The Path to Retirement (from 11/15/21)

The concept of investment is so personal that it is difficult to extrapolate to everyone. In other words, each of us has a certain amount of investment savvy, willingness to stick to a plan, the desire and wherewithal to study investing as well as one must, the emotional baggage associated with an account particularly when is goes down, and the enjoyment of investing itself.One needs to separate emotion from investing. If you can’t, then find an advisor with a demonstrable track record. (And understand that there are the Bernie Madoffs of the world that many bright people invested their life savings with.) So it has to be with someone who has demonstrated trust over the long haul.

Those of you who followed the “forced time off” programs that we did met my advisor who is well-known and frequently seen on CNBC and Bloomberg, among others. How did I find him? He was recommended to me by an insurance agent in another state.I agree with the multiple streams of income concept. Multiple streams may create an active safely net, because not all streams produce at the same rate and at the same time. For most reading this, your primary source of income is your practice. There is however a former president of the AAP, now deceased, who quite readily admitted that his primary source of income was his investments. I believe those investments were real estate, but I’m not certain of that.

Anyway, the multiple streams can be, maybe should be, from different disciplines: stocks, real estate, another business, precious metals are separate entities and can have upsides and downsides at different times.

Years ago, we bought a house that needed to be totally redone on the inside. My wife, Eleanor, redid the entire thing on her own, pretty much acting as the general contractor, hired the right people, shopped correctly, and created a pretty darn good-looking home that took a year to refurbish. A couple of years after she completed the project, I met a person who was buying small houses, fixing them up, and renting them. That was how he made a living and he was at least 20 years my junior. I asked if he would be willing to talk with my wife. They talked and within a couple of months, Eleanor bought the first home that she fixed up and rented out. It was profitable right away, and she learned from the first investment how to shop for homes and did better on the next one. By then, she had her crews that would do the work, she had the standard fixtures and tile, so that a system developed. Tile was the same. Fixtures were the same. She had her vendors that would, for the most part, fill the bill. Two homes became five homes. Each time she had a stopping point, where she said, “This is it,” but that stopping point was only a brief pause as she kept on buying more and more homes with the income that the properties produced.

Eleanor was fortunate that she started her purchases in 2008 at the bottom of the market. (Timing is everything.) She was the landlady (lord, person) for every home, and there were a lot. Each tenant has his/her own set of variables themselves. You have to have a tolerance and a strategy for that. She was far too lenient with some of those tenants and got burned a few times. But overall, it worked very well.

Ultimately, she had enough to start selling them off and bought an apartment house with a built-in supervisor who keeps the property up and collects the rents. It’s far easier for her than when she was the supervisor and rent collector for multiple homes. It took work. It took hands-on dedication.

In the meantime, we worked with our financial advisor on a profit-sharing program for the office, our IRA’s, as well as non-sheltered investments where we were paying the taxes yearly rather than the deferred programs like IRA’s and the aforementioned profit sharing program. Just because a program is tax-deferred doesn’t make it non-taxable. It just defers the tax for another day. When taxes were low, it made sense to pay the taxes as the income was earned on some of our investments rather than wait. I’m not sure what my strategy would be now. But I know that a government-deferred program may have strings. Don’t they always?

You all know of my second business. It’s a stream of income too, but I didn’t do it with that purpose in mind. I have something to offer, love doing it, and can help my long-time office manager, Danyel, earn a greater income than she might otherwise. But it’s because she loves it, I love it, and that means that we have a dedication towards it. I emphasize that because you have to want to do it and understand it well to do it well.

This may sound like a lot of dedication. We all have the same amount of time in the day. We can dedicate that time or we can waste it. If we dedicate the time to learn a discipline, we will do better at that discipline. Look what Frank Spear did, or David Garber, or Michael Cohen. for example. They loved what they did and made what I presume were good decisions, probably along with a few bad ones, and have succeeded brilliantly.

That brings me to where I am right now. I sold the practice earlier this year to my son and his partner. I now work for them. But my job remains the same. I examine and treatment plan. That’s all that I do, and except for a couple of emergencies, is all that I’ve done for over five years. The younger dentists produce. I examine. They’re happy. I’m happy. As the senior doctor in the practice, I have the reputation. I also dedicated myself years ago to doing full treatment planning. That happened even before my son, a top-notch general dentist, started working in the practice. I treatment planning the perio, the endo, for the most part the ortho, and the restorative. The patient got one plan. It was from me. So if the patient had questions, she asked me or my staff. And the restorative dentists? The appreciative ones were happy that I “sold the case” for them.It’s easier now than it ever has been. We were then joined by his now-partner, a board certified periodontist. They work great together, produce fabulous work, and created a the partnership that has now taken over the practice.

Whether it’s my age, my reputation, my experience, something else. Not sure. But it works and the younger partners are happy to pay me to continue to do what I do because it makes their job easier. Imagine being paid for your thinking skills. That’s what’s happened in our practice for over five years. I make less money now than when I owned the practice, but it’s still a pretty good income. I like being in the practice. I like being with the doctors. We still do weekly treatment planning sessions together. I have three great treatment coordinators who are pretty darn good diagnosticians and treatment planners themselves.It’s not a bad retirement. I work with people who I like, I enjoy the patients, I give them alternatives that they may not hear anywhere else. And I can give them the choice of restorative utilizing teeth or implants.

At the same time, I can help others in my profession because I’m working from current knowledge. And I maintain a stream of income in what was formerly my own practice without doing the backbreaking work.It is never too early to plan for retirement. You don’t have to drive a fancy car. You don’t need to buy something just because you can afford something. You can live well within your means rather than beyond your means. You can pay yourself first by making sure that the money hits the bank and stays there and then moves on to your investments, whatever they may be.

I hope this helps.