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Money Versus Doctor by Jen Butler, MEd, CPC, BCC and Douglas Carlsen, DDS

View Comments (74) More by Douglas Carlsen, DDS (62)More by Jen Butler, MEd, BCC (19)

“Money, get away.
Get a good job with more pay and you’re OK.
Money, it’s a gas.
Grab that cash with both hands and make a stash...”1

Is Roger Waters still alive? Maybe he’s in limbo with Keith Richards.

In The Millionaire Next Door, Drs. Thomas Stanley and William Danko comment on overspending doctors: Doctors are expected to live in expensive homes, dress and drive in a style congruent with their ability to perform their professional duties… [Patients give] extra points to those who wear expensive clothes, drive luxury automobiles, and live in exclusive neighborhoods.2

Stanley and Danko examine Dr. South, a real doctor in his late 50s earning $700,000 per year, who is an under-accumulator of wealth. Many doctors have high income but because of profligate spending, have low net worth.

Stanley and Danko provide a list of financial concerns, fears and worries for doctors. A partial list from the book is provided with comments from Jen Butler.

Not being wealthy enough to retire in comfort:
Butler: There is a difference between worry and preparation. Worry occurs when we allow assumptions and unchecked thoughts to fuel our emotional capacity to deal with an event or situation. Preparation occurs when we rationally and intentionally acknowledge an event or situation with facts while asking difficult questions to anticipate unexpected circumstances. Stress related to worry about future retirement can be circumvented by getting very clear on your retirement number, being realistic on how much you can put away during the different phases of your life, and being vigilant on using facts to dispel wayward thoughts.

Not having high enough income to satisfy the family’s purchasing habits:
Butler: There are two types of stress contributing to these thoughts. First is the situational stress of school. Most dentists, and their supportive spouses, are tired of needing to watch their dollars and cents from the many years of higher education. They already did the sacrificing to get through school, so once they get into their career they think they should be able to spend how they want.

Second is the psychological stress of not fulfilling promises, which leads to guilt. The decision to continue into dental school, with all of its requirements, time commitments and price tags, is not easy. Often there are promises made to loved ones of easy living, life of luxury and early retirement. These promises linger in the back of the dentist’s mind and create significant pressure.

Carlsen: I agree. Many a young doc writes me to ask about purchasing a larger home, nicer car or having children attend private schools because their spouse “deserves it” due to the sacrifice of years of education or because of promises made.

Butler: It’s vital to have a paradigm shift around the idea of budgeting. Instead of making it a primary, independent task of the official breadwinner, turn budgeting into a family discussion where each member contributes to the process of spending and saving.

Attach the saving to something tangible so it’s meaningful. Saving just to save does not inspire or motivate someone to pile mounds of money into an account. Picturing, talking about sailing away to an exotic island does.

Having adult children move back home:
Butler: Let’s be honest, parents see their children moving out as a sign of their own “I did it” moment. You’ve raised responsible, independent humans that contribute to society.

When adult children move home, the opposite thoughts flood our minds and you now have regret from all the “what ifs” and “should haves.” The reality is supporting adult children isn’t in anyone’s financial plan, so when it happens it takes a significant toll on a dentist’s stress load. This is why it’s so important to get comfortable with failure. When we allow our children to fail, they build their own capability to be resilient. Resiliency builds strength, adaptability, problem solving and decisionmaking. Children learn what they do and do not want in their own lives and formulate plans on how to make it all happen. Failure is a necessary part of success. Take one away, the other falls off as well.

Experiencing a significant reduction in income:
Butler: Dentists measure their success based on their monthly income statements. They attach who they are, how good they are and what kind of person they are by how much they bring in each year. When there is a drop in income, whether due to the natural flow of business or as they enter retirement, the dentist then loses his or her identity and starts to think and feel the effects of “failure” thinking. This builds significant stress.

Learning and mastering how to adapt to change is critical to ward off the stress associated with income reduction. Start by seeing how change is the catalyst for growth, opportunity and adventure. Write down all the positive results that occur when you change something in your life. Being able to articulate the good will help you through the uncomfortable.

Other dentist-specific topics:
Carlsen: Doctors find it easy to reflect over cocktails or golf one’s practice production, crown fees, appreciation of the value of one’s home and personal property taxes. We complain about property taxes, stoke our egos about our higher crown fees, talk of all the money our homes will surely bring us some day, and are proud of the increases in practice production since the debacle of 2008-2010.

But that’s about it.

Doctors fail miserably in talking of the following underlying and more sinister financial fears:
  • Fear of insufficient practice net income and cash flow to fund personal expenditures. The practice is busy, yet you can’t fund the paycheck you need.
  • Fear of unexpected mail: the Trump-sized credit card statement, the medical bill that’s larger than a CEREC purchase, a collection notice with JD on the return address, the dreaded IRS letter or the State Board inquiry.
  • Fear of April 15: Is there enough to pay?
  • Fear that your CPA or attorney needs your immediate attention.
  • Fear of hidden or non-discussed large purchases by a partner or spouse.

Butler: Fears are irrational manifestations of our thoughts. They can be so pervasive and intense that we believe them to be true—the walls are caving in, there’s no air in a room full of people, everyone hates the dentist, etc. Somehow in society, being afraid has become an acceptable reason for not moving forward.

The real truth is giving into fears keeps dentists small and holds them back from taking risks. Interrogating reality is what keeps fears in check. It’s the number and quality of questions a dentist asks themselves that focuses on facts, not feelings, that will calm their fears, reduce their stress and have them manage their financial situations with ease.

Carlsen: Thanks so much for sharing your expertise, Jen! Many dentists think that they alone face these issues. Your strategies for coping with the financial fears that doctors face are a vital element of a busy doctor’s life.

References
  1. Can’t get the Pink Floyd song “Money” out of my head while writing this!
  2. Thomas Stanley, Ph.D. and William Danko, Ph.D., “The Millionaire Next Door”, 2010, 75-76.
Jen Butler, M.Ed., CPC, BCC has been working in the area of stress management and resiliency coaching for over 20 years. She is available as a coach consultant, speaker and trainer. To learn more about her services and sign up for her monthly StressLESS newsletter go to www.jenbutlercoaching.com. Take the Dental Stress Self-Assessment at www.jenbutlercoaching.com/quiz/ to find out your stress levels. Contact Jen Butler directly at 623-776-6715 or jen@jenbutlercoaching.com for more information.

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 YouTube. Additional Carlsen Dentaltown articles are at: www.dentaltown.com. Search "Carlsen." Carlsen website is at www.golichcarlsen.com.
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April 2024
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