Part 1: 20 steps to building wealth

In his continuing look at wealth for the dental professional, Dr. Doug Carlsen examines 20 steps to build wealth. In the initial installment, Dr. Carlsen tackles the first 10. You can see Part 2 by clicking here.

More from Dr. Carlsen: The millionaire dentist Part 1Part 2Part 3

Savings trumps investment choices: How much you save is much more important than what you invest in. Placing $1,000 per month in a great investment (4.5% per year after inflation) for 30 years is beat by placing $2,000 per month in a money market account (0.5% after inflation).

Use Roth accounts as much as possible in your early career: This is your most efficient way to save when your taxes are low. You pay low income taxes now, all growth is never taxed, and when you withdraw in retirement, no taxes are levied.

Have an emergency fund of six months of expenses. For most doctors, this is normally $50,000+. Docs are one accident away from financial ruin without this fund.

Always take a 401(K) match. If you or your spouse is eligible for it, always take it! It’s free money!

For windfall gifts, including inheritances, where should the money go? Vacation? No! Pay down debt and more.

Do not actively trade your retirement funds. You will average anywhere from 2% to 7% less per year in growth compared to using low-cost index funds. Over an investment lifetime, how much will you lose? You’ll be floored!

Use target-date funds. They follow academically sound principles and are perfect for the prudent investor. They also rebalance automatically.

A look at demographics in the future provides a positive surprise.

Advisers are evaluated: should you choose an adviser who charges an Assets Under Management (AUM) fee of anywhere between 0.5% and 2.0% or one that charges and hourly or flat rate? Several companies are recommended for further evaluation.

Which credit cards are best to have now?