There is no faster way to building wealth and achieving financial independence than starting your own practice/business. NONE (outside of winning the lottery)! Provide me a sounder argument that being an employed nurse practitioner is better than being a self-employed nurse practitioner when it comes to building wealth and financial freedom. I guarantee you can’t.
The fastest way to true wealth is by starting your own business. Ask any business owner and they will agree. Ask any employed nurse practitioner and they will look at you clueless. Why? Because they don’t know any better! They are stuck in a system that preys on their ignorance.
When you are a wage slave, you just don’t know any different. You don’t know what is possible. You just show up to work, collect your paycheck every 2 weeks, have a 30 year mortgage that you likely can’t really afford, maybe invest in your 401k, possibly invest in a post-tax brokerage account hoping to strike it rich on a random stock, and live your life. You might pick up an extra shift here and there to pad your account with an extra $400-500 AFTER TAX dollars and think you are getting ahead, but in fact you are just kicking the can down a very long road.
Why can you not achieve wealth quickly being an employed nurse practitioner? Because you are not generating enough INCOME. Income is a pillar to financial independence, and the most important pillar in my opinion. How can you invest your money appropriately or save if you have no money coming in? It is very hard…
True wealth building does not occur until you have $100,000 saved and invested (sorry, the $8,000 you have saved is nothing in the grand scheme of wealth creation). Getting to that first $100,000 is very difficult. It is very difficult if you are relying on a job to get you there. It is even more difficult if you are living beyond your means, have high personal expenses, and have a large amount of debt. It would take considerable focus and discipline to reach $100,000 in savings being strictly employed. While it is possible, it is difficult. After that first $100,000 though, wealth can accelerate quickly if you are investing and saving correctly, but that is difficult being employed. Here is why:
Let’s pretend that you are making $140,000 as a full-time nurse practitioner. That is a very handsome salary and is nothing to be ashamed of. Most nurse practitioners would kill for $140,000 a year. Now, you will pay approximately 31% of your income to federal income taxes and employment taxes. There is little you can do about this because when you are employed, you pay taxes FIRST before YOU get paid. When you are self-employed, YOU pay yourself first and then pay taxes. There is a big difference and THIS article sums that up. Back to the $140,000 salary at 31% tax though. When it is all said and done, you will walk away with around $100,000. Great, now you have to pay your mortgage, student loans, car expenses, etc… How much could you realistically save a year? If you are living well below your means, you could easily save $50,000 a year, but most people don’t live below their means. Instead, you might only be able to save $10,000-20,000 of this. That is still impressive compared to most people, but it still will build your wealth slowly…
It would take you 5-10 years to save $100,000. Sure you could invest the money as you obtained it into a couple rental properties or into some stocks and watch it grow secondary to compound interest. Hell, maybe you would be able to invest more than $10,000-$20,000 into it year to year as you received small raises and paid off debts. The point here is that it would take you close to 20 years to save $250,000-$300,000 if you were lucky. That is not that much money (even with compounding growth) if you account for inflation and you want to be financially independent.
Now let’s pretend you own a business or two. Let’s say you own a part-time mobile aesthetics practice and also a brick-and-mortar IV Infusion/Weight Loss clinic that took you 2-3 years to build up while working part-time (essentially following The Elite NP Model and totally realistic… I did it, so can you). After 3 years of continuous hustle, you get these businesses up to almost a million dollars a year in revenue. This is totally realistic everyone, it is not a fantasy. After all your expenses are paid for, you walk away with $450,000 in profit. Since you are an astute nurse practitioner entrepreneur, you are investing $61,000 a year TAX FREE into your SEP 401k and also are investing $100,000 a year into real estate that you can depreciate and essentially write off completely (more on that in the Tax course!). After the $161,000 in investments, you are left with $289,000 that you are obligated to pay taxes on. BUT WAIT! You only work 30 hours a week and have decided to elect as an S-Corp for tax purposes, so you pay yourself a reasonable salary of $50 an hour. Now you are only liable for income taxes on the $78,000. The rest of the profit, which now equals $211,000, can be taken as an owners draw and is FREE from employment taxes (read THIS article to understand what I am talking about). You end up paying around $110,000 in taxes. Now you are left with approximately $100,000 PLUS the salary you gave yourself to live off. Remember though, you invested $100,000 into real estate and maxed out your SEP 401k before any of this!
Do you see how much more you were able to generate and invest while not significantly increasing your tax bill? If you lived within your means, you would easily be able to save close to $200,000 A YEAR owning your own business in the example I gave above. In 5 years, you are a literal millionaire. In 10 years, you are a multi-millionaire… This would be practically IMPOSSIBLE being an employed nurse practitioner.
I was a full-time employed nurse practitioner for almost 5 years and was having a difficult time getting ahead. Sure, I was maxing my 401k out at $20,000 a year, but I had no real significant savings or investments outside of that… When I started my first little side practice, a light bulb lit up in my head after just 3 months of being in business: I made more money in 3 months working 1 day a week then I could working full time in 2 months… The income generation capability of having a business is superior in every way. I never realized this until I saw it with my own two eyes. For the business owners reading this, you know what I am talking about. For those that are just getting started, you will see this too!
I know multiple other nurse practitioners who have PROFITED $300,000-$500,000 last year alone through their practices. I have talked with these individuals. I have consulted with these individuals. I know what is possible. It is the same story time and time again: never getting ahead at a job they end up resenting but see the light once they start their own business.
It happened to me, and it happened to them. It will also happen to you if you simply TAKE ACTION and get started.
If your goal is to build wealth and to become financially independent as a nurse practitioner, then you MUST start your own business. There is no other way unless you live well below your means and invest your money WISELY into cash flowing assets such as real estate. But this is a long journey compared to being a nurse practitioner entrepreneur. You will accelerate your savings and investments 4-5x by being a business owner AS LONG as you maintain your current lifestyle. If you go buy a $120,000 vehicle and a million-dollar home, then it will be much slower for you, remember that.
I just wanted my nurse practitioner sisters and brothers to understand this point. Owning a business (or scaling your current business) will be the FASTEST way to accelerate your financial freedom though income generation, legal tax reduction, and professional autonomy. There is no other way and if you know of one, please leave a comment or email me as I am open ears.