I recently had a consultation with a 62-year-old dentist who owned a dental practice that had been recently appraised for $750,000 (let’s call him “Dr. A”). The practice was free and clear of any liabilities, so this amount represented Dr. A’s net equity in the practice. Also, Dr. A had accumulated about $1,000,000 in savings over the years, and when that amount was combined with his practice value, the total could enable him to retire in the not too distant future.
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Dr. A had just turned fifty years old. He operated a successful dental practice that was grossing about $1,000,000 a year. His pre-tax net income was about 40% of his gross collections which enabled him to provide a good living for his family. His staff was well trained and turnover problems seemed to have been eliminated. He practiced four and a half days a week. His practice was stable and maintained a steady flow of new patients. He no longer felt compelled to work any evening or Saturda
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