How Dentists Should Set Attainable Financial Goals

Randy Fine, LUTCF, president of Robert Fine Associates, discusses how dentists should divide and allocate money for savings into short-term, mid-term, and long-term goals.

Interview Transcript (slightly modified for readability)

“When should a dentist plan on setting up short-term, mid-term and long-term savings strategies? It’s really going to depend on a few factors. When a dentist is first getting into practice, there’s a lot of expenses, there’s a lot of unknowns, there’s a lot of uncertainty. Right then, their first motivation of getting things accomplished is about the practice. A lot of time, a lot of money, a lot of energy is going to be invested in the practice.

As an advisor, we want them to start pulling money for their hard work into accounts that they recognize for their future. We look at different short-term, mid-term and long-term strategies to accomplish that. A short-term strategy would just be money in the bank, money available for emergencies, money available for emergency situations both personal and business.

The long-term strategy would be retirement. It would be saving for their children’s education.

Somewhere in the midterm would be maybe their second home, or saving for their second practice.

Our strategy is, if you have a dollar, you want to put a certain percentage of that in short-term, a percentage in mid-term and a percentage in long-term. You’re not just putting that one dollar away into one of those areas and letting the other two suffer.

Say a dentist wants to buy their next practice in five years. That’s going to be something we’re going to heavily invest that dollar in, maybe 60, to 70, to 80 percent of that would go short-term, and long-term — retirement – that is going to be a little more deferred for later on. If their goal is retirement, retirement, retirement, then we’re probably only going to put 20 percent in short-term and keep putting as much as we can toward the long-term goal.”