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The Shift From Income to High Net Worth

June 4, 2021

By Brian Swilling

As a dentist, you are aware of your potential to earn a great income, but are you mindful of your ability to create generational wealth? The main difference between high-income dentists and high-net-worth dentists is often behavioral. Do you have what it takes to become wealthy and financially independent? Most dentists will practice an average of 35 years. Years practicing, times annual earned income, equals lifetime income. A dentist’s lifetime income will be significantly affected by career decisions such as buying a practice, joining a practice as an associate, or for those more risk inclined, starting a new practice. Your career choices will ultimately affect your lifetime income.

According to the most recent data from the U.S. Bureau of Labor Statistics, the average dentist’s salary was $178,260 in 2019. In 2019, dentists in private practice earned an average of $204,710 according to the ADA. Specialists in private practice earned on aver-age $343,410 in 2019. If you assume these dentists will work for 35 years, their lifetime income ranges from $6,239,100 to $12,019,350 over their career (not accounting for inflation). These numbers are significant.

Now imagine all the things you could do with that much earning potential… buy the perfect house, the nicest car, lavish vacations, vacation homes, etc. The options seem limitless. How do you plan to spend your income over your career? Do any of your choices help you to build wealth? Generational wealth?

There are many ways to define the word “wealth.” Merriam-Webster defines wealth as an “abundance of material posses-sions or resources.” This definition indicates that wealth can be both a combination of possessions and experiences. As you make decisions about your wealth, you need to ask yourself, “What is most important to me today?” Just remember, over your career your answer to that question will probably change. As you build your plan to accumulate wealth, please allow room for detours. If your idea of wealth is experiences, then use your income from dentistry to create those experiences. Financial life planning can incorporate building a wealth of experiences and traditional wealth. To maximize the effective-ness of your plan, consider hiring a professional to help you maximize your earnings.

Here are a few strategies that will let you build both an abun-dance of experiences as well as wealth:


Do you track cash coming in (income) and cash going out
(expenses)? Dentists who have a high income can develop a false sense of security around cash flow. Once you understand your cash flow, you need to determine if your money is being used efficiently. For example, if you have student loans, credit card debt, mortgages, car loans or practice loans, all of these debts should have a different priority and strategy for repayment. First, you should start by saving enough in cash for an emergency fund to cover at least 3 months of required expenses. Then focus on eliminating all high-interest loans. You should not discount the need for an emergency fund in exchange for overpaying debts like a mortgage or student loans. I am not necessarily saying debt should not be reduced as quickly as possible, but you need to ensure you have enough cash on hand, so you are not constantly having to use debt to buy necessities.


Do you plan on retiring early or work longer? Whatever your plan is, it is important to write down your goals and be mindful of the following mistakes:

• Spending increases faster than income. After years of earning nothing in dental school, this is an easy trap to fall into.

• Focus solely on paying down low-interest debt. This strategy can cause you to miss out on other opportunities that may help you grow your net worth more quickly.

• Your earning potential is your biggest asset, so make sure you protect yourself completely and cost effectively.

• Not asking for advice. Build your team of trusted advisors early in your career. I recommend your team be made up of a dentist mentor, CPA, financial planner and attorney.

• Following the hottest investment trend. I have seen this many times over in my career. Ask for advice from your team of professionals. Try not to spend too much time on message boards and watching investment news.



Dentists have a lot of expenses and debt after graduating from dental school. Since retirement seems so far away, many dentists put off saving for retirement. It is important to remember that the earlier you save, the longer the money works for you.


The most common way a dentist can invest in themselves is to own a practice or become a partner in a existing one. If you work as an associate, your compensation will likely average 33% of collections. However, if you are an owner or partner in a large practice, you might average closer to 40% – 50% of collections. Practice ownership has its unique set of challenges, but the financial rewards can be much greater. In addition to earning more, you also own an asset at the end of your career that you can sell. A single location practice might sell for 60%-100% of collections depending on the location, size, and other factors.


Diversification can be viewed in a few different ways. You may have heard about diversifying across different asset classes in your retirement accounts. In addition, it is important to diversify across the following variables: the type of assets you invest in, tax consequences of those investments, and the liquidity of the investments. One of the easiest ways to do this is to start saving in a taxable investment account. This money will help you reach your short-term goals since it does not have the same restrictions as your retirement account. We call this the flexibility account because you can use it to fund any of your goals. The other way to diversify is by investing in other assets. These assets can be in your dental practice, real estate or rental proper-ties. Some dentists have generated wealth with real estate, but these assets can be illiquid, leveraged and typically need additional time to cash-flow as investments. Make sure you discuss all investments with your advisors to avoid making potentially costly mistakes.



You want all your personal stakeholders to understand your goals and collectively work with you to reach them so you are not being pulled in different directions. When aligned, family, friends, col-leagues and employees can all help you achieve emotional and financial wealth.


If you want to be a truly happy and wealthy dentist, you need to have options… You may love dentistry and want to practice into your 80s, while other dentists want to retire in their 50s. Whatever your goals are initially, they may change in the future; and it is essential that you have options. These options can only happen with planning, building liquidity and wealth, and avoiding mistakes.

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Securities offered by Registered Representatives through Private Client Services, member FINRA/SIPC. Advisory products and services are offered by Investment Advisory Representatives through RFG Advisory, a Registered Investment Advisor. RFG Advisory and Navipath Financial are unaffiliated entities.