Financial Freedom for Doctors & Medical Professionals

Share on facebook
Share on twitter
Share on linkedin
Share on email

How you pay 11% in overall tax rate as a Doctor of high paid medical professional? I can show you how we do it!

My tax returns (2019 I paid zero in taxes!):

2017

Doctors and other medical professionals have excellent pay and prestige. For the first 30 years of their life they are often the top of the class.Medical Degree? √

Residency? √
Board Certification? √
High-Paying Job? √
Big New House? √
German Cars? √
Private Schools? √
Exotic Vacations? √
Fancy Clothes? √
Big Mortgage? √
Lots of Debt? √
Student Loans? √

The downsides are malpractice suits. Stemming from negligence claims from misdiagnosis, superfluous patience claims or untimely release. Side note (I am not a lawyer) I believe all doctors should have an international trust and not mess around with flimsy LLCs which I have seen getting blown up all the time or pressured into a bad settlement amount (average malpractice settlement amount was $350k per the The National Practitioner Data Bank.)

Insurance is a way to mitigate this but this results in heavy insurance costs. Add that to the decreasing margins taken by insurance companies and for-profit hospitals is making the rich doctor extinct.

 

Live Coaching Call with a Doctor going 45 => 75 MPH!

It isn’t until after spending years in medical school to earn their degrees, the whole residency system, and finally taking the requisite board exams that many physicians will enter the full-time workforce and start making the big bucks. At that point, there is so much delayed gratification and external expectation that “doctors are rich” to buy the large house or fancy car.

Sure doctors make good money (more and more going to insurance companies and admin), but they work long hours. The burden of student loans, credit card debt, and payments on new houses and cars cut into their income and make it hard for many to grow their wealth.

COVID-19 capsizes the physician job market: Trends you should know

  • Physicians are seeing fewer patients. 41% of physicians saw patient volume decreases of 26% or more.
  • Physicians are making less money.
  • They are making major staff reductions.
  • New physicians entering practice may not be able to get their first or second choice of employment opportunities, which was not the case a year ago.
  • More physicians have reached out to physician recruiting firms over the past six months than they’ve had at any time in recent history.

“Obviously I’m a few years older than you but the writing is absolutely on the wall, I was at work last night and had a critical care where I was having to intubate and put central lines in anyhow my aunt was actively having a stroke at the same time and my cousins were asking for guidance on what to do and how far to push the limits, I made the right decision cutting back no question, family first” – Hui Member

Just like humans who grow older and face the reality of our mortality, physicians that get further into their careers start to face the reality of their unpreparedness for retirement.

Here is the fatal flaw… doctors are probably some of the smartest people however that rarely translates to investing expertise because after all most of investing is your network.

 

Doctor Using Short Term Rentals for FI – David Draghinas from DoctorUnbound

Show notes:

  • 4-8k a month passive with short term rentals
  • Started with assisted living for a year but its very intense from an operator prospective and discovered it was too hard
  • Better paying tenants
  • Rental arbitrage game to scale up quickly and downsides
  • Get bookings on own website
  • Why are there so much engineers investors? And the doctor paradigm. And paying off student debt.
  • Pros & Cons of Short Term AirBNB & VROB rentals landlording
  • Better paying tenants
  • Rental arbitrage game to scale up quickly and downsides
  • Get bookings on own website

 

Private equity commercial real estate offer cash flow, capital growth, and capital preservation are prime examples of assets consistent with the personal and investment objectives of physicians.

These include:

  • Assuming responsibility for their timetables. By having the option to take additional downtime without agonizing over salary.
  • Opportunity from stress of how government and insurance agency strategies will influence their training and earnings.
  • Less stress over claims and other lawful consequences of rehearsing medication.
  • Needing to leave an inheritance and give generational riches that will last over different ages.
  • Having additional time and assets to serve others by adding to good cause and worthwhile motivations.
  • To discover fulfillment and satisfaction in building different organizations and associations outside of medication.

Besides immunity to economic downturns (COVID19) and inflation, private investments offer investors higher returns at lower risk than public options.

Tah Dah! It works! Hui member’s tax form for 2019. AGI of 429k and 47k taxes paid!

More on Land Conservation Easements

 

Case Study:

I am trying to find a way, and need your insights, in becoming a Qualified Real Estate Professional in 2021!
Challenge #1: By law, I need to clock in more hours as an ACTIVE, RE Professional than an emergency physician i.e 51% vs. 49%. Right ?
Solution #1: I will be cutting back to 144 hrs/month as an EM Doc, starting on Jan 1st, 2021. So, if I “work” an additional 145+ hours/month (4.83 hrs/day) as an active, RE professional, I would qualify that part. Right ?
Lane (Not A CPA): You are partially right there you need to have 750 hours at least of active (a lot of exclusions there so I don’t want to just generally throw that word around) participation. Technically 49% or less of you time being a doctor is what you need but I would say as a best practice is for your spouse to be the person qualifying and not yourself if at all possible.
Challenge #2: I need to clock in 750+ hours of active RE professional work per year and I know that being an LP in any Nap Cap syndications or and researching any other PASSIVE investment does NOT qualify me. Right ?
Correct, you are not a managing member and do not have carried interest (not guaranteeing the loan or much skin on the line)
Solution#2: Do I have to become a state licensed real estate agent, in Texas, and start listing SMF’s to qualify for that active work or can you think of any other activity that may qualify me instead ? 
This has nothing to do with Active Participation in your portfolio. This is a common misnomer.
Solution #3: I have a friend who owns and manages his own, 40+ SFH’s, in 3 different states. If I help him manage these homes or help him look for future properties to purchase (and add to his portfolio), will that qualify me as an RE prof. ?
This has nothing to do with Active Participation in your portfolio.
Solution #4: Does becoming a GP in any future syndications qualify me as a RE Professional ? Will those future dividends/proceeds now become active income vs. passive ?
This might be a possibility here. Consult your CPA and coach them through your logic. This is where the Family Office Ohana Mastermind comes in where many people are educating and sharing best practices to set up their family affairs and bring their CPA/Tax professionals on board.
In general, remind me again, why can’t my passive gains in my ER Hospital ownerships can NOT offset, dollar for dollar, the K1 losses from my passive MFH syndications ?
Passive losses (PALs) can offset Passive gains. 😁

 

Join our private investor group below:

 

Your time and money is valuable – often over $500-1k an hour!

Many of you folks have have some relationship with a financial planner, advisor, insurance agent, accountant, attorney, etc. When we take a holistic view of their planning, however, most are financially imbalanced. They are often exposed to unnecessary risks from embedded taxes, lawsuits, lifestyle factors, inefficient use of assets, etc. Failing to address all of these forces places downward pressure on their ability to build wealth.

Here, we bring together leading professionals in the fields of financial planning, taxation, law, practice management, succession planning, and client retention. This way, we can best assist our clients in addressing these issues and achieving optimal financial balance in their lives.

For a surgery to be successful, you need several team specialists available to address the various circumstances. Why would your unique planning situation be any different?

See how to work with us.

Close Menu

Free resources!

1) LP Syndication Guides & Turnkey Rentals

2) Accredited & Pure Investor Networking Opportunities

3) Free Trial of Passive Investor Accelerator eCourse

Join Our Community!

Free 15 minute
Strategy Call

*No sales pitch. Period.