Updated: Jan 18
After I finished my Ph.D I was unsure what to do next. I felt I needed another mountain to climb. When I thought about it, it seemed there were a few obvious things I needed to learn.
One of those was fitness. Another was nutrition. A third was money.
I picked money. Partly because I knew we'd be starting a family and I wanted to provide for us, and partly because it seemed if I understood money I'd have time for the other two.
So for the past 7ish years I've studied money. I'd like to share what I've learned.
Most people struggle with money problems. If what I've learned can help, then I want to help. I don't want people needlessly suffering when a solution exists.
So I've distilled what I've learned into what I call the 9 Laws of Money Mastery. I believe the laws laid out below are so powerful that I'll probably be a millionaire by 2032.
Here are the 9 Laws of Money Mastery. I hope they serve you.
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1 The Law of Independence: The goal of money is financial independence.
Financial independence is when you have so much cash and assets that they can cover your spending for the rest of your life.
This is the goal of money and why you work.
This, for some reason, is a hard sell in my circles. When I mention this to most people, they don't seem interested.
It's like people don't want financial independence. Or maybe they don't believe it's possible. Honestly though I've no idea why it's such a hard sell. Baffles me.
The ironic thing is we all know this. At some point we will all stop working. We'll hit 65 or whatever and then live off of our investment, pension, savings, social security, or some combination thereof for the rest of our lives.
So we know the goal of money is to have enough that you don't have to work anymore.
By acknowledging that there is an finish line we can be proactive instead of reactive. Instead of waiting until we are forced into retirement, and hoping we have enough, we can identify our number now and work towards that finish line.
So how do you get there?
2 The Law of The Gap: You can either lower your expenses or make more money.
To become financially independent you have to grow the gap between what you spend and what you earn. There are only two ways to do this.
The first way is to lower your expenses.
I know Americans who've moved to South East Asia where it's dirt cheap to live. With a couple grand in the bank they live like kings for years.
You could also lower your expenses right here in the states. You can live in an RV and only eat home cooked meals and never watch movies and only dream of avocado toast.
For most people, living on less is not the best option. Yeah, if you're a 26 year old tech worker you can cut expenses to the bone and save 80k a year.
But if you're, say, a dad of 3 who wants the option to put your kids in private school, then you can't cut enough to reach financial independence.
You've got to use the second way: make more money.
So how do you make more money?
3 The Law of Problems: You make money by solving problems.
You make money by solving problems.
For me this was a really hard idea to understand.
In school the homework never connected to real life problems and at work the computer tasks were removed from any real result. So the idea that everything I was doing was really to solve a problem, and that's why I was getting paid, well it just didn't make sense. It was like saying the grass was angry.
I understood the words, but the sentence had no meaning.
So I'm going to walk you through an example. Maybe this will help.
If I for some reason lost my job and needed to make money I'd buy a power-washer for 400$.
Then I'd go door to door and tell people I was power-washing driveways.
On my street there are like 40 houses. If I knocked on all of them I'd probably get 2-3 sales.
Power-washing for medium-sized driveways run about 300$. So I'd make 600$-900$ dollars.
Then I'd go to the next street and do it again. And make 600$.
And then I'd go to the next street and do it again.
And then I'd do it again.
Let's say I averaged 4 driveways a week. Max.
Well, then, if I worked 48 weeks...
300$ x 4 per week x 48 weeks in a year = 57,600$
I'd make 57,600 a year.
Solve a problem. Get paid money.
Think about the therapists you know.
Are they worried about passing the NCE?
Are they struggling to find office space?
Are they confused about how to start their own private practice?
Do they struggle with accounting?
Did they miss their deadline for CEs?
Do they want to get more clients?
Do they complain about insurance panels?
Do they wish they could get private pay clients?
There are literally dozens of problems therapists have.
Solve one and you can make a living. But how do you know which problem to pick?
4 The Law of Value: You don't get paid based on hard work. You get paid on how valuable the problem is.
A lot of my friends complain about how hard they work and how little they get paid.
I'm going to tell you something I don't have the heart to tell them.
It doesn't matter how hard you work. Hard work won't make you money.
You get paid in proportion to how valuable the problem you solve is, and a huge part of value is the skill required to solve the problem and how scarce the solution is.
For instance, air is really important. We all need it to breathe. But air is abundant and easy to produce. So as long as you're healthy you're not paying money for air. It has no value to you.
The flip side is that something that takes skill to produce and is scarce is super valuable. So if you're having trouble breathing, well, your body doesn't have the skill to absorbed oxygen.
Which is a problem.
So you'd be willing to pay tons of money for one of those medical oxygen systems.
This is why the therapist gets paid more than the front desk staff. The desk staff at the group practice does important work, but when you look at it through the lenses of scarcity and skill, they're easily replaced. In fact many EHRs do much of what secretaries used to do.
On the other hand to do therapy you have to have a masters degree and a professional license, which not everyone has, so there's scarcity.
Both are working hard. In fact the desk staff might be working harder.
But it doesn't matter. Because that's not how the game works.
Pick the problems that require skill and scarce solutions.
Then apply leverage.
5 The Law of Leverage: Once you can solve a problem, apply leverage.
A friend of mine ran a Walmart. He made something like 80k a year with the potential to bonus 40k.
So his annual pay before taxes was about 120k.
Sounds like a lot of money right?
He was working 100hr weeks.
That's 2 and a half jobs.
If you do the math his hourly pay was 24$ an hour.
That's common for "high paying" jobs. You get paid a ton but then you work constantly, which means you're not really getting paid a ton. You just have 3 jobs.
Most people I know hope they can work hard enough to make a ton of money. But the truth is, the more you're paid, the more work your employer expects from you and you very quickly run into an upper ceiling.
The alternative is to use leverage. Leverage is anything you use to amplify your efforts. So if you're a therapists you could:
Use money to amplify your efforts by buying another therapy practice.
Use labor to amplify your efforts and hire someone to do your billing and a few interns to see clients.
Use code to amplify your efforts. Every week Simple Practice saves me time on billing. This allows me to spend more time on seeing clients which actually brings in more money.
Use media to amply your efforts. I could create an online course about how to start a practice. Anyone with an internet connection could be a potential customer. 
Leverage is the key to becoming rich.
So once you're rich, what do you do with your money?
6 The Law of Safety Margin: Save for a rainy day. Avoid Debt.
Once you're rich you got to stay rich. Which means saving your money.
The purpose of savings is to have a margin of safety.
When I worked in the geriatric psych ward I had to run group. So I'd ask the patients an opening question like, "how many siblings do you have?"
They'd respond, "you mean alive or dead?"
That's when it struck me, if you're lucky enough to live a long time, you will be struck by tragedy.
You'll get cancer, or your house will burn down, or you'll lose your job. Something will happen.
In those moments you don't want to worry about money. You want to be able to take care of yourself without worrying about if it will bankrupt your family.
To do this, you need a margin of safety, which in money means having savings.
There are different ideas about how much you should save, but my general rule is you have enough saved that you won't touch your assets.
7 The Law of Assets: Take the money earned and store it in assets.
So you can make money because you can solve a problem.
And you got rich because you applied leverage to your solution.
And you stay rich because you have substantial savings.
The next step is to build wealth. Wealth is when you have your money make you more money.
You create wealthy by buying assets.
Assets are things that go up in value and/or give you cash.