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A Visit to Dental Camelot? Douglas Carlsen, DDS

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I recently landed a cocktail party invitation to a leading cosmetic dentist's local sanctuary. The home, a spectacular English Tudor in the Denver Country Club, commenced in the foyer, embracing a storybook curved staircase gracefully flowing into a majestic, timber-beamed, vaulted-ceiling living room. The master suite included a sitting room, private study and a massive luxury bath. The gourmet kitchen opened to a beautifully landscaped outdoor stone patio with fireplace. We basked in the afternoon warmth with Napa and Russian River Merlots, Pinot Grigios, Chenin Blancs and Cabernets around the lap pool. After dark, the outdoor heaters amplified the warmth of free-flowing Grey Goose and Johnny Walker Black.

At the close of the soiree, the owner, who I will call "Dr. Geil," motioned me aside and intimated he'd like to discuss personal finances.

Dr. Geil, age 52, has a profitable cosmetic practice, even in this troubling financial climate. As can be ascertained in viewing his particular lifestyle choices, Dr. Geil lives a charmed existence.

The elder Geils wear upgraded outfits from Nordstrom and Saks while the daughters frequent Banana Republic and Neiman Marcus. The Geils have been avid Lexus/Infinity supporters, leasing every three years. The daughters think those vehicles are a bit dated, so they choose to drive sportier BMWs.

Dr. Geil cherishes his membership at the local country club. He and Mrs. Geil dine there at least once a week and Geil attends many functions along with weekly golf. He feels the club's prestige benefits his family's status in the community.

One daughter is a design major, in her sixth and hopefully final year at University of Colorado at Boulder. The other daughter is in her third year at Williams College with plans for medical school. Her top choices are Johns Hopkins, Stanford and NYU. Dr. Geil treats his brood to at least one exotic first-class vacation a year. This summer they cruised the Mediterranean. And each February they spend a week in Vail, Colorado. Geil contemplates a quarter-ownership property at Snowmass.

Take a look at Table 1, and you can see all is not well in Camelot. As is the case for many upward-moving professionals, the wealth cart starts out well ahead of the horse.


In talking to Dr. Geil, he was concerned about increasing debt and zero savings ability. To add pressure, his youngest daughter is interested in attending only private medical schools. In his frustration, he told me, "I earn great money, have the right friends, live in the right neighborhood, yet I can't seem to catch up financially. My wife and I were much better off right after college." I took a quick look at his Rolex and chuckled to myself, "Tom Stanley is right." The Millionaire Next Door author writes, "There is a high correlation between the price of one's watch and one's overall consumption lifestyle."i

In his book Stanley notes that many professionals are income affluent – able to generate large income – yet are balance sheet destitute. This is Geil.

In reviewing his retirement budget, we find that Geil will need over $8 million accumulated before retiring. With his current net worth at $(650,000), he has much hard work in store.

Let's compare buying habits of Stanley's aspirationals, those that act rich and wish to be rich, but aren't, to real millionaires, those that have over a million dollars invested not counting their home.

Also of interest, very few millionaires or decamillionaires own second homes or boats. They feel they are a waste of time and know renting is more prudent. Also, the average price a decamillionaire man pays for a suit is $482.

How did Geil, with an enviable income, end up in the hole $140,000 per year? He doesn't even own a boat, plane or second home.

Stanley, in his newest book, Stop Acting Rich, posits, "Nothing has greater impact on your wealth and consumption than your choice of neighborhood. If you live in a pricey home in an exclusive community, you will spend more than you should and your ability to save and build wealth will be compromised. [There are] social pressures to redecorate frequently, join a country club and send children to private schools."v I also find there is pressure to buy the "right" cars, wear appropriate clothes and take cruises on the proper ship on the proper cruise line!

As I've detailed in the past and in my workbook/CD, having too much home is the biggest threat to wealth building and timely retirement. Homes sized more than 3,000 square feet often require 3 to 4 percent of total value per year for insurance, taxes, maintenance and upgrades. As Stanley and Charles Farrell of Your Money Ratiosvi tell us, never take out a mortgage for more than twice your annual income.

I've found no published information since 1920 that shows homes in America have actually increased in value above inflation when interest and property taxes (adjusted down for tax deduction), upgrades, maintenance and brokerage fees are included. In other words, your home is a poor financial investment. If you treat it as an investment, your wealth will suffer. Other areas of real estate investment offer growth and can provide good income, yet never rely on your primary residence as a means to wealth.

What can Geil do to tame his debt monster? First, he needs to realize leveraged debt can cause financial ruin. He really doesn't own anything. His home is under water by $400,000, he hasn't ever fully owned a car, and he owes about as much in credit card debt as his family's clothes are worth. It's all an illusion!

Second, Dr. Geil needs to start chipping away at debt. His emotional investment in his home and toys will necessitate a transformation to a more Spartan state some time in the future. Better at age 52 than at 80, when he can't work as efficiently.

Below is the battle plan:
  • Cut clothing allowance for Geil and wife in half. Also, take the daughters off the clothing allowance. This will save $23,000 per year.
  • No more cars for four years, and no more cars at all for the daughters. Afterward, keep for five to six years instead of the current three years. With daughters off the dole, savings will be $35,000 per year.
  • College costs will end in the next year; Dr. Geil cannot afford to pay for his daughter's medical school, wherever she eventually attends. She will need to rely on loans and find out how it is to be like her father – in debt. Savings will be $75,000.
  • No more first-class travel or annual trips to Vail. In the future, a strict budget will be in place every year for travel. Right now, $15,000 is prudent; savings: $55,000.
  • I didn't go into entertainment, yet no more Colorado Rockies or Avalanche season tickets. Savings: $20,000.
  • Country Club? I've emasculated poor Geil enough! Let him and his wife hang out with their free-spending friends.
  • Sell the home? Not in this real estate climate. First, Geil can't afford to sell. Second, with proper spending in the other areas of their lives, the Geils should be able to afford the home in the long term.
We've saved Dr. Geil $208,000 of spending a year, more than enough to pay off the unctuous bottom-feeding bankers' credit cards and enough to start a real retirement plan. I just need to keep Geil away from insurance salesmen financial planners.

Endnote: Taking away the clothing and auto allowance from the daughters, as well as not paying for grad school, often creates cold relationships for several years. But to have offspring who are able to manage their own lives is one of the best lessons parents can provide.

References:
  1. Thomas Stanley, Ph.D., Stop Acting Rich, John Wiley and Sons, Inc., Hoboken, NJ, 2009, page 110.
  2. Stanley, p. 71, 199
  3. Stanley, p. 203
  4. Stanley, p. 91
  5. Stanley, p. iii, p. 56
  6. Charles Farrell, JD, Your Money Ratios, Penguin Goup, New York, NY, 2010, p. 80
Author’s Bio
Douglas Carlsen, DDS, owner of Golich Carlsen, retired at age 53 from private practice and clinical lecturing at UCLA School of Dentistry. He provides the point of view of one that was able to retire early on his own terms in his numerous articles, personal financial consultations with dental couples, and practice financial coaching. To contact Dr. Carlsen, view additional articles, or order CD/Workbooks visit his Web site: www.golichcarlsen.com; call 760-535-1621 or e-mail at drcarlsen@gmail.com.
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September 2025
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