Open 1 clinic, 2 clinics, or 3+ clinics? What would YOU do? These are non-trivial questions: make the wrong move and you can defeat any chance that you had to reach your Number.  So, how NOT to leave this critical decision to chance? Well, Scott ‘benefited’ from his turn ‘under the spotlight‘ so, we already have some insight as to where he is heading with all of this.

Now, you can read Scott’s latest thinking … what do you think? And, can you help Scott ‘only’ get 12% compounded on his money?

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Ok, now that i’ve laid it all on the table about my plans and strategy to get to my number of 4 million in 9 years, I’ll just summarize a few things.

First, I’ve realized that opening clinic after clinic after clinic in multiple succession is not necessarily an optimum plan to get me to my number faster. Running the numbers on opening 3 clinics as fast as reasonably possible does not produce a higher number within 9 years than opening 2. The reason being, is that takes capital, to the tune of around 100 grand to get an office up and running and cashflowing positive, not to mention it takes valuable time and a big drop in salary while it’s developing.

If i’m moving things along at warp speed, I can cashflow positive an office in 6-8 months, but looking at the numbers, this sudden drop of 100k to open an office, coupled with the fact that I have to hire a new associate PRIOR to starting up the next office, spend at least 6 months minimum training them to run an office by themselves before I can turn them loose on their own at my old office and they can be reasonably capable, pay them a fair salary during this training period (while they aren’t producing a dime of income and actually dropping the clinic performance, due to patient lack of trust in a new doc a well as my focus being so much on the new doc and less on running the practice), continuing to pay them and increasing salary while i’m at the “new” office building(this drops my salary from the previous office dramatically and remember, i’m not making anything on the new one until it cashflows positive) etc…etc…

NOW, if my goal was to work for 12,15, or even 20 yrs, you would see that NUMBER double and even triple on the backend. Once you own 3 clinics and they all have well trained docs, all cashflowing very well and everyone is happy, it’s easy to have cashflow to the tune of 50k per month to invest. This builds quite a Number very fast, but this process takes a few years before the plane even gets off the runway. It’s a helluva 15-20 years plan for major wealth, just not a good 7-10 year plan.

Now double checking, triple checking and quadruple checking my math says that if I can achieve a 12% gain on my cashflow, while keeping my lifestyle the same, I can accumulate 3.2 million in roughly 9 years by continuing out my contract over these next 29 or so months, then getting an associate asap and moving on with the next clinic startup and just sticking with 2 clinics. At that time, I can sell both clinics for roughly 300k each and when adding those funds to my other assets (home equity at that time, rental property equity, etc…) that will put me right around 4 million in 9 years.

Now, I have to make sure I can produce 12% per compounding with this cashflow…..the next question is, how do I get this rate of growth on my money? Stock market coming out of a recession? Continuing to add rental properties and hopefully great foreclosure buys to my portfolio? Steadily purchasing tax lien certificates in states with a high return rate? Buying the commercial properties that these 2 offices reside in? A combination of all the above?

Also, just for kicks, I ran the numbers on just owning the one clinic the entire 9 years and not even opening a second office, keeping our lifestyle the same and investing all the cashflow. Interestingly, it produces very close to 3 million in those 9 years if I can get that same 12% return. Now think about that one for a minute. 2 clinics “only” produces 200-300k more over that 9 years (plus the 300k value of the second clinic itself if it were to be sold, so I guess i’m looking at more like a 500-600k difference in the end at 9 years) so you can see from the above example, the multiple clinic ownership REALLY needs time to take off and produce meaningful results. Definitely not a get rich, really quick plan, but more of a “get REALLY rich in 20 yrs” plan.

Any suggestions?

Best ways to almost guarantee at least a 12% return on your money?

My Revised Number (and revised, and revised, and revised…)

Debbie and I (as she will tell you) had a lot of fun over this … her original spreadsheet was really just a projection of her current expenses (with some additional ‘do you think I can really afford them’-type stuff) … in other words, it was a budget.

I hate budgets!

So, after a little bit of work – and, thanks to both Lee’s List and Ryan’s Table [imagine: the two most useful tools for this part of our exercise were created by our own readers/contributors ... now, do you see the power of the 7m7y Community?] – Debbie has a clear and concise view of her Number that will knock your socks off …

… if you are just reading and haven’t yet tried to work out your own Number, just take Debbie’s post and give it a whirl … you’ll be glad you did …

I had an extremely difficult time coming up with my new number, using the spreadsheets and formulas and calculations.  It was easier before – when I was just guessing on a number based on some general lifestyle situations, and then making some assumptions on the rest.  Once I sat down to REALLY calculate it, with more accurate estimations and inflation – forget about it.  AJC is probably wishing he was charging me an hourly rate for all the time he spent explaining (and re-explaining) how to work through my mess of numbers!

Anyway!  What I found really interesting is the end result… my Number… after hours of calculating and discussing – is actually not all that far off from the number  I just (basically) made a bunch of educated guesses to get back when we were first looking at the “Number” in terms of our life’s purpose! (It was about 8,250,000). What does that mean, exactly? Eh, I have no idea – just thought it was interesting.

But then- we had to do something about the income tax you pay when you’re a millionaire-type person.  This was another part that was a bit over my mathematical-concept challenged head.  But I used the info from AJC, which was to divide my Annual Expenses in 2018 Dollars / .65 and then Multiply that number by 20  before adding to the one-time expenses.   So my new total, my new number, by the year 2018 becomes =   $7,280,338.46

I think the absolute hardest thing about this process for me was realizing at that date, (November 2018) with that number ($7,280,338.46), I really wouldn’t have to work anymore.  In my mind – I see myself always doing something or other, but the idea of picking projects and business opportunities because they are things I want to do… because they could allow me to make a difference in someone else’s life… it’s just so motivating!  You’ll see I have “start up money” of about $500,000 (in today’s money) in my one-time expense category… it’s the business(es) I fund using this seed money that will likely continue to earn additional income on top of the money the “NUMBER” will be earning in interest to supply me with what’s needed for my living expenses the way I want my life to be by 2018.  I already have a list of ideas in their infancy stages… can’t wait to put more thought into them.

Remember my Lee’s List?  Those items are included in that mess of numbers too… mostly giving the ability to travel, spend more quality time with family and friends…and then the nicer house.  Originally I thought “$500,000″ seemed like the house price to go with, but after looking at some houses for sale –  there’s not much difference between a $400,000 home, so I went with the lower of the two.  I’m so used to being frugal that when the time comes, I could very well be excited over a $280,000 home and feel it has everything I ever needed or wanted!

(art from mc escher)