I am always very careful to use the word “cost” because in business there is really no “cost” for anything of value. Everything is an investment. If it truly is a “cost” then it is not necessary.
Your electric bill, your snow removal, your team uniforms… all investments.
In business, you have investments that drive value, create growth, produce income opportunities, develop people, even nurturing patients – all of these things are investments.
Obviously, I have to deal with this whole “investment” discussion a lot because some dentists (not all), don’t fully understand what investing really is.
A quick example is buying a share of stock whereas you might receive a 2 or 3 even up to 5% dividend on this stock and it should, hopefully, double in value in 10-15 maybe 20 years depending on it’s growth or how long you want to own it.
Say you own this stock and you make your money back through dividends. However, this can take decades unless you sell it but then you don’t have it anymore.
The same goes for real estate. While it’s more secure and most conservative investors who work hard for their money prefer hard tangible assets. Still unless you sell it, it takes a long time to get your money back.
Who wants to only make money when they sell their assets?
Smart people focus on creating income so they can buy into more investments and then those investments can grow without work.
The point is simple. Many doctors think of “investments” like this where they make money very slowly over a long period of time. Then inside of their practice (when they can dramatically grow their income and leverage the asset they are already paying for every single day), they are cheap about it and view everything as expenses.
Even I, yes me, have some Dentists (and I certainly work with the smartest and most successful) who are admittedly too timid about this.
They invest money and they receive immediate growth in 30 days, 60 days, 6 months, 12 months continually. Maybe they go from $60,000 to $100,000 or from $100,000 to $160,000 or from $160,000 to $240,000. Of course, some grow much faster and more dramatically than others (those who focus on it and want to win).
So think about this…
How much would you invest if you could add $40,000 or even just $4,000 to your monthly cash-flow knowing that you would keep that increase every month for the rest of your career?
Don’t forget to factor in the fact that the growth I’m talking about is sustainable because it’s infrastructural and profit-driven growth. If you are a very poor operator and your net remains at 50% (unless you are an investor doctor or using associate based dentistry then perhaps closer to 30%), every dollar you make over and above what you are already doing you should be making nearly 100% of in profit, minus lab fees, basic supplies and team bonus share.
Therefore, if someone asked a smart person how much would you invest in order to make an extra $10,000, $25,000, $50,000 or $100,000 this year and every year thereafter … only a fool wouldn’t invest at least $10,000, $25,000, $50,000 or $100,000 respectively. I mean all of it, seriously. There is nothing else in your life you can invest in to double your investment on a recurring, annual, income basis. Not without taking on debt or making a very long term commitment to something.
Imagine if you made an extra $100,000 cash this year or better yet $1,000,000 cash. I just love it when I take Doctors to more than $100,000 a month in PERSONAL INCOME. That’s quite a breakthrough for most people; something they have not even dreamed possible.
Before you go investing in all kinds of other things, you should be focused on investing in your primary income stream, your greatest asset: your practice.
Because when you do that, you will grow the amount of money you are able to invest in other things and then it will multiply much faster.
People get rich not because of what they invest in but because of how much they invest in. Plain and simple, the more you earn and invest – the more you win. The key is these two things go hand in hand, but earning happens before investing can.
Invest in practice profits and financial independence gets a whole lot easier and happens a whole lot faster.
This is why, last week, I told you there are very different ways to grow. It is critical you understand what you have to give up to do it and then make a smart decision like an investor would.
Being cheap about growth or greedy about your expectations or small minded about investing is the best way to ensure you never break free from mediocre income and reach the real levels of profitability you are capable of inside of your practice.
Next week, I’ll give you the good news… profit without problems, more money with less work. It’s actually possible when you follow this plan and make it your own along the way.
I’m toying around with the idea of hosting a special in-depth training specifically about the money side to owning your practice: mastering the financial components of dentistry. It’s just an idea, but depends on the level of interest. If you are serious about understanding this whole money, finance, cash-flow thing better and how to best make your practice work for you – just hit reply and we’ll see what happens.
Have a nice weekend, you deserve it.
