I have had the pleasure of mentoring young dentists over the years. You can see the thirst in their eyes for knowledge with the questions they ask. They all want to grow in their diagnostic and clinical skills. As our relationship goes on and our friendship grows, I start to bring up topics for discussion.
About 25 years ago, I was playing golf with my mentor from Pankey Institute, Bob. We were walking down a fairway at his club when he turned to me and said, “Let’s talk about the question you have not asked me. Let’s talk about retirement.
"But Bob, I won’t retire for over 30 years from now."
He replied, “That's exactly why we need to talk about it and do something now.” We started to talk about why our money tree (our dental practice) has to be fruitful so it can help us way past its productive life.
The only way you will able to retire and enjoy the rewards from a career of helping others is to take care of yourself first.
Our conversation went on past our golf game, onto the 19th hole. I needed a drink from the bar to help ease the pain as Bob helped open my eyes about the reality of life and money. I did not know if I wanted to hear the truth.
“The truth will set you free, but first it will piss you off."
He told me a story about a dental friend of his at age 65 who cannot consider retirement. He didn’t start planning for his retirement until his mid-40s and trusted someone to make good investment decisions for him. Not only did he start funding his retirement late in life, there were bad investment choices.
But the big problem was that this person never checked on the investments to see that the nest egg was growing. He trusted his investment counselor to manage his money, not knowing it was mismanaged. "Trust, but verify" is a good mantra.
Bob started to tell me what he learned from Dr. Pankey. Build yourself a bank book. If you are not saving money and paying yourself first, your patients will see the money hunger in your eyes. Develop a road map to become debt-free and fully fund your retirement. Dr. Pankey liked mutual funds and Warren Buffett … not related to Jimmy. Bob told me that Dr. Pankey's recommendations of Berkshire Hathaway and Fidelity Magellan helped so he can retire whenever he wants. Bob developed a strong commitment to funding his retirement based on the teachings of Dr. Pankey with help from others as well.
When I was young, I wanted to be Bob. Now, 30 years later, I do not have to be Bob ... I know Bob is a part of me.
So here is what I took away from my many conversations with Bob:
The best time to start saving for your retirement is in your twenties. The second best time to start is today.
The best get-rich-quick scheme is slow and steady. Be dedicated to watching your nest egg grow. Watch it regularly. Trust, but verify. Have a good team to help with your investment choices and review your money strategies.
Know the business of your business. Know your numbers.
The only free lunch in investing is diversification and compounded interest. Learn the power of compound interest and how money grows and why you need less money invested if you start young.
Work to become debt-free. It will add years of happiness to your working life and allow you to enjoy and control your retirement.
I personally have completed a net worth statement every year for the past 20 years. It forces me to revisit all of my assets and debt. Trust, but verify. I have placed the bottom line number on a graph and have watched it go northeast. This has brought a smile to my face and peace of mind.
“Result for many Americans when they punch their data into a retirement calculator: According to your latest data, if you retire today, you can live reasonably well until 5:00 p.m. tomorrow."
I wish for you health, happiness and prosperity for today and many years to enjoy the same in the future. Plan for the future, because it becomes today very quickly.
Carl Steinberg, DDS, MAGD, LLSR