Art Wiederman, CPA: And hello, everyone, and welcome to another edition of the Art of Dental Finance and Management with Art Wiederman, CPA. Welcome to my podcast. My name's Art Wiederman. For those of you who are tuning in for the first time, I am a Dental Division director at the CPA firm of Eide Bailly. I'm located in Tustin, California, is our office.
Eide Bailly is a firm that has about 40 people think we have forty two offices, mostly in the western United States. We work with about three hundred dentists, dental practices and dentists in in our testing office. And the firm is quickly approaching a thousand dentists. And we are very thankful to all the folks who have listened to our podcast and who have been kind enough to give us a call and engage us for numerous different things. The biggest thing that I've been dealing with is the Employee Retention Tax Credit, which we'll talk about in a minute.
But tonight, it's just you and I and I always like these types of podcasts. So I just basically I make an outline, I start talking and I'm hoping that this is going to be a call to action. So I'm recording this podcast on the evening of Sunday, August 15th, 2021.
Well, yesterday I turned 62. My birthday was August 14th. I was born in nineteen fifty nine. Had a wonderful, wonderful weekend with my family and my friends and it got me thinking number one, I guess if I wanted to, if I was going to stop working, I could theoretically apply for Social Security tomorrow morning. I could be at the Social Security office at 9:00 a.m. tomorrow morning. Wow. That's pretty scary to think about that.
I can remember myself as a twenty one year old graduate of Long Beach State University, taking my first job at that time. It was called Deloitte Haskins and Sells it's now known as Deloitte. It was the big 8 CPA firms and now we call it the Final Four CPA firms. And I've been a dental specific CPA Labor Day will be thirty seven years. I started in nineteen eighty four in my office in Newport Beach and I've told my story before so I won't tell it again. But I'm now again part of Eide Bailly. Very proud to be part of Eide Bailly.
So one of my favorite orators people in the world was Franklin Delano Roosevelt. Now Franklin Roosevelt was president of the United States from I think it was it nineteen thirty three to nineteen forty five. He passed away in office I think just after the start of his fourth term. And back then there were no term limits. And if you have an opportunity to listen or watch, if you will, the PBS specials where they do a whole series on Franklin Roosevelt, it's fascinating. And the man is an amazing orator. And he used to have these things called fireside chats.
And I was just thinking about, should I call this a fireside chat? And I said, now, that's kind of old fashioned. So we're going to call this a beachside chat because I live by the beach here in Southern California. And I want to talk about some things that have affected my life and, you know, my journey with the dental profession over the last thirty seven years. And hopefully what I will do tonight is to be able to give you some tools to think about some major decisions that you want to make in your life.
This COVID-19 pandemic has affected everyone. It's affected people in many different ways. Sadly, we've had over six hundred thousand people lose their lives to it in the United States alone. We now have a Delta variant and this variant and this is not going away, folks. I mean, we would just like to kind of wake up one day and say, this is over and it's not over. We have to take proper precautions and do what we have to do. And I'm not getting into politics as to whether you should get vaccinated or not, not get vaccinated. All I'm saying is, is that we have to deal with this and life goes on one way or another.
And I want to like I said, I want to talk to you about some of the things that that I have on my mind. And I hope it will help you. But before we get to that, first, I want to make sure that you know, that we are partners with a wonderful magazine called Decisions in Dentistry magazine. They are kind enough to work with us on the marketing of our podcast, and they have one of the best clinical magazines in the country in dentistry if not the best.
You can buy up to one hundred and forty of their continuing education classes online for a very reasonable price and it's just great stuff. Great who's who of dental clinicians giving great information about all kinds of clinical topics. So go to www.DecisionsinDentistry.com. And if you want a complimentary consultation from me or a member of the Academy of Dental CPAs, the ADCPA, you can go on there, on their website and you can click on the button and ask for that information. And one of us will get back to you.
My mother ship is Eide Bailly, but we are a proud member of the Academy of Dental CPAs. Twenty four CPA firms across the United States that represent over ten thousand dentists. And that's a lot. And we have been the financial first responders, the ADCPA, through this pandemic. I mean, our group has just done hundreds of webinars. I've done, I don't even know how many webinars I've done. If you're not working with a dental specific CPA, you really should be.
So my phone number in Tustin is six five seven two seven nine three two four three. My email is awiederman@EideBailly.com. And if you're looking for someone anywhere in the country, I go to the ADCPA website which is www.ADCPA.org.
A couple of updates on our wonderful government programs that just don't seem to ever go away. Uh, so let's start with the PPP. So we're in the middle of August here. This is going to air I believe September 1st or September 2nd. Yes, I believe September 1st. So by the time you hear this, you should have filed for forgiveness for your round one PPP loan based on when you received it and the fact that you have twenty four weeks in a covered period and then ten months after that date to file forgiveness.
If you haven't, then don't fret. You may just have to start making payments on that loan. And the rules say specifically that if you don't file by the end of the ten months after your covered period, as long as you file before the loan is paid off, which in most cases for all of you is going to be two years, it would be five years if you get the loan after June of twenty twenty. If you file for forgiveness and you get full forgiveness, the bank and the SBA are required to reimburse you every dime of every payment that you've made on these loans.
So if you forgot or you were too busy or, you know, you were watching the Olympics over and over again, I don't know what you were doing. Don't fret. We can get you covered. So that's the PPP loan. Your PPP two loans, same rules. Take the date you get the money. Most of you got that money in January and February of twenty twenty one. Add twenty four weeks. And you can use a covered period of eight to twenty four weeks. Most people will use twenty four weeks and then add 10 months. And most of you don't have to file for forgiveness until early twenty twenty two.
But we need to keep watch on that. We'll be doing some more shows on the round two PPP and what you have to do. Now, I've been talking about my, I don't know if it's my nemesis or my partner, or my friend, or my brother, or my second spouse. I don't know what it is, but the Employee Retention Tax Credit has pretty much consumed my life for the past six to nine months once they passed the rule.
So for those of you who don't know the rules, they passed in March of twenty twenty. When the pandemic started, they passed a three point two trillion dollar bill called the CARES Act, and that included several provisions to help small business owners. One of them was the Paycheck Protection Program, the PPP. The second one was the Employee Retention Tax Credit. And that was we call that the ERTC. And the rule was, is that if you took out a PPP loan back then you could use the ERTC. But that all changed on December the twenty seventh when Congress passed a law and said, hey, wait a minute, we don't like that. We're going to change this for you.
And going all the way back to March 12th, if you either had a greater than 50 percent reduction in your gross receipts, less patient refunds or returns and allowances, if you had that 50 percent reduction in any quarter of twenty twenty, and that would only be quarter number two for dentists, because that's when most of you shut down on the advice of the American Dental Association and the Centers for Disease Control.
If you had that or you had a mandated government shutdown. Now, that does not mean that ADA said you should shut down. That is not a mandated shutdown. CDC recommended that you shut down. No, no, no. There are some states that did mandate that you shut down. There are some cities, for example, in California, the city of San Francisco mandated that dentists could not do dentistry unless it was emergency procedures. It was mandated. It's in the orders. We researched it. Same, I believe, with Santa Clara County, other states in the country also. Same thing. Most states did not. Some did, some didn't.
So for those of you who are going to want to apply for this credit, it's going to probably be fifty percent of your gross receipts, reduction in the second quarter. If you meet that, then you got a potential of a credit of five thousand dollars per employee for more than likely the second and third quarter of twenty twenty, potentially the fourth quarter. I'm not going to go deep into the rules here.
Now, if you say, well, I've already filed for forgiveness, I can't get that. No horse manure. Can I say that on a podcast? Horse manure. That's like the worst word I've ever said in my life on a podcast. But no, that's not true. We have actually helped, I mean, the Academy Dental CPAs has helped hundreds and probably into the thousands of dentists get these tax refunds.
We at in my division just in Tustin, we're up around seventy dental practices that we've helped and you got to remember that not everybody had a 50 percent reduction. And we have some practices that are very small. And it doesn't make sense because it's one employee and he had five thousand dollars. It just doesn't make sense.
So we've hit the federal treasury folks for over three million dollars just in our Tustin office for the Employee Retention Tax Credit. So if you have filed for forgiveness, if you have more than realistically, four or five employees, if you have if you filed for forgiveness, then give us a call, send me an email, we'll send you a complimentary, we'll send you an intake form with a complimentary analysis. After doing 70 of these, I am pretty sure I can take a look at it right from the get go and tell you where you're at.
We have averaged, I think, our average or somewhere between forty two and forty five thousand dollars just for twenty twenty. So give me a call again six five seven two seven nine three two four three awiederman@EideBailly.com.
Now the other thing I want to mention is the rest of the alphabet soup. So you got PPP loans. Some of you were going to get Employee Retention Tax Credits. We have one more. It's called the HHS Provider Relief Fund. Most of you received a check probably in the months of July, August or September of two percent of your gross revenues. The HHS Provider Relief Fund also was created by the CARES Act in March of twenty twenty. And it was one hundred seventy five billion dollars out of the three point two trillion that was authorized by the CARES Act. And it was specifically designed to be money to be paid out to health care providers, solely for the purpose of fighting COVID-19.
But what it's turned into is not only to fight COVID-19, but also to reimburse health care providers for lost revenues incurred because of COVID-19. So for any of you listening who do Medicare work, welfare work and have gotten money from the government for doing dentistry, they started making payments on April 10th of twenty twenty. They were supposed to have a reporting all set up on the Department of Health and Human Services website. They're supposed to have this set up sometime around January of twenty twenty one. Well, they did. They set up on January 15th, just like they promised, but they just set up to register. At that time we were having a we had a new administration. It was very contentious, as you remember, was in the news. There were lawsuits and the Department of Health and Human Services was way behind and they didn't get their act together until June of this year twenty twenty one.
So here's what you need to know about that. If you received between April 10th and June 30th of twenty twenty, if you received more than ten thousand dollars from the Department of Health and Human Services Provider Relief Fund during that time before June 30th, you have a reporting requirement that ends at the end of September. You must report everything that you've received. And there's a whole a whole big deal about that. That you have to do. So, I would strongly recommend if you did receive that money, you can reach out to me, you can reach out to Eide Bailly and I believe we have a website where you can send in questions. I think it's email@example.com or just shoot it over to me. I think they're still setting it up and you need to make sure you take care of that.
So that's enough out of that alphabet soup for one night. Also, since we're publishing on September 1st, on September 8th, a week after that, we are we have been doing a series of webinars for six local dental societies in Southern California. We're about two thirds of the way through in this month. I'm real excited because I'm going to get to participate with Eide Bailly's financial planning team and they are going to along with me, we're going to basically talk to you about what does a financial plan look like? What should you be doing? We're going to talk about some of that tonight and in a couple of the shows coming up here before the end of the year.
And we're actually going to be creating, as I understand, our team over there at the financial planning group. As I understand it, they're going to be creating a fictitious dentist, probably named Dr. Wiederman. And we'll see how much he or she, if it's Dr. Art Wiederman it's a he, how much he needs to retire. So please listen to that. If you don't get to it live, it's six to eight p.m. Pacific Time, because a lot of our listeners are on the East Coast, we have thousands of people listen a podcast every week. And so we have that, on the East Coast that would be late nine to 11.
However, do not fear, folks, if you cannot hear the podcast live, you can go to our YouTube page. Just Google Eide Bailly YouTube and you'll see it right there. The Art of Finance, Art of Dental Finance and Management podcast. And you'll be able, I'm sorry, that's my podcast. I always get my podcast and my webinars mixed up. So it will be you'll see all of the Business of Dentistry webinars. Sorry about that on our Eide Bailly YouTube page. And you can listen to them to your heart's content, at your leisure, on your phone, on your computer, in the car or wherever you like.
So anyway, so let's jump into the topic tonight. Let's talk and jump in to talking about my beach side chat. So I turn like I told you, I turned 62 yesterday. And, you know, it is very humbling. You think about the fact that you get older. It's only a number. And I feel great. I've lost I think I've lost fifteen pounds. And, you know, I started taking care of myself this year. And I'm going to tell you about that in a minute.
But I want to start off with something that happened to me about three years ago. I was in Portsmouth, New Hampshire. I had gone to our Academy of Dental CPA meeting in Boston, hosted by my dear friend Mark Rosen. And his team, had a great time, went to Fenway Park, one of my favorite places on the planet. And we have a wonderful client that was referred to me by somebody I know really well up in the state of Maine. So I called them. I said, hey, I'm going to be in your neighborhood kinda, sorta. So why don't we meet halfway? And we decided to meet in New Hampshire. And I've never been to the state of New Hampshire. And it was wonderful. We were right on the borderline of New Hampshire and Maine.
And I had a night to myself before I was going to meet with my clients. And I went to the caretaker of the place I was staying. And I said, I love lobster. I grew up in Brooklyn. I love lobster. Give me the best lobster place in town. They said, don't even think about it. You go to this place. I got three hours devouring two, one and a half pound lobsters. Just one of those I mean, one of those fun nights I've had involving food, of course.
So when I was up there, I had an afternoon to walk around, it was a little rainy that day. And but I don't get a lot of time to just walk around and look at my thoughts and think about things and think about where am I going in my life and stuff. I just walked around for two or three hours around Portsmouth and I walked by a sign and the sign said it was it was in like letters you would put into a sign like if you ever watch a golf tournament, you see. I don't know. Sun Shimbo, minus 13, they put in the one in the three. Well, this was a sign that was sitting on like an accordion on the ground in front of the shop. I don't even remember what kind of a shop it was. And it said, do the things that make you happy. And it hit me right between the eyes, folks. Do the things that make you happy, that really make you happy. What a concept. I took a picture of it and I show it to people.
And every time I get into a rut and again, I'm a human being like the rest of you, you know, we have good days and bad days. And I get into a rut. I looked at that and it really, really keeps me going. So I made this year about making me happy. Not that I wasn't happy, but I wanted to be, there are some things that I wanted to do. I want to lose, I've been 30 pounds or so overweight my entire adult life. I went and got a physical. My doctor said I am not feeling the love for your numbers and you need to lose 30 pounds, which is something that he didn't have to tell me. And I said, what do you think? He says, carbs. Just cut the carbs out. I mean, I love ketchup, I love French fries, I love bagels and pizza and stuff like that. So I did cut them out. I didn't cut them all out. I cut about 90 percent and I've lost about 15 pounds.
I have to go buy some new belts because I'm, none of the belts I wear anymore will help keep the pants up. So I got to go buy some new belts. So I did that and I'm approaching three hundred rides on my Peloton and I exercise regularly and I walk the dog and I do all these things regularly. So I'm taking care of myself and I've got more into my golf game. I've taken some fishing trips, had some great fishing trips, trying to get together more with friends now that, you know, we're done. Well, we're not done with the pandemic, but it's maybe further along, hopefully, that we're closer to the end than the beginning. Maybe contrary to what I said earlier, but that's the case.
But, you know, do what makes you happy, folks. I think that's a great mantra for tonight. Do what makes you happy. And if you can do that, it makes things really easy. You don't think about the negative as much. And I don't tend to think about the negative as much. And, you know, the other thing that I've done in my life is, I call it next shot. So I used to play golf and I was terrible. I mean, I still play golf, you all know that. And I was terrible, terrible, terrible, terrible, as Charles Barkley from TNT would say. And I was terrible. And I would get mad and I would throw the club and I would just get really mad.
And then finally, I had a friend of mine who's a clinical psychologist, and they taught me about meditation. I started meditating. And what I really realized is that there are two types of situations in life. One is a situation that you control. My preparation of tax returns, I control that. The other is a situation that I don't control. And I no longer get stressed about situations that I do not control. If one of my boys does something, they don't. But if they did, you know, they're adults, they make their own decisions. Do I worry about them? Sure I do, but I can't do anything about it. If a client does something, makes a bad financial move or maybe is not doing well in their practice or they're not behaving well at the office. That's another thing. So I meditate and I relax and I don't worry about things that I don't control. So I would recommend that you also do that.
I've had several clients, folks who have taken ill this year. I've lost one of my dearest clients in their early to mid 60s. And I am going to tell you that lots of my clients just work, work, work, work, work. They don't take off more than a couple of days a year. Again, nobody took off a lot of time last year other than when you shut your office down to travel. Now, travel is starting up again. Take more time off, plan your schedule, go see the world. Go do things that you want to do. I mean, I have a whole bucket list of places. I've been to a lot of places, but I've still got a bucket list of places that I want to go.
Make time for your hobbies. It will make you happier, gives you things to talk about instead of just the office. Again, my hobbies are I love to go to sporting events, fishing and golf. And that's what I like to do and that's what I do. Spending time with my friends and my family, those are my hobbies. And I call this, again, next shot.
So yesterday, August 14th, my 62nd birthday, I told you guys I have two boys. One is thirty two. I'm sorry, one is twenty seven. That is Forrest and one is thirty two. He Forrest lives in the Bay Area. I'm so proud of everything that he's done in his life. He actually does dental loans for a major bank. And my other son, his name is Nathan. He just turned thirty two and he is a sculptor and he's making beautiful sculptures and he is just doing all kinds of great stuff with that.
So Nathan, the last time I went golfing with Nathan was maybe ten years ago. So he says, Dad, listen, why don't we go golfing today, you and me? And I put my hand on his forehead, I said, are you feeling well? He says, no, I really want to go. So we went. And my son Nathan used to get complimented by everybody about how polite he was, what a great young man he was and all the moms when he was in high school and junior high school and public school, oh your son is so wonderful and so nice and so respectful. And he is. But, you know, when he hits a bad golf shot, he wasn't so happy. Right. So I said to him yesterday, I said, you know, I said, let's look at the next shot. So you can't do anything about the last shot, Nathan, you hit a bad shot, you hit a bad shot. What we do is we leave today. We leave the golf course relishing the good shots, the one that was two feet from the pin, the one that curved right in towards the flagstick, the really good putt that we made.
And you're going to hit bad shots. I mean, Phil Mickelson, Tiger Woods, Bryson DeChambeau, Rickie I mean, Rickie Fowler, all the great golfers out there, they hit bad shots. Everybody hits bad shot. Now, they don't have as many bad shots as I do, that's for sure. But they hit bad shots. So next shot. So, folks, you make a mistake. Next shot, go to the next shot. Think about that. I like that.
I want to chat a little bit about leadership and making your practice better because what we're going to talk about for the rest of the show today is making your practice better and a little bit of financial and retirement planning, because here's the deal. You work in a very, very physically demanding profession. All right. I mean, the most physically demanding thing I do is type on a computer. And I do have arthritis in my fingers. And that's what happens when you for 40 years you type on a computer.
Well, you guys, ladies and gentlemen, who are dentists, you have issues with your hands and carpal tunnel in your neck and your back and your shoulders and your spine. And hopefully you're doing everything ergonomically correct and you're stretching and exercising the way you should be. But we have a lot of clients who don't. So you want to plan for your retirement. You want to plan for your retirement so that you can retire on your own terms, so that maybe when you get to 55 or 60 and you can't do this physically anymore, that you don't have to worry about it.
So. The way you do that, folks, and the way you have a really successful practice and you know, yeah, you can produce more, we're going to talk about that in a minute. But it's leadership. It's all about leadership. And nobody wants to hear me talk about leadership. That's what they tell me. I don't wanna hear that. I just I know I need to be a leader. And it is a trait that can be learned. I just had Jennifer Tyson from Fortune Management on one of our webinars, and she did a great job of talking about leadership. And again, go on to our YouTube page and you'll be able to hear her. She gave a really nice about a one hour talk about that and what they teach their clients.
But I ran a team for 33 years, folks, and I'll tell you what, three of the ladies worked for me for over 30 years. The others worked for between 10 and 15 years for me. I didn't lose very many employees. Why? OK, what makes a good leader? Number one, I don't have the corner on every answer. You can read as many books as you want on leadership and how to run a business and all this stuff. And nobody has the right answers. Nobody knew there was a pandemic coming two to three years ago. Nobody knows about what the interest rates going to do to our economy or what the local economy is going to do in the next 12 months.
You know, things hit you that you know, you can't control, right. So, the way you have a successful practice is to have a team that is hitting on all cylinders, and how do you do that? You treat them with respect. I think that might be the most important thing that I tell you tonight. Treat your team with respect. Catch them doing something right. So what you don't do is you don't yell, you don't make faces, you don't argue or scream or talk disrespectfully. Oh, well, God, you make that mistake every single time. You're not very bright. I mean, I've seen that in dental office not too often, but I've seen it.
So you catch somebody doing something right, you basically acknowledge people who do things right. You do everything you can to make someone feel wanted and appreciated. And I think the most important thing is this. As a leader, you are creating the vision for your practice. You are the one that says, OK, we're going to go ahead and expand from four operatories to seven operatories and we're going to move to this new location or we're going to start placing implants in our practice or we're going to start doing sleep apnea, sleep dentistry procedures in our office, or we're going to put in an advanced periodontal maintenance program for our patients.
You're the leader. You make the thirty five thousand foot view, but you include everybody in the plan. So, for example, you go to the hygiene team and you say, I would like us to go from having five percent of our patients in the four thousand codes, meaning quadrants of replaning, SRPs, et cetera. And I'd like that to go, you know, the norm is what we like to see is thirty to thirty three percent. Are you going to do that in one year? No, you're not.
But I'd like to go hygiene team from five percent of our practice, I'd like to go to, I don't know, 12, 15 percent in a year. And these are the things that we're going to do. We're going to talk about it. We're going to make sure we probe. So what you do is you go to the hygiene team and say, this is what I want to do. Let's have a meeting and sit down and see how we can do this. And you're going to find out very quickly who's on board and who's not. Well, you know, I just don't like to I don't like to probe and I just like scraping and scaling. And I don't you know, I don't really that hygienist needs to disappear, it's a liability issue. That's the type of thing that a leader does. A leader sets the tone.
A leader. And this is also really important. A leader is vulnerable. A leader is somebody who says, you know what? And I did this with my team all the time. I said, guys, I don't have all the answers. I need your help. This is what I need. I need your help, this is where I want to go. This is what I want to do. Now I'm going to ask your opinions about things. And I'm going to want to get your input. I want to be upfront with you and tell you that I'm not going to implement everything that you believe should be implemented, because if you go to Suzi at the front desk and you want to look at a new dental software, you get her input and you appreciate it, but you make the final decision. Are we changing dental software or are we going to use it in a different manner? What are we going to do with that?
And that's so important that you make them feel like they're part of the process of growing and managing and operating the business. Always be positive, never yell. That's so important. I can't tell you. I have never raised my voice. And you can ask the folks that work for me. I've never raised my voice to an employee in thirty three years running a business. Not that I remember, maybe I might have gotten a little, you know, talked a little fast or what have you, but I never yelled at somebody because yelling doesn't get me anywhere. Whenever I talk to somebody on the phone and I'm looking to get some information or get them to do something, I say, Hi, this is Art Wiederman. How are you today? And say, I have a problem and I need your help and that it works magically all the time.
Have a plan once a year. Sit down and figure out where do you want to go. Is it realistic that we're going to grow our practice by thirty five percent one year? Probably not. Is it realistic that we like to get an extra five new patients a month into the practice? And how are we going to do it? Well, are we using marketing that doesn't work? I mean, there's tons of marketing companies out there. But, you know, you need to I mean, I talked to my friend Kristie Boltz, whose husband, Jim is our ADCPA member in Columbus, Ohio. And Kristie is you know, she has a company called My CMO. She was a guest on our podcast. If you want to listen to what she talks about.
And, you know, she is the chief marketing officer and she'll look and say, well, you know, this direct mail campaign is not working in this social media campaign isn't working. You should do this. And this and this. She's the quarterback. You know, you have a chief financial officer. Companies have an H.R. officer, and this is the chief marketing officer. That's what she does for dental practices. That's what you need to do every year. What's working in your practice? What's not working in your practice? Running a business is not about being right or getting it right every single day of every single week of every single year. It doesn't work that way, folks, OK? It's about looking at what works, making sure that we keep doing that, looking at what doesn't work and making sure that we make the changes so that we don't do those things any more. Marketing is one big deal.
You know, and like I say, involve your team, reward your team. Folks, you guys live very, for the most part, very, very good lives. You live in nice houses. You drive nice cars, you take nice trips. Your kids go to nice colleges. Your employees in many cases live paycheck to paycheck, share some of the wealth with them. You just, I did that one time. I think I told this story, but I'll tell it again. We had a really good year one year. This was five, six years ago. And I basically had a team meeting and I had my cell phone on and the cell phone was waiting for a call from a limo driver because I was ready to take my team out for the rest of the day.
I said my team was an all female except for one young man. And I said, for the ladies, grab your purses for the young man. I said, grab your wallet, let's go. And they got in a limo and one of them said, Well, where are you going? Where are we going? I said, we're going bowling. All right, just be quiet. Listen to me. And we went to the mall, I gave them each a thousand dollars, I said, let's meet at five o'clock for dinner and I will tell you the goodwill that that built in my practice. I could see it and I could smell it. And I'm not saying you have to do that with a thousand dollars per employee. It could be two hundred dollars. It could be a dinner, it could be whatever it is, do something, help these folks, because you can do this. You can afford to do this.
I want to talk about financial planning because and again, I really, really hope that this helps. But everybody needs to do a financial plan. I've got a financial plan. I do one every year. I have a financial planner. I am a financial planner. But I wouldn't, I was going to say I wouldn't work on my own teeth, which I wouldn't. But I do my own tax return. But I do have a financial planner who kind of gives me a second opinion about what I'm doing.
So the first thing I want to talk about a financial plan is communication with your spouse if you're married. That is so important that you're on the same page. OK, what do you want to do? Where do you want to be? How much money are you spending every month? OK. Are we spending too much? Can we get to the finish line? I have unfortunately seen many, many dentists who are going to work until they die. It's horrible and they haven't saved because they spend money or they're not able to make the decisions in their practice to grow their bottom line. To get rid of expenses that they don't need. To grow their practice by changing the marketing that they're doing, by adding new procedures, by getting rid of bad team members. Oh, my gosh. I've seen such turnarounds by the worst person in your team. We get rid of them, the staff celebrates and you help them to grow and be successful.
OK, so it's going to come from your dental practice. There's two ways to grow your bottom line. One is to cut your spending. Not going to get into that tonight. The other thing is to grow your top line, which is to make more money in your practice.
So let's talk about what can we do, how much do we need and where do we start if you haven't started? So first of all, I want you to go back to your team and find out what is it going to take to increase the production of your practice by a thousand dollars a day? So if you have a practice that is doing a million dollars a year, that's about eighty three thousand dollars a month, that's about four. That would be about four thousand to five thousand dollars a day, depending on the number of days a month you work.
So how do I add a thousand dollars? It's not even one crown, at least here in California in most places. We had a couple of quadrant root planing, one or two additional procedures and we're done. How do we do that? It's about scheduling and teamwork and verbal skills and communication. How much money do I make if I added one thousand dollars a day? You won't need any additional team members. I guarantee you can do that with the team that you have. I've heard this from consultants and dentists every single day of my life. You don't need anybody else.
You will have 20 percent overhead. So let's say you work one hundred eighty days and you can increase production by a thousand dollars a day. That's one hundred eighty thousand dollars. The only real overhead that you're going to have is lab and supplies and maybe some additional charts or other miscellaneous expenses. I suspect you have enough room in the hygiene schedule because maybe twenty five or thirty percent of that is one hundred eighty thousand is going to be forty forty five thousand dollars. You know, take that divided by 50 weeks. That's about a thousand dollars a week. And of that thousand dollars a week break it down into four days, that's two hundred fifty dollars a day. That might be the difference between, you know, two additional root planing procedures in your practice, each making one hundred twenty five dollars a day.
It's a math problem. My life is a math problem. I told you that for two and a half years on this podcast. You can do this. It takes some effort, but you can do this. If I do that and I make one hundred eighty thousand minus 20 percent overhead on that because my rent doesn't go up, my lab and supplies do, my employee cost does not go up, my malpractise insurance, nothing else goes up. That's a net of one hundred forty four thousand dollars a year.
What can you do with an additional one hundred forty four thousand dollars a year? You put into a retirement plan. If you're over the age of 40, there's a plan called a cash balance defined benefit plan. Is it for everybody? Now, 40 is a little young, but we can do it at forty. Forty five, fifty, fifty five is much better. And you can put that money away and save for retirement.
So. How much do I need? Well, here's the rule of thumb, OK? Well, some folks is that you need to save somewhere in the neighborhood of about four to four and a half percent. Be able to save enough money so that you can pull out four to four and a half percent of your nest egg. So let's say that you wanted to spend when you retired one hundred fifty thousand dollars a year. And if I'm going to earn four percent interest, that means that I need twenty five times four percent to get to my number.
So if I want to pull out one hundred and fifty thousand dollars a year and I want to pull that out over my retirement age and it's going to earn four percent a year, I will need about three million, seven hundred and fifty thousand dollars to do that, to pull out four percent a year when I'm ready to retire. And if it continues to earn four percent, you will have enough money to do that through your retirement.
So let's say, for example, how much do I have to save? And that we can go through examples until we're blue in the face here. But I'm just going to give you one. Let's say I have a thirty five year old doctor. A thirty five year old doctor is planning on a four percent investment return. You're going to say now, wait a minute. My investment adviser earns me a lot more than that. Well, folks, I'll tell you what, the markets are crazy. We've talked to investment advisers on this show. We'll continue to do that. And, you know, the markets are at an all time high. Markets go up and markets go down.
Be conservative, four percent return on your money is I mean, that's what I look for. Now, do I want to do better? Of course we do. And I have an investment adviser and they're fantastic and they're very conservative. I sleep very well at night. OK, do I worry if the market goes down three hundred points? I don't like it, but I don't go into conniptions over it because markets go up and markets go down. And I know we have a plan. Sit down with your investment advisor, look at your statements, understand why you are invested in what you're invested in. I can't tell you how many people have said oh well, I trust them. My friend uses them. And what's your annual return? Well, no, but I'm sure it's OK. I get this all the time and I just want to rip whatever little hair I have out of my head when I hear this.
Pay attention to your investments. It's your money. Nobody's going to care more about it than you are. So I'm thirty five years old, four percent return. I have three hundred thousand dollars saved. Say I've been doing a good job. My goal is thirty three point three million seven hundred fifty thousand dollars at age sixty five and retire in thirty years. How much do I have to save per year? The number is forty seven thousand six hundred and nine dollars a year.
Well, you can do that with a profit sharing plan, with a 401k component very, very easily. You can get pretty darn close with a simple IRA. So got to figure out when do you want to retire? On how much do you want to retire? And there's all kinds of factors, you may be getting a huge inheritance. OK, my mother, when she passed away before she died, she used to tell me that she was going to leave me all of her debts. I've told you that before. And, you know, so I didn't get a ton in an inheritance. Neither did my wife. And we've been saving, I save like a fiend because I refuse to not be able to retire when I want to retire. And I will and I could.
But I choose to help my clients to do what they do. And I like to be a role model for them. And I think that's really important, just like you are a role model for your patients. So, you know, if you increase your production a thousand dollars a day, what if you do it five hundred dollars a day? So that's half of that, you grow by ninety thousand dollars instead of one hundred eighty.
Ninety thousand dollars. Eighty percent of the seventy two thousand, that is a contribution to your profit-sharing plan. And a 401k cause the maximum you can do if you're over 50, is I think it's sixty three thousand or sixty three five this year for twenty twenty one. I mean, you do that every year, you are going to have the financial ability to retire.
Get in the habit of saving money. I know your student loan debt is suffocating. It's horrible. It's terrible. I had my friend Mark Johnson from St. Louis on the podcast a couple of weeks ago, and we talked about plans of how to restructure your student loan debt, get it paid off in a reasonable amount of time. And it's about having a plan.
It's about maybe cutting your spending a little bit. I'm not suggesting that you don't live well. I'm not suggesting you don't drive a nice car. I'm not suggesting you don't live in a nice house. Not suggesting any of that. What I'm suggesting is to pay attention to how you spend money. I have my wonderful role that I've lived with God as long as I can remember. It's my sixty five twenty five 10 rule. So the way this works is you earn one hundred thousand dollars, you live on sixty five percent of it, that pays your rent, mortgage, it pays for food, it pays for clothing, it pays for entertainment and pays for everything that you're living in your personal life.
Twenty five percent you're going to pay in taxes. Now, don't say that you're in a 50 percent marginal bracket, but because that's not true, most of you pay somewhere in the neighborhood of twenty five, maybe twenty eight percent of your total income in taxes. If you live in Washington State or Texas or Tennessee or one of the nine states that does not have a state income tax, you pay less. If you live in New Jersey or California or Illinois, where the rates are higher, you're probably paying more. It just depends on what your income is, what your deductions are, and then the other 10 percent you save. I'd like to see you save more. If you listen to Dave Ramsey, he wants you to save a heck of a lot more than that.
But at the end of the day, it depends on when you're starting. And it depends on when you want to retire and on how much. So you want to plan this all out. How much do I need? How much do I want to live on? And then how much do I want to save? And then you go back to the practice and you say, OK, this is how much I'm netting. I'm netting two hundred fifty thousand dollars. Out of the 250, I'm going to pay twenty five percent in taxes, sixty two thousand five hundred dollars. That leaves me a little over one hundred eighty thousand one hundred eighty thousand dollars hundred and eighty seven thousand dollars. OK, what am I going to do with that. Well I'm going to live on that. All right.
I'm going to put money away for my kids college education. I'm going to fund fifty thousand a year to retirement because my financial planner who ran the model. Listened on September the 8th to our financial planning webinar, we're going to tell you how to do this. We do this every day in our financial planning group at Eide Bailly. How much do we need to put away and, uh, and we just do it, we just make it a monthly bill, it's thirty five hundred a month. It's like your rent. It's like your lab bill. It's like your dental supply bill. This is my retirement bill and this is it goes away. And I meet with the investment adviser once, once a quarter, once every six months, whatever you're comfortable with. And that's what we do.
As I've told you, unfortunately, many of my clients live on the ninety twenty five minus 15 rule, which is they live on 90 percent of what they make. They struggle to pay their taxes. They're always in arrears, they're paying penalties, they're paying interest, and they're minus 15 percent. They're in deficit spending just like the federal government is. And where does that go? That goes on their credit cards. And when I see a doctor with one hundred two hundred thousand dollars of credit card debt, I can't tell you how many doctors credit cards I've refinanced.
And, oh, this is great Art. You cut my payment. I have so much money. And then two years later, they've run up another seventy five thousand credit. Well, you know, I got to do this I gotta do that. I say you can't do that. So this is about self-control. You know, you want to lose weight, you stop eating carbs, you want to stop smoking, you go to a smoking cessation program.
I mean, it's all these things that you need to do. If you want to make a change, it takes some effort. So it takes effort to figure out where you at and it makes you feel so much better. I also want your home to be free and clear by the time your retirement date. So pick a retirement date. Maybe that's 60, maybe it's fifty five, maybe it's sixty five. I don't know.
So you get to age 60 and you say, I want my house to be paid for, I want to have four million in retirement. I'd like my kids college to be funded. And that doesn't mean that you can't go get student loans for them. That doesn't mean that they can't go to community college for two years, which would cut things out. That doesn't mean that they can't take AP classes, which cuts the number of classes that you have to have them enrolled. There's all kinds of things you can do to save for college 529 plans. We'll get into that in another episode.
You know, and you do all these things and then you have goals and then you go live your life and you know that this is being taken care of. But you have to pay attention to all of this stuff because doctors, I will tell you. And again, it's funny. When I was in my 30s and 40s, I never understood, I think I probably said this on the podcast, too. I never understood why people who were in their 60s and 70s. No offense to people in their 60s and 70s they're some of my most my best friends in the world, but why they lost patience. I think to some extent lose patience, because you go through life and people disappoint you and you do right by people and they don't do right by you. And it happens.
You know, and I mean, I just lost patience with people. And you get to the point where you've been a dentist for 30 years and you say, you know, I like being a dentist, but I'm getting a little tired. I can't, I don't have the drive to go out and get 20 new patients. I hear this every day from my doctors. I don't have the drive. I don't want to do this. I just want to come in and give me my handpiece. Give me my lunch, give me my paycheck. Leave me alone. I'll be happy. You can't run a business that way. That's why when you're thirty, thirty five, forty, forty five, that you've got to start saving for retirement. Because if you get to that point and you're going to wake up.
I had one doctor dear dear wonderful, wonderful client of mine in the Los Angeles area. And he called me up one day and he says, you know what, one of these days I'm going to call you and I'm going to tell you that I'm ready to pop, which meant I'm ready to retire. And he called me in December one time and he said, Art, I got the pen, I'm ready to pop. Let's go. And we got practice sold and about four months total, Found a wonderful young lady to buy his practice. And he is happily into retirement. And he saved and he planned and we planned. And it was wonderful.
So I want you to be able to be one of the unfortunately, three percent of Americans who can afford to retire at the age of sixty five in the way they have that they would desire to do so. And it's funny you say, well, what am I going to do after retirement? What can I do? And my doctors are busier in retirement than they were when they were working. They are busier in retirement than they were when they were working.
I want to encourage, to put a bow on this, I want to encourage everybody to do a couple of things. Number one, maybe a self-assessment. What kind of a leader am I? Can I be better? These skills can be taught, folks, and again, leadership is nothing more than having a plan. Executing the plan with your team and basically working together with your dental team and the teams that work together are just the best teams. I just love going into offices and seeing these teams that are just running on all cylinders and clicking every single day.
And the team when I was with the Pride Institute back in the 80s, doctor manages, doctor manages team, team manages practice, and that's what they've taught for years and years and years. And you have a practice where you just are so excited about going in and everybody is happy and everybody is looking forward to patients and they're making the changes, the difficult decisions they have to make. And then you go home and you go home and you tell your spouse, wow, I had a great day, another great day, and I want to talk about planning our next vacation. It's a family vacation.
I mean, oh, my gosh, I took my family on some just really cool vacations. Best vacation ever took my family on was to the Galapagos Islands, six hundred miles off the coast of Ecuador. It was unbelievable to go see how pristine that place was. And we went all over. We went on cruises and we went to Yellowstone and, you know, Dad tried to be the adventure dad and ended up upside down once on a rappelling wall. Yeah, but we had fun doing it. And my boys. And that's the other thing, too. I want to encourage you as we kind of bring a bow to this today, be involved in your kid's lives. I mean, it goes so fast.
You know, I'm a CPA and the worst time of the year for me was February 1 to April 15. People would ask me how many, how many hours a week do I work? I don't know, whatever it takes, how many hours, whatever, I have no idea. But I will tell you, I coached every single one of my boys sporting teams when I could. Forrest played baseball and all the way through high school and college. I was not his high school coach, but all the way through juniors. I was an assistant coach on the team. I did not have the time to be the head coach, but I was there. I did not miss a game for any of them. Forrest played water polo and baseball. My son Nathan ran track and he did cross country and he was in wrestling and I did not miss any of it.
And I will tell you, the days that I sent them off to college, Nathan, to the Academy of Art University in San Francisco and Forrest his first year at San Jose State, I was crying like a baby. And it's hard. It goes by really fast. Don't miss it. Set your schedule in such a way that you can, if you want to coach your kids teams, coach your kids teams. If you want to be at every single event they're at, don't miss it.
You know, my, I tell my kids that you can do anything in this life if you put your mind to it. And I have told them that over and over and over again. And set a good example as a parent, a good work ethic with good habits, good personal habits, good communication, because your kids are going to be the product of who you are. And I see my families where the parents are not involved and all they do is work. And I see what happens with the kids and I see other families where the parents are all involved. They do this. I mean, I was a Boy Scout leader for three years. I am not the person as far as having outdoor skills, you know, but I learned them and I had other people teach me them and I helped and it was wonderful. It was just absolutely wonderful.
So be involved in your kids lives, communicate with your spouse, communicate with your team and in closing folks, do what makes you happy. And if you do those things, you will have a fruitful career, a fruitful retirement. Your kids will go to college. You'll see the world because you work really, really hard, dentists work really hard, and you deserve a nice vacation and you deserve to drive a nice car, OK, within the means of the practice.
And if you're not making enough money to do what you want to do, then work on that practice and make your gross revenues higher and your profit higher. And the only one's going to do it is you. There are wonderful dental coaches. I've interviewed dozens of them on this program. I will be interviewing more as we go down the road and just let them help you. We're your financial coach.
And a dental coach is someone who can sit down and help you with the, you know, how do I grow my bottom line? How do I get new patients? How do I how do we do this? And it could be a very simple thing that that person at the front desk needs to disappear and everybody knows it except for you.
So anyway, my podcast is and always will be a call to action. And I do hope that this is helpful and maybe it will give you the kick in the pants and the impetus to make some changes. We get back to the same thing of the definition of insanity, folks. The definition of insanity is doing the same thing over and over again and expecting a different result. And it doesn't work that way.
It's hard work. This is not easy, but the rewards are priceless. The rewards are a great family, a great dental team, a very enjoyable practice. Retirement on your terms, not the terms of your back or your neck or your shoulder. Kids going to college, proper insurances, and a great life. That's the idea. So do what makes you happy.
So, again, let me talk about my partner here, Decisions in Dentistry magazine. Go to www.DecisionsinDentistry.com. Look at all the great CE courses. Look at their great articles, their website's fantastic.
If you're looking for a dental specific CPA, we at Eide Bailly are always taking on new clients, as are the members of the Academy of CPAs. Twenty four CPA firms across the United States that represent ten thousand plus dentists, best in breed, the best around, the best human beings. I can't wait to see my friends for the first time in two years in Miami, October 17th to the 20th. I can wait. We're just going to be hugging each other for two and a half days. I don't know if we're going to get any program in.
And again, if you want to get a hold of me in my office in Tustin, my number is six five seven two seven nine three two four three. My email is awiederman@EideBailly.com. That's about all I've got for you today. I am so honored and humbled by the thousands of people every week to listen to my podcast and send me emails and thank me for what I'm doing.
My legacy is the dental profession. This has been my career. This is what I've done. I think I've left the dental profession when I do decide to call it a career, I'm not done yet. I'm not going anywhere. But when I do, I think I've left it in a better place than it was when I started on September 3rd of nineteen eighty four.
I am honored and humbled that all of our clients choose to work with us. I thank you for that. I'd love to talk to more of you. If there's anything that we can do to help you, please let us know. And with that, I will call it a podcast. And for the Art of Dental Finance and Management with Art Wiederman, CPA. That is it for today. And we'll see you next time.