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How Much Money Can You Make When You’re Dead? by Douglas Carlsen, DDS

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The Mind: Games Dentists Play

Consultants comment to me that when money is tight and bills pile up, doctors often purposely avoid evaluating the numbers related to their personal and practice finances. Why?

Dr. Shawn Worthy, professor of clinical psychology at Metropolitan State University of Denver comments:

One strategy used is denial. Denial is an ancient human form of dealing with stress and fear. For many of us who have not developed positive stress-coping skills, denial might become an option. When in denial, the person will function as if the problem doesn't exist. When the problem becomes serious enough one will flee the situation. Physically leaving the state, divorcing, closing one's business and substance abuse are all possible.

Another strategy is avoidance. One purposely does not engage the issue for fear of evoking negative stimuli. Looking at a budget may expose that the doctor is underworking, overspending, or that a new device is not producing the proper production. The decision to not confront the issue today provides relief and saves time. It can wait until tomorrow. What happens tomorrow? The same lack of action again provides relief. Avoidance can last a very long time.

The avoider knows that the problem will go away or eventually blow up. When it does blow up, grief and loss, as losing a loved one, often occurs.

Remedies:

Realize that probably 80 percent of dentists avoid important financial issues. Financial consultants have a tough time attracting dentists to seminars as most dentists either avoid the topic or are ashamed of their lack of financial control.

Engage the financial threads on Dentaltown.com. Smart doctors provide sound advice and great stories. Read The Millionaire Next Door by Dr. Tom Stanley and The Little Book of Common Sense Investing by John Bogle. The former describes how professionals fall into spending traps; the latter provides great investing advice.

If you have serious avoidance or denial issues, seek a therapist.

The Mind/Body: Zoom-Mode Takes Its Toll

Lisa Knowles, DDS, speaker, owner and coach for Intentional Dental Consulting, www.intentionaldental.com, provides personal thoughts about the frenetic pace of dentists and its toll.

Dentists are always in need of more time. Many of us are in zoom mode at the office. I was not aware of many things when I started out in dentistry and my brain would not let me be aware of problems. I had learned to hit the override button and keep going in dental school. I unintentionally learned to shut down my physical and emotional needs with mental toughness and endurance to survive. Temporarily, this works.

Then came my first warning sign: acid reflux. My physician encouraged me to take Nexium. Purple pills for the rest of my life? I couldn't swallow it. I read about natural ways to resolve these problems and about the acid/base balance our bodies crave. With a minor in biochemistry, I should have known, yet I never applied the knowledge to myself. After reading Alkalize or Die, I experimented with acid levels in my body and took the time to become aware of what was going in my mouth and how it was making me feel.

My second indicator: right shoulder pain at age 35. My massage therapist did her best with no resolution. She convinced me yoga would help. As a decent athlete in college, I was aghast at the thought of doing yoga. But, I was desperate.

Awareness changed my life. I learned to slow my mind and balance out the fast-paced work environment. I thank yoga, meditation and eating better for resolving my shoulder pain and my acid reflux. Most importantly, I am thankful I became more aware by slowing down my thoughts to make intentional decisions for myself and for my practice. No one ever taught me that, only encouragement to do more, go more and make more. Unfortunately, this can lead to feeling less emotional and physical pain. We somehow think we are immune to the pain. Unfortunately, this type of thinking can lead to financial disaster via poor health.

I never had a problem making money due to good business and communication skills, but I had a problem making my body last to make the money I desired for an adequate retirement - free of a disability or heart attack. I now have awareness because I took the time to learn how to slow my thoughts. I no longer want to survive my life - I want to live my life and show others how to do the same.

Remedies:

For yoga, Dr. Knowles recommends finding a local yoga center with a certified yoga instructor. For meditation, again find a local center. Nutritional counseling is available at many wellness centers. Look for a registered dietician or someone with a degree in nutrition.

Dr. Knowles can provide direction and/or referrals by contacting her at www.intentionaldental.com.

The Body: Unbreakable?

Dr. McKay and Dr. Boone (not their real names but real doctors) had medical incidents that directly affected their financial health.

Dr. Boone suffered a ski accident, breaking his leg and ankle. He had three surgeries over two months and missed four months from his private practice. A cadre of study club and friend doctors worked at the office, each a half-day per week, seeing emergencies, checking hygiene and performing minor restorative procedures. They kept the practice open.

Dr. McKay had a stroke one weekend afternoon while hiking. It took him seemingly forever to stumble back home with his dog. His primary sequela was loss of speech resulting in six months of active therapy to relearn English. As with Dr. Boone, Dr. McKay had doctors take care of the basics while he was out of the office.

Both doctors recovered fully with disability and overhead expense insurance providing minor financial relief, yet neither practice had produced near a normal level, leaving both doctors with negative income for the period they were out. There was a huge difference in financial stress. Dr. Boone had little liquid savings on hand. It took six years to recover financially from his accident. On the other hand, Dr. McKay had a large emergency fund to draw from and recovered financially the following year.

Remedies:

Emergency Fund

Have at least six months of your personal expenses in an emergency fund. A doctor earning $250,000 will often spend about $120,000 on taxes and savings in a year, so spending will be $120,000-$140,000. $60,000+ is prudent.

This money must be liquid at all times. Use only money market funds. Also, the fund is only to be used for real emergencies, such as accident or illness. A once-in-a-lifetime vacation or buying a new car does not qualify.

Insurance

Disability insurance is one area where dentists often scrimp. Don't. It provides a monthly cash benefit to replace one's income if incapacitated, normally after 90 days. Benefits are usually paid to age 65 with maximum payment normally 60 percent of one's net income.

Make sure you will receive full benefits for not being able to work in your own occupation - dentistry. This is critical. Because long-term disability is a major cause of bankruptcy for dentists, buy the maximum amount available.

Also, have overhead expense disability coverage for fixed practice expenses. Buy the maximum amount available.

Charles Farrell indicates that one needs life insurance equal to 12 times one's income minus current retirement savings.1 The smart life insurance solution is term life. Universal life, variable universal life and whole life insurance add an investment component that is normally very expensive and not appropriate.

For further information on insurance, check out my article in the April 2013 issue of Dentaltown Magazine.

References
  1. Charles Farrell, Your Money Ratios, Penguin Group, New York, NY, 2010, page 178.
Author's Bio
Dr. Douglas Carlsen has delivered academic-based financial education since retiring from private practice in 2004 at age 53. He has no connection with any company or individual and speaks his mind freely.

Carlsen is very interested in speaking to your study club! Contact at 760-535-1621 or drcarlsen@gmail.com.

Over 25 videos available: search Dr. Doug Carlsen at You Tube site. Additional Carlsen Dentaltown articles are at: www.dentaltown.com. Search "Carlsen." Carlsen website is at www.golichcarlsen.com.
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