To celebrate nurse’s week, I will be publishing a couple articles this week to help my nurse practitioner sisters and brothers build a life that will help them achieve financial freedom in addition to providing everyone a fantastic bundle deal on our wealth building courses. Now, lets talk about financial freedom!
Financial freedom is something that I believe every nurse practitioner should aspire to achieve. The ability to live life on our own terms, without being a slave to debt and financial stress, is something that many people dream of yet never achieve. Why? Because the path to financial freedom can seem overwhelming and daunting. Where do you start? What steps should you take? Listen, it really is not that difficult, and it is totally attainable for any nurse practitioner who seeks to achieve it. It just takes discipline and a plan and an understanding of the four main pillars of financial independence that I believe are crucial to achieving financial freedom.
As a nurse practitioner, it’s important to strive for financial freedom. By achieving financial independence, you can have greater control over your life and the ability to make choices that align with your values and goals, not those of others who see you as a financial work horse to accelerate their financial freedom.
Financial freedom isn’t just about being able to retire early, it’s about having the resources to live the life you want! It is having what many like to call “FU money”, which doesn’t need any explanation. It is the ability to do WHAT YOU WANT… WHEN YOU WANT! That is financial freedom folks.
To achieve financial freedom, there are four main pillars of financial independence that you should focus on: income generation, investing, lowering taxes, and protecting your assets. Let’s take a closer look at each one.
The First Pillar of Financial Independence: Income Generation:
Income generation is the foundation of financial independence. Without a steady stream of income, it is challenging to achieve financial freedom. Therefore, it is essential to focus on ways to increase your income. As a nurse practitioner, there are several ways to increase your income. For instance, you can consider starting your own business (the FASTEST way to achieve financial freedom), become a consultant, work more hours, or pick up another job.
So, why is income generation so important?
Income generation is the first pillar of financial independence because it is the foundation of your financial success. The more money you earn, the more you can save, invest, and grow your wealth, it is as simple as that. By increasing your income, you can achieve your financial goals faster and have the freedom to live the life you desire. The caveat here though is that you need to keep your expenses in check! Many people generate more income but spend it all… That is the exact opposite thing you need to do if you want to become financially free.
Ways to Increase Your Income:
Negotiate Your Salary: One of the easiest ways to increase your income is to negotiate your salary if you are employed. Many people are afraid to ask for a raise or negotiate their salary when starting a new job, but it is an essential skill to master if you want to increase your income. Do some research and know your worth before going into salary negotiations. Make sure you are prepared to show your employer why you deserve a raise but showing them how productive you are and how valuable of an asset you are. If you can show your value, then they can justify a raise.
Take on Extra Shifts: Another way to increase your income is to work more. If your employer offers overtime or per diem shifts, take advantage of them. You can also consider picking up shifts at a different facility or working in a different specialty. I did this during the early stages of my financial freedom journey. While it was a lot of work and sucked at times, it accelerated my path SIGNIFICANTLY.
Start a Side Hustle: Starting a side hustle is a great way to increase your income, and the fastest way. I really don’t need to discuss why I believe starting your own practice is the fastest path towards financial freedom as I have written about it dozens of times on this site. THIS article sums it up.
Invest in Yourself: Finally, investing in yourself is a crucial part of income generation. Consider taking additional courses, obtaining certifications, or pursuing higher education. The more skills and expertise you have, the more valuable you become as a nurse practitioner, which can lead to higher-paying job opportunities and provides you great room when expanding services in your own business.
Investments: Of course, you can also increase your income by investing your money into income generating assets such as real estate and dividend producing stocks. I do this and it makes for a great passive income!
Income generation is the first and most important pillar of financial independence. By increasing your income, you can achieve your financial goals faster and have the freedom to live a life on your terms as a nurse practitioner.
The Second Pillar of Financial Independence: Investing:
As you strive for financial independence, you need to be constantly thinking about how you are going to invest the income you generate through the first pillar.
Investing is a powerful way to build wealth over the long term. It involves putting your money to work in a variety of assets, such as stocks, bonds, real estate, and mutual funds. The goal of investing is to grow your money over time, allowing you to achieve your financial goals and dreams.
I invest every single dollar I make outside of standard living expenses and desires. Sure, I buy nice cloths, toys, and go on fun vacations, but I have been able to keep my expenses low as I live WAY below my means… therefore, I have lots of money to invest. What does this do? It exponentially accelerated my path to financial freedom.
Here are some key principles to keep in mind as you begin to invest:
Start early: The earlier you start investing, the more time your money has to grow. Even small amounts invested regularly can compound over time and turn into significant wealth. But they key is to get started immediately. Do not push it off. Do not say “I will do this next year”, because all that does is delay the goal post by another year.
Diversify: Diversification is key to managing risk in your portfolio. Invest in a mix of assets to spread out your risk and reduce the impact of market volatility. You need to be financially REDUNDANT folks. Only a fool relies on one income source or one investment. I know people who put it all in Bitcoin at the top… well those folks aren’t very happy.
Focus on the long-term: Investing is a long-term game. Stay focused on your goals and resist the urge to make short-term trades based on market fluctuations. When the market crashes, that is when you BUY MORE! Not sell it… Most people sell everything when the market goes down. That is the exact opposite of what you should do. I have personally loved the volatility of the stock market the past 2 years. It has allowed me to make some significant profits buying low!
Keep costs low: Fees and expenses can eat into your investment returns. Look for low-cost investment options, such as index funds and exchange-traded funds (ETFs).
There are many different types of investments to choose from, each with their own advantages and risks. Here are some of the most common investment options to help you wrap your head around:
Stocks: Stocks represent ownership in a company. When you invest in stocks, you’re betting on the company’s future growth and profitability. Stocks can be volatile, but historically they have delivered strong returns over the long term. I personally like stocks that pay a dividend!
Bonds: Bonds are a type of fixed-income investment that represents a loan from a company or government. When you invest in bonds, you’re essentially lending your money and earning interest in return. Bonds are generally less risky than stocks, but they also deliver lower returns. I have invested heavily in bonds the past year because interest rates have increased. Earning a guaranteed risk-free 4-5% is a pretty good deal.
Real estate: Real estate can be a great way to build wealth over the long term. You can invest in rental properties, REITs (real estate investment trusts), short term rentals, or crowdfunding platforms that allow you to invest in real estate projects with as little as $500. Real estate is a great diversifier, and the tax incentives are too numerous to list in this article, but are listed in detail in the Elite NP tax course just FYI.
Mutual funds and ETFs: Mutual funds and ETFs are professionally managed portfolios of stocks, bonds, or other assets. They offer diversification and convenience and can be a good option for investors who don’t have the time or expertise to manage their own portfolio. I invest in a lot of ETFs as it makes managing a portfolio super simple. Use the search function on the main Elite NP website. I talk about a multitude of ETFs I like that grow PLUS pay you a monthly dividend.
No matter what type of investments you choose, remember that investing is a long-term game. Stay disciplined, stay diversified, and stay focused on your goals. With patience and perseverance, you can build significant wealth over time and achieve financial independence. I have, and so have many other nurse practitioners.
The Third Pillar of Financial Independence: Lowering Taxes:
As a nurse practitioner entrepreneur, one of the most important things you can do to secure your financial future is to reduce your tax burden. It is the BIGGEST expense in your life. Bigger than your mortgage, child costs, etc… By keeping more of your hard-earned money, you can reinvest it into your business, invest in real estate, or even take an awesome vacation. But how do you lower your taxes? Here are some strategies for doing just that.
Maximize your retirement contributions: One of the most effective ways to lower your tax bill is to invest in your retirement accounts. By doing so, you can reduce your taxable income while also saving for the future. Depending on your situation, you should have access to a 401k if you are employed. But if you are self-employed, then you should be putting as much money as you can into a self-directed 401k or IRA. You can save tens of thousands of dollars in taxes by doing so. Be sure to contribute the maximum amount allowed by law to take full advantage of the tax savings. This should be a no brainer for most of you.
Take advantage of deductions and credits: Another way to lower your taxes is to take advantage of deductions and credits. Deductions reduce your taxable income, while credits reduce your tax liability directly. Some common deductions include mortgage interest, state and local taxes, charitable donations, hiring family members, having a business vehicle, and so forth. Credits include things like the Earned Income Tax Credit and the Child Tax Credit, which likely won’t make a significant impact for those generating significant income.
Owning your own business: If you have a niche side practice or work as a 1099 contractor, you may be able to deduct quite a few expenses through your business or LLC. These may include things like home office expenses, travel expenses, medical supplies, cell phone, and so forth. Essentially, if it is used in the normal course of business or is an expense necessary to grow the business, you can deduct it 100% in most cases. There are too many to list in this article, but they are discussed in detail in the Elite NP tax course just FYI.
Make strategic investments: Certain types of investments, such as municipal bonds, can provide tax-free income. Additionally, investments in things like real estate can offer significant tax benefits through the power of depreciation. I invest heavily in municipal bonds because it provides a 4% TAX FREE passive income stream. Real estate also allows me to write off the 20% down payment IN FULL through something called a cost segregation analysis. Look it up 😊
Hire a solid accountant and/or tax attorney: Having a solid tax professional on your side is a critical team member to have during your financial freedom journey. But they have limitations. Most accountants are just data entry specialists. They know how to file a tax return. Many of them are not great tax STRATEGISTS folks. That means they don’t know as much as you think they know about how to lower your taxes. That is going to be YOUR job, or you can pay an expensive tax attorney or tax strategist to help you. I have done both, and it was expensive. But they did help me lower my legal tax obligations, and a lot of that knowledge is in the tax course just FYI. I am going to say this one more time: do NOT rely on your accountant to lower your taxes… If you do so, you will be disappointed with the results.
At the end of the day, lowering your taxes is a key pillar of financial independence as it is the biggest expense in your life. By maximizing your retirement contributions, understanding deductions, making tax leveraged investments, and having a solid professional on your side, you should be able to lower the biggest expense in your life.
The Fourth Pillar of Financial Independence: Protecting Your ASSets:
As you work towards achieving financial independence, protecting your assets is absolutely pivotal to your long-term financial wellbeing. Without proper protection, your hard-earned money can be vulnerable to lawsuits, creditors, and other unexpected events. Therefore, it is important to have a plan in place to protect your assets and safeguard your financial future EARLY, because once you are hit with a lawsuit or a judgement, IT IS TOO LATE! You have to implement asset protection strategies into your life BEFORE a lawsuit folks.
Here are a handful of ways to protect your assets:
Insurance: Insurance is one of the most effective ways to protect your assets. It is the first line of defense. Different types of insurance, such as liability insurance, malpractice insurance, home insurance, and auto insurance, can provide financial protection in the event of an accident or unexpected event. It is important to review your insurance policies regularly to ensure that they provide adequate coverage for your needs. This is why I recommend hiring an insurance broker to review your policies, as I discuss in the Elite NP asset protection course.
Estate planning: Estate planning involves creating a plan for how your assets will be distributed after your death. A well-crafted estate plan can help to minimize taxes, avoid probate, and ensure that your assets are distributed according to your wishes. It is important to work with a qualified estate planning attorney to ensure that your plan is legally sound and tailored to your specific needs. Estate planning and asset protection go hand in hand because often, the estate planning is similar to the trusts and other entities involved in an asset protection strategy.
Legal entities: If you own a business, choosing the right business structure can help to protect your personal assets from business liabilities. You must have a limited liability company (LLC) at a minimum… but this should be a no brainer for most of you. Did you know though that there are a variety of other structures you can use to help safeguard your assets? You can have bridge trusts, limited liability partnerships, family partnerships, and much more. Using a combination of these is ideal if you are serious about protecting your wealth.
Asset protection trusts: An asset protection trust is a type of trust that is designed to protect your assets from creditors and lawsuits. These trusts can provide a high level of asset protection, but they can also be complex and expensive to set up. I would recommend working with an attorney that specializes in asset protection if you are serious about taking this next step.
Diversification: Diversification is an important strategy for protecting your assets. By investing in a variety of asset classes, such as stocks, bonds, real estate, and commodities, you can help to reduce the risk of loss in any one asset class. This is the reason why you want to have a REDUNDANT financial life.
Protecting your assets is a critical component of achieving financial independence. By taking steps to safeguard your assets, you can ensure that your hard-earned wealth and money is protected from unexpected events and remains intact for you and your family! You do NOT want to get blind-sided by a frivolous lawsuit and lose everything you have worked so hard to achieve. It is a reason I spend countless hours designing the asset protection course…
So, lets summarize this up. Financial independence is the ultimate goal for many nurse practitioners, but they never even come close to achieving it because they are stuck in dead end jobs and solely rely on a 401k and social security… This is not wise. You must take action to get there and make it part of your life.
The ability to achieve financial freedom means you have control over your finances, and you can choose to work because you want to and not because you have to. That is the key. Essentially, you can do what you want WHEN you want. But to reach financial independence, you need to focus on the four main pillars of income generation, investing, lowering taxes, and protecting your assets.
Achieving financial independence is a long-term process that requires dedication, discipline, and a willingness to learn and adapt. By focusing on the four pillars of income generation, investing, lowering taxes, and protecting your assets, you can create a solid foundation for your financial future which will propel you to financial freedom.
Remember that the key to success is to take action and be consistent in your efforts. Keep your goals in mind and make small, manageable changes that can add up over time. Whether you are just starting out or are well on your way to financial freedom, the most important thing is to keep moving forward and stay committed to your plan.
I did not become debt free overnight…
I did not build multiple income streams in a month…
I did not build a robust investment portfolio over a year…
These things took time and ACTION!
Financial independence is within reach for the nurse practitioner, but you need to be willing to put in the work and make smart choices. By following the principles outlined in this article, you can take control of your financial future and build the life you want for yourself and your loved ones. I guarantee you can!
Be sure to check out The Elite Nurse Practitioner Wealth Building bundle which includes our financial independence/investing course, our tax lowering course, and finally our asset protection course. The combination of these courses will provide you the framework you need to know to reach financial freedom. There are well over a dozen hours of knowledge from my personal journey and the information from professionals in these courses to help you succeed!