Episode 69: Freedom From Needing A Paycheck

Description:

Discover how high-income earners can gain freedom through passive income. Tom Burns, M.D. joins Tom to discuss his transformation from a high-income surgeon to an investor who practices medicine.

SHOW NOTES:

01:43 – How Does A Doctor Create Passive Income?

05:34 – How Can Passive Income Improve Your Day Job?

07:35 – How Does Passive Income Provide Freedom?

10:04 – Why Is Real Estate Investing So Attractive For Passive Income?

13:44 – Do You Need A Team To Create Passive Income?

18:04 – How Do You Start Creating Passive Income While Maintaining A Day Job?

23:07 – How Can Passive Income Provide Tax Benefits?

Transcript

Announcer:

This is the WealthAbility® Show with Tom Wheelwright, way more money, way less taxes.

 

Tom Wheelwright:

Welcome to the WealthAbility® Show, where we’re always discovering how to make way more money and pay way less taxes. Hi, this is Tom Wheelwright, your host, founder, and CEO of WealthAbility®. So are you really comfortable depending on a paycheck, no matter how big your paycheck is? Or would you rather have the freedom to do what you want to do when you want to do it? And it may be that you want to do your job, but you don’t have to do your job. And today I have very, very special guest, a personal client of mine and just an all around good guy, and at the same time, a doctor.

 

Tom Wheelwright:

And a doctor and a real estate investor, Tom Burns, is really one of the great people I know, very humble and just always trying to learn more, and I love that about you, Tom. So thank you so much for being on our show and tell us if you will, just a little bit about your background so that people know, why did you write your new book, Why Doctors Don’t Get Rich. I love this, and I appreciate it. And thank you for allowing me to contribute a little bit to it. But why did you do that, and what’s your background that caused you to do such a thing?

 

Tom Burns:

You bet. And first, thanks for having me on, and I’m proud to be a friend, client, and now guest. So this started a long time ago. I started my path way back when, when I was training as a doctor. I had no training, no business training and I was moving along as a doctor. And I started seeing the doctors that I was supposed to emulate in the future, complaining and moaning about not having control of what they were doing, and they were making pretty staggering amounts of money as far as I knew back then. And that’s not what I wanted for my life. I kind of wanted something that had a little more choice, a little more control. So I started investigating things, ended up in real estate. And as you said that real estate’s done well for me.

 

Tom Burns:

So flash forward for probably the past 10 years, I’ve had enough income coming in from my real estate that I have not had to rely at all on my orthopedic surgeon income. And what that did, Tom, was it made my life so much more fun. You’ll rarely find a doctor that got in the business for the money. There might be a few stragglers out there, but most of them got in for varying reasons, money not being the source. We know there’s a pretty definable, pretty reasonable amount of income that comes from it, but they’re there for different reasons. And I found that once I started relieving a little pressure with money that came from something that wasn’t dependent on my time, wasn’t dependent on a paycheck, was dependent on investments or whatever brought that money and pressure lifted.

 

Tom Burns:

I smiled a lot more. I started enjoying things and I started enjoying medicine even more. And so the reason I wrote the book is a mutual friend of ours inspired me to write it. He said there was a bit of a story there and a good lesson. And I’ll tell you, I actually learned a lot more through the two and a half year process of writing the book, but there are a lot of people out there, not just doctors, there’s doctors, there’s a lot of people out there that might have a paycheck, might even have a big paycheck, but they’re not as happy as they’d like to be.

 

Tom Wheelwright:

Well, I think this is a really interesting topic, Tom, because we’ve heard a lot about universal basic income, for example, that this is one of the problems, is this difference between rich and poor. And I look at that and Buckminster Fuller, who we both studied, a great genius of the 20th century, he was very much in favor of a universal, basic income. But the reason was he said, “We shouldn’t have to work for a living.” Okay. “We should let technology can do a lot for us. We should be able to do what God…” The way he put it is, “What God wants us to do.” And that’s really what I hear in your voice is that’s the freedom you’re talking about is look, I’ve never met a doctor who got in it for the money. And I’ve had hundreds of physicians as clients over the years.

 

Tom Wheelwright:

And not one, got in it for the money, “Oh, I just want to be rich.” No, I mean, that’s a side benefit, but what’s happening also is doctors are not getting richer. I’ve seen incomes plummet in the medical field, particularly in the general practitioner, sole practitioner, those people, their incomes have really dropped drastically over the last 10 or 20 years and no longer are they making big, big six-figure income. And so I have clients like yourself and I have other clients, I’ve got a cardiologist who’s a client, and they want to be a doctor, but they don’t want to have to be a doctor. So what do you tell those people about… Okay, so what’s the story? I mean, how do you not have to be a doctor?

 

Tom Burns:

I believe when a little pressure is lifted and you can do something that you like, that, that’s where the magic happens, right? That’s where these doctors are going to create cures for cancer or helping in ways that we can’t define right now. Way back when, when I was in training, and I sort of had that light bulb, when I decided, “I don’t want this, I don’t want to be those guys that are teaching me how to be a doctor.” They had money, but they didn’t have freedom. And if they got hit by a bus the next day, it all shut down immediately. So it starts with education, Tom, like everything. It starts by learning what’s out there. When I speak with doctors, I just give them a little high level view about what’s possible. And just to give them a little hope, and generally they’ll come up and say, “I had no idea. I thought in order to make more money, I had to work harder and spend more time.” So the answer is learning how to make money without using your time.

 

Tom Wheelwright:

Yeah. So let me ask you about that. My wife, as you know, is also a CPA and she actually won’t take a doctor as a client. She says, “They know everything, they don’t need me.” So to me, what I’ve appreciated getting to know you, is that you’re always wanting to learn more. One of the first things you said was the two and a half year process of writing the book was a learning experience for you. What I love about working with you and frankly, all of my clients, because they’re all that way, is that they really want to learn. And how do you get… When you’re talking about professionals, whether it’s a doctor, a lawyer, an accountant. I mean, seriously, we’re all the same, right? Or anybody else, okay? Whether they’re making high income or low income, to get to the point where they just want to learn. How do you transmit that message to people, Tom, to really encourage people to be learning? What’s the benefit? Why even take the time?

 

Tom Burns:

Oh, because to answer the last question first, because of the freedom it provides. Once you buy back some of your time, you control what you do and it’s blissful, man. I mean, you can do things from anywhere in the world, or you can do things that you want. I mean, that’s so that’s the why. I tell them, or I suggest first. As you say, doctors know everything. The only difference between God and a doctor, right? God doesn’t think he’s a doctor.

 

Tom Wheelwright:

There you go. There you go.

 

Tom Burns:

Anyway. And I can say that, because I’m a physician, but it takes some humility. And then just a little bit of action to reach out and be open to new things. That’s what happened to me. I knew nothing. I just started learning. And when you touch one thing, you touch something else and your network grows and you start learning where to find out where to find things. So just reading a few books, looking on Facebook, joining some groups that do things like this. You immediately start getting into an ecosystem where people may have already been where you want to go. They’ll start guiding you. All of a sudden the options are endless and they’re out there, but you’ve got to have some humility and the ability to go out there and realize you don’t know everything and start learning, because you can learn something from everybody.

 

Tom Wheelwright:

Well, that’s to me, that’s one of the big keys here. Is that what I take from you and what I’ve learned from you over the years is that, you always have to be open to learning and you never know everything. And I had a great professor and I did my master’s degree down in your neck of the woods, the University of Texas. And she said, “Look, the great thing about the tax laws, the more you know, the more you realize you don’t know.” And what I find with finance is, and I’ve literally worked with thousands of entrepreneurs and investors over the years, but I’m always learning.

 

Tom Wheelwright:

There’s always something new to learn. So to me, a lot of it is, it’s a lot of fun to do this. I mean, this is not just that it’s, I think of it’s work. I love to work out. I love to swim. And so to me, getting in the pool is not something I have to do. Getting in the pool is something I want to do. And so one of the things that we’re always talking with people is, find something you like doing. Now, you found real estate. What is it about real estate that you particularly like? Because I know you really like it.

 

Tom Burns:

I do. I do. And I like it because of what it does for me, to be honest with you. What it does for me, it gives me the freedom to go travel, like I’m doing tomorrow. Lets me do things remotely, I’m not tied to the doctor’s office or the surgery suite. And so the reason I liked real estate is as a professional, all of us that have these jobs where we kind of get paid for our time, real estate fit for me. It could be done part-time or full-time. It could be done with partners or with or without partners.

 

Tom Burns:

It moved slow, I didn’t have to be the best at it to start in it. I could go in and make mistakes, make small mistakes, start small and learn as I go, and that’s what I did. I started with small little, little properties, little, little projects, and they grew over time. So it just fit my profession perfectly. My real estate time was after five and on weekends. And I did that for 10 years and it took some time before it provided me the time to start doing it during the middle of the week, because I could lessen the need for me to be in the doctor’s office. And I just balance those scales to a point to where I really liked it.

 

Tom Wheelwright:

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Tom Wheelwright:

Well you make a good point, Tom, is that this is not a get rich quick idea here. This is building wealth over a sustained period of time. But also what I also noticed from you is that you’re not talking about the stock market. You’re not talking about oil and gas. You’re not talking about other things, your focused on real estate and one of the things that we are always teaching at WealthAbility® is one, get really focused on one type of investing and get good at it and what I’ve seen, because I know your business well, is that you’ve gotten really good at it. Have you found that as you’ve gone through the whole process?

 

Tom Burns:

Yeah. I tell people I’m the poster child for ADD. I’ve tried so many things. And I found though that when I focused on one and got better at it and things got easier, systems and processes developed, whether you’re doing it consciously or not, and you get good at it and you develop teams. So I use teams, I use other people to do things I’m not good at and there’s plenty of that stuff. So it’s just been a process to focus. It took me a while to do that. But as soon as I focused, things went better.

 

Tom Wheelwright:

You talk about teams in your book and a lot of employees, right, people rely on a paycheck are very much used to doing the old adage, “Well, if you want to do it right, you do it yourself.” And I know that I have had physician clients in the past, not currently, but I’ve had some in the past that they felt like they need to do everything themselves. And whether it was their bookkeeping or their tax return or whatever it was, what happens when you start using team members? Is it truly, I mean, because you’re always thinking about the cost, right? Do you worry about the cost or is there enough benefit that it makes sense to put that team together?

 

Tom Burns:

So, and as you know, I’ve still got the doctor DNA, so I still struggle with this. I’m still growing as time goes on. But I’ve typically found the cost becomes nominal because teams are like the ultimate leverage. I’m not a CPA, I’m not a real estate lawyer and I’m not a lot of other things. I’ve finally developed a process to where if it’s somebody I trust and they tell me, “This is good for you,” I just do it because that’s something I got off my plate and I can go do what I do well. So with teams, you can get the years of experience of the CPA. You get the law school and all you got to do is pick up your phone or send an email. So physicians are pretty much the top of the pyramid for what they do. And we’ve always got all the responsibility. So it’s a bit of a paradigm shift to seed authority to somebody else. But I can tell your listeners and I can tell myself that it’s always been better to have somebody doing that. Leverage is where you create wealth and time.

 

Tom Wheelwright:

Well, the challenge of course is we’re brought up to be specialists, right? I’m a specialist in tax. You’re a specialist in orthopedics. And so when you’re especially should go, “I’m really good at this. Well, I could be really good at something else.” And it’s good to specialize when it comes to what type of investing, but you’re not going to be able to do everything. You don’t do the all the, I’m guessing, you don’t do all your own due diligence, you don’t do all your own finding. You don’t do all your own management. I suspect you have a pretty serious team around you on that.

 

Tom Burns:

Yeah. We’ve hired people to do most of those jobs. And we contract with others to do the rest. We all focus on what we do best. So even within our real estate company, we’ve got an acquisition specialist and a development specialist and an analyst. So they all do what they do well. When we come together on Mondays, the whole thing meshes together, and that team produces the project.

 

Tom Wheelwright:

Well, and that’s what makes it passive income, right? It wouldn’t be passive income if you were doing it yourself. And I think that, that’s one of the things that scares people away from what we’d call alternative investments. They go, “Well, if I put it in the stock market, I don’t have to worry, I don’t really have to do anything. If I do real estate, I actually have to pay attention to it.” My thought is, I think everybody ought to be paying attention to their investments anyway, you work really hard for that money, and to not pay attention, I think is a huge mistake. But if you have the right team in place and building the right team, it doesn’t take that much time, does it?

 

Tom Burns:

No, it doesn’t And we’ve all got to resist that urge to say, “I’ve got a guy that takes care of my money. I’m going to leave that to the professionals.” Well, that’s goes exactly against what you just said, and it always takes some time. This is your money. This is your life. This is your freedom and time that you’re buying. So you’ve got to put some time to it. But with the right team and the right people, you monitor that from up here and all the work’s being done down here. So, with what could take you hours per day each week, takes you an hour a month or an hour a week, to just monitor and make sure things are being done right. There’s beauty in teams.

 

Tom Wheelwright:

Right. It seems like a little bit of an oxymoron that the best way to gain freedom and control over your life is to let other people do their job. I’m sure that’s one of the things that you learn as a physician. So there’s some natural to it. You lean on your team as a physician, you lean on your nurses, you lean on your anesthesiologists. So you lean on these other people that if you didn’t trust them to do their job, you could not do your job, right?

 

Tom Burns:

Oh, things would grind to a halt, because the doctors know their job. And I can tell you, I went through medical school and training and they never had CPA classes for me. So, I need you and they didn’t give law give me law classes. So yeah, you’ve got to trust the people that have learned how to do what they do and the whole boat moves well if everybody on the cruise is doing the right thing.

 

Tom Wheelwright:

Absolutely. So what are a couple of steps that you think people could take? Let’s say people don’t want to just rely on a paycheck. They want to start building this freedom. What are maybe two or three steps that you think they could take that could get them started?

 

Tom Burns:

Sure. Pick up some books. There’s all kinds of books. There’s several of them behind you there, and pick up my book, that’d be nice. That’ll get you started. And that’s some resources to tell you other books to go read. But, reading’s one thing, and that helps. But that starts to spark your mind. And then you need to, I believe that getting around people that do what you want to do, or what you want to learn, is the best way to learn, because it’s exciting. They’re already excited. It’s a self-selected group of people that are moving in the direction you might want to move to. And if you know nobody, you can literally Google real estate groups in my neighborhood or-

 

Tom Wheelwright:

Well, yeah, in my generation, Tom, we called it networking. But now it’s called meetup groups. But, it’s still the same thing, right? I mean, you’re just meeting up to talk about something that you all enjoy and that you’re all interested and everybody’s got different experiences.

 

Tom Burns:

All you have to do is go to one and you’re going to meet somebody, then you’re going to know where to go from there. And that’s going to be the launch point where you’ll find out if you like it or not, maybe you do like stock trading or maybe you like something else, but at least you can explore that. And that’s kind of what I did. I explored so many things and put them to the side when I found out they didn’t work for me. But once you get in one room or these days, one virtual room with people that are doing this, you’ll know where to go. You contact people, people contact me all the time. I’ve done the same thing, “Hey Tom, I like what you do. Can I learn from you?” And it snowballs from there. And you’ll be shocked at what you learn and who you’ll meet and how you can really move forward and how exciting it can be.

 

Tom Wheelwright:

Hey, if you like financial education the way I do, you’re going to love Buck Joffrey’s podcast. Buck’s a friend of mine. He’s a client of mine. He’s a former board certified surgeon and he’s turned into a real estate professional. So he has this podcast that is geared towards high paid professionals, that’s who he’s geared towards. So if you’re a high paid professional, you’re going, “Look, I’d like to do something different with my money than what I’m doing. I’d like to get financially educated. I’d like to take control of my money and my life and my taxes.” I would love to recommend Buck Joffrey’s podcast, which is called Wealth Formula Podcast with Buck Joffrey. I hope you join Buck on this adventure of a lifetime. So we’ve got books, meetup groups, or networking, anything else?

 

Tom Burns:

Yeah. Well, there’s as you get to those meetup groups, there’s seminars. Then you can start learning and you can learn either how to do it yourself, and everybody thinks that, that’s just too much work. But as you mentioned before, there’s ways to own your own things and start small and learn how to set that system up. There’s ways to learn how to tap into other people that are doing larger projects, so you can just invest in, that sort of thing. I find seminars are wonderful and I miss them since March, I miss the in-person seminars.

 

Tom Burns:

I’ll go often just to see the people and shake hands, but those are the best. And you will leave a day long or a weekend seminar jazzed up and excited with all kinds of things to do. And I just think that gets you started. And I guess the final thing I would say, and there’s a lot of steps in between, but you got to do some sort of action. You can’t just get educated and meet people, if you don’t do something. So do something, start small so your mistakes are small, but get in the game, if you find something you like.

 

Tom Wheelwright:

That’s great. So thank you, Tom Burns, Dr. Burns. The book is, Why Doctors Don’t Get Rich. And it’s a book that while it is, talking to doctors, it really applies to anybody with a paycheck and anybody that doesn’t want to rely on a paycheck. So I would encourage you all to go out there and get the book, read the book, that’s a great book to start with. Obviously I’ve got books behind me, Rich Dad Poor Dad, Tax-Free Wealth, and there are other great… There’s just a lot of great resources and they’re cheap. You don’t have to spend a lot of money. You don’t even have to spend a lot of time. And what I find Tom, is that not only do you get control, you do have a better lifestyle, because you have more time, you have more money and you just have a lot more freedom.

 

Tom Wheelwright:

So with that, I want to thank Dr. Tom burns. Want to thank you personally for writing this book, because I think it’s a very important book for anybody who is stuck in a job, especially this time when people are losing their jobs or even a lot of surgery… I know a lot of surgery centers were shut down. They could get shut down again and you’re out of control of that, right? But when you’re investing people, then all of a sudden you don’t have that kind of worries, those kinds of challenges. And here’s the other thing. Here’s the other benefit we didn’t talk about Tom, but what happens to your taxes when you invest like this?

 

Tom Burns:

Ooh, that’s another whole podcast. Oh, it’s wonderful. Yeah, you may bring in 20% of your gross income in investment money, but that’s not taxed. That’s not taxed like your doctor income or your CPA or lawyer income. So it doesn’t take quite as much passive income to cover what you normally need to live on. Oh yeah, there’s all kinds of benefits. That’s another half hour discussion.

 

Tom Wheelwright:

It is, and I can go days on that. Just remember though, what Tom’s saying is, is, “Look, when you take the time to get educated, financially educated, you get a lot more control of your life. You start to get a little more freedom. You get to do things that you want to do. And you’re making way more money and paying way less taxes. And that’s the key. That’s what we do here at WealthAbility®. So if there’s anything we can do to help you, please let us know and please get Tom’s books, first one, one for now, Why Doctors Don’t Get Rich and we’ll see you next time.

 

Announcer:

You’ve been listening to the WealthAbility® Show with Tom Wheelwright, way more money, way less taxes. To learn more, go to wealthability.com.

 

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