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Wealth extractions: After the earning is over

Dec. 29, 2010
By J. Haden Werhan, CPA/PFSIf there’s one commonality you share, not just with fellow dentists but with your friends, neighbors, and yes, sometimes even investment advisors, it is this: You work so hard at earning your wealth that you tend to procrastinate big time when it comes to figuring out exactly what to do with it once the earning is over. Having provided wealth management services to the dental community for more than a decade, I’ve noticed that you dentists have many other things in common too. You provide an invaluable service that everyone needs but few truly appreciate. (They even make fun of you in movies like The Hangover and Little Shop of Horrors.) You face similar challenges in building, growing, and eventually retiring from your practice. Your career demands the highest levels of business savvy, empathetic patient care, and workaholic fervor all rolled together … and that’s exactly why you love what you do. I’ve also come to realize that you’re each very different — in the professional qualities you bring to your practice, as well as the personal relationships and interests you enjoy when you’re not elbow-deep in a root canal. Whether you’re an amateur pilot (like me), the best quilter in three counties, a world traveler or happiest at home, you know what and who are most important in your unique life. But how much money will it take to sustain your desired lifestyle? What steps are needed to get there, and then stay there? What about all that stuff like insurance, taxes, college education, inheritance, philanthropy, business succession, etc.? Helping you with “all that stuff” is the goal of this and future “Wealth Extractions” articles. So, open wide; this’ll only hurt a little. Wait, I’m just kidding! Think of wealth management as similar to the experience you deliver when a new patient requiring extensive care arrives for his initial visit. Do you plop him down in the chair and start drilling? Not if you ever plan to see the guy again. You start with personal introductions. You examine and diagnose. You form a long-term plan, including a reasonable timetable and budget. You discuss the plan with your new patient and make adjustments as needed. Only then do you take action. That’s how wealth works too. It’s best to first get to know yourself, your money, and the relationship between the two. How much have you got now? Where is it? What are your life’s goals and how can you harness your wealth to achieve them? What are your life’s challenges, and how must you manage your wealth to overcome them? Next (sometimes with the assistance of a professional wealth manager), you form a long-term plan, including a reasonable timetable and expected returns. If the plan doesn’t seem like a good fit for you, you adjust as needed. Only then do you take action. Sounds familiar, doesn’t it? So here’s my prescription for your personal wealth care: • DON’T panic. This really won’t hurt a bit. • DON’T feel like you’ve got to bite off everything related to your wealth all at once. Treat it like a long-term patient relationship: familiarize, then plan, then go subgingival as needed. • DO use this column in a “floss daily” sort of way, as friendly incentive to take at least one discreet, positive action related to your wealth after reading each article. Today’s action? Resolve to read future Wealth Extractions, in which I’ll offer continued tips both general and specific about aligning your money with your life. For extra credit, gather together your financial paperwork and consider making a list of the holdings you’ve currently got. That’s it for now. Now, smile.
J. Haden Werhan, CPA/PFS, says, “Serving the dental community has been core to what I do throughout my career. I tell people it’s in my blood. After growing tired of transacting commission-based real estate sales, I looked for better ways to support practices. I found what I was seeking at Thomas, Wirig & Doll, just as we were setting up Capital Performance Advisors. I’ve never looked back.”Haden has been a member of our affiliated firms since 1998, providing wealth management, accounting, and tax services to successful practitioners. He came to the firm following a lengthy career managing, consulting, and providing accounting services to dental practices ranging from start-ups to acquisitions to large group settings. He has regularly lectured and provided seminars on tax, financial planning, practice management, and practice evaluations at the University of California, San Francisco; the University of the Pacific School of Dentistry; and various dental societies.He can be reached by e-mail at [email protected].