Post dental school concerns...

[Generallee]

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Hello everyone,

I was wondering if anyone else has the same concerns as I do after I graduate from dental school. I shadowed a dentist today and my impression from what he was saying is that as a General Practice dentist you are always going to be in debt. He stated that after school, you have school loans. Then, you will be in the hole at least 400K (if you start own practice) for equipment purchases. In addition, technology is so fast that you are constantly purchasing new equipment to stay current. Then, he said that since you are just starting, the finances are not all there yet and that'll put a damper on your debt. I don't know, but in a way I feel he was just trying to be honest with me that there are lots of things to consider before going into dentistry. Could anyone give any additional insight as to how long you really will be in debt? Will it be your whole career? I just can't picture that to be the case.....but what do I know, I'm not a dentist...

What is a realistic figure of debt? Overhead?

THanks!

 

[ItsGavinC]

How long you will be in debt will depend on how large your debt load is, and how quickly you pay back your loans.

I plan on being in debt for a long time if interest rates stay good. IF they stay low, then a 30-year repayment is probably smart for somebody in my situation.

The thought that "you are always going to be in debt" is ridiculous. Some will be in debt for a while, and some for only a couple of years. Some won't be in debt at all--but few will ALWAYS be in debt.

If they are ALWAYS in debt then they have poor management skills and have made purchases they shouldn't have. Not everybody has to run out and purchase a practice right away.

 

[2thDk]

I will be 33 when I matriculate...I don't want to be in debt too long, when will I be able to retire?

 

[Dr.BadVibes]

Simple solution....goto the cheapest school possible....

 

[3rdMolarRoller]

there is good debt and bad debt

Good debt makes you money and you have to set your own desired rate of return: Mine is 12% but my avg actual return is much higher. So set a rate at which you will not invest unless you get a requried rate of return (although noted you don't always get what your proforma states). For instance, you mention "always" buying new equipment. If you "need" to lets say buy a new laser for $45k and lets just say its monthly expense to operate and pay the loan are $1300. But if this new laser brings in $2000 in addtional revenue....well you are golden my friend and that debt just paid it self back...more than the 12% I needed

Bad debt is something like consumer debt that screws you left and right.

Its all busniess management, hence why I went for an MBA before dental school

If your dentist is complaining about debt, most likely he is a bad business manager and I suggest you shadow someone else for a different view

 

[Mo007]

I think there will be plenty of help and support from institutions such as banks to take care of your after schools hussles, simply because they know your potentials of making good income if you get on your feet. The debt will take care of itself, if you manage it in a specific schedule. Schools will also be there to guide you to tackle the hassles ahead...

I think the average new dentists should worry about where to practice 1st, and where they see themselves in the next 3-5 years - possibly a period to prepare to be a solo, or group owned office. Dentistry is a field of business, I guess some personal finance course might be needed for those who are not sure what to do with their educational/professional debt. I am actually taking "Personal Finance" course this quarter 😀. Its fun, and you will feel more confident about your financial future.

 

[Dr.BadVibes]

Goto the cheapest school possible....you can do all the things that Broc said, but with half the debt by going to a cheaper school......

 

[ItsGavinC]

Goto the cheapest school possible....you can do all the things that Broc said, but with half the debt by going to a cheaper school......

Needless to say, while that works out for some, it isn't the right choice for everybody across the board.

 

[Generallee]

Thanks guys,

I knew that didn't sound right... I mean, why would there be so many people interested in becoming a dentist if you never get out of debt? Just doesn't make sense. I'm hoping to possibly work as an associate for about 5 years to pay off school debt, then open a practice. Then work for another 5 years to pay off the equipment debt and the rest of the time I'm working, is money saved for retirement! What are some of your guys' plans after dental school? How will you approach paying off debt, etc? To practice or to work as an associate? The Dr. I shadowed also made it sound like General Practice is so so hard. He says he puts in 10-12 hours a day. If he could go back and go into a specialty then he would do that. I kind of wanted to go into general practice but after I met with him, he made me think twice about it....What are you guys going to do and why?

Peace,

Generallee

 

[LestatZinnie]

Thanks guys,

I knew that didn't sound right... I mean, why would there be so many people interested in becoming a dentist if you never get out of debt? Just doesn't make sense. I'm hoping to possibly work as an associate for about 5 years to pay off school debt, then open a practice. Then work for another 5 years to pay off the equipment debt and the rest of the time I'm working, is money saved for retirement! What are some of your guys' plans after dental school? How will you approach paying off debt, etc? To practice or to work as an associate? The Dr. I shadowed also made it sound like General Practice is so so hard. He says he puts in 10-12 hours a day. If he could go back and go into a specialty then he would do that. I kind of wanted to go into general practice but after I met with him, he made me think twice about it....What are you guys going to do and why?

Peace,

Generallee

You know what- YOU NEED TO SPEND MONEY TO MAKE MONEY!!!

Every type of business will take a few years to break even- nobody sets shop and then see a personal profit the next day. When people spend hundreds of thousand of dollars opening restaurants, stores, medical offices, it will take time to just even break even, i.e. be out of debt, and then you can talk about making profit. Such is the nature of business. Sometimes you may not make back the money you invested initially, and sometimes it'll take a long time to break even.

 

[3rdMolarRoller]

Thanks guys,

Then work for another 5 years to pay off the equipment debt and the rest of the time I'm working, is money saved for retirement! What are some of your guys' plans after dental school?

Very poor plan unless you are paying a VERY HIGH interest rate... a rate higher than your returns!

Lets think about this: By the time you get out, lets do a worst case here, your student loans will be at the cap of 8.5%. This means prime rate is high and usually means rate's of return are higher (if not inflation would eat us alive).

So you are working hard to pay down this debt so you don't pay 8.5% for 30 years and then when you are done you invest after 10 years

While I will pay my debt slowly and invest my funds and lets just say its my current 12% return (which is by the way what you should get in the stock market if you leave your money long term...bec 12% is the avg long term return in the stock market). I am still ahead 4% and you are now behind me 4%

and here is the kicker. That 4% savings I have over you is earning compound interest (your best friend) and after ten years I would have accumulated a substanial wealth while you are just begining.

You will never regain those 10 years of lost compound...a very major and sad loss

 

[Generallee]

Very poor plan unless you are paying a VERY HIGH interest rate... a rate higher than your returns!

Lets think about this: By the time you get out, lets do a worst case here, your student loans will be at the cap of 8.5%. This means prime rate is high and usually means rate's of return are higher (if not inflation would eat us alive).

So you are working hard to pay down this debt so you don't pay 8.5% for 30 years and then when you are done you invest after 10 years

While I will pay my debt slowly and invest my funds and lets just say its my current 12% return (which is by the way what you should get in the stock market if you leave your money long term...bec 12% is the avg long term return in the stock market). I am still ahead 4% and you are now behind me 4%

and here is the kicker. That 4% savings I have over you is earning compound interest (your best friend) and after ten years I would have accumulated a substanial wealth while you are just begining.

You will never regain those 10 years of lost compound...a very major and sad loss

See, this is why I raised the concern....so, i can get some other insight. 🙂

Thanks for the insight

 

[Dr.BadVibes]

Thanks guys,

I knew that didn't sound right... I mean, why would there be so many people interested in becoming a dentist if you never get out of debt? Just doesn't make sense. I'm hoping to possibly work as an associate for about 5 years to pay off school debt, then open a practice. Then work for another 5 years to pay off the equipment debt and the rest of the time I'm working, is money saved for retirement! What are some of your guys' plans after dental school? How will you approach paying off debt, etc? To practice or to work as an associate? The Dr. I shadowed also made it sound like General Practice is so so hard. He says he puts in 10-12 hours a day. If he could go back and go into a specialty then he would do that. I kind of wanted to go into general practice but after I met with him, he made me think twice about it....What are you guys going to do and why?

Peace,

Generallee

your plan sounds great if you plan on not having a family and go childless for a while....im assuming you'd like to buy a car and house one day, and possibly take a vacation here and there.....my point? Decrease your time frame, and goto the cheapest school possible so you can use the money saved for the things Ive mentioned....