always been frustrating. You cannot scale by just focusing on trading your time for income working as a physician. No matter if you own your own practice, are a contractor or an employee. It is not fun or exciting having a very defined ceiling. I have an entrepreneurial spirit and have always focused my goals on that. It is where my passion lies, not medicine, as I found too late. I am two years out of residency, have paid of my 350k in loans, fully fund retirement (63k) like a utility bill and now have 200k saved towards an active (not passive) entrepreneurial venture. I have just recently cut my hours at work and will have significant income stream coming in as I pursue my goals. My living expenses continue to be meager but I am comfortable.
*63k a year
Alex, have you achieved these milestones with only your physician income or other income as well? This is a large turnaround in a short time, congratulations.
I guess Google Adsense can count as a passive income stream; the only thing is that the amount of money one makes from that is dependent on how much traffic one gets. And how much traffic one gets is mostly dependent on how much one writes, so if I was to stop blogging, the money would eventually stop flowing. I think Yaro had it right when he recursive affiliate income was the best online money making option
It really depends on a lot of things what makes money best online. At different phases of this site different methods have been “best.”
1) Advertising income
2) Affiliate marketing
3) Selling my own products
4) Selling my own time
Each of those has been best at one point or another. Probably in the order of 4, 1, 2, 3. But why do one when you can do all four?