Sorry for the late reply I was very busy. You seem to be making very positive assumptions, would you bet 500k at 7% on these assumptions?
I would bet that if dentistry is no longer profitable that dentists will jump ship into other professions and the government will have a real problem on its hands. As it is, dentists aren't leaving the profession, and that's part of the problem that
we face. I wouldn't bet on 7%, but then I wouldn't bet against it either. I can only work with the information I have in front of me now. If I feared everything that could possibly happen in the future, I wouldn't function.
I am not being negative at all. I am looking at the loan amount, the interest rate, the increasing number of graduates and arguing that dentistry will not be as financially profitable for those with 500k debt as it was for the current generation of dentists (who are the most successful generation of dentists in history). This is just stating the obvious. Unless of course you think dentistry will get better under your assumptions.
Are you looking at inflation (it might not seem like it, but 2% - 3% inflation from the year 2000 has done quite a number on the US dollar...), the fact that every other career field now comes with significant student debt and significantly smaller income than a dentist, and that there is an increasing number of retirees seeking dental treatment?
$100 in 2000 would buy you about $140 today (PPP). So, while student debt has increased by 100% (
"doubled") since 2001, the cost of goods in today's market is ~40% more than it was in 2000. Yes, tuition is outpacing inflation, but not as much as you might think. Additionally, when compared to the national average, dentist salaries have actually increased over the last decade as seen in this graph (extrapolate this out to 2001 and 2014 which are the years of comparison for tuition and I'm sure the effect is even more dramatic):
When you consider that tuition hasn't really "doubled" since 2001 as the common hyperbole on SDN and elsewhere dictates (because people don't adjust for inflation, I guess it makes things more dramatic that way), that dentists are seeing pretty decent salary increases when compared to the rest of the US population, and that pretty much everyone's student loan debt has increased by roughly the same proportion as dentists -- well, dentistry is still a pretty damn lucrative and rewarding profession.
I agree that dentistry occurs in cycles with peaks and troughs, and undoubtably if we head towards a trough then dentistry will recover again. But this time you are going into a trough with 500k debt and corporate offices taking over, it's a little different from last time.
I suppose so, but are you suggesting that dentists in the past didn't have challenges? Corporations have been in the restaurant business, but my cousin is a multi-millionaire thanks to a restaurant he opened fifteen years ago. Somehow he managed to compete with P.F. Changs, Denny's, Applebee's, etc. Plenty of people will pay a premium for better care, better products, and better service.
Lastly, family medicine pays 150-200k straight out of med school with less debt than dental schools. Dentists rarely hit 200k as associates, but very common as an owner. And no, buying a practice is not the same as equity of a home. House prices, in the long run, historically follow inflation. Your practice is almost entirely valued based on your gross production. If dentistry becomes saturated from the increasing new graduates and production goes down, the value of your practice goes down.
First of all, family medicine does not pay $150-$200k straight out of medical school. Medicine is not at all like dentistry. You don't just go to medical school and then leave as a general practitioner. Internists and family practitioners must
still complete a residency which lasts 3 years. In fact, to practice medicine you must complete at least an internship, but you are pretty much unemployable in a clinical capacity unless you complete a formal residency. No one gets to play doctor without 3+ years of residency earning a measly $50,000 annually while carrying the same kind of debt burden that we future dentists will have.
Second, are you suggesting that the value of houses only goes up? You might invest in that dream home for $750k, then sell it at a loss for $400k. Just ask all of the families who lost their homes and found themselves underwater during the recession. Your house's value is no more tied to inflation than is a dental practice. If your beautiful Victorian-era home ends up being just another row-house on the wrong side of town 15 years down the road, then it doesn't really matter what the rest of the economy is doing, you're going to sell at a loss. At least a dental practice can move to a new location and take the majority of patients with it. You can't just move your home and property to a better neighborhood.
Anyway my point is not to be negative. I am trying to make pre-dents more aware about what they are getting into financially and plug the numbers in themselves as I believe many would change their minds if they did this. Too many invest in dental school without gauging the return on their investments.
That's fine, and I don't think you are just being negative for negativity's sake. I have two posts in my signature, one of which has an Excel spreadsheet with basic calculations for IBR and PAYE. I also cover the basics of PhD, military, IBR, PAYE in the other thread. I agree that pre-dents should enter this field with their eyes open. There is a lot of fear-mongering which goes on here though, on pretty much all of the forums (pharm, med, dent, vet, etc.), and so it can become difficult to distinguish between those who are genuinely interested in engaging in important dialogue about debt, and those who are seeing green in other places that it isn't so readily found.
Fortunately or unfortunately, to a layperson:
med school > dental school > pharmacy school > other health professional schools in terms of perceived difficulty of getting in and also prestige...
If you want prestige or just want to "one up" your peers, go to med school (MD, not DO).
However, I feel like at least the first two years of dental school are more rigorous than those of medical school due to non-didactic courses (e.g. preclinical operative labs) on top of all the basic science courses.
Vet school > PA school > med school > dental school > etc. you mean?
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A professor (endodontist) at a dental school once told me the following: this profession is one of a select few that can make an immediate impact and take someone out of pain.
If you go to a dentist with severe pain in a tooth, s/he can save it AND take you out of pain. The endodontist proceeded to share that all a general physician would be able to do is write you a script for temporary pain relief.
Boom!
#dentalswag
QFT!
I discovered this while volunteering in the ER. Patients come in sick, and they leave sick with a referral to someone who *may* be able to help them out. They enter in pain, and often leave in pain. How often does someone come away from the dentist with an "I don't know what's wrong with you" or a, "just wait a few days and hopefully the pain will go away."
interesting (and somewhat disturbing, based on some posters responses) thread. Dr. Penny, there is no shame, in being nervous about choosing a career, but realize at least in this country, to make bank you need to take some punches before you can deliver some (not literally).
Here's a couple of professions I've seen that will be in demand for the near future
-accountants (I've been a number/problem solver but for some reason dentistry was the better overall "business" like job for me)
-engineering (computer, industrial, electrical are good, I think petroleum will decline, avoid civil)
-investment banking from a Top 30 school (obvious con here is that 90% of the time, you'll be working 80-100 hours, no point in spending the money if you dont have time for it)
-psychiatry (deal with a certain population but pay is good for the amount of hours you put in)
As difficult it is for some millenials to understand a company is hiring you, not to get your bills paid, but for you to help the company. If you can take that mentality, you'll be a hard and successful work no matter what field.
Accounting and dentistry are pretty dissimilar. If someone could be an accountant for the rest of their life and never think about dentistry again, then maybe they should. But if you are committed to the calling the dentistry is, then I doubt you will be satisfied as an accountant. To put it plainly, and I mean no offense to anyone as I have close family who are accountants, but I think they would agree with this statement: almost no one grows up wanting to be an accountant. Nothing wrong with it, but people who work hard to get into dental school aren't likely to be satisfied in such a profession in my opinion.
Engineering is good, but again, it is very different from dentistry.
Investment banking takes a very special type of personality. I am reminded of the investment banker who claimed he scored a "29AA" on the DAT... Yeah, that's the personality you need to do a job like that.
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Psychiatry? You know, we hear the old wive's tale that dentists have the highest suicide rate, and that's been proven bogus time and again. However, psychiatry does have the highest suicide rate of any healthcare profession!
http://www.medscape.com/viewarticle/410643_2
