Many Practice owners seem to think that income is the number one factor in measuring their financial success… but actually, net worth is a MUCH more accurate measurement of how well a person is doing financially. It’s the number that every single businessperson in the top 1% cares about the most—the number they track, and use to make important financial decisions.
You can find your net worth by solving one simple equation: what is OWNED minus what is OWED.
So, let’s do a quick exercise. Get a sheet of paper and a pen, and write down a list of every single asset that you own, including your house, your Practice, investments, cars, etc. Beside each item, write its estimated dollar value (in the current market). Not what you hope it’ll be worth someday… But how much you could actually get for it if you sold it today. Now, add up all of those amounts—THAT’S the value of your assets.
On another sheet of paper, write the word “Liabilities”. Liabilities are what you OWE on those assets—so, credit cards, car loans, mortgages, student loan debt, etc. List everything that you can think of, and calculate the total.
Finally, subtract your liabilities from your assets, and Voila!–you’ve found your net worth. That is how much liquid cash you would have if you sold all of your assets to pay off your debts. In this imaginary scenario, you’d be homeless, without a Practice or a job, or a car to get around in—but (possibly) very rich.
So, what’s the secret to increasing your net worth?
It’s common sense, but very few people approach it strategically. You need to actively work towards INCREASING your assets, while DECREASING your liabilities. Let’s start with your liabilities.
When it comes to paying off your debts, there is—sadly—no magic solution. You just need to start. List what you owe from smallest to largest, and start chipping away at the smallest one. Make paying off your credit cards every month a HABIT, or—if you’re too far in debt—put 15% of each paycheck towards paying them off. Alright, but what about increasing your assets?
For most Practice owners, there are three main vehicles for gaining wealth.
- Purchasing real estate
- Developing cash and investments
- Continuously increasing the value of your business
Typically, increasing the value of your business FUELS the other areas… And there are TWO super effective, foolproof ways to supercharge the value of your business. Thousands of doctors have used one or the other or BOTH of them to see production increases of 200% (and higher) in one year!
If you’d like to learn how to supercharge your Practice and start actively building your net worth, call 866-917-2808.
Until next time,