Have you ever wondered, what does it take to be a millionaire?
In this third & final podcast, Dave finishes with the BEST and MOST amazing info in the latest book that he loved, The Millionaire Mind by Thomas Stanley.
There’s so much packed in that book that we’ve divided up the podcast into 3 different parts. This is the final part- part three!
In part three of “The Physician Millionaire Mind”, we discover:
– How Millionaire Physicians Discover Their Vocation [AND how that’s different from everyone else!]
– The Biggest and Most Expensive Mistake That Non-Millionaires Make
– What Are The Habits of An Economically Productive Household? [Basically, what are the habits that we should all have to become millionaires! What do they do that we can learn from. It’s my favorite section of all!!!]
Resources Mentioned In This Podcast
Hey Everyone! This is Dave Denniston and welcome back to the Freedom Formula for Physicians Podcast and Our Three-on-Three video series.
We’ve been asking these questions. We’ve been exploring these things, talking about them….
How do you become a millionaire?
Are millionaire physicians different?
Does a physician millionaire have different needs or desires or drives than other millionaires?
Alright. In case you haven’t had the chance yet, I’ve focused on the book, The Millionaire Mind by Thomas Stanley. Everyone should read this book as far as I am concerned. There are so many golden information nuggets we just do not have time to cover.
In the meantime, let’s hop right back into it…
How Physicians and Other Millionaires Discover Their Vocation
The next thing I want to talk about that is different about physicians and many other millionaires is discovering your vocation. (Check out Page 185 of the book for more info on this)
How do millionaires discover their profession? What’s the intelligence gathering behind finding a vocation?
What’s different about physicians from most folks, especially the Small Business Owners, the senior corporate executives, and even attorneys.
All of them found their profession in a variety of ways… they had some idea through intuition or they studied the industry before joining it, or they may even study the profitability. Alternatively, they may have just stumbled across a great opportunity or they discovered after trial and error. But physicians aren’t this way at all.
Physicians had a very low percentage in finding their profession through all of these methods- whether through ideas through intuition, to studying profitability, or stumbling across a great opportunity. Most physicians were mindful about the reason they wanted to get into medicine.
A lot of millionaires and well…. I assume most of you were, of course with all the education and medical school that physicians have to go through. Well, this isn’t much of a surprise, right?
Now, what is particular interesting to me is when we take a look at how in the choice factors of selecting the vocation one of the things that came up time and time again more so for physicians than any other career path for millionaires was how physicians answered 83% (that’s right more than 8 out of 10) of the millionaire physicians stated the reason for choosing medicine was that it allowed the full use of their abilities and aptitudes.
Do you agree with that as a physician? Do you feel it’s allowing you to use full use of your abilities, your aptitudes?
Physicians higher than everyone else in another category, completely different than the previous one. Again, 83% of physician millionaires says they career gives them self-esteem.
Contrast this to others… only half of business owners say that.
The other very common reason for physician was need for independence. 85% higher than every other single millionaire class cited the reason for being a physician was the choice to be financial independent which we could go on and on and on about that.
(Note: With the ACA & pressure to produce, less and less private practices, and residents/young physicians having sky-high debt… is this still true? I also wonder if the survey was taken today- would most of the millionaire physicians be in private practices or working for hospitals?)
I want to ask you… do you relate to that? Does this ring true with you?
What is the reason that you chose to be a physician?
The One Factor That Separates More Millionaires From Non-Millionaires
The most critical factor that they cite again and again in the book is the importance of choosing a spouse.
On Page 250 and Page 251 of the text, it talks a lot about choosing your spouse. For millionaire folks, this was one of the top reasons that they attributed to their success: having a honest, a responsible, a living, loving, capable, and supportive spouse.
When I talk about factors of selecting the marriage, the partner, they give time and time again that contrasting millionaires of the general population where divorce rates are so high… millionaires do not get divorced.
Obviously, you cut your household in half then, right?
What’s fascinating is more so than anything else….
Satisfaction with your partner’s financial contribution is strongly related to how you feel about the relationship for those that are non-millionaires compared for those that are millionaires.
What the millionaires said was instead that having just enough to live on was good for them. That finances no longer came as a sticking point between millionaire couples.
The millionaire physician can rest easy when they know that even if their spouse loses their job… even if they change careers… that they stick together!
As a matter of fact, the divorce rates for non-millionaires are so much higher. Literally twice as high as millionaires.
We have to keep our spouses. We have to keep a loving relationship. We have to find forgiveness and the guts to stick it out in incredibly difficult circumstances.
I would like to know from you…
Where do you see successful marriages?
What does that look like?
Do you see millionaires having successful marriages?
The Economically Productive Physician Household
This is my favorite part of this whole book… the topic of the economically productive household.
The top habits with millionaires are the following…
HOLD ON A SEC…
As a matter of fact, I would like you to write this down…
Grab a pen…
Don’t worry, I’ll wait…
Alright, here we go, the top habits of economically productive households:
- Buying an older home in an established area (rarely, if ever, building from scratch)
- Never pay the full asking price for a home (they negotiate)
- Millionaires research the area around the home & comparable sales before they buy it (they do the homework!)
- Millionaires take weeks, even months to find the right property (they won’t make a hasty decision with large purchases)
- They test price sensitivity (they negotiate bargains and discounts)
- Having a furniture refurnished rather than buying new.
- Raising the thermostat during the summer (to avoid high cooling bills)
- Switching cell phones/long distance telephone companies for more economical plans.
- Never buying from telephone solicitations.
- Having your shoes re-soled or otherwise repaired.
- Buying quality (to avoid frequent replacement and repairs) and holding onto it for long periods of time. (i.e. cars, furniture, etc)
- Using discount coupons when shopping
- Buying household supplies in bulk.
All of those are assets and traits of an economically productive household. And he goes on and on and on about these different factors.
Pro vs. Do-It-Yourself
What’s interesting to me as you read through this book is this idea of pro versus do-it-yourself.
The author cites in the book is if you are great at something… you do it absolutely… all by yourself. You save yourself the money there.
If you are an amateur at something when you are a millionaire (or want to be one)- you don’t do it!
They give an example of plumbing. Obviously, you can save yourself some money if you do it yourself, but…
You might cause yourself for the issues, he said.
He has repeatedly told people that millionaires are frugal, but many think that do-it-yourself concept defines frugality.
THIS IS NOT TRUE FOR MILLIONAIRES!
In fact, the real frugality is in doing some of the little things that we are talking of. For example, clipping coupons or refurnishing stuff not buying new things every year.
This is what makes economically productive household.
More Details On Economically Productive Households
This is really the struggle. I want you to be frugal- walking the line between doing-it-yourself versus spending wisely.
Some of these things are really interesting in terms of being frugal. Consider that most millionaires (57% to be exact) according to the author raise the thermostat during the summer.
They are paying less in the heating bill, but by the same token… they are not afraid to spend money, when it might save them money over time. For example, they talked about the resoling of shoes.
Millionaires are not afraid to buy a 200-250 dollar per shoes that will last them for a lifetime and instead just get them resoled rather than buying a 70 or 80 dollar pair of shoes every few years.
The millionaire tends to buy quality and hang on to it. They don’t replace it very often.
Another really interesting thing that I see a lot of physicians struggling with is the actions taken in purchasing a home. He talks about this on Page 303 of the book.
What he says here about the economically productive household versus a non-economically productive household.
91% of millionaires, the economically productive, never pay the initial asking price for any home versus 80% for none.
Another big difference…. researching the price of recent home sales in the area.
89% of economically productive households do that. They take weeks and even months to shop around for the best overall deal, 81% versus 52% of non-millionaires.
There are very striking and contrasting differences between them and negotiating was another point. The millionaires tend to test price sensitivity.
They tend to ask for discounts on commissions and so on. Consider that most millionaires do not build their homes from scratch.
They tend to buy older homes in established areas that are built well.
This whole thing was just so fascinating for me… I have learnt many things myself.
I talked with my wife about the things we could do better as we look at millionaire households.
I would like to know from you….
Did you learn something today?
Could you imagine yourself being a millionaire?
What could you improve on?
Well, we’ve covered a lot. I highly encourage you to pick up The Millionaire Mind.
For the Freedom Formula for Physicians Podcast and a millionaire and hopefully future deca-millionaire, this is Dave Denniston.
Thank you so much for listening, we will make sure to go on this journey together and check back in again soon. Have a good one.
Dave Denniston, Chartered Financial Analyst (CFA), is an author and authority for physicians providing a voice and an advocate for all of the financial issues that doctors deal with. He is the author of 5 Steps to Get out of Debt for Physicians, The Insurance Guide for Doctors, The Tax Reduction Prescription, and his new book, The Freedom Formula for Physicians.
He’s glad to answer any questions about how to become a millionaire or other financial matters.