How Doctors are Getting Rich with OPM (Other People’s Money)
Good debt helps you get rich, Bad debt makes you poor: If you want to get rich, load up with ‘good debt’. -Robert Kiyosaki
We have been brought up to view debt as ‘bad’, it has a negative connotation. The average person typically focuses on trying to ‘get out of debt’. Almost all doctor know what it’s like paying off student loans.
Yet debt is often used by the rich to get richer faster, by using other people’s money (OPM). There is a clear difference between ‘bad debt’ and ‘good debt’. Bad debt is used for consumption, while good debt is used to create assets.
In this article I’m going to share a unique opportunity that doctors have to leverage their practice to generate an extra $4 million of tax free retirement income.
The Cycle of Wealth
Leverage is an investment strategy of using borrowed money to increase your returns. It’s the way fortunes have been amassed again and again throughout the ages.
Borrow money from a bank, and invest it in an asset that enjoys higher returns. It’s a simple formula: Investment gains - interest expense = Earnings
Here’s how the rich keep getting richer using debt:
Compound Interest is your Best Friend
When the assets you invest in COMPOUND each year, your profit during this cycle becomes exponential.
“Compound interest is the 8th wonder of the world. He who understands it earns it…he who does not pays it.” — Albert Einstein
You see humans brains have trouble comprehending exponential growth.
Imagine you’re hunting, holding a rifle, and watching an animal run across your scope. As humans, our brains are pretty good at calculating and predicting where to aim, even if the animal was accelerating (linearly of course).
But imagine if the animal went from a 8mph to 16 to 32 to 64 as it crossed your scope. Tough shot right?
Our brains have trouble imagining exponential growth, this executive function ability would have been useless during the hunter and gatherer era on the plains of the serrengti. Nothing was exponential.
But with invention of money (and technology), we better understand exponential growth, and appreciate it fully. That’s why we need graphs to visualize it.
In this example, when we borrow $1000 (green) and invest it in assets that compound annually (purple), you make $4,000, after paying your interest expense (blue).
What if I told you our firm could provide you access to $1,000,000 of debt to use as leverage, compounding with S&P 500 market gains. That’s $1,468,193 made out of thin air as shown in the chart below.
This is too good to be true, what are the risks?
Hint: How to Enjoy Stock Market Gains without the Risk of Loss.
How do I access $1,000,000?
I thought you might ask ;)
Unless you are ultra-wealthy and have significant networth and liquid collateral to post, it’s pretty hard to get a bank to trust you. However, what many doctors don’t realize is that they are uniquely positioned to access large amounts of debt. Doctor’s aren’t just amazingly talented professionals changing and saving lives.
Doctors are business owners AND business executives.
And therefore have unique access to capital.
Commercial loans, with interest paid as a business expense, can be used to buy personally-owned income generating assets. This is one of the strategies my firm specializes in.The plan also involves growing the borrowed money in a tax-free financial vehicle.
It’s alchemy, and a no-brainer for any owner of a small practice.
How to Get Started
My firm has the experience, banking relationships, and tools to help you implement the strategy. Doctors of private practices who implements this plan generates on average $4 million of tax free income.
My name is Spencer. I’m a fee-based financial consultant working at a nationally renowned financial services firm with tremendous experience that’s over a half century old.
Click here to to see if you qualify.
For questions, please contact me: spencers@paradigmgilbert.com
