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Old 01-09-2023, 05:50 PM   #1

Join Date
Sep 2022
Junior Member
Default New Dental Practice Owner
Recently married, no kids. Late 20ís and a new dental practice owner in a LCOL area
Came out of school during the end of the pandemic in August 2020. I wasnít as busy as expected and also did not have a guaranteed minimum salary (mistake, but a story for another day). I planned on leaving or at least working part time to increase income, but ownership was on the table and I really liked the practice, so I stuck around. I made around $25,000 in the 4 months of 2020.
I became an owner (multiple doc practice) in November 2021. Itís truly a great practice. Iím in the area I want to live in and I donít plan on leaving the practice or moving to a different area until I retire. This practice is well established and has been in the area for 35+ years. I bought out another doctor, so my workload is fine now.
Again, I wasnít busy enough in the beginning of the year and my salary for the year was around $131,000. However, income doubled once I became an owner.
I conservatively expect to make around 230K in 2022. Anyways, Iím trying to make sure all my ducks are in a row financially moving forward.
Household income: $295K
Student debt: $450K at 6.7% (yikes)
House mortgage: 280K at 30 year 3.5%.
Monthly mortgage payment comes out to around $1350 a month.
No car payments.
Both are paid off and both around 5 years old and in good shape. We both plan on driving them until the wheels fall off.
Retirement accounts. These are all my numbers, as Iíve only been married for a few months. Wife has been maxing her employer 4% match in her 401K and I believe there is around 25K in that account.
Roth IRA: $4100
Vanguard Brokerage: $8300
HYSA: $27,000
All of these are in VTO ETFís on Vanguard.
Now for the kicker: my practice loan is around $540K amortized over 10 years at a 4.5% interest rate
Monthly payment is around $5600 a month.
Household monthly expenses are around $6000, which includes mortgage and all insurances ($1M Term life, disability, health, malpractice, etc).
This bumps to $11,560 a month with my new practice payment.
Obviously, the COVID loan deferment has been nice to allow me to build up a little bit of savings (albeit not much). I know my student loan obviously is going to weigh heavy on me. When payments resume I plan on enrolling in the PAYE method and paying 10% of my AGI. Ideally, I would refinance the student loans to a lower interest rate. However, I just donít see how it's possible to do that while I have my practice loan.
I met with a Studentloanplanner advisor right out of school who advised that I try and lower my AGI as much as possible, pay as little as possible on the loans and save X amount in a brokerage account for the eventual tax bomb at the 20 year forgiveness date. Also, begin using the difference between the PAYE monthly amount vs private refinance amount to save for retirement.
Any advice on a plan moving forward? I believe I made the right call on ownership so soon out of school, but also beginning to get a little spooked with the debt Iíve accrued. I know my income has increased (and I also believe I can bump that number above even more by adding procedures that were not done by the previous doctor), but Iím a little nervous nonetheless. Alright, enough ramblingÖ
Tentative plan for now:
Pay monthly practice payments
Invest around $1000 monthly in a brokerage account to account for eventual tax bomb.
Invest excess cash I have leftover into a SEP-IRA to lower my AGI, which in turn lowers my monthly loan payments
After practice is paid off, re-evaluate if it would make sense to aggressively pay off student loans or continue on PAYE method.
Any thoughts or advice would be greatly appreciated.
Nibbles is offline

Old 01-10-2023, 07:11 PM   #2

Join Date
Oct 2016
Junior Member
I’m not familiar with dental practices but can you expect your income to go up even more in the future? That seems like a steep buy-in for that expected income. You’d better check your lug nuts often to make sure those wheels stay on as long as possible.
Marilynchildress is offline

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