Columnist Greg Kelly remembers a researcher and author who found that the physicians who build wealth are those who are disciplined, work hard, and have a supportive spouse.
“Wealth is more often the result of a lifestyle of hard work, perseverance, planning, and, most of all, self-discipline.”
—Thomas J. Stanley, PhD
In my recent perusing of business news, I learned that a very wise but largely unsung professor has died. Sadly, Dr. Thomas J. Stanley is gone but his lessons must never be forgotten—especially for today’s worried physicians.
Dr. Stanley, who earned his doctorate in business administration from the University of Georgia, was killed at the age of 71 in an auto accident on Feb. 28 near his home outside Atlanta. A respected Georgia State University marketing professor, Dr. Stanley did years of research to show that most American millionaires don’t live the “Mercedes-driving, Mansion-living” life.
The author of several bestselling research books on money matters including “The Millionaire Next Door” and “The Millionaire Mind,” Dr. Stanley studied the habits of wealthy Americans (including doctors) for more than 25 years. He found that enduring financial success is built on hard work, thrift, determination, discipline, and finding a good spouse.
In his study of physicians, Dr. Stanley found that while they are among the highest wage earners in the nation, less than 10% are actually millionaires. Why? “Most non-millionaire physicians spend what they make,” he explained. “These doctors have a lot of really nice possessions, but are basically broke.”
As an editor I had the pleasure of interviewing him a few times for the Physician’s Money Digest magazine, and frequently quoted him in my editorials. During one of our interviews, Dr. Stanley made the following points:
• "Successful physicians who are able to accumulate wealth are much more likely to say it was through discipline. Doctors are especially sensitive to this issue. If you look at their medical school records, they credit organizational skills more than people skills. They consistently say they work harder than others.”
• "Successful physicians usually have supportive spouses.”
• “Successful physicians give tremendous credit to being their own bosses and to the freedom it brings.”
• “Successful physicians underemphasize superior intellect.”
• “What's interesting about the physicians I've surveyed is that they weren't in the top 1% in medical school. They're not analytical geniuses, but rather bright people who worked extremely hard.”
• “When asked about their experiences in school, doctors say that hard work was a lot more important than genetic high intellect in achievement. What concerns me, however, is that most medical schools put too much emphasis on standardized test scores and not other factors."
Dr. Stanley also had a formula for how much retirement savings/net worth a doctor should have based on his his/her age. His procedure is to take 1/10 of your age, times your annual income, and then double it.
Thus a 40-year-old primary care physician should have a $1.7 million net worth, a 50-year-old PCP needs $2.2 million, and a PCP at age 60 needs $2.6 million. A 40-year-old specialist physician should have a $3.1 million net worth, a 50-year-old specialist needs $3.9 million, and a specialist at age 60 requires $4.7 million.
(Based on 2014 Medical Group Management Association average annual salaries: primary care ($221,000) and specialist ($396,000) physicians)
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Dr. Stanley also developed his "foundation stones to success." They are:
• Know that our economy rewards and will continue to reward success factors such as hard work, integrity, and focus.
• Be assured that a lackluster academic record does not have to stand in the way of economic productivity.
• Take some financial risks and learn how to overcome defeat.
• Look for a vocation that is original, profitable, and makes full use of your strengths; make it one that you love.
• Choose a spouse who is honest, responsible, loving, capable, and supportive—characteristics that are compatible with success.
• Run an economically productive household, focusing your time and spending to enhance your productivity.
• Search and negotiate aggressively when buying a house and choose one you can easily afford.
• Adopt a full and balanced lifestyle—having fun doesn't have to carry a luxury price tag.
Image via Facebook.