MtoM #53 - Dentist Reaches Financial Independence

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. Milestones to Millionaire podcast number 53. Dentist reaches financial independence. At some point in our financial lives, it will be time to buy a home. A physician mortgage can be a good vehicle for a young doctor who's just out of school and has a more effective place to use their money than on a big down payment. These loans allow doctors to secure a mortgage with fewer restrictions and a lower down payment than a conventional mortgage. But if you're further advanced in your career or deeper into your journey to financial freedom, buying a home with a conventional mortgage and then later on potentially refinancing that loan to a better rate with a shorter time frame could be a great move. Wherever you are in your financial journey, make sure you use the mortgage that will be most financially beneficial for you. Hop over to our recommended tab to learn more about all of your mortgage and refinancing options@whitecoatinvestor.com mortgage. Mortgage. You can do this and the White Coat Investor can help. We've got a great episode today. We've got a dentist. We're going to bring on and talk about his accomplishments over the last couple of decades. Okay. Our guest today on the Milestones to millionaire podcast is Dr. G. Welcome to the podcast.

Thank you very much. Thanks for having me on the show.

I understand you recently became financially independent.

That is correct.

Awesome. Congratulations on that.

Thanks so much.

Tell us, what's your profession and specialty, and how far are you out of your schooling and training?

I am in general dentistry, and I'm about 20 years out of dental school.

20 years out of school. And what's your approximate net worth? At this point?

It is about 7 million.

7 million. And what's that divided up into?

I've got about 5 million in the stock market, about 2 million in real estate, and about 2 million in the dental practice.

Okay, so nine total then, huh? Awesome. And what's been your range of income throughout your career?

I started around $100,000 as an associate when I came out of dental school, and I think I made up to maybe 180 as an associate. And then once I purchased the practice, my income slowly went up to $225,000. $275,000. Eventually, I think I probably peaked at around $500,000.

Okay, and compared to what you spend, how much do you spend?

Maybe $120,000 a year or so. I think we live off $120,000, $130,000 maybe.

So you've been financially independent for a long time now?

Well, I think I just hit financial in the last six months or so based on my own definition of financial independence, which is just being able to do what I want to do and have the flexibility and what I want to do with my life.

So what was your secret success? I mean, you built a lot of wealth in 20 years, especially relative to your income. How did you manage to do that?

I think I've just managed to save a lot in the last 20 years. I try to shoot to save somewhere between 30 and 50% of my income and I've been able to invest that money and learn how to invest and becoming financially savvy and financially literate and I enjoy those things. I enjoy reading business and finance and learning about business and finance and I've been able to do that over the last 20 years and it's something that I've enjoyed doing.

Did any of this come from your parents? I mean, did they pay for your schooling or did you get any sort of an inheritance?

No, did not. I had no help from parents. I did it, you know, I took out loans for college and loans for dental school. I came out of dental school with minus 120,000. So I was in debt coming out of dental school and slowly being able to work my way up and becoming financially independent.

How much debt do you have?

Currently I have about just under 2 million in debt.

2 million in debt on the real.

Estate, on see real estate and the practice. But my assets is my assets about 9 million.

I see assets about 9 million and debt of about 2 million. So that's a 7 million net worth.

Yeah, and you know, I've always been comfortable with debt. I've always used debt as leverage. I'm not over leveraged, but I've always been comfortable with debt and I've used it in the last 20 years to build my wealth.

So what are your career plans going forward? Do you plan to sell the practice soon or you plan to keep just practicing like you have been?

You know, I've actually cut back on clinical dentistry in the last six months. I've decided that I wanted to spend more time with my kids, my wife, my family. So I've decided to cut back on clinical dentistry and I'm mainly just managing the practice now. I'm basically managing the practice, spending a lot more time at home, you know, doing the things that I enjoy doing. No, but I still plan on having the practice for a while. I'm just not doing the clinical dentistry much, much anymore.

You have some associates working in there for you?

I do have a couple of associates working for me. And it's, you know, so far it's worked out great and I'm, I'm enjoying the pace and I'm enjoying what I'm doing, so I'm happy right now.

Sounds like you've got a nice balance right now. Was that a struggle in earlier years? Did you find it difficult when your kids were younger to balance being a parent and becoming financially independent?

It was very, very difficult. In fact, I think one of the reasons why I've cut back is because I was just spending too much time at the office and at the practice. Running the practice and managing the practice and doing the dentistry. It became a struggle because I started missing out on a lot of the kids events and activities in the evenings. I can't get to it because I'm working to 6 or 6:30 or 7 at night sometimes. I don't miss out on their activities. I became exhausted when I came home. I was exhausted by the time I get home on the weekends. I'm tired and I'm trying to catch up on things at home. Then things start up again on Monday. So it became a point where I was just exhausted. I think I was kind of burnt out. And I knew it was time to step back. I mean, I knew it was time to step back and step back from the clinical dentistry and focus on just managing and spending more time with the family.

So how do you teach your kids about money? I mean, how are you going to pass on all these lessons that you've learned during your career that maybe you didn't necessarily get from your parents?

Well, I think they know that I invest a lot because they see me managing my brokerage accounts at home. I'm on the computer a lot because I manage my own investment a lot. So they see me doing that and I kind of sit down and talk to them about some of the things that I'm doing. So they do get an exposure to that. I have a Roth IRA going for my daughter because she does help out at the practice. And I do pay her a small sum of money to help me help at the practice. So she knows a little bit about the Roth IRA and investing. So just things like that the kids are getting exposed to.

Well, what advice do you have for somebody that's a decade or two behind you? Maybe they're coming out of dental school now and they want to get to where you are in 20 years. What advice do you have for them?

I think definitely live below your means. Shoot to save 30% at least, maybe up to 50% of your income. If you can save that money first and invest first and then just live on the rest. That's how I've been doing it. Learn how to invest, becoming financial savvy. And just take it upon yourself to invest on your own because you cannot totally rely on, you know, the financial advisors. You had to take on some of that responsibility yourself.

Awesome. Well, congratulations on your success and thank you so much for coming on the Milestones to Millionaire podcast and using your experience to inspire others to do the same.

Thanks so much for having me. I appreciate it.

All right. I think there's a lot to learn from that interview. One is just the value of persistence, right? Even though you may not be making that much money, if you persistently save a significant percentage of it and invest it in some reasonable way, eventually it grows to be quite a sum of money and you will be free from the need to work for your money. Now, a lot of people can define financial independence in a lot of different ways, but a typical definition would be when you can live on 4% of your nest egg. And by that criteria, if he's spending 120, $130,000 a year, shoot. That only takes about $3 million to be able to be financially independent. Obviously, the more you spend, the more you have to have. But understanding how the numbers work is like having a superpower sometimes, because so few people in our society really understand finance. At some point in our financial lives, it will be time to buy a home. A physician mortgage can be a good vehicle for a young doctor who's just out of school and has a more effective place to use their money than on a big down payment. These loans allow doctors to secure a mortgage with fewer restrictions and a lower down payment than a conventional mortgage. But if you're further advanced in your career or deeper into your journey to financial freedom, buying a home with a conventional mortgage and then later on potentially refinancing that loan to a better rate with a shorter timeframe could be a great move. Wherever you are in your financial journey, make sure you use the mortgage that will be most financially beneficial for you. Hop over to our recommended tab to learn more about all of your mortgage and refinancing options@whitecoatinvestor.com mortgage. You can do this and the white coat investor can help. Hope you're enjoying the podcast. If you'd like to come on it, you can apply@whitecoatinvestor.com Milestones. Otherwise, keep your head up, your shoulders back. You can do this and we can help. 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. Dr. So this podcast is for your entertainment and information only and should not be considered official personalized financial advice.