Host: Dr. Tanya Sue Maestas
Guest: Dr. Jennifer Bell
Edited By: Candy Velez CRDH
Today, we speak with Dr. Jennifer Bell, who candidly discusses a financial mistake she made in her career and how it relates to taxes.
Join us as we explore the often-overlooked aspects of dental finances and their implications on a dentist’s practice and personal life.
The Pressure of Depreciating Assets
Dr. Bell begins by highlighting the pressures dentists face to acquire depreciating assets for their practices. She refers to this as “chasing the unicorn,” the belief that acquiring more assets will help reduce tax liability.
In the early years of practice, there is often a desire to acquire various items to enhance the dental practice and reduce taxes. However, Dr. Bell points out that this mindset can lead to unforeseen financial challenges down the line.
“There’s a lot of pressure for this depreciating assets and sort of chasing this unicorn, if you will, that as you acquire things and purchase things, it helps reduce your tax liability.”
Dr. Jennifer Bell
The Reality of Mortgage Payments
As the years go by and the practice grows, dentists may find themselves burdened with mortgage payments on the assets they acquired in previous years.
Dr. Bell emphasizes that these mortgage payments do not provide any tax breaks and are deducted from the practice’s profitability. This means that dentists are paying the total tax burden on the mortgage payments, reducing the amount of money they take home.
Dr. Bell shares her own experience, recounting the lean times she and her business partner faced when they realized the impact of their mortgage payments on their profitability.
They had acquired various assets for their practice, such as a CBCT and a Cerec, all valuable pieces of technology, but came with significant mortgage payments. These payments had to be serviced from the practice’s profits, resulting in lower salaries.
“But there definitely were times where our mortgage payments were 20 grand a month working through all of these different assets that we had acquired. And all that is doing is coming off the profitability of the owner, doc.”
Dr. Jennifer Bell
The Attraction to Shiny Things
Dr. Bell acknowledges that dentists are often attracted to shiny new technologies and equipment that can enhance their practices. She explains that this desire stems from a need to stay fresh and engaged in their profession.
However, she emphasizes the importance of understanding the financial responsibility of acquiring these assets.
“We are attracted to those things because I think we have a desire to stay new and fresh in our profession. And quite frankly, class two fillings get pretty boring.”
Dr. Jennifer Bell
She advises dentists to give ample time for onboarding and training their teams when introducing new technologies. It’s crucial to ensure that these investments are utilized to their greatest potential so that they contribute to the practice’s profitability.
Dr. Bell admits that while she wouldn’t classify her experience as a mistake, she regrets not fully understanding the long-term financial implications of her acquisitions.
The Financial Responsibility of Dentists
Dr. Bell’s insights shed light on the financial responsibility dentists face in managing their dental practices. It’s not just about acquiring assets to reduce tax liability; it’s about understanding the impact of mortgage payments on profitability and personal income.
Dentists must carefully consider their investments’ ROI and ensure they clearly understand their expense line items. Dentists can avoid the pitfalls of excessive debt and reduced salaries by being mindful of their financial obligations.
It’s essential to balance investing in the latest technologies and equipment and maintaining a healthy financial outlook for the practice and its owners.
Conclusion
Dr. Jennifer Bell’s insights into the financial mistakes she encountered in her dental career shed light on the often-overlooked aspects of dental finances.
Her experience serves as a valuable lesson for dentists, highlighting the need for better financial guidance and understanding in the profession. By being mindful of the long-term financial implications of their decisions, dentists can strike a balance between acquiring assets and maintaining a healthy financial outlook.
Looking ahead, dentists must prioritize financial education and seek guidance from professionals who specialize in dental finances. By doing so, they can navigate the complexities of managing a dental practice and avoid the financial pitfalls that hinder their success.
Watch or Listen to our Interview with
Dr. Jennifer Bell
Thought Leadership Summary
Dental Fuel aims to bring these unspoken topics to the forefront of dental conversation, encouraging dentists to have a comprehensive understanding of the financial aspects of their profession.
By addressing these topics head-on, we can empower dentists to make informed decisions and achieve financial success in their practices.
Until next time, keep learning, keep exploring, and fuel your dental dreams with knowledge!
