Top 7 Steps To Becoming A Rich Dentist | Student Loan Planner


How do you become a rich dentist? I’m
Travis Hornsby with studentloanplanner.com. Here’s a couple things that I’ve
learned after speaking to over 400 dentists on what it takes to become a
multi-millionaire dentist, instead of a dentist who’s just scraping by, turns
around when they’re 45, and suddenly they wonder “How the heck do I only have a
hundred thousand dollars of net worth to my name?”,
despite busting your tail and working crazy hours. So, being a rich dentist is
not as easy as it used to be. If you follow these seven steps, you’ll be on
the path to success. Step 1: Fix your cash flow. So many dentists that I speak with
have a big problem with being addicted to fancy toys. We’re talking cars, houses,
vacations, things that cost a lot of money. And a lot of times, they finance
those things. Well here’s the thing. A 1% car loan is a bad decision. Unless
you own your practice and you have lots of net worth and you could pay cash for
that vehicle if you wanted to very easily, then buying a car basically puts
you in a position where you’re hamstringing yourself from being successful for
buying a practice in the first place, or having adequate capital to reinvest
within your business and potentially even grow your little mini dental empire.
So that’s something that people really mess up their finances with. So if you do
not have $10,000 in the bank, you need to get there tomorrow. Focus everything
on getting $10,000 in the bank with no consumer debt. So no credit card debt,
no personal loans, none of that. At the very minimum, you can have a little bit
of car loan, and maybe some home equity debt, but really you want to have as
little as possible. You want to have as much cash as you can, preferably 3% of
the purchase price of whatever practice that you could be interested in buying
one day. So fix your cash flow, have a budget, know what you’re spending, have
way more that’s coming in than going out, and as long as you’re in that kind of a
situation you’ll be in good shape. Step 2: Stereotypes are dangerous. So the
cultural expectation of a dentist is that you’re gonna go wear super nice
clothes, you’re gonna drive fancy cars, right? Maybe you’re going to have a pretty,
you know, lavish lifestyle. That is what people expect of a dentist, you know? They
go to the dental office and they’re kind of expecting the
dentist to be parked up front with Porsche, right? And that’s kind of a lot
of people’s view of dentistry that don’t understand how expensive it is to go to
dental school, and how in some markets saturation is really pushing down
the incomes of dentists because insurance companies have more
power than the dentists do so they can just say “Hey, I’m a Delta Dental, I’m just
gonna pay you this” and you just have to say yes, because if you don’t somebody
down the street will and you’ll lose your patients. So the cultural stereotype
of the dentist being this wealthy dentist will first, keep in mind that
it’s not about what you spend, it’s about what you save. So if you want to be a
rich dentist one day, you kind of have to fight back against this cultural
stereotype. You almost have to surprise people by going against the cultural
norms of what a dentist is supposed to be. So instead of driving a Porsche maybe
you’re driving a Toyota or like a Camry or something like that, that’s maybe five
years old with a hundred thousand miles on it. Instead of living in a five
hundred thousand dollar house, maybe you’re living in the same kind of a
house that a teacher would live in. This is not to say that you have to do
this forever, but if you make these sacrifices early on in your career while
you’re really young and you have a lot of years for interest to compound, you
know, you could be really amazed by the kind of impact that you can have in your
life by making these decisions. Step 3 is to get a plan that actually
fulfills your career goals with your student loan debt. This is what we
specialize in. If you have questions on how to get a plan for your dental school
debt if it’s over a hundred thousand dollars, you can reach out to [email protected] The most important thing is that your student
loan plan does not impact negatively your goals you have in your life. If you
want to work three days a week there’s nothing wrong with that, but why would
you necessarily have everything set up for an aggressive refinancing schedule
when you could potentially go for loan forgiveness, save for the tax bomb, and
have a lower cash flow coming out of your pocket? If you want to have a empire,
and you want to build a giant group of dental practices that you’re running
with associates or something like that, why would you be focused on paying down
so much of your loans so quickly, perhaps on an inefficient repayment plan, just so
that you can save a couple percent in interest
when you’re really risking the ability to get into a practice, which is gonna be
the thing that’s gonna get you out of debt in the first place?
So what we see all the time is people will make mistakes. They won’t have their
student loans matching their life plans, and that’s just not a good decision.
That’s just a classic way to cost yourself tens of thousands of dollars.
Just the other day, I had somebody who wanted to eventually pay back their debt,
but they were on like IBR or Pay As You Earn instead of
Revised Pay As You Earn that comes with the interest subsidy, so they were leaving
ten thousand dollars on the table that they didn’t need to be, and that’s just
not smart, right? Wasting money is not a good way to get rich. Step 4:
Don’t forget about retirement savings. Retirement savings for 2019, you can put
away $19,000 as an employee into a 401k plan. So few dentists
actually do this. There’s other things that seem to take precedence over that,
and that’s just not smart. So if you want to be a wealthy dentist one day, then you
really need to focus on getting a lot of money into your
retirement accounts and also take advantage of employer matching. If you
own your own practice, set up a 401k and suck it up and start doing a 401k match.
A lot of dentists just have a very short-sighted view of things, and they
decide that a 401k match is just an expense so they’re not gonna do it. Well,
guess what, that affects you too. You can’t do a match for yourself if you’re
not doing one for your employees. So that’s not a smart thing to do. You can
even add your spouse onto your dental practice in a lot of cases so that they
can do a 401k match as well. So if two dentists did $19,000 a year, which is the
new limit for 2019, and they only did $19,000 a year and they did it for 25
years with the 7 percent return, that’s like 2.6 million dollars. So if
you want to become a rich dentist, you got to get serious about your retirement
savings. Step 5 is to own your own dental practice. So many dentists that I speak with
live in fear. They’re afraid of what will happen if they leave the safety of their
associate job with the regular predictable income and they go start
their own office, or they acquire someone else’s practice, or they even partner
with somebody in a partnership and take on shared risk that way. If you want to
make the most of your career in dentistry from a financial perspective,
you need to be a practice owner. It’s the unfortunate reality that being an
associate is not a good way to get a big return on your investment of four years
of education plus residencies, if you did that, plus the massive amount of debt
that you graduate with. The dental profession is one of the few health care
professions out there where people can still get massive returns on their
educational investment as practice owners. Most people in health care
professions are being transitioned into giant healthcare systems where it’s, you
know, very difficult to go out and do private practice because of all the
regulation and the compliance concerns and just the unfriendly environment to
independent practitioners that’s happening these days. But for dentistry,
the independent solo practice owner still rules, and that’s
something that I think is really valuable and something that’s worth
fighting for and maintaining. So if you want to be a private practice owner, the
first thing you have to realize is your chance of failure is only like 0.3%. Talk
to some bankers. They tell me that three in one thousand practice loans fail. Of
those three in one thousand, two of those three were because of substance
abuse: alcohol, drugs, things like that. Furthermore, apparently usually that
substance abuse is happening with male dentists so if you’re a female dentist,
you should go and start your own practice because it’s almost certain
that you’re gonna be successful. Dental practices that are not successful
apparently tend to be cosmetic dentistry practices or in startups. Startups that
don’t have a clear plan, don’t have a clear path to making revenue, that kind
of thing. So if you acquire someone else’s practice you have a very high
chance of success. Compare somebody who’s a practice owner to somebody who’s
an associate. A practice owner might be making 40% of the revenue in compensation with 60% overhead, or they might be even making more than that if
their overhead’s like 50 or 55 percent. A associate is gonna make between 28% and
33% of collections on average. So if you want to be an owner, you’re gonna be
getting maybe a much higher compensation, and also on top of that, the practice
that you would have as an owner, you’re gonna have to finance it if you, you know,
don’t have capital to put in it yourself you’re gonna go to a bank and get a
practice loan. So you get that practice loan. Over 10 years, that practice loan is
getting paid off. When that practice loan is paid off, you now own a practice which is worth something, right? So say you pay seven hundred thousand
for a practice, and you pay it off for a million-dollar
practice, let’s say, and let’s say that you are eventually paying that off
overtime. At the end of that 10 years you now own this dental practice that you paid
700,000 for, it might be worth say a million dollars, maybe $900,000, 1.1
million, something like that. The value probably went up because the cost of the
procedures that the practice is doing probably went up, so there’s higher revenue,
right, because of inflation, the very least. So your dental practice is
actually worth something. Ideally six figures or seven figures, low seven
figures, is what it could be worth if you really work hard. So that six or seven
figure practice is something that you could sell. So practice ownership is very
important. Many people wait far too long to close on their own dental practice,
and they shouldn’t do that. They do so at their own risk. Step 6:
Get a good return on investing. So many dentists take $100,000 and just let it
sit in cash. That’s not a good idea, at least for the long term. Now, the markets
can definitely go up and down and certainly they can fall 50 percent or
more and you can lose tons of money on paper. That’s why you need to have an
investment plan. You need to have an investor policy statement where you say
what your goals are and then make sure that your investments reflect those
goals. So you can do that with a fee-only financial planner, there’s plenty of
those out there, or you could also work with a digital investing service like
Betterment. So if you go to Betterment through our link in the comments, you’ll
get a month to a year free, then you can also go to Vanguard.com and they’ll
help you invest as well for a very modest fee. So you want to make sure that
you have investments in bond and stock mutual funds instead of just in the bank,
because if you put it only in the bank, you’re only going to get one or two
percent on your money. When you put it in to a Vanguard kind of investment you
could get maybe three percent on a bond fund long term and maybe five to seven
percent on a stock mutual fund, maybe more, but certainly that will really add
up with compound interest over time. So you need to be putting a lot of your
earnings that you’re not spending on and expanding your practice and reinvesting
in your business and that you’re not putting in the retirement, you need to
open up a brokerage account and put that money and that kind of
account as well. Finally, Step 7 to becoming a rich dentist: Be on the same
page with your spouse about money. So many dentists make so many mistakes
because they are not talking to their spouse about what they want in life
financially. So maybe you’re a saver that married a spender or vice versa, or maybe
you’re both savers or both spenders. Regardless, you want to make sure that
when someone hears that you did five thousand dollars of procedures, that they
know that that’s not net profit, right? That means maybe you made a thousand
dollars, or two thousand dollars, of net profit. So, one common, you know,
expression that I’ve heard for both male and female dentists is if my husband or
if my wife finds out that there’s money in the account, they’re gonna
spend it, okay? And if that’s the case, then you need to go talk to a marriage
counselor, or maybe a financial planner, or somebody to make sure that there’s
not resentment and frustration that’s happening in your marriage, so that
you’re both paddling the same direction in life. So if you do these seven steps
you’re going to be a very wealthy dentist, and if you want our help in
making sure that your student loans don’t get in the way of you becoming a
rich dentist, reach out to [email protected] We’d love to help you.

4 comments on “Top 7 Steps To Becoming A Rich Dentist | Student Loan Planner”

  1. Victoria Stout says:

    stereotypes are dangerous is so true. thank you for this video. I’m a junior in HS and I’ve always cared about oral hygiene but it wasn’t until this year that I realized a dentist would work for me because I can’t put in the effort and I also would like to be rich. Thank you for inspiring me even more with this video. :))

  2. Victoria Stout says:

    liked and subscribed because student loans stress me out so much and I haven’t even graduated HS yet lol. Thank you so much!!!

  3. Egg With 10000 Subscribers says:

    great vid ,im young but i aspire to become a dentist and do it right

  4. Douglas Chamroeun says:

    This was a great video. I’m working on becoming a veterinarian. Although not a dentist, I can see how your advice will help me be a rich and successful veterinarian.

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