Thirty years ago, one of my mentors, Dr. Travis McFee DDS, used this title for a seminar I attended. I am always looking for topics to discuss that would appeal to a wider range of doctors. I was digging through some materials I was hoarding and came upon some notes from a seminar I attended over 30 years ago and a handout article that Travis had written. Bottomline: Today is “back to the future”. I hope you find Travis’s thoughts, along with what I write today, to be an instrument of clarity as you face the challenges of dental practice.
While the title, making the commitment to become financially independent, refers to financial security, I want to add a twist and discuss becoming “wealthy”. Before you stop reading and start sending me negative texts, emails, and posting on social media about how shallow I am, because I only am concerned about money, read on. To me “wealth” is different than “rich” or even just being financially independent. Money was necessary in my life, but I never looked at money as being a goal to obtain. Early on, I did realize that to create protocols and systems to drive a Super General Dental Practice, I needed to be able to quantify a successful strategy and results. So, for me, money represents the amount of service I deliver to our clients. Dentistry is a small, consumer driven business where our potential clients get to choose where they spend their money. Our potential clients have unlimited choices when it comes to our over population of dentists. Our patients vote with their feet and wallets to decide who they would like to buy services and products from. If that is the case, then your collections directly quantitate your ability to do this successfully. Certainly, some are better than others, but a surprising thing can happen.
With graduating students now having $350,000 to over $500,000 in student debt, the start of a dental career is fraught with the burden of servicing that debt while trying to save enough that someday you can be an owner or retire financially independent. Many have decided that a career in dentistry will not afford that outcome, and begin to search for a plan B: Real estate, investing, multiple offices, etc. Here is where I strongly disagree. On the other hand, you have a majority of owner doctors that have had decades to refine their businesses and eliminate debt while saving for a secure future, that are worse off today than even our recent graduates. These mature doctors have spent a lifetime living beyond their means, saving nothing, never educating themselves on finance, while allowing their lifestyle to slowly drag them down to the point that the best thing that could happen to them is that they die early in order to save themselves from having to bend over a dental chair for the rest of their lives. I have seen doctors who think that “successfully ending three marriages” is a wealth building strategy.
When it comes to wealth, certainly financial security is part of it. I hope that wealth also includes the knowledge from a life of study, success, failure, and a balanced home life. Wealth for me would be a much higher calling than just a pile of money. It is wisdom tempered with leadership, and a commitment to an endless life of learning while applying what we learn to help others. Wealth is the result of having played the game of life well, so that you now have a wider range of opportunities. These opportunities would allow you to broaden the range of people you could help in life. Think of wealth as the ideal finish to a life well lived. Wealth could even mean you give away your money and share your knowledge with those who struggle. Be wise about the path you choose.
With this said, it’s never too late to become wealthy. You have my permission to get rich. As far as I can tell it’s not illegal to have money, yet. Please, please, don’t email me with the holier than thou approach to life. You don’t have to email and explain to me how you’re not “all about money.” Fine, I got it. You’re different. You’re not a dirty, greedy, money grubber like those other swine. You’re not vain, you’re perfectly altruistic, and of course, your “family is the most important thing to you.” Now before you get immediately transported up to heaven to sit at the right hand of you know who, I’d like to get a few points across to the others who seem to want to know about this or need to know about this.
First of all, you have my permission. If you’ve been wondering if it’s OK for you to have NO DEBT and enough money to live off of forever, YES! It’s OK so go ahead and do it.
Once you start down this road of becoming “wealthy” you must answer one question: How much is enough? I’m not sure what the number crunchers and financial gurus today would tell you what that exact number is, but during my career that number went up every year. If you are a young doctor, I have an interesting investment strategy for you. From day one of being a dentist, save a thousand dollars each year for your age every year. If you are thirty, save $30,000 and repeat that every year you work. Trust me hear for just a moment and let me give you a couple of calculations to support my strategy. If you were 30 and socked away $30K with just 5% return and did this till you were70, you would have $5,937,546. Now just imagine that you could get a higher rate of return, start earlier than 30, and add in the sales price of your practice at retirement. Do you think that would be a pretty sound strategy for wealth? I do.
There is a very old book by Phil Laut called the FOUR LAWS OF WEALTH. They are: 1-The earning Law. 2-The spending Law. 3-The saving Law. And 4-The investing Law. Allow me to loosely plagiarize further by describing some myths with a short explanation.
Myth #1: Hard Work is What Produces Wealth.
There are several popular myths that need to be dealt with on the way to uncovering the earning law. These are the things that our parents, our teachers, our counselors, our friends, and otherwise helpful, but perhaps not very financially successful, have taught us about money. But this is the most popular one and it is dead wrong. Cloaking wealth with the dressing of work makes it seem that in order to have money you have to have an unpleasant experience. The truth is just the opposite. In fact, there is plenty of evidence (do what you love, the money will follow) that doing what you dislike doing is the surest route to poverty. If hard work produced wealth, then it would produce wealth for every coal miner, every timber worker, every steamfitter, and every dentist. But we know it doesn’t.
The idea that hard work is required for wealth is probably tied up in our Puritan work ethic beliefs. The fact is rich people work a LOT LESS than the rest of us. What I have learned is how to make the best use of my time and rely on the help of others.
Those people who work only for the money have a tendency to create debts and installment payments for the things they buy in order to give them the satisfaction that they miss at work.
Myth #2: It’s Wrong to Enjoy Yourself While You’re Making Money.
The best way to work is in the zone where you are 100% focused on the patient and the service you are rendering. Have you ever started treating a patient and before you knew it, two hours have passed by? You were in the “Zone.” The more you enjoy what you’re doing, the more money you’ll make doing it. I just can’t deal with all these doctors who say, “I hate treating kids, but I have to because I need the production.” When you hear something like that, just understand that an attitude like that is hurting the production a lot more than it is helping. People know when you’re happy and they know when you’re “hating it.” If you hate treating kids. Either learn how you can treat kids and love it or refer them out. I know a general dentist here in my hometown who loves doing endo. This guy probably gets more referrals from generalists than any of the specialists. The reason is: He loves doing endo so much, he’d probably do it for free. He charges less (a little) than the specialists, he does endo free for referring dentists and their family, and his practice is about 70% endo and 30% crowns.
Myth #3: The “Right” Occupation Is the Key to Wealth.
What a bunch of “hooey.” If we still had the yellow pages, I would ask you to go to them, turn to any page, and you would find that there are people earning money, getting rich, or losing money and staying poor, in whatever occupation or profession you choose. There are people becoming wealthy in some of the most improbable professions you could imagine.
Myth #4: Education Is the Key to Wealth.
Wrong again! Of course, what I’m referring to here is a “formal” education. Heck, if this were the truth, PhDs would have all the money, but that’s certainly not the case. Go to any unemployment office in America and ask around and you’ll find people in there from all walks of life, and I guarantee you’ll find lots of people with all kinds of degrees.
Myth #5: There’s Only a Certain Amount of Money to Go Around.
Therefore, the more you have, the less someone else has and that makes you evil. Hogwash. Money is simply a token of exchange. It’s a symbol, it’s for our convenience. It’s like being told that there’s only limited amount of carpentry that can be done because there is a limited number of inches.
Myth #6: Money Is the Cure for Poverty.
The lack of money is blamed for a whole host of personal and social problems, but a study of the Federal Anti-Poverty programs over the years has shown that lack of money isn’t the cause of poverty. The government has spent over $6 trillion on anti-poverty programs and today we have more poverty than ever. You can also study lottery winners who win plenty of money, but after a few years, they usually wind up hopelessly in debt, their winnings being paid directly into an escrow account, and they are back at their janitor or waitress jobs. People who inherit money usually blow it all in a year or two. If they manage to hold on to it until they die, their heirs then blow it. Bottom line is that money isn’t wealth.
Wealth is an attitude. It’s a way of thinking. Actual greenback dollar money isn’t what makes you wealthy. In your lifetime and career, you’ll have more than enough money pass through your nervous little fingers to become rich. The wealthy few know that what really counts is what you do with it.
Back in 1987, another one of my mentors, Dr. Earl Estep, pointed out that one of the most important traits to becoming a millionaire is that you have to have the skill to manage your own behavior and take control of your way of thinking. Let me ask you something: Do you sometimes wish that you had been born a little smarter? Richer? Or had married money? Or do you tend to be more likely to take responsibility for your action? The blunt truth is that those who are more successful tend to be these who have the unique ability to think for themselves. Rich people tend not to pay much attention to keeping up socially. Winners have that rare ability to perceive themselves in a way that gives them the best chance to continue on their chosen path. There are a million distractions out there, but successful people have the ability to block them out. You see, as we go through life, every single day we are faced with choices that can influence us in a self-enhancing way, or in a self-defeating way. Your job is to accept and embrace the idea of accountability and make choices that position you to become wealthy.
Michael Abernathy DDS
972.523.4660 cell
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