Recently, we had the opportunity to sponsor the opening session of Oklahoma Dental Association’s annual meeting. Keynote speaker, former NFL player, and Fox Sports analyst Spencer Tillman spoke about the importance of having a solid game plan to help you navigate tough times. He challenged attendees to draw on preparation, experience, and strength of character to ‘win when the pressure is on,’ and we couldn’t help but see parallels with having a holistic financial plan in place.
Working in the dental field comes with unique financial opportunities – personally and professionally. It’s important to work with a financial advisor experienced in the industry who can offer advice across both your household and business finances. You can – and should – expect more from an advisor than simply helping you plan for retirement and managing an investment portfolio.
Here are five ways a financial advisor can be an asset for dentists and their teams:
Optimize business and household cash flow. Your financial advisor should help you build a budget to identify money coming in and going out. It’s important to understand your full financial picture, so you know where to cut back if you have to – and so you can see how financial decisions in your business affect your household and vice versa. We help our clients build emergency funds, so cash is available if something happens, and after the year we’ve all just been through, that cushion could give you much-needed peace of mind.
Prioritize and pay down debt. Not all debt is bad debt, but all debt must be managed. Your student loans, for example, were necessary debt and an investment in your education and future earning potential. It’s important to pay those off as soon as you can, but for most people, that’s between 5 and 7 years. Home and auto debt are often necessary as well, and if you decide to open or buy a practice some day, that will also be an investment in your future. ‘Bad debt’ is typically credit card debt or loans with high interest rates, and paying them off as quickly as possible should be a top priority.
Save on taxes while you save for retirement. Saving for retirement is not just a way to save for the future. It also helps you save on taxes by reducing your taxable income. As a business owner, having a retirement plan for yourself and your employees affords you important deductions and is one of the best ways to save on taxes.
Evaluate employment contracts and acquisition opportunities. You’ve spent many years getting the education and training to be great at what you do. But dental training doesn’t necessarily equip you for managing business finances or reviewing legal documents. We help review and negotiate the best possible deal for any employment arrangement you’re considering and help evaluate practices before you commit to buying one. We’re on your side – looking out for your best interests in any business deal.
Help buy or start a practice. When buying or starting your own practice, it’s important to work with professional partners who have experience in the dental field and are great in their individual areas of expertise. They need to communicate well – not only with you but also with each other. They need to work well together and act as your team. Your business team should include:
- An attorney
- An accountant
- A banker/lender
- A financial advisor
- An insurance agent
As a dentist, there are many pieces to your financial puzzle. Make sure to work with an advisor who evaluates the big picture and builds a plan around your unique opportunities. If you don’t have a financial professional in your corner, let’s schedule time to chat.
Blog by Aaron Waters, Wealth Advisor.
Category: Financial Service Team
