Financial planning

Work for assets, not money

Accumulating and developing assets that earn money can help you begin to be less dependent on your paycheck for income.

Shortly after I graduated high school, my uncle gave me a copy of Rich Dad, Poor Dad by Robert Kiyosaki. I’ve been a fan of the Rich Dad books and other products ever since. The fundamental premise of most of their work is that financial education is largely missing in our society, and they seek to shore up this issue by providing a common-sense approach to complex topics (hopefully this sounds familiar to us as we communicate with patients!). One of my favorite lessons from the Rich Dad series is the importance of working for assets rather than money.

There are different definitions of both money and assets. To clarify, for the purposes of this article, money is the currency used to pay for goods and services, while assets are tangible and intangible items of value that earn money.

This means, for most, your house is not an asset; rather, it’s a good purchased with money you earned. Does it have value? Of course. But does it earn money you can use to buy other goods and services? Unlikely. On the other hand, a house that is rented to a tenant is an asset because it provides money that can be used for other purchases.  

As physicians, we are easy and popular targets of businesses marketing ways for us to live the good life. We are equally popular targets of lenders standing in line to support us enslaving ourselves to monthly payments that we make by punching the clinical clock. This drives burnout and is the opposite of financial freedom.

So how do we chart a better path?

Through a lot of reading, seminars, formal education and learning the hard way by not resisting temptation, I’ve come to believe there are three fundamental steps on the path to financial freedom for most physicians:

Step 1: Invest in yourself to increase the value of your time at work.

Step 2: Establish a plan for investing your earnings in assets that produce money.

Step 3: Whenever possible, use money from your assets to enhance your lifestyle rather than money from your work.

Invest in yourself

To paraphrase Warren Buffett: The best way to find success is to invest in yourself. Whether it’s perfecting your craft in medicine through CME, improving your ‘soft skills’ like emotional intelligence and communication or by obtaining another externally validated skillset through an advanced degree (MBA, MPH, etc.) or certification (CPE, HCQM, etc.), investing in yourself allows you to command a higher return on your time investment in the form of higher wages. Physician executives with advanced degrees earn more than those without advanced degrees, strong communicators are more likely to negotiate higher salaries, and the list goes on. Investing in personal and professional development is a must for physicians looking for financial success – but leveraging that increased earning power is key.

Invest for cashflow

Investments provide returns in two forms: capital appreciation and cashflow. For example, a rental house may increase or decrease in value over time (appreciate/depreciate) based on supply/demand in the local market while also providing cashflow in the form of rent payments. Likewise, some stocks pay dividends as a form of cashflow while also moving up or down in price per share based on market conditions.

Ideally, investments achieve both positive cashflow and capital appreciation. Different circumstances call for prioritizing cashflow or capital appreciation when selecting an investment, but it’s worth considering that cashflow allows for immediate access to the returns to fund other interests. These returns can be reinvested, invested in other assets or used as money to buy goods and services you need or want.

Let your investment success define your lifestyle

One of the primary drivers of physician burnout is debt burden – not because of the debt itself, but because of the metaphorical chains it places on physicians to have a steady stream of high income. A common mistake physicians make is to take on high levels of consumer debt (material objects that don’t produce cashflow) simply because their high income allows for making the monthly payments. Once in this position, it’s hard to get out (trust me, I’ve been there!).

This habit of trading time for money to support a keeping-up-with-the-Joneses lifestyle runs rampant among physicians and is very unhealthy. Although it takes discipline, I encourage all physicians to work toward having the ability to scale up their lifestyle with cashflow from their investments rather than from their paychecks. Doing so breaks the metaphorical chain to the job.

At its core, the reason to work for assets rather than money, is to stop trading time for money. Making the shift from trading time for money to investing your time for assets that earn money will drive a compound effect that allows you to practice medicine from a position of passion rather than necessity – a liberating journey indeed!

Editor’s note: The views expressed in this article are the author’s own and do not necessarily represent the views of The DO or the AOA.

Related reading:

Start strong: Financial do’s and don’ts for med students and early-career physicians

Public Service Loan Forgiveness: What’s new, what’s left out, and what steps to take


  1. Jenna Dionisio

    This is an extremely valuable article. You are the first to introduce me to the idea of using money earned from investments as “fun money” for discretionary spending rather than my taking away from my take-home pay. Would you consider doing a future article on different types of passive income?

  2. James Huang, DO

    Both the Robert Kiyosaki books which I read during during high school and my maternal grandparents real estate company have shaped my thoughts and practices regarding wealth, taxes, and money. Glad that Dr. Morris is educating physicians about assets (wealth) and “money”. Through the years, I taught my daughters about the differences between owning productive apple tree yielding apples than speculating on the sale of future apples produced in an upcoming season. Those were the valuable financial lessons that my beloved maternal grandparents and parents taught me.

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