THE SECRET GUIDE TO RICH DENTIST

How the heck do I only have a hundred thousand dollars of net worth on my name? How do you become a rich dentist?

How do you become a rich dentist? What it takes to become a multi-millionaire dentist, instead of a dentist who's just rasping by. When you turn around 40, and suddenly you might wonder, "How the heck do I only have a hundred thousand dollars of net worth on my name?", despite breaking your head and working crazy hours.

So, being a wealthy dentist is not as easy as it used to be. If you follow these seven steps, you'll be on the path to success.

STEP 1: FAR FROM FANCY FANTASIES

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Many dentists that I speak with have a big problem with being addicted to fancy toys. We're talking about cars, houses, vacations, things that cost a lot of money. And a lot of times, they finance those things.

A car loan is a wrong decision. Unless you own your practice and you have lots of net worth and you could pay cash for that vehicle if you wanted to, then it's ok.

But, buying a car puts you in a position where you're hamstringing yourself from being successful for purchasing a practice in the first place.

So that's something that people mess up with their finances. So, if you do not have a good amount in the bank, you need to get there tomorrow. Focus everything on getting the right amount in the bank with no consumer debt. No credit card debt, no personal loans, none of that.

Maintain the debt as little as possible. Have a budget, know what you're spending, give more way to incoming than outgoing, and as long as you're in that kind of a situation you'll be in good shape.

STEP 2: DO NOT TRY TO LIVE TO OTHER’S EXPECTATIONS

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The cultural expectation of a dentist is that you're going to wear super nice clothes, you're driving fancy cars, right? It reflects a profligate lifestyle. That is what people expect of a dentist, you know?

They go to the dental office and they're kind of expecting the dentist to be parked up front with Porsche, right? This is how people think of you. They don't understand how expensive it is to go to dental school and to run a dental office.

Dentists are suffering. This average income of a dentist is really pushing down because insurance companies have more power than the dentists do. They (insurance company) can just say "Hey, I'm from  “X” insurance company, I'm just going to pay you this" and you just have to say yes, because if you don't, somebody down the street will and you'll lose your patients.

The cultural stereotype of the dentist being wealthy is a common expectation from society. But it is up to you whether to live up to their expectations or to lead a normal happy life. Once if you start to satisfy other’s expectations, you may lose your identity.

Keep in mind that it's not about what you spend, it's about what you save.

If you want to be a rich dentist one day, you kind of have to fight back against this cultural stereotype. You almost must surprise people by going against the cultural norms of what a dentist is supposed to be. So instead of driving a Porsche maybe you're driving a Toyota.

Instead of living in an expensive rented house, maybe you're living in the same kind of a house that a normal middle class would live in. This is not to say that you have to do this forever, but if you make these sacrifices early on in your career while you're really young you gonna be self-sufficient in no time.

 STEP 3 ROBUST FINANCIAL PLAN

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Do you have an education loan? When are you going to repay? If your answer is to repay it as soon as possible. Then I am afraid you are in the wrong path. Yes! You heard it right.

Loans to some extent are the catalysts to your income. Let me explain in simple words. Think of your practice with full debt environment. By next month you must pay 6000 bucks as you EMI. In addition to it, you might add up your office rent and another day to day expenses which rose the somewhere around 10,000 bucks. What will be your mind thinking in such situations? EARN MONEY! Right?

If you have targets to be fulfilled every month, you will have no other choice, than to work. So, loans are for good, TO SOME EXTENT. (FOR GOD SAKE, EVERYTHING HAS A THRESHOLD OR LIMIT IN THIS UNIVERSE).

Repaying education loan early is not a good idea. Instead, the extra bucks that you are giving every month can be reinvested in your practice. It can help you in stabilizing your finances for your dental practice.

Wasting money is not a good way to get rich. A debt-free dental practice gives wings to a dentist and might make him inefficient in some way or the other. This is my opinion.

STEP 4: SAVINGS & RETIREMENT.

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Savings as soon as you start your career is an excellent idea. Very few dentists do this. There are other things that seem to take precedence over that, and that's just not smart. If you want to be a wealthy dentist one day, then gonna really need to focus on getting a lot of money into your savings.

A lot of dentists just have a very short-sighted view of things, and they decide to spend as they earn. Savings is an essential path to wealth creation. The small amounts that you save today might become the giant financial backup in the future.

Saving is a continuous process. As warrant buffer said, “First save, then spend”, should be your motto.

Make every saving an investment. You must save a specific amount every month. Make it a habit, because without regular saving you are not going to reach the goal of a wealthy dentist. Do not invest in things that depreciate as time passes. Invest on things that appreciate with time.

If you buy things you don't need, you will soon sell things you need.

Have a strong investment strategy. I suggest every dentist to invest aggressively in the beginning of their careers and shift to debt investments on longstanding. Here are a few investment options for savings to beginners:

1. Monthly investment in PUBLIC PROVIDENT FUND – (40% of savings)
2. Few bucks as SIP (systematic investment plan) in an aggressive mutual fund (Equity mutual funds) – (30% of savings)
3. Long term Debt mutual funds SIP (30% of savings)

This is relatively a risk-free investment. (Do mind, every investment carries some risk.)

What about risk? I don’t know any investment strategies. How do I save good amount of money? I know this question will arise in your mind.

Risk comes from not knowing what you are doing. If you are new to financial planning, hire a financial planner. You can even learn such courses online. It doesn’t require any finance background.

If you want to become a rich dentist, you got to get serious about your retirement savings. Don’t think its too early. The earlier you start the better you end.

STEP 5: START YOUR OWN DENTAL PRACTICE.

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Do you know, dentists always lives in fear. They're afraid of what will happen if they leave the safety of their associate job (in the dental school) with the regular predictable income. 

If you want to make the most of your career in dentistry from a financial perspective, you need to be a practice owner. It's the doomed reality that being an associate only, is not a good way to get a big return on your investment of four years of education plus residencies, where huge amount is involved.

Nowadays, it is very difficult to go out and do private practice because of all the regulation and the compliance concerns and just the unfriendly environment to independent practitioners. Therefore, most people in health care professions are interested in building giant healthcare systems.

But for dentistry, the independent solo practice owner still rules, and that's something that I think is valuable and something that's worth fighting for and maintaining.

If you want to be a private practice owner, the first thing you have to realize is your chance of failure is only like 0.3%. Dental practices that are not successful apparently tend to be startups. Startups that don't have a clear plan, don't have a clear path to making revenue.

If you acquire someone else's practice you have a very high chance of success. Compare somebody who's a long-term practice owner to somebody who's an associate. Who might earn more? Let me know your answer in the comments section below.

Moreover, the practice that you might have as an owner, you're must finance it if you. If you don't have the capital to put in it yourself, you must get a practice loan. So, you get that practice loan. Over 10 years, that practice loan is getting paid off. When that practice loan is paid off, you now own a practice which is worth something, right? At the end of that 10 years you now own   dental practice that you paid 700,000 for, it might be worth say a million dollars, maybe more than that.

If you want to retire after years of practice, the clinic that you own (which is now a six to seven figured asset) is something that you could sell. Practice ownership is very important. Many people wait far too long to close on their own dental practice, and they shouldn't do that.

STEP 6: INVEST MORE THAN SAVING

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There is a big difference between saving and investing. Many dentists make good money, but just let it sit in cash. That's not a good idea, at least for the long term. That's why you need to have an investment plan.

You need to have an investor policy statement where you say what your goals are and then make sure that your investments reflect those goals. To do this perfectly, you have to hire an investment planner or a financial planner.

Think of investments in other businesses instead of saving just in the bank, because if you put it only in the bank, you're only going to get a mere 4 to 5% per cent on your money. When you put it in equity investment you could get maybe 5 to 7% on a bond fund long term and maybe 7 to 15 per cent on a mutual fund, maybe more in stocks. This will really add up with compound interest over time.

So you need to be putting a lot of your earnings that you're not spending on and expanding your practice and reinvesting in your business and that you're not putting in the retirement, you need to open up a brokerage account and put that money and that kind of account as well.

Investing in real estate is the best investment of all times. It is the most trusted risk-free investment. It can be considered if you are planning to invest a bulk amount.

STEP 7: DISCUSS WITH YOUR FAMILY:

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Talk to your family partner about your financial plans. Always make a financial plan along with your life partner.

Tell him/her everything about your investment. It should be a vital part of your investment strategy.

Share your ideas with your family. Ask their opinion. You may find good and relevant solutions to your financial problems.  Moreover, have a note on each and every investment you made. 

See to it that your partner knows each and every investment you made. This is vital, because in your absence it is your partner who takes the lead role of your family.

CONCLUSION:

Becoming rich requires courage and lot of determination. Have a perfect plan in your main and start implementing it from today. So! What are you waiting for? Start your great journey towards a happier, healthier and ofcourse wealthier life today!