MtoM #31 - Millionaire Dentist

This is the White Coat Investor Podcast, Milestones to celebrating stories of success along the journey to financial freedom. Here is your host, Dr. Jim Dali.

This is Milestones to Millionaire podcast number 31, the Millionaire Dentist. Do you ever find yourself wishing there was somewhere to go to ask your finance, insurance, or investing questions? The White Coat Investor community is a great place to turn. We have a thriving community across all of our social, Facebook, Twitter, Instagram, Reddit, and our WCI forum. We have been discussing solutions to your money problems since 2011. Join the Conversation with thousands of other White Coat investors. Follow WCI on your favorite social media platform for financial resources, tips and strategies. Just head to your platform of choice and search for the White Coat Investor. You can do this, and the White Coat Investor can help. All right, we've got a great interview for you today. Let's get our guest on the phone and talk about him and his recent milestone. All right, we have Dr. X on the phone today. Welcome to the Milestones to Millionaire podcast.

Thank you very much. And I'd like to take this opportunity to thank you so much for everything you do for all of us out there in the medical profession. And, you know, I kind of have to say I really wish we had service like the White Coat Investor. When I first started.

Yeah, me too, now that you mention it.

Yeah, yeah, yeah. Because, well, we have some similarities in that. When I first started, you know, I ran into a lot of problems with. I didn't have the right help coming out, and I decided to defer all my investments to financial advisors that later on I found out were really just salesmen. And I'm not saying there aren't good ones because I know there's quite a few good ones. But it's just a matter of finding the right one. And I just wish it happened a lot sooner.

Yeah, for sure. Well, today we're here to talk about your accomplishment. Use it to inspire others to hopefully do the same. So tell us just a little bit about yourself. What's your specialty? What do you do? And how far are you out of training?

Yeah, okay. Well, I'm a general dentist. I graduated in 91, and so I've been out for a while. In 92, I did a GPR. It allowed me to move down from Illinois to Florida. And I didn't even realize at the time I just wanted to move to warmer climate. But that in itself probably saved us quite a bit of money throughout the years and mainly in taxes. Since we don't have a state tax. They do collect it in other ways, but it's not anything like it would be living up in Illinois or Chicago area.

And what's your approximate net worth at this point?

Right now, it's between 6.7 to 7 million.

And what's that divided up into?

Yeah, I've got about 5.4, what we probably refer to as liquid. And the homes anywhere from 1.3 to 1.5 could be more than that. I just don't know for sure, you know, to break it all down. And it gets kind of complicated when you look at what I've got. And there's a specific reason I can go into all that later. But I've got a Schwab account and that's our retirement account, which is IRAS. And I got about 1.75 in that. When you look at our tax managed accounts, we've got two ones at Vanguard, and it's about $2 million in that. And then Fidelity is 1.56. So we also have a little HSA, and that's about 91 or. Yeah, I think $91,000 of that.

You got your money spread around the three big ones anyway.

Yeah, yeah. Well, there's a reason for everything. And part of it has to do with, you know, in the past, when I first started, we had advisors and it might have been with, you know, I won't name the companies, but for a long time we just didn't earn much and it probably was about.08. I looked at what we had and it's probably under 300,000. And at that time I kept hearing you need $3 million to retire. Somebody gave me the advice that you don't want to count on your practice, which we own our own practice. We owned our own building, but I didn't want to include any of that. So I thought, well, how the heck am I going to get that much money? And it seems like I put money into it and it just evaporated. And obviously that was at the fees or poor choices for investments. And what I mean is they're selling product. And of course, at the time, the S and P wasn't doing that great. It was kind of a flat 10 years. So I decided to learn on my own. There was a dental educator and he came up. I would talk to him periodically, and he mentioned Paul Merriman. So I went to his website, looked at some of his information, and, you know, I just took over from there. I mean, he kind of broke it down and made it simple where he had his ultimate buy and hold portfolio. And, you know, I Just went all in on that. I, I just aggressively started saving and from then on, I mean it was $80,000 a year, $100,000 a year. The pre tax wasn't much. All we had was an ira. And I know a lot of, a lot of listeners have 401ks, but with my age, my staff's age, I just wasn't able to swing it. So we just relied on the IRA to invest pre tax and everything else was after tax. And that was a big chunk of what I saved. That's why the Vanguard account was so large. While the Schwab who we had an advisor and he started putting into that, we did switch advisors eventually and he's pretty good at it and he helped us out quite a bit.

Now this is a pretty interesting story where you came out in 91, didn't really acquire much wealth for the first 17 years. Then over the last 13 you've basically gone hog wild. When did you start owning your practice?

You know, as far as hog wild, I get obsessive about things. So yeah, you know, I didn't buy the practice till 96 and my wife helped me run it. She graduated with me and she was a pharmacist. She quit her job to help me at the office. And I've got to say, out of all the choices I ever made, that was probably the best choice. You know, she, she's been with me. She helped me run it, she helped me build it. So you know, one of the things I would spend money on is instead of blowing it on a boat or a plane or something, you know, we buy a house. Paid off. We bought a farm, paid it off. And you know, none of them were cheap. They were pretty expensive. So we would do things like that and you know, buy. If we bought a car, we'd pay it off. So I never had any debt. We were just very debt averse. So it's something that if I knew I can count on investing and make money off it, eventually I would have done that. But at the time, until I found that I could do it myself, that I come up with pretty decent results. And of course the past 10, 12 years has really helped because it's been a pretty much bull market except for last year.

So what's been your range of income throughout your career?

Yeah, that's funny. The first year I think I earned $35,000. The last year somewhere in the 500s. And I never really look at how much I earn. I kind of look at how much do I get to save. Well, take 2020, I probably saved 300,000 and in 19 it was 220, 18, about 180. Same thing with 17, you know, so I've really been able to put away even this year was so far to date, 130,000. That's pre and post tax, which most of it is after tax.

Now you sound pretty debt averse. How much debt do you currently have?

Oh, none.

None at all. Practice is paid off, house is paid off, the farm's paid off, everything's paid off.

Yeah, I've been debt free four times and basically we buy something expensive and then paid off. Now what had also happened was with the farm, we had bought that at the peak of the market back in 0304 and then we sold it at the bottom. It was funny, within a month we sold our house, we sold the farm and we bought five acres on the river in Florida. So you know, we just kind of swapped everything out. Never really looked like debt. You know, it just kept us out of trouble and really it allowed me to sleep at night. That's always the biggest concern for me, owing people, owing other, you know, others money.

So what advice do you have? Somebody that's where you were a decade or two ago, let's say they're a mid career doc and they kind of look around and realize they're really not accumulating wealth very quickly but they want to, they want to be financially successful like you've been. What advice do you have for that person?

Well, first thing is set goals. And you know, I've been setting goals for a long time and it's really, in this case we're talking financial of course, you know, what's your end goal going to look at, look like, excuse me, when do you want to retire with how much, you know, you kind of figure out how much you need and then just go from there. And whatever you think you want to save, I always bump it up a little bit more. I mean you could do a third, a third, A third which is, you know, a third towards your expenses, a third towards taxes or a third towards investing. But in this particular case, you know, if you're mid career, you got the funds, I just dedicate 40, 50% and try to get it up there as soon as you can because you know, as they say, the first million is always the hardest. And you know, before you know it, 2 million came and there's something I left out and that's when you want to retire. And you know, I decided last year I wanted to retire, had nothing to do with the year. Actually, it was a fabulous year for us. We produced quite a bit, but 2019, right about that time I was getting kind of burned out and I was just ready for a change. So. So we sold it in March of this year. By the time I got done and ready to sell it, we had about 3.7 in investments and we just bumped it up after that, you know, after the sale, of course.

Awesome. Well, congratulations on your success. It's a really inspiring story and I know others will take some great lessons from it and apply it in their own lines in their own lives. Excuse me. And thank you so much for coming on the Milestones to Millionaire podcast.

Thank you very much for having me.

All right, a lot of good takeaways there. Somebody who was not getting carried away with debt and probably most importantly, decided to own his practice, which makes a huge difference. When you own it, everything extra comes to you rather than whoever else owns the practice. There's always a cap on your income if you're an employee. Not the case if you were an owner. I think that savings rate is also a big part of their success story as well. Do you ever find yourself wishing there was somewhere to go to ask your finance, insurance or investing questions? The White Coat Investor Community is a great place to turn. We have a thriving community across all of our social Facebook, Twitter, Instagram, Reddit and our WCI forum. We have been discussing solutions to your money problems since 2011. Join the Conversation with thousands of other White Coat investors. Follow WCI on your favorite social media platform for financial resources, tips and strategies. Just head to your platform of choice and search for the White Coat Investor. You can do this and the White Coat Investor can help. If you'd like to come on the White Coat Investor or rather the Milestones to Millionaire podcast, go to whitecoatinvestor.commilestones and you can apply to be a guest there and celebrate with us your financial milestones and use them to inspire others to do the same. Until then, keep your head up, shoulders back. You've got this and we can help. And we'll see you next time on the podcast.

My dad, your host, Dr. Dahl, is a practicing emergency physician, blogger, author and podcaster. He is not a licensed accountant, attorney or financial advisor. So this podcast is for your entertainment and information only and should not be considered official personalized financial advice. It.