Glass half full advice for young and aspiring DVMs
Veterinary journals are overflowing with articles on the shameful student debt situation in our profession. The debacle is a national embarrassment, and it impacts a wide range of people—from parents who want to see their veterinarian children have a good life to the clients who end up paying more because professional salaries have to be earmarked for student debt service.
I was recently reminded of how worried DVM candidates are about student debt when, after delivering a presentation at a veterinary school, several students approached me to solicit advice. Namely, they wanted to know how the current generation of new veterinarians should plan aggressively to navigate obstacles and thrive economically.
Drawing on years of advice from older doctors and the experiences of my consulting clients, I gave the eager questioners a few recommendations I hope will help them as they confront the realities of today’s tough economic environment.
1. Remember that each market is unique
Follow me on this, because it’s important: On every day of every age, there are coexisting economic realities that result in bad times for some and good times for others. For example, are these good oil times or bad oil times? That depends on whether you sell oil or consume it. You may be loving gasoline at $2 a gallon, but on a recent visit to Bahrain, I saw abandoned, partially constructed skyscrapers everywhere.
The same duality applies to the marketplace in which our profession and its practitioners operate. For example, while veterinarian pay is static or increasing only slowly, interest rates and inflation are very low by historical standards. So are these good times or bad times for veterinarians?
My perspective is that licensed veterinarians are experiencing relatively good times. In a country where many workers are either unemployed or underemployed, most able-bodied veterinarians can and will locate decent paying work.
That doesn’t mean the position will be perfect (the hiring clinic may not be in your preferred location or espouse your exact practice philosophy), but work is out there. Money can be earned and saved. In that respect, veterinarians are way ahead of those in manufacturing, mining, construction, and so on. We are employable and (perhaps more importantly) likely to remain employed.
The fact that banks are in pain and the government is pumping out stimulus is an advantage for veterinarians as well. For creditworthy borrowers (more on this later), this is a time of unparalleled opportunity. The current credit market and interest rates and terms should be extremely enticing to DVMs aspiring to establish their own practice, enter into a professional partnership, expand an existing facility or purchase veterinary equipment.
My own practice manager has been telling me I need to buy new diagnostic equipment for our hospitals. When I see how low the interest rates are in this post-2009 financial crash environment, more often than not I respond positively.
In my consulting practice, I am seeing buy-in offers for high-quality practices that are owner-financed at 4 and 5 percent. Drug wholesalers are offering unprecedented long-term, low-interest financing to doctors opening new clinics. In many areas of the country, commercial real estate mortgages are being granted at remarkably low rates.
In every cycle of the “boom and bust” capitalist economic system, there will be winners and losers. I recommend being aware, nimble and opportunistic in today’s unique economy.
2. Get the better of compound interest
If you incur credit card debt at the rate of 17 percent, what you owe doubles about every 4.5 years. That should terrify you. But if you buy a modest, high-quality, fairly priced home and the mortgage is the same as you would have paid in monthly rent, you gain:
Equity in your property against which you can borrow for a clinic or practice buy-in
Loan interest at a third of what credit cards charge
Deductibility of that interest at the federal level and that of most states
Appreciation potential as your area recovers from the last economic downturn
A boost in your credit score as soon as you make a few on-time mortgage payments.
Never, ever stay in a position with credit if a lower-interest option is available. Every single additional interest rate point is geometrically toxic to your long-term well-being, and evidence of your consistent commitment to good financial planning will increase your chances of being invited to participate in clinic ownership or partnership.
For example, the first two questions I ask my legal and consulting clients who are considering selling their practices are: “Do you have an associate? If so, do they seem to know how to handle money?” Boneheaded credit decisions are a major clue that they don’t.
3. Seek the advice of older veterinarians
Managing staff, dealing with other doctors, keeping clients happy and balancing home life with work life are stressful undertakings, but do you really believe that yours is the first generation to face tremendous strain? Of course not, so seek out opportunities to listen to and learn from older veterinarians who have been coping with stresses and disappointments for decades.
As a thirty-something veterinarian, I learned from the three vets I knew best: My father and the two “competitors” (a.k.a. lifetime friends and colleagues) he had supper with on a monthly basis.
They didn’t teach me how to practice. They taught me about practice—things like the positive and negative aspects of having family members work in your practice and the types of clients who are most likely to run up a big bill and then walk away. I also learned how to size up the honesty of a drug rep, the importance of developing personal thrift and the critical importance of delayed gratification.
These doctors had some specific stress-avoidance tips for me as well, though you may not want to try all of them at home. For example, one of them told me that if a client wakes me up at 3 a.m. for an emergency and then fails to pay after “rushing out of the house without [his] wallet,” I should call the client at 3 a.m. every night to check on the patient’s progress.