Your Retirement Clock Starts Now

Hey everybody. Welcome to DE solutions lab. I'm Dr. Pam Maragliano Muniz, chief editor of Dental Economics. And tonight's topic is your retirement clock starts now. It's never too early or too late to start planning for a financially free retirement. Now I don't know about you, but it depends on the week or the month or the year that I'm having. That retirement either looks really attractive or I'm like, meh, I have time. But I think that the older I get, the more and more I realize that I need to start thinking about these things. So with us tonight is dental industry leading expert and advocate, Gary Katie. Gary is the CEO and founder of Next Level Practice. I am super excited to have Gary back tonight for his residency here, Katy Perry, not the other types of residencies out there at DE Solutions Lab. Gary, welcome.

Oh my gosh, Pam, it's always a joy to be back with you every month. I look forward to our time together and sharing great wisdom. Your retirement clock starts now. It's so important to listen to this that if you're 30, 40, it's never too early to start really looking at this because, and you're going to see, going to share stuff with, you know, docs and owners in their 30s who are actually building their practice to retire on their terms whenever they want. And the next generation of dentists are thinking this way. So that's why we're calling this. Your retirement clock starts now. And it's never too early or too late to do it, no matter what your age at any time. Right now we're going to unpack this and it's going to be a huge difference maker for people in their careers.

It's incredibly important too, because as dentists, we all know how important cash flow is for our financial security. However, when we retire, that cash flow dries up and we don't have pensions. And our future really relies on our savings and our investments and what we do as early as we can in our career. Now, unfortunately, most doctors don't realize that until it's too late. And, and there are some really frightening statistics out there to back it up. And I know you'll be sharing some solutions tonight and I know our audience is really eager to get them. But before we get into that, I'd like to get to the bottom of this alarming trend and figure out why so many dentists find themselves in financial distress so late in their careers.

Yeah, you know, it's because it's the someday wins someday. When, when, you know, I used to say, someday when, when I get skinny, I'm going to meet a nice girl and then I'm going to have a family. The. It's really the someday nevers, Pam. Right? And what happens is you sit there and money. If you've ever noticed, there's this law called Parkinson's law. And Parkinson's law, it's not about neurological brain, it's about this phenomenon in the universe called Parkinson's law, which means you ever notice that your expenses rise to meet your new levels of income? Do you ever notice that when you set a deadline, you fill time and then you're rushed to get it done, Time and money get filled to reach the new levels of benchmarks, rather than having money go to a certain place, keeping you away from the money that you would normally just spend and, you know, then it doesn't add up during your career. And then when you get to the end, the old school model is, you know, of retirement is like, buy a house, pay it off, um, work your butt off as a dentist and take care of your family. And then, you know, stuff happens, divorce happens, illness happens, stuff happens along that journey. And then when you get to the end, you know, you think you're going to sell your practice and that's, that's your nest egg. Not so in today's world, especially understanding a few things, the landscape of our industry right now is in that of consolidation, right? So 10 years ago we had nothing. Five years ago, 12 post pandemic, 30, we're going to 60. So there's opportunity right now that didn't exist even five years ago to actually be financially free. But we really have to acknowledge how many doctors on average retire financially free. What do you think that number is?

I don't know. I would hope that a high percentage of them do. Seeing as how I am a dentist, that would give me hope for the future. Oh, what is that?

That is called the red green model. And that is called that 76% or 96% of dentists cannot retire financially free. Here's what financial freedom is. It's where your assets, Pam, when invested properly, can take care of your liabilities. So a lot of doctors always ask me and they don't know this, how much do I need to retire? Well, I always say 5 million depending on, unless you live on the coast, maybe a little bit more. But, but 5 million, and if you invest it right, you can get maybe 6 to 7%, let's just call it even, 5%. 5% of 5 million is 250 a year. And if you have rent and all that stuff goes down when you get older, 250,000 living on that annually would be a nice living for most people. Plus, like if you do a little odds and ends jobs and then before you know you have more than enough, you can get there if you have a million dollar practice. You know, a lot of doctors don't think that they could ever get to 5 million in net worth, but you can actually do it if you have a million dollar practice with the right profitability in today's world. So this is important to know other, the other statistic that comes from Dental Economics, the January issue of 2022, it talks about how the average adult in the US can retire at 62. According to Gallup. That's a survey. Dentists make three times more than the average person and they are retiring at 70, not 62.69ish. Right. That's not okay. And that very simply, I'm going to make it really simply. You don't leave dental school equipped to run a business. You just don't. And a profitable one. The problem with dentistry is it's easy to make money and we get blinded by making the money we make. But there's so much more that's available to us and we don't know that. We don't know that. And once you learn this, you'll never look back again. We're going to start highlighting some of this in our next parts of our content tonight.

It's interesting because I think depending on where you are in your career, there's just different almost themes in your career. I think many dentists that are graduating right now are graduating with so much debt that the thought of retirement is just not even on the radar. And then all of a sudden you realize you can sort of manage your debt. And then you get to like where I am, where you're like, you know, it's just sort of something. You pay every month and then you have money and you're like, but I like bags, I like shoes, I actually have, I like vacations. I have some money that I would like to start to finally start my life. And then all of a sudden you start looking at your accounts and you're like, oh, shoot, I actually need to think about the future. The future is going to be here faster than we think.

Yeah. And right in the article, that January article in de, it talks about you need a tracking system, you need ways to keep it alive because it looks like you have cash. It looks that way on the surface. Like, wow, Especially after PPP loans and that influx of dollars like, oh my, it looks like there's money everywhere. But you got to get in reality about it and understand it. And once you understand it, then you're going to be able to have wealth beyond your wildest dreams.

Well, that kind of segues us perfectly into getting into what we're going to talk about. But before we do, I think many of you, especially if there's only 4% of us, and it's certainly not me who are financially free at this point, you need help and you need a helping hand and Gary is going to be able to do that for you. So definitely stick around to the end because you definitely don't want to miss what Gary's going to offer you. We'll also be fielding some questions at the end, so please feel free to ask some questions, enter them in the box that you have there on your right hand side and let's get into it. So let's get into solutions. What is the first way a doctor can start planning for retirement? You. Right now?

Yeah. So you got to get in reality, right? You got to get into looking at where you want to land this plane. See, the reason why people don't retire financially free is because they don't reverse engineer the date and the amount that they need. So most doctors, because they'll never know, I'm just going to say you want net worth of at least 5 million, so think that way. And you want that amount of net worth in 5 years, 10 years, 20 years. So, and then the way to do it is reverse engineering. So we created this reverse engineering form that allows you to do that. I'm just going to share it briefly here just so you can get a sense of it. And you know, for those that get on my calendar, I'll be happy to give this as, as a, send it to you as a gift. But this is. Can you see this, Pam? I can pulled it up, yeah. So you just, it's a form that you filled out. So your vision is you make a clear vision of what you want your future to look like. See, the reason why we don't really create our future is because we're not clear about it. So when you sit quietly, I recommend doing this with your spouse, your partner, whoever that you're confidant is and create a vision together because I often see this happening. You know, 85% of our clients, Pam, are husband and wife teams and they're not on the same page. So this, this form starts bringing that vision together and Then you want to say why you want to do this. Because if the why is not big enough, you won't deal. You won't want to deal with it. A lot of our doctors, you know that get on the calls, they're like, gary, I want to do the minimal things I got to do. I'm tired, I'm exhausted. I hate doing this. I love dentistry, but I don't want to do this. And when I tell them it's like an hour, an hour a week, they're like, wow, that, that's doable for me. I can work on this about an hour a week to have peace of mind, joy of going to work while I'm finishing my career. That's amazing. So you got to be connected to your why, why this is important. You know that's key. And then you reverse engineer. This happens to be a one year reverse engineering the three outcomes you want by, by one year. And then by fulfilling on these dreams, this is what you're going to get. So getting connected to a why on a deeper level. And if you don't, what is the cost of not getting that? See, this is a nice business plan that gets you emotionally centered on the things that are important to you. And if you don't do them, do you want to leave a legacy of generational wealth, your patients taken care of, whatever that might be, that might not happen if you don't have a plan? And then what we do is we did one year outcomes, then we do nine month, then we do six month, and then we do three month. And you can logically see where you need to be along the journey. And, and then what this eliminates is a ramp up at the end where you have to gradiently hit everything within such a short period of time and it doesn't work. And then you sign the agreement and now you're, you have your integrity at stake, which is, I wrote this up, I have this plan. It's in front of you and it's a simple plan. I can't tell you how many times people fill this out. They forget about it and they go, gary, I found my reverse engineering form. Do you know, I did everything that was on there and I didn't think I did. It was like. But if you don't get it out of your head, write it down and get clear on it, it'll start living inside you and you'll start taking new actions that you wouldn't have taken before. So that's why this is important.

So as people are starting to think about Their goals. And you say 5 million is a good goal. Is 5 million a good goal for me, or is 5 million a good goal for me and my husband collectively?

Well, yeah. I mean, again, you got to work this out. But I've learned that if I don't give doctors a number, they don't have a starting point because I'll give them a five, and they'll go, you know what? We really figured it out. And we need six or we need seven. And then, like, it isn't even on the radar that, oh, If I get 5 or 6 at 6 or about 6% interest coming my way, oh, I see. That's 300,000. Oh, can we live on 300? So, like, the dialogue, it's an equation to work from and a benchmark to work with. We have a course that we do called 5m over 5y. Did it in March. We're going to do it in November in Arizona. 5M stands for 5 million. 5Y stands over 5 years. That's a nice way you can get 5 million over 5 years today. I mean, I have some older gentlemen and older ladies that are in their 60s, and they need to ramp up. They need 5m over 1y. We can do that. Depending on your current profitability. It is doable, and I've done it with people, but, you know, it's just, you got to make the call. You got to get on the court. You got to start jumping in. But, yeah, that's been doable. We've been able to do that. And sometimes we need to, because, you know, the biggest thing is don't be hard on yourself and don't beat yourself up if you don't have a good retirement. 99% of the people that come to us, Pam, they go, man, I wish I would have made better decisions. I wish I would have made better choices. I wish this. This circumstance didn't happen. It did, but we're not judged for it. Because you're an entrepreneur now. If you were a 1099 and you were getting a salary, you wouldn't be able to do some of the things that we can do to create wealth. And that's what makes you things that you don't know, that you don't know as a business owner that you can do in today's world and really get where you want to be.

So once they've set the right goals, what is the next area they need to focus on?

Once you set the right goals, what you need to do is really look at what is the asset that you have and what's the value of that asset? So let me tell you a quick story about these two. Let me just bring them up. This is dear, dear people to me. I'm not going to lie. I like being a father to many. These guys are amazing. Nick Ritzma, Kristin Ritzma. Can you see them here?

I can.

Amazing human beings. Just incredible practitioners. Five kids, two cats. Grand Rapids, Michigan. Amazing human beings. They bought a practice for 500. It was due in 700. And 12 months later, they did 1.8. Now, how do you do that? Well, first of all, they got a lot of energy and they've been trained. They just didn't walk in blindly. They were an associate in another practice that worked. That worked with us as well. So. And then what they did was they followed this model right here. This is called the Lost Revenue locator. So in dentistry, most people, this is the myth, and this is flipping the script in dentistry, Pam. And this is why so many private equity firms are buying undervalued practices. This is why it works to throw money at a dentist, because most dentists are leaving so many millions on the table. And here is what I always say, what DSOs don't want a private practitioner to know if a crown is at a thousand and a buildup is 250. So the average adult will invest in the value of a crown and a buildup. I'm not saying sell crowns that are not needed. What I'm saying is if you're, you know, if you're a specialist, this also works. But I'm just doing it for a GP right now. 12:50 on the case acceptance. Now, patient retention is another leaky boat. Most people don't look at retaining their patients. They're actually leaking more patients, Pam, than they're getting in the front door. They go, oh, I'm getting 20 new patients. They don't know how many are going out the back, usually double that. So their patient base is shrinking over the years, but we fix that problem of retention. Two profis, two exam set of bitewings, 250. Let's say these are general PPO fees in Boston, that's 1500 is the average annual value of an adult. Now this, you know, the average Practice will have 1200 patients. 1500 times 1200 is $1.8 million. $1.8 million sitting under your roof. The way Nick and Kristin did it was they took care of people and served people, created value and urgency and hygiene, made sure that the patient showed up twice. And when they were there, they put a patient education system in that educated the patient on asymptomatic care, because that's the problem in dentistry. There's no symptoms. And here's the other problem. Dentists are trained by their professor Pam to find the chief complaint and fix it. That begets the question, what, what hurts? What's bothering you? What brings you in? Today you lose all your power as a practitioner and an advisor because you're training your patient to look for symptomatic problems if they don't have any, and you recommend asymptomatic care. They're going, you're trying to sell me something that I don't need. We put in a business model that allows that to happen, and that's how you get to 1.8, by the way, do you see any new patients in this? Not a zilch. Zero. That's why we can get a practice running from 700 to 1.8 in 12 months.

And those numbers are really interesting because I would say that those numbers are extremely conservative as well. So it looks like there's a really significant opportunity for many dental practices. We have a ton of questions coming in, and we'll try to get to them shortly. Now, a lot of those questions, and I love this. We're dentists. This is what we do. We like to tell our stories about our problems that you can help us directly, and that's what we're getting. I know you're super busy, but you're offering your time free of charge to meet with doctors personally.

Yeah. Well, look, you know, in my residency here, I have had so many insane, amazing conversations of the dental economics community. I got to tell you, man, it's been amazing. I. Each month I block out five hours of my time. Ten slots, ten half hour slots. And I've had conversations that have been life changing. We've cried together, we've laughed together. But what. What I've really gotten is to get to know the community at Dental Economics and give them clear direction. Because there's a lot of nuances that some people have. Like, I had a doctor yesterday, he's like, I have two operatories and I don't want to. I can plumb three more. But I want to really maximize my space, get this thing set up. I want to bring an associate in because we did our associate one last month and he's like, I don't even know how to do that. And I just gave him the steps and bam, he's all set. I had a gal in Sudbury, Mass. Call and just Outside of Boston. And they have the super general dentist. They have every practitioner under the roof. They have every 7,000 patients. They have 10 operatories. And they built this from scratch like five years ago. And they're running a multimillion dollar practice on a chassis of like a Kia. Like, you know, they have a. They have this Ferrari dentistry up here. And then not a Kia is bad. Kias are good. If you drive a Kia, don't give me hate mail here. But you can't run a multibillion dollar business on a chassis that doesn't work. And then, you know, these are the types of conversations that we just, you know, have a customized conversation, and you get to go out and be clear about things. And really, sometimes people share intimate things about, like, I've had a couple of practices. They know I'm sober. Like, I'm. I'm 14 years sober Sunday. Isn't that cool, Pam? I'm so happy. Yeah, I share that because, like, you know, people see us and they think we have it all together. No, Pam, we have problems, we have issues. We have to deal with the same thing our hero colleagues deal with. And there's a way out of all of it. And I can't tell you how many just, I think I shared. I was sober on our last call, and I must have had five people out of the 10 say, I have a problem. Can you help me? Or my wife has a problem, or my husband has a problem. And it was like, we got down to business and got straight and they left, like, shoulders down and with a. With a new possibility of living life. And that's the type of work that I love to do. Transparent, vulnerable, authentic. Half hour on zoom. And we just get down to it and get connected. It's awesome.

I love that. I think the other aspect of it, I think, and it seems to be an overwhelming theme when we talk, is that you don't know what you don't know. And as business owners, there could be a lot of things that we're missing and significant things financially, significant things that we really need to be aware of. And I just, I applaud you and I thank you for what you're doing for our audience. So seriously, thank you for that.

Yeah, it's a pleasure.

So, okay, what's the last area that we need to be focusing on for retirement?

Yeah, I think you want to have two things. You want to have first, some reality about things, and what is the current value of the asset you have? Because if you don't understand what the current value of the asset that you have, it's like 15,000 bucks. Now, by the way, we can even just plug this in. I work with Brian Laskin, who is the biggest innovator in dentistry. He is a genius. He's my partner on this project. Because what we wanted to do was we know dentists don't know the valuation of their practice and they have to spend like 10 to $15,000 to figure it out. And then we know that they're in day to day. Like, just like the article said in January at DE about the reason why dentists don't retire financially free is because they're not tracking their P&Ls. They don't know how much money is coming in and coming out, and they avoid looking at their P and ls. And they only look at the one in January that tells them how much they did for the year and how much they're going to have to pay them taxes. So Brian and I got together and we said, let's just take away the friction and the barrier and the effort because he's a dentist and, you know, he's like, I didn't. When I sold my practice, I did not know how much it was worth. They told me and I just accepted it. But imagine having a tool that you can plug into your QuickBooks, your bank account, and have, you know, a real clear picture of your financial situation. And this is the tool to actually have you be financially free. So I'm going to share my screen right now. And this is called the Abundance. And by abundance, abundance means more than enough for everybody. That's why it's named that. This box right here shows the valuation of this practice of $923,000. Most guys or gals don't even know how much it is. Now they're getting in it. You know, there's that Zillow. You know, I don't know if you've ever gone. I'm going to just tell a secret here, Pam. I went over a friend's house in San Diego and I go, I wonder how much this place costs. This is a pretty special joint, right? So I walk out, I go on Zillow. Oh, 6.5 billion. Okay, that's decent, right? But you don't know how much your practice is. So this takes the general algorithm, the general benchmarks, just like Zillow does for real estate. We do this for your practice. Then what happens is, this is the nice thing. I love this. This is where you can get in real time, practice profitability. So in this practice they took in 1 65. Their expenses were 106. Profit was 60,000. 60,000 times 12, 7, 20. Not, not bad, right? And then you can actually break down what your expenses are by, by a click of a mouse. Done, done and done. That's what you want. You want to be able to just know in real time how you're doing. This took two seconds to look at. You're not going to read a P and L at the end of the month. It's in your email box. You don't look at it. So this tool is plug and play. Look at it, you're done. It's amazing.

So let's talk about that a little bit more. It looks like. And it seems to me if you know what your practice valuation is today, if you wanted to retire 10 years from now, 15 years from now, 5 years from now, it's going to help you reverse engineer your goals.

Totally. Totally. Now you know you're going, hey, I need, if I'm going to five, I need a, I need either another practice or I got to bring on an associate. The decision making is different because you know, I always say landing the plane, right? I'm going to be going to Arizona tomorrow. So you're taking off from JFK and you know once they take off, the pilot puts it on automatic pilot autopilot and the winds, the headwinds, the tailwinds, the side winds and there are just. They spend four and a half hours adjusting the plane to land it in Phoenix, Arizona. The same metaphor is true. You're going to have to adjust based upon circumstances to land your plane at 5 million. So you got to know where you're starting from and then you got to know what's happening in the daily events and then you got to go, okay, what do I have to do to get that plane landed right? And, and there's like associates, there's you know, other, other units and for those that don't want to do that, they just want to sit chairside. There's roll ups for you that you can get multiples beyond what you could ever thought. So there's all these things that if you're sitting there, you're going, hey, how am I going to get there? I spoke to a guy yesterday, the guy with the 2, 2 OPS. He's got 900 in his house and he's got 350 and is in his, in his practice location. So he has 1.2, but he's 60 and he needs to get to a little bit more than that. So we Came up with a plan. And he's like, oh, my God, this is a doable plan. See, the likelihood of the success of something is so important, and that's what that half hour does, Pam, when you work with me, because what I do is I find out what you want and what you don't want and what you're willing to do and not willing to do, and then you just get a plan from there. It's like, that's what we do when we have that intimate time together just to bring it back to what was happening. Because you're sitting there going, how am I going to get there? And I can't see in any way to get there. And most people don't want to work more hours. Most people don't want to, you know, spend less vacation time. And most docs don't want to work, you know, more, more harder, like. But they want to be more efficient. They want to have more output. And this is how we get it done.

I also think when you're creating an exit plan, it's not a one shoe fits all kind of situation either. And I think that having a coach to help you figure out what's going to be the best plan for you and your situation is only going to set you up for success.

Yeah, yeah. It's a blind spot for a lot of people. Like, you know, there's three things and we. I want to highlight it one more time, Pam. There's things that we know, there's things that we don't know. The things that we don't know, we know we don't know them. They can go into the domain of knowing. It's what a coach does, is highlight the things that you don't know, that you don't know that when you're at the foul line when if you don't bring your elbow up, you're going to shoot 60% and if you get your elbow up, you're going to shoot 90%. And my Phoenix Suns, that's what they do. They, they win. All they do is win, win, win, no matter what.

And we need to.

Are you reading all the. All the people's questions coming in? I see you.

I know there are so many questions, but. Okay, I'm going to kind of bundle the questions into one concept. One concept. How could we. And should we be thinking about our exit plan?

Yeah, this is great. This is the someday wins, like interrupted right here. So I'm going to share my screen and you know, our listeners, especially Brian. We have Brian who always joins us and he loves the telestrator. So I'm going right to the telestrator, Pam, on this one, okay? So I'm going to draw it out. So here's what we know, right? We're going to start here. What we know is this. We have a current situation, and the current situation is the current situation. Like, please be kind to yourself. Don't judge yourself where you are, where you are. And then we know this is your future, right? And then we know inside of there is time, right? So the current time never stops. That's going to be the constant. You want to begin to look at what is your. When do you want to land your plane? You know, get. Just declare something, like I said, about the 5 million. Let's just say it's going to be five years right? Now, over those five years, you have stuff that's going to happen, right? So if you sit and you avoid. So you know, 80% of the dentists that we. Dentists that we work with are humanist methodicals, right? Humanist methodicals. Myers Briggs. Humanist methodical is the default mechanism, Pam, is avoidance. So we are that antidote for avoidance. And I use red here because what happens is with no plan, no structure, we drift. And then time happens and we get away from. There's a gap between what our clear future is that we put on our reverse engineer form, and it's somewhere way less than that, right? Then the other option is the green line. So this is where thriving is. And the green line goes up like this, okay? So here's what to note. And this is really important. The longer you wait, if you're over here, it's costlier, harder, and riskier. That's the cost of waiting. If you're right here, the lines here, you. You jump the line. So you jump the line. You immediately jump the line where it's least expensive, least difficult, least risky. Then what you do is you follow the green line. And what you do is you follow the green line and you ride the curve. So now you're riding a curve. Because here's the thing. If you don't have structure and scaffolding in place to know what the measures are and a systematic process to land the planet, to thrive, you're going to go down the drift line. Now here's the other thing. You can accelerate. So how do you accelerate? You find someone. This is the acceleration. You find someone that has done this, you can find me. I've done it 6,000 times. There's all kinds of people that line up. If they line up with your values and you get your accelerator because that's where accountability comes in. That's where removing barriers comes in. That's where all those things that get in the way of landing your plane five years at 5 million happen. So it's so important to understand that without structure, that plane is not going from JFK to Phoenix and landing because the wind and all the circumstances with 2500 miles is going to thwart that landing. And that's what we're talking about with an exit strategy. That's what it takes. Pam.

So interesting. And we really have to come up with a plan regardless of where you are in your career. And I think having help to I know I need help to come up with my plan. So I think many of others feel the same way. So I know we've gotten to many of the questions, but I know we didn't get to all of the questions. And unfortunately we are out of time for tonight. And I know this time flies by so quickly. But don't worry, Gary will get to your questions. We will make sure we forward them to you. And he is more than happy to answer them. And again, Gary, I can't thank you enough for this month and I can't wait for next month.

You bet. I look forward to it, Pam. Thanks, everybody. Look forward to seeing you guys. And thanks for the privilege of being a part of DE. Thank you.

Thank you, Gary. And for DE Solutions Lab, I'm Dr. Pam Miragliano Muniz. And we'll see you next month.