Page 114 - The Dental Entrepreneur

The Dental Entrepreneur

Living Below Your Means

There are some obvious deductions and depreciation in a beginning dental practice that will
reduce your tax burden, but I want you to fully understand the concept of profitability and the
effect that taxes play on it. You will handle a lot of money in your career but the mistake that
one makes is to equate those large “gross income” dollars into thinking you can afford the
latest luxury car and a $750,00 home. Nothing can be further from the truth and those are not
the steps to take if you want to become truly financially independent.

Savings

One of the most important aspects of your entire financial life is savings. I owe a great deal to
Greg Stanley of Whitehall management for decades ago teaching me the principles of
becoming debt free as soon as possible and having a systematic savings plan. I will tell you
that almost all of my criticism as to the financial irresponsibility practiced by the majority of
doctors stems from the fact that they were never instructed as to the importance of saving
money. “Paying yourself first” is a principle one must understand and setting aside a minimum
of 10% of your income for investment on a regular basis should be practiced from day one as
difficult as it sounds. If you wait until you think you can afford to save, that day will never arrive.

What Financial Institutions Do Not Want You To Know

Study this section very carefully. The insights gained here may be your first awaking into how
the financial world really works and what you can do to make it work for you.

In our dream case scenario where you are grossing $500,000 per year but netting a little over
6k per month, how much house can you afford? In other words how much dentistry do I have
to produce to make my house payments and what kind of an asset building device is a home
mortgage.

I can tell you right off that mortgages of any kind are the eight wonder of the financial world.
They are made to keep you in virtual servitude your entire life. I discovered this very early in
my career when I set out to better understand debt service. I learned some very powerful
approaches to beating the bank. What happened to me to undertake this query was after being
in practice for about three or four years, I experienced an unusually slow period at work that
lasted a month or two. Cash flow was beginning to be a problem. I can tell you that no matter
how long you practice dentistry, you will experience periodic slow times and the feelings will
always be the same. It is downright scary but you will inevitably regain your momentum, but it
is always frightening for a busy practice to go thru an unusually slow time.

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