Elements® Comprehensive Financial Planning
Elements® is a proactive treatment plan for your financial health. It’s the difference between control and damage control. It provides assurance that all your hard work is paying off.
To learn how the Elements® function, click on one of the four main questions answered by the table or select an individual block for further explanation.
Elements® analysis is performed on a recurring, calendar-based schedule.
Each evaluation is based on current information, which we gather through live connections with your Dentist Advisors dashboard and by requesting updated documents from your other service professionals.
In-depth analysis for each Element includes:
Upon review of your Elements® performance summary, your advisor will determine if adjustments are needed to optimize your plan.
Depending on the level of explanation required, recommendations will be delivered to you by email, video, or phone.
As the point person on your financial plan, your advisor will:
Explore educational content related to each Element in our periodic table of financial indicators
Helps us determine whether the client will experience too much volatility risk for their personal level of spending and age.
Measures how much money the practice owner keeps as a percentage of collections. This serves as an important indicator of business efficiency.
Measures how much insurance a person has compared to how much they need based on annual spending and net worth. Coverage is evaluated for the following types of insurance: life, general disability, business overhead disability, buy-sell, key person, personal liability, and business liability.
Indicates how much of a person’s income is being put away for future expenses, emergencies, and retirement.
Indicates whether a person is servicing too much or too little debt for their individual circumstances.
Estimates the number of years a person could live on his/her cash or cash-like assets outside of a retirement plan. Lt also indicates the amount of after-tax money an individual can access if needed.
Estimates the number of years a dentist could live on the assets he/she has within qualified retirement plans (401k, IRA, etc.).
Estimates the number of years a person could live on his/her current practice equity. It also indicates how much of a person’s wealth is concentrated in the practice.
Estimates the number of years a person could live on his/her current real estate equity. It also indicates how much of a person’s wealth is concentrated in real estate.
Estimates the number of years a person could live on his or her current assets if they did not grow. This includes cash, investments, practice value, and real estate equity.
Tt (Total Term) is the crown jewel of the Elements® table because it indicates how long you could live on your current wealth if it did not grow. In other words, it provides a conservative estimate of how many years you could survive if you stopped working today. Tt is calculated by dividing net worth by annual personal spending. It is also a summation of the four blocks to its left which represent each asset type: Rt (Real Estate Term), Pt (Practice Term), Qt (Qualified Term), Lt (Liquid Term).
The four blocks to the left of Tt (Total Term) estimate how long you could live on your liquid assets, qualified retirement plans, practice equity, and real estate equity respectively. These represent the four asset types in a dentist’s portfolio, and when added together, they create your Tt. These four blocks also provide a clear view of your asset distribution to help you and your advisor understand if there’s an opportunity for better diversification.
The second row of the Elements® table calculates the percentage of your total income that goes toward savings (Savings Rate), spending (Burn Rate), Debt (Debt Rate), and Taxes (Tax Rate). These are the only four places your income can go and it’s important to keep them optimized to accelerate growth.
The top row of Elements® contains Er (Equity Rate), Pr (Profitability Rate), and Ir (Insurance Rate). These ratios indicate risk levels within your investment portfolio, business, and insurance profile respectively. The amount of risk you should take in each area will depend on a number of factors including your tolerance for risk, career phase, liquidity, and financial goals.