Stocks, Bonds, Real Estate Or Practice

There are two components for building a wealth account… income and capital gains.

Income is the money you earn from your practice and interest or dividends from other investment vehicles like stocks, bonds, real estate and retirement accounts. How has that worked for you?

Capital gains is tax-advantaged growth in the value of an asset, i.e., stocks or real estate. How is that working for you?

In recent years, stocks, bonds, mutual funds and real estate have not been very profitable investment nor have they contributed any significant rewards to your wealth account.

The best return on investment has been gold recently, but, nothing lasts for ever. The stock market grew by 1% during the past 10 years… real estate? Well you probably know the story about real estate.

But, the one source of income and wealth is your practice. By far, it will outshine most other wealth producing schemes.

On average, for every $10,000 your practice collects, you earn $5,000 in pre-tax dollars and you gain 70% or $7,000 more in equity when it is time for you to retire.

Essentially, for every $10,000 you increase your collections this year, you add $12,00p to your wealth account!

Now, that’s a wealth building program that you can control and not be subject to the ups and downs of the markets.

Every dollar that you put into an retirement account is a dollar that you were not able to use to build your practice. Ah, you say, but it is tax deferred and when I withdraw, it will be tax at a lower tax rate. Hogwash! First, taxes will never go down and who wants to enjoy retirement at a lower tax bracket?

Grow your practice and you gain both increased income and bottom line profits and you build your equity in the practice when it is time for your exit strategy to kick in.

Here’s an example: you take the maximum contribution to your 401K Plan of $22,500 and you invest in marketing your brand of chiropractic. In both cases, you get to deduct the $22,500, so it doesn’t impact your lifestyle or Profit and Loss Statement.

But, in the 401K your contribution will “grow” provided the market is good… 10-15% in a good year. And, the growth is also tax deferred until you withdraw.

Invest the $22,500 into marketing and add another $100,000 to your collections in the year and you:

1. $100,000 increased collections.

2. $70,000 increase in your wealth account subject only to capital gains taxes when you sell/retire from the practice.

3. You continue to receive the income, plus the next year increase, etc., until you retire.

If you grew your practice $100,000 each year over the previous year for 10 years, you would have a million dollar practice, earning you $500,000 or more per year, and a equity value of $700,000!

Compare that to a retirement account. Look at your plan statements and then compare the end results. Only fixed income people should worry about a poor performing retirement account. Chiropreneurs can grow their wealth much faster with a larger number by focusing on the growth of your practice and not waiting to see if the market performs.

Ah, you say, you have to pay taxes on the increased income… it’s not tax deferred. True, provided you don’t REINVEST, your increased income into more marketing for faster growth or you don’t expand with additional offices… and do it all over again two, three or more times!

You have the greatest wealth-building plan… your practice. Maximize it and you will retire with a real wealth account and the ability to enjoy the lifestyle of the rich and famous.

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