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Tim has spent his entire working life as a financial advisor but the only that that really matters is meeting his wife, Dana Yeoman D.D.S. In the process of joining lives together Tim learned what the life of a dentist is like. Seeing his wife's frustration with the complexity of running a dental practice he set out to make things simple. Since meeting his wife Tim has advised hundreds of dentists on wealth management issues that dentists face. Tim is CEO of LifeStone Wealth Management - An Dental Only Wealth Management Firm that works with a limited number of dentists for whom he can have a significant impact. He has also been recognized as a “Best Financial Advisors for Dentists” by Dental Products Report in 2013, 2014, 2015 and 2016. He and Dana enjoy exploring California’s wine country, a good single malt, and raising standard poodles. Tim can be reached at email@example.com or 855-FIN-XRAY (855-346-9729)
Are you just starting your career as a dentist? Congratulations! You've chosen a profession that can be very rewarding, both personally and professionally. You probably have a lot on your plate right now. You're learning how to work with your staff (here are 3 ways to keep your staff happy). You're getting to know the unique issues, concerns, and needs of your patients. You may even be working through some early jitters, which are completely normal and to be expected.
Although you're undoubtedly busy right now, it's important that you take a little time for yourself to do some critical planning. You can save yourself serious stress throughout your career by taking care of important action items early in your career.
Here are five actions that you should take today:
What's your most valuable asset? Your house? Your car? Your investments? If you're just starting out in the business, your most valuable asset is probably none of those things. Rather, it's your ability to generate income.
You have decades of work ahead of you. Even if you have a moderate income by dental standards, that income will generate millions of dollars over the course of your career. One of your biggest risks is that you'll somehow become injured or sick and be unable to work in the future.
Disability insurance can generate at least a portion of your income even if you are physically unable to continue your career as a dentist. Talk to your financial advisor about how disability insurance could protect you.
This is true in almost any field. However, it's especially true for dentists because many have the goal of practice ownership. If you want to have your own practice someday, or if you want to buy into a partnership, you'll need capital to do that. Starting to put away money early will help you in that regard.
It's also a good practice to help you prepare for retirement. Many dentists are dependent on the sale of their practice to fund their retirement. Having some investments and capital outside of your practice can give you more flexibility when retirement comes around.
Start by automatically deducting a percentage from your paycheck. Have it directed to a savings account, an investment account, or both!
You probably racked up some serious debt getting your education. It's tempting to put that debt off. After all, your loan servicing company may let you go years without making payments.
Resist that temptation. Paying down debt early will give you added flexibility as you navigate career options in the future. Don't drive yourself into poverty paying down the debt, but make payments as much as your budget permits.
A knowledgeable and experienced certified public accountant can be an invaluable resource. Many dentists don't start working with a CPA until they have ownership in a practice. However, it makes sense to start the relationship as soon as possible.
A CPA can help you with your taxes, sure. However, they do so much more. They can provide guidance to help you reach your financial goals. When or if you do someday own a practice, they can provide business consultation to maximize the practice's profitability.
Look for a CPA who has experience working with dentists and who clicks with your personality, desires, and goals.
Author's Note: Raymond James does not offer tax services.
You'll have a lot of tough decisions to make throughout your career. Do you take that new job? Do you buy a practice? Do you take on a partner? How much staff do you need?
It helps to be able to talk about these decisions with someone who has already faced them. Look around for a dentist that could serve as an informal mentor. Learning from their experience could save you from making the same mistakes.
Of course, there are many other things that you should consider, but this list serves as a great starting point. It's also a great idea to meet with your financial advisor. He or she can create a financial plan for you that creates action items to help you reach your goals.