32. The three financial stages in a dentists’ life and how to “own” them

Through that whole journey, the whole constant companion… and the thing I would encourage everyone to think about is to always be implementing strategies that are flexible and adaptable. Because life changes, and what worked for you two years ago may not work today. 

Likewise, I'm thrilled to be here.

Well, when you build a business right, you can do all the things you want.

I'll tell you, I'm known for helping dental entrepreneurs build true wealth so they can thrive no matter what life throws at them, but my life certainly didn't start that way for sure. You see, I started my life as a very ordinary financial advisor, thought it was my job to manage an investment portfolio, and well, as you know and anyone listening to this show knows, there's a lot that goes into a dentist's life beyond the investment portfolio. And I met and fell in love with my wife, who happens to be a dentist.
But it turned out we had another person in our relationship and it was her dental practice. We'd be out to dinner or on date night and all of a sudden the conversation would turn to work and it would be, you know, I just don't know what to do about that grumpy patient or I've got to hire new staff or I'm getting killed in taxes. And as that ordinary advisor, I just couldn't help her. And I really found myself in a job I hated and I couldn't take care of the person I love the most. 
I knew something needed to change. And so I started to reach out for help. I hired some of the top consultants in my industry to really teach me how the super rich manage their wealth, and the lessons that I could learn from that. And my wife and I started implementing some of those lessons, and we got back to enjoying our date nights again and having fun. But as you know, life is full of curveballs, and sometimes it'll throw you something you're not ready for. And the same was true for my wife and I.
I'll never forget being down in San Diego Del Mar. We weren't down there though for the beaches, the sun and the sand. We were there because my wife was having problems with her hands. And as you know, in dentistry, your hands are everything. If you can't practice dentistry, what's gonna happen? Now we weren't just worried about the practice invading date nights. What's gonna happen if she can't practice? How are we gonna make the mortgage payments? What's our future gonna look like? And, you know, thankfully we had done the planning. 

And when the doctor walked in the room, we weren't worried, we weren't scared, we were calm, we were confident because we knew, no matter what he told us, we were gonna be okay. And that's really when I knew this is what I wanna do. I love dentistry, I love helping dentists, and I saw the big impact I could have when we really moved to advanced planning strategies to really build that life of significance so that you can thrive no matter what life throws at you.

I'll tell you, even before building wealth, I want to pull back just a little bit because this is a step that I think gets ignored so often, and that's getting clarity, right? We're so quick to jump into advice, and advisors, they provide advice, but what I find is most dentists want leadership. They want someone to really help them make those choices and sort through their options. And so before trying to figure out, you know, do you pay off your student loan? Do you go work for this practice? Do you open your own? Get some clarity about what you want your life to look like. And you're just starting out, so the good news is you can change your plans, you can change where you wanna go, but at least get some clarity around what's important to you. Where do you wanna head? What does your life look like? And then once you do those things, then you can start putting a plan into place, but you gotta start with that clarity. And so you've graduated dental school, congratulate yourself. That's the other thing you should do.
Realize you've just done something incredibly hard. And one of the lessons I've learned is, I feel like so often I'm always reaching towards this golden ring that's just right ahead of me, right? If I could just do this one more thing, this one more thing, then I'm finally gonna make it. But the truth is, the more I do that, the more I fail to look down and see all the things I've already accomplished. And that's a danger every single one of you can fall into. And so, you know, one of the keys to actually building wealth…
Interestingly enough, is finding contentment in where you are right now. So get clear, be content, recognize your successes. And now how do you actually start building wealth? Well, you need that plan. And one of the things that I see ignored so often is just that the failure to start saving and investing in yourself and getting clarity and really assembling that right team of advisors to help you achieve your vision.

I'll tell you, when I do this with my clients, is we always really center around seven key areas that we find clarity is so important. The first thing is, figure out what's important about money to you. Is it about providing for your family? Is it financial stability? Is it because you want to accumulate things? Is this the status that it brings? Like figure out what's important about money to you. Then dive in and figure out who your most important relationships are.
Right, and if you're a young dentist, you may not have those most important relationships yet. So imagine what they might be one day for you. From there, dive in and start doing that assessment of what are your assets, what are your liabilities, what does that picture look like? Then do an assessment of, you know, what does your current team look like? Do you have a team? If you're right out of dental school, chances are you don't have anyone to talk to. 
So start figuring out who your board of advisors is gonna be, who are those trusted partners, the people who can provide leadership to you, not just advice, but leadership on where to go. Do an assessment of that team. Then figure out what do you like to do when you're not working? What's the process look like for working with advisors? Are you really hands on? Are you really hands off? So get some clarity around those areas first, because that will help you figure out who the right advisors who can provide leadership for you are.

Yeah, absolutely. And when it comes to student loans, right, there's different options for paying these down, right? Everything from income-driven repayment plans to refinancing loans to accelerating the payments. And it's hard to say which one's right for you because once again, that's gonna come to that clarity piece. There's some doctors who I talk to and we're running the numbers, we're crunching them, and the strategy becomes, hey, your loans are at a great interest rate.
Your practice is doing really well. Pay the minimum on the loans. Don't accelerate those payments. For other doctors, they say, oh my gosh, you know, I just hate this burden of having a payment. I can't sleep well at night. I know the interest rates are low. I know I really shouldn't technically pay them off, but I want to sleep well at night. And so for them, the right answer is to pay those off. But the point is get some kind of debt management strategy in place that aligns with your goals. 
And... maybe your goal is to go work in the private sector somewhere. And so in that case, you know, maybe one of these income-driven repayment plans or debt forgiveness programs makes a lot of sense for you. But if you're going into private practice and you want to own it one day, well, being on the hook and working for another entity for years may not make as much sense. And so that's why, you know, I come back to that clarity of goals is so important because we can get lost in those strategies and tactics.
And without something driving us forward, you're gonna end up making mistakes all along the way.

I'll tell you that the one that I have fallen prey to, and I'm sure a lot of our listeners will fall prey to, is I love cars. I love the technology, I love the cars, I love the latest and greatest. And you know, so cars for the most part, now there's a way to do it right, but for the most part, cars are depreciating assets and they usually don't go up. 
And so, you know, instead of going out and buying the latest and the greatest and something brand new right off the lot, why don't you look around for a used car? There's so many good values out there. And you can drive great cars. I drive a 2007 Jaguar XKR that I bought from another doctor who never drove it. It's a hundred thousand dollar car that I got for less than the cost of my wife's Honda. Like that's how you can make some smart choices out there. And really get the things that are important to you. So watch out for that lifestyle creep because that's what we're talking about is right? You make more money, you wanna spend more money. You wanna buy more things.
And that's one of the mistakes I see. The other big mistake I see is really the failure to put together an emergency fund. I mean, this is simple, basic financial planning 101, but you are gonna sleep so much better knowing that you've got some living expenses tucked away in an account, and that if something happens, you've got the assets there to pay for it, right? An emergency fund is gonna help you sleep so well. And so lifestyle creeps a big mistake.
Not having an emergency fund is a big mistake. And the other mistake I see is not saving for retirement, at least not starting that habit. I don't care if you start with $1 going into some kind of a retirement plan, just start that habit. Because you are gonna have to accumulate assets and build wealth for the things that you want, whether that's retirement or putting kids through school or acquiring practices, right? You're gonna have to build some wealth out there. So start that habit of paying yourself first.

I'll tell you, things that are on autopilot are really the success strategies that are out there. Keep the expenses low, right? When I deal with investments, I wear another hat, the registered investment advisor hat, so I'm not going to go into specific asset allocation strategies or anything, but it really is like, keep your costs low. Don't get swayed by what your neighbors and everyone else is talking about or the latest hot tactic. That's the best way to lose money, right? Pick some kind of long-term strategy that you can put money away in and really recognize that power of compounding interest. Start early, that's the most important thing you can do because the earlier you start, the better off. And the studies have been done time and time again versus saving a little bit of money early versus saving a lot of money later. The people who saved just a little bit earlier do much better. And so just start that habit, get started.

Well, actually, and interestingly enough, you may expect me to say, yeah, you shouldn't list someone right away. But I would argue, no, you need to enlist the advisors, not just for advice, but for leadership. And you've heard me say that a couple times, right? Advisors provide advice. But what I find and what I provide to my clients is leadership, and there's a big difference. Because leadership is gonna help you see a bigger picture of what's possible. It's gonna encourage you to think, hey, yeah, you really can get that practice. Yes, you really can do that. And then leadership is going to help support you. And so, you know, if you're just looking for advice, you know, talk to people, get the advice, but you really want to start from the very beginning by putting leaders around you, people who can provide leadership in different areas for you. And you want to assemble that board of advisors, those resources who can help you throughout your entire career.

I'll tell you, one of the best ways is asking your peers, right? When you're going to meetings, when you're getting your CEs, like talk to the person sitting next to you, right? You will be surprised at the wealth of knowledge in those rooms and just ask them, say, hey, I'm struggling with this. Who should I talk to? The other way is look for thought leaders. You want to work with thought leaders in the industry and thought leaders are people who write, speak, and publish in dental who are sharing the strategies, the tactics, and the leadership that can help you move forward.

Reach out to the people who can really help you accelerate and anticipate those things that you don't even know you're gonna face one day

Yeah, absolutely. And for me, this is where it really gets fun. And this is where it really gets exciting because you as a mid-career dentist, you have options. Oh, wow. Do you have options! And you know, one of the things that's happened is by the time you're mid-career, hopefully you've reduced your student loans a little bit. Hopefully you've paid off some of that debt that you have. Hopefully your income has increased pretty substantially. 
And so you've got options now, right? You've accumulated possibly a house, maybe you’ve bought a practice, maybe you're thinking about, hey, I'm ready to leave that associate position? I've been there for quite a while now and you're ready to step out. So you've got options ahead of you. And it's also where complexity really kicks in because now you've got more moving parts than ever before. And so as a mid-career dentist, right, I really find, like I said, that increased earnings, more earnings, more potential, right? 
Maybe you want to go out there and acquire a building for your practice. Maybe you want to start acquiring equipment so that you can upgrade your practice and really do that kind of dentistry you've always wanted to do. So mid-career for me is a lot of fun. Not only that, but now things like retirement planning really kick into high gear because you have that clarity that you were playing with as the new dentist and maybe those visions have shifted a little bit, right? Maybe you're married now, have some kids. So your life will change. So now you've got some estate planning concerns that are kicking in. And then often I find that dentists are very generous, right?
You have causes that you've become passionate about. So now philanthropy becomes part of that, right? How do you use your practice? How do you use your assets? How do you use your wealth of knowledge to start giving back to the community? And so it really becomes a lot of fun. And the other thing that really kicks in for a mid-career dentist is the issue of risk management and asset protection. You know, there's a lot of people out there who look at you as a dentist and think, you've got lots of money, you're doing really well, and I'd like a piece of that. And you know, when I came into your office, I think I got hurt a little bit and, you know, I'm going to sue you. And so really that risk of protecting everything you've worked so hard for, so it's not unjustly taken from lawsuit, divorce, or some other unjust means, that becomes a big, big major concern for those mid-career dentists is really protecting everything you've worked so hard for.

Well, I mean, there's everything from some dentists will set up their own insurance company that will include a dental warranty program for retreatment of cases, or a lot of times just having the proper liability insurance and professional liability insurance can help protect. And then there's other asset protection strategies, the use of trust, the different kinds of planning that can be done to make sure that your assets are separate from your corporate assets and that things are protected so that if someone comes after you don't have anything to offer them because it's all owned by your trust. So there's things that can be done, but you have to do it before those issues arise.

Yeah, absolutely, right? It's a journey for sure. And when you just graduated, right, you're excited, the world's your oyster, you're ready to get out of there, but you got debt hanging over your head. And so first things first, build that financial safety net, right? Get that emergency fund paid off. Get a debt management strategy in place. And that doesn't mean you pay off everything, it just means you have a strategy for dealing with it. 
Then as you gain experience, as your practice grows, continue to assemble that team. Do that from the very beginning, but lean on that team. And you know, I'm a fan of private practice. My wife's in private practice. I love private practice. I would encourage you everyone to consider ownership. It may not be for you, but you definitely have to look at it. You definitely have to consider it. 
So as your practice grows, your earnings are going to grow and it's okay to upgrade your lifestyle, but make sure you're doing it in a responsible way, right? This is a marathon. It's not a sprint. So once again, mid-career continue to really focus on reducing debt. Pay off those loans.
Then as you start moving into late career, right, you can see retirement on horizon. You can see that your lifetime of hard work is about to pay off. It's real. It happens. But make sure you're prepared. Go full throttle on your retirement savings. Make sure you've stored up enough so that you can fund that retirement you want. Your investment should really change from growing your wealth to preserving your wealth. 
But through that whole journey, once again, the whole constant companion, and the thing I would encourage everyone to really think about is always be implementing strategies that are flexible and adaptable because life changes. And what worked for you two years ago may not work today. And what's working for you today may not work in three years. So make sure you're putting things that are flexible and adaptable in place because life will change for you.

I'll tell you, I love studying the super rich. I've helped underwrite a lot of research on the super rich. And when I say super rich, I'm talking about people worth north of half a billion dollars. And the reason I want to study those people is I don't want them as clients. I don't have any clients that rich. I want to learn from them and you should want to learn from them too. And the super rich do two things extraordinarily well. 
Number one, they have an elite team of people who provide leadership to them. They have the advisors, they have that team of people who aren't pitching products, who aren't trying to sell things to them, but who really understand what they're trying to achieve. And then that team does everything in their power to help support them so they can get to where they want to go. So the first thing the super rich do is they have an elite team of the best of the best people who are advising them and providing leadership.
The second thing the super rich do so well is they trust... but verify, like our president Ronald Reagan used to say, trust but verify. And they do this through a process called stress testing. And stress testing is really questioning the underlying assumptions of the planning that you've done. And this becomes so important as your level of wealth grows is you wanna do two things. Number one, you wanna be making sure you're taking advantage of all the opportunities that are out there. And secondarily, you wanna make sure you're catching errors in your plans before they occur because the errors will actually go down.
You'll have less plan or less errors in your plan as your wealth grows But the severity of that error is gonna cost you a whole lot more right a 1% error of a $10,000 net worth not that much money a 1% error of a 10 million dollar net worth… Well now we're talking some serious change and so, you know, you really want to be catching those errors. So the super rich they build that elite team around them of people who are gonna provide leadership and they're stress testing their plans on a continual basis.

Yeah, absolutely. Super easy to get. You go to DentalWealthNation.com and you'll see a link there. You get the book. I'll send it to you for free plus shipping.

I'll tell you, we dive into a lot of the super rich strategies that the super rich are using that you can use. And we also interview other thought leaders. We talk to people who can help you hire the best people for your practice or get the equipment financing or help you finance a practice or the attorneys that will talk you through everything that goes through, you know, lease negotiations and the buy-sell agreements.
So you've got a resource of thought leaders, super rich strategies, and even interviews with other successful dentists.

Really easy. I'm on LinkedIn and dentalwealthnation.com or send me a text at 818-534-4949.

Oh, it's a joy, Corey. And thank you so much for supporting dentists out there. It's an incredible industry. And if you're thinking about getting on the path of ownership, I couldn't encourage you more. Go do it. You won't regret it.