I was recently approached by a young dentist who was feeling overwhelmed about his student loan payments. He had many other questions about his personal finances in regard to purchasing a home closer to work, whether or not to receive a 1099 over a W-2 at a new position and how much to save for future goals including retirement savings …but the big overhang was “I’m paying 40% of my paycheck to student loans”. Ouch!
The reality for many new dentists who try to navigate both their busy career and personal finances is that they get overwhelmed and this can lead to procrastination on important financial decisions. Thanks to the internet, information is abundant, but financial wisdom is knowing what applies to you and when to actually act on it.
I was recently approached by a young dentist who was feeling overwhelmed about his student loan payments. He had many other questions about his personal finances in regard to purchasing a home closer to work, whether or not to receive a 1099 over a W-2 at a new position and how much to save for future goals including retirement savings …but the big overhang was “I’m paying 40% of my paycheck to student loans”. Ouch!
The reality for many new dentists who try to navigate both their busy career and personal finances is that they get overwhelmed and this can lead to procrastination on important financial decisions. Thanks to the internet, information is abundant, but financial wisdom is knowing what applies to you and when to actually act on it.
And then there is the time factor: We all have 24 hours in any given day, so the ability to do all things and well is tempting, but you’ve heard the saying “A jack of all trades is a master of none”. I find many dentists love figuring things out and managing their personal finances on their own, but forget to factor in the worth of their time. How many hours are you spending on your finances and what is your hour worth? It’s not uncommon to spend 10-20 hours a year on your financial plan and if your hour is worth $200 that means the opportunity cost of your time is between $2,000 and $4,000 per year. So the question is what would you rather do with the hours you can save by hiring a financial planner?
As we dug into this dentist's personal finances, we discovered several important items for action:
I know what you are thinking-I’d never make that mistake! This has happened to more people than you think.
It’s one of my favorite client cases because with the right financial plan and guidance the possibilities are endless. I know it took many years of schooling and hard work to become a dentist, and with a well thought out financial plan addressing all the pieces of your financial situation you can feel more financially secure.
Some financial experts advise everyone with student debt to pay their student loans as quickly as possible, but that fails to address all your other personal and professional goals. At TruWealth we believe you deserve better than blanket recommendations based on the general rules of thumb. If you wish to discuss your unique situation and see if we’re a good fit schedule your free, no obligation consultation by clicking here: Schedule a Consultation
This is meant for educational purposes only and not meant to represent any other particular client situation or experience. It should not be considered investment advice, nor does it constitute a recommendation to take a particular course of action. Please consult with a financial professional regarding your personal situation prior to making any financial related decisions. (02/21)