Wealth Management Tips for Dentists

Posted by Square Practice on May 28, 2019 8:47:00 AM

It's never too early to start thinking about retirement. In fact, if you don't plan for retirement, you may find yourself still working at 70 years old! Your professional development plan should include a plan for wealth management. Being a dentist allows you room to plan for a comfortable retirement as long as you know a bit about wealth planning or hire someone who does.


What is Wealth Management?wealth management dentists

Wealth management is a combination of financial services including managing portfolios, investments and assets, as well as advising clients. When talking about wealth management for dentists, it is a comprehensive approach to financial freedom and planning that includes: specific personal and professional goals, kid’s college costs, buying and selling a dental practice, and retirement.


According to the article that Mark Moehlman (MBA) wrote for Dental Economics, “most practitioners would agree that wealth management is a professional service that:

1) Focuses primarily on process, rather than products

2) Is mostly fee-based, rather than commission-driven

3) Is comprehensive, rather than fragmented, in nature.”


Steps to Wealth Management


You need to discover what your financial picture looks like right now. Then dig deeper to discover how you got here...good or bad. That will give you insight for the next steps of the process.

Create a Plan

A plan is a roadmap to where you want to end up. Without it, you are wandering aimlessly on a road to somewhere you may not want to be. A financial or wealth management advisor can help you create a plan for the future and detail out the steps to reach your financial goals, which includes retirement.

Track Dental KPIs

You need to make sure your practice stays profitable! The only way to do that is to track your KPIs and see if you are growing or not. You should be tracking new patient retention analytics, reactivation statistics, monthly and annual goals, and several other KPIs on a dental analytics dashboard. You can only improve what you are aware of. Therefore, if you’re not tracking your progress, you won’t reach your goals

Understand Your Finances

From a financial standpoint, you need to know and understand your profit/loss statements, overhead, and inventory costs. Having a dental CPA can help you discover more about where your practice stands, limit tax liability, and plan for the future. A financial advisor can help you know when you invest back into the practice and when to put the extra profits away for retirement.


Tools for the Journey

Here are a few tools we found that can help you on your wealth management journey.

Financial Independence Calculator

Minafi posted an article, “An Interactive Guide to Early Retirement and Financial Independence" that has several financial calculators to help you understand where you are and how to get where you want to go. The article is a 10-part guide that walks you through the questions you need to consider when planning for financial independence and retirement. 


Wealth Management For Dentists Book

Mark Horstmann wrote a book called, “Wealth Management for Dentists: A Guide to Financial Wellness for Dentists and Their Families” that you can purchase on Amazon. 

The book outlines the following:

  • When to hire a professional
  • What you can do yourself
  • Financial strategies for exiting your practice
  • How to increase revenue
  • Both personal and practice financial strategies


Wealth Management Dental Podcasts

Listening to podcasts is an easy and free way to learn more. On your drive to and from work you can listen and begin putting into practice what you are learning. There are several good dental podcasts and wealth management podcasts out there.

Here’s a list of podcasts we found that talk about finances and wealth management for dentists:


Reach FIRE (Financial Independence Retire Early)

Is it possible to become Financially Independent and Retire Early as a dentist? It absolutely is! One of the best ways to do that is to learn from someone who already has or is well on their way. Joining in discussions on dental forums is a great place to start. There’s no point in trying to reinvent the wheel. If you are currently managing your wealth on your own, you might want to hire a financial advisor who specializes in wealth management. That will free up more time for you to focus on getting your practice to a place where you can sell it and retire early.


Final Thoughts

Wealth management comes down to a simple goal to discover, plan, invest, and retire. Plan to include financial advisors, coaches, consultants or other experts who can assist you on the journey. Don’t go at it alone!

With the wisdom of those who have gone before you, and if that knowledge is applied, you'll be able to create the future you want. Do your research, get recommendations for who to include, listen to podcasts, and get to work. Your future depends on it!


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Topics: Professional Development