Dentaltown May 2022 - 55

in fi ve to seven years or less. Then you make larger payments to
speed up debt reduction and free up cash fl ow.
A prime example of an unwise capital investment is equipment or
technology that doesn't drive revenue, despite what the salesperson
tells you. These are typically impulse purchases seen at a convention
that you don't take the time to financially analyze. Have you
considered the cost and downtime of training? Service contracts?
Shipping and installation? Other added or hidden costs?
Before you decide you can't live without that latest gadget,
remind yourself that your patients are far more impressed by a great
end-to-end experience at every touch point in your offi ce and with
every team member. Do you really want to be paying for that piece
of equipment for years to come and ultimately at a total price that
far exceeds what you intended to spend on it?
4. COMMERCIAL REAL ESTATE MORTGAGES
The size of mortgage debt involved in purchasing commercial
real estate keeps most business owners, especially new ones, from
even considering the possibility of buying their own building. So you
enter into long-term lease agreements and someone else earns all the
income as the building owner. Yet owning your own offi ce building
could be the goose that lays the golden egg for a practice owner.
Buying your offi ce building is the single best long-term investment
you can make not only for your business but also for your personal
future. As the building owner, you earn additional income by paying
rent to yourself. Ideally the building has additional offi ce space for
tenants who pay you rent and for room to expand, whereas a lease
land-locks you so you can't add treatment rooms when you grow
to the point where you need more capacity.
While initially expensive, commercial real estate is a valuable,
income-producing asset with signifi cant tax advantages. Unlike
residential property, you continually recover your investment through
rent and once paid off, that income is pure profi t for a lifetime. We
teach this as one of the most fundamental long-term strategies for
becoming fi nancially independent.
Take the fi rst step
Tackling heavy debt can be overwhelming when you don't
know where or how to start. Begin by making a list of every debt
from the smallest to the largest (which is probably your mortgage).
Systematically pay down the smallest one until you can cross it off
the list entirely. Then move on to the next.
Chunking your total debt into smaller bites and using an
approach that gives you quick wins builds confi dence in the process
and in your ability to take control. Even small extra payments will
eventually lead to big balance reductions, and applying discipline
will help you avoid the debt trap because you'll be loath to undo
all that you've accomplished.
It may take a while, but eventually you'll get to the point of being
able to pay extra on your mortgage. By then, you will have positioned
yourself to leverage credit responsibly to make strategic investments
designed to grow your business and its value to accumulate wealth
and build net worth. ■
Learn more about debt
and fi nance with a chance
to earn 1.5 CE credits
Dentaltown founder Dr. Howard Farran's video
CE course Uncomplicate Business-Advice
for the Next Generation of Dentists goes into
more detail about debt, personal and business
spending, and the importance of consulting
a pro and fi nding a mentor. The 90-minute
course is available 24/7 at dentaltown.com/ce.
dentaltown.com \\ MAY 2022 55
http://www.dentaltown.com/ce http://www.dentaltown.com
Dentaltown May 2022

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