Financial Independence in 10 Years - The Journey of Dr. Jared Lee

Hey, dental associates and new practice owners. Welcome to the Associates on Fire podcast. Powered by Practice cfo. This is the podcast that teaches you what you never learned in dental school, the financial side of dentistry. We cover topics from planning for ownership, buying a practice, to student loans, taxes, and all things financial for the hungry to learn Dental Associate. So let's light it up.

Okay. Welcome back to another episode of the Associates on Fire program. We have Dr. Jared Lee and his wife Kristen Lee on the show. Welcome, guys.

Thank you.

Really excited to have you on the program. And we go way back, don't we, Jared?

We met when we were both starting our careers here, our companies.

I remember.

Yep.

I was in that single executive suite office, and you came in and you had different options. You were thinking about buying into an existing sort of partnership here in California. And then you made a dramatic pivot and you moved up to Alaska, to Juneau, Alaska, and you built a great practice. And the reason why I wanted you on the podcast is, as you know, this podcast is geared for associates who don't own yet. A lot of this content is also great for owners as well, but the primary focus is those who are going to be buying a practice and stepping into ownership, and what lessons can we impart to to help them in that process. I'm such a believer in practice ownership. I'm a believer in it because I see that's where the most, I think, sense of reward.

Both sort of psychologically with your career and also financially, comes from being a practice owner. If you can do that successfully, why don't you start off? Tell us a little bit about your journey from associate here in California, some of the experiences you went through, the key decisions you had to make, to eventually moving up to Juneau, Alaska, and buying a practice up there. And then we're gonna jump into what it's been like as a practice owner in these first, roughly five years.

In Juneau, Alaska.

So at this point, we worked up here for five years, but before coming up here to Alaska, we practiced down in California for about six years. So I graduated from Loma Linda University in 2008 when the bottom fell out of the market. And it was a scary time to graduate because there just wasn't much out there. When I graduated, I assumed that I probably wouldn't be working for about six months. And most of my classmates didn't work for that first year. And if they did work, it was very minimal.

But when I graduated, I had a good relationship with the school, and the dean pulled some strings for me and I got my license very quickly in order to jump into a practice with one of the teachers, one of the professors there at the school. And she was selling her practice. So I covered it until she was able to sell it. So initially I took anything I could could find. That job paid me $300 a day. So pretty much coming out of school I thought I was going to be making big money. And I probably could have made more money working at a McDonald's or something because the amount of hours I put in compared with what I actually got paid was pretty low. I also thought that working with one of my professors, I was going to have a little bit of hand holding because I was a little nervous coming out. But the very first day I showed up, she saw that I was there and she walked out and said, hey, good luck on it. And nobody in the office even knew that she was not going to be there. So it was a scary, scary entrance into the dental world. But from there I worked part time at several different offices. That was an office in Riverside. I got a job out in Palm Springs. I'd have to drive an hour and a half out to work in Old Town in La Quinta, where I worked three days a week because it was only part time. I would also moonlight at other different jobs. And so I got a lot of experience with a variety of different offices. Some very good, but then also some things that as a dentist you wish didn't exist because they're kind of a blemish on the dental field to see how some things are run. So I got a good spectrum with all of it. I was approached by somebody from one of the dental distribution companies that gave me a number to a company and asked me to call it. That's where I got started with probably my longest term.

Employment there in California. It happened to be with one of my former priorities, professors as well, who owned a group of practices. And I worked there for them for a little while in Victorville, California. They owned in Victorville, San Bernardino, Palm Springs, Las Vegas. They had a good conglomerate of practices there.

I worked there as an associate for a while, but I had a goal that I wouldn't give myself more than five years as an associate. I wanted some time to get in there, to get some experience, then to jump off and start my own practice. I had received a lot of counsel that right after school I should jump into private practice. But I was very hesitant, very nervous, very cautious. So I wanted to work with somebody that could help me out, that could mentor me. And so that Was one of the reasons why I chose this particular office. And after working there for a number of years, I let him know that I've got a. I've got to take off and find something on my own. At which point they offered me a deal to work into ownership. Both of the owner dentists were very old, ready for retirement, and they let me know that if I was to work there, I'd gain sweat equity. And they put my name up on a billboard and showed that, hey, this guy's going to be the new owner of the place. And so I continued to work for that office as an associate.

Believing that I was working myself into a partnership or ownership there. And the realization of what I was in actually came through the cda, through one of the dental conventions where I met with different specialists, dental specific lawyers and brokers and that. And as they asked what kind of situation I was in, I told them and I, I actually showed them the contract that I had and they all laughed and told me that this is not an ownership. They said, this is a way to keep you as an associate even longer.

When I took it to the owners and asked them more questions about it, I quickly realized that they were exactly right. It was just a way to extend me as an associate farther. So at that point.

Is when we.

When we separated, went our separate ways and I decided I needed to jump into this. I'd hit my five year mark, I needed to go out and become an owner. Because at the time I was working so hard in order to make somebody else rich. And so there was many days I would be working 12 hour shifts. I was always willing to do whatever they asked me to do, which was pick up any shifts that somebody didn't cover to put in that extra time to do the on call to do everything. And it would burn me out. And whenever I'd get burned out, I would look out and I would say, what do I have to show for all of this? And it was nothing. I had no hopes of ever paying off my dental loans. We actually.

Worked a deal where it was a loan forgiveness program where if I kept up with my payments, they would forgive things eventually. Because I really thought there was no way I would pay the loan off. I made just enough money to get by.

As an associate. You would make enough money where you had that hope of making something more, of becoming more efficient, of seeing more patients, producing more in order to try to get just a little bit more money. So they always would keep me nice and hungry. And then I would see the Owner Dennis come by in his hundred thousand dollar car that he just bought and as a treat he'd let me sit in the passenger seat as he drove around the parking lot with me.

It was very tough, but at the same time I didn't know what else to do. And that's why I stayed in there so long. I was scared to go out there and buy something on my own because I'd heard so many horrible stories because the market was so saturated down there in California.

There was a lot of young dentists that would take risks. And a lot of my classmates who had purchased practices were going hungry, were struggling to keep from going bankrupt. And I didn't want to be like that.

But luckily when we made that break, it was a very harsh thing to do because I thought that was the practice I was going to own. I believe it was seven practices in all and I was going to be the king of that thing. And to walk away from that was very difficult. Now when I did that, that was around the time where I met Wes and he had had something very similar happen as well, where he had been brought in by a dental specific accountant as a partner. But I believe kind of realized, hey, you know what, I. I'm more of the lackey in being not necessarily given the reins, but I'm being used as a workhorse. And we both found a lot of similarities in what we were going through. I think because of the beatdown that I got, and I assume Wes did as well a little bit. We both had a very strong drive.

To make something big and to take all these lessons that we had learned and to put it to use. And at the time I looked at Wes and I said, you know what? I says we're going to knock this out of the park and I'll give ourselves 10 years and we're both going to be able to retire because we're going to find so much success. And in all my heart I believed it. I believed that we could do something because we had so much potential. I saw it in him, I felt it in myself. And that's one of the reasons why I kind of partnered up with him at that time. And initially I'm surprised he did not block my calls because I called him about every day, it seemed like of the week, getting information, analyzing practices. And I was set that I was going to stay in California. I've always loved Southern California. I thought that was one of the reasons why I became a dentist, so I could choose where I wanted to live. And the more I ran through the practices, the more I realized that.

It just wasn't working.

I was also. While I was an associate, I was also the head of the pre dental program for the UC Riverside pre dental group. And I would go speak with them once a month. And one of the tough things is I could never get any of my classmates to go in and speak with them because most of my classmates said they regretted going into dentistry. They hated being a dentist. They weren't proud of what they did. They didn't find any value in it, and they felt that they had made the wrong decision. And in all honesty, I felt that as well. I regretted becoming a dentist. I felt that I was. The skills I picked up in dental school were worthless because there was a hundred other guys within a mile radius that could do the exact same thing that I could. I came out of dental school thinking I was Joe Studd. I picked up a lot of scholarships. Delta Dental gave me one that really patted my ego, where they picked one person from every school in California and brought us all up to San Francisco to have dinner with the heads of the insurance company. I got awards from the cda, from California Dental Association. From this dental school I went to, they gave me an award for, named after the guy that founded the school. So I came out thinking I was hot stuff. But after practicing five years and looking back, I was like, I've done nothing with my education. I was like, what am I? What have I done? And I wanted something that was going to give me either going to give me value for the skills that I learned, or that was going to get me out of dentistry so I could do something, something else. And Wes and I evaluated, it seems like thousands of practices. We had Bob Affleck from Citibank, we had bank of America. We had pretty much every dental rep from either Patterson or Shine helping with the feed me practices. And I had a good time relating with different sellers. And so even if I wasn't offering the most money on things, it seemed like they would bump me up as one of their top choices for the practice. But even with a little bit of home cooking and favoritism from some of these sellers, the deal just didn't seem to work out right.

Bob Affleck from Citibank at the time, he works for a different place now, but he said, I'm determined to keep.

He's back at Citibank.

He said, I'm determined to keep you in California, he says, because you belong here. And he found me some beautiful practices in Santa Barbara. Camarillo Seal beach, all places that I wanted to live in. And I loved all of it. But as we analyzed the practice together, it just didn't generate the money needed in order to come out ahead. And one of the sad things that I saw as I was going through a lot of these practices is dentists who had worked their whole lives and didn't know what they were going to do once they sold the practice because they couldn't retire, they had to sell the practice because of health reasons, things like that.

There was a handful as well that could retire, but there was enough that had nothing to show for all of their labor. That gave me a little bit of a scare as we were going through all of these things.

With social media influence. I was using everything I could to widen my web, to try to catch anything possible. And we started looking at practices in Colorado and Florida, in Michigan, all over, just because what we are seeing in California just wasn't working. And I began to open up our view of maybe there's something else out there, something that's going to make me.

Give me the opportunity to stand up and be a practice owner. And when that happened, we looked on social media and a friend of mine who had gone to specialty school at Loma Linda, we saw his pictures. And this guy was going to the World cup.

In Brazil.

In Brazil, which I loved, soccer. I played soccer until I blew out both of my knees to where I couldn't play anymore. And I couldn't fathom how this guy could do it, because for us, it was very difficult to take a vacation, to take any time off. One, because the corporations we worked for didn't want me to take time off. But the other, we just financially couldn't afford it. And to see these guys just up and fly to Brazil for a soccer game was unbelievable. And it perked my curiosity enough where I gave him a call and I said, what is it like up there? What's the dental climate up there? I end up flying up there. And I was blown away by how everyone said, come up. We need you up here. We would love to have your skills up here. Which was very different from what I was seeing. Not only in California, but Utah, Michigan, all these other places, they had enough. It's kind of like they had 100 McDonald's and I was trying to put in another McDonald's, and they didn't see any value in that. But up in Alaska, where we looked, they needed us. They needed somebody to come up and do dental work. And immediately there was a lot more of A value of what we had. The problem was, is I am used to the sunshine and have never lived anywhere cold. And when we went up there, it was cold and dreary, and somebody made the statement of, oh, you came up on a good day. And I said, oh, my goodness. I said, I could never live in a place like this. So Wes and I analyzed the practice, and it was nothing but good. It was so different than anything we'd seen before. He says, what do you think about this? And I said, I don't want to practice in Alaska. I want the sunshine. I want something warm. So we stuck it in the back pocket.

I went ahead and applied for a license in Alaska, and it took six months to get the license. In that six months, we analyzed as many practices as we could. I would drive her to different locations, meet with different dentists.

All these practices that were supposed to be so good, I would go to them and see for myself what I thought of it, what kind of a feeling I had.

After all of that time, nothing could compete with what we saw with the Alaska one. The good thing is, during that six months, I jumped in with another clinician. And it was probably one of the best experiences I had. The guy knew that I was only there for a part time, but he was one of the best mentors that I found, which is what I never got working as an associate.

During all that time. The five years before, I made that leap. Five and a half years or so.

The last six months, I got more training.

Than I did the whole time before. And I felt like as an associate, there was a few things I was after. I saw right off the bat I wasn't going to be rich from it. Anytime you've got. At the time, I had $250,000 in loans, and I was making $300 a day initially. And there was no way I was going to get rich from that. So what I was after was education. I wanted to get as much knowledge as I could from the dentist I was working under. But then I wanted to get as much repetition. I'm a firm believer that to be good at anything, you have to have 10,000 hours in it. And I put in the hours.

Knowing that I was not getting compensated monetarily for it. But I was after a skill which became very difficult.

When I would feel like my skill was worthless, that I was acquiring because of the vast number of dentists that had the same thing as me down in California. But anyway, with this guy, we did go our separate ways. And I went up to Alaska. I ended up doing it. I said, I don't see any other choice. And one of the biggest things that pushed me there was in order to achieve this success that no one else has, I've got to do something that no one else would be willing to do. And in California, the last place people want to go is Alaska. To go live in an igloo and be chased by polar bears.

Married to Chris, who was wanting to go to Alaska. Right. Kristen?

I did not grow up in the sunshine like my husband. And I guess we lived in California if we had been there 10 years and.

You know, when we moved up here and there was always this unsettling feeling that I didn't was it was just really crowded. And I always just felt like it wasn't the place we were meant to be to kind of raise our kids, um, and be able to just enjoy life. And so, yeah, I grew up in Michigan with four seasons. And so, yeah, I distinctly remember seeing that same social media post and saying, why don't you give them a call? Like, you know, what's. They live in Alaska? Like, how bad could it be that there was something more for us?

That's interesting because I thought it was. I thought you were reluctant. Jared just wanted to go get the great practice that was going to make him rich quick. And you were like, well, do I have to? But it sounds like you were okay with Alaska. And Jared, you were the one who was regretting leaving sunny California. But let's talk about that point when you do come up here. Or let's, let's actually back up a little bit. We're looking at the numbers of the practice. The numbers are looking good and I've got them in front of me. This practice was growing heavily during the three year period leading up to when you bought it, which always sort of raises questions of why, how is this sustainable? Is this legitimate? It went from, per my numbers, 2011, 812,000 in a year to 2013, 1.5 million. That's a massive growth in just a few years. And the profit was also pretty good based on the financial statements that we saw at the time. So you put in the letter of intent, we sort of do some due diligence on it. I looked at the money. Did it actually hit the bank? Yes, it actually hit the bank. All right, it's looking good. The payroll numbers reflect the payroll reports accurately. So the numbers were checking out in terms of due diligence. But there was a lot of sort of instability under the hood. One could say, go ahead and describe sort of how you discovered that and what you had to do when you stepped into the practice to fix, really an engine that we all thought was in great condition but perhaps wasn't.

Yeah. So we jumped up here to Alaska, to the last frontier and the last place I had ever intended to live, because we had this jewel of a practice. And.

When we were doing the purchasing, they asked me to do an audit of the charts. I had no idea what I was doing. I looked through them and I was like, well, I'm lost. So I did it according to what was asked of me. I believe it was 20 charts I had to look at and just write down what they were. But the good thing is, I was aware enough of my ignorance of the practice of buying a practice that I held pretty tight to Wes, But I also held tight to those that had helped me to discover that I was being led along as an associate, which was Sherry Mustafi, which is a great lawyer for cda, Dental Specific, and just some other people that were good counselors on things. And luckily, Sherry caught some things. And I didn't understand what she was talking about when she was telling me to watch out. She even went as far as to say, if I had to analyze practices like this and see this kind of thing, I would not be in this business because it would disgust me. And I had no idea what she meant because these were the nicest group of guys. It was five guys that were associates that had bought this practice. And they told me it was a practice that was going under. And they fixed it up, they prepped it for just the right guy, and that was me. And I bid on that hook, line and sinker. So I came up here.

Yeah. Tell us a little bit about what Sherry uncovered.

So what she found was that the practice really had no, not much of a patient base. And so it had become an urgent care clinic more than anything. And so somebody would come in with a toothache and they would treat that tooth either, extract it, root canal it, do whatever needed to be done. But then they would crown anything else in the mouth that had a somewhat large filling. And that was where the production came from. It was just a very aggressive treatment protocol. And there was no recall whatsoever.

Nobody really got new patient exams, X rays, cleanings. The number of people that had been seen that actually got a cleaning was nil. There was nobody. They actually didn't even have a hygienist for about a year, which wasn't an issue for them because, again, all they were doing was Getting people out of pain and doing more aggressive treatment. And there was many cases where somebody would agree to do an implant, they'd get them in, they'd sedate them, and they would come out with more than one implant and they would pay it. And so there was a lot of things there. As we got into the practice and as I started to learn about managing a practice, I started uncovering more and more things. Now, this particular practice had been the great practice up here in this town, but the owner became very ill. He lost his eyesight, he lost his hearing. He. He tried to sell the practice for eight years and it just gradually dropped down farther and farther until these guys picked it up. When they picked it up, they put in the typical kind of a corporate model where they put in a brand new graduate to run it, and then they set back. But the problem was, is in these smaller towns up here, they don't want.

Just some kid up here working. They want someone that they can be neighbors with, friends with, that they can interact with. They want somebody who's not only going to be a dentist, but is going to be a part of their community. Things didn't work out for this particular kid, and so he went off and these five guys got stuck holding the bag and so they did everything they could to sell it. So as we went through the practice, the patients, we thought there was 2,000 patients. In all reality, there was less than 500. Many of the patients that were listed, there was only a first name.

Or they had no phone number, they had no address, there was nothing on them. Sometimes they saw one person in the family and they listed all the rest of the family even though they'd never been seen. I wasn't knowledgeable enough to know to look for those types of things. I'd never seen anything like that before.

So, yeah, if somebody was seen once in the practice, they stayed on the records as always being in that practice. Even though they probably moved out of town two years ago. This is an area where they do see a lot of tourists as well. So anybody that came off of a cruise ship that needed something done was listed as a patient. So we bought this practice thinking that there were 2,000 patients, and we paid for those 2,000 patients. The other thing is they had accounts receivable. We, after analyzing everything, we bought the accounts receivable because we felt that that money coming in would help support us.

Most of the things were ones that they were going to write off, but once they found out the practice was going to sell, they kept those things so that it looked like there was more money coming in.

Luckily, Sherry saw a lot of these red flags. And so in writing the purchase contract, she included a clause that said if there was any dental work that was below the standard of care that had to be replaced, the previous owners would have to pay for it. And that's actually, I feel like that's what kept us afloat that first year because we bought this practice that had no patients, it had no goodwill. The practice had a very, very bad name in the community. The other dentists in town would use it as their dumping ground. If they had a patient they didn't want to deal with, they would send it over to this practice.

And when I went to the first dental meeting and I said what practice I had purchased, they all looked at me and like, well, thank goodness it's somebody else that's there now. I hope you don't do the same thing as what had been done before. And it was just a very negative vibe to the point where it crushed me when I realized what I had purchased. And it was rough because we had spent so much time going through so many practices and then after making that purchase to realize.

We had, we'd gotten bamboozled, almost like, yeah, the numbers were there, they had produced all of that. But it's not always about production. It's about the stability of the practice, of how many of those people that got all those crowns done were going to come back. But yeah, thank goodness for Sherry that she did put those things in. And I got so many calls, angry calls from the previous dentist saying, you need to be a little bit more giving. You don't make the previous people pay for things. You just need to suck it up and take the hit. If I would have taken those hits, I would have been put under.

Because the patients that were there were angry with us. So pretty much we had to purge all of the patients.

We were told that the staff was this nice group of people that loved each other. I think it was my second day, I witnessed a full out fight between the staff, physical fight, which I had never seen in all my time working as a dentist.

There's not a lot of personnel to draw from up here.

So it was tough about the turnaround.

Experience then because we buy it, we have a loan payment on the practice, we realize the recall isn't there, the number of patients isn't there.

The staff situation was a little bit questionable as well. The stability of the staff. And yet during the past five years, you guys have paid down a Significant amount of debt in the practice. You have bought various technologies, you have a CEREC in the practice, you have a cbct, if I'm correct, and you're doing implants in the practice. And during that time you've been maxing your 401, you've been maxing Roth IRAs, you've even funded a taxable account. You've lived sort of on that budget that allowed you to sort of have an enjoyable life. But at the same time, it was still a budget which allowed you to divert income away from the IRS into your future selves through these retirement plans. And you've been able to save during that period of time, $800,000 for your future self. There was probably a little bit of catch up you were almost having to do because as you mentioned, you put in five years in California and felt like you walked away with nothing to really show for it, which is such a unique thing in dentistry. The fact that only 2, 3% of dentists are able to retire at age 65 and maintain their lifestyle is a statistic that's hard to understand given the fact that dentistry is always voted as one of the best career fields in USA Today. You know, in other studies it's this great career field and there is good opportunity for income and it's a lot higher than your average household. And yet a lot of dentists who I come to know in their 50s and 60s and they say, Wes, if I had you 15, 20 years ago, I think I'd be in a different situation now because I've just never had a system, I never had a budget. I never understood how 401ks worked. I never set collection based goals and I never really had a great tax plan that was a part of the overall global cash flow plan. And so everything just sort of slipped away. It's like that missing sock in your sock door, like where the heck did it go? And it always seems to be there or the holes in the boat. But what you guys have done is you've been really diligent on being on a system since we started this. So even though the practice had some serious.

Needs when you bought it, you've been so disciplined that you've been able to do in five years, would take many dentists 20 years to do in securing more of a financial future for yourself. So as a financial planner, you make me proud on that front. Let's talk a little bit about you and your practice going.

To be more high tech. When you bought the practice, if I recall, there was no CAD cam. Correct.

When we bought the practice, we had a panel that was the extent of our.

And you do have a CBCT now, is that right?

Yeah, we have a cbct. We have a prime scan.

Yeah, we're gradually just upgrading everything. Everything was. All the chairs were old, kind of on the verge of breaking down. We actually had to get a diesel mechanic to come in and repair one of our chairs in the first six months we were here because there was nobody to fix things up here. And it was just things were falling to pieces.

So let's talk about that rebuild process. Maybe I'm jumping ahead by saying let's talk about the technology, but let's actually talk about the order of spend because you have all these things you want to do. And in our meetings over the years, sometimes Kristen wanted to put money here in the practice with some, you know, some remodel and some, you know, improvements to the aesthetics. And you were wanting to get, of course, the technology and the build out. But you guys, by and large were on the same page. But we had all of these things that we wanted to do. Early on, you sort of had this vision, this plan, and you both had it. Because Kristen, you're really involved in the practice as well. How did you order your spend over that period of time? And what advice do you have for associates as they step in and they have to deal with an old beat up office? Maybe it doesn't have the technology they want. And really the staff situation is tenuous. They have to deal with that and hiring people and sometimes even paying a little bit more to hire the right people. How did you go about making those decisions in organizing your priorities when you stepped into the practice as you built this up?

I would say initially, well, because coming from California, where everything is cutting edge and everything is new, and coming up to Alaska.

Where we're like 10, 20 years behind everything else. It seems like.

Initially I was the one that wanted to remodel everything.

We got a hold of Holger Kapler. He came in and presented us with a whole new facelift for the whole thing. It was a $2 million remodel. But initially I believe Kristen and I's our view was what can we do to stay afloat? And it wasn't necessarily what can we do to be a better practice, but what is the biggest hole we need to plug or what is the biggest fire we need to put out?

Staffing has always been something tough. And so how are we going to manage payroll with what's coming in the schedule Was very, very light. We relied on emergencies to come in. But throughout all the different practices that I worked in, I don't feel like I deviated from what the standard was, from what I learned in school, which was you do an initial exam with everything, find out all the information, set forth a plan, and push forward with it. When we started building up the practice, little by little, and we would make ends meet, I feel that we would talk together as far as, what can we. We have this cash now. Where can we put it?

Most of the time, we consult with you, and we have a wish list of things we wanted. Initially, that wish list was huge, but we would go with what was the major thing. I remember one of our first purchases was a dental chair. It was because we had a chair go out and we didn't know what to do other than just replace it. And it was a huge hit at first. I believe all of our initial purchases were, what can we do so that this can be workable? We had a guy come off of the north slope that had a huge infection. And when I was trying to do an extraction, I felt like the equipment I was using.

Was subpar, was worse than what I would use when I'd go overseas to do mission trips. And so we would buy certain things that would just make it so that we weren't dangerous, per se, Things where we could work up to that standard of care.

Good sensors?

Yeah, X ray sensors. We couldn't see anything with the X rays.

They had internal cameras.

Yeah, internal cameras were one of our first things that we did purchase. And it was because early on I had learned that.

I hated the feeling of somebody coming in and saying.

You know, this guy did all this work on me. I don't know why, but it's no good. And.

Regardless of what happens, I will always identify with dentistry. And when someone says, this guy did a bad job on me, this guy botched something.

I really would feel that hit myself as well, because what they were saying is our profession was sleazy, and I wanted to be as transparent as possible. And right from the start, we taught our office we will never do any work unless the patient can see exactly why it needs to be done. And so, yeah, we purchased cameras as one of our first things so that they could see what needed to be done. And we made sure our X ray sensors were top of the line. Now, those darn sensors cost as much as a car for each one.

And I don't believe those things are worth it. But at the same time, we had to have it. And so we put in a. What was bare minimum at first.

Do you believe that the investment in all the technology has been a good decision for your practice? And how has your staff adjusted to the fact that when you have, say, a CAD cam, you have to alter your schedule because now you're doing your crowns in house takes longer visits. Did the team embrace that because your labs are low? I love seeing labs at 3%. And you really only get to labs at 3% if you're using your CAD cam pretty consistently. And how did that sort of conversion to so much digital and so much technology go in your practice? And has it been a good thing for you?

So, yeah, so we actually don't have the CEREC in. We have the prime scan is all. But at this point.

Yeah, we have the scanner portion. We don't have the milling machine. We do have our own lab and office.

There's only one person in this whole town that does dentures and that. And we're lucky enough to have the person. And we will be putting in the crown portion as well. With COVID with everything. It's quite a headache trying to deal with these labs that have lost all of their personnel and then in addition to the shipping and that. So it is something we will be getting. I believe that our office has. We restaffed our whole group. The team we have now is completely different than the team we had when we started. We've made big changes with it. We've brought in people that have the same dreams as us, the same visions as us. I am a bit of a big dreamer. I have lofty goals and I know a lot of times they'll make you chuckle because I'll do the countdown at the end of each meeting of when we're retiring because I truly believe it. And I have a vision for this office. And the people that work here share that same vision. They see us do amazing things. And when they go around town, they're treated very well because they're identified with this office. And as a result, they're very open to things. They adapt with any of the changes we have. I make sure that they know whenever we are making a change, this is why we're doing it. And I have never had anybody that said I don't believe in that change. If we did have people that didn't believe in it, there's a high likelihood we wouldn't make the change. Because.

One is either the team isn't functional with what's going to happen, or maybe there's A problem with the change that we're making. And all the changes that we've put in have been very, very beneficial. But at the same time, we have had to make changes with our team. We've had to replace people, for example, with hygiene. We make sure that all of our hygienists are very capable at using a laser at understanding the biochemistry of the mouth. That have a drive to learn more, to be more. We pay for. If anybody wants to go get more education, we cover it and we really push that they become educated and they're proactive in learning and, and getting new skills. And at any time that they don't want to learn more and they become stagnant at that point, that's where we go looking for somebody new. And we, like I said, we were probably, well, we were the bottom office in the town. We were thought of very poorly. Within a year we brought ourselves up to the top. The last four, I think three, three years we've won the number one office.

That they vote on in the town in the local newspaper. The year before that we were, I believe it was number two.

But the office has been very good at embracing new things. The prime scan has been very difficult for all of us. We bought a new Sirona chair and oh my goodness, that thing is hard to get used to. We were doing a surgery the other day and out of nowhere the thing starts moving on us and nobody can figure out what happened to it. So there is a lot of technology that's difficult. Most of our staff we bring from out of state.

Because the requirements for education are a lot higher out of state than they are here in Alaska. And so we try to bring in and try to maintain that mentality that we are the crown jewel of this place. And the treatment we give everybody will be top notch. And in order to do that, we need the top notch materials. And all of our girls know, the hygienists know that if there's something they need, we will pay for it. That they're not to worry about the cost of things, they're to worry about what is going to make them a better clinician. And I think that mentality has made everybody grasp onto to new equipment, new technology. And they're always excited for it because they just feel like it's one more arrow in their quiver where there's just more that we can do, more we can provide. And the town is very good about acknowledging that they appreciate what we're bringing in. They appreciate our drive for care. And as a dentist There's a lot of stigmas that we have that we're these rich guys that go golfing here in Juneau. Anytime there's an expensive treatment, there's always that temptation to say, oh, I'm paying for your fishing boat. Because everyone has big fishing boats here. But our patient population, no, no, they're paying for the next upgrade into the practice to give them better care. And we've had people say, like, hey, can't we make this a little bit cheaper? And maybe we can use a wooden chair instead. Just ingest. Because they know that what we're doing is either put back into the office or put in the community somehow, and they feel a lot better about what they're paying for.

Well, the numbers are reflecting that. I think you hit 200,000 in collections. Is that right? You shot me a text.

212 last month, and I believe over 200 the month before.

Yeah, we're very productive.

Yeah. This. This is a single doctor office, right?

We.

Do we have any associates? We have no associates going in. Single doctor. How many operatories do you have?

We have six operatories. We do have three hygienists. And then I do have three dental assistants that are very well trained.

So. And the numbers are stable in that. Now you've got these hygienists, you've got a recall program. You have what a dental practice is supposed to look like. And because you've been sort of living still carefully on the personal side, you've been able to reinvest, and you've been able to set money aside in these retirement plans, and your financial condition has just improved so dramatically. One of the things about you guys that I really want the listeners to take away, a real good takeaway action item, is to always have your priority list of.

Action items. And I say that because, you know me, whenever we would meet, we would have a set of action items. And you're probably the only client who, when you would finish that, you'd say, wes, what's next? We check these off. What's next on the list? And I think that mentality right there is what has caused such an accelerated progress. Because you were always prioritizing. You were always asking me for that list of things to do my side on the financial stuff. And you would do it, and you would do it as a team. Then we'd meet again, and we'd come up with our next list. And when you'd have surplus cash, we would define what we're going to do with that surplus cash. One of the areas where I think you guys have done a great job at, and I want all dentists to really think about themselves this way, is to think of themselves as a bank in a way, and not in that I want you to think you have to wear nice suits and go down walk on Wall Street. That's not what I'm talking about. When I think, when I say be like a bank. Bank's entire existence depends on the deposits that they have, defining what their surplus is, meaning they have to keep a certain amount in the vaults per government regulations, but then defining the surplus and using that so they get a return on that more than they're having to, of course, pay their depositors. And in other words, they are excellent at what's called capital allocation. They are excellent decision makers at knowing what to do with their dollar. And as a dentist, the first goal when you buy a practice is just to make sure you've got enough in the vault. And half the time, that's the struggle is how do I keep money in the bank to cover my payroll, to cover my lease, to cover my own personal budget, to cover my student loans, to pay the taxes? All of that stuff is sort of swirling in your head, causing some concern. Do I have enough? Do I have enough? Do I have enough? But at some point, you do have enough. And if you, I think, work hard enough and lead your practice in the right way, and you sort of give vision and you communicate well with your. With your patients that you're gonna. You're gonna have enough pretty quickly, and now you've got enough in your vault. Let's define that as one month of total outflows. And maybe that's $100,000. Then anything above $100,000, let's say at the end of the month, payroll just went out. You're sitting on $120,000. Well, we've got $20,000 of surplus above our vault needs. What you do with that is one of the key determinants in how fast you become financially independent. Do you sit on it, or do we say, hey, I've got some extra money. Let me go take that extra trip to Hawaii. Or hey, I've got some extra money. Let me go out and.

Buy the latest in the car area. And you spend it on things that depreciate or lose value over time instead of putting it into or converting it over into your personal balance sheet. There's a great book called the Millionaire Next Door. Maybe you've heard of it, maybe you haven't, but it's by a guy named Tom Stanley. And he talks about how so many of the people who accelerate their financial progress, you would never know it by the way they live, but what they're excellent at doing is converting their income into, into their balance sheet, converting the surplus cash into either building an asset or paying down a debt. And between those two options, doing the one that's most effective. For example, paying down your practice debt faster, rather than setting up a tax deductible retirement plan that's going to grow tax deferred is what I don't recommend. I don't recommend paying down your practice debt any faster than you need because you're paying, I don't know, 3.5%, 4% tax deductible when you could be getting a 40% tax deduction on that dollar by putting it into a retirement plan. And then that dollar is going to compound and grow tax deferred over time. And so as we've been working together over the years, as we've defined that surplus, you guys have done a great job at allocating it out the right way, creating a set of action items, always moving down those action items and, and recreating that list. And it's just an ongoing process. You know, there's always something to be done.

The stuff that. The financial parts. I have my vision of what I want. I want to be financially free. Those years of working so hard without seeing anything made me not want to be a slave to student loans, to debt. And so I've been very vocal with you about I want to be financially free. I don't want to have to worry about if I'm going to be able to pay off this loan. The other thing is I want to have respect for the profession that I'm in, that I've given so much time so that when I walk down the street and someone says, hey, he's the dentist, I am proud of that statement. Not that them saying he's the dentist is like, he's a slime ball. And so whenever we've gone over the budget and the finances.

The first goal was I want to be financially free. And you set out some standards for us. This is where we need to do then with the money we're making. This is what you're generating. This is where our debt is. This is what we need to do. And then once we do have that extra.

That'S not going into retirement plan, now what do we do next with it? And we look at the practice. What tools do I need so that I can be A good clinician. It doesn't matter how intelligent I am or how skilled I am if I don't have the right tools. And that's where your statement of technology comes in. What things do I need so that I can do good work, that I can be proud of what I'm doing?

Kristen has taken on a large role. When I first came up here, I was in this office seven days a week. Every night after work, I was in here. And she. We actually lived in the dental office. We had an apartment underneath the office. And so she would have to come up and get me to leave the office because it was just so much work as far as diving into everything and figuring out everything with the accounts. The patients that we did have, what did they need? How could we turn them into permanent patients?

And then going through the finances, we actually found somebody that was embezzling money off of us right off the bat. And it was a lot of work for me. And so it's nice now when we do our financial meetings. I've transitioned almost to the opposite, where when you say, this is what you need to do, you need to put money into this account, we need to pay off this. Kristen, that's doing 90% of that. And so it's become much more of her baby as well. She's a nurse. She could go work in a hospital.

But she finds much more satisfaction with the business aspect of dentistry.

Where we can still provide health care in that. But we're building this machine. And as an associate, you. You get joy off of what you can do with your two hands. But as business owners, you produce something that can do so much greater good. And so maybe she's not drawing blood or taking temperatures or whatnot, but she's found. I feel like that by building this machine, we're able to help so many people. And even though my name's on the door, when we're out in the community and we meet somebody for the first time, they always say, oh, you're the dentist in town. And we built this reputation of helping through the financials as far as being able to manage this business, because if we didn't have the business aspect of it, then I'm back to square one where I'm helping just whoever comes into the office that day. And we don't have as wide of a keel where we're actually changing the way people think about healthcare. Not just our patients up here, but when we communicate with physicians in town and we spot different things and we call them, it was something that we Had a lot of resistance to initially where we called a doctor's office and they would say, why in the world are you calling us? And we tell them, because we spotted this different thing. This is our patient. We're responsible for them. We found that their blood pressure is through the roof. They're on these medications which have not been checked in five years. What can we do to alter these things? So the influence that we're making is not just plugging some holes in some teeth. But I believe that we're changing how people think about health care in this community. And I feel like one of the reasons why we've been so successful with COVID is because we recognize the virus for what it is and that it is a virus. And there's other viruses that could come. And we focus on the things that provide protection. We talk to people about nutrition. They didn't get a cavity just because they weren't brushing their teeth. They got the cavity because they're drinking 20 cans of soda a day and eating Fruit Loops for every meal.

Dentistry, I think, has evolved so much that we deal with their nutrition, we deal with their exercise, we deal with their psychological health. I am able to focus more on those things now. And then Kristen is able to focus more on the business part with you on those things.

Can I touch on that real quick? And by the way, it has been awesome to have Kristen involved, and I'm sure you could share a lot of insight as the wife of the doctor. My last program, we had Dr. Libby on Landon Libby and his wife was very involved. And in a lot of these great practices, I am seeing kind of a double threat there, a dual team between the doctor and their wife. And you. You don't have to have the wife involved to have a great practice, but I find that to be a characteristic that enhances the success of the practice. No doubt. One of the things I notice about as I have interviewed a number of doctors recently for our podcast who have really thriving practices, some of the common themes are when you're thinking about profitability in your practice, if you look at a profit and loss statement, there's two ways to do it. You can increase your collections, or you can decrease your expenses. And I'm almost able to categorize most of the dentists I come to know financially as the ones who think I'm going to make money by cutting expenses, and then those who think I'm going to make money by increasing my profit. And it's not always black and white. It's not always you're just one or the other. You have to sort of have an eye on both your collections and your expenses. But what I mean by this is that the ones that I'm finding that have great practices and are really getting ahead financially, they've, they have a bigger vision than thinking about how can I save a dollar here with this vendor and a dollar there with that vendor. They know that their best, their, their highest value is not thinking about that question. Their highest value is creating a vision in their practice that, that is almost contagious, that their staff gets sort of swept up into this vision that your patients feel like you are the doctor and if you go out and network, heck I'd still be coming to you because you've just created this sense of purpose that surrounds you and it just sort of brings everybody in. And what happens is case acceptance goes up. A lot of the treatment that people are delaying, it finally gets done. New patients start to go up. People have a great experience, not only with you, but with your staff. Because everybody's sort of got this great energy about them. And then they delegate. They delegate to people like, you know, their spouse or they delegate things to their, you know, maybe some get a practice management consultant, some will delegate things to somebody like us, like around the finances. And you delegate to your team and you create scopes of responsibility and you trust your team and you don't get on them too, too much when they make a mistake or two as they learn what their role is and you lead them through it. That's where I'm finding doctors doing 150,000amonth, 200,000amonth, and they have profit of 50, 60 thousand dollars a month to pay for their debt and set aside for retirement plans and you know, deal with their student loans and really get ahead in is they're great leaders and they think much, you know, they think just much bigger. And then they pull everybody almost like a magnet in with them. And yes, some of them have a lot of expenses they do on their P and L. They're investing in build outs and they're investing in technology and they might pay their staff a little bit more than the average in their local area. And they might pay for some coaches or advisors to help them in different areas at different stages in their career. But those are the people that are dramatically improving their life and their own personal skill set. Not only their clinical skill set, but their leadership skill set as well. And that's when big change has happened. It's been awesome to see you guys go through this Experience as going from what was a clinician back when you were an associate to becoming a practice owner. Growing this thing together, putting your heart and soul into it. And I've seen, gosh, the pitfalls, the struggles, the successes. I went up there and was in your practice and we spent some time together. It's just such a great story. I really appreciate you sharing it. Let me just mention a couple takeaways, then we'll end the podcast. We're right here at about an hour. Number one is when you're doing, you're buying a practice that clinical due diligence is really, really important. And the clinical due diligence, maybe you need a practice management consultant to help you or. Or maybe you sort of get. You know, we have in our Associates on Fire a clinical due diligence questionnaire that can help guide some of that, but that can't be neglected. Knowing what to do when you look at the patient charts, understanding your recall program, how well was the work done? What sort of redos are gonna be coming down the pipeline? How do you deal with that? Who's gonna pay for that? Really good commentary there, Jared. Also prioritizing your spend and always having that checklist, always moving on to the next thing. And the other thing you mentioned was having a mentor. I've heard that from a number of my podcast.

My doctors is having a great mentor right out of school in those early years to really help you master a lot of that clinical work and then also having a great vision. So any parting words for associates wanting to own? Maybe they are in Southern California, where it is saturated. Maybe they're in Alaska. Maybe they're in New York or Ohio, somewhere else. What parting words do you have for them?

I would say is be confident in what you have. I think that's the thing I struggle the most with. Bob Affleck told me he said he'd never seen somebody with so much potential be so scared to take that leap. And I don't think I wasted time. But if I would have jumped into ownership a little sooner, I would have gotten to enjoy what I'm enjoying now a little earlier.

It's a scary thing to jump into it, but I think that if you find your team, you find people that you trust that can help you with things, it makes it possible. And the other thing is to recognize what you have as far as you. You spend a lot of. A lot of time in dental school learning a trait, and I heard Howard Fran call it dental kindergarten because it is just the first steps of learning but what you have is very valuable. And I would say find a place where people value what you have as much as you do.

And then as far as the. The numbers and those other things, they'll work out. But if you believe in your skill and you have that need, that want to help people, and you find a group of people that recognize they need your help, that you can set up something. And back in the day, they used to delay the shingle every time they come out of dental school and start their own practice. It's much easier and much more tempting to be an associate now. The longer that you are an associate, the more you're making somebody else rich. And again, the only takeaway that you really get is.

The experience. It's kind of like renting a home compared with buying it. That home is beautiful. You can make up the yard, you can make it nice, but in the end, it's someone else's home. And associateship is a good, good residency. But I would say treat it like a residency, because as a dentist, to do the type of work that we should be doing, ownership allows you that mantle to be able to dictate how things should be done.

Kristin, give me some words, final words for the advice for spouses of newly minted dental graduates who are going to likely be involved supporting their husband or their wife, in your case, a husband. But it could be the other way around, supporting them as they go through that experience. And what advice do you have for them?

Just kind of thinking of, I guess, what we've. How far we've come and how much we've grown. You don't always. You're not always going to know the right answer, and you're not going to know how to do everything. And I just think with us and Jared, we always just had to just dive in and we kind of figure it out as we go. And that's kind of. I'm not one of those people. I like to know everything before I jump in. And I can see Jared, you know, in the beginning, he also felt like he should. We felt like we should know all these things before we bought the practice, before we did this. We don't have to know everything. You just kind of got to dive in, feel good about your decision.

And you have those family goals that you want to achieve and be in a place where you think that will give it to you. But things evolve and usually figure it out. Now we just figure it out as we go. And I just kept hearing you say previously, what's next? And that's just been our motto is what's next? And really treating people like people. Really putting a lot into our staff and our patients. And I don't, I do the business kind of like the financials and stuff, and I don't think about those fine details. I think we just. Things have a way of working out when you do good work and have that vision.

So I love it. Having faith that it's going to work itself out. I do think that there's very much an element of you just have to pull that trigger. You're never going to feel totally ready. This is never going to happen. I know when I started practice cfo, I had only a little bit in my savings account. I'm living in Southern California with my stay at home wife and three kids. And gosh, I felt butterflies every day when I was starting out. And I remember thinking, am I going to be able to do this if looking back now realizing you sort of give a pound of flesh to make it work, getting your own business or starting your own business, and had you known that ahead of time, gosh, I don't even know if I would have done it. But it's just one of those things. You got to jump in, you got to believe in yourself. You got to know that you're going to be really busy. And I tell doctors in those first few years, you're probably not going to have a whole lot of extracurricular things going on in life. It just consumes so much of you and that's okay. Eventually it dials itself in and a system starts to form and a way of life starts to form and, and then you can lift your head back up and you start to get more balance in life and the cash continues to even come in and grow even when things settle down a little bit because you've created that platform, that system upon which your business is running successfully. So thank you for being on the podcast, Jared and Kristen. Total honor. Great to have you guys as people I've worked with and known over the years. And you are going to hit that 10 year plan. Have no doubt. I'm just trying to keep up with you.

All right, guys.

All right, thanks.

Thank you.