Saving for retirement, paying down debt, buying a home or building liquidity — when extra money is tight, where should your dollars go first? At the beginning of a budding career, nothing seems farther away than retirement. It can be difficult to focus on saving for an event 40 years in the future, when today’s needs and desires seem much more urgent.
A lot of time is spent talking about the “why” of ownership, and although this is critical to keep in the forefront of your mind, looking for answers around the “how” is the next logical step.
The rise in student loan debt is one of the most significant challenges for a new doctor. It’s not uncommon to meet recent graduates with loans that exceed $500,000, with interest at 7 percent or more. New doctors and residents almost always start their careers with a goal of working for several years while paying down burdensome debt.
With changes in the marketplace, building a dental practice from the ground up has sparked interest for many new doctors. Though risky, the personal and financial rewards can be plentiful and attainable. While advisors have historically championed buying into practices to take advantage of cash flow and income to tackle student loan debt and begin accumulating wealth, what we’ve seen is that there are fewer practices on the market and more competition for the ones that do hit the market. We see baby boomers working and keeping their practices longer, leaving new dentists with a tighter market to begin practicing.