There is certainly value in learning from your own mistakes. However, learning from the mistakes of others can be a lot less painful – and less expensive.
Just as others come to you for your dental expertise, you will undoubtedly seek advice from other professionals. It is critical to use advisors who independent and objective. They will protect your best interests and can play a fundamental part in your future success. Biased investment advice may well lead to significant losses – or even bankruptcy.
One investment mistake that is unfortunately very common is to purchase what you think is a tax shelter, only to learn subsequently that the Canada Customs and Revenue Agency (formerly Revenue Canada) will not allow the tax deduction. You are left with a useless investment and a huge loan.
Your best resource for choosing reliable advisors is references from other dentists.
Mutual Respect Is Key
The difference between a good advisor and a great one is that the latter understands you and your profession. Valuable advice results from knowing your business, your personal and professional circumstances, your past experiences and future goals.
It is important to build a level of trust and comfort with each of your advisors and to understand the value they bring to your business. Many dentists make the mistake of not asking their lawyer or accountant to review documents before signing on the dotted line. Whether you are considering a lease for office space, or signing an associateship, financing, or
purchase and sale agreement, your lawyer and your accountant should first review these documents to ensure your interests are protected. During this review process, your advisors can arrange your affairs to minimize taxes and legal exposure.
Think the Unthinkable
Divorce, death and disability: three events no one wants to think about. However, lack of planning for these occasions can truly upset your financial state.
Preparing for these events can preclude unnecessary consequences of already tragic circumstances. For example, a prenuptial agreement may be advisable, given that, in many instances, a dentist enters into marriage with a greater number of assets (or potential earning power) than the other spouse. Without a marriage contract in place, your assets remain unprotected in the event of a divorce. Similarly, many dentists do not prepare a will and power of attorney. Even though it is unpleasant to think about disasters, it is necessary to plan for them.
Invest In Yourself
It is human nature to be enticed by “get rich quick” schemes. However, experience shows that such schemes rarely succeed: investing in “opportunities” about which you have little knowledge or control generally leads to disappointment. Instead, invest in your dental practice. Few investments yield better returns than those for which you have been trained.