Why Dentists Don’t Get Rich
Dr. Joel J. Napeñas
5 minute read
When I was an undergraduate student at the University of Toronto, I was striving so hard to get into medical or dental school. I attended a bachelor party for my roommate’s brother, who at the time was in dental school. I was in awe of all those that were at that party, his classmates, as I thought to myself that the earning potential in the room was amazing.
People think that doctors (whether it be physicians or dentists) are rich. They see that Tesla that you are driving with the vanity plate, the home in the country club community, your kids in the best private schools, and the picture of your sailboat displayed in your dental practice. Your social media posts show you and your beautiful family traveling to nice places.
Have you had a patient quip to you “The fees I’m paying you are going towards that boat of yours’”
We are blessed, as it is a privilege to work in a profession where you serve others and get paid a decent salary so you can live a comfortable life, and can afford many of the things that were once a pipedream when you were a college or dental student.
However, it comes at a price and at the cost of the most valuable asset. Your time. I previously established that the average dentist’s take home pay (after taxes) works out to around $1 a minute of their working time (oral surgeons and other specialists are closer to $2 a minute). It is considerably more than the average earner. But it doesn’t make you rich.
The natural tendency is to start spending more when you earn more, with the average high earning dentist increasing their spending based on their higher wage. Whereas the average worker drives a Honda, the dentist will drive the BMW. While the average worker lives in a 2000 sq ft. house, the dentist lives in a 4000 sq ft house. The average worker puts their children in public school while the average dentist puts their child in private school. While the average worker stays at a budget friendly hotel, the average dentist will stay at the Ritz-Carlton. Why? Because they can.
I have trained dozens of residents over the years. As they are about to get their first high paying job, their first priority is ‘participate in the American dream’ and buy their first home. Thus, they take on a mortgage of hundreds of thousands of dollars, in addition to the student loan debt that they have of several hundred thousand dollars. They are also anxious to begin doing the things that they deferred for many years as a ‘poor student’, like traveling and entertainment. Thus, prior to even beginning their careers, they have already committed their future self of having to trade years, even decades of their time to paying for those commitments and lifestyle.
When you’re starting out, that prospect doesn’t seem so bad, as everything in your new career is a novelty. But what about several years into your career? Or how about in those first jobs you realize that it is all that it is not cracked up to be?
The stress of dealing with patients. Those patient calls while you are away on vacation. The regulatory pressures placed upon the operation of and how you conduct your practice. Staffing issues. Competition from or having to work in corporate dentistry. The long days, after hours and weekends either being at or operating your practice (or for some of us like me, being at the hospital). The amount of taxes you have to pay. The degree of burnout is high.
You may earn a good wage, but as long as the sole means of earning that wage is by trading your time, you are not rich. Even if you are doing something you love, if you are doing it because you HAVE to and not because you WANT to, you are not rich.
Ask yourself, if I were to all of a sudden not be able to go to work, at a set physical location, for a set period of time, can I still pay for my commitments and lifestyle? For most, the answer is ‘NO’ as they are living paycheck to paycheck.
We are all trained as students on how to be good doctors and make a good living. But we are not trained on how to be financially savvy, let alone become rich. That is why, I have been mentoring and teaching our young budding dentists about financial literacy and wealth building. (You can watch the video series here).
And how can you become rich as a dentist? Accumulate assets that build wealth and generate passive income. It is not about how much you make, but how you make it. Having assets that earn $200 a day without you having to get out of bed and physically be somewhere is much more valuable than you having to work 10 hours to earn that $1000 a day.
Don’t be the average dentist. Once you have multiple streams of income then practicing dentistry on your time and own terms is the ultimate fulfillment of wealth. You, not your job, OWN YOUR TIME.
Only then you can be truly RICH, being able to do WHAT you want, as MUCH as you want, WHERE you want and with WHOM you want.
I would love to personally talk with you about the different ways you can earn passive income and build wealth. Set up a time to talk with me here.