DMD Staff

, we looked at horror movie tropes and their investing counterparts, including the car that never starts (picking the wrong investment vehicle), the killer who won’t die (not having a contingency fund), and the fact that there will be a sequel (high fees). Now, let’s look at a few more clichés that can threaten even smart investors.

In metropolitan areas or desolate backwoods locations, the cell phones always work in horror movies until the prey needs to make a call for help.

Not all financial advisors were created equal. Some are terrific, others are unethical, and still others have too many clients and, thus, may choose to concentrate their efforts on those with the highest net worth or investment portfolio. Despite the fact that many consider dentists to be “wealthy,” you and I both know that to be a misnomer for the vast majority of dentists. Make sure the advisor you choose answers your calls, no matter what level of peril you’re in.

The music slowly turns ominous. Our movie star gets an odd feeling, looks around, and slowly opens the closet door…MEOW! The harmless cat comes leaping and screaming out of the closet. The hero breathes a deep sigh of relief…for now!

All markets are cyclical. But even experienced, long-term investors who know this sometimes fall into the trap of trying to time the market (sell right before a market downturn or buy right before a market recovery), or shedding blue-chip stocks in the face of market turbulence or uncertainty. Britain’s recent decision to exit the EU will have long-term economic consequences both for that region and markets around the world, but it’s too soon to tell what the overall impact of those consequences will be. Overreacting to the market forces of today can lead to unnecessary losses tomorrow and beyond.

That fellow who has a good sense of humor and seems really trustworthy? Yeah, he’s probably either the killer, or he’s secretly working with the killer. In any slasher or horror scenario, stick close to people you know!

Investing in strange or unknown companies or products. 

Even if you don’t know a lot about investing and don’t want to know a lot, you should at least be familiar with the pros and cons of any product, stock, or bond you’re considering. Annuities, for example, have a very negative reputation among many investors—unfairly, in some cases&mdash;but the truth is that they’re a complex product with significant drawbacks. If you don’t understand what you’re getting into, you have a much greater chance of having your investment slashed.

Developing a sound investment strategy isn’t always fun, but it doesn’t have to feel like a bloodbath. Avoid the tropes above, and you may even be one of the survivors!

Articles

If you don't watch your back, you can find yourself in some scary situations. It's true in horror films, and it's true in your investing career.

Avoid the Horror Show of Investing Tropes, The Sequel!

Public health officials are on high alert as many say the nation's opioid abuse problem has become an epidemic. What role do dentists play in the problem? What should dentists do to help solve the problem? Please take our DMD Survey and share your thoughts!

DMD Survey: Are Dentists Part of the Opioid Abuse Problem?

Nothing about saving and investing is easy, but it doesn’t have to be a horror show, either! One of the definition of “trope” is “a common or overused theme or device.” In movies, tropes are often associated with horror movie clichés, such as the prey constantly falling while being chased.

. Today, we’re going to look at investor missteps to avoid. Along the way, we’ll have some fun with horror movie clichés that can be analogous to your biggest fears as an investor. I hope the suspense isn’t killing you!

Our plucky heroine has temporarily escaped, and now she heads for her trusty steel friend, only to find that the battery has picked this moment to die—and she may be next!

For better or worse, saving and investing offers lots of ways to get to your goal. You have the option to consider an annuity, life insurance products, individual retirement accounts, a college savings plans, or a simple investments in corporate bonds. Each of those vehicles has advantages and disadvantages. Make sure the vehicle you choose will get you were you want to go.

Sure, that bullet seems to have stopped Freddy/Jason/Michael Myers/Ghostface. But this movie goes on for another 40 minutes! Don’t look away, victims. Our slashers disappear all too easily. And they’ll be back. You may not know where or when, but they’ll be back!

If you had a contingency fund, you’d be much less likely to tap into your retirement savings to cover the cost of that “unexpected” expense. But, you might argue, it’s an unexpected expense! How can you expect it? Fair point. Perhaps you can’t predict the exact nature or amount of the expense. But you must know that unplanned costs will arise. Be ready for them. Or they 

Sure, the masked slasher seems finished off for this movie’s satisfying conclusion, but if there’s another dollar to be wrung out of the franchise, you can be sure that our slasher will return for many more installments.

Speaking of horror, have you seen this glorious 

 of the financial services industry? If not, you owe it to yourself. I’ll tackle some of Oliver’s criticism in a future column, but for now, pay close attention to his salient points about the insidious nature of the fees you pay for certain funds and to certain advisors. They can be a fatal blow to your savings strategy!

If you keep having nightmares about your investment portfolio, fear not. Follow these tips to keep yourself one step ahead.

Avoid the Horror Show of Investing Tropes

As a practicing dentist, you know that in the absence of acute pain, many people who should be coming in for regular dental health visits don’t, even though it would be very valuable to their overall health for them to do so. If you don’t have a social media strategy, you’re engaging in a similar behavior. While you might not be in acute pain, but you’re overlooking a major part of your overall financial health.

It isn’t just the kids who are using social media anymore. Some studies suggest that the group with the largest growth in the use of social media is the group of adults aged 50 and older. Finding young patients and treating them over the course of their lifetimes is great, but it’s also important to find new patients among all age groups. Social media can help you do that, and it provides advantages over traditional marketing in three key areas.

High visibility relative to overall costs.

 Because many social media networks are available for free and are available and used by millions, social media offers access that other avenues--such as print magazine or cable television advertising--simply don’t. Establishing a Facebook page or a Twitter account for your practice is fast, easy, and cheap. But don’t let the lack of barriers to entry fool you. Effective marketing through these channels is still very difficult. In a future article, we’ll walk through social media strategies that work and some pitfalls to avoid.

Social media marketing offers another advantage over traditional mass-marketing efforts: easy-to-categorize measureables and analytics that can tell you who is visiting, when, and what, specifically, they click on. These analytics, while readily available and low-cost, can be difficult to decipher. If you are interested in developing a greater social media presence, now may be the time to consider working with a company or an individual with experience in website and marketing analytics to help you sort through the data.

The best marketing campaigns make the target customer feel something. They establish a strong connection with that customer. Social media, with its ability to incorporate images, anecdotes, and personal experiences, invites these types of connections more than a static ad on a diner place mat or a phone book advertisement. (Are phone books even a thing anymore?) The key to taking advantage of this is to implement a social media strategy that is authentic but compelling. It can include links to interesting dental news articles, patient testimonials, videos starring you or members of your staff about key dental concepts, or any other kinds of lively content you can think of. You don’t have to be Spielberg or Kubrick to make this work for you; part of the charm of this approach is the low-tech quality of any audio or video you create.

Of course, the “advantages” of a social media strategy above all come with things to watch out for, and the items listed here barely scratch the surface of potential benefits and strategies you should consider. Future articles will cover this topic in greater detail, but for now, the idea is to get you thinking about your social media strategy. If you really want to expand your practice, social media can’t be an afterthought.

If you don't have a social media strategy, you're overlooking a major part of your overall financial health.


Do You Even Have a Social Media Strategy?

My entire life, I’ve had a soft spot for the villain. I was 7 when Star Wars exploded onto the scene, and I rooted hard for those fellows in the cool white armored outfits. 

 King Creon was a friend of mine, and the Dallas Cowboys are a lifelong rooting interest. This may explain, in part, my affinity for the otherwise seemingly universally despised Internal Revenue Service (IRS).

So it is with a heavy heart that I lament the current state of the IRS—underfunded, compromised, broken. A commissioner 

. An audit division severely limited in its capacity to conduct audits and collections. How did we get here, and why does it matter?

 the political and fiscal circumstances that have led to the IRS losing about $1 billion from its 2010 budget in inflation-adjusted terms. Those budget cuts, in turn, have forced the agency to downsize by about 13,000 people—a huge chunk of the agency’s workforce&mdash;many of whom are responsible to responding to public inquiries and performing tax audits. Ornstein’s full article is worth a read, even if you don’t normally have a big foam finger that reads: “IRS No. 1!”

In addition to rooting for Duke basketball, I am a card-carrying capitalist, a firm believer that a smaller government is a better government, and a devout reader of Adam Smith. But those characteristics don’t extend to a belief that tax evaders or tax cheats should get away with their crimes.

Beyond having a rooting interest in the IRS, consider this: Compromised tax collection efforts and insufficient auditing procedures harm the vast majority of honest Americans who dutifully calculate and pay their taxes. Thus, our entire society suffers. As Ornstein astutely points out, “Intimidating, undermining, and destroying the IRS’s capacity to carry out its role, to collect all the tax money that’s owed, to starve government, makes all agencies perform more poorly, and leads to a backlash against government. The poor service that results from cutting personnel also alienates taxpayers, frustrates their efforts to keep up with tax law, and makes it easier to evade the law.”

As a law-abiding taxpayer, there may not be much you can about this current sad state of affairs. Maybe it’s enough to be aware of it—to know that there are consequences when even a body few have an affinity for, can’t meet its obligations.

For many, the Internal Revenue Service is an scary villain. But do we really want a country without an effective revenue collection service?

The Sad, Troubling State of the IRS

The new start that can come with the turn of the calendar can be refreshing. All too often, however, we begin rather quickly to fall back onto the same patterns. I’ve written before on the psychology of saving for retirement. It’s a topic 

, however, because how we think has a lot to do with how we save—or don’t save.

One of the behaviors we engage in when we don’t save is making excuses or developing rationalizations. These excuses come easily even to dentists, despite the fact that they're generally among the best compensated professionals. There is no foolproof way to eliminate this excuse-making, but just being aware of the most common lies we tell ourselves can make us less likely to use them.

“I’ll save more when I earn more/own my own practice.”

 Maybe. But maybe not. If you’ve just started your career in dentistry, you are probably paying off student loans, seeking a dental partnership, or developing some kind of plan to purchase your own practice. Those represent significant financial challenges. But running your own practice, if indeed that’s your goal, is no slouch, either. As your income grows, so might your desire to expand your services, upgrade your equipment, and hire additional staff. Dentists do typically make more later in their careers; a dentist’s peak earning years are typically in their early to mid-50s. You’re not planning to wait until then, right? While you can take advantage of catch-up contributions to a 401(k) or 403(b) plan in your 50s, the simple truth is that when you start saving—and how much—are the two biggest factors that will determine how much you have to retire on.

Practice challenges aside, as your income improves, so, generally, does your lifestyle. The mortgage and car payment may get larger as well. Our choices of goods and services may lean towards premium brands. Earning more doesn’t always equate to having “extra” funds to set aside. So don’t tell this lie. Start saving what you can now.

“I’ll save more as soon as I get out of debt.” 

This excuse is among the more interesting ones, because there is some logical basis for it, particularly for dentists, who more often than not carry a large load of debt through the early years of their career. This can be an excuse, though, that’s too easy to tell ourselves.

The key is to differentiate your “good debt” from “bad debt.” Keep making payments against good debt, but not at the price of your retirement savings. Student loan debt, while it can be seen as an albatross, is probably not high-interest date. Mortgage debt is also unlikely to be high-interest debt, unless you are paying an out-of-market interest rate for some reason. But credit cards or personal loans that carry high interest rates should be paid off as soon as possible, because they are likely to outpace savings or investment gains in the long run.

“I don’t have time to devote to an investment strategy.”

 This is a bad lie. This is akin to saying your current self doesn’t have time to plan for your own future. It’s also an excuse that is really simple to overcome. Consider working with an advisor, or consider an investment vehicle designed for its ease of use, such as a mutual fund or 

including Fidelity, Vanguard, TIAA-CREF, and many others

have made huge strides in making investing easier, such as providing online and in-person advice, self-management tools, easily available education, and many other resources that will enable you to put the investment basics in place with every little investment of time or requirement for expertise.

“It’s too late to get started now.” 

I saved the worst lie of all for last. It’s true that the later you 

start saving for retirement, the less you will ultimately have to live on, and the longer you may need to practice. But every dollar you invest counts, and you can’t let past sins dictate future decisions. With compounding interest and catch-up contributions allowed for older earners, it’s never too late to start an aggressive savings strategy.

Excuses abound, and they can be easier than making the sacrifices needed now to secure a better retirement. Your future self is counting on you right now.

Psychology can play a major role in whether or not you succeed in meeting your retirement savings goals. Which of these lies do you tell yourself?

4 Lies You Tell Yourself About Saving for Retirement

The knowledge and skills you bring to the table as a dentist are formidable and admirable, developed over years of education and as a working dentist. But if you are thinking of buying your own dental practice, those same skills are not necessarily applicable to your future role as an entrepreneur and a business owner. Buying a dental practice is likely to be one of the most critical financial and career decisions you’ll ever make. In this two-part series, we’ll look at eight crucial factors that can and should be primary considerations as you look to acquire a practice.

o your research. And then dig a little deeper.

This seems like it would go without saying, but one of the key laments of new practice owners is that they didn’t fully understand the nature of the practice before making the leap. Find out what the patient demographics and local trends are. What is the competition like in the area? What’s the revenue base of the practice? The state of the current equipment? The trend in patient numbers? What procedures are currently available, and will you add to those or subtract? These are just some of the considerations you’ll want to examine in this first step in the process.

If the selling dentist isn’t retiring, why is he or she departing? Is she opening up a new practice across the street? Is he leaving the area because it isn’t as profitable as it could be?

You may need some help with this step from an accountant or an attorney, because you’re going to have to do a deep dive into the current books of the practice. Pay close attention to financial data, including how customers pay for your services, and whether there is a heavy Medicaid base, which could impact your potential profitability. Your cash flow model should include projections 5 to 10 years into the future. It should consider growth rates, variable and fixed operating expenses, the debt service needed to finance the purchase of the practice, and the compensation you will need to support your personal financial needs.

When thinking of buying a practice, don’t just look at your immediate street-front or building. Consider the whole area, including the proximity and financial health of the competition. Will this area be pleasant for you and your family to live near? Is the community established, steady, in decline, or on the rise? If other local businesses are performing poorly, or if a new high-speed rail line to the nearest commuting location is nearing completion, those factors can have a major impact on a business. Non-financial factors may play as big a part in this consideration as the potential profitability of your practice.

Don’t take the seller’s information at face value.

If you’re working with the selling dentist directly or with a practice broker (which is much more common), don’t just take the information given to you at face value. As with all goods and services, a seller is likely to exaggerate positive points and downplay potentially negative aspects. Make sure how the selling practice defines “active patients” is clear, and make sure the financials make sense, including the number of insured patients, the trend in new patients, and the fee schedule. Is the current practice over- or under-staffed? Do the open office days and hours worked correlate closely to what you’re looking for?

In Part 2, we’ll look at the value of working with a professional, taxes and lending, a transition plan to your ownership, and some preliminary thoughts about managing the new practice.

The knowledge and skills you bring to the table as a dentist are formidable and admirable, developed over years of education and as a working dentist. But if you are thinking of buying your own dental practice, those same skills are not necessarily applicable to your future role as an entrepreneur and a business owner. 

In the Market for a Dental Practice?

Depending on the state where you practice and the overall economic well-being of your municipality, establishing and maintaining a policy for treating the uninsured and under-insured is one of the most difficult decisions you’ll have to face. The Affordable Care Act (ACA), while expanding coverage for the uninsured in many ways, requires health plans to cover dental services for children, but not adults. Medicare generally does not cover dental care, and Medicaid coverage for adults varies by state and may only cover a limited list of dental services.

Data from the American Dental Association (ADA) show that emergency department visits for dental care doubled from 1.1 million in 2000 to 2.2 million in 2012. Many others who lack insurance forego dental visits altogether, which can lead to higher costs and lower health in the long run. Striking a balance between providing needed services and maintaining your practice is complex and challenging. As you are probably intimately aware, most reimbursement through state Medicaid programs is significantly below what private insurers pay.

Yet, the desire to help others and give back to their community compels many dentists to dedicate certain days and hours to providing the uninsured with check-ups, and others operate on a sliding payment scale or find other means of providing care. Many volunteer at community health centers, and still others allow bartering arrangements or discounting of services whenever possible.

No strategy for treating the uninsured will be appropriate for every dentist or every practice. But no matter how you choose to deal with the issue, one thing that is consistent across every practice is that once you have begun an appointment with a patient, their ability to pay must have no bearing on the level of service you provide. The standard of practice cannot vary based on the identity of the patient, the type of dental coverage, or the patient’s ability to pay.

Any failure to recommend appropriate treatment, any improper treatment, or any other form of malpractice will be subject to potential lawsuits, removal of licensure, or censure or suspension by dental coverage plans (such as Delta Dental and others). Participation agreements with those plans have very clear language about this and strict terms on providing patient care.

No matter how your practice deals with the issue of the uninsured, you can become personally involved in serving the uninsured and under-insured by volunteering at a community health center or low-cost health clinic. As I noted in 

, volunteering offers rewards for not only the recipients of your care, but it offers tremendous non-pecuniary benefits for yourself as well. 

Depending on the state where you practice and the overall economic well-being of your municipality, establishing and maintaining a policy for treating the uninsured and under-insured is one of the most difficult decisions you'll have to face. 

Providing Dental Care to the Uninsured Remains a Steep Challenge

While many consider dentistry a calling rather than a career, there is a certain anticipation of the retirement years that builds as you get closer to age 50 and beyond. The allure of free time, travel, and pursuing hobbies is undeniable. But the years leading up to retirement can be stressful as well.

Will you find the same sense of fulfillment when you’re no longer caring for patients? Will you struggle to keep yourself occupied without the daily purpose of work? Will your practice (or you share of the practice) be worth as much as you’ve planned? And, on a related note, will you have enough money set aside to make your retirement enjoyable? The first three questions are difficult to answer, and the fourth is no bargain either. But there are steps you can take as you near that projected date that can help you make sure you’re ready.

 If you got started on your retirement savings late, and now you’re 50 or older, you can contribute as much as $24,000 a year to workplace retirement plans such as a 401(k) or 403(b) in 2016. (See the 

for 2016; in short, the maximum contributions did not change from 2015.) If you are in position to max out your contributions, that’s a good chunk of change to add to your nest egg.

Yes, your investments should gradually shift from more aggressive to more conservative as you get closer to retirement. But that doesn’t mean you have to become ultra-conservative, especially if you’re looking to build extra income. You may want to think about keeping some of your investments invested for growth.

Though it takes a little bit of the shine off the idea of being unencumbered, a part-time job is a necessity for many retirees, and a way to stay sane for many others. Though you may want to use your accumulated dental skills, you may also want to do something completely different. Having a flexible role that you can go in and out of will still allow for travel and time for hobbies, while helping pay for some of those hobbies and helping you keep some of your retirement savings still earning rather than being spent.

. Before you retire, make sure you know the absolute bottom of the range of income you’ll need to cover basic expenses. Then, measure this against your projected income, including all retirement plans, other investments, and Social Security. Does the math work? If it doesn’t, while you’re still earning is the time to talk to a financial advisor about the strategies available to you.

One you’ve made the leap, adjustments won’t be as easy, and your earning window will have closed. Look now so you can act now.

If you're getting to that point in your career where you begin to see retirement on the horizon, you need to take a moment and gauge whether you've got the right pieces in place to succeed in your post-career life.

Nearing Your Retirement Date? Take Stock Now

You know how important your patients are to your dental practice. Keeping them happy and coming back often is far from an exact science. No measures will be enough to please all patients, of course; some people are happier being unhappy. But there are some simple strategies you can use to make sure most of your patients keep coming back — and coming back with a smile.

Wait times seem like such a simple thing, but year after year, surveys of dental patients reveal this as among the top aggravations of going to the dentist office. No dental office sets out with the goal of keeping patients in the waiting room through two entire hours of 

, but the simple fact is that patients who are dissatisfied with their visit often either start their visit with a long wait, or have waited a long time to get an appointment, or both. There is a sound financial principle around double- and triple-booking patients, because of cancellations, high patient loads, and other factors. But when other factors, such as under-staffing or mis-scheduling are also in play, wait times can get truly out of hand.

Regularly review your scheduling practices.

 Scheduling can be as much art as science. How often do you and your staff review your appointment policies? Do you keep records on specific patients who seem to reschedule often? Do you have clear, flexible plans in place for when a team member calls out sick? As much as you may not want to do this regularly, do you have a strategy in place for referring patients to other dentists if your load is too full? Turning away customers never seems like a good idea, but it can sometimes be necessary.

 Perfect scheduling won’t solve all wait-time problems. Some patients would rather wait an hour on an appointment day than wait an additional three weeks to see the dentist. But they may still get ornery in the waiting room, wondering why the dentist’s time is more important than theirs.

Value your patients’ time — and empathize.

 Ask patients if they had to wait a long time, and if it’s appropriate, offer an explanation for the delay. Have you ever sat in a mystery traffic jam, only for it to clear up suddenly, with no evidence of an accident, construction, or any other reason causing the delay? Isn’t that even more frustrating? Keep in mind that there’s a big difference between making excuses and offering the patient a fuller picture of the delay. You don’t necessarily have to apologize for the delay (although you can and should if one is called for), but you can empathize with the patient.

 Once the patient is in the chair, devote your full attention to that patient, and spend as much time with the patient as you can without starting the cycle all over again in the waiting room. A long wait can be made a distant memory for a patient if they are treated as if they are important as an individual, rather than as a cog in a wheel. Asking the patient questions about themselves and taking a genuine interest in their answers is not only a good practice no matter what, but it may also make the patients realize that some of their wait time was because you were devoting the same level of care to another patient.  

Everyone wants to feel important — even at the dentist office. Every interaction with a patient is an opportunity for you to let them know that they matter to you. 

Wait times seem like such a simple thing, but year after year, surveys of dental patients reveal this as among the top aggravations of going to the dentist office. 