Brian Hufford, CPA, CFP®
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You may not realize that the Serenity Prayer by Reinhold Niebuhr has been updated for the challenging year of 2010. It now reads:
God grant me painkillers as I face financial difficulties and life circumstances I cannot change.
Give me wisdom to justify the need to wallow in despair and the courage to recognize hopeless circumstances.
As I ponder the loss of my retirement goal, help me to cease enjoying life one day at a time, realizing that no one can have peace when financial hardships abound and dreams can no longer be realized.
Help me to cynically trust in nothing and to lose all hope for happiness in a world where nothing is as it should be.
I suppose I really could be talking to myself here with my recreated version of the Serenity Prayer. What I have been noticing among dentists in this financial environment is a loss of hope. Fear and frustration have turned into hopeless despair. I have thought deeply about the character traits that are necessary to overcome hopelessness. I think the most necessary trait is resilience.
These are times for resilient thinking and resilient planning. Perhaps the biggest obstacle to resilience for most dentists is holding on to the world that existed in 2007 before the immense changes that occurred. Most of us are holding on to the way things used to be and refusing to take action with new strategies to navigate the current landscape. There is a severe lack of resilience.
From an investment planning standpoint, the loss of resilience is exhibited by retirement savers adhering to only two investment modes: stocks or cash. There is a great deal of investment possibility between the polar extremes of stocks and cash.
If present circumstances are "As Good as It Gets" for the foreseeable future, you can increase your peace of mind by creating more control in your personal world. This may require some radical, but resilient steps.
Step 1: Ruthlessly evaluate old "financial bubble" assets that are destroying your peace of mind
Many dentists purchased or built dream homes or purchased second homes that are now destroying peace of mind. Resilience would dictate that you ruthlessly shed threats to your mental health in this environment. A lack of resilience would be exhibited by clinging to the hope that good times will return so that these assets may be sold without a loss. It may be much more productive to realize a loss and have more focus and enjoyment in practicing dentistry and being with your family.
Step 2: Don't lose focus on basic, fundamentally good financial practices
For some unfathomable reason, dentists have surrendered their desire to plan for financial success. Many believe that saving adequately for retirement is no longer important because of investment challenges. In times like these, planning and control increase your sense of hope and optimism. Resilience demands a dedication to basic, good financial disciplines along with the need to be more creative in pursuing goals. Don't surrender to extremes such as stopping retirement savings to pay off debt. Ask yourself which financial factors in your life most threaten your confidence in the future and develop a detailed financial plan to overcome those barriers to increase confidence.
Step 3: Exhibit personal fiscal responsibility
Hopelessness tends to engender poor fiscal and personal responsibility. The best way I know to overcome this problem is with attention to details and accountability. Create cash flow plans for your practice that are realistic. Compare actual results to plan every month. Be ruthless in embracing current realities while creating detailed action steps to improve outcomes. Increase leadership and practice-management skills. When times are tough, attention to details is critical. Although it is easier to just give up, confidence begins to increase with an acknowledgment of the truth and creating detailed plans under present realities. This requires tremendous resilience and determination.
Are you clinging to the past? Can you bring the characteristics of resilience and determination to overcome the financial realities that currently exist? You have a tremendously valuable service to offer your patients. Hope is engendered with a vision of a positive outcome with a plan of action that you know you can achieve. Display resilience and develop the plan.
Brian Hufford, CPA, CFP®, is CEO of Hufford Financial Advisors, LLC, an independent, fee-only planning firm that helps dentists achieve financial peace of mind. Contact Hufford at (888) 470-3064, or [email protected].
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