Get an estimate of your practice’s worth. If you’re considering selling your dental practice, merging with a DSO, or planning your financial future, knowing your practice’s value is crucial.
The Elements Financial Planning System™, originally developed by Dentist Advisors, is a proactive treatment plan for your financial health. Our advisors use Elements to monitor your key financial indicators, benchmark your performance against other dentists, and optimize each moving part of your wealth strategy.
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 takes hundreds of financial jobs to be done and simplifies them into 12 main categories which our team uses to make sure all the accounts, data, and documents related to your financial plan are accurate, up to date, and easily accessible.
With a clear picture of your income, personal spending, practice profitability, savings, debt, insurance, assets, and so on, our advisors can turn your various financial inputs into quantifiable scores that provide an objective diagnosis of your financial health.
Your Elements scores will highlight gaps and opportunities in your plan, and give our advisors the ability prioritize adjustments that will help you:
A list of action items will be documented and used by our advisors to:
See how your performance compares to hundreds of other dentists. Take our Elements® benchmark survey to receive your free report.
Explore educational content related to each Element in our periodic table of financial indicators
A 40,000 Foot View of Your Practice – Episode 198
A Social Media Master Shares His Secrets – Episode 197
What Dentists Want to Know — Listener Q&A #12 – Episode 192
Turn Your Biggest Expense Into Your Best Investment – Episode 183
Why Owning a Practice Might Not Be for You – Episode 179
Game Over: Common Traps That Kill Financial Progress – Episode 178
Your Best Investment Could Use Some Attention – Episode 176
How to Get High-Cost Treatment Cases to Say “Yes” – Episode 173
Here’s Where Your Profits are Hiding – Episode 171
Dentistry is Changing. Where Do You Fit? – Episode 169
Chicago’s Pediatric Dentist for The Pros – Episode 168
What Dentists Want to Know — Listener Q&A #10 – Episode 167
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.
Helps us understand a client’s spending patterns and retirement preparedness.
Indicates whether a person is servicing too much or too little debt for their individual circumstances.
Indicates whether tax liability could be reduced with better tax planning.
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.
Podcast #82
The Numbers Dentists Need to Know to Retire Better
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.
Podcast #95
This is Why Dentists Spend Too Much Money
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.
Podcast
How Much Insurance Does a Dentist Need? – Episode #100
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