How This Doctor Created A Rich Life With Tom Burns | 668

MORI 668 | Rich Life

Financial freedom is the ultimate dream for most people who strive to live a rich life. But how is it actually achieved? Is earning money simply enough, or do you need passion for your work? In this episode, Chris Miles is joined by Tom Burns, who shares his journey of escaping his rat race, getting into real estate, and ultimately creating enough passive income to live free! He shares the most important lessons from his inspiring journey to becoming financially secure. Tune in and learn how you can do it too!

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How This Doctor Created A Rich Life With Tom Burns

Welcome to our show. It’s for you and about you. Those of you that work so freaking hard for your money and you’re ready for your money to start working hard for you now. You want that freedom and cashflow today, not 30 or 40 billion years from now but right now so you can live that life that you love with those that you love. Most importantly, it’s not just about getting rich. It’s about having a rich life because as you become blessed financially, others can become blessed as well, and you create that ripple effect through their lives.

I appreciate that I have the opportunity to do that with you. I love hearing the feedback you are giving, the questions, and the topics that come up. That inspires me and helps me want to serve you. That’s why we’re here. Thank you so much for tuning in, bingeing, sharing, and applying this stuff so that your life changes too. As a reminder, if you haven’t done this already, subscribe to our YouTube channel, the Money Ripples with Chris Miles page. There, you can find lots of different videos, shorter stuff that we teach, and little snippets and tidbits to help expand your education more. Be sure to go check that out today.

I’ve got a special guest that I’ve heard about through reputation but yet I was not able to meet him until recently. I feel fortunate to have him on with us. You may already know Tom Burns. You might have seen some of his stuff if you’ve been online, especially if you’re in the medical field. You may have come across this stuff before. He is a principal of a private equity real estate firm in Austin, Texas. He’s a physician from the US Ski Team, and he’s the author of the book, Why Doctors Don’t Get Rich. He’s developed or acquired $500 million of real estate locally and internationally over the past 25 years.

He’s not showing up on the scene when the real estate got hot. He’s been around for a while. He’s been doing this for a while now. He’s a sought-after speaker mentor. He’s frequently featured in nationally circulated print articles, news, and other real estate-oriented show like ours. He’s been financially independent for a decade. His mission is to help people like you create financial independence so you can enjoy your life and the joy that comes with it. Tom, welcome to our show.

Thanks, Chris. I love your energy and that have a rich life thought. I am glad to be here. I’m sure I’ll be learning something, and what a great mission. That’s what we all want. We’re all humans. We all want to have control over our environment. That’s why we lived in caves first. That’s why we like indoor plumbing. Those of us now that have all that stuff want to control what we do with our lives and do what gives us purpose and meaning. That’s by creating some financial freedom and doing that through income that’s coming in without your effort or time

As humans, we want to control what we do with our lives and do what gives us purpose and meaning. Click To Tweet

Some people on here are financially independent, but I’d say most people are on this journey now. Tell us about your journey and how you even got there in the first place.

I was an athlete when I was young. I found out nobody was going to pay me to be an athlete. I became a sports medicine orthopedic surgeon. I decided to go be a doctor. In my training, I was watching the guys that I was supposed to be in twenty years and I didn’t like their life. They didn’t look happy. That’s not what I got in the game for. I decided I needed to find something else. I bounced around a bit and found real estate, which was the main thing that got me there. I started at square one with zero education. I learned as I made my mistakes and as I had a few victories along the way. It slowly built over time and I kept investing back in that business.

Over time, it didn’t make a huge difference. It then had this exponential jump. I got to a point where I was making more money in my real estate without having to put much mind share to it than I was as an orthopedic surgeon. That’s a fair income for most of you out there. Orthopedic surgery is a fair income. I enjoyed what I did. I loved being a sports doc. I just eliminated all that I didn’t like about medicine. I had a fun practice because I had the control to do that with the passive income. I did that for another twelve years. I hung up the scalpel about a year ago. That’s how we did it. I’ve had some partners along the way. I still have partners and still doing what I do.

I’m curious to get your perspective because like you said, you were looking at the doctors around you. Why didn’t you take the path of getting a financial advisor or someone from Merrill Lynch, Goldman Sachs, or something like that to help you invest your money? Why didn’t you go that path instead?

One, that’s what they did. These guys were on their second or third marriages. They were in the hospital late at night. They were moaning and complaining about not having control over what they were doing. I was probably more of a control freak. I wanted my stuff. I didn’t want to have to work with it because I was a doctor. I was busy. I needed something that fit that schedule.

The first thing I ever went to was a marketing seminar from a financial planning firm. These doctors are about to get out because traditionally, those docs are all going to have money and need to have a guy. You’ve heard that statement, “I’m an investor. I’ve got a guy. I prefer to have a professional do that rather than me having to worry about it.” Not necessarily the right way to go. They got me to look at the numbers. I understood the numbers and compounding and how that stuff worked. I applied that to real estate rather than put my money in the stock market. I don’t like to gamble.

Me neither. That’s one thing we have in common and that’s why we’re anti-financial advisors and pro-alternative investments because I was in that field. I was a financial advisor, teaching people how to do that. I realized over time that people aren’t becoming financially free. I’ve seen the evidence. I’ve seen what happens after decades of getting that advice and they’re still not there. You said the same thing and you’re coming up from a field where there’s great income. You can’t use the excuse of you’re not saving enough. You could save a lot more than the average American can, and yet you still saw that there was a danger there.

It gets called Parkinson’s Law, expenses tend to rise with income. They kept living that doctor’s life with the golden handcuffs. You keep your expenses at a reasonable amount and then get that. Doctors make a significant professional income, not all, but you can do very well. If you’re a doctor, what a great way to start your investing career, just don’t live at 110% of your income.

Don't live at 110% of your income. Click To Tweet

That’s a universal principle across the board. Can you tell us more about your experience and what you’ve learned? I’ve been through a few recessions myself and got banged up and beat around and learned a lot of things. When I was in my 20s and 30s, I was overly aggressive and overconfident even. Whenever there are changes in markets like what people are starting to feel today, a lot of times people start to wonder, “What’s next? How do I adapt to this? What have you learned over the last 25 years of doing real estate investing, especially when many people are thinking real estate investing is going to flop right now? What’s your perspective on that?

If you’ve only been in the business in the asset class for a decade, it’s like this has never happened. That was a long bull market. I said two great opportunities today. When there’s fear and a little bit of blood in the streets, that’s when somebody that’s prepared can make a lot of money. What I’ve found is that you need to step back and use a broader perspective. Everything is waves. Life and energy are waves, and so are the real estate markets, stock markets, and things like that. They all go up and down. This is normal and expected.

MORI 668 | Rich Life
Rich Life: Everything in life is waves. Energy is waves. This applies in the real estate and stock markets. They all go up and down, and this is normal.

I’ve been asked for years, “When do you think the recession Is coming?” I kept saying 2017. I was wrong by five years. We know it’s coming. It doesn’t take a rocket scientist to know it’s coming. It’s just when. This is normal stuff. There are always resets. It doesn’t matter who’s the president or the Fed does have some effect on things, markets are markets. I did have financial advice when I was young. I was told to buy zero coupon bonds to fund my children’s college expenses. That was a bust. I got out of that. I bought the mutual funds from the star mutual fund manager from the year before that tanked and lost 50% of my money in the stock market in 2001.

There was that run-up to the Great Recession. By the time we got to the Great Recession, to be transparent, I still had money in the stock market. It was just there. I had already stopped funding my retirement plan because I didn’t believe in it. I didn’t believe in the fees, the funds, and the restrictions. I gave them to my employees but I stopped doing them. I wasn’t much in the stock market. I pulled all my money out right before the Great Recession. The only time in the history world that Tom Burns has made a good decision in the stock market was when I got out. I did not get back in. I gloated as it went down to 6,700, and then stopped looking and kept doing real estate.

I still think I’ve profited fine since then. There’s been a great run-up. I learned some lessons in 2001 to not necessarily trust the advice you’re getting. You can trust it, but the financial advisor wants to feed his family. You want to feed yours. Given a choice, he’s going to feed his before he feeds yours. That’s not a bad person. That’s just life. In 2008, things were cranking along and I thought I was conservative. I had some mezzanine debt out at high-interest rates for short-term deals. Those short-term deals turned into long-term deals when the market went bad. I owed a lot of people 18% on quite a lot of money. I had to go out and get lines of credit from a bunch of banks. I paid all those people off and arbitraged it down to 4% or 5% at the time.

It took me a couple of years to pay those off. I missed the first two years or so of the sale post-Great Recession, the real estate sale. If you treat my investors right, they stick with you. That’s the main thing. If you run deals, always be transparent and treat your investors right. Be honest with them. Tell them when things are good. That’s fun. Tell them when things are bad too. You’ll find that most of the time, most of them will say, “Stuff happens.” Always be honest and I was honest with those folks.

I was certain I knew what was going to happen so I had everything laid out. I was mostly right. The one thing I was wrong is on what I expected to be getting income from. That also went dry. Expect the unexpected. We’re going into something now for sure. I’m a lot more seasoned. I got more of this gray hair. My question to myself is, what am I missing this time?

I’ve tried not to put my name on too much personal debt. Most of my debt is non-recourse. I have some things that are fully paid off, some real estate. That’s not smart when you’re thinking velocity of money. I’m okay with it. I got enough and that’s my real estate gold. If things go bad and those values go down, I can get money out of that. I call it digging a foxhole. I’ve dug a bit of a foxhole if things turn around. I’ve stayed in the market so that I can take advantage of profit opportunities.

I like the point you brought up because often when we’re talking about people here, they’re trying to get out of the rut. They’re trying to become financially free. Once you get there, it’s an interesting phase you move into, where you’re more focused now on the wealth and trying to stabilize things a little bit more. I like what you said there because it might be the time when having debt no longer serves you. You don’t need it anymore because you’ve already got to that point.

You can now start worrying about figuring out, I can build equity. Make sure you still protect it, especially from creditors, lawsuits, and things of that nature. You start to build that up. That’s interesting because that’s phase two. People try to apply phase two to phase one and say, I won’t have any debt. You just lost a big part of the leverage you could be using to help get you there faster and then pay your debt down faster too.

Good debt is vital to a growing portfolio. You won’t go very fast if you’re not using any debt.

MORI 668 | Rich Life
Rich Life: You won’t go very fast if you’re not using any debt.

What advice would you give to somebody who is a busy professional like you? If someone says, I won’t be creating my own deals. I’m more of a passive investor or I want to be a passive investor but I’m not sure where to go or how to do it,” what advice would you give them?

To be clear, for some bizarre reason, there weren’t any syndications around, at least that I knew of. I ended up doing my own thing. That has been my path. I’ve always been on the sponsor GP side. I do invest with others because sometimes it’s nice not to be the general and just be one of the soldiers and let somebody else go to all the trouble. You always have to do your due diligence. It’s easy to find things to invest in right now. It’s super easy. Is it easy to find good deals to invest in? It’s a little harder. I suggest to people a simple plan and it’s laid out in the book.

Number one is to figure out why you want to do all this. Do you do real estate because you love real estate or do you want the results of the cashflow that comes from real estate? For sure. Your why will keep you going because it’s not going to be easy. Get some education. Find out what you like. Maybe it is real estate. We’ll just use that as an example because there are a lot of other ways to make money. Get some education and find out which type of real estate you like. Read as many books as possible.

Listen to podcasts. You’ll get more book ideas and you’ll get more information from podcasts like yours, plus I like the way that you teach once a week. You send out an episode once a week with a guest. That’s awesome. There’s free education. We didn’t have YouTube. We didn’t have much of the internet. I had to walk to my real estate properties 20 miles in the snow. Everything is out there for you right now. That’s good and bad, maybe new things or ethically challenged people. There are a lot of folks out there that would love to take your money.

Listen to the podcast and then start understanding what you like. Something will come to you. It is a stepwise thing. Go to some seminars. Why do I say that? There is great information on the stage. I speak at things like that. A lot of people give good information, but what you get is the people in the crowd. It’s the side meetings, the drinks, the dinner or the lunch that you have on the breaks. You start meeting people and you get a lot of things from that. You get information. Find out what’s possible and what other people are doing.

You get motivated. It’s nice to keep getting motivated because it’s doing something that most people don’t do. It is not that easy. You do have to put some effort into it. You’ll find people to invest with or people to get to know before you invest with them. If you’re putting your deals together, you’ll find investors. It’s why you go to those to meet people and see what kind of value you can provide them, and friendships will grow. A step further, I’ll tell you what I did and what I do now for folks. I reached a point where I had bought some real estate. Things were going nicely. It was awesome. I had a friend who was a developer. I felt like I’d hit some sort of ceiling. I went to him and said, “I like what you do.” He was a guy I vacationed with and everything. I said, “I like what you do, will you teach me?” He looked at me and he goes, “You’re a rich doctor, you don’t need to know that.” I said, “That’s okay, I’ll do it.” I worked for him for about eighteen months with no pay.

See what kind of value you can provide to other people and friendships will grow. Click To Tweet

I had to cancel the office. I was willing to forego some income. I learned a lot. We did build the suits, land development, and a lot of things. That morphed into a very large project that we still own now, just him and I. I sought out somebody who had been where I was before and soaked up the information that he gave me. I’ve continued to do that. The coaching bill that I pay personally is over a couple of $100,000 a year. Seek out somebody who’s been there. Start with why like Simon Sinek says. Find somebody that’s where you want to be and do what they say. Do what they do. Keep at it and don’t stop. Persistence wins the game.

You got to have to know your end point where you’re trying to get to. You can’t figure out on a GPS the fastest route to get there if you don’t have point A and point Z. You can’t do that and you got to have that guidance to help also give you that little shortcut to where you’re trying to get to.

I have a friend who truly made enough money to exit orthopedics by being a purely passive investor. Find people you like. Find deals, find a niche that you like, and just keep doing it. Let somebody else do all the work. They’ll get a little piece of that pie. You get the majority of the piece of that pie. You can keep doing what you do best and just keep reinvesting that. Those investment returns, you keep reinvesting them back into that plan. Don’t go buy a Tesla with it. Keep the golden goose where it is. You make the rest of your money doing what you do. You’ll find that the scales will start sliding to where you have to do less work. You have more and more time to look at syndications and you can take it where you wish. You can do your own or just keep investing with somebody else.

I’ve seen that in my experience where it has that slow start. As you start to reinvest, there’s that little hockey stick curve or that exponential curve that goes. It’s fun when you get there.

It happened to me unexpectedly. I just looked and went, “Oh my gosh.” I was walking through the house and realized I’m making more doing that than I am fixing knees. It was nice.

Before I ask you our final question, I always want to know what you see as an opportunity coming up. You already alluded to this. You have people that are your own mastermind investor thing. Tell us about some of the services and where people can find more information about you.

It’s called the Rich Life Club. It’s based on people, deals, and adventures. I’m a traveler. I’ve owned property in Africa. I like to climb mountains and things like that. I want to bring people who want to do fun stuff like that. Over 30 years, I’ve run across a lot of people that do good deals and good operations. I make those available to those folks, and we do a lot of teaching. We’re teaching and guest speakers and things like that. People have done that for me and it’s a lot of fun. If you go to, that’s where you can get some free stuff and some information.

Be sure to check that out. That’s some great information you can get from there. Gleaning on Tom’s experience, it’s great. Go along with that experience. What do you see coming up? What are you excited about right now? As you’re saying, you’re seeing markets transition, which they always do. They always go in waves. Where do you see the opportunity for yourself or others even?

It’s interesting, my shop is doing primarily development and acquisition, but we’ve been heavily weighted towards development, which is great. It’s still going to be good. We all have challenges and all those. There are some supply line challenges and we have ways to hedge that. We’re seeing on the acquisition side, I can tell you over the past several weeks, somebody said, “When there’s blood in the street, there’s opportunity.” I guess Warren Buffett said, “Be greedy when others are fearful.” We are seeing some fear out there. Whether founded or not, it is dropping prices.

When we were looking at large projects, 360 units, it’s a 20% price reduction from where it was 6 to 8 weeks ago. Where properties used to trade for 10% above whisper price, they’re trading for 10% below whisper price. We had a letter of intent accepted and saw where things were going. It had been several weeks. We went in and got a 2% to 3% price reduction right before we sent in the deposits.

My point with those real-life examples is that some folks are fearful, folks that were new to the game. Over the last ten years, if you threw a dart and hit an apartment complex, you were going to make money. If the leverage was a little too high and if the business plan didn’t put in enough contingency, some folks are in a bit of a pickle.

It’s unfortunately for them, fortunately for those that are prepared. That’s where the opportunities are going to come. That’s one thing. There are alternatives out there. As interest rates rise, things change. You may see some owner financing come up more or financing options come up that happen in high-interest rate environments. You pay a little higher interest but you don’t have to go through the bank. There are alternatives in the oil and gas world. Oil is high right now. We are not going all electric for quite a few decades.

It takes a long time to make that transition. Alternative energy is a little spec on top of a stack of petrochemicals. That’s still good stuff. I was in a meeting the other day with very high net-worth folks. I’m not sure why I was in there. We had somebody from Washington who said that the Ukraine war is probably going to go 2 to 5 years. That’s what they were advised. Boeing and McDonald Douglas are spinning up. He said investing in defense if you’re in that market. That’d be one thing, commodities and of course, real estate.

If you can lock an interest rate and own a hard, hard asset such as real estate or some commodity that holds its value, as those dollars lose their purchasing power, your fixed rate is going to be paid with cheaper dollars. That’s going to hedge inflation for you and going to help preserve your capital, and make you money when and if a recession comes and then we come out of it.

That’s great advice. It’s good to hear how it’s transitioning. As you said, you don’t want to take advantage of the misfortunes of people because there are a lot of people that got greedy and lazy in how they underwrite and analyze deals, and figure out what’s a good investment. Combine that with CNN and all the fear-mongering, you’ve got an opportunity.

If you didn’t do the underwriting on that property, you got to do your underwriting and you put in a price that seems fair. There’s opportunity there and sometimes you’re helping those folks by getting it sold. At least it gets them under some debt that they might not be able to serve then in the future. We don’t know how long this is going last.

This may be just a short period of fear, not as founded as it needs to be. We don’t know that. My crystal ball is cloudy. I don’t know what the future’s going to hold. I’ve always found that if you stay in the market, you’ll know when things turn. This is how we have found these other deals. When you’re in the market, you know when things change. You can feel it.

I appreciate your time, Tom. This has been awesome. This has been great. They can get more information on Check out the information he has. If you want to be hiking Kilimanjaro, Tom is going to be your man too. I don’t know if you guys have done that yet, but that sounds exciting when you mentioned going to different places and exploring, and doing that kind of thing.

That’s the way I want to do it. Do stuff like that. When we have our meetings, we have one in some exotic place and people have options to go do some adventure stuff or some mild adventure. That’s where I get my jollies.

It’s that rich life. It’s not just about getting rich. It’s living that rich life.

It’s true. It’s about friends, your health, your spirit, and your community. Money is just one portion of a rich life.

I appreciate your time, Tom and everybody else. Be sure to check out his stuff, All of this is about the information. Remember, there’s opportunity everywhere even when there’s fear around. Look to see where there’s blood in the streets. Look to see where everybody is being fearful. That’s the place where we can be greedy. Go and make it a wonderful and prosperous week. We’ll see you later.

Thanks, Chris.