North Texas Dentistry Volume 8 Issue 3 2018 ISSUE 3 DE | Page 26
ceeded in enjoying a 37% tax savings on money contributed to a
retirement plan, only to find that 30 years later when you start
to withdraw this money from your retirement plan, your tax
rate on withdrawals could possibly be as high as 91%. Not pos-
sible you say. Think about the US deficit as it climbs and an in-
solvent social security system if you don’t think there is a need
to raise taxes.
Certainly, if you have a dental practice that generates $300,000
to $350,000 in overall compensation you can afford to contribute
$50,000 into a tax deferred retirement plan and we do not dis-
courage this. However, we have found that many clients who
have (net income) earnings of $800,000 or more annually sim-
ply do not have retirement plans. They will sell multiple busi-
nesses as part of their retirement plan. Most of these clients
truly enjoy running their businesses. They have accumulated
several dental practices and corresponding real estate and they
are not concerned about a retirement plan. Yes, some have self-
directed IRAs and Roth IRAs and other retirement plans. We
definitely want you to have a retirement plan of some form. De-
pending solely on a retirement plan for retirement purposes is
something we are trying to get you to rethink.
Most money contributed into a retirement plan is invested in
Wall Street. These same people have learned that few people
get rich investing in Wall Street. You are investing in other peo-
ple’s businesses. These businesses are using your money to grow
their own businesses.
Dental Service Organizations
Most wealthy people have learned that they can make more
money on main street making prudent investments in businesses
that they can touch, feel and control than in Wall Street. Your
banker could direct you to businesses that have a high success
rate (for example restaurants have a high failure rate; loans on
commercial real estate have a low failure rate). Dental practices
have an extremely high success rate because they are a
business that most people in the United States consider a non-
discretionary spending service industry. Real estate that supports
a dental practice is also a way to watch your wealth increase as
opposed to giving the money away in the form of a monthly
lease payment to a landlord.
We have seen dental practices started from scratch grow at an
absolutely phenomenal rate when started in the right location.
We can direct you to several sources that can assist in this loca-
tion criteria. A great dental practice can eclipse the contributions
and earnings of a retirement plan. Multiply the first practice
times three or four practices and the resulting sales price can
make retirement suddenly become a reality.
Some believe there is a finite amount of wealth in the world, so
your chances of becoming wealthy are limited based on this “fi-
nite” concept. Nothing could be further from the truth. There is
no cap on the number of people who can become millionaires
26 NORTH TEXAS DENTISTRY | www.northtexasdentistry.com
or billionaires. If you live in the United States, Japan, or Ger-
many, you already have a better chance than most people at be-
coming wealthy. Favorable trade, regulatory and tax climates
are the easiest places to create wealth. North America is the
single largest place of high net worth individuals and contains
31% of the world’s millionaires and 40% of the world’s billion-
aires according to the annual World Wealth Report put together
by Capgemini and Merrill Lynch*.
I have talked to several new dentists who believe that the most
money a dentist can make typically is not more than $300,000.
I have told them to triple this perceived maximum and many
are surprised. Some dentists’ net compensation or net income
annually is equal to the gross receipts of other dentists (amount-
ing to about $1,000,000 annually). DSO practices that own mul-
tiple dental practices earn substantially more than this.
If you believe your children should be sent to school only to “get a
good job” – better think again. If you believe your retirement savings
alone will permit you to retire, think again. If you believe there is a
finite amount of wealth opportunities in the world, think again.
If you think you cannot learn to own and manage a DSO with more
than one practice, think again.
Goal setting involves a series of planned, progressive small steps
to first own and operate one dental practice successfully and
then begin looking for your next practice. Committing time to
study the business of dentistry each day will eventually lead you
to a point where you know the answers to run a dental practice
inherently as well as the best dentists. Certainly, a major part of
running your own DSO is personalizing and establishing treat-
ment plans with niche marketing you can live with that give
consideration to the patient’s personal needs and avoid the fast-
paced production dentistry some of the larger national DSO’s
experience. The personalized business plan is what distinguishes
your practice from other practices. If you believe that all DSOs
are an assembly line, better think again here as well. A planned
DSO with the right team, with the right systems, a superb mar-
keting plan and one with highly ethical treatment standards is
entirely possible. If you think you can or if you think you cannot –
you are probably right.
*http://www.investopedia.com/financial-edge/1110/
getting-rich-what-are-your-odds.aspx
Wm Stukey & Associates LLC works with dental
associates, dentists with a solo practice and nu-
merous DSOs that own multiple dental practices in
Texas and throughout the United States. Our primary
focus is advanced tax planning to minimize tax bur-
den. We are trained tax strategists on your side of
the table working to fight to minimize tax, defer
tax and avoid higher taxes at every opportunity.
For more information, send email to [email protected] or call
(214) 926-1494.