AMA - Practice startups and early retirement

[Cold Front]

No. If you are seeking early retirement, retirement accounts are of limited use because of the low amounts you can put in, and the age restrictions on use/withdrawal. Save your money to open an office instead. You'll make way more than having it in a retirement account.

Limited use?

Retirement accounts can be utilized to reduce tax liabilities and maximize your future income.

I do a 401k at my office with profit sharing. I include myself in the program as an employee, so I put away $18k a year, and my office matches 4%. My wife does the same, the office also matches 4% for her. We both get additional funds from the office profit sharing program, so we put away about $75k each year combined. 401k limits usually go up $500 a year for each individual, and there is a $6k limit increase when you reach mid to late 50's. We love index funds, so the rate of return has been great for the past year or so, averaging 9%. Ofcourse the yield rate has been lower in the past, but the long term average historically is 8%.

So compounding effect of $75k a year at +/- 8% over 20-25 years is on track for $5-6M. I don't have to work past age 59 (the earliest you can withdraw from retirement accounts), and withdrawing 5% from the nest is $250-300k a year pre-tax (or $20-25k a month). With all the debt and mortgages paid off, this side of my global portfolio speaks for itself.

Outside retirement accounts, there is a still dental offices income (whether I sell it or find an associate(s)) + commercial buildings income + social security (if it's still around) + other investment = that's going to bring additional income, more than retirement accounts for sure.

Never overlook retirement accounts when you are ready to start putting money away.

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[786783]

Limited use?

Retirement accounts can be utilized to reduce tax liabilities and maximize your future income.

I do a 401k at my office with profit sharing. I include myself in the program as an employee, so I put away $18k a year, and my office matches 4%. My wife does the same, the office also matches 4% for her. We both get additional funds from the office profit sharing program, so we put away about $75k each year combined. 401k limits usually go up $500 a year for each individual, and there is a $6k limit increase when you reach mid to late 50's. We love index funds, so the rate of return has been great for the past year or so, averaging 9%. Ofcourse the yield rate has been lower in the past, but the long term average historically is 8%.

So compounding effect of $75k a year at +/- 8% over 20-25 years is on track for $5-6M. I don't have to work past age 59 (the earliest you can withdraw from retirement accounts), and withdrawing 5% from the nest is $250-300k a year pre-tax (or $20-25k a month). With all the debt and mortgages paid off, this side of my global portfolio speaks for itself.

Outside retirement accounts, there is a still dental offices income (whether I sell it or find an associate(s)) + commercial buildings income + social security (if it's still around) + other investment = that's going to bring additional income, more than retirement accounts for sure.

Never overlook retirement accounts when you are ready to start putting money away.

Don't understand where the 75K is coming from. 18k + 18k + 4% of 36K?

Your financial planning and strategy sounds nice for its very low risk.

 

[Cold Front]

Don't understand where the 75K is coming from. 18k + 18k + 4% of 36K?

Your financial planning and strategy sounds nice for its very low risk.

The employer matching contributions don't count toward the maximum limits that I can contribute to a 401(k) plan. There is, however, a combined contribution limit of $53,000 for the employer and employee contributions in 2017. Also, in 2015, the employee's contribution limit is $18,000. So I (just me) can put away upto $53k + spouse $18k (plus her 4% match) = $72-3k to be exact.

 

[TanMan]

Limited use?

Retirement accounts can be utilized to reduce tax liabilities and maximize your future income.

I do a 401k at my office with profit sharing. I include myself in the program as an employee, so I put away $18k a year, and my office matches 4%. My wife does the same, the office also matches 4% for her. We both get additional funds from the office profit sharing program, so we put away about $75k each year combined. 401k limits usually go up $500 a year for each individual, and there is a $6k limit increase when you reach mid to late 50's. We love index funds, so the rate of return has been great for the past year or so, averaging 9%. Ofcourse the yield rate has been lower in the past, but the long term average historically is 8%.

So compounding effect of $75k a year at +/- 8% over 20-25 years is on track for $5-6M. I don't have to work past age 59 (the earliest you can withdraw from retirement accounts), and withdrawing 5% from the nest is $250-300k a year pre-tax (or $20-25k a month). With all the debt and mortgages paid off, this side of my global portfolio speaks for itself.

Outside retirement accounts, there is a still dental offices income (whether I sell it or find an associate(s)) + commercial buildings income + social security (if it's still around) + other investment = that's going to bring additional income, more than retirement accounts for sure.

Never overlook retirement accounts when you are ready to start putting money away.

Alright, we're not on the same page again. Your strategy is for long term 20-25 years. Your advice is great if you plan to retire at around that time. However, the whole point of this thread is to retire EARLY from dentistry (or overall). He is right though, its a slow, steady, and low risk way of retiring and being well off.

If you want to do dentistry for the rest of your years, then this would be the way to go. I have discussed before that dentistry is only the means, not the ends. Use it to gather a lot of capital, invest it aggressively in other businesses and keep feeding it capital to let it grow beyond your dental office, then retire.

I'm not saying he has bad advice, I'm saying he has an approach that misses the point of the whole thread. Financial independence and retirement while you're still young. Lets talk about a business I may have discussed before... invoice factoring. With invoice factoring, I recently negotiated a 1.25%/week rate for a volume of 100k+/month for net 30 and 45 invoices + add on service charges, etc... Do the math in terms of returns. Previous court cases rule that this is not usury. Would I be better off putting that in a retirement account, or would I rather factor receivables? I have other businesses, and it only takes one to be able to retire.

You might ask about tax strategy? Look up captive insurance as a potential strategy.

We both have a different strategy. We both want to retire. I just want to get there faster. I'm not going into too much detail because there are some things that I am not allowed to disclose.

 

[Sanducan]

Ok, here's a question in regards to taxation.

So you are the owner of a practice that collects $1M every year. You decide to make your salary reasonable and pay yourself $150K per year. Since you operate your practice in a state that is not crazy with taxes, plus you're still married to your high school sweet heart, your take home salary post tax came out to be $103k.

Now, after your overhead and all expenses in the practice, including your salary, the business generated $450K. Disregarding depreciation and amortization, how much tax do you pay on this portion of profit??? Assuming your entity is an LLC.

 

[Cold Front]

Ok, here's a question in regards to taxation.

So you are the owner of a practice that collects $1M every year. You decide to make your salary reasonable and pay yourself $150K per year. Since you operate your practice in a state that is not crazy with taxes, plus you're still married to your high school sweet heart, your take home salary post tax came out to be $103k.

Now, after your overhead and all expenses in the practice, including your salary, the business generated $450K. Disregarding depreciation and amortization, how much tax do you pay on this portion of profit??? Assuming your entity is an LLC.

All LLC profits are considered self employment tax. So you will pay tax on the $150k + $450k profit = $600k. If you are the sole owner, you don't separate your income from the business profits for tax purposes. If you file jointly with your spouse, welcome to the 39.6% federal tax bracket (state and city taxes not included).

 

[TXftw]

TanMan,

I am a DS2 looking ahead to the future and trying to prioritize the things that will give me a leg up for when I finally graduate and make the transition to "real-world dentistry". Obviously I am not in clinic yet (just sim lab right now). Are there any procedures that you recommend I devote extra practice to in sim lab before I actually start clinic? I know restorative dentistry on plastic teeth in typodonts is nothing like natural dentition in a human mouth, but maybe there are certain projects that are worth more of a time investment than others? Or any information I should be reading up on to better educate myself on the business aspect of dentistry?

 

[TanMan]

TanMan,

I am a DS2 looking ahead to the future and trying to prioritize the things that will give me a leg up for when I finally graduate and make the transition to "real-world dentistry". Obviously I am not in clinic yet (just sim lab right now). Are there any procedures that you recommend I devote extra practice to in sim lab before I actually start clinic? I know restorative dentistry on plastic teeth in typodonts is nothing like natural dentition in a human mouth, but maybe there are certain projects that are worth more of a time investment than others? Or any information I should be reading up on to better educate myself on the business aspect of dentistry?

Simlab is just another useless hurdle to go through. Real preps are rarely ideal, but follow the same principles, you'll probably never cast your own post, make your own diagnostic waxups, etc... unless you really love that stuff. I hope we're on the same page when we talk about real-world dentistry: pretty much being a profitable dentist. Only thing I can think of would be to work on extracted teeth, learn the anatomy for root canals. Take an occlusal xray of #3/14. Learn to read the radiograph and pulpal floor and you'll get MB2 most of the time. Also learn to read/know when there's a 3rd root on #5/12. With a lot of other dentists, I see that they either rush and do a terrible job w/ endo because they don't care, or they take forever because they don't know what they are looking for. If your business model entails doing the former, just make sure you don't do that to a specific demographic that likes to sue and a state that has tort reform (limits on damages). The latter is more preventable by learning how to access and read the pulpal floor chamber. Getting down to the apex is the easiest part. Most people fall into the trap of doing terrible root canals because they work for corporate where there are little consequences to doing bad root canals. When you bring that to your own practice, this can bring a lot of headache to you and explaining why you have to pull the tooth out. Most common excuse that the patient reports their dentist said is that the "root canal didn't take hold or your body is rejected the root canal." Professionally, nothing will probably happen unless they aspirate a file or you have a severe bleach accident. However, lawyers are expensive.

Anyway, case in point - practice molar endo. It's the gateway to profitability. Also, learn to prep CEREC crowns in 5 mins or less. Doesn't always happen, but you want to be fast. Electric handpieces + two striper burs are my go to + diode laser (avoid cord + hemostasis). Stand up when you're doing your work - you'll notice you can see more and go faster as a result.

You should be reading and studying business models. There's more than one way to develop your business model. Are you a process-oriented individual or goal-oriented individual? What I mean by that is will your end goals determine how you want to practice and what you want to do? Or, do you want to practice a certain way with less regard to the end results. Once you answer that question, that will determine the type of practices you can have. If you were more interested in a way of practicing, that may not necessarily coincide with your end goals. Vice-versa, if you have more extreme goals (massive wealth, superearly retirement, etc...), then you are limited to your practice types, as certain practice types are more successful than others. I think once you answer that basic question, you can educate yourself more on the business aspect of dentistry. I'm hard pressed to recommend any specific book that will tell you everything, and many of the literature out there is horrendously biased. I tend to read books about business in general, then think about ways to apply them into your current/future practice.

Dentistry is not unique and we are in a unique position to market ourselves as a service and/or product. There are advantages and disadvantages to both, but also depends on the market you're in. In a more highly competitive market, it's better to present yourself as a service. You can charge more and justify charging more for "quality". The downside is the expectations are higher. The alternative is to present what you do as product-oriented service. In a less competitive market, this would be a preferred way of marketing your practice as products tend to have lower expectations, can be delivered faster w/o the patient feeling that they didn't "get their money's worth". Also, charging as a comparable product to higher end items such as TV's/cars makes it look less expensive.

This barely scratches the start/extent of how you should start looking at dentistry as a business, but these are the logical steps that go into my mind when I first started. There's a LOT more. Other practice owners may not agree with me on these sentiments, but these are my perspectives on how to be a successful dentist. I hope that this brief discussion will help you in your journey of being a profitable dentist and frame the mindset that you should be in dental school. Just pass and focus on the business part. If you ever become supersuccessful, remember me and throw some money my way if I'm still alive 😀

 

[DrJeff]

Simlab is just another useless hurdle to go through. Real preps are rarely ideal, but follow the same principles, you'll probably never cast your own post, make your own diagnostic waxups, etc... unless you really love that stuff. I hope we're on the same page when we talk about real-world dentistry: pretty much being a profitable dentist. Only thing I can think of would be to work on extracted teeth, learn the anatomy for root canals. Take an occlusal xray of #3/14. Learn to read the radiograph and pulpal floor and you'll get MB2 most of the time. Also learn to read/know when there's a 3rd root on #5/12. With a lot of other dentists, I see that they either rush and do a terrible job w/ endo because they don't care, or they take forever because they don't know what they are looking for. If your business model entails doing the former, just make sure you don't do that to a specific demographic that likes to sue and a state that has tort reform (limits on damages). The latter is more preventable by learning how to access and read the pulpal floor chamber. Getting down to the apex is the easiest part. Most people fall into the trap of doing terrible root canals because they work for corporate where there are little consequences to doing bad root canals. When you bring that to your own practice, this can bring a lot of headache to you and explaining why you have to pull the tooth out. Most common excuse that the patient reports their dentist said is that the "root canal didn't take hold or your body is rejected the root canal." Professionally, nothing will probably happen unless they aspirate a file or you have a severe bleach accident. However, lawyers are expensive.

Anyway, case in point - practice molar endo. It's the gateway to profitability. Also, learn to prep CEREC crowns in 5 mins or less. Doesn't always happen, but you want to be fast. Electric handpieces + two striper burs are my go to + diode laser (avoid cord + hemostasis). Stand up when you're doing your work - you'll notice you can see more and go faster as a result.

You should be reading and studying business models. There's more than one way to develop your business model. Are you a process-oriented individual or goal-oriented individual? What I mean by that is will your end goals determine how you want to practice and what you want to do? Or, do you want to practice a certain way with less regard to the end results. Once you answer that question, that will determine the type of practices you can have. If you were more interested in a way of practicing, that may not necessarily coincide with your end goals. Vice-versa, if you have more extreme goals (massive wealth, superearly retirement, etc...), then you are limited to your practice types, as certain practice types are more successful than others. I think once you answer that basic question, you can educate yourself more on the business aspect of dentistry. I'm hard pressed to recommend any specific book that will tell you everything, and many of the literature out there is horrendously biased. I tend to read books about business in general, then think about ways to apply them into your current/future practice.

Dentistry is not unique and we are in a unique position to market ourselves as a service and/or product. There are advantages and disadvantages to both, but also depends on the market you're in. In a more highly competitive market, it's better to present yourself as a service. You can charge more and justify charging more for "quality". The downside is the expectations are higher. The alternative is to present what you do as product-oriented service. In a less competitive market, this would be a preferred way of marketing your practice as products tend to have lower expectations, can be delivered faster w/o the patient feeling that they didn't "get their money's worth". Also, charging as a comparable product to higher end items such as TV's/cars makes it look less expensive.

This barely scratches the start/extent of how you should start looking at dentistry as a business, but these are the logical steps that go into my mind when I first started. There's a LOT more. Other practice owners may not agree with me on these sentiments, but these are my perspectives on how to be a successful dentist. I hope that this brief discussion will help you in your journey of being a profitable dentist and frame the mindset that you should be in dental school. Just pass and focus on the business part. If you ever become supersuccessful, remember me and throw some money my way if I'm still alive 😀

So much of what tanman says is spot on. I will say though, that the idea of standing up to work, especially if one is on a multi decade career plan, as opposed to tanman's rapid retirement plan, might want to be taken with a grain of salt.

Most practitioners who practice standing up for the majority of careers are oral surgeons. So many oral surgeons that have been practicing standing up for decades have far worse back problems than those practitioners who practice sitting down with better in general posture. Improper posture DOES take a toll on one's body after a while. It's also why having a regular fitness plan that pays probably more focus on core agility rather than core muscle bulk, is paramount for one's career path if they plan on having a long career.

If you talk with many dentists who have been practicing for multiple decades and ask them what they would of done differently had they known then what they know now, having a better fitness routine and posture is usually near the top of the response list for many. Flexibility over muscle bulk is a key thing for not just dentistry, but also for one's day to day activity enjoyment as one ages through their 40's and beyond....

 

[TanMan]

So much of what tanman says is spot on. I will say though, that the idea of standing up to work, especially if one is on a multi decade career plan, as opposed to tanman's rapid retirement plan, might want to be taken with a grain of salt.

Most practitioners who practice standing up for the majority of careers are oral surgeons. So many oral surgeons that have been practicing standing up for decades have far worse back problems than those practitioners who practice sitting down with better in general posture. Improper posture DOES take a toll on one's body after a while. It's also why having a regular fitness plan that pays probably more focus on core agility rather than core muscle bulk, is paramount for one's career path if they plan on having a long career.

If you talk with many dentists who have been practicing for multiple decades and ask them what they would of done differently had they known then what they know now, having a better fitness routine and posture is usually near the top of the response list for many. Flexibility over muscle bulk is a key thing for not just dentistry, but also for one's day to day activity enjoyment as one ages through their 40's and beyond....

That is true... the reason I can go through standing all day is because I have to see a lot of patients and I can't be slowed down by sitting, and I'm not going to do this for long. Thankfully I'm still young and can recover quickly with just a night's rest. This will probably be different as I get older and heaven forbid I have to do this for too much longer.

 

[I-hate-alginate]

I still think you should have gone into ortho. You say that the main reason you want to retire early is because of dentistry's physical toll on you. No such thing in ortho.

True. You walk a mile everyday and you get a very good salary.

 

[Medin2017]

I still think you should have gone into ortho. You say that the main reason you want to retire early is because of dentistry's physical toll on you. No such thing in ortho.

imo nothing beats ortho if you don't care about getting bored

great lifestyle, arguably the least stress from patients (they actually wanna be there), let assistants do the majority of work, no emergency, list goes on and on

also, there are quite a few 2-year ortho programs where you can moonlight during weekends, limiting the opportunity costs.

are you considering ortho? I read about its saturation issues (the orthodontist firm says ortho today is not nearly the same as years ago).

 

[I-hate-alginate]

are you considering ortho? I read about its saturation issues (the orthodontist firm says ortho today is not nearly the same as years ago).

Everything is saturated out there, yet all the orthos and most Gen dentists I know are living the lives they always wanted.

 

[Steins;Gate]

there are quite a few 2-year ortho programs where you can moonlight during weekends, limiting the opportunity costs

Do you know which programs specifically? And some pay a stipend as well if I recall correctly.

 

[Steins;Gate]

a good place to start

https://www.aaoinfo.org/system/files/media/documents/Graduate Orthodontic Programs Feb 17, 2014(2).pdf

Thanks. You could still try for ortho?

 

[TanMan]

I still think you should have gone into ortho. You say that the main reason you want to retire early is because of dentistry's physical toll on you. No such thing in ortho.

imo nothing beats ortho if you don't care about getting bored

great lifestyle, arguably the least stress from patients (they actually wanna be there), let assistants do the majority of work, no emergency, list goes on and on

also, there are quite a few 2-year ortho programs where you can moonlight during weekends, limiting the opportunity costs.

another thing is that being a specialist makes you more employable to dental school. there's your retirement plan right there once you hit 50.

Physical toll is only one part of the equation. I really do not want to work for the rest of my life, especially wasting away my prime years. I'm not sure where people keep thinking that I want to work until 50... around 35 +/- 1-2yrs and that's it. Why the hell do I want to work at a dental school? I wouldn't want to deal with the politics, commutes, or have anything to do with school, let alone dental school.

I don't think I can go back to school anymore because I will only see it an exercise in futility. Easier said than done when it comes to going to an ortho residency. I'm not a gunner, I don't care to suck up to faculty, nor do I have rich parents that can buy my way into a residency. If I were to see it as a race, an orthodontist who pumps and dumps patients and takes their money can probably make a lot and leave the patients with unfinished cases and end it in a few years. I know that some orthos did that during the heyday of the Texas Medicaid Ortho boom. Tons of unfinished cases, open bites, etc... Unfortunately, I missed out and thank goodness I didn't go into ortho.

My path pretty much attempts to condense 25+ year working plan into 5-8 years. If my businesses take off or I get a nice buyout offer from a larger company for one of my businesses, I'm taking it, closing the office, and I'm done.

So.... I'd agree with you if you wanted to work till 50+, your plan seems to make sense in that context. If I wanted to retire at 35, not so much. Given how PPO has transformed in orthodontic reimbursement, a lot of them won't pay you upfront.

 

[periopocket]

Physical toll is only one part of the equation. I really do not want to work for the rest of my life, especially wasting away my prime years. I'm not sure where people keep thinking that I want to work until 50... around 35 +/- 1-2yrs and that's it. Why the hell do I want to work at a dental school? I wouldn't want to deal with the politics, commutes, or have anything to do with school, let alone dental school.

I don't think I can go back to school anymore because I will only see it an exercise in futility. Easier said than done when it comes to going to an ortho residency. I'm not a gunner, I don't care to suck up to faculty, nor do I have rich parents that can buy my way into a residency. If I were to see it as a race, an orthodontist who pumps and dumps patients and takes their money can probably make a lot and leave the patients with unfinished cases and end it in a few years. I know that some orthos did that during the heyday of the Texas Medicaid Ortho boom. Tons of unfinished cases, open bites, etc... Unfortunately, I missed out and thank goodness I didn't go into ortho.

My path pretty much attempts to condense 25+ year working plan into 5-8 years. If my businesses take off or I get a nice buyout offer from a larger company for one of my businesses, I'm taking it, closing the office, and I'm done.

So.... I'd agree with you if you wanted to work till 50+, your plan seems to make sense in that context. If I wanted to retire at 35, not so much. Given how PPO has transformed in orthodontic reimbursement, a lot of them won't pay you upfront.

I don't think these pre-dents understand what you have in your hands. Why in the hell would tanman jump fields and drop his current gig that is netting 1+ million dollars a year - this is a redicilous question.


Sent from my iPhone using SDN mobile

 

[stoopidmonkeycatdog]

Everything is saturated out there, yet all the orthos and most Gen dentists I know are living the lives they always wanted.

My dad always told me, "There's always room at the top". In any industry there is still ample room to get your name known and be successful as long a you're willing to put in the work. I am not scared at all by all of the saturation talk, since every dentist i know is still enjoying life as well.

 

[TXftw]

Why the hell do I want to work at a dental school? .

Hahahaha I could not think of a bigger waste of his time and earning potential than working in a dental school

 

[786783]

Hahahaha I could not think of a bigger waste of his time and earning potential than working in a dental school

Don't admin end up making 500k a year just signing papers all day long?

 

[TanMan]

you'd make a perfect instructor for a practice management course and maybe an ethics course too

oh and no one here was suggesting that you go back to school for ortho.... (note the difference between should vs should have) ortho ship's already sailed for you it seems, as you have acknowledged yourself.

maybe having to jump between patients every minute got you a habit of ignoring some fine details??

My answer is based on the both the context of when I just graduated dental school and today. Even as I was finishing dental school, I really did not want to go through anymore school. I dodged a bullet by not going into ortho. If I could turn back the hands of time, I still wouldn't consider going into ortho.

Yes, I tend to ignore a lot of BS that's said while jumping around so I can focus on the task at hand. If you don't filter out stupid things, you'll be overwhelmed with irrelevant information pretty quickly.

Edit: Juggling patients is a skill that's a MUST if you're going to be an efficient and profitable dentist. You need to have full awareness of the schedule so you know where to go for ops. I try not to have more than 4 ops going on at the same time, but since it's summer, I've been having to juggle 3-6ops at a time. I tend to follow FIFO principle for patients with appointments.

 

[schmoob]

Let's keep it Professional, please.

 

[Chipotlegonewild]

you are in your 30's...your prime has most likely passed

You have no idea what you are talking about.

 

[DDSER1]

I'm sorry to hear that you have a chip on your shoulder.

You're clearly the one who's trying to antagonize everyone, while offering zero valuable input, so why don't you just do everyone a favour and keep your comments to yourself

 

[Steins;Gate]

Clearly you have no idea what a forum is. Also, read up on first amendment right. For the record, I don't antagonize everyone. Besides, my points brought up in this thread are mostly valid. I suggest you check yourself before you wreck yourself.

I think you made a few assumptions about @TanMan that are not correct. He actually really enjoys dentistry. He said it himself - initially he thought it was a way to make lots of money but then in dental school he said he was lucky enough to really enjoy it.

But what he enjoys more is not working and spending his prime years (which he believes is until he is about 40) not working and enjoying life. Dentistry and his other investments are simply a vehicle to retire ASAP. Not much work really beats dentistry for him as no other field will let him retire at about age 35 like dentistry does.

His points about ortho are valid. There are 2 to 3 years of opportunity cost and he actually likes a lot of the procedures in dentistry (there are specific ones he doesn't like or feels are not worth his time/the headaches). Plus GP has passive hygiene income.

TanMan has thought things through super clearly and instead of questioning his motives, we should appreciate that he would even reply to our questions and take the precious time out of his day to do so.

 

[Steins;Gate]

Eh some people would rather retire than work, even if they enjoy their job (every job is stressful to some extent and some people would prefer a stress free life). Maybe you aren't in that camp but there are people who work to live and define living as not working and enjoying the fruits of their labour and retiring at an early age. Some people are wired like that.

I don't think TanMan is lazy. If he were lazy he wouldn't be overworking himself right now. I think he believes his short term pain is the key for long term happiness. He is just accelerating his career. Different approaches to life than you. Your approach is good too.

His plan was to retire during his mid 30s, ortho or GP. He would be delaying his retirement by 2 to 3 years which is counteractive to what he wants to achieve. The whole physical tiring thing isn't his main reason why he's getting out - I feel like that is a minor reason and it probably wasn't something that worried him when he decided to accelerate his career. He wants to retire to enjoy a non working life, full stop.

Another assumption is that he is compromising his care by doing what he does. I think he addressed it in a previous post but he actually gives enough time for all his patients. Some patients want to chit chat and some want to get out of the chair ASAP. And patients would not be coming back to his office if he was compromising care to a level that patients found unacceptable. Once again, he has interest in dentistry. Being interested and wanting to retire early aren't mutually exclusive.

Well yes OP will sell the practice in a few years but how he does it is not up to us to judge. Perhaps he will be responsible with the transition - we have no reason to think he will simply abandon his patients.

I get your points but there are many assumptions made that aren't fair to OP.

 

[distressstudent]

I love how the idea of financial independence/early retirement is so foreign to you that you literally can't comprehend it.

 

[DDSER1]

I suggest you check yourself before you wreck yourself.

..........wow, now that I know I'm arguing with a 6 year old troll, a lot of your comments make sense

 

[Str82th]

That isn't. Abandoning a practice like it's nothing just to be lazy afterwards is.

How is it any of your business how he chooses to spend his life?

 

[schmoob]

Users are encouraged to use the "Ignore" feature if another member rubs them the wrong way.

 

[TanMan]

you are in your 30's...your prime has most likely passed

also, dont you think by working at least three to four times as hard as a typical general dentist your age, you are essentially shortening your lifespan? you said it yourself about headaches and bodyaches...at least you are getting some cardio in

dont get me wrong tho. your work ethic, greed, and motivation are truly second to none. hope you find something that you genuinely enjoy doing, and when/if you do, please come share with us. maybe then you would have a better idea on the meaning of life.

Thank you for the compliment. Your own posts say a lot about the hypocrisy of your views. The more you talk, the more you demonstrate that you know nothing. I'll leave it at that.

As I have said before, I work to live, not live to work. For those considering early retirement and want to retire early, do not let the naysayers say that its a waste or put you down. I don't exist solely to work, nor did I sell my soul or sign away the majority of my mortal life to this profession. The unfortunate aspect of this life, is that in order to survive, you need money. The whole point of early retirement is to be able to save enough money so that you no longer have to worry about surviving and you can focus on what makes you happy.

Being able to walk away willingly v. forcefully are two different concepts. The best feeling in the world is when you no longer have anything tying you down and having the freedom to do what you want without any worries. This is a concept that's becoming harder and harder to visualize since a lot of people are stuck in the trap of perpetual debt or commitments. Look at how many people are afraid of student loan debt. It's a rational fear but there's a definite way out.

I like what I do, and just like with any profession, the majority of patients are great, and there's that 1% that just ruin your day. At the end of the day, its still work. Remember, the timer is counting down, and you're not immortal. You might as well have the financial freedom to do what you want, when you want, when your body can still do it. If you hate what you do, that's even a bigger incentive to get out of the profession.

No one walks away from something that he/she truly enjoys. OP literally said he's willing to ABANDON his practice if it means not having to work a day in his life, just so he can eat whatever he wants everyday while sleeping in everyday. Is that something that a dentist who enjoys what he does would really utter? Also, since when are laziness and prolonged lack of productivity not frowned upon? There's even a special place in hell for lazy people apparently.

Further, when he says "prime," he obviously is referring to physical youth. If you think men's youth does not decline after 30, you are kidding yourself. Don't feel like digging up pubmed for evidence-based reply; I'm sure you can do that yourself (most likely won't change the gist tho). As I've said earlier, his actual physical age is probably higher given the exorbitant production number in his practice and the consequent physical toll, more than enough to push him past the physical prime mark.

Had he gone into ortho, he probably would not have had to resort to such an aggressive method of practice and investments since there is no need to retire early due to the lack of physical demand in orthodontics. The opportunity costs are irrelevant here since there would be no need to accumulate colossal wealth early on had he gone into ortho. The main reason he's trying to retire early is because of the physical toll. To emphasize, no such thing as physical hard work in ortho. hence, no need for building wealth at a rapid rate.

The problem with using dentistry as "means to an end" is that it really reduces the profession into a mere trade. Like a plumber. (no offense to plumbers) Let's face it. Dentists enjoy certain privileges not available to other professions. Public places a great deal of trust on dentists in providing a quality dental care. When someone providing a service has no inherent interest in his profession and is eager to get out, it really jeopardizes the consumer of the service. Would you rather have a compassionate and a competent dentist or a competent but aloof dentist who just wants to go home asap? Competence probably won't last long when there is an inherent lack of interest/passion. Just think about the soon-to-be-abandoned practice and his patients.... especially what they will think about the profession

I don't know if this is fake outrage or some kind of joke with some kind of plug/advertisement to go into an ortho program? Are you bitter because you don't have the grades to get into ortho? Any profession is a means to an end, to think that you would do it for free or near free is preposterous. In my conversations with my patients, the question I get a lot is, "what brought you down here?", and my very honest answer is money and opportunity. I've had some that say they hope I'm their dentist for a long time and I respond that I don't think I can keep working at this pace and will be retiring soon. I haven't lost any patients or production over being honest with my patients. The free market has spoken and I believe that should be the answer to your question of what patients prefer.

PS: Get off your ideological high horse.

 

[TanMan]

You and I have differences of opinion. Your way appears to lean heavily on gaming the system, the morality and ethics of which are arguable. I'll rest my case there. You do you.

Yes, let me know if/when you get out of dental school and practicing for a few years, whether you feel the same way you feel now. I still feel like you may be trolling other members as your stances are wildly varying but consistently antagonizing.

There's nothing wrong with understanding the system and succeeding. It is similar to knowing and understanding the rules of the game, and strategically planning your moves to succeed. Gaming is a loaded word, but if gaming the system (the business of dentistry) is wrong, then you might as well become another mediocre dentist who's practice stagnates to a lower production level and be "like everyone else". If I understood the rules and mechanics of the dental profession and my competition did not, is it considered unethical to utilize that insight to become relatively more successful than your competition?

There is a point to the whole rant just now... Clinical success is not the only key to your success as a entrepreneurial clinician. You need to be a good businessman as well. This thread takes it a step further by putting everything into perspective by looking at accelerating the end goal. Otherwise, you may wake up one day and realize you've been working all your life as a great businessman, but all the other aspects of your life may suffer. What I propose is to work as hard as you can while you still can so that you may enjoy the fruits of your labor early on, not into your 50's. That's why I have not been too keen on promoting retirement plans, real estate, or other slower methods of gaining wealth. That's not to say they are bad investment vehicles, but they just do not fit my timeline. I've hired a wealth management company recently and I'll keep you guys posted on this evergoing pursuit for early retirement. While you're still young and capable, you should take on more risk in your investments (that's what I'm doing). If it succeeds, you retire earlier. If it fails, you are still young enough to recover financially.

Remember, you didn't sell your soul to dentistry, you have no obligation to be there for the rest of your life. From a free market and health perspective, you are performing the services that you have been authorized to do at a clinically acceptable level in exchange for money. There's nothing wrong with doing good dental work, retiring early, and enjoying the rest your life.

 

[rdub]

maybe then you would have a better idea on the meaning of life.

This guy has it all figured out 🙄

 

[786783]

Yes, let me know if/when you get out of dental school and practicing for a few years, whether you feel the same way you feel now. I still feel like you may be trolling other members as your stances are wildly varying but consistently antagonizing.

There's nothing wrong with understanding the system and succeeding. It is similar to knowing and understanding the rules of the game, and strategically planning your moves to succeed. Gaming is a loaded word, but if gaming the system (the business of dentistry) is wrong, then you might as well become another mediocre dentist who's practice stagnates to a lower production level and be "like everyone else". If I understood the rules and mechanics of the dental profession and my competition did not, is it considered unethical to utilize that insight to become relatively more successful than your competition?

There is a point to the whole rant just now... Clinical success is not the only key to your success as a entrepreneurial clinician. You need to be a good businessman as well. This thread takes it a step further by putting everything into perspective by looking at accelerating the end goal. Otherwise, you may wake up one day and realize you've been working all your life as a great businessman, but all the other aspects of your life may suffer. What I propose is to work as hard as you can while you still can so that you may enjoy the fruits of your labor early on, not into your 50's. That's why I have not been too keen on promoting retirement plans, real estate, or other slower methods of gaining wealth. That's not to say they are bad investment vehicles, but they just do not fit my timeline. I've hired a wealth management company recently and I'll keep you guys posted on this evergoing pursuit for early retirement. While you're still young and capable, you should take on more risk in your investments (that's what I'm doing). If it succeeds, you retire earlier. If it fails, you are still young enough to recover financially.

Remember, you didn't sell your soul to dentistry, you have no obligation to be there for the rest of your life. From a free market and health perspective, you are performing the services that you have been authorized to do at a clinically acceptable level in exchange for money. There's nothing wrong with doing good dental work, retiring early, and enjoying the rest your life.

How are you planning on having passive income of 50k/month with 5m in liquid assets?

 

[TanMan]

How are you planning on having passive income of 50k/month with 5m in liquid assets?

That's actually a pretty good question that requires clarification. When I talk about 5+ in liquid assets, there's also the illiquid assets as well. The businesses I am targeting have a 100%ROE, so I can replenish my cash reserves relatively quickly. There's a few paths that I'm looking into getting 50k/month depending on my current and future successes; either continue invoice factoring, hard money lending, and possible diversification into commercial real estate if the returns are sufficient. Also, I should have passive income from the businesses that I am involved in via dividends. I might go into litigation financing, but I don't have any personal experience with that yet. I heard its good money. There's always opportunities abound, as long as the capital is there, I hope to be able to find more sources of passive income.

So the answer is... still under development, but I have an overall idea how much I can get from each business monthly, and how much needs to be supplemented from other lending-type activities.

 

[insaiyanpredent]

That's actually a pretty good question that requires clarification. When I talk about 5+ in liquid assets, there's also the illiquid assets as well. The businesses I am targeting have a 100%ROE, so I can replenish my cash reserves relatively quickly. There's a few paths that I'm looking into getting 50k/month depending on my current and future successes; either continue invoice factoring, hard money lending, and possible diversification into commercial real estate if the returns are sufficient. Also, I should have passive income from the businesses that I am involved in via dividends. I might go into litigation financing, but I don't have any personal experience with that yet. I heard its good money. There's always opportunities abound, as long as the capital is there, I hope to be able to find more sources of passive income.

So the answer is... still under development, but I have an overall idea how much I can get from each business monthly, and how much needs to be supplemented from other lending-type activities.

How about residential real estate, with enough capital buy coops in safe and expensive thriving urbanized neighborhoods. Put it on rent, collect profit after property taxes.

 

[insaiyanpredent]

Residential might not be worth the amount of ROE compared to commerical. Then again I don't know much about commerical. Residential will only give you a little uptake compared to the 50k/month scale.

 

[Cold Front]

How are you planning on having passive income of 50k/month with 5m in liquid assets?

$5M in liquid assets in your 30s almost never never happens. If it does, you would have to gross $10M+, then pay taxes and take away cost of living, etc. So I call that fantasy land numbers... unless you got the money from someone else or you found the money in some non-dental means.

Anyways, to make $50k passive income a month is realistic. You won't be able to make it as net early on if you enter the real estate market, because that takes many years and a lot of debt and liability reduction to increase the bottom line eventually.

To give you an honest perspective, here is a general idea of my real estate investment numbers:

Commercial Building 1: Gross income between 2 tenants is $12k a month now before CAM. Almost all of gross income goes towards the mortgage. If debt was paid off today, I would net $12k a month. After couple of renewal options (if tenants stay), it will increase to $15k a month.

Commercial Building 2: Gross income between 5 tenants is $25k a month before CAM. Again most of net goes towards mortgage. After couple of renewal options it will be close to $35k a month.

Residential Building: Currently considering buying a group of family style apartment buildings. Again, if I do purchase, most of the income will pay for the debt. The passive income will be appreciated in a decade.

My goal is to pay off all mortgages/debt in 10 years. 10 years flies quickly, so this is a good path/portfolio to hit the $50k+ a month passive income. No short cuts, no "rush hour" game plans... just the traditional way of investing for a good passive income and living a good life at the same time. Anything quicker, is a pure exception and comes with its own side effects. Yes, no one takes the roads less travelled without a sacrifice.

 

[insaiyanpredent]

$5M in liquid assets in your 30s almost never never happens. If it does, you would have to gross $10M+, then pay taxes and take away cost of living, etc. So I call that fantasy land numbers... unless you got the money from someone else or you found the money in some non-dental means.

Anyways, to make $50k passive income a month is realistic. You won't be able to make it as net early on if you enter the real estate market, because that takes many years and a lot of debt and liability reduction to increase the bottom line eventually.

To give you an honest perspective, here is a general idea of my real estate investment numbers:

Commercial Building 1: Gross income between 2 tenants is $12k a month now before CAM. Almost all of gross income goes towards the mortgage. If debt was paid off today, I would net $12k a month. After couple of renewal options (if tenants stay), it will increase to $15k a month.

Commercial Building 2: Gross income between 5 tenants is $25k a month before CAM. Again most of net goes towards mortgage. After couple of renewal options it will be close to $35k a month.

Residential Building: Currently considering buying a group of family style apartment buildings. Again, if I do purchase, most of the income will pay for the debt. The passive income will be appreciated in a decade.

My goal is to pay off all mortgages/debt in 10 years. 10 years flies quickly, so this is a good path/portfolio to hit the $50k+ a month passive income. No short cuts, no "rush hour" game plans... just the traditional way of investing for a good passive income and living a good life at the same time. Anything quicker, is a pure exception and comes with its own side effects. Yes, no one takes the roads less travelled without a sacrifice.

Avoid Mortgage by paying in full, could be a risky buy if property isn't generating any value.

 

[TanMan]

$5M in liquid assets in your 30s almost never never happens. If it does, you would have to gross $10M+, then pay taxes and take away cost of living, etc. So I call that fantasy land numbers... unless you got the money from someone else or you found the money in some non-dental means.

Anyways, to make $50k passive income a month is realistic. You won't be able to make it as net early on if you enter the real estate market, because that takes many years and a lot of debt and liability reduction to increase the bottom line eventually.

To give you an honest perspective, here is a general idea of my real estate investment numbers:

Commercial Building 1: Gross income between 2 tenants is $12k a month now before CAM. Almost all of gross income goes towards the mortgage. If debt was paid off today, I would net $12k a month. After couple of renewal options (if tenants stay), it will increase to $15k a month.

Commercial Building 2: Gross income between 5 tenants is $25k a month before CAM. Again most of net goes towards mortgage. After couple of renewal options it will be close to $35k a month.

Residential Building: Currently considering buying a group of family style apartment buildings. Again, if I do purchase, most of the income will pay for the debt. The passive income will be appreciated in a decade.

My goal is to pay off all mortgages/debt in 10 years. 10 years flies quickly, so this is a good path/portfolio to hit the $50k+ a month passive income. No short cuts, no "rush hour" game plans... just the traditional way of investing for a good passive income and living a good life at the same time. Anything quicker, is a pure exception and comes with its own side effects. Yes, no one takes the roads less travelled without a sacrifice.

I agree with @Cold Front on this. You will rarely do it through dental means alone. 50k+/month in passive income is just a start; hopefully we'll be making a lot more than that in our retirement years. And that's why I'm not a fan of the real estate path. Very slow, steady, but consistent growth.

How am I confident with the goals that I've set?

One of the businesses I'm invested in is pretty much set to overtake my dental office next fiscal year in net income and revenue. This is where the mystery box exists. I cannot say what I'm doing, but all I can say is that it's not dental (and 100% legal). However, I can discuss some mechanisms that I can liquidate the money. I can choose to trigger dividends or reinvest heavily into the company. From there, you may ask about reinvestment and liquidity. If I were to trigger dividends, I'd essentially give myself money from the company to use for other things. This may limit growth, but there may be an upper limit to the growth (nowhere near the upperlimit as we only have market presence in two regions). Second option, reinvest heavily, increase market cap of the company, and from there, I can choose to exercise my option for liquidity if I draw a line of credit based on the company's financials. This option requires relationships with private lenders and certain banks. Private banking opens up some doors in terms of getting high lines of credit. Third option, grow and sell the company (buyout $$).

5MM+ liquid assets doesn't necessarily mean you're just sitting on a pile of cash. You just need a mechanism to liquidate by leveraging your current assets. This can definitely be done with physical assets such as real estate, but time is a factor.

I'm not sure if this post is a jest at what I'm doing and implying I don't live a good life. I think I have a good life, and I might be taking risks, but I'm taking calculated risks. If making money faster is a shortcut, give me all the shortcuts you can throw at me, lol. That was the whole point of the thread - get out quick! I'm not sure how we keep going on about real estate... It's suitable for most portfolios, but just takes way too long.

I think the missing link here is what businesses can you invest in (and most frequent PM'd question)? That's where time and research goes into play. I've gone into a few examples in this thread that you could use to make money. I wish I could go into more details, but if you are doing what everyone else is doing, you'll be doing dentistry for the long haul.

 

[Cold Front]

Avoid Mortgage by paying in full, could be a risky buy if property isn't generating any value.

Without mortgage, 90% of real estate investors wouldn't be purchasing properties. It's a win win for the investors and the lenders. Besides, the cost to borrow money has been cheap the past decade. It's been 3-5% since 2008, compared to historically 10% or more rates.

I don't want to say "you young people just opened your eyes"... and I'm in my late 30s and fall in the median age of this country, but there was a time where older generation had much more difficult time to open a business (even dentists), but also pay high price for borrowing such money. We are living in a day where lenders are fighting over us, which if approached with caution and a good plan, fortune will favor you. So I'm all for mortgage at the current circumstances, because you are basically using someone else's money to build wealth and assets if you do it right.

Didn't we all use someone else's money to go to dental school? But, but, but... before you say "that's different..", money is still money, and an investment is still an investment, the choices you/we make is the difference.

 

[Cold Front]

I cannot say what I'm doing, but all I can say is that it's not dental (and 100% legal).[/USER]

If you can't say what you are doing, then what "value" does your advise hold to the reader? No one knows you, where you are, or even if you are a real dentist (just like me). The only thing that we all have in common on these forums is to "share" ideas, but if the idea is "secret", then why bring it up?

Speaking of sharing ideas... I think the dental products isle in pharmacies and grocery stores are untapped compared to the medical isles. I can think of many products missing from there that are on dental office catalogs, but are not available to the public directly. I'm not talking about controlled substances or dentist-only as vendor products, but I think this is an areas grocery chains and pharmacy chains poorly understand and can be very lucrative. That's just me putting on my "shark tank" hat.

 

[TanMan]

The value for the reader is to have an open mind to explore different avenues. I have shared a few "secrets" (they really aren't secrets, just obscure), and there's some that I don't want to disclose. The whole point is that there's always a faster way, and that people should keep an open mind beyond the traditional methods of investing. Look into alternative financing vehicles. That's true that we're all anonymous to a certain extent here, although one of our readers already knows who I am since I got a phone call from them.

If you wanted to share untested ideas, I did have one that I wanted to pursue but haven't gotten around to, but would like to get into eventually: Male strip shows/clubs.

 

[Cold Front]

Look into alternative financing vehicles.

Aka Alternative Risk Financing. Aka High Risk Auto Loans. Aka Bad Credit Auto Loans.

This country will experience Carmageddon soon because of the default rate of subprime auto loans. The outstanding subprime auto debt is nearly 3x higher than it was on the eve of the 2008 financial crisis. So there is a tsunami coming for this industry, a correction in auto loan extensions is certain, everyone in the industry almost unanimously agrees.

The explosion of auto credit went from $800 billion in 2010 bottom to more than $1.5T today, was fundamentally driven by asset inflation. But with used car prices now plummeting, the last gasp of “borrow and spend” on the dealer lots has been exhausted. That’s why big banks like Morgan Stanley is now projecting a huge decline in car sales during the balance of this decade.

So why should anyone be involved or invest in this market? Do tell.

 

[Apramana]

If you can't say what you are doing, then what "value" does your advise hold to the reader? No one knows you, where you are, or even if you are a real dentist (just like me). The only thing that we all have in common on these forums is to "share" ideas, but if the idea is "secret", then why bring it up?

@Cold Front and @TanMan

In light of that comment, I would highly encourage you both (and any other of our non-verified SDN dentists) to get verified through the SDN badge system. It would definitely help those of us hoping to separate the real professionals from the impostors, and would also add a much greater level of legitimacy to what you're kind enough to share on SDN with the rest of us.

Doctor Verification

In addition, it appears your account benefits from other upgrades by participating in the badge process, so hopefully it's a net gain for you as well 🙂

Thanks for your consideration and for all that you do to help the community, both on and off SDN. Please have a great day.

 

[Cold Front]

@Cold Front and @TanMan

In light of that comment, I would highly encourage you both (and any other of our non-verified SDN dentists) to get verified through the SDN badge system. It would definitely help those of us hoping to separate the real professionals from the impostors, and would also add a much greater level of legitimacy to what you're kind enough to share on SDN with the rest of us.

Doctor Verification

In addition, it appears your account benefits from other upgrades by participating in the badge process, so hopefully it's a net gain for you as well 🙂

Thanks for your consideration and for all that you do to help the community, both on and off SDN. Please have a great day.

Request sent.

 

[Apramana]

Thanks, @Cold Front.

With Dentaltown closed to pre-dents who aren't employed in the field or accepted to dental school, it's nice to know who the real dentists are on SDN 🙂

Thanks, again, for your contributions to the community.

 

[TanMan]

Aka Alternative Risk Financing. Aka High Risk Auto Loans. Aka Bad Credit Auto Loans.

This country will experience Carmageddon soon because of the default rate of subprime auto loans. The outstanding subprime auto debt is nearly 3x higher than it was on the eve of the 2008 financial crisis. So there is a tsunami coming for this industry, a correction in auto loan extensions is certain, everyone in the industry almost unanimously agrees.

The explosion of auto credit went from $800 billion in 2010 bottom to more than $1.5T today, was fundamentally driven by asset inflation. But with used car prices now plummeting, the last gasp of “borrow and spend” on the dealer lots has been exhausted. That’s why big banks like Morgan Stanley is now projecting a huge decline in car sales during the balance of this decade.

So why should anyone be involved or invest in this market? Do tell.

Doesn't have to be the types of financing that you named, there's alternative financing methods that are not as risky either. Essentially, one of the investments I'm advocating for is the use of market inefficiencies (i.e lending to companies/individuals that need money but can't get money from banks) to make a significantly larger profit. With respect to consumer loans, some states are starting to regulate payday loans, so it's not as profitable as it used to be.

I thought of the differences between our philosophies (practice, business, and investment-wise). We're very opposite, from the way we practice, the way we think about life and business, and the way we think of dentistry. My practice philosophy of opening when other dentists aren't open pretty much addresses a need that allowed me to ramp up my operations faster; seeing a good number of patients allows me to work harder in my prime and allow myself to exit faster. Pretty much, my investment philosophy lines up in a similar fashion. I look beyond the traditional investment vehicles because I'm looking for higher returns, faster money (albeit with more risk). This lines up with my life philosophy, enjoy it as much as I can and having enough resources without having to do this ever again.

Although, I am getting a little tired of the back and forth because it seems like we don't necessarily see each other's point. Your strategy makes sense if I were going for a long term strategy. My strategy makes more sense if I were going for an all in, make it or break it approach. However, I do understand your skepticism in that I don't want to share too many details, but this is not necessarily a how-to-guide on business, nor do I want to share some of those details. Going back to basics, make your money first as a dentist, then decide how you want to make it grow. There's always more than one way, but this thread is about early retirement, not retire with a lot of money at 50+. If you guys have any specific questions, shoot me a PM instead.

@Cold Front and @TanMan

In light of that comment, I would highly encourage you both (and any other of our non-verified SDN dentists) to get verified through the SDN badge system. It would definitely help those of us hoping to separate the real professionals from the impostors, and would also add a much greater level of legitimacy to what you're kind enough to share on SDN with the rest of us.

Doctor Verification

In addition, it appears your account benefits from other upgrades by participating in the badge process, so hopefully it's a net gain for you as well 🙂

Thanks for your consideration and for all that you do to help the community, both on and off SDN. Please have a great day.

Verification request sent.

 

[Apramana]

Verification request sent.

Thanks, @TanMan 🙂

Thanks, as well, to both you and @Cold Front for showing us that dentistry is still viable through a variety of practice models, and it's not all doomed to corporate dentistry yet 🙂

It's nice to know that you have both found ways to be successful practicing dentistry the way that you want. Thanks for all that you have contributed to our forums, and for all that you choose to contribute in the future.

 

[nebuchadnezzar90]

Thank you for doing this AMA, really enjoying it.