Interesting Financial Analysis of Being a Dentist

[Doctorfish]

I came across this short video breaking down an average cost of living as an associate dentist here:

There are quite a few things I fine interesting and have questions about this analysis. First, is this an accurate average analysis?

Second, is 40,000 dollars left over for utilities, gas, savings, and splurging not enough for someone to be well off? How much should this amount really be.

Third, how much more can you really make as a dental practice owner, and wouldn’t your net income theoretically be even LOWER than what he’s proposing, at least for the first few years of getting a loan for practice purchase? I understand some practice owners can make A LOT, but what is an average income for small practice owner?

Lastly, I’d like to point out how he said in the video that for all that hard work just to end up with $40,000 free income, “you might as well become a dental assistant.” Am I missing something, or is his analysis poor? Because from my understanding, a dental assistant makes around $38K a year. Assuming lower taxes and no debt, that translates to about $34-35K net. If this dental assistant were to spend on the same house and car as the examples he uses in the video, they would be left with $7,400 of useable income for utilities, gas, and splurging vs the $40K an associate dentist may have.

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[Carmencitas]

I do agree that in some circumstances that becoming a dentist is not a financially wise decision & it’s really easy to only take home $40,000 or even less after your loans( and still have to pay for rent, etc). But this video already accounted for loans, tax, house, and a car, so I agree after after all that taking home 40,000 isn’t the WORST situation. I just don’t think it’s the type of lifestyle that a lot of people going into dentistry unaware expect. I think he should’ve used more examples like of someone in $250k debt vs $400k of debt (both of which will look nothing close to that amount after interest). Also, he should’ve added the hypothetical practice owner or associate example, but overall a good video.

 

[Doctorfish]

I do agree that in some circumstances that becoming a dentist is not a financially wise decision & it’s really easy to only take home $40,000 or even less after your loans( and still have to pay for rent, etc). But this video already accounted for loans, tax, house, and a car, so I agree after after all that taking home 40,000 isn’t the WORST situation. I just don’t think it’s the type of lifestyle that a lot of people going into dentistry unaware expect. I think he should’ve used more examples like of someone in $250k debt vs $400k of debt (both of which will look nothing close to that amount after interest). Also, he should’ve added the hypothetical practice owner or associate example, but overall a good video.

But wouldn't you say you are probably still more well off than other professions (using his example numbers strictly). Imagine a PT making 85K. With this scenario, I feel as though the PT is making slightly less than the dentist, that is if he had absolutely no student loans, which probably isn't the case for most. And once your student loans are paid off, you'll have much more take home money as a dentist than many other professons. Not to mention you income potential is greater than $120,000 as you gain experience. Or am I wrong about this?

Making a quick indeed search, I actually see a lot of dental associate positions in corporations starting at $140,000 and even ranging past $250,000.

 

[2thDoc11]

If one went to dental school and maybe even specialized for a total of 500k, is it worth it?

I’m assuming yes but just curious as too others opinion.

 

[Carmencitas]

But wouldn't you say you are probably still more well off than other professions (using his example numbers strictly). Imagine a PT making 85K. With this scenario, I feel as though the PT is making slightly less than the dentist, that is if he had absolutely no student loans, which probably isn't the case for most. And once your student loans are paid off, you'll have much more take home money as a dentist than many other professons. Not to mention you income potential is greater than $120,000 as you gain experience. Or am I wrong about this?

Making a quick indeed search, I actually see a lot of dental associate positions in corporations starting at $140,000 and even ranging past $250,000.

You are right that your salary will increase as you gain experience and/or open your own practice but you also have to consider loans. Very few schools are going to leave you at 250k or less in loans unless you have parental help, massive scholarships, or HPSP/NHSC. I agree you’re definitely better off than a dental assistant for example if you have a manageable amount of loans. If not you will not be seeing that full amount of money for 10+ years.

 

[ESPN907]

Sky is the limit

 

[TanMan]

Although this mentions 120k as part of a new dentist compensation package, most dentists get out of the 120k payscale pretty quickly. Debt payments tend to be stable (unless doing IBR), Taxes scale with income, and Home/Auto may or may not scale depending on lifestyle. Important lesson here is to get out of 120k base pay asap or be prepared to live a mediocre lifestyle. Increase your income by working faster or becoming an owner.

If one went to dental school and maybe even specialized for a total of 500k, is it worth it?

I’m assuming yes but just curious as too others opinion.

I think it is if you're willing to move anywhere and work hard. I wouldn't specialize because I value time too much. Even 2 years of specialty training could be 4% of your total life if you live to be 50 (or 2% if you live to be 100 or if you have 30 years of prime working life, 6.7% of your prime working life). As I alluded above, if you can't work faster or have no aspirations to own an office, you probably shouldn't be taking on 500k of debt.

But wouldn't you say you are probably still more well off than other professions (using his example numbers strictly). Imagine a PT making 85K. With this scenario, I feel as though the PT is making slightly less than the dentist, that is if he had absolutely no student loans, which probably isn't the case for most. And once your student loans are paid off, you'll have much more take home money as a dentist than many other professons. Not to mention you income potential is greater than $120,000 as you gain experience. Or am I wrong about this?

Making a quick indeed search, I actually see a lot of dental associate positions in corporations starting at $140,000 and even ranging past $250,000.

Income potential is huge in dentistry with large variations. There's just a lot of dentists that don't/won't do what it takes to succeed. I just don't understand it. Even in solo practice, you could potentially do over a million a year. Of course, looking at it from a business standpoint, you want to lower your startup costs (dental degree) as much as possible since long term debt can hinder long term growth due to debt servicing. If your operating income is going towards debt servicing, you have less money to invest. Also, if your debt/income ratio is too high, lenders may be less than willing to let you borrow for potential investments, but there's always a way to hide debt.

 

[2thDoc11]

Although this mentions 120k as part of a new dentist compensation package, most dentists get out of the 120k payscale pretty quickly. Debt payments tend to be stable (unless doing IBR), Taxes scale with income, and Home/Auto may or may not scale depending on lifestyle. Important lesson here is to get out of 120k base pay asap or be prepared to live a mediocre lifestyle. Increase your income by working faster or becoming an owner.



I think it is if you're willing to move anywhere and work hard. I wouldn't specialize because I value time too much. Even 2 years of specialty training could be 4% of your total life if you live to be 50 (or 2% if you live to be 100 or if you have 30 years of prime working life, 6.7% of your prime working life). As I alluded above, if you can't work faster or have no aspirations to own an office, you probably shouldn't be taking on 500k of debt.



Income potential is huge in dentistry with large variations. There's just a lot of dentists that don't/won't do what it takes to succeed. I just don't understand it. Even in solo practice, you could potentially do over a million a year. Of course, looking at it from a business standpoint, you want to lower your startup costs (dental degree) as much as possible since long term debt can hinder long term growth due to debt servicing. If your operating income is going towards debt servicing, you have less money to invest. Also, if your debt/income ratio is too high, lenders may be less than willing to let you borrow for potential investments, but there's always a way to hide debt.

You’d advise against specializing in endo or surgery?

 

[TanMan]

You’d advise against specializing in endo or surgery?

It's a safer route (on average) to specialize, but if you value your time more, I wouldn't go into endo or surgery. I'd probably make less if I ended up specializing since the business dynamics are different as a specialist v GP.

 

[Abbasr2000]

I have heard that dentistry has good income potential but you can also be in over 400k in debt depending on the school you go to. If you are doing dentistry for the money it is not a good field, you should have a passion for dentistry and should make sure that you want to work on teeth for the rest of your life. If you enjoy dentistry then the income should not really be an issue.

 

[TanMan]

I have heard that dentistry has good income potential but you can also be in over 400k in debt depending on the school you go to. If you are doing dentistry for the money it is not a good field, you should have a passion for dentistry and should make sure that you want to work on teeth for the rest of your life. If you enjoy dentistry then the income should not really be an issue.

I don't think people ever really know if they want to work on teeth for the rest of their lives until you're knee deep in the profession. I guess if you hate teeth, there's always perio/os/oral path/oral radiology/orofacial pain/dental anesthesiology. It's a broad enough field that you don't have to work on teeth directly.

It is a little idealistic to say income isn't an issue, because it almost always is.

 

[NJ_Doc]

Thought I'd chime in as a naïve pre-dent. A quick google search of this guy will show you he does consulting, and mentioned it a few times in the video lol. I'd take everything with a grain of salt a 30-something yr old dentist that is in the business of helping others start and grow their private practice with barely a decade of experience doing it himself, says. With that being said, the gross vs net income analysis doesn't seem that off, however $40k is relative and will go a long way towards investments/debt reduction/lifestyle for a single person. Like TanMan said you want to get away from $120k/year asap, but will probably have to be in the 120 range for a few years because I doubt recent grads have the purchasing power or knowledge to buy and run their own practice.

The guy in the video is just trying to scare recent grads so he can be a consultant and spend less time in the chair.

 

[Doctorfish]

I have heard that dentistry has good income potential but you can also be in over 400k in debt depending on the school you go to. If you are doing dentistry for the money it is not a good field, you should have a passion for dentistry and should make sure that you want to work on teeth for the rest of your life. If you enjoy dentistry then the income should not really be an issue.

Yes, of course the money isn't an issue. If I love what I am doing then I will be happy and that's what counts. But my question is, is this money feasible for someone trying to live a middle class/slightly above average lifestyle. I am not expecting to be sticken rich like some people think dentists are. But can I possibly buy a house a few years in, or even get a brand new car? My question isn't really about "will I be poor?" It is more like "Will this be enough money to live and enjoy my life comfortably (buying a medium sized home, a good car, and using some left over money to spend on trips and invest)?"

 

[WhiteningStrike]

So i guess, based on my opinion 120k/year is still better than a lot of professions. I recently read an article about a congressional aid that only makes 45k/year. Looking at average salaries across the board too, dentistry is a lot better than most professions. I understand the debt due to loans can be extremely high, but if you can cover that aspect, then 120k/year isnt bad if you dont have to pay any loans back.

 

[NJ_Doc]

2thfairies is right. Most of my family only have bachelors and work in tech/finance and after 4 years of work (time dental students are accruing debt and have zero income) they are already past the starting salary of a new grad dentist. This is multiplied by the fact that saving and investing a little income in your early 20's compared to late 20's can make a huge difference in final $$ later on in life.

This can be an endless debate but being a financially savvy dentist will help alot in the long run. You can make alot of money in any profession.

 

[PerioDont]

So i guess, based on my opinion 120k/year is still better than a lot of professions. I recently read an article about a congressional aid that only makes 45k/year. Looking at average salaries across the board too, dentistry is a lot better than most professions. I understand the debt due to loans can be extremely high, but if you can cover that aspect, then 120k/year isnt bad if you dont have to pay any loans back.

120k salary ⇒ 90k after taxes (conservative estimate).

90/12 months in a year ⇒ 7.5k/month.

400k in loans on a ten year plan is around 4k per month.

so 7.5-4k = 3.5k/month. So your 'real' take home is 3.5k*12=42k/year.

there are many hygienists, office managers and dental assistant that make that much.

I am unsure of the requirements of a congressional aid, but pretty sure it doesn't require 8 years of school and the day to day stress of dealing with pts.

 

[GotchaSmiling]

I came across this short video breaking down an average cost of living as an associate dentist here:

There are quite a few things I fine interesting and have questions about this analysis. First, is this an accurate average analysis?

Second, is 40,000 dollars left over for utilities, gas, savings, and splurging not enough for someone to be well off? How much should this amount really be.

Third, how much more can you really make as a dental practice owner, and wouldn’t your net income theoretically be even LOWER than what he’s proposing, at least for the first few years of getting a loan for practice purchase? I understand some practice owners can make A LOT, but what is an average income for small practice owner?

Lastly, I’d like to point out how he said in the video that for all that hard work just to end up with $40,000 free income, “you might as well become a dental assistant.” Am I missing something, or is his analysis poor? Because from my understanding, a dental assistant makes around $38K a year. Assuming lower taxes and no debt, that translates to about $34-35K net. If this dental assistant were to spend on the same house and car as the examples he uses in the video, they would be left with $7,400 of useable income for utilities, gas, and splurging vs the $40K an associate dentist may have.

Unless you have a good chunk of your education paid off by family or friends, being a dentist is not a feasible way to be financially stable. You will be in debt for 15-30 yrs.

If I only pay my monthly minimum payment of $2,000; $6000/yr goes to the balance, $20,000/yr goes to interest. My balance is 300k.

The stress from work, the pain from work position, the ****ty job markets, the inability to afford your own practice—none of is worth it. Do something else! Go into Data Science or be a PA if you really like.

Most dental owners are looking to get the most money from selling their practices so the trend is selling to corporations. In corporate, you will take orders from low education managers who don’t understand time management or patient care; they only are trained to understand the bottom line which is money, so they don’t have any mind for how much time you actually need spend on each procedure.

Even if you’re lucky enough to buy a practice, your life becomes about the hustle with all that debt. You start to oversell treatment. And staff...staff are the worse, but then again, unless you’re an extremely patient person, dentistry will bring the absolute worse out of you. I’ve heard everything—dentists throwing things across the room, drinking w staff often, having affairs; offices billing incorrectly under your name. It’s a terrible, sad, bleak world. Lol!!

Dentistry is absolutely, 1000% not worth it. Run away as fast as you can!!

 

[dPseh]

Unless you have a good chunk of your education paid off by family or friends, being a dentist is not a feasible way to be financially stable. You will be in debt for 15-30 yrs.

If I only pay my monthly minimum payment of $2,000; $6000/yr goes to the balance, $20,000/yr goes to interest. My balance is 300k.

The stress from work, the pain from work position, the ****ty job markets, the inability to afford your own practice—none of is worth it. Do something else! Go into Data Science or be a PA if you really like.

Most dental owners are looking to get the most money from selling their practices so the trend is selling to corporations. In corporate, you will take orders from low education managers who don’t understand time management or patient care; they only are trained to understand the bottom line which is money, so they don’t have any mind for how much time you actually need spend on each procedure.

Even if you’re lucky enough to buy a practice, your life becomes about the hustle with all that debt. You start to oversell treatment. And staff...staff are the worse, but then again, unless you’re an extremely patient person, dentistry will bring the absolute worse out of you. I’ve heard everything—dentists throwing things across the room, drinking w staff often, having affairs; offices billing incorrectly under your name. It’s a terrible, sad, bleak world. Lol!!

Dentistry is absolutely, 1000% not worth it. Run away as fast as you can!!

100% true. This post says it all. Dentistry is not an easy job, and if someone gave me admissions to a dental school that would put me at 400k+ debt, “that’s a hard no from me dawg.”
Seven years ago as a starry-eyed pre-dent, I would have taken that offer in a heartbeat. But I know better now.

 

[2TH MVR]

Unless you have a good chunk of your education paid off by family or friends, being a dentist is not a feasible way to be financially stable. You will be in debt for 15-30 yrs.

If I only pay my monthly minimum payment of $2,000; $6000/yr goes to the balance, $20,000/yr goes to interest. My balance is 300k.

The stress from work, the pain from work position, the ****ty job markets, the inability to afford your own practice—none of is worth it. Do something else! Go into Data Science or be a PA if you really like.

Most dental owners are looking to get the most money from selling their practices so the trend is selling to corporations. In corporate, you will take orders from low education managers who don’t understand time management or patient care; they only are trained to understand the bottom line which is money, so they don’t have any mind for how much time you actually need spend on each procedure.

Even if you’re lucky enough to buy a practice, your life becomes about the hustle with all that debt. You start to oversell treatment. And staff...staff are the worse, but then again, unless you’re an extremely patient person, dentistry will bring the absolute worse out of you. I’ve heard everything—dentists throwing things across the room, drinking w staff often, having affairs; offices billing incorrectly under your name. It’s a terrible, sad, bleak world. Lol!!

Dentistry is absolutely, 1000% not worth it. Run away as fast as you can!!

This dentist has a debt of 300K which is reasonable. Can you imagine those with 500K plus?

 

[SkinnyT]

Orrrr you can just repay loans at the "minimum per month" rate, and actually live 25 years spending your hard worked money however way you want until it becomes forgiven (I know there is still a tax bomb but its okay well post pone that as well)! I always hear people complaining about the debt issue and I totally get it. Id rather pay the min and make the most out of my salary with my family doing things I love. I also wont be surprised if a new forgiveness program comes out by the time I graduate. But I am not too stressed. I'm not gonna be stressed out about living a workaholic life to pay my loans in full - it could take my lifetime! Our lifetime is short, life is short, our lives will eventually come to an end, student loans on the other hand .... So work to actually LIVE and enjoy with your family! Loans can wait! Everyone is on the same boat!

Feel free to disagree, but to each their own... just my 0.02 cents

 

[charlestweed]

Orrrr you can just repay loans at the "minimum per month" rate, and actually live 25 years spending your hard worked money however way you want until it becomes forgiven (I know there is still a tax bomb but its okay well post pone that as well)! I always hear people complaining about the debt issue and I totally get it. Id rather pay the min and make the most out of my salary with my family doing things I love. I also wont be surprised if a new forgiveness program comes out by the time I graduate. But I am not too stressed. I'm not gonna be stressed out about living a workaholic life to pay my loans in full - it could take my lifetime! Our lifetime is short, life is short, our lives will eventually come to an end, student loans on the other hand .... So work to actually LIVE and enjoy with your family! Loans can wait! Everyone is on the same boat!

Feel free to disagree, but to each their own... just my 0.02 cents

You can do that if you plan to stay single for the rest of your life. And the only person that you have to take care of is nobody else but yourself. But if you plan to settle, get married and have kids, I think it will be hard for you to find someone who is willing to carry the financial burden that you created. Nobody wants to marry a future spouse who owes a large amount of debt and is incapable of paying it back.

Living with the huge debt amount all your life, you won’t be able to buy a house, lease a nice car, open a practice, and save money for your kids’ college etc because none of the banks would lend you the money. At 65, most people are ready to retire and live in the house that was paid off. At 65, you don’t have a house and have to face a huge tax bomb.

 

[SkinnyT]

You can do that if you plan to stay single for the rest of your life. And the only person that you have to take care of is nobody else but yourself. But if you plan to settle, get married and have kids, I think it will be hard for you to find someone who is willing to carry the financial burden that you created. Nobody wants to marry a future spouse who owes a large amount of debt and is incapable of paying it back.

Living with the huge debt amount all your life, you won’t be able to buy a house, lease a nice car, open a practice, and save money for your kids’ college etc because none of the banks would lend you the money. At 65, most people are ready to retire and live in the house that was paid off. At 65, you don’t have a house and have to face a huge tax bomb.

I disagree. I bet you regardless of the amount of debt, as long as I pay minimum I will still be able to afford a nice car, a nice house, and take care of my family. If I pay my loans and minimum and use the left over money for other things (invest), I think I would get more out of it rather than throwing the majority of it into loan pit.... There is student loan debt, and then there is non-student loan debt, both which are looked at differently. But everyone feel free to do what they think is best, and if that means spending most of your hard earned money paying an absurd amount of loan debt while living frugally during the years you have the most energy to enjoy life then by all means. I don't want to wait be old to be able to enjoy life. Most of my income will go to raise a family, house, etc... doesn't mean I wont use some of that income to pay my loans, I will, just a very small part of it. Priorities.

 

[SuxDrugs&Rocuronium]

I disagree. I bet you regardless of the amount of debt, as long as I pay minimum I will still be able to afford a nice car, a nice house, and take care of my family. If I pay my loans and minimum and use the left over money for other things (invest), I think I would get more out of it rather than throwing the majority of it into loan pit.... There is student loan debt, and then there is non-student loan debt, both which are looked at differently. But everyone feel free to do what they think is best, and if that means spending most of your hard earned money paying an absurd amount of loan debt while living frugally during the years you have the most energy to enjoy life then by all means. I don't want to wait be old to be able to enjoy life. Most of my income will go to raise a family, house, etc... doesn't mean I wont use some of that income to pay my loans, I will, just a very small part of it. Priorities.

Or just don’t go to a school that has such an outrageous tuition. Even with the government repayment you end up paying a lot in the long run. Monthly payments for 25 years plus the tax bomb. No thanks.

 

[ESPN907]

Or just don’t go to a school that has such an outrageous tuition. Even with the government repayment you end up paying a lot in the long run. Monthly payments for 25 years plus the tax bomb. No thanks.

In the end there are different ways to go about it, much of it is personal preference...

 

[charlestweed]

I disagree. I bet you regardless of the amount of debt, as long as I pay minimum I will still be able to afford a nice car, a nice house, and take care of my family. If I pay my loans and minimum and use the left over money for other things (invest), I think I would get more out of it rather than throwing the majority of it into loan pit.... There is student loan debt, and then there is non-student loan debt, both which are looked at differently. But everyone feel free to do what they think is best, and if that means spending most of your hard earned money paying an absurd amount of loan debt while living frugally during the years you have the most energy to enjoy life then by all means. I don't want to wait be old to be able to enjoy life. Most of my income will go to raise a family, house, etc... doesn't mean I wont use some of that income to pay my loans, I will, just a very small part of it. Priorities.

Yes, you should be fine if you can discipline yourself not to spend the extra amount of money (for making minimum payments only) that you have every month and use all of it to invest….and invest it wisely. Just don’t be like that infamous orthodontist who lets his original $600k student loan to balloon to $1million in a short period of time. The good thing is he is still young. Hopefully, he'll have enough time to turn things around.

There’s a big difference between student loan debt and non-student loan debt. Student loan debt will stay with you forever. Even when the amount will be forgiven after 25 years, you will still have to pay the tax bomb, which is just another form of debt. With non-student debt like a home loan or a business loan, you can get rid of the debt by selling your house or your practice….and hopefully make some profits.

An annual income of $120k is not that much for a family of 4 even if you don’t have any debt. For low income families, they have medicaid, college grants and other financial assistance from the government. For you, an independent contractor or a business owner, you have to pay for everything…..buying your own health insurance for your family, paying for your kids’ college tuitions, and saving for your future retirement etc. Make sure you and your significant other have an honest conversation about each other's finances before getting married.

 

[SkinnyT]

Or just don’t go to a school that has such an outrageous tuition. Even with the government repayment you end up paying a lot in the long run. Monthly payments for 25 years plus the tax bomb. No thanks.

Much easier said than done nowadays with the 300+ tuition of most schools, but sure do what you prefer. And yes you might still end up repaying a lot in the long run, but at least you enjoyed life while you were still young. So the question is of whether to pay minimum slowly over long run and use most of the money to actually live your younger years or waste your young years using most of your salary to tackle that loan debt and be debt free but 65 to enjoy and live life. You choose. But Ill take the first option. Just me though What good is it to be student debt free but be old have no energy to do anything? I guess I just value living my life to the fullest with my family more than paying my loans as quickly as I can.

 

[SkinnyT]

Yes, you should be fine if you can discipline yourself not to spend the extra amount of money (for making minimum payments only) that you have every month and use all of it to invest….and invest it wisely. Just don’t be like that infamous orthodontist who lets his original $600k student loan to balloon to $1million in a short period of time. The good thing is he is still young. Hopefully, he'll have enough time to turn things around.

There’s a big difference between student loan debt and non-student loan debt. Student loan debt will stay with you forever. Even when the amount will be forgiven after 25 years, you will still have to pay the tax bomb, which is just another form of debt. With non-student debt like a home loan or a business loan, you can get rid of the debt by selling your house or your practice….and hopefully make some profits.

An annual income of $120k is not that much for a family of 4 even if you don’t have any debt. For low income families, they have medicaid, college grants and other financial assistance from the government. For you, an independent contractor or a business owner, you have to pay for everything…..buying your own health insurance for your family, paying for your kids’ college tuitions, and saving for your future retirement etc. Make sure you and your significant other have an honest conversation about each other's finances before getting married.

Definitely! Either way, I still appreciate your take on it

 

[2thDoc11]

Are there any dentists that break into the real estate business and invest that way?

 

[NJ_Doc]

Are there any dentists that break into the real estate business and invest that way?

There are a lot. I’d recommend to look on dentist Facebook groups and get some info on dentistry and real estate. It’s really interesting.

 

[2thDoc11]

There are a lot. I’d recommend to look on dentist Facebook groups and get some info on dentistry and real estate. It’s really interesting.

Sick! my sister is a realtor and is starting to get into it and my brother has a few properties.. I’d really like to get to that point but probably won’t be fore a while cause of school. bigger pockets real estate is pretty motivational and they did interview a cRNA but that’s as close as it got to anyone in the medical fields

 

[NJ_Doc]

Most of what everyone is saying on this thread is opinion which is great but we all know that anything over $300k is going to be an extreme burden for decades.

I would love to hear some recent grads (2010’s and newer) talk about their experience with debt and repayment. I know this is the pre-dental section but it would be more experience than opinions.

 

[HabituallyPlacid]

Investment at an early age (early-mid 20’s) could also help mitigate some of the financial burdens new dentists will have to find a way to circumvent. Investing in the right Roth IRAs could make a substantial difference down the line when you’re trying to balance debt and life.

 

[PerioDont]

Investment at an early age (early-mid 20’s) could also help mitigate some of the financial burdens new dentists will have to find a way to circumvent. Investing in the right Roth IRAs could make a substantial difference down the line when you’re trying to balance debt and life.

Which students have money to put in their early-mid 20s? I am 24 and can barely rub together a few hundo, esp after paying for my boards and licensure etc. It has been like that for me personally and many other students I know in this age group.

Of course as a concept I agree this is a wonderful idea, the practicality I question.

 

[MG14]

I disagree. I bet you regardless of the amount of debt, as long as I pay minimum I will still be able to afford a nice car, a nice house, and take care of my family. If I pay my loans and minimum and use the left over money for other things (invest), I think I would get more out of it rather than throwing the majority of it into loan pit.... There is student loan debt, and then there is non-student loan debt, both which are looked at differently. But everyone feel free to do what they think is best, and if that means spending most of your hard earned money paying an absurd amount of loan debt while living frugally during the years you have the most energy to enjoy life then by all means. I don't want to wait be old to be able to enjoy life. Most of my income will go to raise a family, house, etc... doesn't mean I wont use some of that income to pay my loans, I will, just a very small part of it. Priorities.

You can sacrifice those first few years to be free the rest of your life, or you foolishly live free (while being broke) and are shackled the rest of your life.

Never studied finance have you? Might want to get with a financial advisor and let them break it down for you. I’d hate to be the 55+ y/o you.

 

[ESPN907]

You can sacrifice those first few years to be free the rest of your life, or you foolishly live free (while being broke) and are shackled the rest of your life.

Never studied finance have you? Might want to get with a financial advisor and let them break it down for you. I’d hate to be the 55+ y/o you.

Just differences in financial philosophy really. I’d hardly call it foolish just because you’re debt adverse and he’s focused on liquidity and time in market. He’d probably hate to be the 25-30 y/o you. Trade offs...

 

[2TH MVR]

Which students have money to put in their early-mid 20s? I am 24 and can barely rub together a few hundo, esp after paying for my boards and licensure etc. It has been like that for me personally and many other students I know in this age group.

Of course as a concept I agree this is a wonderful idea, the practicality I question.

Exactly. This is the reality of life as a student. Unfortunately this is also the reality for alot of low income earners (paycheck to paycheck) and others who have no financial common sense. Maybe if you're single ... you can "CONTROL" your expenses somewhat. If you have family now or in the near future ..... life's inevitable, unpredictable EXPENSES will arise. Not once, not twice, but ........... forever.

Investing is near impossible for students with no stable income. Once you have stable income. Take advantage of the workplace 401K with employer contributions (hopefully). Own your office in the future? Discuss tax avoidance strategies/investments with a qualified tax accountant. The best investments are reducing taxable income and keeping what you earn.

I kind of laugh when I hear alot of you younger posters discussing investing in Real Estate for passive income. It takes MONEY, TIME and KNOWLEDGE to invest in real estate. So .... along with your DS debt, possible practice debt, mortgage/rental, etc. etc. you will be able to secure a low interest loan for the real estate?

Best investment for most of you is. Don't overpay for dental school.

 

[2thDoc11]

Exactly. This is the reality of life as a student. Unfortunately this is also the reality for alot of low income earners (paycheck to paycheck) and others who have no financial common sense. Maybe if you're single ... you can "CONTROL" your expenses somewhat. If you have family now or in the near future ..... life's inevitable, unpredictable EXPENSES will arise. Not once, not twice, but ........... forever.

Investing is near impossible for students with no stable income. Once you have stable income. Take advantage of the workplace 401K with employer contributions (hopefully). Own your office in the future? Discuss tax avoidance strategies/investments with a qualified tax accountant. The best investments are reducing taxable income and keeping what you earn.

I kind of laugh when I hear alot of you younger posters discussing investing in Real Estate for passive income. It takes MONEY, TIME and KNOWLEDGE to invest in real estate. So .... along with your DS debt, possible practice debt, mortgage/rental, etc. etc. you will be able to secure a low interest loan for the real estate?

Best investment for most of you is. Don't overpay for dental school.

True but not everybody goes into dental school as a helpless predent with no money and no knowledge.. what’s your view on securing a house and renting out bedrooms to other students(house hacking)? This would be contingent on the fact that you know the market, find a property at a good value and have done your homework.
Theres always a way to make things work.. just have to be creative and figure it out. Most people don’t know where to start and therefore never do.

 

[PerioDont]

Exactly. This is the reality of life as a student. Unfortunately this is also the reality for alot of low income earners (paycheck to paycheck) and others who have no financial common sense. Maybe if you're single ... you can "CONTROL" your expenses somewhat. If you have family now or in the near future ..... life's inevitable, unpredictable EXPENSES will arise. Not once, not twice, but ........... forever.

Investing is near impossible for students with no stable income. Once you have stable income. Take advantage of the workplace 401K with employer contributions (hopefully). Own your office in the future? Discuss tax avoidance strategies/investments with a qualified tax accountant. The best investments are reducing taxable income and keeping what you earn.

I kind of laugh when I hear alot of you younger posters discussing investing in Real Estate for passive income. It takes MONEY, TIME and KNOWLEDGE to invest in real estate. So .... along with your DS debt, possible practice debt, mortgage/rental, etc. etc. you will be able to secure a low interest loan for the real estate?

Best investment for most of you is. Don't overpay for dental school.

yep exactly. I've done everything 'right' by all measures, graduating UG early with full ride, state school thats fairly cheap, live with roommates, working during DS, no credit card debt, and still have no money for investing purposes.

It is simply a part of being a student. the best financial investment as a student is minimizing debt.

 

[PerioDont]

True but not everybody goes into dental school as a helpless predent with no money and no knowledge.. what’s your view on securing a house and renting out bedrooms to other students(house hacking)? This would be contingent on the fact that you know the market, find a property at a good value and have done your homework.
Theres always a way to make things work.. just have to be creative and figure it out. Most people don’t know where to start and therefore never do.

I agree this is possible to do. I have seen a handful of students try this, it seems to only work when a spouse is willing to manage this.

Are you wanting to deal with a broken faucet the day before a final? What if your tenant makes a ton of noise when you are trying to study? Having an additional source of stress in your living situation during dental school is penny wise, pound foolish.

If you spend your extra time practicing as much endo as possible you could make millions over your lifetime instead of referring out. Invest 100% into your skills in dental school. If you still have energy left over then start thinking about this sort of thing.

 

[HabituallyPlacid]

Which students have money to put in their early-mid 20s? I am 24 and can barely rub together a few hundo, esp after paying for my boards and licensure etc. It has been like that for me personally and many other students I know in this age group.

Of course as a concept I agree this is a wonderful idea, the practicality I question.

If not before or while in school, that kind of investing would even be beneficial a few years after graduation when you’re practicing and earning enough income to set aside a couple of hundred a month for starting a portfolio.

 

[PerioDont]

If not before or while in school, that kind of investing would even be beneficial a few years after graduation when you’re practicing and earning enough income to set aside a couple of hundred a month for starting a portfolio.

agreed. the income early in your career is worth much more than later if invested due to the power of compounding.

However, that is the time for many that delayed gratification builds up and people start leasing BMWs and buying houses they can't afford. I understand it but it does cost as you have already spent years delaying your investing power in school.

 

[Judajudo]

The only really good advice I see in this thread is investing in retirement early, as much as possible. Many of you are making very disingenuous arguments.

1. The video is nonsense. Notice how the final figure is after you take out home payments and car payments. That means you have 40k a year that you can use just on Food, Leisure, and savings/investments. There are entire families of 4 living off of 40k/yr salaries pre-tax. Someone mentioned that this person is just trying to scare new dentists into hiring him as a consultant. That sounds pretty plausible.
2. As someone said before in the thread 120k/yr is likely your first year salary. Unless you make every wrong choice forever, you will earn more each year on average.
3. But lets say you make 120k/yr forever. For those people making arguments that other jobs that don't require the loans or education also earn around 40-50k/yr, that is before tax and other deductions. Calling back to point 1, the 40k/yr for the hypothetical dentist is after tax, loan, home, and car payments, which increases when you pay off debt.
4. Someone brought up the stress of dentistry, and all the things you have to worry about, as if other jobs and careers do not have the same or similar stresses.
5. Someone mentioned that their friends who just have a bachelors degree make more than 120k/yr. While this is definitely possible it is not the norm. Average income for bachelors degree holders are less than 55k/yr (https://nces.ed.gov/programs/coe/pdf/coe_cba.pdf). Having had a long consulting career before I went to school, I've personally worked with many adults in their 30s and 40s in tech that still do not make over 100k/yr in major cities.

Based on the pattern of what I am reading, most of you that think the grass is greener on the non-dentistry side don't really understand how majority of Americans live.

 

[SkinnyT]

You can sacrifice those first few years to be free the rest of your life, or you foolishly live free (while being broke) and are shackled the rest of your life.

Never studied finance have you? Might want to get with a financial advisor and let them break it down for you. I’d hate to be the 55+ y/o you.

Foolishly? And sacrifice first few years? Lol! It’ll be more than just “first few years”. No disrespect but Yea as @ESPN907 said: hate to be you on your 20s,30s,40s,50s......lifetime. But hey still wish you the best good luck man 👍🏻

Minor in finance btw.

 

[MG14]

Foolishly? And sacrifice first few years? Lol! It’ll be more than just “first few years”. No disrespect but Yea as @ESPN907 said: hate to be you on your 20s,30s,40s,50s......lifetime. But hey still wish you the best good luck man 👍🏻

Minor in finance btw.

Well that makes it even worse and shows how formal education isn’t the best indicator of knowledge.

1) Sure it can be more than a few years. If you’re foolish in undergrad max out loans, then max out loans for dental school. Then sure you can live your philosophy and be “free” while being broke the rest of your life. that is if someone unwisely chose to go into $500k, $600k, and even $700k debt for undergrad and dental school to become a dentist. That’s basically financial suicide so I see where you may think that, I guess if you dig a hole deep enough, making it extremely difficult to get out, you mine as well make that hole look and smell real good. We can sit and debate philosophies all we want with that debt. But the real solution and for anyone who understands finance would know choosing a different career that brings a livable and manageable income/debt ratio is the real answer.


2) Now with someone with a manageable debt <~$300k, then you can start talking “philosophies.” Personally , I’ll graduate DS when I’m 28, that’s even with a 2 year break from education, at ~$300k debt. So I know people can be in a similar age range, if not younger. I know I can aggressively pay off my loans, and still take home $60-70k a year (after tax and debt payments). From not having an income for nearly 8 years, to taking home $60-70k I can live somewhat comfortably while paying off my loans by the time I’m 35-38 (given I don’t have all that expensive taste and want suburban/rural areas). And by that time being debt free and having none of my income go to loans only allows you to work in progression take control of your life sooner. Putting off debt til you’re close to retirement yeah may work, but you don’t go from living a lavish “free” lifestyle to going back to living in a modest salary when you need to pay it off. If anything, taste gets more expensive with age, (and so does compounding interest). But here’s the deal, there’s more than one way to skin a cat. You’re free, do your route and of course that’s fine but save these posts and let us know how it works out.

 

[PerioDont]

Well that makes it even worse and shows how formal education isn’t the best indicator of knowledge.

1) Sure it can be more than a few years. If you’re foolish in undergrad max out loans, then max out loans for dental school. Then sure you can live your philosophy and be “free” while being broke the rest of your life. that is if someone unwisely chose to go into $500k, $600k, and even $700k debt for undergrad and dental school to become a dentist. That’s basically financial suicide so I see where you may think that, I guess if you dig a hole deep enough, making it extremely difficult to get out, you mine as well make that hole look and smell real good. We can sit and debate philosophies all we want with that debt. But the real solution and for anyone who understands finance would know choosing a different career that brings a livable and manageable income/debt ratio is the real answer.


2) Now with someone with a manageable debt <~$300k, then you can start talking “philosophies.” Personally , I’ll graduate DS when I’m 28, that’s even with a 2 year break from education, at ~$300k debt. So I know people can be in a similar age range, if not younger. I know I can aggressively pay off my loans, and still take home $60-70k a year. From not having an income for nearly 8 years, to taking home $60-70k (after tax and debt payments) and paying off my loans by the time I’m 35-38. And by that time being debt free and having none of my income go to loans only allows you to work in progression take control of your life sooner. Putting off debt til you’re close to retirement yeah may work, but you don’t go from living a lavish “free” lifestyle to going back to living in a modest salary when you need to pay it off. If anything, taste gets more expensive with age, (and so does compounding interest). But here’s the deal, there’s more than one way to skin a cat. You’re free, do your route and of course that’s fine but save these posts and let us know how it works out.

Let us remember the average American family of 4 makes less money than this. The average American family has a higher standard of living than the vast majority of the planet, literally billions of people.

Bottom line: you do not need hundreds of thousands of dollars to live a good life. You can live well on 60-70k in your 30s, pay down all your debt, and then start upgrading your life if you still find that you want to. Otherwise you may end up shackled to your debt and having to work till your 70s. Add in a divorce or two and you will never be retire.

No one is saying you have to live in a shack and drive a 1989 honda civic. You absolutely can still live very well even if isn't in a 5000 sq foot house with an S550. once you pay down your debt, you can also likely afford those things as well.

Also everyone on here should read white coat investor.com and mrmoneymustache. will give you a good basic financial understanding.

 

[2TH MVR]

Here's the problem with kicking that debt can down the street. Most young people think that once they hit age 50 and above ... they think that they will AUTOMATICALLY have a bundle of money in investments and are set for life. Especially as a professional. You know. "By then .... I will have my **** together. Will be debt free. I'll be able to retire in my early 50's". Livin on easy street. "Sky is the limit" lol.

It doesn't work that way. Expenses will RISE as you get older. Raising a family is extremely expensive. I'm 58 and I am still paying for my daughter's college expenses. Paying for my other daughter's wedding. Do you think that your dentist salary will continue to rise as an age 50 plus dentist?. Maybe. Probably not. Most people in their 50's are trying to slow down. Work less.

How many working yrs after dental school will you have to pay all your debt and build wealth? 25-35yrs. I literally didn't start working until I was around 27-28. It's taken many yrs of "properly" guided investments (mostly stocks with a financial planner) to build the nest egg I currently have and to be 100% debt free.

I cannot imagine having that tax bomb in my late 40's. I cannot imagine still paying student loans in my 40's.

tldr; Don't assume that by the time you reach your 50's that everything will automatically be great financially. Those in their 50's who have done well financially started in their 20's, 30's with low DS debt, no future tax bomb, and proper investments.

 

[ESPN907]

If Mike Meru has the rest of his financial life in order he’s “crazy like a fox” as Jim Dahle “WCI” has said. There is something called student loan repayment strategies and for more and more people that kind of strategy is the right call for their situation. Just because you don’t see what happens behind the scenes doesn’t mean they are being irresponsible. You may be putting 60% of your income towards student loans and have a savings rate of 0% while they are putting 10% towards student loans and have a savings rate of 50%...

 

[charlestweed]

Here's the problem with kicking that debt can down the street. Most young people think that once they hit age 50 and above ... they think that they will AUTOMATICALLY have a bundle of money in investments and are set for life. Especially as a professional. You know. "By then .... I will have my **** together. Will be debt free. I'll be able to retire in my early 50's". Livin on easy street. "Sky is the limit" lol.

It doesn't work that way. Expenses will RISE as you get older. Raising a family is extremely expensive. I'm 58 and I am still paying for my daughter's college expenses. Paying for my other daughter's wedding. Do you think that your dentist salary will continue to rise as an age 50 plus dentist?. Maybe. Probably not. Most people in their 50's are trying to slow down. Work less.

How many working yrs after dental school will you have to pay all your debt and build wealth? 25-35yrs. I literally didn't start working until I was around 27-28. It's taken many yrs of "properly" guided investments (mostly stocks with a financial planner) to build the nest egg I currently have and to be 100% debt free.

I cannot imagine having that tax bomb in my late 40's. I cannot imagine still paying student loans in my 40's.

tldr; Don't assume that by the time you reach your 50's that everything will automatically be great financially. Those in their 50's who have done well financially started in their 20's, 30's with low DS debt, no future tax bomb, and proper investments.

Yeah. It's much easier when you are single and don't have kids. My son's classmate's dad recently contracted the Covid and had to be hospitalized. The wife cried a lot because the husband is the only one who works. They have 3 kids, who currently attend expensive private middle and high schools. I had to lend the husband my office's oxygen tank because his oxygen level dropped below 80% and the overcrowded hospitals didn't want to admit him. The hospital finally admitted him....he had stayed there for 21 days..... and fortunately, he survived.

Human life is so fragile. I am glad I've saved enough (hopefully) for my kids. If something happened to me (carpal tunnel which prevents me from working, cancer, stroke, or death), my wife would be fine with raising my 2 teenage kids by herself. I have a disability insurance and life insurance ($1 million policy) but these are not enough. It's expensive to live in CA. College tuitions are expensive.

 

[2TH MVR]

If Mike Meru has the rest of his financial life in order he’s “crazy like a fox” as Jim Dahle “WCI” has said. There is something called student loan repayment strategies and for more and more people that kind of strategy is the right call for their situation. Just because you don’t see what happens behind the scenes doesn’t mean they are being irresponsible. You may be putting 60% of your income towards student loans and have a savings rate of 0% while they are putting 10% towards student loans and have a savings rate of 50%...

I'm not sure there is any rational explanation to justify what Dr. Meru did to become an orthodontist. I have no issues with "Student Loan Strategies" as long as it doesn't involve tax payer bail outs. Yes. Gubermant is partially responsible for uncontrolled lending, but Gov't gets it money from regular people who borrowed responsibly. Oops. Politics.

 

[SkinnyT]

$1 Million? Why Dr. Mike Meru is Paying Too Much on Dental School Loans

Here's my response after reading the Wall Street Journal piece about orthodontist Mike Meru with $1 million of student debt.

www.studentloanplanner.com