Do You Have A Viable Plan?

Picture of by Dr David Phelps

by Dr David Phelps


 have the blessing to work with a lot of professionals in healthcare – usually dentists –

 and over the years what I find is most struggle with having a plan.

Insights on Retirement Planning for Dentists

They struggle with having a game plan, or a blueprint for building enough wealth to turn into the assets they need for “retirement.”

It’s not a word I particularly like to use, so let's just call it taking your foot off the pedal, living your life with more certainty, less stress, and more peace of mind.

No matter how long you want to continue to practice, can you do it on your own terms? And eventually sell out?

That's the game plan we all have. 

The problem with most professionals I speak with is that there is somewhat a plan, but the plan looks like this:

Work hard, save what you can and put it in a tax deferred vehicle (typically a 401(k), cash balance plan, defined benefit plan, something of that nature). You pile it up there in what I call the lock box.

Let me just say that it's better than nothing at all, but is it really the foundational vehicle that you need to set yourself free?

For myself and the people I work with in my own world in what I did, absolutely not.

In fact, I had a 401k back in the nineties. Why?

Because I felt guilty. I felt guilty because everybody else had one. That's the group-think. “If you're not doing this, then there's something wrong with you.” So I set one up through one of the well-known dental consulting groups.

There's nothing wrong with them, but that's the mainstream herd mentality…

You make money, you need to save money on taxes, so you put it in a lock box, and that's supposed to set you free at some future age.

Dr. Phelps discusses retirement planning for dentists and more.
Dr. Phelps discusses retirement planning for dentists.

The problem with the lock box is you can't get to that money until you're 59 ½ without paying tax and a penalty, no matter if there's other opportunities to utilize that money in better ways.

Better utilizing capital is what we do in Freedom Founders and what I did my whole life.

In order to do that, you have to have your capital in your hands where you can actually direct it, access it when you want it, and not have rules around it.

After having a 401k plan for four years, the results were just very minimal, and I didn't have access to that money. I basically locked up several hundred thousand dollars in a 401(k) plan but I couldn't use it on the outside, on the streets so to speak.

Because of what I created through many years of building a network in real estate, my ability to get my money, my savings working for me was the key.

That's the problem with these other plans.

Yes, you do save. It requires some discipline, and that's the good part.

The bad part is that money that you put in 401(k)s, mutual funds, index funds and wherever else your financial advisor puts it, it’s just playing the market. And the market is a casino. It's up, then it's down, it's up and it's down again.

If you look at the track record going back over 2-4 decades of people who have done that, what they have at the end of the line is really pretty nominal. It's not what they hoped it would be.

Today with the inflation rate and the cost of living going up so much, so many are going to be left with very little in their hands. 

How do I know? I see it all the time.

I talk to many dentists who are in that position. And when you're in your fifties or early sixties, you don’t want to look around and say:

“Wow, I did this plan that my financial advisor provided me and I'm still afraid I can't let go of the practice. I have to keep churning away, even though my back and neck hurt, and I've got carpal tunnel syndrome. But I have to keep doing it because if I don't, I'll be depleting this relatively modest nest egg too quickly.” 

Learning to invest in real assets where you don't have to be the one doing the work is the key to successful retirement planning for dentists.

You can't do that on Wall Street.

Yes, you can build up some assets there, but the problem is, it's going to be a depletion game when you decide to start taking distributions out.

You’ll have to put your money in very low risk investments like bonds, CDs and T-bills which pay next to nothing in this low interest rate environment. Then you’ll be depleting a certain amount of that capital over the years.

Your financial advisor will make up some number and say you need $10-15 million to even get close to living a lifestyle that you want to have for the rest of your life.

Well, that's a number most hardworking doctors are just not going to get to. So, what do you do? You just feel the need to keep going.

But what if you actually learn how to invest your capital, your hard earned savings, into other assets (besides your practice, your number one investment)?

What if you learned how to do that and do it well?

Think about the compound effect of having control of your money so you don't have to wait until 59 ½ to actually take distributions out. 

I've got young doctors who are in their early forties and they've locked up $1-1.5 million in a 401(k).

It's no use to them.

We can make that money work harder for them, but they can't access it.

It goes counter to what everybody else says. If you want to stay with a plan that's going to get you potentially nowhere, not where you want to be, then stay with those traditional saving plans. 

If you want to actually learn how to make your money work for you, then you've got to have access points.

You've got to learn how to think differently. Learn a new education path. Learn a different set of models that will get you there. 

It's what we do in Freedom Founders. We transform the lives of every member who comes through our group and set them up for Freedom way earlier than they ever expected. Much sooner. That is our track record – it's what we do.

We can't work with everybody. It's a select group, so if you're interested, you just need to reach out. We can decide together if this is the right time for you. 

If it is, great. If it isn't, hopefully we can at least point you in the right direction so that you're not on this treadmill to nowhere.

To your freedom!

P.S. Whenever you’re ready, here are some other ways I can help fast track you to your Freedom goal (you’re closer than you think) :

1. Schedule a Call with My Team:

If you’d like to replace your active practice income with passive investment income within 2-3 years, and you have at least $1M in available capital (can include residential/practice equity or practice sale), then schedule a call with my team. If it looks like there is a mutual fit, you’ll have the opportunity to attend one of our upcoming member events as a guest.

2. Become a Full-Cycle Investor:

There are many self-proclaimed genius investors today who think everything they touch turns to gold. But they’re about to learn the hard way what others have gained through “expensive” experience. I’m offering a free report on how to become a full-cycle investor, who knows how to preserve and grow capital in Up and Down markets. Will you be prepared when the inevitable recession hits? Get your free report here.

3. Get Your Free Retirement Scorecard:

Benchmark your retirement and wealth-building against hundreds of other practice professionals, and get personalized feedback on your biggest opportunities and leverage points. Click here to take the 3 minute assessment and get your scorecard.

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