Using Assets to Fund Your Lifestyle

Picture of by Dr David Phelps

by Dr David Phelps


 great tip for you that very few people have figured out in life (which I happened upon a little bit by chance) is this:

 Instead of allowing your lifestyle to elevate with your natural income increases, acquire assets that will pay for the things you want in your life. 

As you get better at what you do, your income typically goes up. Then what happens? So does your lifestyle. Big, big mistake. Rather than using your new extra income to pay for those things, what you should do instead is acquire assets first, and allow the income from those assets to pay for the things that you want – the better car, the bigger house, the better wardrobe, better vacations, whatever it is.

That’s the disciplined approach. Where most people get it wrong is they go along in life and they keep enhancing their lifestyle, thinking: “Well, that's the right thing to do;  I've earned it. I’ve paid the price, and I should have the opportunity to rise up.” And of course, everybody else is doing it too… but you don't want to live the life that everybody else is living, do you? I mean, that's really not the goal – to be average or mediocre.

So think about it this way: I can acquire assets that produce sustainable cash flow. I love real estate, but you can do it with real businesses too. Instead of enhancing my lifestyle, I started buying properties that started producing cash flow, and as I paid off the leverage they started producing more cash flow. Then, and only then, did I allow my lifestyle to go up.

I owned probably 15 rental properties before I actually owned the first house my family lived in. It seems backwards, doesn't it? But that was the way to go because the assets increase in value and increase in cash flow, and then if I want to enhance my lifestyle, I can do it.

Now, if I do happen to increase my active income, which I did, then I can put those into more assets.

That's the way you compound your way to Freedom. If you do it the other way around by letting your lifestyle go up and putting your money into captive, tax deferral schemes like 401(k)s, you're never going to get there. That model is so old and broken. You've got to take charge of your finances.

You've got to be the one to take charge and say: I will no longer abdicate the responsibility that I have for building my financial future. It's not as complex as people will tell you or want you to think. You can do it yourself, but you've got to level up. You've got to get yourself in a place where you can collaborate with other people and have the inside information that it takes to acquire the right assets, and have them managed by somebody else (so it doesn’t give you a second job).

So remember, always own assets before you elevate your lifestyle.

The discipline is amazing, and the compounding effect of the growing assets will be incredible.

To your freedom!

P.S. Whenever you’re ready, here are some other ways I can help fast track you to your Freedom goal (you’re closer than you think) :

1. Schedule a Call with My Team:

If you’d like to replace your active practice income with passive investment income within 2-3 years, and you have at least $1M in available capital (can include residential/practice equity or practice sale), then schedule a call with my team. If it looks like there is a mutual fit, you’ll have the opportunity to attend one of our upcoming member events as a guest.

2. Get Your Free Retirement Scorecard:

Benchmark your retirement and wealth-building against hundreds of other practice professionals, and get personalized feedback on your biggest opportunities and leverage points. Go to to take the 3 minute assessment and get your scorecard.

3. Ready to Step Away?

“How Much is Enough?” This simple question keeps hard-working professionals at the hamster wheel of active income far longer than they need to be. Watch this free training, and discover a proven model for determining how much you really need before hanging up the handpiece!

4. Apply To Visit The Mastermind:

If you’d like to join dozens of dentists, docs, and practice professionals on the fast track to Freedom (3-5 years or less), visit to apply for a guest seat.

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