You deserve to be wealthy. As a private practitioner, nobody comes as far as you have, only to stall out in mediocrity. Every dentist I’ve met is indisputably hardworking. Yet the harder they work, the more out of reach wealth becomes. Lack of commitment is rarely what holds someone back. Dentists are some of the most dedicated people on the planet.
What determines a dentist’s wealth has less to do with fortitude and more to do with perspective. When you see how wealth works, its procurement becomes as natural as breathing. I’ve long espoused that a few easy-to-understand steps stand between aspiring entrepreneurs and a life of abundance. That abundance eludes more than 99% of the general population.
Wealth building as a pyramid
For those who like visuals, I describe the process of wealth building as a pyramid, with the most fundamental piece at the bottom, and each subsequent step gaining relevance as you move toward the top. Since building a pyramid from the top down would cause a collapse, we begin by laying a firm foundation before gaining elevation. Forgo the first step at your peril.
Start by protecting yourself and your business. Those who expect to make it to the top must have adequate insurance to shield themselves from accidents. Make it impossible for anyone to take away what you’re building. Without proper insurance, particularly an umbrella policy, you put yourself at tremendous risk.
I can’t stress enough that insurance isn’t just a good idea; it’s essential. It’s also affordable and easy to carry, especially compared to the burden of being the target of an opportunist. I think of insurance as the immutable base. It’s the part of the pyramid that sits just below the surface, invisible to the eye, but is critical for supporting everything above it.
Moving to ground level, we come to the next critical component, which is cash confidence. Illiquidity is the number one reason many businesses fail. You need three to six months’ worth of operating expenses in cash on hand as a safety net, no exception. Equipment breaks. Air conditioners need to be replaced at the most inconvenient times, and other mishaps.
Like most businesses, dental practices are prone to temporary profit loss due to economic fluctuations out of their control. Being cash poor is the kiss of death. Never be forced into making a poor decision because you don’t have adequate reserves. It’s often impossible to recover from circumstances. On the flip side, you have a tremendous advantage with ample cash on hand. Not only can you easily ride out downturns, but you can swoop in to pick up opportunities available only to the fortunate few who have liquid means.
Feed your cash machine
When it comes to discerning such opportunities and investments, remember the next step up the pyramid, which is to prioritize feeding your cash machine. Have an unlimited appetite for investments but be selective. Allocate your resources only toward surefire ways to ramp up your income. Don’t go out on a limb. Understand what your marketing efforts are likely to produce before you write the check.
The same goes for upgrades to your equipment. Consult with experts rather than relying on hunches so you know how capital improvements will increase your bottom line. A good rule of thumb is that an investment that doesn’t earn a minimum of four to five times return isn’t worth considering. Some of the best investments cost little to nothing. If you’re starting out with just a dollar in your pocket, invest it in yourself by improving your education, professional development, or the overall reach of your network.
When you reach the point where your investments are paying off, climb to the pyramid’s next step, which is delineating between paychecks and playchecks. This is the point at which you achieve some semblance of financial freedom. You have enough money coming in to maintain your reserves and expenses while making prudent investments, and you have additional income to spend however you like. It serves no purpose other than to be your reward. The caveat? You don’t earn playchecks until you’ve allocated income to all other aspects of your pyramid. Cut yourself playchecks prematurely, and you threaten the integrity of your business.
As wonderful as disposable income is you must still reach the peak of the pyramid. The top step—earned income—brings you to multigenerational wealth, the aim of every entrepreneur. Here, you’ve ultimately made enough successful investments that they pay significant dividends in perpetuity. With the right real estate holdings, strategic partnerships, and managerial staff, you can sustain the lifestyle of your dreams without ever having to sell off pieces of your empire. Enough income flows to you via multiple channels that your wealth will easily outlive you.
Live a life by design
Until recently, I considered perpetual earned income the crowning achievement. However, that changed after rewatching a cinematic classic. Mr. Potter, a bank owner in It’s a Wonderful Life, represents “the meanest and richest man in the town,” a miser who’s reached peak wealth. Yet despite his money, he’s miserable and heartless. Thus, one additional step remains: living a life by design. You don’t just want wealth. Money isn’t the goal; satisfaction is.
Be continually on the way to doing something you love, and then something you love even more. I call it continual fascination mode. A work-life balance is irrelevant when you love everything you create. Why vacation from that? I’ve presented it as the highest point of the pyramid, but it doesn’t have to be. The sooner you adopt the living-a-life-by-design mentality, focusing on the joy and satisfaction of your business, the smoother journey you’ll have on your way to the top.
Editor's note: This article appeared in the May 2025 print edition of Dental Economics magazine. Dentists in North America are eligible for a complimentary print subscription. Sign up here.
