Financial Freedom for Dentists

 

When you’re still a dental student, have you heard about FINANCIAL FREEDOM being discussed?

Or are you regretting that you focused solely on your career as a Dentist, and forget how to properly deal with money, diversify on other investments, and learn more about financial independence?

Most often than not, the dental school focused on honing the perfect Dentist. Equipping all there is to know about dentistry, putting up a dental practice, maintaining a healthy smile, and how to provide top-notch dental care to patients. However, they forget to tackle another important part which is money/ debt management and how to deal with student loans effectively.                                          (Financial assistance for dental student)

Imagine what it would be like if you learn (and plan ahead of time) all about cash flow, power of money, financial planning, meet up with an expert financial professional (financial advisor), the huge potential of real estate investing, and retirement plans, even as a practice owner early on. Remember, your profession is highly dependent on your dexterity, and as hard as to admit, it is dependent on age. It would be difficult to strangle with the patient’s tongue and perform surgery on a very limited mouth opening while your hands are shaking.

For sure, he is speaking based on experience!

Financial Planning and Investment Management for Dentist

To help you with financial goals, here are five tips, dedicated for Dentist, to achieve financial freedom:

5 Tips to Achieve Financial Freedom for Dentist

Focus on building your practice

Physicians and Dentists are both doctors in their own fields. However, the way they establish their practice is different. Mostly, physicians are employed in the hospital while dentists put up their own practice. If it’s your cup of tea, it is more beneficial and you can generate more profit if you own practice. This does not apply to all as some dentist is not keen to the “business” side of it. Being a dental practice owner is far from being a dentist alone. Marketing, operations, finance, administration, and customer relations (dental insurance concerns), are all part of being in the dental industry.

As they say, huge responsibility yields great rewards.

The good news is you can create a team that can take charge of the different aspects of your business. Besides hiring a dental assistant and dental hygienist, you can avail yourself of the service of a CPA to help you with the business financial aspect and deal with any tax consequence (if there are any). Appoint a clinic manager to handle the operations and be the go-to person if there are clinic issues to prevent office drama.

Make it a habit to pay yourself

How would you be able to sustain a living if you’re not going to pay yourself? “But it’s my dental practice and the clinic’s money is also my income…

Yes, that’s true! But hold on!

Your income comes from your dental practice but it is obligatory that you must have a separate bank account for your personal finance and an account for your business. In this way, you can monitor if you’re making a profit and monitor your financial plan that will have an impact on your financial future. You can pay yourself between 20% to 50% which is based on your profit and based on what stage your dental practice is in.

Save and invest

Once your dental practice is thriving start to save, build wealth, pay your loan, avail of disability insurance, and invest ( real estate investment). Slowly, your practice transitions from merely being a dentist alone to becoming also an investor and allot something for your retirement. Take note: as you become an investor yourself, don’t forget to consider estate planning. It’s a more complicated subject to discuss and we will elaborate it more on another segment.

Diversify your investment

Do not let your dental practice be your only source of income. The pandemic notably highlighted this. It is better to have other investments (real estate investment) that will generate passive income and adequate cash flow in the long run. Example: If you can afford to buy the unit/ building where your practice is that’s well and good.

Differentiate good and bad debt

Good debt has the ability to increase your net worth. An example is if you are availing of a loan to establish your dental practice or if you will purchase a property as an investment.

Bad debt involves borrowing money to be used to buy a liability rather than an asset. An example is a luxurious car or enormous credit card debt due to irresistible online shopping.

When buying clinic supplies/equipment, be sure to take advantage of great financing and appropriate payment terms to maximize your budget. If you have a good relationship with a product representative, some companies offer a payment plan that is apt for you.

 

Yes, it is easy to think “why haven’t these things been taught when I was a dental student?”

It’s never too late to handle your money/ finances well, plan for your retirement, and achieve financial independence.

The importance is you can diagnose what is lacking in your financial system and formulate an actionable “treatment plan” to address it. Admittedly, dentistry is lucrative once you have established it.

Why You Should Not Buy a Commercial Property for Your Business?

One of the biggest mistakes business owners or operators make, especially brick and mortar business operators, is they are eager to buy their commercial building. Thinking that if they can eliminate their rental payment or mortgage by purchasing the property, they can save a lot for the profit and loss statement monthly.

They are unaware of the tedious process that amateurs (like them) will have to go through in handling a commercial real estate or real estate in general. There’s an immense chance of not getting a good deal on a property.

People must specialize and focus on what they do best and their technical expertise. Since you’re a business owner, you must focus on your business and leave the real estate management and ownership to the pros.

Moreover, most brokers can sense if they are dealing with the amateur landowner. Instead of saving much money as you can, you may be paying above-market rates for the assets. It can be too late once you notice that you are indeed overpaying them.

Curious on how you can pay 11% in overall tax rate as a Dentist?

(Below are the photos of my tax returns so you’ll have an idea)

I am not a Dentist, I was an Engineer by profession but through real estate investing, I have this tax benefits.  

This is real! And yes, it works!

Know more about Land Conservation Easements

Image below: Hui member’s tax form for 2019. AGI of 429k and 47k taxes paid!

 

Take note: Your time and money is valuable – often over $500-1k an hour!

Many of you folks have some relationship with a financial planner, insurance agent, financial advisor, CPA, attorney, etc. When we take a holistic view of their planning, however, most are financially imbalanced and are unaware to handle their money. They are often exposed to unnecessary risks from embedded taxes, lawsuits, lifestyle factors, inefficient use of assets, etc. Failing to address all of these forces places downward pressure on their ability to build wealth.

Here, we bring together leading professionals in the fields of financial planning, taxation, law, practice management, succession planning, and client retention. This way, we can best assist our clients in addressing issues (money)and achieving optimal financial balance in their lives.

While doing dentistry, you help your patients achieve a healthy, brilliant smile then let the financial professional guide you in your investments, personal finance, and business finance.

See how to work with us.

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