by Michael Schuster, DDS
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More than 30 years of working with my colleagues tells me that creating wealth is simple, but not easy! I would like to share the four requirements for creating wealth that can make all the difference in your career as a dentist.
Requirement One: Master plan. First and most importantly, you must know exactly how much is enough and by when. You have to create a Master Plan. Obviously, the earlier you do this, the better. In reality, this is more neuroscience than science. The way our brains work is simple, but most people are too busy to stop and consider how their mental mindset determines their lives. Your brain works in two ways. First, the energy is directed toward seeking a goal and knowing why you want this goal. The second is discovering and taking action to accomplish the goal.
Your goals are your plan for the future. In concrete terms, you need 20 times your yearly income to create wealth or abundance. If it's $100,000 a year, you will need $2 million, $200,000 a year, $4 million, and so on.
Those who intend to create wealth PLAN, the rest don't. In fact, the wealthiest people I know are planners, not plodders.
A Master Plan considers four main areas of your planning process. It considers your goals for production, but also your goals for expenses in every major category of your practice and life. Your Master Plan also takes into consideration what your life will be like when you pursue your goals.
- The money it takes to run your practice (this is first because you can recapture the most money here).
- The money it takes to run your lifestyle.
- How much money goes to taxes, FICA, state and federal taxes.
- The amount of money you need to save or invest each month.
The major pieces look like this:
Requirement Two: Models. The second most important action is to have a MODEL OF PRACTICE that enables you to go to work every day with a plan and a process. This helps you create the life and practice you want today, yet you create wealth in the process.
When I write that you have to have a model, you have to know what wealth means to you. You have to know how much and by when. Equally important is how your practice will create value for those who come to you as patients.
One of the greatest mysteries to the unaware is the following: "To the degree you create value for others is the degree that others will help you create wealth."
Your model of practice has to create value for your patients. When I say create value, the value that is created is not in your mind, but rather in the mind of the people you care for. If they do not see, experience, feel, sense, or want the value you are offering, no matter how hard you try, then they're not going to be willing to pay you what you deserve for your services.
Since I've been privileged to work with many of dentistry's finest dentists, I see the difference when I visit their practices. Those who are creating wealth talk about their great teams, what more they can do for their patients, and how they're working on various aspects of themselves and their practices to create even more value for their patients.
Whereas the majority focuses on production, this smaller group focuses on how they can deliver a great service that fulfills the needs of their patients in an empathetic, caring, informative way.
This is the reality of your business: Your practice exists for a PURPOSE, and that purpose isn't you. Your practice exists to make a difference in some way for the people you serve.
If there is any recurring theme among those who are NOT creating wealth, it is that their thinking and practices are focused on themselves and not on the value they are creating for their patients or team.
Requirement Three: Mentoring. Those who are creating wealth have wealthy mentors, guides, and coaches, men and women who have been down this path and have created their own wealth. Successful people leave clues. The top 3% of dentists are 10 to 100 times wealthier than the rest. "If you want to be a winner at anything, hang around with winners."
Every week I talk with dentists from around the country who are ages 55, 60, or 65. They have worked hard their entire lives, taken care of their families, educated their children, and had good lives. But one thing is so common it could be called a crisis: 95% can't afford to retire on the same income they have while in practice. Keep this in mind. These are good, well–intentioned people, but they have operated their entire lives without a plan, without goals, without a model, without mentors or guides, and lastly without …
Requirement Four: Monitoring. Every person I know who has achieved wealth in dentistry has had an ongoing (long–term) relationship with a mentor, guide, or coach. This person holds them accountable.
Therefore, the four requirements of creating wealth are:
- Master plan
When I wrote The Science of Creating Wealth™, I based it on 30 years of working exclusively with dentists. Here are some key points.
• The first area where the most money can be recaptured is in your practice since we are dealing with "gross income." With average overheads in the U.S. approaching 70%, it is clear that if one lowers practice overhead 10%, this is 10% more of gross dollars that could be saved and invested for creating wealth.
• The second area is home expenses. No one thinks they are spenders. Yet without some form of budget or understanding of what is spent at home, you'll spend whatever you make unless you have plans to the contrary. I'm not recommending keeping tabs on every penny you spend, but I am recommending that you have a plan or budget for your expenses. No matter what your income, you need to know what your lifestyle costs you.
• The third area is taxes. It is important to plan ahead for taxes, as Uncle Sam is a partner in all of our lives and businesses. Being PROACTIVE with taxes is vital to creating wealth. Our experience suggests that most dentists are paying $10,000 to $20,000 too much in income tax every year.
• The fourth area is save and then invest. It is important to become a saver first and investor second. It isn't that dentists don't save; we just don't save enough.
When practice overheads are 65% to 70% and higher, clearly there isn't enough money to save. Many think they don't have enough money to plan, but the key is that without a plan there will be little wealth created.
You'll take in $25 million to $60 million or more in the lifetime of your practice. You could end up wealthy at 55 or broke at 65. Choose wisely. Choosing to create wealth is a fundamental life orientation. Everyday choices turn into habits. In time, you'll realize that money flows like water. If you control the flow of money, you can retain it. Your life and practice are truly in your hands, and I can't think of a better place for them to be.
A practicing dentist, Dr. Michael Schuster founded the Schuster Center in 1978. Guiding more than 3,500 graduates to achieve wealth and freedom, the Schuster Center is the first business school created exclusively for dentists. The center will celebrate 30 years this year. Dr. Schuster is a cadre and former director at the Pankey Institute, adjunct faculty at The Dawson Center, OBI, and LSU Cosmetic Continuum. Dr. Schuster can be reached at www.schustercenter.com or [email protected].