Dentaltown March 2013 - (Page 66)

finance feature by Douglas Carlsen, DDS [Author’s Note: Investing information included below provides a broad perspective and should not be construed as speciﬁc ﬁnancial advice. Please consult with a professional adviser and/or spend considerable time studying academic-based literature. See the end-notes for further study or contact me for educational resources.] Saving and investing can be quite complex. Thousands of books are available, almost all claiming to make you rich. This distillation provides the research viewpoint, augmented with wisdom gleaned from doctors who have generated real wealth, not just high income. In my February 2013 article on cash flow, Dr. Bill and Jennifer looked in detail at their after-tax budget of $193,000 per year on a combined income of $300,000. They contribute $11,500 to a simple IRA annually, yet found they had only $2,000 left to contribute to additional retirement savings, college savings for their two daughters, other short-term savings needs and an emergency fund. Later, Jennifer found additional savings of $30,000 per year from clothing, vacation, entertainment and home improvements/maintenance allowances. We will see how they divvied up that $30,000. Bill and Jennifer’s Financial Savings Goals: • Emergency fund • Retirement savings of 15 percent per year ($45,000 per year with their income of $300,000) 66 MARCH 2013 » dentaltown.com • Home repairs: new roof and furnace • New bathroom • College savings for two daughters Emergency Fund First, Dr. Bill and Jennifer need an emergency reserve of six months of spending, or $80,000. The most disastrous calamity that can occur to a dentist is the inability to practice. Illness, office fire, flood or personal accidents can financially debilitate a family for years. Insurance helps, yet loss of one’s building for several months and disability insurance waiting periods of 90 days can cause huge cash flow disruption. You should place emergency funds in a money market account – no CDs, no HELOCs (if one can’t return to work for an extended period, one may lose one’s home), no stocks or bonds. You need immediate liquidity. Do not play games with “but inflation will eat up any possible growth.” This account needs to be rock solid. Dr. Bill and Jennifer realize that for the next three years they will be growing their emergency fund, using money market funds. http://www.dentaltown.com

Table of Contents for the Digital Edition of Dentaltown March 2013

Dentaltown.com Highlights
Howard Speaks: Dentistry Could Come Back with a Vengeance
Professional Courtesy: I’m No Anti-Dentite
Continuing Education Update
Second Opinion: Should Endodontists Place Implants?
Needle Stick Question
Am I the Only One Who Didn’t Know How to Use My Loupes?
The Patient Blames Me for Cracking His Tooth
Corporate Profile: {KöR}
CAD/CAM Materials
Dentaltown Research: Cosmetic Dentistry
Do-it-Yourself Finance, Part IV: Savings and Investing
Product Profile: Centrix
Keep Them Coming Back
You Should Know: Likeable Dentists
Multimodality Endodontics
Endodontics for the Recent Graduate: Instrumentation
Continuing Education Porcelain Veneers: From Case Selection to Cementation
8½ Tips for Dental Safety Checklists
How Prepared Are You For a Medical Emergency?
Dental Stem Cell Preservation and the Dawning of Regenerative Oral Medicine
Product Profile: Ivoclar EvoCerem
Narrow Diameter Implant Overdentures with Locator Attachments
In This Issue: Zeroing in on Xerostomia
Perio Reports
Ad Index
Profile in Oral Health: Substances for Targeting Xerostomia
Dentally Incorrect

Dentaltown March 2013