Getting out of debt is easy. Getting rich is not

Financial success is built upon establishing goals and achieving them. We call this the financial plan. This plan is similar to any other blueprint that we create—there should be some concrete achievable goals, a timeline, and an action plan to how to meet the milestones during the process.

The challenge in creating a sound financial plan is to identify what we hope to achieve as the end product. My earliest financial goals had been rudimentary:

“Get rich”

“Become a rich doctor”

Over time, the goals end up becoming loftier:

“Earn $1 million”

“Earn $10 million”

The problem with these statements is exactly how college admission essays are graded a ‘3’ out of five points—they have an endpoint, but the story isn’t very well-developed.  I was throwing out great ideas, but none of the goals were concrete. Some of these goals probably weren’t achievable in one full career.

You might also like: How I paid off $148,260 in student loan debt my first year in practice

As I reflect on all of the goals, mini-victories, and long-term financial visions I’ve tackled, perhaps the easiest one that I’ve achieved has actually been getting out of debt. Why?

Goals have to be concrete, with an achievable timeline, and plan in order to succeed.

It turns out that getting out of debt meets those requirements handily.  The concrete aspect of getting out of debt was to achieve a net worth of zero, a quantifiable amount on the family balance sheets.   The plan for getting out of debt involved reducing my living expenses as much as possible while building up a strong financial offense.  Transitioning from a medical fellow to an attending physician is probably one of the only times in a doctor’s life that her earning power easily more than doubles.  That’s impressive financial offense.  The timeline to getting out of debt for a medical resident transitioning into attending level work is essentially immaterial.  As long as your expenses do not increase proportionally with your income, you have a clear-cut formula to get out of debt. Easy peasy.

Getting rich is not easy.

Of course once the income increases, so do the expenses.  It’s psychological.  Some of us have that innate ability to live on minimal expenses, but it can be tough to sustain especially if you have an income that is several times higher than that of the average household.  For this reason alone, many high income professionals never become “rich”.  We simply spend too much to become “rich”.

It’s easy to grow into your income.

More challenging is how you define “being rich”. In the broadest sense, we are already rich if we are high-income professionals.  Some people don’t consider being “rich” until they have a better lifestyle, house, and wealth than most people they know..quite the slippery slope.  Some others keep changing how they define “rich”.  You simply cannot become rich if you don’t have a set definition of it.

Becoming rich shouldn’t be your goal.

As I became more well-versed in my financial knowledge, I realized that “becoming rich” shouldn’t be my goal.  It’s too vague. You’ll never reach a vague goal.  What’s more important is to identify a quantifiable lifestyle to achieve with quantifiable measures of wealth.

What is your next goal after getting out of debt?

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