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The biggest mistakes dentists make: Not working with a professional money manager


A conservative investment plan - paying excellent returns in good years and weathering not-so-bad losses in bad years - will serve dentists well, says Dr. Roger Levin.

Editor's Note: Based on his extensive experience with dentists over the past 30 years, Dr. Roger P. Levin has authored a new book entitled The 31 Biggest Mistakes Dentists Make. His premise is simple. As he says in the introduction, “We can learn from our mistakes. But isn’t it better to learn from other people’s mistakes?”

Following is an excerpt from the book.

Mistake #20: Not Working with a Professional Money Manager

A big financial mistake dentists make is not working with a professional money manager to handle their investments. Over the last 30 years, Levin Group has seen many clients - who think they’re good judges of investment opportunities - end up losing large amounts of money. In some cases, they have even risked losing their practices and homes by using them as collateral for loans to back unwise investment schemes.

Another big mistake: Keeping the poor performers on your team

The first thing to understand about investing is that there are no sure things. No matter how good the economy, no matter how attractive a particular investment, there’s always a risk. The Great Recession of 2008 showed us all how bad things could get virtually overnight. Quite a few dentists were investing in real estate at that time because it looked like a surefire, amazing investment. It turned into a disaster.

Then there are the dentists who decide to personally handle their portfolios of stocks, bonds and other investment vehicles. They may look like geniuses when markets are soaring, but they get hurt badly when the market turns (as it always does). Dentists typically can’t identify a hot investment until it has nearly reached its peak. They buy into bubbles just before they burst. Nothing goes up forever and when the market loses momentum, it can come down very hard.

Another big mistake: Not using KPIs to evaluate your practice's growth

If you insist on speculating in the market, I suggest you use the 90:10 rule. Put 90% of your assets in the hands of a smart, fee-based money manager. Think of the other 10% as “play money” that you can afford to lose. You may do okay with that 10% but, if not, professional handling of the other 90% should protect you from catastrophic losses.

In fact, if those assets average approximately 7% growth per year, that would translate into doubling your money in 10 years. A conservative investment plan - paying excellent returns in good years and weathering not-so-bad losses in bad years - will serve you well.

Another big mistake: Neglecting leadership training

The 31 Biggest Mistakes Dentists Make has now been published and a digital download is available here for just $59.

Systems Training: Save $50 on doctor tuition for Dr. Levin’s seminar “Ignite Your Production” seminar in Dallas on June 10. Register with code DPM50 to receive your discount. For details and to register, click here.

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