In order to build real wealth over your career without losing your mind in the process, there are two mindset shifts I want dentists to make. Let’s get right into them.
Don’t Be Scared of Debt
Smart debt is okay—good, even! We’re all familiar with the saying “It takes money to make money.” What we don’t emphasize very much is that it doesn’t have to be your money.
Banks have lots of money! And while some people have to beg and plead to get their hands on some of it, you don’t. You’re a dentist, which means the banks are ready, willing, and eager to lend you money for a great practice. So going into debt to buy a practice is actually…pretty easy! (Season 3 of the podcast is all about financing your practice purchase, by the way.)
As a fellow grad school survivor, I understand that that mountain of student loan debt makes the idea of taking on even more seem like a horrible idea. It isn’t. Banks are so eager to lend to dentists because with the right practice, you’re about as close to a sure bet as they ever get. Start thinking of yourself that way!
Going into debt to buy a practice seems scary in the short term, but in the long term it’s the best way to set yourself up for long-term financial independence. You invested in yourself once to get through school. Now do it again.
Spend Money to Save Money
A couple hundred bucks for TurboTax to file your returns, or five grand for a CPA to do it. Which sounds more appealing?
Saving money is an excellent impulse, don’t get me wrong. But when it comes to running your business (or preparing to), sometimes you have to shift your mindset on this one.
I talk a lot about having good people “on your team.” I can be one of them during the transition, of course, but what about after you’ve purchased your practice? Spending money to have people around you who help you run your business will pay off big time in the long run.
A trusted lawyer, for example, is vital to limit your liability with both patients and employees (among other things). But my favorite member of your team is your CPA.
A good CPA ain’t cheap. But a good CPA will also help you protect your money and make sure you keep as much of it as possible.
Filing taxes is probably the highest-profile thing a CPA will do, but it goes beyond that. A dental CPA will know the ins and outs of how a healthy practice should look by the numbers, and can alert you if, for example, your labs and supply costs are creeping up too high, or if money that was expected in one area of the business seems to be missing.
That five grand the CPA is charging you? Or even twice that? It will—again, in the long run!—save you more than you were able to save yourself by going it alone.