The Gap and The Gain Investing Edition

As a medical professional trying to navigate your finances, have you ever found yourself wondering, “Am I doing enough?”. Even if you’re on the right track, there can be a constant feeling that it’s never quite enough. You’re putting in the effort, but the results seem slow and distant.

Don’t worry, in this post, you will see what it looks like to build wealth over time and how to bring a bit more peace to your financial journey.

Let’s say you're a hardworking medical professional, earning around $130,000 to $140,000 annually—pretty close to the national average for PAs or NPs. In this scenario, you’re single, with a steady income, and committed to investing smartly. Your portfolio includes a 401(k), Roth IRA, HSA, and a taxable brokerage, covering tax-deferred, tax-free, and after-tax accounts. With this diversified tax strategy, you're investing around $2,200 a month, which is a solid 20% of your gross income. That’s the benchmark every medical professional aiming for financial security should target.

Projecting Returns: The Power of Compounding

In this example, we assume an 8% annual return—achievable with a broadly diversified portfolio of low-cost index funds or ETFs. These returns are realistic as long as you avoid hefty fees, like a 1% assets under management (AUM) fee, and focus on low-cost funds.

But even with this high-performance strategy, it’s natural to feel like you’re falling short. For many of us, the goal of “having enough” feels elusive, no matter how consistent we are.

So, let’s say you set an ambitious goal: a seven-figure portfolio, $1 million invested. Here’s how that journey might look over time:

The Long Road to Wealth

Over a 35-year horizon (starting at age 30 and going to age 65), your investment snowball slowly begins to roll. In the first decade, growth feels modest. After 10 years, you still haven’t reached half a million dollars. Compounding works its magic gradually. At the five-year mark, you might only have around $181,000 invested. It’s easy to feel like your efforts aren’t producing results proportional to your commitment.

The Power of Perspective: Gap vs. Gain Mindset

At this stage, you’re five years into diligent investing, and you’re looking at that $1 million goal in the distance. When you compare your $181,000 to that seven-figure target, it can feel like an enormous gap, leaving you wondering, “Am I doing enough?” This “gap” perspective can lead to discouragement.

But there’s another way to view it—the "gain" mindset. Instead of focusing on the gap, look at how far you’ve come. Five years ago, you had just $10,000 in investments. Now, you’re at $181,000, and you’ve built a consistent, automated system that’s working towards your future. This shift in mindset transforms the journey from discouragement to empowerment.

So, How Can You Achieve More?

If you’re still feeling that your progress isn’t enough, it’s time to ask, “How can I reach my goal?” This simple question can unlock a world of possibilities:

• Increase Income: Consider a side hustle, negotiate a raise, or look for higher-paying roles in the same field.
• Adjust Lifestyle: Lower expenses to free up more for investments.
• Diversify Investments: Beyond stock and bonds, look at cash-flowing assets like real estate.
  
   

What If Your System Needs Tweaking?

If your investing rate isn’t high enough or your expenses are eating into your returns, you may need to adjust your approach. Evaluate your fees—are they too high? Are you in the right tax-diversified accounts? If not, you might need to ask, “How can I optimize my investing strategy to secure the future I want?”

By framing your financial journey with positive, solution-focused questions, you’re more likely to reach the answers that work for you. 

Remember, your investing system should ultimately be automated, effective, and aligned with your long-term financial goals. Adjust as needed, but stay consistent, and know that over time, your efforts will snowball into the financial security you’re working towards.