Economics of dentistry - is it worth it?

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JoeyDirt

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I know this has probably been discussed before, but I want to get a few opinions.

First of all, I'm an average student. I like dentistry. I'm not going to fool myself into thinking I LOVE it and I will admit that I could probably be just as happy with a few other jobs, but the pay would be less. Science classes are boring to me and I struggle mightily with things that bore me. I'm sure dental school will be HELL. My grades are great, but I have to study harder than most because I hate every minute of it.

On to my main question...

Pursuing dentistry will basically require a 5.5 yr commitment (finish pre reqs/gap time/dental school).

At the end of this process, I will likely be $225k in debt (dental school plus some undergrad).

My goal would be to practice around my home town (in the south) with a population of 60k. I'm NOT looking to relocate or specialize (again, average student). I don't desire to be super wealthy or anything, but I would like to make good money considering the commitment I'm undertaking. I want to do general dentistry in my small town and I don't want to work long hours. I like to limit stress in my life and travel when possible.

According to BLS, the median wage for a dentist is $149k. I have a good feeling that working in a small rural city my income will be slightly lower than this. Lets say $125k for arguments sake. After tax, I'm thinking my net income will break down like this:

$125,000 gross
$75,000/yr? after federal and state taxes
$1300/month student loans (20 yrs/3.5%)

= $59,400 net

Now keep in mind opportunity cost over the 5.5 yrs I'm taking classes. I'm not sure how to average that out over say 20 years, but I'm sure it would bring my effective net pay down quite a bit.

In other words, I'm wondering if it's financially worth it?

I don't need a speech about "if you love it..." or "money shouldn't matter..." etc. I just want to discuss the financial aspects. It almost seems like being a dentist isn't an awesome financial decision (as some would assume) unless one can come out with little debt or plans of opening their own practice/specializing to make a lot more money.

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A lot of time rural docs or rural dentists make MORE than an over saturated big city....add in a low cost of living for a rural area, and being a small town dentist can be pretty lucrative---not to mention you'll be an esteemed part of the community (people will actually know you and appreciate you)
 
Dentistry is a business. I'm sure it'll be economically "worth it" if you have great business acumen.
 
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I am tired of seeing threads like this.
 
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A lot of time rural docs or rural dentists make MORE than an over saturated big city....add in a low cost of living for a rural area, and being a small town dentist can be pretty lucrative---not to mention you'll be an esteemed part of the community (people will actually know you and appreciate you)
That may be true for some, but I'm trying to be as realistic as possible. If big money were common in rural areas, the national median would likely be much higher than $149k.
 
Dentistry is a business. I'm sure it'll be economically "worth it" if you have great business acumen.
I don't have great business acumen....probably average or below average.
 
I made some threads a while back which should be in my signature. Feel free to check them out, they hopefully offer a glimpse of reality to the situation. Frankly, it is a good option. Taking everything into consideration (including loans for school, starting a practice, etc.) the average dentist makes ~$100 per hour when all is said and done. More information may be found here: http://www.medscape.com/viewarticle/759190

medscape said:
Dentists took in $99 per hour, which put them second. Only lawyers made more, at $130 per hour. Orthopaedic surgeons took in $88 per hour, nurse anesthetists made $93 per hour, and nurse practitioners made $49 per hour.

As they allude to in the linked article however, the data on lawyers was 15 years old and times were very different for the legal profession back then.
 
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I made some threads a while back which should be in my signature. Feel free to check them out, they hopefully offer a glimpse of reality to the situation. Frankly, it is a good option. Taking everything into consideration (including loans for school, starting a practice, etc.) the average dentist makes ~$100 per hour when all is said and done. More information may be found here: http://www.medscape.com/viewarticle/759190



As they allude to in the linked article however, the data on lawyers was 12 years old and times were very different for the legal profession back then.

That is $200,000 a year and paying for loans and everything at the same time. I highly doubt that!
 
If you read the article you'll see that they are looking at a dentist's entire career.

medscape said:
They assumed that educational loans would be deferred until the annual liability was less than 25% of earnings, and that interest on the loans was 8.25%.

In addition, they assumed that the individual would save 0.15% of earnings after achieving a stable income.

The researchers found that dentists earned a cumulative career total of $6,866,796. That was less than the $10,756,190 made by orthopaedic surgeons, the $8,381,250 made by lawyers, and the $7,338,412 made by nurse anesthetists, but more than the $3,867,504 made by nurse practitioners.

Of course, inflation eats up a lot of those earnings. Assuming a 5% inflation rate, the researchers came up with $1,855,430 as the cumulative career earnings for dentists in real dollars. After adjusting the numbers for the other professions, they still found that dentists came in fourth of the 5 professions.

Importantly, they mention that dentists work much less than their physician counterparts.

medscape said:
However, these figures still do not give an accurate comparison of the income from different fields, the researchers say, because some professionals work more hours than others. And apparently dentists work less than surgeons.

I don't think this article is a comprehensive analysis of the economics of dentistry, but it's a start. The problem with their dental statistics though is similar to the one they admitted with lawyers. Dentists are working more hours today than they did a decade ago from what I understand, and the accountant they interviewed does briefly mention this.

mescape said:
Dentists, too, are under pressure, Michael added. "What we're seeing in some of the larger cities is that some dentists are having trouble finding jobs," he said. "A lot of big cities are saturated. Basically, the only opportunity is to buy a practice."

High unemployment has deprived many patients of the means to pay for dentistry. "They may not be doing the 6-month cleaning. They may be putting it off and putting it off."

Michael sees the patients' tight budgets reflected in the figures that his dentist clients give him. "When I look at the overhead for my dentists, I see them spending less on lab fees and more on supplies. That means they're doing more fillings and fewer crowns. They are trying to do repairs."

Young dentists graduating with student debt of $250,000 or more are in the hardest spots, but even established dentists are working harder, said Michael.

To make ends meet, a lot of the dentists are freezing employees' wages, shopping more aggressively for deals on supplies, and in some cases buying from overseas labs.
 
I made some threads a while back which should be in my signature. Feel free to check them out, they hopefully offer a glimpse of reality to the situation. Frankly, it is a good option. Taking everything into consideration (including loans for school, starting a practice, etc.) the average dentist makes ~$100 per hour when all is said and done. More information may be found here: http://www.medscape.com/viewarticle/759190



As they allude to in the linked article however, the data on lawyers was 12 years old and times were very different for the legal profession back then.
Thanks for the article but I wish it was more detailed. Was that $99/hr figure the cumulative average after 40 years on the job (with years 21-40 being highly profitable)? Before or after taxes? Does it take into account opportunity cost for the 5 or so years to get the degree? In other words, as a dentist it seems like I would live pretty well (but certainly not very wealthy) for the next 20 years (~15 years on the job). But once experience is gained and student loans are paid off, one can live very well. For me that would be in my 50+ years.

A few more questions: what percentage of dentist never gross more than 170k? With the national median at $149k, it seems like there would be quite a few that never made more than that. Surely, the "rural median" would be closer to $125k or so (I know there probably isn't data on that). And what's the average salary of dentist that never opens their own practice?

Lets say I have to go to a private school - ~$350k of debt would have me paying $25k/yr in loans. I'd have to make a lot...
 
If you read the article you'll see that they are looking at a dentist's entire career.
And I assume this includes more lucrative specialties which would skew the number higher. A national average would also be higher than specifically looking at rural dentist.
 
I am tired of seeing threads like this.

The question is a valid one considering the rising costs of tuition. I priced out several schools over four years using the latest ADEA guide. Factoring in living costs, tools, tuition, etc. there are several schools that will run over $400k. That's not a small amount of money that anyone can just ignore.
 
I really feel for you guys who are jumping into 200k plus debt. Out of curiousity do any of you guys work during the summer months and make money for tuition/spending? Ive been working full time every summer since i was 16 and even with paying tuition every year i still have enough to get through my first year of dental school with no loan. Admittedly i do still live in my parents basement though
 
JoeyDirt said:
And I assume this includes more lucrative specialties which would skew the number higher. A national average would also be higher than specifically looking at rural dentist.

They probably did include specialists by that figure. The BLS is the most definitive source that I'm aware of on these matters:

General dentist salary http://www.bls.gov/ooh/healthcare/dentists.htm
$149,310 per year
$71.79 per hour

Keep in mind though that these figures include dentists who don't own their own practice and associates just starting out.

According to the ADEA, dentists in private practice earn an average $207,210. Now, some time ago dentists were averaging significantly less than 40 hours per week, which means their hourly pay would be pretty high. I don't know if that's true anymore.

JoeyDirt said:
A few more questions: what percentage of dentist never gross more than 170k? With the national median at $149k, it seems like there would be quite a few that never made more than that. Surely, the "rural median" would be closer to $125k or so (I know there probably isn't data on that). And what's the average salary of dentist that never opens their own practice?

Lets say I have to go to a private school - ~$350k of debt would have me paying $25k/yr in loans. I'd have to make a lot...

If anything the rural median is higher as there is typically more demand for dentists outside of heavily urbanized areas. Dentists who never open their own practice are not likely to earn as much as their colleagues who do.

To answer any questions you have about tuition and cost of attendance take a look at the two threads in my signature as they're a fairly comprehensive overview of what you can expect (I even included the Excel sheets I used to make the calculations with instructions in the threads on how to use them).
 
Hey, I applaud your honesty... here are some of my thoughts.

First, why do you keep assuming that a rural dentist will make less money? I have NOT found that this is the case, and the dentists in my small town make PLENTY of money.

Where in the world are you going to find a loan at 3.5%? Please help a girl out and share that info.

Are your parents helping pay? If you have undergrad debt, I'm going to assume they won't be, but I may be wrong. However, since you will have undergrad AND graduate school debt, I think 225k total seems pretty dang low. But maybe I just don't have all the info.

In a small town, you'll probably be a business owner. Are you up for that?
 
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Hey, I applaud your honesty... here are some of my thoughts.

First, why do you keep assuming that a rural dentist will make less money? I have NOT found that this is the case, and the dentists in my small town make PLENTY of money.

Where in the world are you going to find a loan at 3.5%? Please help a girl out and share that info.

Are your parents helping pay? If you have undergrad debt, I'm going to assume they won't be, but I may be wrong. However, since you will have undergrad AND graduate school debt, I think 225k total seems pretty dang low. But maybe I just don't have all the info.

In a small town, you'll probably be a business owner. Are you up for that?
Perhaps rural is the wrong word. I don't mean setting up shop in a village that's in the middle of nowhere - 250+ miles from a large city. We do have a lot of very rural places is NC (Appalachian mountains), but that's not really for me. I'm talking clusters of population ~4k-50k cities that are ~45 minutes from a larger city (Charlotte or Atlanta). I come from a city of 5k which is 10 minutes from a city of 60k which is 30 minutes from a city of 900k. Rural but not stuck. It seems like there are 100 dentist in this town of 60k.
 
They probably did include specialists by that figure. The BLS is the most definitive source that I'm aware of on these matters:

General dentist salary http://www.bls.gov/ooh/healthcare/dentists.htm
$149,310 per year
$71.79 per hour

Keep in mind though that these figures include dentists who don't own their own practice and associates just starting out.

According to the ADEA, dentists in private practice earn an average $207,210. Now, some time ago dentists were averaging significantly less than 40 hours per week, which means their hourly pay would be pretty high. I don't know if that's true anymore.
Does the $149,310 also include specialist?

It seems the two biggest things impacting income are taxes and loans. With say $300k in student loans (including some for cost of living), a dentist making $149k would effectively net something like $75k/yr. That's great money, but factoring in ~5 yr opportunity cost of non-employment, the real net is probably closer to $65k/yr for the first 20 years.

For comparison, someone making $75k probably nets $50k/yr. That's a difference of $15k which pretty much means living the same lifestyle.
 
Until the loans are paid off... Not to mention most dentists will see their income rise as they become more established. Also, you seem to be forgetting that there are opportunity costs associated with just about any career today. You'll hear a lot on these forums about how their friend is a banker or an engineer and that they make $75k fresh out of college, but the fact is that's exceptionally rare. Often, when they do earn that much, it's in an area which is notoriously expensive (Silicon Valley for example) and $75k doesn't go far there. Most people are netting between $40k and $50k fresh out of college, maybe less. $75k is much more than most people will ever earn. Even engineers often don't make $75k. At some point in your career you'll be out-earning just about every other career field by a large margin and most of those career fields have opportunity costs associated with them too.

There are dentists out there who make half a million, and dentists who pull in $70k. The business is what you make it. If you are willing to move to find a good client base and put the time into growing your business then you may be quite successful.
 
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Until the loans are paid off... Not to mention most dentists will see their income rise as they become more established. Also, you seem to be forgetting that there are opportunity costs associated with just about any career today. You'll hear a lot on these forums about how their friend is a banker or an engineer and that they make $75k fresh out of college, but the fact is that's exceptionally rare. Often, when they do earn that much, it's in an area which is notoriously expensive (Silicon Valley for example) and $75k doesn't go far there. Most people are netting between $40k and $50k fresh out of college, maybe less. $75k is much more than most people will ever earn. Even engineers often don't make $75k. At some point in your career you'll be out-earning just about every other career field by a large margin and most of those career fields have opportunity costs associated with them too.

There are dentists out there who make half a million, and dentists who pull in $70k. The business is what you make it. If you are willing to move to find a good client base and put the time into growing your business then you may be quite successful.
It probably is exceptionally rare to make $75k straight out of school, but I think we can all agree that becoming a dentist is even more rare! Not many people can: maintain a 3.75GPA for 4-5 years, complete the science pre reqs with nearly all As, make 20+ on the DAT, interview well and eventually make it through 4 years of very strenuous course work. And I'm not saying the average person can easily make $75k after 4 yrs of college, but keep in mind that the person not going to dental school has 4-6 years to work, advance and get their pay up. I'd say it's more than possible to make $70k 4-6 yrs out of undergrad. Easy? No. But probably much more obtainable than a DDS.

I agree the business is what you make it. That can be the case for a lot of professions though -- I know a guy that started his own lawn care service and quickly turned it into $100k+ income. This is why I prefer looking at average pay - I don't want to delude myself into thinking I will be in the top 20% of earners. According to the averages, I would live a lifestyle similar to those making $75k/yr....which is not a bad thing, but it's not "rich" like a lot of predents/average people assume. Heck, after 9-10 yrs of schooling -- if one rewards themselves with a nice bimmer/house, they could be living paycheck to paycheck like most of the country.
 
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