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Dental Financial Illiteracy

Being doctors, we all are familiar with risk factors.  If you do this, or don’t do that, it could mean that in the future your risks go up for a particular event.  It’s a basic “cause and effect” formula.  One risk factor I continue to bump up against is that doctors as a group fail to plan when it comes to money, profitability, and an exit strategy.  With every doctor I speak to, I will ask them two very specific questions.  Questions that if answered make the rest of the decisions in their career very black and white.  The first question is how long do you want to practice?  The second is how much money will you need to accumulate to feel financially independent?  Most answer the first question with some increment of 10 years or so.  The money is a little more difficult for them.  It is as if they have never thought about how much they might need, what they spend, what debt they have, or what their practice would have to do to make it happen.  In every case, few have saved, no one knows how much they will need, and regardless of age none of them have a plan to end up where they know they would like to be.

I am sure that every young doctor graduates from dental school with the over powering goal of being “average”, but by definition, most do become “just” average, and a lot fall far short of it.  Financial illiteracy is rampant in dentistry and when added to an attitude of “it will never happen to me”, or “I can always start saving and get out of debt next year”, you have a risk factor for financial captivity:  The inability to ever retire or have choices in the future.  How do we as doctors allow millions of dollars to pass through our grasp during our work years and almost never have anything to show for it?  Insurance companies are quick to quote a study that shows that at age 65, 96% of you will be dead or dead broke.  Only 3-4% of us will ever retire having saved enough money to be considered as financially independent.  NOTE:  Financial Independence should be considered as having enough money in savings to replace the income we had while working daily and be debt free for the rest of our lives.  In retirement, the average person spends 81% of what they spent before retirement, and many spend more than they spent before retirement.  I am calling these doctors “financially illiterate” because they all think of debt as normal.  It is rare indeed that I speak with any doctor that has a financial goal, date for completion, and is right on track to make it happen.  Believe it or not, no one can work forever.  We all have a “use before date”.  You have to plan for the likely event that you will someday be unable to work or provide for yourself and your family if you continue to have debt and don’t save.

Do you and your spouse think this way?

  • Isn’t debt normal?  It must be, because everyone has debt.
  • Why not spend all that I make?  I’m young, I deserve these.  (cars, houses, country club memberships, second homes) This must be so, because the average dentist spends just a little bit more than they make.
  • Shouldn’t I buy that newest greatest whiz-bang do-dad that the Patterson or Schein rep says “no good dentist can live without”?   This one has to be true because Dr. Legend has one and he is doing great.  I know the speakers out there and most are not doing great unless you consider successfully ending 3 marriages a standard of success.
  • It’s just Christmas and so what if we spent a little more than the kids need.  We have 30 days interest free to pay for it.
  • It’s important that my family and I look the part of a successful doctor.  Got to live in the right area, drive the right car, send our kids to the private schools, take extravagant vacations, etc.
  • Shouldn’t I have the right to build a great office building after all those years of working hard?
  • Sure, I’m down a little with all the loses in the Stock Market, but I’m about to invest in a great real estate deal, oil well, condo project, etc. 

Like it or not, debt and lack of accumulation has never been a smart strategy and should never have become the norm.  I can’t tell you why, but somehow doctors and their spouses think that it should take a lifetime to get out of debt.  We are seeing young doctors with the right mentor and strategies become debt free in 5 to 10 years while accumulating more money in savings than the average dentist does by age 60.  There ought to be a time when you have outrun practice and personal debt while accumulating millions.

So take a look at where you are.  How much money have you saved?  How much debt have you accumulated?  Why are you putting yourself in a stressful, unfulfilled situation where the lack of money is directly caused by the limiting beliefs and poor habits that you follow and model for your children who will be the next generation of financial illiterates?

I have been fortunate to meet and become friends with Dr. Ace Goerig, an Endodontist in Olympia, Washington.  He is a walking encyclopedia of debt reduction and wealth building.  He has even set up a web site at that can literally walk you through the entire process of debt reduction and habit reversal that puts you on the road to be debt free within 6-8 years.  He has done this with his staff and with every dentist he has had the opportunity to talk to.  I encourage you to go to his web site and start your financial life over.

Before we go let’s take a few minutes and look at the financial world around you right now.  Will Rogers said it best when he said:  “The problem in America isn’t what people don’t know.  The problem is what people think they know that ain’t so.”  Nowhere do we find this so true as it is in financial understanding of debt and wealth.  Trends in Dentistry clearly point to a plateau of earning potential and many challenges from insurance companies, corporate practice, demographics, and national healthcare.

Cultural family encoding teaches us to:

  • Believe debt is normal and always will be.
  • Spend everything we make.
  • Use credit cards instead of cash.
  • Have to work hard for a living.
  • Spend to nurture our selves.
  • Have a home run mentality.
  • Have an inability to say I can’t afford it.
  • Be natural spenders, not savers.
  • Have poverty consciousness.


Let’s take a quick look at the traditional investment mentality.

  1. Give your money to a “Broker” to invest it.  I don’t know about you, but I think they could come up with a better name for someone that I just gave my money to than “broker”.  A “wealthier” sure does sound better to me, but maybe it is truth in advertising at its best.  For the last two decades, the typical equity investor beat inflation by a measly 1% a year.  Considering the ups and downs, risks, and the fact that if you were out of the market just two days during the year at the wrong time, you would have a negative portfolio.
  2. In the last decade, Wall Street has lost more than 45% of the typical investors money twice.  Are you sure it won’t happen again?
  3. Over the last 40 years long term Treasury Bonds have outpaced the Stock Market.
  4. For the Dow to give you a measly 5% return on your money, it would have to hit 27,000.
  5. The average U.S. family with a head of household age of 60-70 has saved only 25% of what is needed for retirement.
  6. 45% of baby boomers are not expected to have enough money to even cover basic living expenses in retirement.
  7. The basic baby boomer has been forced to postpone retirement at least 5 years.


The key to eliminating retirement uncertainty is to plan carefully, save as much as possible, invest wisely, and at age 65 get hit by a bus.

We have entered a phase in government called INEPTOCRACYA system of government where the least capable to lead are elected by the least capable of  producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.

Hope you are getting the idea.  Bottom line: Get out of debt today.  Start accumulating wealth by saving, and limiting an insatiable life style hunger that will limit your future choices and put you squarely in the poor house at age 65.

If you want to start today by getting out of debt, getting a savings and debt reduction life style plan, just go to  It’s free.  It’s simple.  It works.  Become the top 3-4% that actually will be able to retire.  for free down-loads and financial calculators.

Michael Abernathy, DDS
[email protected]

PS:  I received four calls today and all of them were about money or the lack of it.  One was a soon to be graduate with $357,000 of school debt who came up with a unique wealth building strategy of marring another dental student with an equal amount of debt.  The next was a doctor who is just starting out as an owner of a scratch practice and had questions about financing and how to service the debt.  The final two calls were from established doctors.   One about 40 years old wanted to know if he could afford this million-dollar plus house in an exclusive neighborhood.  The final doctor was 64 and wanted to know how much she needed to save in order to retire.  In each case, regardless of age, experience, or profitability during their careers, they were all “financially illiterate”.   I kid you not, don’t be like these guys, or maybe call someone else.    MA