10 things wealthy doctors won't tell you

Guess what? You’re surrounded by rich doctors. You probably didn’t even know it. You know why? Because doctors don’t talk about that filthy lucre known as money. So while you’re assuming that all the other doctors in your group, office building, and hospital are in the same position as you, you’re wrong. Some of them are rich. There are ten things they’re not telling you, but which you probably need to know.

10. They don’t care about your Tesla

You know that Tesla you drive? It goes so fast. It’s so environmentally responsible. It shows people that you’re a doctor now, and a successful one at that. Guess what? The rich doctor across the hall doesn’t care. She really doesn’t. In fact, almost nobody does. You’re buying things you don’t need with money you don’t have to impress people you don’t like. Would you really want to hang out with someone impressed by your Tesla anyway?

9. They don’t care what you think about their beater

They don’t care what you think about their spending choices either, whether it’s their car, their house, their clothes, their vacations, their kids’ schools, or their favorite restaurants. They’re immune from keeping up with Dr. Jones.

8. They never owed as much in student loans as you still do

You know that $300K student loan you’re keeping under the bed? That rich doctor down the hall doesn’t have that. She lived like a bum when she was a student, like a student when she was a resident, and like a resident for 2-5 years after residency. Her student loans were only 2/3’s what yours were and she paid them off by Halloween after residency graduation by living like a resident.

7. They don’t have payments

It’s not just the student loans. Those other docs don’t have any payments. No student loan payments, no car payments, no credit card payments, no residency relocation loan payments, no timeshare payments, no ski condo payments, and not even a mortgage on their primary homes. There are lots of great mathematical arguments showing that you should drag out low-interest loans as long as you can, but most of those rich doctors stupidly paid them off early. Idiots. That lack of payments, however, did improve their cash flow and gave them the confidence they needed to take risks in their lives and their careers, and often times those risks paid off with higher incomes and better investment returns.

6. They have a written plan.

Guess what else those dorks down the hall have? A written financial plan. Silly, huh? Some of them wrote it themselves after reading some books or taking a course, but lots of them met with a financial planner and some of them still do regularly. They could actually tell you where their money goes each month, about how much they have and will need for retirement and college, and what their investment returns have been. Weird huh?

5. They’re not afraid to take ownership risk

Rich people tend to own stuff, and that includes doctors. Owning stuff can be risky, whether that means a high stock allocation in your portfolio, owning a practice, owning a side business, or owning some rental real estate. But since they apply the same intelligence and hard work to ownership as they did to get into medical school, those risks generally pay off with more wealth.

4. They’re financially literate

Not only does that rich doctor across the hall have a written financial plan, but she’s also financially literate. She knows what a Roth IRA and a mutual fund are. She knows the difference between a savings rate, an expense ratio, and a safe withdrawal rate. She can calculate her investment return and the payments on a fifteen-year mortgage. She knows the going rate for financial advice and why a capitalization rate has nothing to do with a mid-cap stock. Do you? Would you like to? There are ways of learning this stuff almost effortlessly.

3. They buy for quality

If you went to their house, you might be surprised at some of the old furniture and sporting equipment they have. But when that stuff wears out and they replace it, they do so with top quality stuff. They want something that will last a long time. They have saved up for it and shopped for it and aren’t afraid to spend money on it. They have plenty of money and are ready to enjoy it. But they’re still going to wait until the old one wears out. They might be driving a 15-year-old Accord, but the next car will be a brand new Audi paid for with cash.

2. They like their work more than you do

The doc down the hall likes her job more than you do too. How do you know that’s true? Because she’s there. She doesn’t have to be, you know. She has enough money not to work at all. So if she didn’t like it, she’d be off mountain biking, home with the kids, running a business, or pursuing a different career. Some people are surprised when they reach financial independence and find out they don’t enjoy their work more. But guess what? They’re not in clinic down the hall. They’re somewhere else. The rich ones down the hall want to be there. But they don’t put up with the crappy parts of the job. They can tell the administrator cracking the whip to shove it. They can pay someone else to work their night shifts or take their call. They no longer do procedures they don’t enjoy. They’ve figured out how to eliminate most of the parts of their job that they don’t like.

1. One house, one spouse

Remember that rich doctor in the lounge that you would have never guessed is rich? He’s been married for 25 years. To the same person. I know, right? He’s also in the same house he bought when he moved to this town. It’s been paid off for 18 years. No lake house or ski condo either. Maybe those decisions have something to do with his net worth. Or maybe it’s just the X Factor.

James M. Dahle is the author of The White Coat Investor: A Doctor’s Guide To Personal Finance And Investing and blogs at the White Coat Investor. He is the creator of Fire Your Financial Advisor!, a high-quality 12 module course with a little over 7 hours of videos and screencasts, a pre-test, section quizzes with answer explanations, and a final exam. The goal is to take a high income professional from square one, teach them financial literacy and help them write their own financial plan.