Most healthcare professionals (not all of you, but MOST) are in substantial debt. You may still have Student Loan Debt. Then you bought or started a practice from scratch. How about that amazing house you bought or built. But is it all bad debt?
A Primary Impulse
It seems that most people have a goal “to get out of debt.” However, that is a negative goal and will slow you down in life. If you focus on “debt,” that is like having a goal to “not have an accident” and by focusing on that, you start trying to avoid it, which can make it much more likely to happen. Instead, what would like to achieve? … Pick a positive goal like to “have enough savings to retire at age 55” (or sooner … or if you love your job passionately maybe retire at age 85). This makes you focus on the future and want to work out step by step how to get there.
What is Debt Anyway?
Some debt is bad, such as credit cards that you run up and up and have to pay interest on with no further asset building. If you are spending more than you are earning, you are running further and further into the hole and your net worth is decreasing.
On the other hand, some debt is positive because you invest in something that will increase in value beyond your original investment. For instance, if you have a house and there is a mortgage on it, you could call that mortgage good debt because in the long term it is accumulating you some net worth as the house increases in value.
Good Debt: Investments
There are several ways to make money with money that you borrow that would be considered good debts:
(1) Investments into property, proven franchises, art, and other items that will for sure increase in value in the long or short term.
(2) Investment into your own business in terms of equipment, marketing and other actions that will increase the value of your practice.
(3) Investment into your own education. Getting trained on things like marketing, promotion, staff management, sales skills, executive decision making and so on gives you the ability to increase the profits in your practice. This is your best investment of all because you can generate ever so much more income which you can then turn around and invest into (1) or (2) above. It all starts with you.
The Ultimate Aim
The goal that you should be aiming for is having more net worth by double (or more) than you have debts (please check “INCREASING YOUR PROFITABILITY“ for more tips) And it must be growing, not static. Anything you put money into, you should have a good return from. Risky investments can set you back years of savings, so be sure that what you invest in is solid.
Control your spending and you will arrive at your goal much faster. That doesn’t mean not to plan for vacations and save up for them. Heaven forbid! And waiting until you are “old” and have “saved up enough to retire and have fun” are also not the correct goal as life is to be lived.
Stay away from Killer debt (credit cards and Lines of Credit) and the worry and anxiety that can be connected with it. Control that awful impulse to buy things you don’t HAVE to have if they are not on your ultimate plan.
Invest in the 3 ways listed above and watch your net worth grow. A well planned future with the correct skills to get there as fast as possible can make life positively fun and exciting!
We Can Help You Big Time with #3 above!
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