Here’s the uncomfortable truth: a high income doesn’t automatically make you wealthy. For a practice owner, most collections go to overhead first, then taxes, debt, and lifestyle take big bites of what’s left. Whether you build wealth comes down to one number — your savings rate.
Where does the money actually go?
Follow a practice owner’s dollar. Of every $1 in collections, roughly 60 cents goes to overhead — staff, lab, supplies, rent. The remaining ~40 cents is owner earnings, but it isn’t take-home yet: taxes, debt payments, and living expenses all come out of it. What survives all of that is what builds your future.
| Slice | Rough share |
|---|---|
| Practice overhead | ~60¢ |
| Taxes (varies widely) | ~10–15¢ |
| Debt & living expenses | the rest |
| Left to build wealth | whatever you deliberately keep |
Why doesn’t a high income make you wealthy?
Because wealth is built from what you keep, not what you earn. Two dentists with the same income can end up in completely different places based on their savings rate. This is the “busy, well-paid, and still not ahead” trap — and it’s almost always a spending-and-saving problem, not an income problem.
What savings rate builds real wealth?
Aim to save at least 20% of gross income, and more if you started late. The most reliable way to hit it is to pay yourself first — automate savings and investing so it happens before lifestyle spending, not after. See how much you should have saved by age.
How do you avoid lifestyle creep?
- Grow your lifestyle slower than your income — bank most of every raise.
- Automate investing so “extra” money is invested before it’s seen.
- Revisit fixed costs (housing, cars) — they quietly set your savings ceiling.
- Give every dollar a job so a high income doesn’t just evaporate.
Frequently asked questions
At least 20% of gross income is a reasonable floor, and 25–30% for those who started late or want to retire early. The exact number depends on your goals — but the savings rate matters far more than your income.
It’s almost always a savings-rate problem, not an income problem. High earners who don’t deliberately save watch taxes, debt, and lifestyle absorb the difference. Automating savings usually fixes it.
Founder & Financial Planner · Investment Adviser Representative · Series 63 & 65
Ian McGinnis is a financial planner and founder of Dental Wealth Partners, a non-commission, fee-only financial planning firm for dentists. He is the author of The Wealthy Dentist: Smarter Money. Less Stress. More Life. and hosts the Smiles & Cents podcast.
Keep reading
- How much should a dentist have saved by age? Net-worth benchmarksNet-worth benchmarks for dentists by age and career stage, why dentists start behind, and the savings rate that actually builds wealth.
- Dental practice overhead benchmarks: what’s a healthy percentage?A healthy general practice runs around 60% overhead. Here are the category-by-category benchmarks and how to lower overhead without cutting quality.
- Why your dental practice shouldn’t be your whole retirement planConcentration risk is the quiet danger for successful dentists. Here’s how to think about building wealth beyond the practice.