Where Should I Invest?

Dentists often ask me where the best place to invest is. Should it be property, shares, buying a practice, or simply paying down the mortgage?

The honest answer is that there is no single rule that works for everyone. The right decision depends on your goals, risk tolerance, time horizon, and how much time and mental energy you are willing to spend managing investments.

Career stage can provide some useful guidance, although no dentist is truly “typical”.

Young dentists

Early in your career, investing in yourself is often the best investment you can make. Expanding your clinical skills increases the range of treatments you can offer patients. Developing expertise in particular procedures can also help attract the type of patients you enjoy treating.

At this stage, building savings is important. Having money in the bank gives you options. Opportunities such as practice ownership, further training, or other investments often require capital. Financial flexibility early in your career can be very valuable.

Mid-career dentists. For many dentists, buying a practice can be one of the most significant financial decisions they make. A well-run practice can generate returns that exceed many traditional investments. At the same time, it is demanding in terms of staff management and business decisions, which can occupy a lot of mental space.

With practice ownership, the challenge is balancing how much you invest inside the practice versus outside it. Many dentists concentrate most of their wealth in their practice and their home. It is important to remember that a practice may not be worth as much as you expect when it is time to retire, particularly if the business depends heavily on you.

If practice ownership does not appeal to you, there is nothing wrong with remaining an associate dentist. The key, then, is to consistently save and invest in other assets such as shares or property. Each comes with different risks. Direct property investing concentrates a large amount of capital in a single asset and should be approached like a business. Share investing allows diversification but requires the discipline to stay invested through the ups and downs of the market. Investor psychology often plays a large role in long-term success.

Across all career stages, paying down your mortgage provides a risk-free return equal to your interest rate. The challenge is that if too much focus goes into mortgage repayment, you may miss out on the long-term compounding that can come from investments such as shares or rental property. Finding the right balance is different for everyone.

Pre-retirement dentists

Matching your accumulated assets to future liabilities requires some planning and ongoing refinement of the plan. With Practice owners exit strategy should be considered well before retirement. There is little point in gradually slowing down if it reduces the value of the business you intend to sell.

Ideally, planning should start at least 5-10 years before you expect to exit. Preparing the practice for sale, developing systems that do not rely solely on you, and maintaining strong profitability can significantly impact the eventual sale price.

Every dentist’s situation is different. Career goals, family commitments, debt levels, and risk tolerance all influence the right approach. Having a clear financial plan provides direction and helps you make better decisions along the way.

If this is something you are struggling with, feel free to reach out. I work with dentists on both financial planning and insurance protection, helping them build a strategy that supports their career and long-term goals.