Debt

[Ablecablestable]

---

Members don't see this ad.

How long does it normally take to pay off undergrad/dental debt as well as the debt from buying a new practice once one is a dentist?

I realize that this varies but could any dentists shed some light on how long it took them? And how much they paid vs made a year in the beginning.

Does the high debt-load preclude you from enjoying the salary in the first few years?

 

[Regmata]

There are multiple posts regarding this very topic, try searching.

Alternatively, you could think about it a little bit and come up with a decent answer. The amount of your debt will be largely determined by the cost of your school and could vary from 150k to over 500k. Once you estimate your debt, there are calculators online that will tell you your monthly payments. Figure out where you want to live and what car you want to drive, house you want to buy etc and do the same thing. You could then research roughly what practices are going for on dentaltown just to get an idea of what your costs would be. Then plan on making from 80-150k, adjust for taxes and figure out your budget.

 

[whlee84]

Like he said, there are many many factors that go into how fast you can pay off your debt. Most dentists I talked to had about 300K - 350K debt coming out of school, and they paid it off within 8-10 years. However, if you add an additional 500K debt for buying a practice, you could be looking at an additional 10 years...so basically you will be consistently paying off debt throughout your career as dentist.

You can shorten that time by being very frugal with your salary, and/or putting in your own money to buy your practice instead of shelling out 500K loan to buy your practice. It's all about how you manage your salary and whether you can wait a few years before buying a nice car or house.

 

[whlee84]

and to answer your other question about how much they paid vs. making? well, I'll just throw some numbers out there:

Let's say you make 100K straight out of school, and you want to pay off your 300K debt in 10 years. You would be paying about 30K out of your 100K salary after taxes (let's not include interest buildup in this case). This may seem like a huge chunk out of your salary in the beginning, but as years pass your salary will increase but your loan payments could stay the same, so you will still be able to enjoy the "lifestyle"

 

[Daurang]

.

 

[zriceman]

I graduated with $150K debt and borrowed another $120K for office construction/working capital. The first year I netted $175K. I paid everything off in five years.

hi daurang, when did you graduate dental school?

 

[Daurang]

hi daurang, when did you graduate dental school?

1999

 

[zriceman]

1999

Doesnt seem too long ago! Are you practicing in a rural/semi rural area? Your build up cost seems very low. Do you still remember what an average fresh out of school associated was compensated back in '99?

 

[Daurang]

I'm in a ridiculously competitive major urban area. Complete construction costs with all equipments was actually only $80K; price should be no different today due to contractors desperate for work in this horrible economy. I did 3mos. private associateship for $300/day and 3mos. community health for $300/day. Then my practice opened.

 

[DrReo]

I'm in a ridiculously competitive major urban area. Complete construction costs with all equipments was actually only $80K; price should be no different today due to contractors desperate for work in this horrible economy. I did 3mos. private associateship for $300/day and 3mos. community health for $300/day. Then my practice opened.

Do you think you could have purchased a practiced day 1 and transitioned OK from dental school? Or were those 6 months working for others a crucial learning period?

 

[Daurang]

Do you think you could have purchased a practiced day 1 and transitioned OK from dental school? Or were those 6 months working for others a crucial learning period?

I needed that 6 months working and construction period to pick up my speed.

 

[carbide]

I'm in a ridiculously competitive major urban area. Complete construction costs with all equipments was actually only $80K; price should be no different today due to contractors desperate for work in this horrible economy. I did 3mos. private associateship for $300/day and 3mos. community health for $300/day. Then my practice opened.

From your experience, would working only in a community clinic and no private associateship have been detrimental/non-issue/beneficial within your first 6-12 mo upon graduating?

 

[Daurang]

I didn't learn anything in the community clinic. EVERYone there is so lazy. I couldn't even get myself an appointment even when I worked there. They'd booked me 12 patients a day but half would show most days and 3 would show other days. It's great for kicking back reading newspapers and internet but not useful for real career intellectual nor practical development. Now that I'm pondering retirement, I'd sell my practice in an instant if I can get such a job back.

 

[mirk3]

I graduated with $150K debt and borrowed another $120K for office construction/working capital. The first year I netted $175K. I paid everything off in five years.

Of your total net, what percentage was from your practice and what percentage from associateship/community clinic? Also, how much did you gross first year if you don't mind me asking? Very inspirational.

 

[Daurang]

My practice opened mid-November 2000. I didn't count year 2000 because no insurance payments had arrived and get deposited as income until 2001 anyway. The practice first year gross was ~$240K with ~30% overhead. I never worked for some else anymore so the total net is 100% practice.

 

[ToldYouSo]

I didn't learn anything in the community clinic. EVERYone there is so lazy. I couldn't even get myself an appointment even when I worked there. They'd booked me 12 patients a day but half would show most days and 3 would show other days. It's great for kicking back reading newspapers and internet but not useful for real career intellectual nor practical development. Now that I'm pondering retirement, I'd sell my practice in an instant if I can get such a job back.

Wow, retiring after 10 years, you are doing something right heh, and 30% overhead in my very limited knowledge is quite low (Isn't average about 50-60%?) Can you offer some tips to how you manage to keep it so low? Thanks!

 

[mirk3]

My practice opened mid-November 2000. I didn't count year 2000 because no insurance payments had arrived and get deposited as income until 2001 anyway. The practice first year gross was ~$240K with ~30% overhead. I never worked for some else anymore so the total net is 100% practice.

That is awesome. Was your practice FFS or insurance based? I am wondering how doing a startup now a days would fare and if FFS is still feasable.

 

[lacroix0818]

Sometimes it depends on how you use your skill and effort and to be assured be safe.