Transcript
Speaker: ADEC's Smart Start program offers first-time practice owners their deepest discounts on equipment and furniture for two years, plus other savings and complimentary services. Ask your ADEC rep for details and start smart with ADEC.
Speaker: Join Drs. Savannah Craig and Renetta Sartor as we navigate life beyond graduation. Real conversations about forging our own paths in our early years in our careers.
Speaker: There's a reason it's called practicing dentistry. All right, welcome back to another episode of Beyond Graduation. Again, this is our special edition Ignite Retreat version. um So I am Savannah Craig, and with me as always, Renetta Sartell.
Speaker: And we have a special guest today So Dr. James Pitts, we're so excited you're here. Thank you for having me. Tell us a little bit about yourself. Well, my background consists of 25 years in dental practice. I went to school at the University of Florida and then set up my dental practice in Dunedin, Florida. Okay. Practiced there for about 25 years and always had my goal to retire at 50.
Speaker: And so i had a good friend who was actually in the financial industry. and In my late 40s, he knew that I spoke to various different dental groups.
Speaker: and He asked one time if he could come hear me speak. I told him, sure, but I think you're going to be bored. It's just a bunch of dental talk going back and forth. and but He said no, he wanted to come, so he did. and When I finished speaking,
Speaker: He said, everything you're talking about is financial planning. You just call it practice management. So interesting he said, you know, I know you want to retire 50, but when you get done, you really should think about becoming a financial advisor because you already know how to do it. You just have to get your license.
Speaker: So i I thought about it for a couple of years, turned 50, and pulled the plug on my, you know at that time, a little over $2 million dollar practice solo, sold it at the height of its value, and then said, OK, what do I do now? yeah and And I knew I couldn't can sit around because I'm a terrible golfer.
Speaker: And I couldn't go fishing every day, so I decided to to look into financial planning, and and I did. And over the course of about a year or two, I got all my licenses and just started from scratch.
Speaker: So if you think about when you first start your dental practice, and that first patient comes in the door, yeah and you wonder where they're coming from, and is there going to be another one?
Speaker: it was It was the same feeling in the financial practice. And little by little, i just built it up. I never did any advertising. And it was all dentists that I knew or that were referred to me. And and now it's grown into a lot more than I thought. yeah i'm I'm very blessed in being able to help my fellow dentists to plan their lives and to achieve the success that they want, whatever that means to them.
Speaker: That's incredible. And do you feel like having the dental background, dentists like to talk to other dentists, you get where we're coming from. Do you feel like that has given you an edge in the financial planning world Absolutely. you know there's The old joke is that you know you could swing a dead cat and hit five financial advisors probably.
Speaker: But none of them have been a dentist before. And so I feel like I've definitely walked a mile in all of my clients' shoes.
Speaker: And I understand the challenges that they face on a daily basis and the opportunities that maybe sometimes don't get taken advantage of.
Speaker: So my whole goal for doing this was to help other dentists be able to basically condense their careers.
Speaker: Because typically in the past, a dental career was 35 years maybe. And the only reason you stopped is because you had to yeah Your neck gave out, your back gave out.
Speaker: you know Something happened. yeah But in reality, if you plan correctly, if you save well, you invest well, and you do it in the right places, you should be able to condense that career to around 10 years.
Speaker: That would be great. And then you practice because you watch it. Yeah. Not because you have to. So I did have a question. i think a lot of our listeners probably would have the same question.
Speaker: Student loans have gone up tremendously. you still feel like you know we could still achieve that in that 10-year period, or do you think it makes that time frame a bit longer?
Speaker: It depends on exactly how much the person has and what type of student loans they have. so And in that world, things are changing so quickly because the government comes out with new programs.
Speaker: yeah Whether it's income based or 20 years and you're forgiven type thing or just you have a payout over time. And depending upon the particular person, that repayment program will be different.
Speaker: It is a, I like the question because it's actually one of the the biggest challenges to young dentists nowadays. Because when they come out, most of them on average owe between $400,000 and $500,000 a year in student loans, and that's before they buy a house, buy a car, buy a practice, do anything.
Speaker: And it is a significant factor, but it's not one that's not insurmountable. So, you know, it's funny because when you look at dentistry and how it's changed over the years,
Speaker: There have always been challenges, but there's more challenges now, but there's also more opportunity now. So I actually think that we're in one of the golden ages of dentistry right now.
Speaker: I think for the person that takes advantage of what's available to them and does really good planning, that there has never been a better time to be a dentist.
Speaker: I love that take. What would you say, so I think a lot of the information out there is that practice ownership is the way to this financial freedom and that sort of thing. What is your opinion on that? And if if you have a differing opinion, could you speak to the people who want to be associates for a little bit longer and and can they still retire in that 10 year period or or have the financial freedom to do what they want in those 10 years?
Speaker: Yeah, good question. Certainly I think for the majority of people practice ownership is the best way to financial independence in the shortest amount of time.
Speaker: Because as an owner you have so many things available to you that you don't when you're just an employee. You have a retirement plan that you can customize.
Speaker: You have IRS benefits that are given to employers and not employees. And you have flexibility in how you do things.
Speaker: You have the ability to categorize in income various ways. Whereas when you're an employee, typically you get one type of income, and that's W-2.
Speaker: So is it something that everyone needs to do? No, I don't think so, because I actually have several clients that are employees for DSOs.
Speaker: I mean, you know We can probably all rail against DSOs and and agree that you know maybe it's not the best thing that ever happened to dentistry, but it's a fact of life now.
Speaker: And so you work with what you have. And these particular clients of mine and I, we have found ways to to circumvent the fact that they can't have their own retirement plan. yeah They can't own their own real estate.
Speaker: So we figured out a way to get them to their goals. It requires more saving. and requires more diligence. But it's not something that is insurmountable.
Speaker: um would you i I would love to hear you speak to like lifestyle creep and the the financial decisions that, i mean, for me it was wild to go from literally negative income to quite a substantial paycheck and and If you own an independent dental or orthodontic practice doing around seven figures a year, pay close attention for a second.
Speaker: A lot of practices think they have a marketing problem, but in reality, they have a leak problem, and most dentists don't even realize where the revenue is slipping away. Missed calls, weak follow-up, patients who never get reactivated, cases that never get accepted, front office systems that quietly break down behind the scenes.
Speaker: That's where thousands of dollars disappear every single month. And that's exactly what Kickstart Dental Marketing helps practices fix. They've spent more than 17 years working exclusively with dental practices, and their 90-day practice growth acceleration program is built around these three things. increase production, fix the leaks, and build the foundation for sustainable growth.
Speaker: They don't just run ads and hope for the best. They look at the entire patient journey from the very first phone call to scheduling, case acceptance, and a long-term patient value.
Speaker: Instead of handing you a cookie cutter strategy, you get a dedicated growth strategist plus a team of four dental marketing experts focused specifically on your practice and your numbers.
Speaker: Now, because you're listening to Beyond Graduation brought to you by Ignite DDS, they are offering a free 90-day practice growth acceleration plan consultation call.
Speaker: In about 45 minutes, they'll audit your new patient flow, show you exactly where revenue is leaking right now, and map out a custom 90-day growth plan focused on the moves that create results fast.
Speaker: If you want to see more about what this might look like for your practice, please head to kickstartdental.com backslash ignite. They are only opening a limited number of spots each month for this 90 day practice growth acceleration. So if the page is still alive, there's still an opportunity for your practice. And remember, tell them Beyond Graduation sent you.
Speaker: And my husband and I were actually just talking about this last night of like, compared to like in his workplace, maybe his coworkers are are the breadwinners. and And so that's a different tax bracket than maybe we're in. And I think coming out of school, you have to decide how you're gonna set up your life, but also you've,
Speaker: delayed all of these life things for a lot longer. So how do you, how do you help your clients navigate that like a newer grad versus maybe somebody who came to you late in the game who's already made some maybe not so great choices?
Speaker: Yeah, I love working with young guests because um you do have a lot more open to You you haven't made maybe such bad habits yet.
Speaker: And I will tell you that though, practically most dentists They have good lifestyles. I mean, we don't live like paupers.
Speaker: Our spending is generally between $10,000 $20,000 a month for our lifestyle. that's If you compare it that to the rest of the United States, it's it's a pretty nice demographic. ah Here's the thing, if depending upon how much income you bring in and how it comes in
Speaker: you have to realize that income is only part of the story. You can make as much as you want. I think you alluded to this. You you can have a practice that collects you know a million or two million a year if you spend it all, you're no better off than the person that works as an associate and gets paid $100,000 a year and spends it all.
Speaker: In the end, it's the same because it's not a amount it's not about how much you make, it's how much you keep. So there are ways that you can set up at any income level savings programs that will keep you from doing what I call human nature.
Speaker: Human nature says, as you said, lifestyle creep. I came out, I'm making this amount so I can live this way. Now I'm making that amount so I can live that way. So if you have a program in place that will automatically save and invest your money and have it go to the right places, then you spend the difference.
Speaker: so But you save first. that That's the critical thing, is that usually most dentists and most people in general save what's left over at the end of the month.
Speaker: So they pay all the bills, have all the fun, go on all the trips. And then they say what's left over because, you know, I've got some left over in my bank account.
Speaker: Usually that's not a big number. But if you set aside the amount that you and your advisor have deemed that's necessary for you to get to your goals in your timeline, which we're talking about 10 years, that's usually a pretty good sized number.
Speaker: If your timeline is 15 or 20 years, it can be a smaller number. But the important thing is that it's done automatically and it's done right off the top. So instead of at the end, it's taken right off the top and it's done automatically so you never see the money.
Speaker: You don't miss it. It goes right to where it should go. It's invested. And then a year later, you're like, wow. Where'd all this come from? Yeah, yeah, yeah. yeah Compounding is a thing.
Speaker: Yeah, and if if you had said, well, I'll just, I'll say that myself, it never happens. Yeah. That was going to be my next question. I feel like as dentists, even when we're in school,
Speaker: They say, you know, when you get out, you're going to have a lot of people that's trying to tell you what to do with your money and where to put it and everything. So I found a lot of our colleagues pretty much are either ashamed or afraid or nervous to talk to a financial advisor because they just feel like that person might have some judgments.
Speaker: Judgments or not do with the funds what They would known even though it's kind of the blind, you know, at the point, blind leading the blind because we don't know what to do with it to help grow it But what advice would you have for someone that just kind of has some preconceived notions of what it is to have a financial plan help you?
Speaker: That's a good question. so And I think in the past, you're right. Maybe there were you know that. And maybe shame on the advisors that that did that. you know But our job is to make sure our clients are successful. and that's That's it. That's the number one job.
Speaker: And so for a young person who wants help, that is the best thing That's what gets my my juices flowing because ah I love to help somebody to meet their goals. And I would tell them, let's start off small.
Speaker: Tell me your what your goals are. Tell me your timeline. Tell me where you're starting from. and we'll figure out a pathway then. We'll figure an action plan. And it'll be a step-by-step plan.
Speaker: Maybe some of it gets done the first year, and some of it may take a couple years. But little by little, we're going to start instituting the good habits that will help you to be successful.
Speaker: In general, in generalities, I would say you need to be putting them light away tax efficiently. That's one part. So pre-tax, for most people, that means in some sort of a retirement plan, if you're a practice owner, you need to make sure you have the right retirement plan, which we could talk for probably an hour on that.
Speaker: I think you've got other people. You probably want to interview today. But most dentists are in the wrong retirement plan for their office. Interesting. But at some point, they need to be putting their money away tax efficiently into a plan.
Speaker: They also need to be saving no after-tax money. And this is where most dentists don't don't do this at all, or if they do, it's very little bit. And the reason is later on.
Speaker: Because once you retire, unless you want to work until you're 80, and not many of us do, we want to retire generally around 55 or 60 maybe So what we want to do, that means that basically if you retire at 60, I have to assume that you're going to live to your 95. Because nowadays, that's a pretty good assumption.
Speaker: In the past, people that were in my place and were a financial advisor didn't have to be very what good at what they did, honestly. Because you didn't outlive your money. No, because the... the You know, there was a couple and usually the husband and wife would retire at 65 and he was dead by 70. And she might have lived a couple more years later, but you didn't have to be very good.
Speaker: But now... People are living to be older. People are living into their 90s. And so you have to have your money last for 30 years. Yeah.
Speaker: And think about that. So now what you're living on is your income, but later on you're going to live on your investments. So the first money you're going to spend in retirement is money that you've already paid your taxes on.
Speaker: And the reason is it's more efficient to spend that down first. versus money that you've put away pre-tax into your 401ks, IRAs, things like that.
Speaker: That's money that you got your tax break on when you put it away, and it's growing and growing, but when you pull it out, Uncle Sam's got his hand out. So every dollar you pull out of that is 100% taxable. So we want to leave that alone for as long as possible.
Speaker: and live off of that other bucket of money, if you will, and other sources. But that is one thing I see dentists not doing is saving after-tax money.
Speaker: can And it can be done in the same way automatically didn't it and periodically. And the nice thing about that is that it's accessible to you in case of an emergency. and so It's not locked up.
Speaker: yeah and that's a That's a huge piece of advice. We're not thinking about that one. um what Was there anything when you started financial planning that shocked you, or do you think you had a pretty good grasp on what people were maybe not doing well?
Speaker: Yeah, actually there was because i assumed because i had my career that every dentist was like me. Well, thank God they're not, first of all. but But no, how little information is out there to us. And we all know that we were never trained on this in school. They they swatted us on the rear on the way out and said, have a nice life, you know and go figure it out yourself.
Speaker: Which we all do, and we all make mistakes, and we talk to each other and try to, what are you doing now? OK, how are you doing this? but there's no real business or financial and education in school. And there still isn't. It amazes me. but So when you get out, you're making a lot of more money, but you don't know what to do with it.
Speaker: yeah You don't know how to manage it, and it all just kind of disappears into the ether if you're not careful. I'll give you an example. I won't use any names, of course, but I was meeting with the a dental colleague and and when I was first as an advisor, and I thought this guy was like a big shot in our community.
Speaker: and he was doing pretty well. He didn't own one. owned two Ferraris. Wow. You got to be doing pretty well. One would think.
Speaker: One would think. until I looked and saw what he had saved up. And my my grandfather was, he was a farmer and a rancher in Alabama.
Speaker: And I used to spend the summers there. And he had a term for folks like that. He called it big hat, no cattle. So you probably heard that term, but when somebody appears to be wealthy or successful, but they're not.
Speaker: and There was a book written by a gentleman called The Millionaire Next Door, and you've probably all heard of it. And it talks about how really successful people don't need to be flashy and don't don't necessarily show you their wealth.
Speaker: yeah And that's the way I think we as dentists should be. we should We should be wealthy, but we don't need to be flashy, and we don't need to show it to everybody. Because it first of all, it's not good and not healthy to do that.
Speaker: And second of all, it's nobody else's business except for your own. So I was surprised at the at the lack of of that. and But I said that this is why I'm doing what I'm doing. So if I can help a few people before time for me to go home, then you I will have done what God made me here to do.
Speaker: That's amazing. Would you share with us the your book that you brought? Oh, sure. Tell us tell us about this and where to find it and It is, i i wrote it last year. yeah Last year it was it came out um and it's called The Dentist's Guide to Wealth.
Speaker: And it basically tells not only my story and how I came to learn how to save and invest and become an advisor, but it's every dentist's story.
Speaker: Because I took information from my clients too that have basically verified hundreds of times that we all go through the same thing. Yeah, the shared experience. yeah and we all struggle with common issues and and we have But we have good common opportunities too. So it's out on Amazon in both Kindle and paperback.
Speaker: And again, it's called The Dentist's Guide to Wealth. That's awesome. Everybody should get a copy. Yeah, and if you're happy. recently wrote it, so yeah. Yeah, I feel pain.
Speaker: Wow. that's I'm very happy about that. And if you're having trouble going to sleep at night, it works really well for them.
Speaker: Well, now we got the mic set up, we could do an audio book version. Right, right. That's true. That's true. um We're so grateful that you came and chatted with us and and have put up with our technology issues. But can you tell our listeners where to find you? Or um is your license Florida specific? Or how how does that work in the financial planning world? In our world, you take a series of tests and one of them that I took is allows me to practice any state in the union. i just If I have a client, I buy that state's license. okay
Speaker: So right now I've got clients all throughout the Southeast United States and a few other states. so as you know, a client comes up and and wants to work with me, I just buy that state's license and and it works very well. Awesome.
Speaker: And you can reach me at my email is james.pitts at jwcemail.com and my website is jamespittsdmd.com.
Speaker: Awesome. Yeah, thank you again. This has been wonderful and I'm i'm sure our listeners will be reaching out to you. It'd been my pleasure. Thank you. Thank you. Thank you.
Speaker: Thank Thank you for joining us for this episode of Beyond Graduation. If you enjoyed this week's episode, be sure to share it with a friend. Connect with us on social media at savannahcraigdds and at dr__sartor.
Speaker: And remember, you are not alone on this journey. ADEC certified pre-owned equipment is a sustainable, affordable choice that makes genuine ADEC equipment available to every doctor. Each package is sold on a first-come, first-served basis. So if you see one you like, contact your dealer. For more information, go to www.adec.com. backslash find a dealer. Thank you for listening to Beyond Graduation brought to you by Ignite DDS and Future Dentists. This episode was sponsored by Ignite DDS Coaching.
Speaker: We build self-determined futures. For more information, please reach out to the Ignite DDS team.
