Going Way Too Fast

Kristin and her husband are about to make a huge mistake when he gets out of dental school.

QUESTION: Kristin’s husband is in dental school and will start his own dental practice in a few months. They will buy a house then as well, and he’s thinking of buying commercial property with his dad (dad is just helping to buy) to build a dental office later. They have $120,000 in student loan debt and have $220,000 in cash saved.

ANSWER: I doubt I can help you, because a doctor or dentist tends to get on a fast track to accumulate debt and you are on that track, and I can’t help them most of the time because they won’t change their ways. I think you’re making a series of dumb decisions.

If you were to take my advice, go a lot slower. It takes several years to build a dental practice. Start very conservatively and don’t borrow money. Don’t go into a family partnership, or any partnership. You have money saved up, so start the practice with cash. You don’t need to buy a house or property right now. You’ll end up making $150,000 a year and have $500,000 in debt if you’re not careful. Take the money you make in the practice and pay the student loan off with cash. Go a lot slower.