An Interview with Dr. Douglas Carlsen

In 2016, before this site was born, I sent an email to a financial writer, Dr. Douglas Carlsen, that I’d come across in a few of my wife’s dentistry magazines. As an engineer, you might not be surprised to hear that these magazines weren’t of great interest to me in general. However, I always wanted to leaf through them to find any finance-related articles.

Dental practices, debt management, etc. are big issues for practicing or aspiring dentists, and the topics related to dollars and cents weren’t well covered at the school my wife attended. With that, I always wanted to find resources talking about the financial implications of being a part of the dentistry profession. Over the course of a few years of perusing my wife’s magazines, I came to learn and look out for the name Dr. Douglas Carlsen.

I became interested in the message of Dr. Carlsen, as the general sense I got from his writing was that one could take a few non-conformist (but common sense) steps and take a high paying career in dentistry and turn that into a substantial net worth at a relatively young age with the potential to retire early – as he had.

Reaching Out

With no expectation of a response, the questions I sent off were quickly and graciously replied to and answered in detail. In my email I had asked questions about a more extreme version of the brand of financial independence that he was advocating for.

I told him we were starting in a rough spot, but wanted to reach financial independence by the time we were 40. We wanted to keep in mind any obvious obstacles that we weren’t considering. He let us know that there really weren’t any provided we stayed out of our own way as generally lifestyle inflation is what kills a high income earners chances at an early retirement.

Following our interaction at the time, I wound up with a deeper understanding of what I thought possible as a young couple still facing a crippling amount of student loan debt, and also made a close contact that I’ve managed to stay in touch with periodically since that time.

Debt Ascent is Born

After hearing our goals of financial independence before turning 40, we were met with encouragement rather than being dismissed or ignored. It was that initial discussion that developed into the plan to document our journey out of student loan debt and toward financial independence. That shortly turned into the start of this blog.

As we got Debt Ascent off the ground we came into contact with a few other dentists by way of referral from Doug. I’ve maintained contact with a few of these folks as well, and these sorts of interactions are absolutely the reason we started this blog. Hearing their stories and discussing unique challenges that young dentists face has been a valuable experience for us, and it’s one we likely would not have had if not for Doug being so kind to us.

With that, I’d like to introduce the first interview that we’ve had on this site. I reached out to Doug and asked him even more questions specifically as it relates to his experience educating others following his career in dentistry, his experience with financial independence, and his overall advice for those that desire to be on a similar path.

Our Interview with Dr. Douglas Carlsen

How would you describe your role to help others better their financial position?

My role is to provide simple and ethical solutions to doctors. That might not seem possible at first glance, especially with what the media and financial industry tell us. Fortunately, though, academic and honest gurus posit that financial fitness really is quite simple.

What inspired you to take on this challenge?

Gross ignorance! What the hell was I thinking?

Actually, being able to retire in my mid-fifties presented a million possibilities. It also presented responsibilities. What is one to do for the next 30-40 years? I decided I’d like to try something besides clinical practice, yet what would really engage me?

My first wife, who died of breast cancer in 2001, was an artist/graphic designer and always said, “If you ever face a situation where you don’t know where life may take you, involve your right brain and take a drawing course.”

That advice was critical long-term. I did take several art courses and loved watercolors in particular. In the back of my mind, though, was the point that I had saved enough over the years to not have to work. Maybe others would benefit from learning how I had reached that point.

I’ve always done well writing and have a way of simplifying with a touch of humor. Actually, some of my early articles had a BLAST of humor. I started by writing several articles to several dental publications. The fact that they were written with no agenda, other than providing best-practice financial information, was what probably got me published.

What is your favorite part about writing personal finance articles geared toward dentists and other medical professionals?

Adding humor. People are as scared of talking to a financial adviser as going to the dentist! To have the reader stop and realize finance is not a life or death issue, and that the pain may not be as intense as one feels soothes the soul a bit. What’s more important than finance?  Health and family come to mind…

What does financial independence or financial freedom mean to you?

The ability to get up when you wish. This is huge!

The ability to not worry about a car breaking down, your kids being unemployed for a period of time, the price of gas, paying for an emergency trip across the country, and what the stock market did yesterday or will do in the next couple years.

Should I buy a Tesla? Could, but don’t feel like it…

AND, you can provide unexpected gifts to anyone and realize instant gratification, for you.

When did you reach financial independence? How long after that did you continue working in your practice?

Actually, I discovered I had reached financial independence after my first wife died in 2002.  I was 52. We had never budgeted, but talked about large purchases and made sure we saved 20%+ per year.  I find this a common occurrence amongst those who have early wealth.

In talking about savings/our financial future to my second wife, whom I married at the end of 2003, I realized I had saved enough such that neither of us would have to work. That was when both my second wife and I were 53.  I sold the practice at the end of 2003 and moved from Albuquerque to her home in San Diego in April 2004.  She wished to continue working as a dean at a Cal State University.

The answer to the question is that when I realized I had reached financial independence I retired quickly.  BUT, that is not common. I had unusual circumstances.  If my first wife were still alive, in our late 50s we would have taken a close look at our retirement scenarios and decided from there. Interestingly, I was not burned out from dentistry but realized that upon marrying my second wife who worked 60-hour weeks, we would never see each other if we both had full-time jobs, which we did not need financially. So I became the part-time “housewife”. Quite a change for me!  But it worked.

Are you aware of the ever-growing FIRE movement? If so, what do you think about it? What do these folks have right? What are they overlooking?

Financial Independence/ Retire Early is a growing trend and I think it’s quite healthy. It does not mean that people in their late thirties to late forties will do nothing but soak up the rays, get fat, lazy, and brag about their triumphs. From what I see so far, these people are way too busy to even think about those issues. I sure haven’t!

What do aspiring FIRE folks get wrong about being retired, either for good or bad?

I haven’t researched the FIRE movement well, so don’t have wisdom here. My guess is some may not fully realize that life will go on, even though money is not a major issue, and core pursuits are essential to well-being.

What does an ideal life after achieving financial independence look like to you? How close to that ideal are you?

That is the $5,000,000 question! Frugality, consistent savings, and common sense got me there.

But those issues have melted away. It’s much more about involvement and education.

I’ve spent a lot of time in the last three years looking to the future. Because of the 40-hour workweek of answering emails connected to all my writing, in late 2015 I stopped writing articles and promoting speaking gigs. I still do speak to groups occasionally; yet find no big reward in hotels and PowerPoint!

I’ve read several retirement books, such as What Color is Your Parachute for Retirement, The Couple’s Retirement Puzzle, Retirement Rx, You Can Retire Sooner Than You Think, and Life after Dentistry.

Alan Moss’ You Can Retire Sooner Than You Think provides some key indicators of a happy retirement and covers core pursuits. These are what you will actually do in retirement. To say “I’ll travel and spend time with grandkids” is certainly valid, but that only lasts for a short period of time.

Life after Dentistry by Alan Roadburg is another winner. It has a workbook section that helps individuals and couples find paths going forward. It’s involved and takes a few hours, but my wife and I have found it well worth it. I’ve decided I like road trips, storm chasing, skiing and biking as always, becoming a gym rat, concerts with NEW GROUPS, not so much the old farts, and maybe getting back to art.

What should life look like after retirement? For me it’s:

To take political science courses at a nearby university, or meteorology, as I did, or learn to play bass guitar and join a retro-funk oldies band that has some character!

To summarize: BECOME A CHARACTER, DENTISTS! Life is too short to not do what you wished as a kid. BECOME “NUTTY PAPAW”— My official name to grandson Mason. Or was it NAUGHTY PAPA?

What took you by “surprise” in early retirement? Something you didn’t think you’d be doing, or something you thought you’d be interested in that you weren’t?

Actually, because the decision was made so quickly, it all was a big mind-fart and I needed to search my soul for what I might wish to do.  It started with drawing/painting, which added part-time work in a corporate dental clinic, which morphed into looking into practice management consulting, which morphed into the realization that I made many “right” personal financial decisions and thus personal finance study, which morphed into writing financial articles for dental societies, then Dental Economics, then Dentaltown.

I did some financial consulting with individual doctors, which lead to some speaking engagements. By the end of 2015, I was writing for Dentaltown, White Coat Investor, and Dental Practice Report. I was providing videos via YouTube and Dental Practice Report.  And I was speaking about once a month.

All of a sudden I realized I was working as hard as my wife!  Not a good situation!  I quit all the writing, turned down 90% of speaking queries, do occasional consultations, yet still make videos.

And by the way, I have never really missed private practice.  I wasn’t burned out, yet I have so many interests, practicing dentistry is not a true passion anymore.

In your experience, what are the top 3 things that a younger person most often fails to consider that will impact their finances?

Budgeting is the huge issue. And it’s so easy with Mint. To save, you need to figure out what you spend.

Feeling entitled: This gets all doctors, especially MDs, into the “I must behave like a professional, buy things a professional buys, and have hobbies that professionals pursue.” This is total nonsense! I played 3rd base slow pitch softball for years….Many docs said, “You’ll break your fingers on you non-gloved right hand.” How many times did that happen? Twice. How many days did I miss work? Zero. What kind of cars did I drive? A Jetta, Ford Ranger pickup, Pontiac Bonneville, Toyota Camry, and Subaru. Note the lack of German cars—-they are in the repair shop way too often!

What else do young docs fail to consider: one’s home is an investment. It is not! Numerous studies show that homes appreciate at the rate of inflation long-term. And the larger, more expensive home one buys, the more maintenance and upgrades one incurs, thus often making it much harder to save.

The above may be the most important point I make. Do not think that a home is your path to financial freedom. It is often the opposite.

What’s the top piece of advice you would give someone at these three stages of their career:

a. Rookie – massive student loan debt.

Follow Debt Ascent! Really. This debt is about as tough as it gets, and the author follows a straightforward path to eliminate debt and begin saving.

b. Established – Net worth back to zero (this may or may not mean all student loans are paid off).

Keep doing what you’re doing until all loans are paid, then see your net worth take off.

c. Veteran – Has built up a solid foundation both professionally and financially.

Stop feeling guilty! This is common with many early retirees. You need to do what feels right to you. It may mean gardening and reading novels. It may mean walking the dog and watching CNN or Fox. It may mean world travel. It may mean doing research on composites (UGH). It may mean running for office. (DOUBLE UGH). It does not mean you need to provide dentistry in a third world country. Sure, many do and love it. But it’s only an option. It could mean sleeping in and beginning each day with NO planning.

What are the unique financial challenges of a dentist relative to say that of a physician or other non-medical professional?

I don’t see any other than those who run a business. To run a private practice, being the “missing owner”–yes, you are in back working most of the day, is tough. And I personally think many dentists are not emotionally willing or able to lead the way they should. Yes, with proper consultants, it’s possible, yet many, me included, would probably be better off working for a corporation or a group practice. Yes, Carlsen does not think it’s a bad idea to work for someone else.

You mention those that are running a business. I wonder what your thoughts are surrounding the “corporate dentistry” world? It seems to this observer that a private practice job is most desirable. However, for many new dentists, they turn to these corporate jobs due to their low barrier to entry and flexibility. In my wife’s case, she started on this route because we weren’t comfortable with the prospect of adding hundreds of thousands of dollars of additional debt in the form of a practice loan on top of our student loan debt. I wonder what your thoughts are on this and any insights you may have for the young dentists out there just starting out?

I have strong thoughts here:

My guess is that maybe 20% to 40% of dentists actually have the entrepreneurial bent to tackle owning a practice. In my opinion, most dentists are NOT emotionally enabled to handle a small business.

Engaging with 50+ year-old docs who have never owned a practice, either having worked for a military service, a private corporation, or state or local clinic, I have found, comparing “owning docs” compared to “non-owning:”

The non-owners usually have more savings, especially including military pensions, and spend more time with family.  They do often wish that they’d tried private practice, hearing all the glorious stories of nice homes, nice vacations, and nice cars.  What they don’t realize is the financial pressure cooker many private practice dentists live in.  In other words, they don’t own the “hot doctor items,” yet don’t have the emotional financial headaches.

So is private practice really the better route financially?  For most, my answer is no.

One final thought:

The most-heard complaint I’ve heard over the years from private practice docs is: “If only I could just sit in the back of my office and do clinical work all day, life would be so much better…”

I think that comment speaks volumes!

Are there any resources you’d like to share? How best for someone to reach you?

Resources:

Carlsen Videos: over 50 with over 120,000 views.

Best Financial Blogs:

White Coat Investor
Debt Ascent

Books:

John Bogle: The Little Book of Common Sense Investing. A two-hour quick read and all you really need.
Tom Stanley and William Danko: The Millionaire Next Door: Buying habits of the wealthy. Doctors are key characters in the book.

Financial Adviser:

White Coat Investor Recommendations

Podcast:

Dentist Money. Reese Harper has tons of information on investing And running a practice the right way.

The best way to reach me is at drcarlsen@gmail.com.

Docs, please send this blog on to at least three other dentists. You’ll be helping to change our profession.

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I wanted to offer a special thanks to Doug for replying to that first email, along with each one that has followed since. It was great to have someone to listen to and answer some questions that were a bit out of the ordinary. I’m grateful he was willing.