Dentistry can be a rewarding career, yet dentists often face tough challenges when it comes to their financial planning. Because so many dentists are also business owners, their situation is often complicated. Not only do they have to provide for their family, but they must also look after the livelihood of their staff and the financial success of their practice. It takes an experienced professional to help guide them through all that, plus the complexities of planning for retirement, developing savvy tax strategies, saving for children’s college education, and creating an estate plan.
Is it worth paying a financial planner?
There is no one-size-fits-all financial planner in today’s world. SYM Financial Advisors specializes in serving dental professionals in Indianapolis, Fort Wayne, Mishawaka, Warsaw and Midland, MI. We are deeply familiar with the pressures of navigating the personal and the business sides of money issues. Going it alone or with a financial planning generalist is fraught with pitfalls and expensive mistakes.
SYM Financial Advisors works with dental professionals of all ages and income levels. Dentists go through so many stages of financial life from their foundational years in college and training, through running a practice, and into retirement. Each of these stages (and there are many more in between) requires different priorities. In the beginning, many young professionals have questions about paying off student loan debt. Later in the career, questions evolve to cover retirement planning, saving for college, or key-man and buy-sell insurance for practice partners. We must constantly pivot as your practice evolves and as your life changes. SYM Financial Advisors’ experience with dentists and specialists means that you are in capable hands from the beginning.
Why does someone need a specialist advisor?
Financial planning has evolved to be a technically complex and dynamic field. Market conditions change, client circumstances change, laws change, the economy changes — and the advisor must stay on top of all these moving pieces.
A generalist financial planner is often out of their comfort zone when it comes to the unique challenges that highly compensated professionals, such as dentists, face in their day-to-day lives. Dentists have sophisticated needs, which may include opening a practice, selecting various insurance packages, running a successful small business, handling a company retirement plan, and eventually monetizing the business as retirement nears. That is where the value of hiring a specialist financial advisor comes in. SYM Financial Advisors has experience with the challenges you face.
Common Mistakes Dentist Make in Financial Planning
Dentists often earn a relatively high income, but that does not automatically result in better financial decisions. “More money, more problems,” as they say.
Many of these common mistakes are not unique to dentists. Most of us tend to live in the present and discount the future. In behavioral finance terms, this is called “hyperbolic discounting” or a bias for the present. This bias for the present is seen among many self-employed individuals, due in part to how busy they are. Being your own boss is great, but it also means that you are responsible for your financial future. A trusted advisor can walk alongside you to help you stay on track toward long-term financial success.
What are the common mistakes we see dentists make? Here is a short list.
Not taking a financial snapshot.
One of the important financial statements is the balance sheet, which is a snapshot of the assets, liabilities, and equity of the business. Dentists must do the same thing with their personal financial situation. They must be intentional about having a plan to optimize their assets and manage their debt.
Not having clear goals.
The financial planning journey is a long road. You must have clear goals in mind so that we can build and manage a financial plan. Goals can include a set target date to retire, the desire to leave a legacy through a foundation, or to leave your dentistry practice to a group of other dentists. There are smaller goals along the path of your life, too. Paying off your student debt, saving for your child’s education, owning your house, going on a nice vacation, the list can go on. We must document your goals in the financial plan to help you be intentional about moving toward them.
Not considering risks.
It is so easy to only focus on the positive outcomes. We do not like to think about what could go wrong. Unfortunately, operating a dental practice and building your personal financial foundation do not always go according to plan. It is important to remind yourself that difficult events will most likely happen at some point in your life. Knowing the proper amount of insurance to carry and the various types of insurance you need is critical to managing your risk. SYM Financial Advisors helps dentists to analyze risk policies and can work alongside your CPA, attorney, and other professionals to protect your family and your business.
Not considering the essence of time.
We have all heard that time is our most valuable asset. Dentists are often better off when they allow themselves to be dentists and business owners — not financial planners. They must invest in professional services that save time, so that they can operate their business and serve their patients. While it is natural to want to own every piece of running a practice and managing every aspect of your financial situation, that approach has an opportunity cost. An experienced financial planning team can be quite valuable in that regard.
Not keeping or maintaining a budget.
High income-earners often come to us with a question, “Do I spend too much money?” Or, sometimes, it’s more of a statement: “My spouse spends too much money.” We get it. You work hard and have a stressful career, so you want to enjoy your rare free time. Sometimes, that can mean fancy toys and exotic getaways. At SYM Financial Advisors, we want to help you enjoy life while maintaining a long-term focus. Creating a financial plan that includes automated savings is one technique to help build wealth outside of your business. A budget is another method to setting financial guardrails. A budget can help you see where your money is going.
Not focusing on the taxes.
High-income professionals typically have a relatively high tax liability. There is a good chance that tax rates will increase in the future, as well, so it is important to focus on after-tax cash flow for you and for your business. Tax strategy is one of our specialty areas at SYM Financial Advisors. We work with your CPA to help you keep up with tax laws. We aim to minimize taxes over the long run and to help you take advantage of the tax opportunities available to you.
Not considering interest payments.
Dentists often start their career with a higher amount of debt than an average person — and that is before you pile on the loan to buy into a professional practice, the mortgage on the family home, etc. Those interest payments add up over the years, and a few percentage points could potentially make a difference in the thousands of dollars over the life of the loan.
Missing the boat on investing.
Dentists are in a unique situation among professionals. On the one hand, the focus for many dentists in their early earning years is on paying back the student loan debt. They often feel that they could not possibly afford to save and invest. On the other hand, once they finally reach higher-earning years, dentists become the target of dubious pitches from many different directions. And so, they can get pulled into fly-by-night trading strategies and all kinds of risky ventures, from oil wells to restaurants. It is important to find a fiduciary financial advisor who is legally obligated to put your interests ahead of their financial gain.
Not optimizing their savings.
Most people consider themselves lucky if they can save enough to max out their 401(k) contributions. Dentists often max out several available accounts (401(k), Roth, IRA, etc.) and still have money left over. That can mean having to manage half a dozen or more accounts, each with a different set of rules. Working with a financial advisor who specializes in helping dentists can help with both strategy and navigation.
Dentists need financial advisors they can trust.
Today’s financial landscape is difficult to navigate. From market volatility, to constantly changing tax laws, to risk management — SYM Financial Advisors can help you stay on top of the quickly shifting landscape.
There were days when a local dental practice simply had to attract the right number of patients, hire quality staff, invest in good equipment — and then process payments all the way to the bank. Today, a dentist must juggle so much more just to survive. Risk policies must be constantly updated, small business retirement plans must be administered, laws need to be monitored for changes, and the entire industry seems to be in flux. Dentists need a financial advisor they can trust to handle complex financial situations.
SYM Financial Advisors specifically helps dentists tackle these challenges. As fiduciaries, we put our clients’ interest first.
Update your plan regularly.
SYM Financial Advisors does not just make financial plans; we do financial planning. Think of all the possible changes in your financial life that could take place. You might get married, buy a house, change careers, start a new business, get divorced, inherit a large sum of money, send your kids to college. The list goes on! A financial plan is not something you write and then set aside for a rainy day. It’s an evolving document that must be adjusted and tailored to what is happening in your life and how your goals change. Good financial planning means pivoting when your priorities and responsibilities shift. SYM Financial Advisors helps dentists have an accurate and solid plan for a good life — and a peaceful retirement.
As life events and stages demand adjustments to your financial plan, SYM’s mission is to proactively attend to your financial realities as your advocate so that you can focus on relationships and enjoying life. To have SYM Financial Advisors work for you in Midland, Fort Wayne, Mishawaka, Warsaw, and Indianapolis areas call 800-888-7968 or email firstname.lastname@example.org.