The average dental school grad in 2023 came out of school with a whopping $296,500 in student loan debt. Woof.
In one way, those loans are great! They got you into a great career with high earning potential. On the other hand, we don’t have to pretend that they’re not a huge drag. So how best to get rid of them?
According to the American Dental Education Association, the most popular repayment strategy is an aggressive plan, with 52% of grads saying they overpay on the most expensive loan whenever possible. The second most popular strategy, at 37%, is to make minimal monthly payments.
I’m here to encourage you to move from the second group into the first—when the time is right. Keep reading, you’ll see what I mean.
Making more as an owner
According to our data, surveying tax returns and other info from over a thousand dental practices, the average dental practice owner in the U.S. makes about $414,223 annually.
That number is going up! Compare it to the average associate dentist, who pulls in $141,209, according to ZipRecruiter. (I think that number is skewed downward and it’s actually closer to $200K, but we go with the data we’ve got.)
If you know that I’m the author of How to Buy a Dental Practice, you know what I’m going to say next: Buy a practice! You’ll pay off your loans faster! And yes, I am saying that. But easier said than done, right? So how do you do it?
How to become an owner
Buying a dental practice takes some serious prep work. Here are the five minimum requirements you’ll need to meet:
- Cash (at least $50K in the bank—these days usually a bit more)
- Strong production history
- Clean credit history
- Credit score over 680
- At least one year of experience
If you want more info on all of those, you’ll get it in my book, or in the podcast episode above. But let’s talk about that first one: cash. If you want to become an owner, you’ll need to save some money. Because of that, during the first year or two out of dental practice, if you want to pay only the minimum payment on your loans so that you can build up that necessary savings, then go for it. As long as you’ve got a solid plan.
Normally I’d encourage higher payments. But for that first year or two, you’re continuing to invest in your future by preparing yourself financially for ownership. As an owner, making on average twice as much as you would as an associate, you’ll be in a position to pay off your loans in years, not decades. And once those loans are gone, you’re in a position to start building real wealth.
And let me add a sixth thing to that list as well. If you want to buy a dental practice, you’ll need…a dental practice to buy. Check out this video on the very first step to finding the right one, then dive deeper with my course on the entire process. Once you think you’ve found it, let me know, and I’ll help you crunch the numbers and navigate the entire purchase process!
