As dental professionals we often find ourselves in financial situations where we thought we had made a safe investment only to discover that maybe it wasn’t the best choice after all. In this article, Stephen Gardner proposes another strategy to help us achieve our financial goals. I personally know Stephen and he is passionate about helping doctors achieve financial success.
Imagine buying a dental practice that was cash flowing $1 million a year for only $400,000. What if you could legally buy your building for 30 cents on the dollar? In both scenarios you’d be walking into equity from day one and securing a very smart purchase. This is the power of buying equity while everyone else trips over themselves to try and grow it.
Every year I go to financial conferences where advisors talk about wanting to get more doctors as clients. Yet they continue to offer you the same options and investments as the previous six planners that dropped by unannounced. Don’t you get tired of being pitched the wonders of the stock market every year?
Since you are following Dr. Donna Galante, you and your practice are no doubt making more money. What should you do with that money to ensure it is growing, isn’t exposed to large amounts of risk and doesn’t have to be watched over with fear? How about instead of earning money and attempting to grow equity, you buy equity. It’s not a strategy discussed very often, but it is a more efficient way to increase your money.
Whether you play the stock market or invest in real estate or acquire other companies, the best opportunity to make money is made at the time of purchase, not when you try to resell.
Let me give you an example using real estate as the asset to help you better understand buying into equity instead of attempting to grow it. Let’s say I am a real estate agent and come to you with two scenarios to choose from:
#1: You can buy a $150,000 property and hope it goes up in value by the time you want to sell it.
#2: You can buy a $150,000 property for $100,000 and walk into $50,000 worth of equity from day one. Plus, you have the chance of it increasing in value by the time you are ready to sell it.
Which would you choose? The standard way of buying assets at market value and hoping they go up or the alternative of buying at a discount so you have equity to harvest from day one?
Most smart investors will choose option 2 because of the $50,000 of equity from day one. If the price never increases on the property, at least you know you walked into a positive 50% on your value. Even if you sold the house in 4 years, 50% divided by 4 years is equivalent to a 12.5% simple return in each of those years, while the home you bought at full market value may lose or increase slightly over the same time.
Most advisors recommend products, companies or programs that have you buying at market value. This leaves you only praying for favorable outcomes and hoping it goes up in value. Hope is a good quality to have but a terrible investment strategy.
One of my clients is a doctor in Illinois that lost close to $800,000 in 2008. During his career, he had been a good saver and bought stocks and mutual funds with the thought that they would increase over the years. The great recession taught him some valuable lessons. Lessons he later admitted he thought he had learned during the dot com bubble, but had forgotten when the market was heating up.
After sharing the idea of buying equity and how he could do it with the most safety, he decided to place money on a contract and allocated $71,428.57. The contract was worth $94,345.24. He walked into $22,916.67 in equity from day one. Six months later the contract came to an end. The doctor received his $94,345.24. That was equivalent to a 32.08% return. Now I am not one to chase returns because I think that can be dangerous, but in this case, it turned out very well for him.
The return will differ depending on the asset you use and the time frame needed to complete the investment. Would knowing you’ve walked into money from the beginning be easier or harder on your mind than always guessing how your investment will turn out? This strategy of buying equity becomes incredibly popular once you understand how and where to use it.
How is your money currently growing? Are you buying assets and using hope as your strategy or are you focused on securing your gains from day one? The plan you have for your money may be outdated or more in line with an advisor’s goals than your own.
In my best-selling book, Smartest Doctor in the Room, I break down this strategy on how to buy equity in advance. I also show how you are most likely being ripped off in fees and may not even know it.
The book further discusses the fuzzy math used by Wall Street that prevents you from becoming wealthy while making itself rich on your hard earned money. You will also learn about an alternative way to take full control of your IRA money that less than 6% of Americans are familiar with. This knowledge alone is a game changer.
As a dental professional, your schedule is already packed. Running a practice, performing dental wizardry, keeping the front desk running smoothly, dealing with product and drug reps, monitoring your finances and then deciding how to invest without taking a big hit. Learn how you too can become the Smartest Doctor in the Room, take control of your finances, minimize risk and evaluate alternative investment strategies.
Legal Disclaimer: This post is not an offering to sell any security or financial instrument. This is purely educational material and the opinion of the author. Legal advice and research should be conducted by the individual before making any financial decisions.
Stephen Gardner is the owner and founder of the Safe Millionaire Club, author of A Bridge Over Troubled Wall Street and Smartest Doctor in the Room and is a Safe Money Specialist that lives in Salt Lake City, Utah with his wife and 3 children.
He is also a National Sales Trainer and speaker in the financial services industry. He has often been heard saying, “I am on a mission to strengthen America one family at a time.” His focus is on building tax-free investments, educating and strengthening doctors’ financial health and showing clients how to tap into the wealth building power of commercial real estate.
He is passionate about helping families get safe returns on their retirement funds. Although he calls himself Stephen, many of his clients and friends call him Safe Money Steve. www.yourbridgeplan.com