Secrets to financial and personal freedom for endodontists

In part 1 of his series, Dr. Ace Goerig offers the first steps to becoming debt-free

I was presenting at an AAE national meeting with over 200 endodontists in the room, and I asked the question, “How many of you are completely debt-free?”  Only about 12 people raised their hand. I did not ask the question, “How many are financially free?”  Personal and financial freedom begins first with becoming debt-free.

In this first of a three-part series, I want to show you how you can be completely debt-free within 2 to 10 years and where to invest to make over a 100% return your money guaranteed, without risk or tax consequence. In part 2, I want to introduce you to the concept of effortless endodontics and how to modify your business systems in your practice so that you only work 3 days a week, take 8 to 12 weeks off a year, and produce more than you are now. And in part 3, I will help you understand how to obtain total personal freedom by shifting your “deserve level” to a point where abundance and peace can easily flow into your life.

I am not a financial advisor or a broker, but an endodontist who eventually realized that the American financial system was designed to keep us broke and always in debt. Working with a few great mentors, I was shown the secrets of financial and personal freedom that work for everyone. It does not matter how much you make or what age you are; this simple program will help you find the elusive goal of financial freedom and personal peace that you are always searching for in your life.

Every endodontist I talk to says they would want to have financial and personal freedom, but 95% of all of them still are slaves to their monthly payments. The real problem is that they think always being in debt is normal. The big banks, credit card companies along with the mortgage companies have trained them in this belief. And they have developed a proven profit system that keeps you in debt for a lifetime so they can steal half of your life’s income. You become their cash cow.

Getting out of debt is very easy especially for endodontists. In the next few minutes, you will read about how to make over 100% guaranteed return on your money while watching ALL of your debts disappear (even your mortgage, school loans, and practice debt) in 2-10 years — no debt payments of any kind. You will no longer worry about paying off student loans, a slowdown in your practice, or having enough money for your retirement. Once you are debt-free, the two-thirds of your income that was going to debt payments will be yours to live the life of your dreams. One endodontist that I personally coached was able to double his net income in 1 year and, over the next 18 months, became completely debt-free and paid off $705,000 in debt using this system.

The secret to getting out of debt and becoming financially free is to use your debt to make over a 100% return on your money, guaranteed, without risk or tax consequences.

Most people think they have a 3%-6% interest rate on their home mortgage, but in reality, they are paying over 100% interest for the first 18 to 20 years of the loan. Here is an example from Karl’s mortgage calculator found at www.drcalculator.com. Go there and put in your own numbers. In this calculation, we have a $300,000 loan for 30 years with a 5.61% interest rate. The monthly payment is $1,724.13 of which $321 goes to principal and $1,400 goes to interest. This may be a 5.61% loan, but the first month of the loan is really a 400% interest loan. Most people do not know that they are paying 400% interest on their loan. Instead, pay an additional principal payment of $321 and eliminate the $1,400 interest payment that you gave to the bank; thereby, you will make 400% return on your money, guaranteed, without risk and without tax consequence. With this type of return on your money, you can get completely out of debt between 2 to 10 years depending on your situation.

“A penny saved is a penny earned”

– Ben Franklin

As Table 1 shows, by paying an additional $3,960, you could eliminate $16,729 in interest. This is like earning an additional $16,729 a year, for which you would have to pay an extra $5,855.15 in taxes. If you paid off this loan in 7 years, you will have saved $257,244 in interest payments.

The mortgage hoax

Most financial advisors and accountants recommend that you keep your home mortgage so that you can reduce your taxes by writing off the interest. This is pure stupidity. The problem is that most accountants are taught to save you taxes and not make you money. In the preceding example, when you write off interest, you lose your yearly standard deduction of $12,400. In the first year, you paid $16,729 in interest, and because you lose your standard deduction, you are able to deduct $4,329. But because you are in a 30% tax bracket, you are only able to write off 30% of that, which is a total of $1,299. ($16,729 – $12,400 = $4,329 x 30% tax bracket = your real tax savings is only $1,299, not the $16,729 in interest you paid.)  In other words, you paid $16,729 to save $1,299 in interest. Not the wisest return on your money.

This even gets worse. To pay back the original $300,000 loan, you will need to earn $912,733 (3 times what was borrowed). Because the $620,686 is aftertax money, the true amount you would have earn before taxes is determined by dividing the total house payments by 1- 32% tax bracket (national and state taxes) — $620,686/0.68 equals $912,733.

If you live in a high-income tax state (California, Oregon, New York, Hawaii, Vermont, Washington D.C.), you may be paying over 45% in taxes. You would have to earn $1,128,520 (3.7 times) to pay off the $300,000 loan.

The average American moves every 7 years. By then, only 11% of the home is paid off. Then a new mortgage starts all over again at 100%. By then, you have paid $144,918.00 toward your mortgage, but only $33,087.00 went to principal (home equity). You also lost an additional 7% to the agent in sales commission ($21,000), $20,000 in home improvements, plus $5,000 in closing costs — an overall loss of $12,913.00. If most Americans understood this system, they could have paid their entire house off in the 7 years and then paid cash for every other house after that.

How to eliminate dental school loans within 5 years

Dental school loans are misunderstood by most new endodontists, and this limits their possible career choices. With the current administration, interest rates on school loans have gone up from 2% to 3% to over 8%. Here is a true example of an endodontic student with a 30-year $300,000 loan at a 7.9% interest rate where she will pay $485,000 in interest and would have to produce $1.5 million to pay that interest. In the first year of the loan, $23,600 goes to interest and only $2,500 goes to principal, which is over a 900% interest rate. If she would pay $6,000 toward principal each month instead of the $2,180.41, the loan would be paid off in 5 years, and she would save $420,000 in interest.

Recommendations for quickly getting rid of student loans

• Just because they will lend it, does not mean you have to take all of it.
• Try to refinance your loan at a lower interest rate.
• Live like a student when you are a student.
• Live like a student until all school loans are paid off.
• Buy a cheap practice.
• Buy used equipment.
• Look for office space (800 to 1,200 sq. ft.) where a dentist is moving out.
• Take advantage of minority loans.
• Commit to paying your loans off in 5 years.
• Get a practice coach to show you how to double your net profit.

Until their school debt is paid off, it would be very smart to live more simply as if they were residents because the benefits are enormous.

Now that you understand the value of paying off debt first, I would recommend that all excess money should be focused on paying debt. Many people want to put money away for retirement in 401(k)s, emergency funds, or children’s education funds. Before you put your money anywhere else, ask yourself this question: Am I getting 100% return on my money, guaranteed without risk, or tax consequences? Some people may like to tell you that there is good and bad debt, but all debt is bad.

When you are debt-free, you will have the freedom, time, and money to…

• You can live a life of your own design. (No one owns you.)
• Retire in practice.
• Live and work where you want.
• Go to work because you want to, not because you have to.
• Be with the people you love and want to be with.
• Do only what you want to do in your life.
• Truly live the life of your dreams.

To learn more on the specific step-by-step game plan to pay off all your debts, and to find out the 12 financial myths and mistakes that almost all endodontists do not understand, go to my free endodontic website www.endomastery.com and watch the entire video series on becoming financially free while downloading the handouts and audios.  In part 2, we will talk about understanding the business systems of endodontics to help you become more profitable, have more time off, and practice true effortless endodontics.

Change is terrifying for most people. Robert Frost once wrote, “Two roads diverged in a wood, and I, I took the one less traveled by, and that has made all the difference.”  The only way this program works is by your making an intentional change and to committing to becoming debt-free in the next few years. Personal and financial freedom is just around the corner.