MalocclusionParticipantStatus: DentistPosts: 7Joined: 01/30/2018
Hey Teefus. Congrats on a great start.
It’s a wonderful position to be in . You’ll find many debt hawks on this board, and none of them are wrong. You’ll soon find yourself in a position that debt is less of a stressor and more of a tool. Debt that is hard to pay off is a problem. Debt that you choose to be in to facilitate better options is not. I’ve borrowed 5 and 6 figure sums several times just to smooth cashflow and never held them more than a month or three. That’s the power of earning. Everytime it worked out either financially or personally.
Here is what I would do if I was you.
First prioritize insurance. You are off to a great start.
A. I’d go 6 million on the life insurance, just because you can, and a few hundred a year now is a lot of piece of mind for your family. My lifestyle is scuba, road and mountain cycling, and soon to be small aircraft. I don’t plan to die doing these things, but at least I know I’m not abandoning my family if crap happens.
B. Disability seems good. Same as above regarding going to $25k. Mine isn’t that high, but I have more net worth than you.
C. Malpractice. 2/4 is a ton. I’m guessing you are OMFS, otherwise that is overkill. If so, then my opinion is useless.
D. Practice interruption / overhead insurance. You need to get enough of this to pay your bills due, your rent, and your staff for at least 3 months. You aren’t just the head of your family now, but you have an obligation to your staff to not disappear and leave them in the lurch. This works similar to disability. I broke my hand a few years ago and missed a few weeks work. If I were a better patient and did what my surgeon suggested, I’d have missed 6 weeks. Floods happen. Tornadoes happen. Fires happen. Protect yourself.
Health insurance. I got caught up in the High deductible HSA plans for a while through the marketplace, and ended up costing myself a lot of money. We even did the healthcare ministries thing for a while. An HSA is great, but depending on costs and needs, it is only one factor to consider. We do give a wellness bonus to my staff, but we don’t provide healthcare insurance. Once you start, it is VERY hard to go back if costs become unmanageable.
I saw that you addressed estate planning. That is a big one.
Depending on the number of staff you have (less is better, younger is better), a defined benefit plan might just work in your favor in a big way. Your young age is against you.
I would pay the max on my practice loan, but not a penalty. 2.99% on the car loan is close to a tipping point for me. If it was 4%, it would be gone tomorrow. If it was 1%, I’d ride it to the end. At 3%, you aren’t wrong either way. I suspect you barely notice the payment in your monthly budget.
401k and DB/CB plans require a select specialist to plan for. You just can’t do those yourself, especially if you have staff.
Hank has a lot more experience as a practice owner than I do, but it is (I think) as a general dentist. Hiring a specialist is SO much harder than a GP, especially to a low density area. Hiring a specialist associate to a LCOL area is so much harder than it should be, especially if you have a large geographic area to cover. If you know an endodontist who wants to live in an incredible place and make double or more what their peers do as an associate, have them call me. We do put high mileage on our cars though.
PS. I’d avoid the LIRP, but may not be the most informed there. Feels dirty though.Click to expand…
Molar Mechanic: and I though you were an orthodontist…lol. In orthodontics “mechanic” refers to the force systems designed to move teeth. I guess it makes sense….you’re a mechanic fixing molars.April 10, 2019 at 9:01 pm MST #205602MalocclusionParticipantStatus: DentistPosts: 7Joined: 01/30/2018
If you know an endodontist who wants to live in an incredible place and make double or more what their peers do as an associate, have them call me. We do put high mileage on our cars though.Click to expand…
Molar Mechanic: and I though you were an orthodontist…lol. In orthodontics “mechanic” refers to the force systems designed to move teeth. I guess it makes sense….you’re a mechanic fixing molars.April 10, 2019 at 9:02 pm MST #205603