According to Credit Suisse’s Global Wealth Report, there are 21,951,000 millionaires in the United States and this number is expected to rise by 28% by 2025. More and more dentists are joining the Millionaire’s Club, as dentists’ remuneration rises amidst a shortage of dentists. Here is how dentists have come to join the millionare’s club and how you can too.
Incomes of Dentists
Median household income in the United states is just $67,521 as of 2020. In comparison, the Survey of Dental Practice estimates that the average net income for dentists in private practice in 2020 was $170,160 for general dentists and $323,780 for specialists. The U.S. Bureau of Labor Statistics says that the average annual income for general dentists is $180,830.
A good dental clinic can be a very lucrative business. A survey by the American Dental Association found that the average annual gross billings per owner (general practitioner) are $742,490. Meanwhile, the average gross billings per owner dentist (specialty) are $1,059,890. This makes dentistry a potentially lucrative business.
With salaries like that, dentists have become some of the best paid professionals in America. This has given rise to the millionaire dentists. Dentists such as Herman Ostrow, Richard Malouf, Dan Fisher and others have become millionaires, leveraging their skills to treat high net worth individuals and to set up successful dental services businesses.
The demand for dental services has risen as the population has grown, become more affluent and better educated about the importance of oral care. As technological advances have driven down the price of aesthetic dental treatments, dentists have also been able to tich a much wider audience, who are desperate to perfect their smiles. Celebrity dentists are able to command high incomes as influencers and other celebrities flock to them to give them that Hollywood smile thanks to Avant Permanent Cosmetics.
It’s not just celebrity dentists who are becoming millionaires. The high incomes earned by many dentists mean that with prudent spending and wise investments, a dentist can become a millionaire next door.
The Path to Becoming a Millionaire
We know that most millionaires do not conform to the typical image of a millionaire as a fast-living person with a large-than-life lifestyle. The typical millionaire is a married 46 years old person with two or three children and has an average annual revenue of at least $300,000.
The typical millionaire puts in 45 to 55 hours of work per week and makes most of their own financial decisions.
These are hardworking people, self-disciplined, and prudent. Their lifestyles belie their fortunes. Many live well below their means. They are not people who blow their fortunes on frivolities. They immediately invest 15% to 20% of their income as a matter of course, rather than treating investment as something that they do only when they have extra money. One technique that many use is to link their accounts with a brokerage service so that when their paycheck comes in, an investment is immediately made. Many of these people are so prudent that if you went to a dental clinic and wanted to know who the owner was, you would have more luck looking at the oldest car in the parking lot.
We have come to associate wealth with ostentatious spending. Indeed, for many people, the whole point of becoming rich is to be able to afford that kind of lifestyle. But, that desire to display status is not compatible with the preservation of wealth. The great fortunes that have fallen have nearly always fallen because their owners have spent far more than they earn. The typical millionaire does not fall into this trap. The typical millionaire is not one of those people with, as they say in Texas, a big hat but no cattle. Instead, they live the way that people who are less well off than them live. That requires a lot of discipline and above all, humility, but they manage it just the same.
To become a millionaire, these professionals, (and most millionaires are ordinary professionals and not Instagram influencers or celebrities) dedicate time and effort to building their wealth. This means starting on their investment journey at a young age and having clearly defined financial goals and a strategy for achieving them. The average millionaire dedicates 8.4 hours a month to managing their financial affairs. In contrast, those who do not become rich dedicate just 4.6 hours of the month to their financial affairs.
To become wealthy, you have to own assets. Assets are those things that give you a claim to cash flows or which hold the prospect of capital gains, i.e. becoming more expensive. Those who become millionaires do it by buying assets, such as stocks, certificates of deposit, and real estate. The tilt of a person’s possessions is a tell-tale sign of where they are going financially. The more assets a person owns, the more likely it is that they will improve their financial standing in the future.