Transition Out
What's Your Practice Worth?
Own Both Practice and Busniess Sooner
Valuation Optimization
Funding Your Transaction
A Faster Way to Fund Your Transition Into Business Ownership
When you’re a younger dentist who’s ready to start transitioning into ownership of
the practice you’ve been working in, it’s important that you have the funds to
complete the acquisition.
The dentist who owns the practice may require a buy-in for you to go from being
an employee to being a partner who will transition into full ownership of the
practice after they retire.
This, of course, raises the question: where is the money going to come from?
For most people, the answer would be “from a bank”.
This is not a great answer, because it means that you will pay thousands of dollars on loan interest that you could have avoided if you had funded the transaction more strategically.
A better way to fund your transactions: your Personal Liberty Bank
Instead of buying into the partnership by paying a lump sum that you borrowed from a bank, Un-DSO practice acquisition strategies can help you get payment terms from your new partners that allow you to pay the buy-in cost over time, at a low rate of interest - usually 6% or less.
That way, instead of paying the full purchase price up-front, you can pay a portion of it to your partners annually.
You can then invest the balance of the purchase price, along with your other assets, in a dentist-centric Hedge Fund (a.k.a. the Fund), that targets a 15% annual return for the investor, thus doubling your money every 5 years.
The Fund can provide the foundation of your Personal Liberty Bank by getting you higher returns as an investor (i.e., 15% instead of 6%), and by forming a partnership with you and providing the capital that you need to invest in two or more dental practices and dental office real estate assets.
On top of this, you may be able to double your money again, as the Fund helps your group of practices monetize the asset value that you helped it double over the previous 5 years.
You can also arrange to pay interest to YOURSELF instead of other people.
Your Personal Liberty Bank includes three components:
1. The Fund
2. Customized financial strategies that include whole life insurance policies
3. A dedicated checking account
How does your Personal Liberty Bank make you into your own banker?
When you’re working with a normal bank, you “lend” money to the bank by making deposits, and get a low interest rate in return - usually 2% or less.
When you take out a loan, such as a mortgage, the bank effectively loans your own money back to you, but at a higher interest rate than it’s paying you.
If a bank “borrows” money from you at 2% interest, then loans money to you at 5% interest, the 3% difference is the “spread”, or the bank’s profit.
This isn’t a good deal for you, because you’re losing the 3% spread, when you could be EARNING it instead!
How do you go from paying a spread to the bank to making a profit for yourself?
The Personal Liberty Banking System helps you set up your own bank, in the form of a high cash value life insurance account. Most people pay premiums into their life insurance accounts anyway, but we help you turn those payments into an asset that makes you money.
When you put money into your high cash value insurance account, you’re effectively loaning money to your own bank, and you will often receive a 7% interest rate in return - much better than the 2% the traditional bank was giving you!
You can then borrow money from your cash value account, at a rate of 5%. When you pay 5% interest and receive 7%, the 2% difference is profit for you, which increases your cash value.
This enables you to use your personal bank to pay off your other creditors, so instead of paying interest to other people, you pay that interest to yourself.
It also allows you to set your own payment terms and schedule, so you can borrow more money from your cash value and get even higher returns.
For example, you can increase your return on investment by borrowing money from your cash value account at 5% interest, and investing it in a Hedge Fund that gives you 15% interest, thus obtaining a 10% return on your investment. But that’s not all!
When you combine this 10% with the 2% spread you were already obtaining by receiving 7% interest from your cash account while paying 5% on the money you borrowed against it, your effective rate of return is 12% (10% on the hedge fund and 2% growth on the cash value).
We’re here to walk you through every step of the process.
The Personal Liberty Bank is a sophisticated system that requires managing referrals
and collaboration among specialized professionals who work together to help you turn
your liabilities into assets.
These professionals include lawyers and accountants, as well as real estate, business
and insurance brokers, and financial planners who help you and your partners to
evaluate all available options and select the option that’s best for you.
The Un-DSO helps you with these collaborative business processes from start to finish!
Even if you have NO prior experience in owning your own bank or minimizing debt,
we can walk you through the entire process, which begins when we start collaborating
with your Liberty-certified life insurance broker, attorney and accountant.
We will tailor your strategy to your unique situation, and help you to optimize the conversion of your debts to assets.
With this strategy, you will be able to pay off your student loans and other debts on a schedule that propels you forward on your path to financial freedom.
You can also use this strategy to acquire equity in your dental practice and dental office real estate.
As you follow our Liberty Financial Freedom Formula, you will learn about the importance of owning your business, real estate and bank.The Fund can help you acquire equity not only in the dental practice and management company business, but also in the dental office real estate, far faster than you could have on your own.For example, let’s say you have an opportunity to buy a practice, but you have very little money.The Fund may be willing to acquire 60% or more of the practice, and loan you the money you need to acquire the other 40%. That’s why the Fund can be an important component of your Personal Liberty Bank.Even if you have the funds to buy 1 practice, this strategy can help you to buy 2 or more practices, as well as the management company business and dental office real estate. It can propel you forward on your path to financial freedom by helping you acquire your own Business, Real estate and Bank far faster than you could by yourself!
This strategy gives you additional opportunities to minimize expenses and earn residual income.
A dental office is usually a great tenant that pays its rent on time and increases the value of the building. The rents from your practice and other tenants in the building pay off the mortgage and expenses.That means when you own the real estate that receives rent from your dental office, your net worth increases by the net value of that real estate.
What if you don’t have money to buy real estate?
If you’re a young dentist who’s transitioning into ownership of a practice, we may also be able to help you transition into ownership of the office real estate.
Your transition plan can provide for you to ultimately acquire a majority equity interest in the real estate as your senior partners transition out and exit the practice.
As with the Personal Liberty Bank, this strategy requires collaboration among lawyers and accountants, as well as real estate, business and insurance brokers and other professionals, all of whom need to work together with you and your partners as Members of the same Joint Venture to evaluate all of the available options and select the one that’s best for you.