money matters
Wealth Building
Deferred Retirement Plan vs . Dental Service Organization
By William Stukey , CPA
The dental business secrets offered in this article are drawn from real life experience with dentists and dental consultants over the past 20 years that have led many dentists to become financially independent . We share a brief overview of these concepts here to help “ jump start ” those dentists who seek to become great dental business men and women developing a solid financial plan and sound means for future retirement . On a weekly basis our firm studies with some of the best tax experts in the United States to seek out ways to help our dental clients avoid and minimize taxes in order to help achieve financial independence .
Overview
It is nearly impossible for most dentists to retire before age 60 . A dentist must establish a very high investment savings plan annually . Social Security benefits also do not maximize until age 70 . Strong Capital Management conducted a recent survey and asked people how prepared they are for retirement . The results showed that 59 percent of Americans expect to maintain their current lifestyles after retiring . The typical dentist in America at age 60 has approximately $ 300,000 in retirement savings which is inadequate for retirement .
There is a small group of dentists ( most unnoticed under the radar ) who amass wealth early , attain early retirement and then once again fall off the radar . Early on they mastered the dental business skill sets which are included in the precepts of the book The E-Myth Dentist ( discussed below ) by Michael Gerber , Alan Kwong Hing and Christopher Barrow . In some cases , this small group of dentists were second or third generation dentists or they had an undergraduate degree in business . Their business coaching gave them a head start .
The E-Myth Dentist book authors attempt to reveal the illusions and obstacles that small business owners encounter so they can , in turn , visualize how to reach their full potential as a dental businessman . Through this book dentists realize the possibilities open to them not only as dentists , but also as managers and entrepreneurs working on their practices . The E-Myth Dentist is “ the conceptual road map ” that outlines a solid initial plan reflecting stability , growth and high profit potential . It offers a plan of hope which should encourage you to continue taking dental business classes , reading more books on dentistry , joining dental study groups and surrounding yourself with business professionals who continue to offer sound counsel .
These dentists don ’ t feel their careers are unique . They have read many business books like The Millionaire Next Door by Thomas Stanley and William Danko . Their focus is on learning the business of dentistry and especially the niche areas of dentistry that can catapult a general dental practice to an extremely profitable practice in just a few short years . Their next focus is to start a new practice every 18 months to three years , hiring the best and brightest staff and replicating their model year after year . They prefer starting a practice versus purchasing an existing practice . Purchasing a practice is certainly a viable alternative in many cases . They have read Good to Great by Jim Collins and understand that hiring great people makes the difference between a mediocre practice and an out-
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