The Millionaire Next Door

A Doctor in Need

I recently received an e-mail from a physician of the Income Statement Affluent variety (high income/low net worth).  In it he laments about the difficulty in transforming himself into a Balance Sheet Affluent millionaire. 

I have all the basics to live frugally; I just have not done so because I have been caught up with my status.  Until your latest book, Stop Acting Rich, which is my 3rd installment, clearly I must have forgotten from reading The Millionaire Next Door and The Millionaire Mind.

He wants to know how he can invest his money to the fullest, what cars he should drive [wants to get rid of his BMW], and whom he can rely on in an effort to develop “a better financial success.”

Building wealth is not just about having a financial plan, driving an inexpensive car or reading my books!   Even knowing what actions to take is not enough.  Building wealth is a lifestyle. In his situation, this physician needs a stern mentor to guide him, advise him and actually discipline him into changing his ways and means.  

I have consistently found that most self employed millionaires, including physicians, have one thing in common: they work closely with what I call an entrepreneurially oriented certified public accountant.  In The Millionaire Mind, I mention that 71% of multimillionaires regularly receive investment advice, primarily for private investments, from their CPA. In fact, CPAs are the number one provider of this type of advice among the millionaire next door types.  [See, for example, Table 4-4, p.155].

Of all of the CPAs of this type whom I have interviewed, one stands out from all the rest, Mr. AG aka Joe [see pp. 201-237 in Networking with the Affluent]. Like members of his cohort, Joe and his partners own the commercial building out of which they operate.  He also owns several other small businesses which he started.  Joe provides a variety of services beyond the traditional accounting offerings.  Many of Joe’s clients are of the millionaire next door type including 63 physicians.  Most of these physicians own the office building that houses their practices.  Joe encouraged them and facilitated the purchase of these buildings. 

My advice to the physician who wrote to me is to spend a little extra time with his patients who own businesses and ask them about the services provided by their accountants.  Alternatively he could contact the accounting departments in the colleges and universities in his area for a referral.  Once he has found a Joe-type CPA he should ask him to build budgets for his household and his business.  Over time, the CPA will help him stay out of bad deals and bad investments and keep him on track with his financial goal of becoming a member of the Balance Sheet Affluent.

3 thoughts on “A Doctor in Need”

  1. Bruce Benson (

    “needs a stern mentor to guide him, advise him and actually discipline him into changing his ways and means”

    Which may not be a CPA, who might provide great ideas, but not the personal discipline to live life moment by moment in a smart way. I suspect frugality -> CPA, but I have some doubt that CPA -> frugality.

    Thinking about your writing, often the spouse provides some of the lean towards frugality. I notice no mention of a partner in this case. My ultra frugal wife (and I’m considered frugal) helps me stay the course.

  2. Mike @

    One thing that I learned from “Networking with the Affluent” is that an accountant is a millionaires most trusted advisor. I have worked hard to find the right accountant and our relationship has helped me really grow.

    I gave her specific instructions to be my most trusted advisor. I told her to confront me about any expense on my profit and loss statement. I told her not be nice about it. This has helped me so much financially.

  3. I also have an ultra frugal wife. Sometimes she might be known to say, “Why did you buy that bottle of water when you could have filled it up at the tap?” I believe it must be quite difficult to change the purchasing or using of status type things when that has been a pattern over time. In short, I believe embracing the words of the late Jim Elliot, “He is no fool who gives up what he cannot keep to keep what he cannot lose.” Less is so often so much more.

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