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The Truth About Income Jay M. Geier

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If you're a business owner it's important for you to realize most of the advice you hear in the world today is not designed for business owners, but for employees. If you're taking advice from people who make less money than you, it's hindering your net worth. If you're taking advice from people who are not focused on net worth you're not going to be focused on net worth. A client recently said to me, "My accountant tells me I'm paying off debts too aggressively." I replied, "Sounds like it's time to get a new accountant!" Do not let advisors derail you from increasing your net worth.

Net worth is very important to your future and it isn't just about knowing your net worth. It's about increasing it. If you don't already know your net worth, figure it out in the next 24 hours (there are charts included to help you). Then craft a plan to begin increasing it and pay close attention to it on a regular basis.

As you know, net worth is the total of all your assets minus liabilities, or debts. I find it helpful to break this into three groups. First is your personal value. This is the total of all your savings, investments, valuable items (significant content in your home, jewelry, vehicles, boats, etc.) minus your personal debt (not including real estate). Second is your real estate value. This is the total of your real estate value minus your real estate debt. Third is your practice value. For a formal valuation you should get your practice appraised, but you can use 50 percent of gross revenue minus debt as a starting place.

When setting values for assets, do not inflate the values. Set them realistically based on what they would sell for at the present time. Some things drop in value over time and you should adjust accordingly every year. It's better to show them being worth less than more than they're really worth.

Debt should be paid off aggressively and you should only take on new debt if you have an aggressive plan to pay it off quickly. At one point in my life I had $3.5 million worth of debt. Today I am debt-free. I have been able to eliminate all my debt by taking the steps I'm sharing with you in this article. Use net worth as your measurement. If you pay close attention to this number on a regular basis it will become very clear how much progress you're making toward increasing that number. The fastest way to increase net worth is to pay down on debt. Every dollar paid to debt is a dollar added to net worth.

Step 1 – Manage Cash Flow
Every day you should know exactly how much money comes in and goes out of your practice. Don't spend hours on it; just a few minutes. If someone else in your office knows these numbers, require them to give you a daily report summarizing what happened financially. Being consistently aware will prevent financial surprises.

Step 2 – Get in the "Black Zone"
Your practice should be profitable. You should be collecting enough money every month to pay all the expenses and still have margin. If it's not profitable, or you have very little margin, there is a problem. The one asset you have that most people don't have is the value of your practice. It's shameful to spend your life working in your practice and at the end not have any value in it. Be focused, but be patient. It usually takes six to 12 months to turn a practice around.

Step 3 – Follow the "Checkbook Strategy"
This strategy will support your efforts to get in the black zone. List all your debts smallest to largest including every single person to whom you owe money. You'll probably be surprised by how many debtors you have. Then go to your business checkbook and pay off that very first debt. Once that first debt has been paid, you must continue down the list systematically and intentionally work toward paying off every debt. A debt doesn't have to be completely paid off at once, but you must be actively paying down on debt at all times. If you plan to wait until your income goes up or you want to save before you start paying debt, you're making a huge mistake. Remember, every dollar paid to debt is a dollar added to net worth.

Step 4 – Set Aside Cash
If you don't already have accounts for these purposes set them up and move money to them frequently. The idea is that you move money out of your checking account because if it sits in your checking account it will get spent. You only need enough money in your checking account to cover expenses plus a little buffer.
  • Your savings account should hold just enough money to cover emergencies.
  • Your tax account is important. The more distributions you do, the more important it is to set aside money for taxes. Bottom line is, you must pay your taxes so make sure you're planning ahead for this.
  • Have a large purchase account. This is the antidote to getting lines of credit when you need to make a large purchase – like buying a new building/office space, adding a treatment room or redecorating the office. Don't wait until you need something to start saving. Move money to that account frequently so when you go to make that purchase you can pay cash rather than take on debt.
The bottom line is income is irrelevant if you spend it all and none of it goes to your net worth. You should have a very intentional impact on your net worth. It's about focus, time commitments, the structure and process and your habits and discipline. Unfortunately there are no shortcuts. For every financial decision you make each day, you should know exactly how it's impacting your net worth. Get engaged in the process. When you see your progress, you're going to be amazed.
Author’s Bio
Jay M. Geier is a speaker, consultant and the president and founder of The Scheduling Institute. He helps his clients reach new levels of success and create a lifestyle they dream of, using their practice as the vehicle. He has a unique ability for getting results in a practice by leveraging its current resources with a primary focus on the staff. The Scheduling Institute currently offers several on-site training courses that focus on telephone training, marketing and creating the ultimate new patient experience. The strategies in this article are the basic strategies the Scheduling Institute clients are implementing. For more information and special Townie pricing, call 877-215-8225 or e-mail info@schedulinginstitute.com.
Orthotown Magazine
September 2025
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