Pay Yourself First
The Key to Building a Thriving Optometry Practice and Personal Wealth
“When you pay yourself first, what you’re really doing is putting yourself first.” ― David Bach, the author of Smart Women Finish Rich
As the CEO optometrist of your private practice, it’s easy to fall into the trap of “paying yourself last”. You prioritize rent, staff wages, inventory, and utilities, thinking the business comes first. But here’s the truth: if you want a thriving business and personal financial success, you must pay yourself first.
Paying yourself first isn’t a luxury, it’s a necessity—and it’s the first step toward building a financially sound practice and securing your own future. In this blog, we’ll explore what it really means to “pay yourself first” and how to make it work for you in multiple areas of life, from covering your household expenses to leaving a legacy for future generations.
Top 3 ways to pay yourself first:
1. Pay Yourself First as one of the company employees
If you work in your practice, you deserve a salary just like your staff. This ensures that you’re compensated for the time, energy, and expertise you invest in your practice. Many optometrists neglect this step, thinking the practice needs the money more than they do. However, your time is valuable. By paying yourself first as an employee, you not only compensate yourself fairly, but you also create a predictable income stream for your personal expenses.
2. Pay Yourself as the CEO
As the CEO, your role isn’t just about providing patient care; it’s about leading, growing, and managing the business. Paying yourself a CEO salary reflects your efforts in expanding the practice, navigating challenges, and driving its success. This salary acknowledges the critical role you play in making strategic decisions and ensuring the business runs smoothly.
3. Pay Yourself as an Investor
Your practice is not just your place of work—it’s an investment. As an investor, you should expect to see returns on the business you’ve built. A portion of the profits should be allocated to you as an investor in the form of dividends or profit-sharing. This can be used to reinvest in the business, diversify your investments, or fund your personal financial goals.
What to do with the income and cashflow you receive from your practice:
1. Cover Your Household Expenses
Once you’ve paid yourself as an employee, CEO, and investor, it’s time to ensure your personal household expenses (the parent company) are covered. Paying yourself first ensures that your mortgage, utilities, groceries, vacations, and other essential expenses are taken care of. This keeps your personal finances in order, allowing you to focus on growing your practice without financial stress at home.
2. Build a “Rainy-Day Saving Fund” or an “Emergency Savings Fund“
Building an emergency savings fund is crucial for both personal and business stability. Pay yourself first by setting aside a portion of your income to build a safety net that can cover unexpected expenses. Experts recommend having 3-6 months of expenses saved for emergencies, such as an economic downturn, personal illness, or business challenges.
3. Invest in Other Assets
After covering expenses and saving for emergencies, use your earnings to invest in other assets. This might include real estate, stocks, bonds, and other investments that will grow your wealth over time. Diversifying your investments is a great way to build long-term financial security, separate from the success of your practice. Build a winning team to help you build wealth.
4. Buy Insurance
Protecting yourself, your family, and your business from unforeseen events is crucial. From health insurance to disability coverage and professional liability insurance, paying yourself first means ensuring that these protections are in place. This safeguard can prevent catastrophic financial losses in the event of illness, injury, or lawsuits.
5. Pay Taxes
Taxes are inevitable, but with a solid financial plan in place, they don’t have to be stressful. By paying yourself first, you can set aside enough money to cover your taxes without scrambling at the last minute. Working with a good accountant to plan your taxes efficiently will also help you minimize your liability and maximize your deductions.
6. Enjoy Everyday Life
Life isn’t just about work, saving, and investing for the future. Paying yourself first allows you to enjoy the present moment—whether that means taking vacations, dining out, or indulging in hobbies. Financial security allows you the freedom to live a balanced and fulfilling life, without constantly worrying about money.
7. Leave a Legacy for the Next Generation
Finally, paying yourself first enables you to build a legacy that will outlive you. By growing your wealth and wisely managing and protecting your finances, you can leave behind something of value for your children, grandchildren, or even a cause that’s close to your heart. Whether through an inheritance, a family trust, or charitable donations, your legacy will be a testament to your hard work and success.
Paying yourself first may seem simple, but it’s one of the most powerful steps you can take toward securing both your personal and business financial future. It ensures that you’re not only growing your practice but also building wealth that can sustain you and the generations that come after you. Start paying yourself first today! Start small and increase the amount as you grow. As one of my financial mentors said:
“If you don’t pay yourself first, you’ll never have the money you need to invest in assets that will lead to financial freedom in the future.” -Robert Kiyosaki
Are you ready to take control of your finances and your practice?
If so, Click HERE to join the Optometry Divas community and our CEO of YOU Business Consulting program. We’ll help you design a plan to pay yourself first and build a thriving, profitable practice that supports the life you dream of!
Until next time, remember: Dream Big, Take Risks, and become the CEO of YOU™!
Note: The content of this blog is designed for educational purposes only and is not intended to replace professional advice. If you need financial, legal, accounting, and other professional advice, please hire a licensed professional in your area.
