Retirement

[dent for the win]

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How much are you saving annually in preparation for retirement? Did you pay off student loans before saving? Did you buy a house and practice and then start saving? How do you envision retiring? Will it be a gradual decrease until you sell your practice or will you sell it and then continue as a part time time associate?

So many questions, and each case and person is different, but I think it's worth familairizing aspiring dentists like myself with the long term plans people had/have in this field for their retirement. Please feel free to share your experience with this topic whether or not you have retired.

 

[FanOfCostco]

How much are you saving annually in preparation for retirement? Did you pay off student loans before saving? Did you buy a house and practice and then start saving? How do you envision retiring? Will it be a gradual decrease until you sell your practice or will you sell it and then continue as a part time time associate?

So many questions, and each case and person is different, but I think it's worth familairizing aspiring dentists like myself with the long term plans people had/have in this field for their retirement. Please feel free to share your experience with this topic whether or not you have retired.

I personally try to save 25 dollars every paycheck and put it into a high yield savings account. Then I'll pay bills.

 

[OhioDMD]

I am currently in the process of selling my private practice and retiring after 36 years and can share some insight and hind sight. Keep in mind that what has transpired in the last 30 years may not hold true for the next 30. Three main pieces of advise are start saving early, live below your means and marry wisely.

Compounded interest and the time value of money are in your favor especially if your young and just getting started. Start with something, no matter how small and increase it as your income increases. Take advantage of tax deferred entities. On average your investments should double in value every 3 to 5 years. In hindsight I wish I had been more aggressive and less risk adverse my first 10 years however I do like to sleep at night.

A wise man once told me “ Remember you live off your net not your gross income “ . I am not advocating a pauper lifestyle but keep in mind your choices and priorities may have an effect on your ability to save and plan for retirement. Pay off debt early if you can. I have been debt free for the last 10 years. Imagine the positive cash flow no mortgage payment or office rent (I own my office) creates. It has allowed me to maximize my retirement contributions and start a sizable after tax account.

Aside from health issues one of the largest destroyers of wealth is divorce. The later it happens in your career the worse the effects. Alimony, child support, splitting your assets and attorney fees are all detrimental to an early comfortable retirement. I could give specific examples but this is not the place.

All in all dentistry has afforded me an interesting and challenging career with a much more than average lifestyle. In retrospect are there things I could have done differently? You bet, but hindsight is always 20-20. Remember to not only set goals and plan for the future but enjoy the journey.

 

[alldemteeth]

On average your investments should double in value every 3 to 5 years. In hindsight I wish I had been more aggressive and less risk adverse my first 10 years however I do like to sleep at night.

While I think you give great general advice in your response I'd like to address the above statement. Doubling your investment every 3-5 years implies an annualized return somewhere in the ballpark of 15-25%. Bernie Madoff's infamous Ponzi scheme returned about 10.5% annually for 17 years until he went to prison for like....forever.

The market is quite hot right now and has been since 2009. It's not hard to make money in a bull market so yes, doubling your money every 3-5 years in our current market environment is possible. But to suggest that it is expected to achieve these phenomenal results through the entirety of an investing career is not wise.

This is assuming you are placing a hefty portion of your portfolio in the market. If you are referring to other investment vehicles with the promise of higher returns...they most certainly come with higher risk.

 

[deleted659902]

This is assuming you are placing a hefty portion of your portfolio in the market. If you are referring to other investment vehicles with the promise of higher returns...they most certainly come with higher risk.

I think a lot of dentists and other high-income professionals are actually accredited investors with access to risky investment options such as hedge fund, private equity investments and the likes that their expectation of 20%+ ROIs isn't so unreasonable. Oh and let's not forget the biggest investment for most private practice dentists: their own practice. Starting up with only minimal capital and selling it for 1M+? $$$

 

[alldemteeth]

I think a lot of dentists and other high-income professionals are actually accredited investors with access to risky investment options such as hedge fund, private equity investments and the likes that their expectation of 20%+ ROIs isn't so unreasonable. Oh and let's not forget the biggest investment for most private practice dentists: their own practice. Starting up with only minimal capital and selling it for 1M+? $$$

I defer to the Oracle on this one: Warren Buffett has won his $1 million bet against the hedge fund industry

 

[ysrebob]

How much you need to set aside for retirement each year depends very heavily on how early you can get started saving. This is where going to dental school later in life (non-trad student) takes its toll.

I for one am not counting on seeing a dime from social security. They say that in retirement you can sustainably draw about 4% annually from your savings to live on. So, in rough terms you need to save 25x your annual expenses... again roughly, perhaps you need on the order of a couple million saved to retire comfortably with no pension? You can do the math based on your own needs.

If you start saving early (late 20s), maybe saving 10% of income annually would get you there easily. If you start later, as I did, you will need to sock away a large fraction of your post-tax income every single year to get to the same place at a reasonable age. I work very hard and lately earn a large income nominally, but after the tax people get done wielding their meat cleavers and annual saving goals are funded, live very very modestly. The price of starting D-school later. You can avoid this fate by starting your retirement saving as early as possible, even while still paying off school loans (unless your loan interest is far higher than the investment returns you can obtain).

 

[Saddleshoes]

I am currently in the process of selling my private practice and retiring after 36 years and can share some insight and hind sight. Keep in mind that what has transpired in the last 30 years may not hold true for the next 30. Three main pieces of advise are start saving early, live below your means and marry wisely.

Compounded interest and the time value of money are in your favor especially if your young and just getting started. Start with something, no matter how small and increase it as your income increases. Take advantage of tax deferred entities. On average your investments should double in value every 3 to 5 years. In hindsight I wish I had been more aggressive and less risk adverse my first 10 years however I do like to sleep at night.

A wise man once told me “ Remember you live off your net not your gross income “ . I am not advocating a pauper lifestyle but keep in mind your choices and priorities may have an effect on your ability to save and plan for retirement. Pay off debt early if you can. I have been debt free for the last 10 years. Imagine the positive cash flow no mortgage payment or office rent (I own my office) creates. It has allowed me to maximize my retirement contributions and start a sizable after tax account.

Aside from health issues one of the largest destroyers of wealth is divorce. The later it happens in your career the worse the effects. Alimony, child support, splitting your assets and attorney fees are all detrimental to an early comfortable retirement. I could give specific examples but this is not the place.

All in all dentistry has afforded me an interesting and challenging career with a much more than average lifestyle. In retrospect are there things I could have done differently? You bet, but hindsight is always 20-20. Remember to not only set goals and plan for the future but enjoy the journey.

All the young dentists out there need to print out OhioDMD's post and put it on top of your finacial file!
This is sage advice.
I would add, that the single most important finacial choice a dentist can make is in selecting a spouse.

 

[2TH MVR]

How much are you saving annually in preparation for retirement?
I'm 55 and "semi-retired" I work 3-4 days per week. Everyone has different situations. Obviously you want to save as much as you can.
Did you pay off student loans before saving? Did you buy a house and practice and then start saving?
No. I started with a profit sharing plan in my office. Pre-tax savings before I fully paid off my student loans. As you make more money ... you need these tax saving strategies to conserve wealth. The PSP was in place before I purchased a house.
How do you envision retiring?
Again, everyone is different. I enjoy what I do, so I do not have an exact age where I stop practicing. The KEY is being financially free to do what ever you want and at any age. Life is a journey. I choose to live my life in the present. In other words ... I'm enjoying my life NOW. No one knows the future.
Will it be a gradual decrease until you sell your practice or will you sell it and then continue as a part time time associate?
Again, everyone's situation is different. I chose to sell my ortho practices (I still own the real estate for one office) and work in a dental corp office part time. My stress level went down 100%. I'm enjoying my mid - 50's with my wife and grown up kids. Running around in my sports car. Play golf once a week. Vacations. Etc. Etc. Will I retire ultra wealthy? No. But I will be financially comfortable, happy and have no regrets that I wasted my youthful 50's.

So many questions, and each case and person is different, but I think it's worth familairizing aspiring dentists like myself with the long term plans people had/have in this field for their retirement. Please feel free to share your experience with this topic whether or not you have retired.
Another bit of advice. Connect with a trusted financial planner early on. I've had the same financial planner for my entire career.

 

[charlestweed]

I think a lot of dentists and other high-income professionals are actually accredited investors with access to risky investment options such as hedge fund, private equity investments and the likes that their expectation of 20%+ ROIs isn't so unreasonable. Oh and let's not forget the biggest investment for most private practice dentists: their own practice. Starting up with only minimal capital and selling it for 1M+? $$$

It’s true that I didn’t spend much to setup all 4 of my offices (2 of them are at GP offices, which I paid $0 in construction) but I don't think they will be worth (probably worthless) a lot by the time I retire and try to sell them. Why? Because:

1. When I get older, like most old docs, I won’t have the same level of energy and motivation to work as hard as I do right now because the kids get older and no longer need my financial support and I no longer have debts to pay back. I’ll take more vacations and more days off and spend less time at the office. This “carelessness” will result in more patients leaving the practice for the younger docs, old equipments that are not properly maintained, slow lazy overpaid assistants who don’t care etc.

2. I don’t think any new grads will buy my practice because it has nothing. My low tx fees make it impossible for any new grad to earn a profit. I make money by running my practice the same way the orthos in the 80s, 90s ran theirs (AKA extremely low overhead)….paper charts, $5 appointment book, non digital, no invisalign, alginate impressions etc. The new grads are not trained the same way I was trained 15+ years ago. They need CBCT, intraoral scanners, digital pan/ceph, and a $200-300k state-of-the-art facility. They’ll probably laugh and shake their head when they walk into my office.

3. I don’t think even my own kids (if they decide to pursue ortho) will be interested in taking over my practice. They were born with silver spoons in their mouths. I make money by doing a lot of things by myself to avoid hiring a lot of employees (most are part timers) such as working as an extra assistant, making my own ortho appliances, fixing leaky faucets, sterilizing instruments, sweeping/mopping the floors with my staff etc. My kids are only in their early teen years….I hope I am wrong about them.

When I am ready to retire, I’ll probably try to finish all the cases and close up shop….or ask another new grad ortho to help take over for free because it’s pretty much a worthless practice. That's why I don't believe in purchasing my own office building. I invest my money on residential properties instead.

 

[charlestweed]

I personally try to save 25 dollars every paycheck and put it into a high yield savings account. Then I'll pay bills.

This is too little. I've put away $600 ($300 for each kid) since my youngest one was only 1 year old. 11+ years later, the amount of saving (+ interest) is still under $100k, which is barely enough to put 1 kid in college.

 

[Awarara]

It’s true that I didn’t spend much to setup all 4 of my offices (2 of them are at GP offices, which I paid $0 in construction) but I don't think they will be worth (probably worthless) a lot by the time I retire and try to sell them. Why? Because:

1. When I get older, like most old docs, I won’t have the same kind of energy and motivation to work as hard as I do right now because the kids get older and no longer need my financial support and I no longer have debts to pay back. I’ll take more vacations and more days off and spend less time at the office. This “carelessness” will result in more patients leaving the practice for the younger docs, old equipments are not properly maintained, slow lazy overpaid assistants who don’t care etc.

2. I don’t think any new grads will buy my practice because it has nothing. My low tx fees make it impossible for any new grad to earn a profit. I make money by running my practice the same way the orthos in the 80s, 90s ran theirs (AKA extremely low overhead)….paper charts, $5 appointment book, non digital, no invisalign, alginate impressions etc. The new grads are not trained the same way I was trained 15+ years ago. They need CBCT, intraoral scanners, digital pan/ceph, and a $200-300k state-of-the-art facility. They’ll probably laugh and shake their head when they walk into my office.

3. I don’t think even my own kids (if they decide to pursue ortho) will be interested in taking over my practice. They were born with a silver spoon. I make money by doing a lot of things by myself to avoid hiring a lot of employees (most are part timers) such as working as an extra assistant, making my own ortho appliances, fixing leaky faucets, sterilizing instruments, sweeping/mopping the floors with my staff etc. My kids are only in their early teen years….I hope I am wrong about them.

When I am ready to retire, I’ll probably try to finish all the cases and close up shop….or ask another new grad ortho to help take over for free because it’s pretty much a worthless practice. That's why I don't believe in purchasing my own office building. I invest my money by buying residential properties instead.

did your referring general dentists care you set up shop in the same office as another general dentist?

 

[charlestweed]

did your referring general dentists care you set up shop in the same office as another general dentist?

No, since all of them are my friends, whom I met at the corp offices. When they quit their jobs at the corp offices to setup (or purchase an existing one) their own offices, they refer patients to my offices. I am currently treating the daughter of one of the referring GPs at my GP office location. I treated his older son before that. They don’t mind since I send the patients back to their offices for cleanings, fillings, and extractions.

 

[FanOfCostco]

This is too little. I've put away $600 ($300 for each kid) since my youngest one was only 1 year old. 11+ years later, the amount of saving (+ interest) is still under $100k, which is barely enough to put 1 kid in college.

Yeah I know. But right now I'm just one year out and single. I'll beef it up when I get some of this loan situation taken care of. I figured something is better than nothing

 

[dent for the win]

1. When I get older, like most old docs, I won’t have the same kind of energy and motivation to work as hard as I do right now because the kids get older and no longer need my financial support and I no longer have debts to pay back. I’ll take more vacations and more days off and spend less time at the office. This “carelessness” will result in more patients leaving the practice for the younger docs, old equipments are not properly maintained, slow lazy overpaid assistants who don’t care etc.

When I am ready to retire, I’ll probably try to finish all the cases and close up shop….or ask another new grad ortho to help take over for free because it’s pretty much a worthless practice. That's why I don't believe in purchasing my own office building. I invest my money by buying residential properties instead.

I have a question about how efficient you can be as a dentist after a certain age. Did you find dentists who start having poor eyesight or hand skills that made it difficult to practice? Did you encounter people who had severe back pain after more than 15 years of working in the field?

 

[charlestweed]

I have a question about how efficient you can be as a dentist after a certain age. Did you find dentists who start having poor eyesight or hand skills that made it difficult to practice? Did you encounter people who had severe back pain after more than 15 years of working in the field?

Yes, a lot.

Right after graduation, I was hired by a corp office to replace a 70+ yo orthodontist, who had to miss work serveral times due to his poor health. According to the asssistants, he had multiple eye surgeries. A lot of times he had to let the assistants position the brackets for him....a job that is supposed to be performed by the doctor. The company was afraid of getting sued so they hired me to replace him.

In 2009, I purchased an office from a 60 yo orthodontist. In her office, there was actually a built in twin size bed, which I later tore it down and converted the room into an additional tx room, for her to take a nap. She saw about 8-10 patients per day from 8am-5pm. When I took over, I booked 4-5 times more patients per day and reduced the work days from 16 days/month down to just 6 days/month....and once I got used to the system, I cut down further to only 4 days/month. To be fair, she only had 1 chairside assistant, whom I later fired because she's too slow. I brought in 3 P/T assistants, whose combined salaries are less than what she paid her F/T assistant. I remember when I looked at that practice, a lot of orthos came by (it was an open house day) but no one made an offer because the office was 30+ years old. The seller was actually the 2nd owner of that practice. The office was very low tech (the receptionist still used a typewriter), which I like. And it was in 2009 when the country was still in the recession. I bought it for a very low price.

My wife's former boss had carpel tunnel . He had to hire associate periodontists to work for him so he could claim the disability money from his insurance. He later sold the practice to my wife's co-resident.

I don't know what will happen to me in 5, 10, 15 years from now. Human life is so fragile. I've seen many young dentists, who are only in their 40s, 50s and had to stop working because of carpel turnnel, cancers, and death. This is why I continue to work as hard as I can when I am still able to do so. My kids are still very young.

 

[dent for the win]

Yes, a lot.

Right after graduation, I was hired by a corp office to replace a 70+ yo orthodontist, who had to miss work serveral times due to his poor health. According to the asssistants, he had multiple eye surgeries. A lot of times he had to let the assistants position the brackets for him....a job that is supposed to be performed by the doctor. The company was afraid of getting sued so they hired me to replace him.

In 2009, I purchased an office from a 60 yo orthodontist. In her office, there was actually a built in twin size bed, which I later tore it down and converted the room into an additional tx room, for her to take a nap. She saw about 8-10 patients per day from 8am-5pm. When I took over, I booked 4-5 times more patients per day and reduced the work days from 16 days/month down to just 6 days/month....and once I got used to the system, I cut down further to only 4 days/month. To be fair, she only had 1 chairside assistant, whom I later fired because she's too slow. I brought in 3 P/T assistants, whose combined salaries are less than what she paid her F/T assistant. I remember when I looked at that practice, a lot of orthos came by (it was an open house day) but no one made an offer because the office was 30+ years old. The seller was actually a 2nd owner of that practice. The office was very low tech (the receptionist still used a typewriter), which I like. And it was in 2009 when the country was still in the recession. I bought it for a very low price.

My wife's former boss had carpel tunnel . He had to hire associate periodontists to work for him so he could claim the disability money from his insurance. He later sold the practice to my wife's co-resident.

I don't know what will happen to me in 5, 10, 15 years from now. Human life is so fragile. I've seen many young dentists, who are only in their 40s, 50s and had to stop working because of carpel turnnel, cancers, and death. This is why I continue to work as hard as I can when I am still able to do so. My kids are still very young.

This is definitely intimidating to know about the profession. Knowing what you know now, would you still recommend the profession with the increase in loans and physical toll? Would you have considered becoming a phsyician or physician assitant? And if not for you would you recommend this for your wife?

 

[2TH MVR]

Lets be real. There's plenty of jobs out there that are considerably more physically and mentally demanding than dentistry. Like anything in life. You have to eat well and take care of your body. If you choose not to .... than it doesn't matter what kind of job you have. Stay lean. Strengthen and stretch those lower back areas. Practice ergonomically correct dentistry.

 

[dent for the win]

Lets be real. There's plenty of jobs out there that are considerably more physically and mentally demanding than dentistry. Like anything in life. You have to eat well and take care of your body. If you choose not to .... than it doesn't matter what kind of job you have. Stay lean. Strengthen and stretch those lower back areas. Practice ergonomically correct dentistry.

That's very true, my reservation is with the large increase in the COA while the salary has decreased annually. I just worry how that's going to translate over the lifetime of a career.

 

[321931]

Like anything in life you have to have a goal to actually accomplish something.

If you say I will figure it out later I will be in the job for 30 years... then by year 25 you probably will have no savings and a broken back

If you say in 10 years I want to have an investment portfolio of x amount, a paid off practice and a paid off house... then with hard work and a set goal you will probably achieve it.

Don’t get me started on start up versus acquisition... it can take years to become profitable and those years could of been used investing compound interest and working at your prime making money.

 

[charlestweed]

This is definitely intimidating to know about the profession. Knowing what you know now, would you still recommend the profession with the increase in loans and physical toll? Would you have considered becoming a phsyician or physician assitant? And if not for you would you recommend this for your wife?

Why feel intimidated? These are just the sad truth about old age. Your physical strength, your immune system’s ability to fight against diseases, your eyesight, your heart, every organ in your body get worse when you get older. One poster (Ysrebob?) above correctly stated that you need start your career early and begin to save/invest as early as possible….and I agree with him. The harder you work now, the sooner you can retire. One of my assistants, who is in his early 60s, is still living on paycheck to paycheck. A few times he asked me to pay him in advance because he ran out of cash. You wouldn’t want to be like this assistant when you are his age.

Study hard to get good grades and try to finish college in 4 (or less) years. Don’t waste too much time in college to explore different career options and keep switching to different majors. There is really no ideal job out there…nobody likes working. Any health related profession should give you a good stable long term job, that allows you to support your family and retire comforatably. Set your goal early and work hard to accomplish it. I wanted to be a doctor. Immediately after I took the MCAT for the 2nd time, I realized that I did poorly and I needed to switch plan fast because I didn’t want to waste any year in college. I studied for the DAT exam and took it 3 wks later as a walk-in. I earned my DDS at 26 and ortho certificate at 29. I am 46 now.

I actually have a very easy job. Most of the manual labors are performed by my assistants. This is why I don’t mind traveling to different offices and working on Saturdays and Sundays. I am at work right now....and I have a lot of free time to write this post. I am also on the Orthotown forum (a forum for orthodontists only). Many of my colleagues there feel sorry for me because I have to work so hard to compensate for my low tx fees. I don’t feel sorry for myself. The doctors, pharmacists, PAs, nurses at the hospitals work a lot harder than me. I choose to work hard now because I am still healthy to do so and I want to retire early. I am far ahead many of my colleagues. Many of them are older than me and still have a lot debt to pay back.

Don’t be scared of debt. Having student loan (as long as it is not too high) is actually not a bad thing. It forces to you make wiser decisions….frugal living, working harder, being less picky about the job offers, doing whatever it takes to succeed, low overhead office etc. Facing challenges makes you stronger. If I had rich parents and everything was handed to me, I don’t think would be able to get to where I am today. Being a poor immigrant and having minimum wage jobs during my HS and college years taught me a lot.

Good luck with your decision.

 

[321931]

Charles post about closing up shop about on his Ortho practice does ring true. Most specialty practices just don't have that goodwill attached to it compared to a GP practice. But now we are getting way off tangent.

Have a plan, and have a goal.

The worst plan you can have is "well I will just put it on the back burner, buy a practice, cross my fingers and hope the government forgives my loans." You will most likely end up like one of those 50 year old dentist with student loans still not paid off and a bunch of debt with a hurt back and carpel tunnel surgery.

 

[Munks]

She saw about 8-10 patients per day from 8am-5pm. When I took over, I booked 4-5 times more patients per day and reduced the work days from 16 days/month down to just 6 days/month....and once I got used to the system, I cut down further to only 4 days/month.

Just curious, as I know many orthos have >1 practice/location, how do you set up your schedule with the different practices? I would imagine you don't just go M-T Practice 1, W-R Practice 2, F Practice 3? Because I would think patients at the different practices may need a different day than is available. Instead is it something like Practice 1: Week 1 M-T, Week 2 T-W, Week 3 R-F, something like that? Especially now that the above location is only 4 days/month... is it like Week 1: M, Week 2: T, etc, so that patients have multiple options of days to come in?

 

[Localnative]

Yes, a lot.

Right after graduation, I was hired by a corp office to replace a 70+ yo orthodontist, who had to miss work serveral times due to his poor health. According to the asssistants, he had multiple eye surgeries. A lot of times he had to let the assistants position the brackets for him....a job that is supposed to be performed by the doctor. The company was afraid of getting sued so they hired me to replace him.

In 2009, I purchased an office from a 60 yo orthodontist. In her office, there was actually a built in twin size bed, which I later tore it down and converted the room into an additional tx room, for her to take a nap. She saw about 8-10 patients per day from 8am-5pm. When I took over, I booked 4-5 times more patients per day and reduced the work days from 16 days/month down to just 6 days/month....and once I got used to the system, I cut down further to only 4 days/month. To be fair, she only had 1 chairside assistant, whom I later fired because she's too slow. I brought in 3 P/T assistants, whose combined salaries are less than what she paid her F/T assistant. I remember when I looked at that practice, a lot of orthos came by (it was an open house day) but no one made an offer because the office was 30+ years old. The seller was actually a 2nd owner of that practice. The office was very low tech (the receptionist still used a typewriter), which I like. And it was in 2009 when the country was still in the recession. I bought it for a very low price.

My wife's former boss had carpel tunnel . He had to hire associate periodontists to work for him so he could claim the disability money from his insurance. He later sold the practice to my wife's co-resident.

I don't know what will happen to me in 5, 10, 15 years from now. Human life is so fragile. I've seen many young dentists, who are only in their 40s, 50s and had to stop working because of carpel turnnel, cancers, and death. This is why I continue to work as hard as I can when I am still able to do so. My kids are still very young.

off subject. are you a value oriented investor? You sound like you come from the Ben Graham school of thought. Curious what your investment strategy is. and how you are dealing with this market volatility.

 

[charlestweed]

Just curious, as I know many orthos have >1 practice/location, how do you set up your schedule with the different practices? I would imagine you don't just go M-T Practice 1, W-R Practice 2, F Practice 3? Because I would think patients at the different practices may need a different day than is available. Instead is it something like Practice 1: Week 1 M-T, Week 2 T-W, Week 3 R-F, something like that? Especially now that the above location is only 4 days/month... is it like Week 1: M, Week 2: T, etc, so that patients have multiple options of days to come in?

I schedule my patients base on the days that I don’t work for the corp offices and the availability of my P/T chairside assistants. My patients are super easy…good tx results at low fee are all they care about. The parents love my weekend hours (most ortho offices don’t offer this) because they don’t want their kids to miss schools. I currently work 12 days/month at my own offices:

Office 1: 5 days/month: 1st and 3rd Wednesdays, 1st and 3rd Saturdays, and 1st Sunday. (350 active patients)
Office 2: 4 days/month: 4th Tuesday, 2nd Wednesday, 2nd and 4th Thursdays. (200 active patients)
Office 3: 1.5 days/month: 2nd Sunday, 3rd Wednesday (9am-noon). (120 active patients)
Office 4: 1.5 days/month: 3rd Sunday, 3rd Wednesday (2:30pm-6pm). (120 active patients)

For the 3rd Wednesday of every month, my staff and I work at office #3 in the morning and then travel 25 miles to work at office#4 in the afternoon.

 

[charlestweed]

off subject. are you a value oriented investor? You sound like you come from the Ben Graham school of thought. Curious what your investment strategy is. and how you are dealing with this market volatility.

I am totally clueless about the stock market. My wife and I only invest in rental properties. We happened to graduate at the right time when the real estate market was very hot. In less than 5 years after graduation, I made more than $400k by simply buying and selling our first 2 houses (to upgrade to a bigger house, where we currently live in). We used this money to pay off our $450k student loan. And then in 2008, when the housing market crashed, we purchased 4 single family houses and a 5-unit apartment at very low prices. During these housing bubble years, the banks were very strict but we had no problem getting the loan approvals, thanks to our good stable dental incomes. Now, all these properties are worth nearly 2x as much as when we purchased them. We don’t plan to sell them and continue to collect rent money from our tenants. They will be our retirement incomes…along with our 401k.

 

[yappy]

I recommend reading boglehead guide to investing. It's a great book with sound financial advice. Regarding investing in the market; with automation, globalization, and emerging markets I think that the prudent investor will allocate at least some portion of their wealth in the market. I feel like I must capture some of these gains over the course of my career or I will be crushed by them.

 

[Localnative]

I am totally clueless about the stock market. My wife and I only invest in rental properties. We happened to graduate at the right time when the real estate market was very hot. In less than 5 years after graduation, I made more than $400k by simply buying and selling our first 2 houses (to upgrade to a bigger house, where we currently live in). We used this money to pay off our $450k student loan. And then in 2008, when the housing market crashed, we purchased 4 single family houses and a 5-unit apartment at very low prices. During these housing bubble years, the banks were very strict but we had no problem getting the loan approvals, thanks to our good stable dental incomes. Now, all these properties are worth nearly 2x as much as when we purchased them. We don’t plan to sell them and continue to collect rent money from our tenants. They will be our retirement incomes…along with our 401k.

looked at this for the passive income. timing is everything, landscape is not ripe for this sort of endeavor right now. Learned some basics about fundamental analysis. I target undervalued companies, take positions only in those that pay a nice quarterly dividend.

However the market is extremely volatile right now. Nothing is safe! Would like to get a conversation going with practicing dentists regarding the market. The wealth management guy I hired is basically an insurance salesman who is anything but savvy. Every time I talk to or email him I'm pretty sure he charges me some sort of commission fee.

M

 

[2TH MVR]

looked at this for the passive income. timing is everything, landscape is not ripe for this sort of endeavor right now. Learned some basics about fundamental analysis. I target undervalued companies, take positions only in those that pay a nice quarterly dividend.

However the market is extremely volatile right now. Nothing is safe! Would like to get a conversation going with practicing dentists regarding the market. The wealth management guy I hired is basically an insurance salesman who is anything but savvy. Every time I talk to or email him I'm pretty sure he charges me some sort of commission fee.

M

You're in the wrong forum. You need to ask your questions in a financial forum. Not sure dentists are the wisest financial savvy people in the world. My friend is a professional financial broker who OWNS his own brokerage firm. He sure as hell knows more about financial strategies than I do. We meet every quarter to re-balance my portfolio. He takes a personal interest in my financial well being since we have been friends for the last 30 years. He NEVER suggests get rich schemes to me. Just basic financial products. His fee is tied to my total investment value.

I also work with a dentist/physician specific tax accountant. Been with his firm for the last 30 years also. He also OWNS his accounting firm. He's conservative (no audits last 30 years) and works every angle that is available for tax savings.

Point is. Seek trusted financial specialists to help you with your financial strategies. I agree with you that I wouldn't trust some employee who works at Charles Schwab, or Edward Jones, etc.

 

[Localnative]

You're in the wrong forum. You need to ask your questions in a financial forum. Not sure dentists are the wisest financial savvy people in the world. My friend is a professional financial broker who OWNS his own brokerage firm. He sure as hell knows more about financial strategies than I do. We meet every quarter to re-balance my portfolio. He takes a personal interest in my financial well being since we have been friends for the last 30 years. He NEVER suggests get rich schemes to me. Just basic financial products. His fee is tied to my total investment value.

I also work with a dentist/physician specific tax accountant. Been with his firm for the last 30 years also. He also OWNS his accounting firm. He's conservative (no audits last 30 years) and works every angle that is available for tax savings.

Point is. Seek trusted financial specialists to help you with your financial strategies. I agree with you that I wouldn't trust some employee who works at Charles Schwab, or Edward Jones, etc.

thanks for the sage advice
you are very fortunate to have a trustworthy "team"

 

[charlestweed]

looked at this for the passive income. timing is everything, landscape is not ripe for this sort of endeavor right now. Learned some basics about fundamental analysis. I target undervalued companies, take positions only in those that pay a nice quarterly dividend.

However the market is extremely volatile right now. Nothing is safe! Would like to get a conversation going with practicing dentists regarding the market. The wealth management guy I hired is basically an insurance salesman who is anything but savvy. Every time I talk to or email him I'm pretty sure he charges me some sort of commission fee.

M

The way I look at this is I only need to put 20-30% down (only $50-100k) to buy a house now, let the tenants pay the mortages + property tax+ property insurance for me.…and 20-30 years later when I retire, I’ll have 100% ownership of the house. It’s ok if these houses don’t appreciate in value….luckily, all of mine have almost doubled. It’s a very safe way to make/save money for future retirement. I should have listened to my uncle, who is a physician and has made his fortune in real estate invesment, earlier. I didn’t start this real estate thing until 2008 when I could have done so 4-5 years earlier. I was preoccupied with paying off the student loans.

 

[dent for the win]

Why feel intimidated? These are just the sad truth about old age. Your physical strength, your immune system’s ability to fight against diseases, your eyesight, your heart, every organ in your body get worse when you get older. One poster (Ysrebob?) above correctly stated that you need start your career early and begin to save/invest as early as possible….and I agree with him. The harder you work now, the sooner you can retire. One of my assistants, who is in his early 60s, is still living on paycheck to paycheck. A few times he asked me to pay him in advance because he ran out of cash. You wouldn’t want to be like this assistant when you are his age.

Study hard to get good grades and try to finish college in 4 (or less) years. Don’t waste too much time in college to explore different career options and keep on switching to different majors. There is really no ideal job out there…nobody likes working. Any health related profession should give you a good stable long term job, that allows you to support your family and retire comforatably. Set your goal early and work hard to accomplish it. I wanted to be a doctor. Immediately after I took the MCAT for the 2nd time, I realized that I did poorly and I needed to switch plan fast because I didn’t want to waste another year in college. I studied for the DAT exam and took it 3 wks later as a walk-in. I earned my DDS at 26 and ortho certificate at 29. I am 46 now.

I actually have a very easy job. Most of the manual labors are performed by my assistants. This is why I don’t mind traveling to different offices and working on Saturdays and Sundays. I am at work right now....and I have a lot of free time to write this post. I am also on the Orthotown forum (a forum for orthodontists only). Many of my colleagues there feel sorry for me because I have to work so hard to compensate for my low tx fees. I don’t feel sorry for myself. The doctors, pharmacists, PAs, nurses at the hospitals work a lot harder than me. I choose to work hard now because I am still healthy to do so and I want to retire early. I am far ahead many of my colleagues. Many of them are older than me and still have a lot debt to pay back.

Don’t be scared of debt. Having student loan (as long as it is not too high) is actually not a bad thing. It forces to you make wiser decisions….frugal living, working harder, being less picky about the job offers, doing whatever it takes to succeed, low overhead office etc. Facing challenges makes you stronger. If I had rich parents and everything was handed to me, I don’t think would be able to get to where I am today. Being a poor immigrant and having minimum wage jobs during my HS and college years have taught me a lot.

Good luck with your decision.

Thank you this was exactly what I needed to hear!

 

[TheSuccessfulDentist]

I think real estate can be a great way to invest. There are significant tax advantages to it. However, I think for the vast majority of people, investing wisely in the stock market can also be effective in growing wealth while at the same time requiring a significantly smaller investment of your personal time. I have had good success in real estate, but it has been more time intensive than my investments in the stock market.

I think John Bogle has it right. Low cost index investing should be the primary mode of investing in the stock market for most people. Warren Buffett (the greatest value investor of all time) agrees and so do most academic and real world experts.

Take full advantage of available tax-advantaged accounts like Roth/401k etc, use low cost index funds, don't invest money you might need within the next 5 years, and don't try to time the markets (meaning invest as much as you can as frequently as you can and don't sell until you retire). For most dentists who have a decent income this strategy will allow you to retire comfortably while spending very little time actually doing the investing.

The most common mistakes I see (and I have made them myself) are waiting too long to get started investing, and not having a well-thought-out game plan for the short and long term.

Charlestweed, your real estate investment strategy seems solid. One concern I would have is that it sounds like you aren't very diversified--meaning geographically in terms of real estate investments and also in terms of asset classes. Since 2009 the era of low interest rates has caused all asset classes to rise in value, but this won't last forever. Things will start to get a little more volatile and less coordinated across asset classes. Diversification hasn't been important over the past 10 years but the advantages will become more apparent when a recession hits, or there is an unexpected shock to the financial markets or real estate or whatever.

 

[TheSuccessfulDentist]

You're in the wrong forum. You need to ask your questions in a financial forum. Not sure dentists are the wisest financial savvy people in the world. My friend is a professional financial broker who OWNS his own brokerage firm. He sure as hell knows more about financial strategies than I do. We meet every quarter to re-balance my portfolio. He takes a personal interest in my financial well being since we have been friends for the last 30 years. He NEVER suggests get rich schemes to me. Just basic financial products. His fee is tied to my total investment value.

I also work with a dentist/physician specific tax accountant. Been with his firm for the last 30 years also. He also OWNS his accounting firm. He's conservative (no audits last 30 years) and works every angle that is available for tax savings.

Point is. Seek trusted financial specialists to help you with your financial strategies. I agree with you that I wouldn't trust some employee who works at Charles Schwab, or Edward Jones, etc.

I think there is nothing wrong with using an advisor to do your investing if that's where you feel comfortable. BUT, I also believe that with a modest investment of your time up front, that you can learn all you need to know about investing in order to handle it yourself and save the advisor's fees. If you are paying an AUM fee then this can have a significant, negative effect on the rate at which your investments grow. The key is to get the best, risk-adjusted return on your investments while keeping fees as low as possible. Fees eat away at the rate at which your money compounds over time. This can easily mean hundreds of thousands of dollars less in your accounts when it comes time so retire.

I have found that as a business owner a good accountant can be really helpful. I don't mind paying my accountant to help track my business finances and to help me minimize taxes. I don't have the resources to do all of that myself. Investing in the stock market is much, much easier and more straightforward than doing business accounting.

 

[DocJL]

Haven't been on the forums for awhile.

I see CharlesTweed is still active, and still providing some of the best advice - we would all do well to read his posts and adapt his advice to our own situations.

Like most dentists/doctors (read "The Millionaire Next Door"), once my income went up, so did my spending habits. My first large civilian paycheck after leaving military dentistry went towards a brand new $55k sports car.

So stupid. I still can't believe I did that.

From the time I graduated always put whatever the max was in IRA's, and then later in my 401k. 20 years later, when I actually realize how little Social Security will pay, and how expensive it will be to maintain the same standard of living in retirement, I am trying to catch up, so on TOP of my full 401k contribution, I am putting away at least $10k a month.

The only advice I can offer is to save as MUCH as you can as EARLY as you can, and do what you can to maximize your income as early in your career as possible, to help you with this.

There really is no magic bullet.