Smart/Thrifty Personal and Business Finance Decisions

[Cold Front]

Just curious what some of you, who are either dental associates or practices owners, are doing for smart personal and/or business decisions. Please share anything thrifty or smart decisions that you’ve made in the past/doing now/plan to?

I will start with one of mine.

I have an AMEX Business Platinum card that I use for all personal and business purchases. It has some really cool benefits, but the biggest benefit is that it allows me to earn 1.5X Membership Rewards points per dollar spent on any purchase of $5,000 or more. So if I use the card for a $5,000+ purchase/transaction, I get 7,500 points.

I have been using the card for all my practice expenses (utilities, supplies, vendors, equipment purchases, etc), building expenses (maintenance, property taxes, etc) and personal (food, gas, utilities, IRS/state/city income taxes, travel, etc). When all these expenses are add up with the 1-1.5x membership rewards, I earn somewhere between 1-1.2M points a year. Also, my Business card reward points are not taxable - the business expenses on the card themselves are tax deductible, the personal expenses however are subject to taxes - but not on the points earned on the personal expenses.

Let’s say if I hypothetically use all the points for travel, 1.2M points = $12,000 worth of air travel a year. Plus, I would get 35% of the points back if I fly with a preferred airline, which means my flights would really cost me 780k points or $7,800 with the 35% refund.

Luckily, I’m not much of a traveller lately, but over the next 5-10 years, I should be able to collect close to 10M points with the AMEX card (unless there is a change in points policies) - which would allow me to use them for (if I choose to) a 3-4 months world cruise - visiting over 100 of the world’s greatest cities, just using points.

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[Not_A_Doc]

THIS is awesome. Keep em coming.

 

[charlestweed]

I am not really into traveling because I don’t want to visit a country that is poorer than the US. My kids are very busy taking AP classes and studying for the SAT and ACT so I can only travel during the summer time. I currently use Capital One Business Visa card that gives me 2% cash back. And this is the total cash back amount I got in 2019:

I also have another personal BofA Visa card that gives me 1.75% cashback on all transactions and 3% for online shopping. And this is what I got last month:

 

[charlestweed]

Instead of buying a fancy $300k car like a Ferrari, I bought my very first investment property for $295k in 2008. And I paid it off in 4 years. The tenant currently pays me $2695/month in rent for this property. With this passive income, I can lease 2 new cars every 3 years for the rest of my life. The lease payment for my wife’s Tesla Model X (a $98k car) is $1198.06/month.

I paid $44k for the solar panels on my roof top. With the government incentive and tax credit, the net cost was about $33k. The system should pay for itself in 7-8 years. It’s been 6 years. So in 1-2 more years, I should get free electricity for as long as I stay in this house.

 

[Cold Front]

I paid $44k for the solar panels on my roof top. With the government incentive and tax credit, the net cost was about $33k. The system should pay for itself in 7-8 years. It’s been 6 years. So in 1-2 more years, I should get free electricity for as long as I stay in this house.

Charles, you are a smart man!

I was listening to NPR radio on my way to work this morning, and they said there is a new mandatory solar panel law for all new homes in California now. This will drive up the price of solar panels in the short term.

I live in a (4-5 months) winter state, and I’m considering installing solar panels at my commercial buildings, and hope I can the ROI to be no more than 6-8 years like yours. The 10 tenants in those buildings can eventually pay me for the electricity - an average of about $400/month per tenant - so the ROI can be sooner, I just didn’t do all the maths yet. I have been delaying this decision for couple of years now, so the price of solar panels can come down. I think I will just do them this year.


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[ToothJockey]

Charles, you are a smart man!

Not to mention Charles also charges his Teslas with that same free electricity.

Charles is a smart man indeed

 

[Cold Front]

Not to mention Charles also charges his Teslas with that same free electricity.

Charles is a smart man indeed

That too. Utility prices will go up in the future, projected at 2%/year, due to old infrastructure.


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[charlestweed]

Not to mention Charles also charges his Teslas with that same free electricity.

Charles is a smart man indeed

The solar pannels only generate enough electricity to run the AC and other household appliances. So in 1-2 years, I'll save around $350-400 every month for not having to pay to run the AC in my house. I have to pay for charging my 2 Teslas at home. The cost per mile is around 5 cents, which is less than 1/3 the price of gasoline. The cost to maintain the Tesla during the first 3 years is zero. By the time the car is due for maintenance service, I give it back to Tesla and lease another new car with new warranty and fresh battery pack. The only downside is I have to pay much higher insurance premiums.....$2,900 for every 6 months for the 2 Teslas😱.

 

[Cold Front]

The only downside is I have to pay much higher insurance premiums.....$2,900 for every 6 months for the 2 Teslas😱.

You pay 2 Tesla auto insurance at $2,900/6 months?

I pay a Porsche macan turbo and Merc G wagon at $600/6 months.

That’s a big difference. Why is Tesla insurance so high?


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[TanMan]

The solar pannels only generate enough electricity to run the AC and other household appliances. So in 1-2 years, I'll save around $350-400 every month for not having to pay to run the AC in my house. I have to pay for charging my 2 Teslas at home. The cost per mile is around 5 cents, which is less than 1/3 the price of gasoline. The cost to maintain the Tesla during the first 3 years is zero. By the time the car is due for maintenance service, I give it back to Tesla and lease another new car with new warranty and fresh battery pack. The only downside is I have to pay much higher insurance premiums.....$2,900 for every 6 months for the 2 Teslas😱.

Look for an electric plan that has free nights. Works well in tandem with solar panels. Although cost per kW is higher on daytime, solar panels will offset that and you can use more at night time to charge your vehicles.

 

[charlestweed]

You pay 2 Tesla auto insurance at $2,900/6 months?

I pay a Porsche macan turbo and Merc G wagon at $600/6 months.

That’s a big difference. Why is Tesla insurance so high?


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$2,914.76, to be exact. Everything in CA is expensive. Car insurance is no exeption. And it only covers up $250k/500k. I have to buy an additional umbrella policy that covers up to $1million. Both my wife and I have good driving records. It's expensive for Tesla because the body is made of aluminum, which is very expensive to replace. And the parts are not readily available. Some Tesla owners said that they have to drive a rental car for 1-2 months while waiting for Tesla parts to arrive to the body shops.

 

[charlestweed]

Look for an electric plan that has free nights. Works well in tandem with solar panels. Although cost per kW is higher on daytime, solar panels will offset that and you can use more at night time to charge your vehicles.

There is no such free plan here in CA. The lowest plan that is offer by Edison (my electric utility company) is 13 cents per Kw at night. Since so many CA homeowners installed solar pannels in recent years, Edison moved the peak period from 12noon-6pm (a period when you get the highest solar generation) to 4pm-9pm. I installed mine 6 years ago so I am still on their cheap grandfther plan. I think in 2022, I will be forced to move to their new plan. Just like other big corporations, these ultility companies always try to maximize their profits.

The good thing is there is a free Tesla supercharger near where I work.

 

[Cold Front]

$2,914.76, to be exact. Everything in CA is expensive. Car insurance is no exeption. And it only covers up $250k/500k. I have to buy an additional umbrella policy that covers up to $1million. Both my wife and I have good driving records. It's expensive for Tesla because the body is made of aluminum, which is very expensive to replace. And the parts are not readily available. Some Tesla owners said that they have to drive a rental car for 1-2 months while waiting for Tesla parts to arrive to the body shops.

I was seriously considering Tesla to be thrifty for my gas expenses.... but I didn’t know about the high insurance premium that comes with the car. That’s going to give me a long pause now. I currently love my cars and I guess it will be cheaper to keep them than get a Tesla.


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[charlestweed]

I was seriously considering Tesla to be thrifty for my gas expenses.... but I didn’t know about the high insurance premium that comes with the car. That’s going to give me a long pause now. I currently love my cars and I guess it will be cheaper to keep them than get a Tesla.


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Yeah, it costs 2x as much to insure a Tesla. I remember when I drove the Mercedes S550 and CL550, I had to pay $300-500 every 10-13k miles for maintenance services, $800 for spark plug replacements, $1000 for brake pad replacements etc. When I drove the BMW cars, my neighbor thought that I worked for BMW because they saw me driving a different BMW every month. I had to explain to my neighbor that those were service loaner cars because the car kept giving me problems and I had to bring it to the BMW shop for repairs. With the Teslas, I don't have to worry about any of these anyoing maintenance services.

 

[2TH MVR]

Routinely check your credit card processing fees. I remember not accepting American Express cards or other high reward cards. Even though these fees are tax deductible as an office expense .... Your take home profit is lower when patients use these cards.

@charlestweed probably already know this, but I used to buy high speed handpieces from a company in China. I could get 10 handpieces for $100. I initially bought these thinking they will only last a few months, but then I could just toss them in the trash. Heck. Those handpieces lasted for 6-12 months.

Shop your office insurance policies annually. I was always looking for better premiums.

Lease your car for office use. Easier for the acct to write this off vs. an owned work car.

Own your own real estate that houses your practice. Equity and control of your monthly mortgage expense. Set up a separate LLC for your real estate.

I paid my acct a monthly fee. Therefore I was not nickeled and dimed for every phone call. I called him alot. Quarterly meetings and all. Always tax planning.

In house payroll.

I paid all my bills and entered in the daily deposits. QuickBooks. Do this and you will always know where your $$ is going.

Obviously pay off your office credit card every month to not pay fees.

I use a trusted financial planner. Same person for the last 27 years. He owns his own brokerage and has been invaluable. He's a personal friend.

If you have an office employee retirement plan. Watch out for those third party administrator fees.

Have a trusted IT guy.

Learn some basic maintenance stuff to take care of your equipment, etc. I could fix just about everything.

 

[TanMan]

Just curious what some of you, who are either dental associates or practices owners, are doing for smart personal and/or business decisions. Please share anything thrifty or smart decisions that you’ve made in the past/doing now/plan to?

I will start with one of mine.

I have an AMEX Business Platinum card that I use for all personal and business purchases. It has some really cool benefits, but the biggest benefit is that it allows me to earn 1.5X Membership Rewards points per dollar spent on any purchase of $5,000 or more. So if I use the card for a $5,000+ purchase/transaction, I get 7,500 points.

I have been using the card for all my practice expenses (utilities, supplies, vendors, equipment purchases, etc), building expenses (maintenance, property taxes, etc) and personal (food, gas, utilities, IRS/state/city income taxes, travel, etc). When all these expenses are add up with the 1-1.5x membership rewards, I earn somewhere between 1-1.2M points a year. Also, my Business card reward points are not taxable - the business expenses on the card themselves are tax deductible, the personal expenses however are subject to taxes - but not on the points earned on the personal expenses.

Let’s say if I hypothetically use all the points for travel, 1.2M points = $12,000 worth of air travel a year. Plus, I would get 35% of the points back if I fly with a preferred airline, which means my flights would really cost me 780k points or $7,800 with the 35% refund.

Luckily, I’m not much of a traveller lately, but over the next 5-10 years, I should be able to collect close to 10M points with the AMEX card (unless there is a change in points policies) - which would allow me to use them for (if I choose to) a 3-4 months world cruise - visiting over 100 of the world’s greatest cities, just using points.

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I love the Amex Platinum card for its benefits and flexibility. I am diversified with the Chase UR/Citi TYP programs as well, but Amex is my go-to card. The great thing about the Pay with points is definitely the 35% rebate, but I believe they capped that at 500k. Pay with points is definitely the most flexible way of getting a ticket for cheap, but another method that I find works well is using transfer partners such as Aeroplan and ANA. You can sometimes score F/J tickets for a relatively low amount of points. At this point in time, I end up using my points to fly my parents whereever they want to go by transfering to FF programs and the conversion is a lot better (usually yielding at least 10 cents/point). I refuse to use my points for domestic flights, since the cost/points is usually a poor value (except in some Transcon F scenarios).

However, the biggest benefit I find to the Amex Plat is actually their IAP (International Airline Program). I save about 2-3k per flight (5-6k total per flight) w/ my gf when I fly abroad. They used to have the 2 for 1 sale, but I find that I'm saving more money with the new IAP.

Edit: I forgot to mention, if you do a lot of advertising/social media, get the amex gold for 4x points.

Routinely check your credit card processing fees. I remember not accepting American Express cards or other high reward cards. Even though these fees are tax deductible as an office expense .... Your take home profit is lower when patients use these cards.

This was true with American Express, but I find that other cards are starting to creep up in fees as well. However, if given the choice of accepting CCs v. Carecredit or other 3rd party financing, I'd take a credit card anyday. The one thing about Amex card holders is that they tend to have more money/resources due to the more stringent selection criterias (that and Chase Sapphire Reserve) and willing to pay more upfront. I see credit card fees as a way to shift the risk of default from us (the provider) to the credit cards, but make sure we are not left holding the bag. I'm sure I can make up 2-3% in other ways too (that I will not discuss here). I have had an unscrupulous patient do a chargeback one time, I had my staff send out all our documentation and it was reversed. We make sure to scan photo ID, take signatures, financial agreements, documents, xrays, preop/postop photos, etc... We've gotten to the point where everything is paid or getting paid and we have no use for a collection agency.

 

[Cold Front]

Lease your car for office use. Easier for the acct to write this off vs. an owned work car.

I own 2 cars (no lease) and I pay $1,450/mo or $17,400/yr in payments.

I own 5 businesses (offices and buildings) with physical locations, and my accountant and I write-off daily mileage (about 50 miles total) between the 5 locations (to check on the property, mail, deliveries, tenants, etc) - yes, 7 days a week (350 miles/week), 365 days of the year (18,250 miles/year). Plus I do regional driving for CE courses twice a year - another 1,500 miles a year. So a total of about 20,000 miles a year. The IRS allows 58 cents per business miles driven to be expensed out through the business - which gives me about $12,000/yr auto related expenses against my $17,400/yr payments for my 2 cars.

I will pay off my cars this year, so the $12,000/yr business miles credit will continue as an expense against my taxes - with no actual money going out for car payments. An auto lease would not allow me to do that... you can’t get the business miles and the lease payments write-off together. It’s either one or the other, and money will always go out with a lease.


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[Cold Front]

The great thing about the Pay with points is definitely the 35% rebate, but I believe they capped that at 500k.

They raised the rebate to 1-3 million couple of years ago - for those who spend $1M-$3M a year on their card.

All About The Business Platinum Card® from American Express

The Amex Business Platinum Card is a premium card that charges a high membership fee but can offer $1,400+ in annual value. Is it worth it?

awardwallet.com

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[TanMan]

They raised the rebate to 3 million couple of years ago.

All About The Business Platinum Card® from American Express

The Amex Business Platinum Card is a premium card that charges a high membership fee but can offer $1,400+ in annual value. Is it worth it?

awardwallet.com

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Nice - great to know! Now if only I can get Business Centurion for the 50% rebate. My spend is not high enough to qualify for the business centurion and the personal centurion has limited benefit except for the private suite membership.

 

[Cold Front]

Nice - great to know! Now if only I can get Business Centurion for the 50% rebate. My spend is not high enough to qualify for the business centurion and the personal centurion has limited benefit except for the private suite membership.

Nice. How did you get the invite for the personal centurion? I’m still waiting for mine. lol

The platinum and the centurion have about 90% same benefits, unless one really cares about the centurion status symbol - which in my opinion is not worth the $10,000 initial fee and $5,000 annual fee. That’s steep!


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[2TH MVR]

Nice. How did you get the invite for the personal centurion? I’m still waiting for mine. lol

The platinum and the centurion have about 90% same benefits, unless one really cares about the centurion status symbol - which in my opinion is not worth the $10,000 initial fee and $5,000 annual fee. That’s steep!


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Geez. I brought up $10 handpieces and you guys are discussing $10,000 initial fee and $5000 annual fee CC. How about bringing the tips back to our lowly level? lol. 😀

 

[Cold Front]

Geez. I brought up $10 handpieces and you guys are discussing $10,000 initial fee and $5000 annual fee CC. How about bringing the tips back to our lowly level? lol. 😀

I don’t have the “Centurion” card, so I’m not paying those ridiculous fees.


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[Debt Free DDS]

Spend 40% of my income on building wealth (investing or debt repayment.
Don't have a loan on anything except my practice and home. I plan to try and pay those off fast and never have any debt again. I don't buy fancy cars.
I play the credit card game hard. Get lots of free travel. Also, our cash back card has paid for all of Christmas the past 4 years.

 

[2TH MVR]

How about the old saying: "If it flies, floats or fornicates ..... cheaper to rent than buy". 😱

 

[TanMan]

1-1.2M points/year is incredible, but the expenses paid with that card must be somewhere between 800k-1M? Is that normal for a business owner? It seems high to me.

It's not that much if you're spending into the 3-5x bonus points categories. My ad spend alone is sufficient to get 600k in bonus points. On top of business flights @ 5x, they add up quickly. I got 100k alone from one flight, lol.

 

[Cold Front]

1-1.2M points/year is incredible, but the expenses paid with that card must be somewhere between 800k-1M? Is that normal for a business owner? It seems high to me.

I use my AMEX card for paying my 3 offices expenses - and just recently for my buildings property taxes, my residential home property taxes, my IRS taxes, my state and city taxes... I think I will get 2M+ points in 2020 and for each year after that.


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[P7898]

What do you all think about buying commercial real estate with a group of 3 people?

 

[laundry]

What do you all think about buying commercial real estate with a group of 3 people?

Why not do it alone?

 

[charlestweed]

What do you all think about buying commercial real estate with a group of 3 people?

That’s what my sister did. She bought a multi-million dollar commercial building with 17 other doctors. Our uncle, who is a physician and also a very successful investor, put in the largest percentage of the down payment. At that time, my sister was just a recent grad and she could only afford to put in $100k. Every month, our uncle wrote her a $1000 check…..it’s the rent money from the tenants. The building was later sold to an investor from Hong Kong for 4x as much as the original purchase price. So my sister made $300k for doing nothing. Our uncle managed everything.

I had never thought about investing in real estates. I tried to pay down the debts as much as I could. Until one day, this same uncle told me at a family gathering that I should start investing. He told me “if you don’t invest now, you will end up retiring with just a house, a car, and nothing else.” A month later, I took his advice and bought my very first investment home for $295k. It was during the housing crisis in 2008. This property is now worth more than $550k. My uncle probably doesn’t remember what he told me on that day but his advice helped me reach my retirement goal a lot faster. I am not a big risk taker like my uncle. I bought small houses, let the tenants help pay the mortages/property taxes, and then I tried to pay each of these properties off in a few years. That’s why I am not rich like my uncle.

 

[P7898]

Why not do it alone?

The cost of the down payment. They usually want 20% so your insurance for your loan doesn't become crazy expensive.

 

[P7898]

That’s what my sister did. She bought a multi-million dollar commercial building with 17 other doctors. Our uncle, who is a physician and also a very successful investor, put in the largest percentage of the down payment. At that time, my sister was just a recent grad and she could only afford to put in $100k. Every month, our uncle wrote her a $1000 check…..it’s the rent money from the tenants. The building was later sold to an investor from Hong Kong for 4x as much as the original purchase price. So my sister made $300k for doing nothing. Our uncle managed everything.

I had never thought about investing in real estates. I tried to pay down the debts as much as I could. Until one day, this same uncle told me at a family gathering that I should start investing. He told me “if you don’t invest now, you will end up retiring with just a house, a car, and nothing else.” A month later, I took his advice and bought my very first investment home for $295k. It was during the housing crisis in 2008. This property is now worth more than $550k. My uncle probably doesn’t remember what he told me on that day but his advice helped me reach my retirement goal a lot faster. I am not a big risk taker like my uncle. I bought small houses, let the tenants help pay the mortages/property taxes, and then I tried to pay each of these properties off in a few years. That’s why I am not rich like my uncle.

I was thinking more of a NNN property investment like a Jiffy Lube or a Dollar General. Something that you don't have to up keep because it is a NNN lease and the tenant has a guaranteed lease of 15 years of cash flow. These leases are always guaranteed by the corporation so if they leave after 7 years, they have to pay the remaining 7 on the spot.

 

[AONLINE]

That’s what my sister did. She bought a multi-million dollar commercial building with 17 other doctors. Our uncle, who is a physician and also a very successful investor, put in the largest percentage of the down payment. At that time, my sister was just a recent grad and she could only afford to put in $100k. Every month, our uncle wrote her a $1000 check…..it’s the rent money from the tenants. The building was later sold to an investor from Hong Kong for 4x as much as the original purchase price. So my sister made $300k for doing nothing. Our uncle managed everything.

I had never thought about investing in real estates. I tried to pay down the debts as much as I could. Until one day, this same uncle told me at a family gathering that I should start investing. He told me “if you don’t invest now, you will end up retiring with just a house, a car, and nothing else.” A month later, I took his advice and bought my very first investment home for $295k. It was during the housing crisis in 2008. This property is now worth more than $550k. My uncle probably doesn’t remember what he told me on that day but his advice helped me reach my retirement goal a lot faster. I am not a big risk taker like my uncle. I bought small houses, let the tenants help pay the mortages/property taxes, and then I tried to pay each of these properties off in a few years. That’s why I am not rich like my uncle.

I am a 3rd year student. Recently I was presented with the opportunity to buy a small house to rent it out for investment (I can’t live in this house because it’s too far from school). I have some cash so I don’t need a mortgage for that. Should I go ahead with this investment?

 

[Cold Front]

I am a 3rd year student. Recently I was presented with the opportunity to buy a small house to rent it out for investment (I can’t live in this house because it’s too far from school). I have some cash so I don’t need a mortgage for that. Should I go ahead with this investment?

Specifics? How big is the house? Taxes? Renovation cost? Rental rate? Neighborhood HOA?


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[charlestweed]

How much is the property cash flowing?

I don't know. I don't think my sister knew much about this investment either. At the time that she made this first invesmtent, she was just a broke clueless new grad and she still lived with our parents. Our uncle gave her the opportunity to invest and she just relied on his expertise. He didn't ask me because I was still in the middle of my ortho residency in another state.

 

[charlestweed]

I am a 3rd year student. Recently I was presented with the opportunity to buy a small house to rent it out for investment (I can’t live in this house because it’s too far from school). I have some cash so I don’t need a mortgage for that. Should I go ahead with this investment?

I don't know what to tell you. I took the risk and I just got lucky. It's a hard decision to make, isn't it? especially when you are still a student, who doesn't have a lot of cash. It was easier for me since I already had good income flow from my practices and my associate job when I started investing.

My cousin bought an investment home in AZ and another one in New Mexico. According to him, it was a mistake to buy both of these houses. He can't sell them. Everytime the old tennant moved out, the management company sent him a big repair bill. It's also hard to find a new tennant fill the vacancy.

 

[TanMan]

I was going over my YoY income statement and one of the things we forget is to reinvest back into your dental office (This is probably one of the best and easiest ways to improve your income). Find bottlenecks and places to improve your office to improve your income. One of the best things I've done so far (besides advertising) was to add a 2nd CEREC. I purchased one in June and found our productivity went up about 400k over the 6 month period. We're adding a 3rd mill in February to start doing same day long span bridges and temporary maryland bridges.

 

[2TH MVR]

I was going over my YoY income statement and one of the things we forget is to reinvest back into your dental office (This is probably one of the best and easiest ways to improve your income).

I agree with this 100%. Invest in what YOU KNOW. The only people who make good money in real estate investments are those that DO IT EVERY DAY. The rest of are just hoping to be lucky with our acquisition. I've made this mistake. Bought two beach rental properties. I did OK on one property and lost my ass on the other. Same thing with my commercial building that housed one of my practices. I bought at the WRONG time.
In some areas (CA, Seattle, etc.) property just continues to increase in value (bubble at some point???), but most areas .... unless you bought the property during a recession, or fire sale .... will not automatically increase in value.

Also ... the investors that do well with rental property tend to perform all the maintenance and management stuff. Are you willing to do this? Do you have the time to do this? Most don't. I paid a vacation rental prop management company to do this for my beach properties. After their fees, taxes .... there was hardly any money left over.

I'm doing OK with my current property since I do ALL of the management paperwork (lease, pay HOA dues, send out monthly rental invoices, prop is NNN, etc. etc.). But most investment commercial property is only worth what it makes in income: leases for and how long that lease is for (cap rate). No lease. No tenant. Very little value.

Then when you sell your property at a profit. TAXES. Unless you 1031 it into another property to delay the taxes.

Bottom line. Invest in YOU. Your practice. Invest in tax strategies/retirement to minimize taxes.

 

[Debt Free DDS]

Specifics? How big is the house? Taxes? Renovation cost? Rental rate? Neighborhood HOA?


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Are you using loans for your school? If so, you should use that cash to lower your student loan burden. School isn't the best time to get rich.

 

[charlestweed]

I agree with this 100%. Invest in what YOU KNOW. The only people who make good money in real estate investments are those that DO IT EVERY DAY. The rest of are just hoping to be lucky with our acquisition. I've made this mistake. Bought two beach rental properties. I did OK on one property and lost my ass on the other. Same thing with my commercial building that housed one of my practices. I bought at the WRONG time.
In some areas (CA, Seattle, etc.) property just continues to increase in value (bubble at some point???), but most areas .... unless you bought the property during a recession, or fire sale .... will not automatically increase in value.

Also ... the investors that do well with rental property tend to perform all the maintenance and management stuff. Are you willing to do this? Do you have the time to do this? Most don't. I paid a vacation rental prop management company to do this for my beach properties. After their fees, taxes .... there was hardly any money left over.

I'm doing OK with my current property since I do ALL of the management paperwork (lease, pay HOA dues, send out monthly rental invoices, prop is NNN, etc. etc.). But most investment commercial property is only worth what it makes in income: leases for and how long that lease is for (cap rate). No lease. No tenant. Very little value.

Then when you sell your property at a profit. TAXES. Unless you 1031 it into another property to delay the taxes.

Bottom line. Invest in YOU. Your practice. Invest in tax strategies/retirement to minimize taxes.

I have 4 properties and they are all for long term rents. The cities prohibit short-term rents. I manage 2 of them myself. It’s pretty easy. I don’t need to do much. The tenants mail the checks to my house every month. In 5 years, I’ve only gotten 1 call for a roof repair and 3 calls for plumbing repairs at one of the properties. I never call big plumbing companies because they charge at least $100 just to come to the property. My handymen charge me $80-150 for most plumbing repairs.

I hire a management company to manage my 2 other properties. They charge me 5% service fee for the 5-unit apartment and 6% service fee for the 3-bedroom house. They don’t do much. Whenever there is a problem, they call me and I call my handymen. So why do continue to hire this management company? Two reasons. First, they help bring in good tenants by running credit checks on everybody. Second, they are very good at raising the rents every year. The rent for a 3-bedroom house was $1900/month when I first bought it in 2008. Now, it is $2695/month. For the 2 houses that I manage myself, I haven’t raised the rents in the last 5 years…..they are good tenants, they take good care of my house and I feel guilty to increase the rents on them.

 

[P7898]

I have 4 properties and they are all for long term rents. The cities prohibit short-term rents. I manage 2 of them myself. It’s pretty easy. I don’t need to do much. The tenants mail the checks to my house every month. In 5 years, I’ve only gotten 1 call for a roof repair and 3 calls for plumbing repairs at one of the properties. I never call big plumbing companies because they charge at least $100 just to come to the property. My handymen charge me $80-150 for most plumbing repairs.

I hire a management company to manage my 2 other properties. They charge me 5% service fee for the 5-unit apartment and 6% service fee for the 3-bedroom house. They don’t do much. Whenever there is a problem, they call me and I call my handymen. So why do continue to hire this management company? Two reasons. First, they help bring in good tenants by running credit checks on everybody. Second, they are very good at raising the rents every year. The rent for a 3-bedroom house was $1900/month when I first bought it in 2008. Now, it is $2695/month. For the 2 houses that I manage myself, I haven’t raised the rents in the last 5 years…..they are good tenants, they take good care of my house and I feel guilty to increase the rents on them.

Charlestweed, off the beaten path here. But how did you and your wife raise children when you both were working? Parents help?

 

[charlestweed]

Charlestweed, off the beaten path here. But how did you and your wife raise children when you both were working? Parents help?

No, my parents had to help taking care of my sister's 3 kids. When our 2 kids were born, my wife and I had to hire a live-in nanny, whom we paid her $1500/month, so we both could work 6 days/week. Since my wife had her own office, she only took 3 weeks off for her martenity leave. The nanny also cooked and did the laundry for us. So when we came home, we just ate and then we spent time with our kids. We also hire a cleaning lady to come in 2x a month to clean our house. When I set up my first office, our son was only 1.5 yo and our daughter was 3 yo. When our daughter was 6 yo and started first grade, my wife started to cut down her work days because the student loans were already paid off. She volunteered to coach the academic decathalon team at our son's school so she could have more time with our son. Now, she only works 2-3 days/week, 1-3 hours a day.

My wife is also a dental specialist. She doesn't have to work 8 hours/day like the GPs. Just last month, when both kids were on their Xmas break, my wife took them with her to work at her friend's GP office. It only took my wife 30 minutes to place 2 implants. Her GP friend then wrote her a $1800 check for those 2 implants. My wife took the kids to their favorite Korean BBQ restaurant for lunch afterward. Life is beautiful. Hopefully, when the kids see the good life that they have right now, they are more motivated to work hard in school so they can have a good career like us in the future.

My wife is very good at teaching the kids. She can teach them biololgy chemistry, physics, algebra 1&2, and even calculus. She is also very good at disciplining our kids.....practicing piano, studying for ACT, SAT, AP exams etc. So I let her handle all these school stuff. I continue to do what I do best....and that is to work full time as an orthdontist.

I am off every other Tues and every Thursday. My wife is also off on those days. We usually spend time together for lunch, grocery shoppings etc in the morning. And then, we both go straight to schools to pick up the kids in the afternoon.

 

[DDS9994]

Just curious what some of you, who are either dental associates or practices owners, are doing for smart personal and/or business decisions. Please share anything thrifty or smart decisions that you’ve made in the past/doing now/plan to?

I will start with one of mine.

I have an AMEX Business Platinum card that I use for all personal and business purchases. It has some really cool benefits, but the biggest benefit is that it allows me to earn 1.5X Membership Rewards points per dollar spent on any purchase of $5,000 or more. So if I use the card for a $5,000+ purchase/transaction, I get 7,500 points.

I have been using the card for all my practice expenses (utilities, supplies, vendors, equipment purchases, etc), building expenses (maintenance, property taxes, etc) and personal (food, gas, utilities, IRS/state/city income taxes, travel, etc). When all these expenses are add up with the 1-1.5x membership rewards, I earn somewhere between 1-1.2M points a year. Also, my Business card reward points are not taxable - the business expenses on the card themselves are tax deductible, the personal expenses however are subject to taxes - but not on the points earned on the personal expenses.

Let’s say if I hypothetically use all the points for travel, 1.2M points = $12,000 worth of air travel a year. Plus, I would get 35% of the points back if I fly with a preferred airline, which means my flights would really cost me 780k points or $7,800 with the 35% refund.

Luckily, I’m not much of a traveller lately, but over the next 5-10 years, I should be able to collect close to 10M points with the AMEX card (unless there is a change in points policies) - which would allow me to use them for (if I choose to) a 3-4 months world cruise - visiting over 100 of the world’s greatest cities, just using points.

Sent from my iPhone using Tapatalk

Get the AMex Blue Business, its 2 points per dollar up to 50,0000 then switch to the Platinum.

 

[Cold Front]

Any day (market) traders here?

I wish I had the time to do it. For example - Boeing is so cheap now, after their recent crisis with one of their airlines - I could have made a lot of money based on their short term future, and also with other similar events (trader war, currencies, etc) than seeing patients in the chair.

It’s the ultimate frontier for me, because I read so much current events and business news articles.


Sent from my iPhone using Tapatalk

 

[Cold Front]

I make trades for no less than 3-5 weeks. I used to day-trade as a student but it’s practically impossible as a full time dentist. Percentage wise I’m positive for the past 6 years, but since I’m trading such low amounts the absolute dollar quantity is not life-changing. My plan is to continue to hone the skill as I continue increasing investable capital.

I agree. How did you get into it? Take a class? Someone mentored you?


Sent from my iPhone using Tapatalk

 

[P7898]

No, my parents had to help taking care of my sister's 3 kids. When our 2 kids were born, my wife and I had to hire a live-in nanny, whom we paid her $1500/month, so we both could work 6 days/week. Since my wife had her own office, she only took 3 weeks off for her martenity leave. The nanny also cooked and did the laundry for us. So when we came home, we just ate and then we spent time with our kids. We also hire a cleaning lady to come in 2x a month to clean our house. When I set up my first office, our son was only 1.5 yo and our daughter was 3 yo. When our daughter was 6 yo and started first grade, my wife started to cut down her work days because the student loans were already paid off. She volunteered to coach the academic decathalon team at our son's school so she could have more time with our son. Now, she only works 2-3 days/week, 1-3 hours a day.

My wife is also a dental specialist. She doesn't have to work 8 hours/day like the GPs. Just last month, when both kids were on their Xmas break, my wife took them with her to work at her friend's GP office. It only took my wife 30 minutes to place 2 implants. Her GP friend then wrote her a $1800 check for those 2 implants. My wife took the kids to their favorite Korean BBQ restaurant for lunch afterward. Life is beautiful. Hopefully, when the kids see the good life that they have right now, they are more motivated to work hard in school so they can have a good career like us in the future.

My wife is very good at teaching the kids. She can teach them biololgy chemistry, physics, algebra 1&2, and even calculus. She is also very good at disciplining our kids.....practicing piano, studying for ACT, SAT, AP exams etc. So I let her handle all these school stuff. I continue to do what I do best....and that is to work full time as an orthdontist.

I am off every other Tues and every Thursday. My wife is also off on those days. We usually spend time together for lunch, grocery shoppings etc in the morning. And then, we both go straight to schools to pick up the kids in the afternoon.

How did you get the nanny so cheap? Did she live at home with you all?

 

[charlestweed]

How did you get the nanny so cheap? Did she live at home with you all?

Everything was cheaper 15+ years ago. My nanny came to the US when she was in her early 60s. No one would hire her since she didn’t speak any English and didn’t know how to drive. She and I speak the same language. To her, this was a very good salary since she got a place to stay and free food.

There are plenty of these older Asian people in my community who are looking for nanny and caregiver jobs. Asian immigrants don’t like to sit around doing nothing. When my mom came to America, her first job was to take care of an elderly woman, whose nephew is an orthodontist. This orthodontist helped fix my younger brother’s teeth at a discounted fee. This orthodontist convinced me to specialize when I was dental student. And when I became an orthodontist, he encouraged me to open my own office.