[Editor's Note: The following email was sent to me by a retired dentist who wishes to remain anonymous but who desires to show younger docs what the “other end of the spectrum” can be like when you follow good principles of investing. Success like his is what the mission of WCI is all about. I couldn't be more happy for this doc and echo his desire to want to spread the good word of financial literacy to the rest of the community.]
Dear Dr. Dahle,
I attended your seminar on personal finance at the recent AAE meeting in Denver. You might possibly remember me because I was by far the oldest person in the room. I was there with my son, a budding endodontist. I have been advising him about investing for years, but I was hoping that he would hear sound financial advice from somebody other than his father, which would help it sink in. I was definitely not disappointed. You gave an excellent overview of a very important, but usually overlooked aspect of a professional’s career.
I am the end result of faithfully following the financial concepts you are promoting. About 40 years ago, when my dental career was just beginning, I finally had a few extra bucks to invest so I foolishly “gave” it to some young advisor at a major investment firm. After a year or so of watching him frequently buy and sell stocks with my money – always with a commission, of course – I determined that I could do just as well on my own. Like you, I studied the process and then forged ahead.
Some items I learned early on and they have helped me stay the course:
Pay Yourself First
Develop a mindset that you will stash this money and pretend like it never was part of your pay. Set up automatic withdrawals from wherever your paycheck goes – checking account, savings. Start with as much as you can tolerate – 10% to start – and increase that percentage as your income increases. In my last several years of work I was putting in 20% or more of my gross income every month.
Set up several “baskets” to put this money in:
1) A basket for emergencies
Should be one of the first you fill. Get it to at least 6 months of living expenses and hold it there.
2) A basket for retirement
The more you can put in this account early on, the better off you’ll be when you get to my stage. One of my favorite quotes is from Albert Einstein:
“Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t pays it.” (Good old Al knew more than just quantum physics.)
3) A “car basket”
I fill this one until I can pay cash for my next vehicle. I have never financed a car. Think of how much I’ve saved on just that over the last 40+ years.
4) A vacation basket
…same concept.
You can set up as many baskets as you want – the more, the better.
Track Your Finances
Early in your career try to track your finances a while. My wife and I kept track of every penny we spent for about the first five years of our marriage. That’s probably a little anal – but I think most health care professionals are a little anal anyway! Even just a rough tally gives you a great idea of where all that money is going and highlights waste and areas in which you can cut back.
Be Proactive About Your Office Retirement Plan
One of the many things I learned was to continuously keep up with financial concepts related to office retirement plans. I practiced with a partner and an associate – we were an S-Corp with ten staff members. Several years ago I read about age-weighted defined benefit plans and realized that since I was at least ten years older than everyone else in the practice this would be very beneficial to me, so I convinced my partner that we should set one up. It’s not easy, and they are expensive to set up and maintain, but in the latter years of my career, I was able to stash away over $100,000 per year in this tax-deferred account.
I suspect you emphasize those concepts more, and go into more detail about them, in your book and website, but just thought I’d reinforce how important they were for me to get to where I am now.
Flying First Class
I have been a fairly aggressive investor over the years, and still am relative to my age – 73 years old and about 60/40 stocks over bonds & cash. In the late 90’s I could see the “dot-com” bubble approaching the bursting point, so I cashed out a chunk of my holdings and purchased my dream waterfront property and built my “Doc House”. About a decade later I held on through the housing/banking crash and almost cried when one of my good dentist friends related how he was “fed up” with the process and directed his advisor to sell all his holdings. I retired from private practice in 2012 and my wife and I have been thoroughly enjoying our life of leisure and travel.

Managing your finances well allows you to visit places like this both before and after retirement. Name the city for bonus points.
An interesting sidelight – shortly before I retired, a branch office of Fidelity, with whom I have about 30% of my holdings, opened in our city and an adviser contacted me and invited me to come in for a free evaluation of my portfolio. I brought my package in and he perused it. He noted my low 8 figure net worth and asked me what we were planning to do during retirement. I said that my wife and I love to travel and would be doing a lot of it in the future. He looked me in the eye and said: “You should fly First Class.”
We are now living on a retirement “budget” of about $400K per year. That breaks down to about $100K for taxes, $100K for travel all over the world – and “First Class” all the way, $100K we give away to our kids (we call that “inheritance on the installment plan”) as well as to charity, and the rest is for “everything else”. I have been retired for six years now and even at that spending level, our retirement fund is more than $500K higher now than it was when I first retired.
Hope this isn’t too verbose, but I wanted to let you hear from someone on the other end of the spectrum who, by following the same concepts you are putting across, has made it to the final stage in fine shape. Thanks again, I hope the AAE has you back every year and I’m going to promote your book to all the young docs I can get to listen to me!
Have you been living WCI principles throughout your career? How has it paid off for you? Were the sacrifices of living like a resident, paying cash for cars and holding off on the big doctor house worth it? Comment below!
What a great example! Getting emails like that must be the highlight of your day. Start early, pay yourself first, save at least 20% of your gross income, and this is what you’ll get 35-40 years later.
Did he mention at all if he was interested in adopting other adult “children” who would like to take part in his $100,000 “inheritance installment” plan? What a deal for his kids!
TPP
Kudos to this retiree for “getting it” way before it became popular to do so. A high savings rate, interest in finance, and active in optimizing retirement plans are all well before its time (ie before it became popularized on the internet by blogs) and as a result he is living a retirement life that most people only can dream about.
I bet that Fidelity advisor had his mouth drop when he saw your portfolio as he would have likely expected an endodontist have no where near a low 8 figure portfolio. You definitely deserve flying first class all the way.
I think I am going to check out of the rat race far earlier than I would be able to hit 8 figures but for me I think my enough will be far less (really shooting for a $125k/yr retirement plan).
Thanks for providing a blueprint of how it is supposed to be done in real life. Hope you son follows your footsteps as well.
Awesome! Congrats on the successful career and retirement. I’m glad that he is getting to enjoy it. You worked hard, it is your money, do as you please! That is something that I have told my father, who retired multiple times in his early 50s. It is your money, spend it as you please, just try not to leave me with debt.
Congrats and thank you for setting an awesome example!
In addition to the sound investing strategy, this guy really benefited from length of career. To reach these numbers you have to spend the time, 35-40 years. This is impossible if you want to retire at at 50.
That was my thought! Also a reminder of the “one more year” phenomenon…he could have stopped much earlier and still done most of what he’s doing, but keeping on going a few more years lets him fly first class.
Part of the issue with “one more year” is you can’t really be sure in advance whether that one more year is a necessity, whether it gives you a few nice perks like flying first class, or whether it will be completely superfluous.
Great story. Accumulation is not rocket science but temptations are hard to avoid. Panic in down markets is hard to avoid. It can be done but it is hard.
when I was in the ACCUMULATION phase I put my first $$$$ yearly right into my pension plan
Put my wife on the payroll as well
thanks to bogle and malkiel I reached financial independence earlier than expected
Word of caution-look at the rate yield curve!
Anyone use the 3 Fund Porfolio that many Bogleheads follow
I’m glad they are somehow able to get by on a retirement income of 400K! This shows what is possible if you consistently save and invest and work until a full retirement age of 67. Contrast that with the 1 in 4 physicians who have less than a million dollars at that age.
That’s completely nuts. 25% of docs have less than 1 mm at 67? Madness.
Did this anonymous dentist say low 8 figure net worth? Wow! How impressive!
The WCI message has helped me immensely with my finances. Paying down debt with the aim to pay off soon, low cost investing, and getting your finances in order are the aspects i’ve improved.
In retrospect it sounds like he worked too long. But hard to know that on the front end. Hence all the machinations about “when do I have enough?”
One critique—I don’t think Albert Einstein ever really said that quote about compound interest. For some reason it is often attributed to him (on the Internet), but from what I remember the first time that saying was printed was in like 1989, long after he had died. But, like Abraham Lincoln said, you can only believe about 80% of what you read on the internet…
I guess I’m working too long too. But if I hadn’t “worked too long” half the people reading this would have never read anything on this site.
More info on the Einstein quote: https://www.snopes.com/fact-check/compound-interest/
Apparently the New York Times is responsible for this probable whopper.
Einstein also didn’t work in the field of quantum mechanics. His claim to fame was general and special relativity. In fact he was apparently not a fan of quantum mechanics. He supposedly said of quantum theory that “I do not believe that God plays dice with the universe.”
Half true. He didn’t like nor believe many aspects of quantum theory, but he spent a lot of time thinking about it, mostly to try to disprove it and to meld macro physics with atomic physics to create the Theory of Everything that never came.
I cant find the attribution even with googling, but I thought I’ve read a quote that said, “there are two types of people in the world; those that dont understand quantum mechanics, and those that pretend to.
How many years did he work? 20?30? 40? How much in retirement savings? 10 to 12 Million?
Pretty sure this doc has revealed as much personal financial info as comfortable at this point. I wouldn’t expect the answers to those questions, but perhaps he’ll answer them in the comments section.
What a wonderful story! And a huge thank you to Jim for showing many thousands and thousands of us how to get to the same place.
Great story, thanks for sharing! I would love to hear how he allocated his investments …. large index ETF’s vs individual stocks, etc. He mentioned that he followed WCI principles, but would love to hear more details if possible. Thanks!
Nice to see the endgame playing out.
Frankly, that’s a far better endorsement than any talking head could ever give you. It’s not “hey you write well and I think you give great advice”.
It’s “I may not have heard it from you, but I’ve been following this advice with great success all my life, and on the basis of what I’ve read, not only am I bringing my son to your presentation, I’m promoting your book to everyone because they need to hear this.”
Congrats.
I thought the 2 comma club was an exciting milestone, but hitting the 8 figure club is really inspiring. Now that’s my kind of fatFIRE!
Great story. I have found that after so many years in the accumulation stage, it is hard to break that mold and fly first class. Even though I could, I still fly coach. I just can’t get myself to spend four times the money to get me to the same place. I just booked a flight for a conference and I am trying out basic economy. We’ll see how that goes. Maybe someday I will be able to lighten up and buy that first class ticket. Just because you can, doesn’t mean you should.
Dr. Cory S. Fawcett
Prescription for Financial Success
Heh heh…I know the feeling. Perhaps you can split the difference: I just purchased tix, booking regular one way and business on the return. To be fair, that return is a redeye, so the lie-flat seats are something to look forward to.
Corey,
A very comfortable retired surgeon friend of mine told me: He was telling a friend of his that despite his wealth, he really doesn’t want to pay to fly first class, and he travels often. His friend replied, “Don’t worry George – your sons-in-law will fly first class and thank you!” Every since, first class and loving it.
It’s a compelling post. I would be very interested in hearing about how he manages his income stream in retirement. Particularly to minimize taxes.
Nice to see a post from a dentist on this site. So glad to see a great representation from this wonderful profession. As a dentist myself, I can tell you that this post is from the exception rather than the rule. Dentistry suffers as badly from poor finacial literacy as our physician colleges.
I sort of wonder what would have happened had he stayed on with the “young advisor at a major investment firm” mentioned in the second paragraph…i.e. could he estimate or quantify the almost certainly negative effect on his current situation.
Great post! Not sure how feasible early retirement or retiring rich is for dentists these days as student debt after 4 years is currently running between $300,000 to $600,000 with an initial income potential of $90,000 to $125,000/year. After another $1,000,000 practice loan and 10-15 years of private practice, income potential can go up to $200,000 to $300,000. If the military pays for dental school, you’ll definitely be off to a better start. I’m doing PSLF (just 3 more years to go!) but not sure how much longer that will last for new students.
Emily,
Your numbers are in the ballpark, though perhaps somewhat pessimistic, for a general dentist. However, the author of the post was an endodontist. Many dental specialists earn incomes significantly higher than what you share (double your numbers to get in the ballpark). I can say that my personal experience as an early career specialist has not been as gloomy as you report, but I do not doubt that others face the prospect of trying to pay off 500+ in loans on 120/year in income (rare but not as rare as it should be…that kind of financial pressure is bad for the dentist and bad for their patients). Many of us are fortunate to be able to practice a profession we love and earn a great living that will provide for an early retirement if we choose.
I’m glad to hear that, Pulps. That makes me feel better about the future of the profession. I just worry when I meet the current dental students that rotate at our clinic, and they tell me they’ll have over $600,000 in loans when they’re done and they’re planning to be an associate dentist in California, ie not planning to own their own business nor specialize.
Just do nursing. California nurses can easily make $100 plus time and a half OT, and that’s not counting their phat union-mandated pension and retiree health bennies. Oh…and that’s a two year degree.
This is such an inspiring story
Bravo
Couldn’t agree more. ( I’ve always paid cash for cars and usually have the most mileage of anyone in the office )
One word of caution , defined benefit plans aren’t for everyone . Tread carefully and consider the tax consequences of a very large retirement plan. Ordinary income vs capital gains and no step up in basis for your heirs.
Yep! Be careful about overfunding tax deferred plans. There can be unfortunate tax consequences later in life.
Like too many opportunities to do Roth conversions? Like having more than you need? Like having to pay more tax because you have more money? What exact tax consequences are you concerned about? The truth is there is very little reason to invest in taxable if you still have tax-deferred space available.
maybe 3% of dentists retire comfortably at age 66
poor savers, bad investors, hi lifestyle, huge loan debt, fierce competition
the booming 80-90’s surely helped
with that income have you considered partial Roth Conversions
VERY VERY FEW dentists will amass 8 figure net worth
A great story indeed! But I’m mostly here for the bonus points for the picture of Ålesund, Norway taken from Mt. Aksla (possibly the Fjellstua viewpoint). 🙂
Winner winner chicken dinner!