Friday, March 6, 2015

Loosening up the Purse Strings

I am obsessed with money. And I know, as a Christian, money is not supposed to be my god, but I have to admit, it is sometimes.

I think that kind of comes from being the breadwinner in the house. I think it comes from me listening to Dave Ramsey on the radio every day on my way home. (I don’t totally agree with everything he says.) I also think it comes from having to pay the bills every week, and sometimes feel like I am playing Russian roulette.

I add up the bills and click on the website that has my office checking account balance to see how much I am in the red this week. This is so stressful. Every week we have to go through the same torture. Each day we come to work and see what is on the schedule. We are jumping for joy when we see crowns listed, and we walk around like our dogs just died if all we see scheduled are sealants. Or how about the day you come to work and all your patients are sick… oh except for the all the redos—they always show up.

How can you not be obsessed about money? How can you not worry about it? How can you not get upset when there is nothing on the schedule? I mean we all know Friday is coming, payroll is due, and maybe it’s the same week the lab bill is due. I am starting to sweat just writing this.

In my first year out of dental school I read the book “The Millionaire Next Door.” This was a life changer for me. Look if you have not read this book, I think it was the MOST influential book I have ever read. You have to read it. (I have felt like I have done about half of what it says and I am about half successful at money.) But one thing I remember is the book says, if you do it right, then you are going to be cash poor.

What does that mean? Well, if you have $100. First you pay yourself; this is fancy way of saying put money away for the future. Now depending on whom you listen to, this should be more than 10 percent and up to 15 percent. Then, for my family, we tithe 10 percent (on the gross). Then you have to pay taxes. Let’s say that is 28 percent. Wow, the first three things are over 50 percent.

Then you have to live. Then you have to eat. Then you have to have insurance: medical, disability, general liability, car, house, an umbrella policy, life, etc. Then you have to educate you kids. Then you have to drive. Then you have to get entertained. Then your team makes it to the Final Four and you HAVE to go. Then you have to have clothes. Then you have to get a stupid dog. Then you have to buy anniversary gifts (I love you honey!). Then you have to go on vacation. Then you have to get an iPhone. Sorry, but I don’t know why I am so obsessed with money.

But anyway, this is not what the blog is suppose to be about.

I have been doing this for about 20 years. And I know all the sayings, “How do you get rich? Slowly” or “steady plodding brings prosperity.” But, when will it end? When will I ever feel secure?

I bought my practice from my dad about five years ago, but I didn’t really starting making money until he left about two years ago. That is not what I meant. I have always made good money, but I felt like I had a little more room to breathe after he left.

I have an office savings account for the first time ever. It has been so nice buying large pieces equipment with cash instead of credit. The office is very healthy. But again, personally, I am living week to week. I am able to do all the things the book says, but I am cash poor.

Now I read this blog called The White Coat Investor. It is a financial blog written by a physician for guys/gals like us. High earners (theoretically) with high IQ’s (theoretically). He is a big Dave Ramsey guy too, and he is really smart about investing and living below your means.

He recently posted a blog called “Loosening the Purse Strings.” He talked about how he looks at his portfolio and see that it is pretty healthy so he is going to start spending money. He is about my age and he says if he lives modestly he can retire in about five years. He wants to finish paying off the house and he thinks he will be set.

So he started “loosening up the purse strings.”

He saved up and bought himself a $4,000 bike. Him and his wife saved up and went on a vacation to Belgium (or something like that). Then he saved up and took his family of four on a no-holds-barred vacation to Hawaii. Then they improved their house. Then he talked about buying a boat...

I was having a grand mal seizure every time he spent more money. I am not a miser, but I am not a spendthrift either. You see, I have been in this mode of week to week for so long that I don’t ever see me coming out of it. I don’t know my number (I actually do, but it is too high to reach). I don’t know what the number is going to be for me to breathe. What is that number going to be for me not to sweat the compressor breaking? For me not to sweat my car making weird noises?

I don’t know, but I do know that I am getting healthier. My number in my 401(k) keeps going up. I know that I have been funding some backdoor IRAs (read that blog). I know that I have been able to pay for my kids to go to this swanky private school (barely).

But I don’t see it getting any easier, because I see buying my son a car soon, then two kids in that swanky private school, then college, then two colleges and one more in that swanky private school. Oh, did I tell you I have forth kid who is five years old? (What can I say, my wife couldn’t keep her hands off me!)

So, I see me doing all the right things. I see me financially healthier. But it ain’t easy because I am still living week to week. I still sweat my schedule. I still sweat the big bills. I certainly don’t see it getting any easier any time soon. And for sure I don’t see myself loosing up the purse strings, much less buying myself $4,000 bike!

Where are you at? Are you healthy enough to loosen the purse strings? Tell me, is it nice?

Have a great weekend!
John Gammichia DMD, FAGD


Jenn and Steven said...

Thanks for your post John. I struggle with this a lot and it's nice to know there are other dentists out there going through the same thing.

Tooth Crown Dentist in Chicago said...

Thanks so much for the post, I thoroughly enjoyed it.


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