July 10, 2023
DA Today
Your Monthly Newsletter from Dentist Advisors
“The highest form of wealth is the ability to wake up every morning and say, ‘I can do whatever I want today’.”
~ Morgan Housel
Featured Article
Lifestyle Creep: The High Blood Pressure of Finance
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Learn more about:
Victoria Hughes, CFP®
Victoria enjoys providing the tools and resources for clients so they can make educated financial decisions they feel good about. She believes that it’s called personal finance for a reason – your money and how you approach it is deeply personal. She helps clients determine when the standard cookie cutter advice doesn’t make sense.Victoria Hughes is a Financial Advisor and CERTIFIED FINANCIAL PLANNER™ professional. She earned a degree in Finance from the University of Utah and has a background in women’s wealth, holistic financial planning, and building a strong financial foundation. She resides in Salt Lake City with her husband, and they enjoy spending time outdoors.
Favorite TV show? Jane the Virgin
Go to day off activity? Anything outside! I love skiing, hiking, going on a walk, etc.
Favorite finance topic? Behavioral finance
What inspired you to be a financial advisor? I didn’t grow up financially literate. I made a lot of mistakes due to lack of knowledge and would have made more mistakes if it weren’t for the incredible mentors and people in my life. I truly enjoy playing a role in someone’s financial journey and helping get them where they want to go.
What is the toughest part of your job? Supporting clients through difficult situations.
What is the most satisfying part of your job? I love educating clients and providing the knowledge they need to feel confident about their money decisions.
Do you have any secret talents? I take adult ballet classes and enjoy participating in ballet performances!
Favorite place to visit/travel? Fiji
Did you know that about one-third of consumers who earn $250,000 live paycheck to paycheck? It’s true. How does this happen? And why do so many people experience this?
You may have heard about a concept called lifestyle inflation, otherwise known as lifestyle creep. It is the idea that as your income increases, your expenses and standard of living increase as well. This is to be expected and totally normal. However, where people will find themselves in trouble is if their expenses grow at a faster rate than their income. It happens slowly over time and before you know it – you can’t keep up with the expenses you’ve incorporated in your life. This is how dentists often find themselves living paycheck to paycheck.
Here’s some common reasons dentists are at a higher risk of experiencing lifestyle inflation:
#1 You were in school for longer.
A delay in income combined with watching your friends or family members increase their standards of living while you are working hard in dental school is difficult. It makes sense to feel that pent up demand for a better lifestyle (i.e. keeping up with the Joneses). If not managed well early on, you can easily start to unconsciously build habits that don’t serve you, like overspending.
#2 You’re busy!
As a dentist, you have so much on your plate – a practice to manage, patients to treat, maybe a family or aging parents to take care of, being involved in your community, your own life to live, etc. With demands for your attention coming from every direction, it can be easy to lose sight of where all your money is being spent.
It’s called lifestyle “creep” for a reason. It tends to slowly happen over time without you really noticing. I compare lifestyle creep to high blood pressure – it truly is the “silent killer”. Salty foods (french fries please!) every now and then aren’t harmful. But if you indulge every day, you’ll likely experience high blood pressure. And you can probably live with it for a long time before you experience negative effects.
Like high blood pressure, an elevated burn rate (i.e. spending-to-income ratio) can slowly chip away at your goals and, over time you’ll find yourself with fewer options and less flexibility. When life throws you curveballs, you don’t ever want to be backed into a corner and forced to make decisions you don’t feel good about. Your hard-earned money is meant to give you options and fuel the life you want to live – not slowly take it from you.
Now, if reading this did spike your blood pressure – take a breath. The good news is with a little awareness and a few behavioral adjustments, you can create more distance between your income and your spending.
Let me give you a couple tips to overcome lifestyle inflation and maintain flexibility throughout your career.
#1 Establish your “why”
Why did you go into dentistry? Why did you work incredibly hard in school? Why do you continue to put in the hours you do? Your responses to these questions will likely guide you to your values and your most deeply held beliefs. Keep going and ask yourself – what is important to me? In a time you felt content with life, what was going on? In a time when you were close to tears, what was going on?
Knowing your values and your “why” can be a powerful anchor when lifestyle decisions emerge.
#2 Automate
Spending within your means doesn’t have to be stressful or require your constant attention. It can actually be pretty easy if you take the time to build in the right support systems. As long as you are saving at least 15-20% of your income, you can feel confident that you are not overspending. Just be sure you aren’t turning to your credit card 😉. You’d be surprised just how helpful automated savings are for dentists. If you want to take it a step further, consider downloading an app to help you track your spending. Then you’ll not only force yourself to set aside funds for the future, you’ll also be able to see over time if you are actually spending in alignment with your core values.
As a financial advisor, it’s hard for me to think of an indicator with more impact on financial flexibility than personal spending. By giving it your attention, aligning it with your values, and using automation to keep it under control, you’re unlikely to find yourself part of the 30% of consumers living paycheck to paycheck.
Client Spotlight
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Dr. Randy & Marne Blair
Pediatric Dentist
“Dentist Advisors has brought peace of mind by organizing all our finances. Armed with this information, it’s a lot easier for my wife and I to make purchasing and retirement decisions. The advisors at Dentist Advisors are always just a text or a phone call away if I have a question or concern.”
Learn more about Randy & Marne
Learn more about Randy & Marne
Practice name: Blair Pediatric Dentistry
Dental School attended: University of Nevada Las Vegas
Years in practice: 13
Employment status: Sole owner single location
Practice location: Meridian, Idaho
Why dentistry? I always thought I’d like to work with kids, so my plan was pediatric dentist or pediatrician. I can deal with crying kids a lot better than crying adults! I love the flexibility dentistry affords me. I get to be home by 5 and spend the evening and weekends with my family.
Dental industry involvement: Elevation Association
Hobbies: I enjoy camping, boating, and traveling with my wife and kids.
Favorite day off activity: Going to the lake with family and friends.
Favorite vacation spot: Scotland
Biggest money lesson learned: Life is a lot easier when your savings and retirement plans are all automated.
Thoughts for other members: Your success is inevitable, so trust the plan and take the vacation.
What is one goal that you have for the next 1-3 years? My kids are starting to graduate from high school, so I’d like to take an international trip with each one.
What else about Randy? I like watching Cops. It makes me feel great about my life.
Elements® Insight (Burn Rate)
Knowing how much you spend is crucial to being a step ahead in your financial life. Using the Elements® app, you can track your spending and see how it fits into the rest of your financial picture.
Dentist Advisors Benchmark Survey
For over a decade, Dentist Advisors has collected financial data from a large sample of dentists and specialists across the country. Take our benchmark survey to see how you stack up.
Related VIDEO Recording
Can You Out Earn Bad Spending Habits?
Is it time to put an end to your bad spending habits? In this podcast, Reese Harper and Ryan Isaac offer their advice for how to make sure you’re checking your limits through every lifestyle step you take—from penny-pinching student to top earner.
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Featured Partner
Axle
Axle is an advanced virtual robot that allows your practice to capitalize on artificial intelligence, automation, increasing patient retention, lowering risk and boosting your overall production all from one place.