JennyW said:
I understand what you are saying about the rat race. Rich Dad Poor Dad seemed to say over and over again that you should own your own business.
Jenny, the type of "business" in Rich Dad Poor Dad is referring to is not a sole proprietorship, which is what a doctor's office is if your in practice by yourself or work for someone else. On the other hand, if you're the head ophthalmologist with a corporation and 5 doctors work for you, then that is different and exactly what Kiyosaki is referring to. However, the sole practicing doctor or shop owner are still in the rat race. I know a cornea fellow who is signing on with a doctor who will charge her 70% overhead and no chance of buying in. This doctor has numerous physicians and optometrists working under him. Do you think he still gets paid when he leaves for meetings? You bet. He's a multi-millionaire with millions of dollars worth in land too.
Businesses Kiyosaki are referring to are formation of corporations. Unless you have a corporation for your ophthalmic practice with doctors as your employees, then you'll be stuck in the rat race.
Thus, if doctors can't form a corporation and get others to work for them, then they need to make a new corporation or invest in corporations that will work for them on the side. This is the key; however, this is difficult. While it's easy in concept, it is difficult in reality to form a successful corporation. 9 out of 10 corporations will fail. Thus, few have the stomache to form corporation after corporation.
On the other hand, investing is another way to make your money work for you 24-7. The point of the book is that there is more than one way to make money. People just need to be creative in their thinking. Break out of the mold that you need good grades, good school, and good job.
Personally, I've been in the rat race all my life.
I've been working all my life to get out of what Kiyosaki calls the "rat race": get married, buy a house, have kids, pay debts, work to pay off debt, pay for college, work to build a retirement, etc...
This book teaches us what schools have failed to teach me. We are taught that to be financially well off, we must: go to school, get good grades, go to college, and then get a "stable job". We all know there is no such thing as a stable job. Look at all the employees at MCI WorldCom. Even in my field, Medicare is cutting my salary 5% per year! I was just on Capital Hill, and the politicians don't have a solution. Medicare is in trouble even with a $155 BILLION dollar budget. That means when the rest of the world gets pay raises, physicians will earn 25% less in 5 years! When starting salaries are already $90K in Florida for new ophthalmologists, are we willing to start with $68K? Instead of seeing 40 patients a day, I have to see 50 or 60 a day. Science PhDs are in trouble too. There are few jobs for them. NIH cuts funding for research. I've seen the best scientists lose their laboratories because their grant did not get renewed. I've seen senior scientists stress every five years during their grant renewal process. Who controls the paycheck for these educated physicians and educators? - The government.
Jenny, physicians are in trouble. Draw a simple liabilities and asset diagram with cash flow in as income and out as expenditures.
When inflation is going up 4% and reimbursements are going down 5% each year, then how do doctors keep up? See more patients. However, seeing more patients will increase your chance of screw ups because less time is spent with patients, malpractice insurance go up, overhead go up, and the once well-off doctor cannot cover his/her bills. Isn't this a horrible rat race?
It's not a pretty scenario. Congress knows there is no easy fix. I've spoken to the legal aid for the chairman of the health care and finance committee. All they're doing are little bandaide fixes.
Even with the Navy, I'm not even sure Congress will continue to provide my retirement after I serve 20 years. We all know that Social Security can't support us.
I truly believe that we all should keep our day jobs, but also keep our minds open for other opportunities to increase our assets and decrease our liabilities. If I am financially independent through other means, i.e., investing, real estate, or corporations, then I will practice ophthalmology the way I want to. I want to avoid the rat race where I am encouraged to do 40-60 cataracts a week because there are 5% decreases in Medicare funding. The joke amongst ophthalmologists is how low will you go for cataract surgery? 10 years ago, many said a $1000 per case. Now, some get less than $600 per case. How low will we go?
This is not just ophthalmology. Medicare cuts affects ALL of us.
