Debt Free Dr

To help other dentists obtain financial independence within 5-7 years by investing in passive real estate investments.

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DENTIST EXPLAINS: The #1 Money Habit Keeping You Poor

Have you ever wondered why some of the smartest and most educated people are broke? Doctors, dentists, brain surgeons, and attorneys—despite going to school for many years—often struggle with money. In this blog post, we're going to discuss the number one money habit that's keeping us poor.

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My Early Financial Mindset and Background

Hello, I'm Dr. Jeff Anzalone, a periodontist on a mission to help you reach the point where work is optional. I went to school for a long time and about ten years into my practice, I started rethinking how money was coming in. If I couldn't work using my hands, I couldn't provide for my family. This realization led me to study wealthy people and understand their financial habits.

Discovering Key Financial Concepts

As I delved into the habits of wealthy individuals, I noticed that many of them kept referencing a few key books and mentors. One of the main ones was Robert Kiyosaki’s "Rich Dad Poor Dad," often called the 'Purple Bible.' Kiyosaki’s story, whether fact or fiction, illustrates a crucial point: being educated doesn’t necessarily equate to being good with money.

The Problem with Paying Cash for Liabilities

In "Rich Dad Poor Dad," Kiyosaki contrasts his two father figures. His biological dad, the "Poor Dad," was an educated college professor who struggled financially. On the other hand, his "Rich Dad," his best friend's father, was a high school dropout but a successful businessman. This contrast highlighted a key difference in how they handled money.

Misplaced Focus on Earnings

Doctors and dentists, like many professionals, often focus on how much money they make. However, if you have money problems, the instinct is to seek more money rather than learn how to manage what you have. This mismanagement is what keeps many professionals poor.

The Foundation Analogy: Building a Solid Financial Base

Think about the foundations of skyscrapers—they spend a lot of time and resources laying down solid posts, concrete, steel, and rebar before building up. Similarly, a strong financial foundation is crucial. Most people build their financial house on a flimsy foundation and try to support a skyscraper on it, leading to instability.

Understanding Assets vs. Liabilities

To build a strong financial foundation, you need to understand the difference between assets and liabilities:

    
• Assets: Items that put money in your pocket (e.g., investments, rental properties).
    
• Liabilities: Items that take money out of your pocket (e.g., personal residences, cars).

Exploring Different Perspectives on Debt and Assets

Many professionals make the mistake of paying cash for liabilities, thinking they're making smart financial decisions. However, wealthy individuals focus on acquiring assets that generate income, which can then cover the costs of liabilities.

Leveraging Other People's Money (OPM) to Cover Liabilities

Instead of spending their earnings directly on liabilities, wealthy people invest in assets. These assets generate income, which is then used to cover liabilities. For example, investing in an RV park syndication can generate passive income, which can then be used to pay for personal expenses.

The Value of Real Estate for Wealth Building

Real estate is one of the most effective ways to build wealth. Unlike personal residences, which are liabilities, investment properties are assets that generate income.

Real-World Example: RV Park Syndication

Let’s consider an example involving an RV park syndication. Suppose you invest $100,000 in an RV park syndication that generates an annual return of 8%. This investment would produce $8,000 in income per year. Over time, as the property appreciates and generates more income, your investment grows, providing you with a solid financial foundation.

Final Thoughts: Time, Freedom, and Finding Your Financial Path

The ultimate goal is to reach a point where work is optional. By focusing on acquiring assets rather than liabilities, you can achieve financial freedom and enjoy more time to do what you love. Remember, the key to financial success is not just making money but understanding how to manage and invest it wisely.

Conclusion

Start and educated people often struggle with money because they focus on earning rather than managing and investing their earnings. By understanding the difference between assets and liabilities and leveraging investment strategies like real estate syndications, you can build a solid financial foundation and achieve financial freedom.