North Texas Dentistry Volume 8 Issue 3 2018 ISSUE 3 DE | Page 25

standing one. They are involved in a least
one mastermind group and work 50-hour
work weeks in their first few years of den-
tistry. Human capital or sweat equity take
a priority over financial capital, especially
in the initial stages of business. It is hu-
man capital / hard work that precedes
the accumulation of financial capital.
They read business and personal books
to help them grow. They engage a law
firm and a CPA firm with significant den-
tal expertise, both offering dental busi-
ness concepts in order to coach them in
business, to minimize tax and plan for
retirement. (One dentist mentoring a
younger dentist stated “I would not have
been able to retire without my dental
CPA.”) These dentists attend several den-
tal business conferences annually and
they believe investing in themselves and
in their businesses, is always a smart
choice. They expect some failures along
the way. They are not afraid to engage a
good dental practice management per-
formance company.
Many dentists have a goal of owning a
practice and then successfully selling that
practice someday in order to retire. They
believe they are building a dental practice
as a business, not realizing that they are
simply “self-employed.” They spend most
of their time working in their business
and very little time working on their busi-
ness. Building a business that is system-
atized that can scale to multiple locations
and support your life as a dental busi-
nessman is something that many dentists
believe is not possible. They are not as
intentional as they could be with this
limited approach. The key here is the
word “believe.” If you think you can or
think you can’t, you are probably right.
You make the choices and set the goals,
create an action plan and determine
the outcome.
I teach my children that they are to attend
school and a university with the goal of
managing, owning and running a busi-
ness. They are keenly aware that most
parents send their kids to school to “get a
good job.” These parents teach their chil-
dren this concept because that is what
they have been taught. Getting a good job
is certainly important, but breaking this
cycle and encouraging your children to
become business owners takes them to
the next level.
I teach my children, “When you were five
years old you did not think you could ever
drive a car.” Time, maturity and training
change all that. After observing others
drive a car and taking drivers education
courses that involve classroom, online
and on the road training, they understand
that they can drive a car.
B. C. Forbes at the turn of the century
stated, “A business is like an automobile,
it has to be driven, in order to get results.”
In other words, to drive an auto with in-
tention, skills must be acquired from road
experience, driver’s education and differ-
ent traffic patterns. One must be able to
see out all windows, rear view mirrors,
the instrument panel and then be able to
shift, use the gas pedal and most certainly
use the brake. People can be trained to
drive a business as well if they “observe”
and if they are “trained” properly. The
problem is that the trade secrets to run-
ning a business are addressed in business
schools in compartmentalized segments
(marketing, economics, accounting, etc.),
and it is a rare feat that someone sits
down and provides overall training cov-
ering all aspects of running a business
successfully and connecting all of the dots
(unless someone enrolls in entrepreneur-
ship classes). For the most part, even the
universities talk around the subject of
business but never directly address the
concept with intentionality.
Deferred Retirement Plan
and Wall Street
A commonly quoted statistic is that only
four out of 100 dentists can retire by age
65 and maintain the same lifestyle that they
enjoyed while they worked.
It is normal to see financial planners push
new dentists to contribute and defer as
much retirement money as possible into
a 401K plan, a SEP IRA plan or some
other plan which allows up to $54,000
to be tax deferred. And many times, these
financial planners are pushing this be-
cause they earn more in commissions
given the higher contribution levels.
One must also understand that you may
be contributing money into the tax de-
ferred retirement plan at a 37% tax rate,
but in 20 years you may find that when
the money is withdrawn, the tax rate
could be considerably higher. For exam-
ple, before the Reagan administration
changed the tax law, the highest tax rates
for individuals were 91% from 1951 to
1963. Don’t think for a second that tax
rates would never increase again to these
high rates.
Society, the government, and financial
planners made retirement planning such
an accepted norm, that no one has both-
ered to tell the public that they have a
silent partner in their retirement plan.
Why would financial planners want to
point out that we all have an Uncle who
is the silent partner in all of our retire-
ment plans. His name is Sam (Uncle
Sam). If Uncle Sam decides to raise tax
rates to 91%, you could find that you suc-
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