The Web-based Dentist

Hugh F. Doherty DDS CFP

1. Don't Pay Attention to Where ALL the Money Goes

 Were you able to save 10% of your practice income last year? If not, where did your money go? Each month, it is important to know where all your money goes. For your practice, this means monitor your "numbers" via Quickbooks for major categories i.e. for overhead to compare to ideal percentages: staff, lab, supplies, facility, promotion, equipment purchases, and debt payments. For home expenses merely pay yourself a flat monthly salary, rather than having to track a budget.

 

2. Don't Have a Financial Plan

Even if you can track where your money goes, without having a plan for where your money should go, you are lost. Needs, wants, and savings must be properly aligned. From practice cash flow, savings should be 20%, debt payments should be 25%, taxes should be 25%, and lifestyle spending and large purchases should be 30%. The above percentages are an alignment for your cash flow.

 

3. Don't Have a Retirement Plan

Five retirement variables must be planned and managed: retirement income needed, savings needed, investment return assumption, risk assumption, and retirement date. These five variables must be led and owned by the dentist.

 

4. Don't Have a Savings Plan

You should be saving 10% of your practice income. L D Pankey did just that and accumulated substantial wealth. This number will be adjusted only if larger to incorporate the amount needed for college savings and retirement savings. Achieving this annual savings goal is really the ultimate measure of whether you have financially successful habits.

 

5. Make Large Financial Decisions Without Proper Financial Planning

All large financial decisions - building an office, buying a practice, large equipment expenditures, purchasing a home, etc. - should be made in the context of how other goals, such as saving 10% of practice income, will be affected. Financially unsuccessful tendencies would forgo saving in a year because of an unexpected tax bill, for instance. Savings should not be negotiable. Planning and managing is the key.

 

6. Don't Manage Debt Properly--or at all!

Dentistry is very capital-intensive. It is not only important to get the lowest interest rate possible, but it is important to have a plan to manage overall debt payments so that savings can happen. Try this exercise: Write down the amount owed on all of your debts, practice and personal. Also write down the monthly payments. Divide the total monthly payments by the total amount owed. If this factor exceeds 1%, your debt is not properly managed and you won't be able to save sufficiently.

 

7. Don't Protect Themselves nor Their Families with Adequate Insuranve

 I cannot tell you the number of tragedies that have been averted simply due to the discipline used in having the correct amounts and types of insurance in place - life, disability, overhead, and umbrella liability.

 

In summary, these seven common financial mistakes should be a warning to you about areas in your life that might need attention. Make the new, good habits as hassle-free as possible to make sure they last a lifetime. Good Luck!

More About Doctors Financial Network...

If you're using out-dated dental software today, the kind that must be installed and maintained, you know that whenever an upgrade arrives at your practice you're running for the hills. "Whatever you do," says your IT pro, "Don't touch that upgrade!" You and your IT pro both know from experience that installing that upgrade could bring havoc to the technology in your practice.

More than havoc (as if that's not enough), upgrades require time and money. If you're the adventuresome type you'll install the upgrades yourself, taking a night or weekend to complete the nasty deed. That's a night or weekend away from the family or other important things. Why is it your job to keep the software up to date? Shouldn't that be your dental software company's job? Aren't you paying them for "software maintenance"?

And speaking of money, usually the hassle of upgrades is accompanied by the frustration of trying to get everything to work together. In the end you call your IT pro to come in and fix everything. And that costs more time and money.

Is it just me or doesn't all of that sound ridiculous and antiquated? Yes, it does! With a cloud-based system, like Curve Dental, you never hassle with upgrades. Every time you use our software you're using the very latest tools and features designed for maximum efficiency and productivity. What's more, we're adding new features and enhancements all the time. Not annually. Not semi-annually. But all the time. As soon as a new features is ready for use we put it to work for you.

 

Classic Dental Jokes

A little boy was taken to the dentist. It was discovered he had a cavity that would require a filling. "Now, young man," the doctor said, "What kind of filling would you like for that tooth?"

The young boy replied, "Chocolate, please!"

Fun Dental Facts

 

• Chemical manufacturers use sugar to grow penicillin.
• A teaspoon of sugar after a hot curry will extinguish the fire in your mouth.
• A spoonful of sugar added to a vase will prolong the life of freshly cut flowers.

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