F
Frank22
Out of curiosity, at what age do most dentists begin saving for retirement? Also, how much do most dentists retire with?
I plan to begin saving for retirement the first day I earn income. Most young people (whether dentists or otherwise) don't have retirement on their radar but they should. It's so much easier to reach your goals if you begin saving as early as possible. Everyone needs a different amount of money--it depends on your lifestyle and goals.
I planned on saving from day one, then stuff happened and I'm starting over again.
Been saving since I graduated and started working as a dentist in 2005. I'm really no better off now in the retirement savings department than I was 7 years ago. Compound interest has done nothing for me. Evaporating negative interest is more like it.
As for the initial question of this thread, I started my 1st year out of residency when I entered private practice
I've been quite proactive with working with my retirement fund manager the last 5 years, and as such have been lucky enough to see the overall value of my profit sharing account go UP each year (and more than just the 40-45k a year I've been contributing to it!) Some years it only been a couple of percent, others it's been in the mid teens, but it's been up every year!
The key is that in conjunction with both our retirement fund manager and our practice accountant, at the beginning of each fiscal year, my business partner and I decide roughly what we'd like our profit sharing contributions to be for ourselves, and then figure out roughly how much that means that we need to fund it (our employees are part of the profit sharing too) and then come years end we generally end up with roughly the amount that we wanted for ourselves (the actual amount is determined based on a formula set forth by the laws and regulations that governs the plan that takes into account things such as the category of employee, hours worked, production, etc.) That way we know if our target total for the profit sharing fund is say $140k (what it is for this year), then we know that we need to be setting aside roughly 12k per month into our profit sharing account so that come the end of the year we won't need to find the cash to make say a 50k contribution and also end up with the rough amount that we want, and that we've told our employees that they can expect as part of their overall total compensation
How do I go about learning this the same way you did? Business major or books?
How do I go about learning this the same way you did? Business major or books?
Did you miss the part about the "retirement fund manager"? Any of us can get one of these guys. Sounds like Dr. Jeff has one that looks out for his interests which it can be hard to find one you trust. The other key part of his post is the word "lucky." That's what no one tells you when you "save" for retirment by tossing your money into the stock market in various forms. It's all about the luck.
It is not important that how old is our dentist, the remain thing is that is he or she cure you family and you or not.
Thanks.....
How do I go about learning this the same way you did? Business major or books?
probably neither. i would bet one year of your average salary as an eventual dentist that DrJeff learned how to run his business like >9000% of practitioners out there do and did: "as they go".
the other thing is: for the things you can't do, you hire experts to do them.
Do retirement managers give advise like the one where Dr. Jeff pulls in money together from associates and hired staff into a single investment plan kind of deal?
Did you miss the part about the "retirement fund manager"? Any of us can get one of these guys. Sounds like Dr. Jeff has one that looks out for his interests which it can be hard to find one you trust. The other key part of his post is the word "lucky." That's what no one tells you when you "save" for retirment by tossing your money into the stock market in various forms. It's all about the luck.
How do I go about learning this the same way you did? Business major or books?
I wish I knew more about finances; can someone please tell me how it's possible to put money into a retirement account and for that money to actually decrease? Are financial advisors really that bad at what they do nowadays?
I wish I knew more about finances; can someone please tell me how it's possible to put money into a retirement account and for that money to actually decrease? Are financial advisors really that bad at what they do nowadays?
Sure, he're what happened to me. When I graduated, I kept hearing that a "ROTH IRA" was this great thing for retirement. So I decided to get one. That meant taking my money to a place that sets up a ROTH IRA account for you. In my case being a newbie dentist, I walked into the Fidelity office that was around the corner from where I lived. You see those ads for Fidelity, Charles Schwab, Vanguard, TD Ameritrade, etc. that say "we're there for your retirement!" so that's where I went. They said "Great! Now that you have a Roth IRA, you need to put this money into something that will grow. Because you are young, you want aggressive growth. We recommend this mutual fund." Sure why not. I had heard this word "mutual fund" connected to the word "retirement" so I figured this is where your retirement money goes.
That was 2005. For a few years, that little balance I started with was growing and I thought "So this is how retirement works. You park your money and it grows, just like the commercials!" So I added more to that balance in subsequent years. Then I started reading headlines in the news about banks collapsing and stock crashes and what not. And I saw that my little balance was plummeting down to below the level of my original deposit.
What I didn't know in 2005 and learned much much later is that a "mutual fund" is just a neatly packaged bundle of stocks. In fact, it seems like most of what is out there for "retirement vehicles" is tied to the performance of the stock market. Hence if the stock market is down, your funds are down. This is why you hear about dentists who can't retire because they lost all their savings in the tech crash in 2001 and post-real estate bubble crash in 2009. All that money they had tied up in various retirment funds crashed and they are left with less than what they put in.
All retirement "advisors" I seem to meet are the young types. I can tell that this is just their first job where they have to recruit clients to survive and then they leave the firm at a moment's notice if they get a better job. I've had to start saying no to their pitches because I don't need a newbie to tell me that I should be in aggresive growth because I'm young. I have found that getting a recommendation for a good financial advisor and a good accountant are incredibly difficult.
I continue to put the the maximum I can according to the tax laws into retirement accounts. What I didn't know then that I know now is that you can open retirement accounts and keep your money in cash (money market accounts). That way if some scumbag bank that has been mismanaging itself is discovered tomorrow and sends the stock market crashing (Bear Sterns, Lehman, AIG, I'm looking at all of you), at least you still have what you put in.
Pick up one of those "Dummies" book and start reading.
This is one persons experience in a short time frame. My father has said his retirement has grown at a net rate of ~8% since he started contributing 40 years ago. Are you going to get that kind of return on a 1.5% CD? You'll be wiped out via inflation.
There is nothing wrong with holding safe assets that have little risk but little return. I just don't think it's good to be so safe that you put all your money in vehicles that have a net loss every year due to inflation.
Wow--I just thought that a dentist put money into a savings account every year where the bank offered 6.5% annual interest or something of that nature. I had no idea that saving for retirement was a matter of purchasing stock or real estate.
I'm going to take a course in personal finance next semester after reading this.
So would most of you agree that funding your retirement though a pension plan is a matter of being successful on wall street or picking the right legal and financial advisers?
I would certainly read up on economics (specifically Austrian economics) for anyone actually still in college and plans on becoming a dentist. I've been buying Gold and Silver for the past 3 years (the actual Physical Bullion, not the stocks or ETFs that they can charge Windfall profit taxes on).
You see, the fundamental problem with the U.S. economy is we've become a nation of consumers and spenders. What we really need (and what made us prosperous during the industrial revolution) is savings and production.
The Fed (Federal Reserve) is using numerous tactics to give the public the illusion that the dollars that we make are somehow worth something. The truth of the matter is that since they try to keep propping up our economy with continuous borrowing, and printing fake money, the value of our currency will continually go lower and lower over time. They've been doing their best to try to keep these commodity prices down by using their constituents at these big institutional firms to pour in billions of dollars to counteract the up movements of these commodities. They do this by a method called naked shorting where they cause a mass selloff of commodities on the open market and slowly repurchase them once the price has fallen to their liking.
Learn about the fundamentals of economics once you graduate. And not from Keynesian textbooks either. You can thank me later 👍
I've been buying Gold and Silver for the past 3 years (the actual Physical Bullion, not the stocks or ETFs that they can charge Windfall profit taxes on).
The only thing of value to come from the Austrian school are some elements of their business cycle theory and opportunity cost. Both of which are now in more accepted models. The rest of the Austrian school is not well accepted by economists.
Full disclosure - people who like the Austrian school do so because of political reasons. Indeed, the Austrian school does not provide models and operate off of rule-of-thumb-tenets rather than quantifiable concepts.
I do agree though that economics is a great class. Just take a macro class at your college (micro is good too), read The Economist, and explore different theorys such as Keynesian and Monetarist models. After you get into this stuff you can start reading academic papers and see how deep the trail goes. But, IMO anything useful from the Austrian school will be taught by studying these other subjects. Austrian model will lead you down a politically motivated path and cause you to make assumptions that are not established.
Where do I go to buy physical bullion?
It's not well established by economists because it's in the governments best interest to teach the Keynesian philosophy to students. They think that continuous expansion of a consumer based economy somehow gives us real wealth: it doesn't. And if by predicting the dot com bubble, the housing bubble crash, and the real crash that's heading our way in the very near future is not useful, then I don't know what is. The mathematical models used in Keynesian philosophy are flawed, as is the basic tenets of what it teaches. It wasn't Keynesianism that gave our country real wealth, and it won't be keynesianism that gets us our of this mess that we're in now. That will come from a true laissez-faire contraction where supply and demand is influenced only by the free market
So it's a conspiracy of sorts? For anyone keeping score please reread my previous comment about the political bent to Austrian economics.
My point is that you take what is good from each school to come up with a composite that is as close to reality as possible. Austrian school is econ for the layman. It's not rigorous and is not specific. They are okay with that because they believe that the economy cannot not be quantified. I think it can be and they're just lazy. If you want to learn about GDP [quantified], the banking system, consumption, velocity of money, levelers, and interest rates or inflation don't look to the Austrian school.
BTW: Don't buy gold right now. Why would you buy something at such a high? Why not look into other less costly metals?
Because Gold is drastically undervalued right now. There are large short positions in both Gold and Silver, and once these institutions get squeezed out, both metals will start raging higher. Currently 1% of institions are involved in long positions in Gold...imagine if that turns out to be 3%. And all those topics you mentioned can be taught in the Austrian school.
From a technical prespective, Gold looks very solid right now to go a lot higher. I've been trading futures, stocks, bonds, and options for over 8 years now, and it looks very sound...
It may take a few years, but mark my words, Gold will easily reach $3000/ounce. I wouldn't be surprised if it goes as high as $5000/ounce. Europe is just the beginning...once the problems start cascading here nuclear QE will be in full effect
When gold corrects it's not going to touch the sides on the way down. Why not invest in growing markets like BRIC countries?
When gold corrects it's not going to touch the sides on the way down. Why not invest in growing markets like BRIC countries?
EDIT: I think we differ in our views of the global economy. I don't think the world is coming to an end in 2012. I can see hedging on some commodities if that were the case. But I would rather invest in growing markets than a non-income-yielding commodity. I expect gold to come crashing down in the next few years - it's inflated on a bubble due to rampant advertising that has bought interest from just about everyone and their brother. I've been selling gold off to keep it at a constant % of my net worth. Once it falls I'll buy more of it.
Sounds good. Let's check er' out in 2014 or 15. This is obvious but I just wanted to mention that I have no crystal ball. If anyone should read what I said I would say do some reading and come to your own conclusions. Don't mistake me for a sage or prophet.
I would certainly read up on economics (specifically Austrian economics) for anyone actually still in college and plans on becoming a dentist. I've been buying Gold and Silver for the past 3 years (the actual Physical Bullion, not the stocks or ETFs that they can charge Windfall profit taxes on).
You see, the fundamental problem with the U.S. economy is we've become a nation of consumers and spenders. What we really need (and what made us prosperous during the industrial revolution) is savings and production.
The Fed (Federal Reserve) is using numerous tactics to give the public the illusion that the dollars that we make are somehow worth something. The truth of the matter is that since they try to keep propping up our economy with continuous borrowing, and printing fake money, the value of our currency will continually go lower and lower over time. They've been doing their best to try to keep these commodity prices down by using their constituents at these big institutional firms to pour in billions of dollars to counteract the up movements of these commodities. They do this by a method called naked shorting where they cause a mass selloff of commodities on the open market and slowly repurchase them once the price has fallen to their liking.
Learn about the fundamentals of economics once you graduate. And not from Keynesian textbooks either. You can thank me later 👍
Question: is it possible to get an average rate of return of 10% to 15% on your investments if you're a really good investor? I've read that Warren Buffet has averaged 20% over decades. Of course, he's among the best in the world, but we're also not aiming for that high of a rate of return either.
That is basically impossible... forget about it. There will be good years and bad years and they end up averaging to about 6-7% return.
Another question: will I be allowed to invest in my own stocks and real estate, or will my financial adviser determine all of them for me?
Another question: will I be allowed to invest in my own stocks and real estate, or will my financial adviser determine all of them for me?