You can live like you are rich or you can be rich, but very few will ever be able to do both.

 

Question. What are the keys to long-term financial success?

Answer. Achieving financial independence is remarkably simple: make a lot of money, don’t spend a lot of money, and make the difference between what you make and what you spend work as hard as you do. Believe it or not, a great example of this method is basketball great Shaquille O’Neal.

Shaq, like many incredible basketball talents, left college early to start playing in the NBA. Although well-known as a terrible free-throw shooter, he was a prolific scorer and won many awards, including Rookie of the Year, league MVP, and 15 invitations to the NBA All-Star Game, in addition to four championships. However, if you listened to him on TV after a game, you wouldn’t be surprised to learn that he spent a million dollars within 30 minutes of joining the league. This led to a call from his banker, chastising him and warning him he would end up broke like so many other NBA athletes if he kept it up. Shaq apparently took it to heart and decided to learn about business and finance. He went back to school, finished his bachelor’s, and then did an MBA. In 2012, he finished a doctorate degree. That’s right: he is now Dr. Shaq. More important, he applied those lessons and turned his high income into a high net worth by purchasing hundreds of businesses, including 172 restaurants, 150 car washes, 40 fitness centers, a shopping mall, a theater, and some nightclubs. I suspect he now earns far more money than he ever did as an NBA star.

Physicians have a lot in common with successful artists and athletes. All three groups enjoy a high income due to unique talents and skills rather than any significant business acumen. All three groups are also well-known to end up broke despite earning millions of dollars over their careers. This is not a coincidence.

Continuing medical education (CME) is a mandatory part of being a physician. There is another type of continuing education you should be doing: continuing financial education (CFE). This is far easier and requires much less time than CME. It can be as simple as forcing yourself to read a financial book once a year, following a financial blog, or meeting frequently with a good advisor who educates you. The vast majority of physicians find personal finance, investing, and taxes incredibly boring and painfully dry. However, if you recall, so was organic chemistry, but you forced yourself to learn that because you had to. You also have to do CFE, or else it may cost you hundreds of thousands, or even millions, of dollars over your career.