If you haven’t read this article in DentalTown, you absolutely need to right now: “Doctor’s Biggest Financial Mistakes“. It’s both funny and sad. But it really shows you how poorly thought out decisions can cost dentist a lot of money in the long haul. Here are some takeaways:
- Making large purchases when interest rates are high = no savings.
- Don’t always go out to buy new toys for the office. Keep it simple.
- Don’t marry the wrong person.
- Don’t buy a house when the market is hot.
- Don’t think that, if you don’t buy something now, there won’t be a better opportunity later.
- Don’t try to time the market.
- Be weary of who you entrust your money to (i.e. accountants, financial advisors, etc.).
- Don’t give any time to telemarketers.
- Don’t spend more just because you make more.
- Owning your own building isn’t always a good investment (particularly if you pay too much for it!).
Here’s my personal financial advice:
- Protect yourself at all times. Have life and disability insurance just in case. Buy travel insurance just in case. Have your Wills and Powers of Attorney in order just in case.
- Hire professionals with experience/reputation. Don’t hire the cheapest + least experienced person on the block. You know what they say: go cheap + pay twice.
- Plan ahead. Think about your tax obligations and savings you want to achieve. Think about retirement the moment you start working as an associate. Set a budget for yourself.
- Write it off. To the extent that you can (speak with your accountant about this one), try to deduct travel + meals + entertainment expenses. Remember: they need to be justified and reasonable (i.e. incurred for the purposes of making money, etc.).
- Prioritize. What are the most important things that you need to spend money on this year? Is it a trip? A new house? French lessons? Visiting Australia? Write them down and know what your priorities are.
- Find the Right Partner. The wrong spouse/business partner can set you back years (if not decades) financially. Find the right person by making sure your personalities are complimentary. Spend time with them (working / socially). Ask others (your friends and family) what they think about them. And protect yourself with legal documents (e.g. marriage contact, prenup, shareholders agreement, partnership agreement, etc.).