Securing Your Financial Future: What's Most Important?

As a chiropractor who has taken the risk of owning a professional practice, you are undoubtedly assailed with financial advice in some form or another on a continuing basis from experts, financial media, gurus, accountants, friends and family. Everyone has an opinion on what to do because, quite frankly, everyone has a vested interest at some level with how you go about managing your money.

The problem is simple: Most of the advice and information you get is just plain wrong. Sorry, but that's the way it is. If it weren't, then the average practitioner would be a debt-free multimillionaire by the age of 45. Because this is not the normal state of affairs and since people make the best decisions they can with the information they have, the quality of the information must be suspect. And it is.

Our attention has been hijacked by marketing hype that touts "the next big thing" and diverted away from the fundamental principles that have always worked, as boring as they are. We then struggle with discerning between the important and the unimportant.

When I was a child, my dad had a plaque on his office wall that was hand-crafted by a person that was a parishioner in his church. I would see it every time I went into his office and it was one of those sayings that stayed with me throughout my life. The plaque read:

"The Most Important Thing is that the Most Important Thing Remain the Most Important Thing."

The purpose of financial planning is to create the financial means necessary to accomplish your most important goals and purposes. In order to make this a reality, it is critical that you be able to recognize what is truly important – and what isn't.

In the course of working with the public in this area, I am continuously awestruck at what clients consider important in their financial decision-making and what they consider trivial or not worth the attention. It is this inversion that has created an abundance of household debt, low income and asset destruction (any economic or financial loss that could have been prevented). Since this is a common state of affairs, it behooves you to get clear on what actually is most important if you want to approach a more affluent financial experience.

Know Exactly What You Want to Accomplish

This has to do with setting specific goals. Know what you are doing in your life and why you are doing it. Only then can you responsibly align your financial decisions with your direction in life. I have found that most people have only vague ideas of what they are really trying to achieve and therefore, lack adequate financial means.

For example, one goal many people have is "to retire when I'm 65." This isn't a goal, but a vague idea. A goal is "to retire at 65 with $150,000 of guaranteed lifetime income annually without any effort on my part." Only then can you plan for that goal. The more detailed your goal, the better.

Increase Your Take-Home Income

As a chiropractic practice owner, you must always work to get your take-home income higher. This is of paramount importance since it is difficult to be financially prosperous with no or low income. If you watch the media, it is evidently a crime to make a good income since people who are prosperous tend to be demonized. Since the masses believe the media, you must disagree with them, or at least some of your friends, and earn an excellent living anyway.

Invest in yourself first and foremost. Attain specialized knowledge to convert more new patients and deliver services that are more lucrative. Spend more on effective marketing and become the "go-to expert" in your market.

Get Out of Debt

Right now. Pay off all of your non-business debt, including your house, as soon as possible. Don't worry if your neighbors and accountants disagree. You cannot be financially prosperous by paying more for things than they are worth.

That said, don't pay off business debt, commercial real estate and lines of credit. Since these loans are against income-producing assets, it is usually better to keep the debt to reduce risk and increase return.

Save and Protect a Chunk of Your Income

You will never be in a position of financial stability if you do not have a small fortune saved and protected from loss. And if you ever want an income without having to go to work to earn it (especially one guaranteed to last the rest of your life), then save and protect what you make now. There will be no other source of a lifetime pension for you. You are on your own.

How much? At least 10 percent of practice gross collections. That's right. This is your profit that you are going to pay yourself first, before you pay any other bills. You are the first expense of the practice since without you there would be no practice. This is not income for you to spend; it is for the funding of your retirement income and nothing else.

These are the most important actions. Every other financial decision you make is less important than working out solutions for the four points listed above.

Some of the less-important questions include: Which mutual fund should I buy? Should I refinance my mortgage? How should I incorporate my business? Should I work with a fee-only advisor or one who earns commissions? Should I take that tax deduction? What deductibles should I have on insurances? What kind of life insurance should I purchase? What kind of return am I getting on my investment portfolio? And on and on…

These are the types of questions asked of financial advisors, yet they are so unimportant compared to knowing your goals, making money, paying off debt, saving and protecting what you already have. Great advisors always address these lesser items, but only after items 1-4 are addressed. So much attention and energy is spent on questions of little consequence to the overall game that the game is never won. It truly is majoring in minor things. Unfortunate, but true.

If you want to reach financial freedom in your life, always remember:

"The Most Important Thing is that the Most Important Thing Remain the Most Important Thing."

P. Christopher Music is a financial planning expert and best-selling author who has appeared on NBC, CBS, ABC and FOX affiliates nationwide and been published in Forbes, The Wall Street Journal and various health care industry publications. He is the president of Econologics Financial Advisors and is known as "The Financial Prosperity Coach." Learn more at www.pchristophermusic.com.