Light a FIRE to Manage Your Own Finances

By Clayton Sorrells, DDS

I recently decided to part ways with my financial adviser and start managing my money and investments myself. If you are in dental school, you might be thinking, “Wait, I have negative money to manage. This doesn’t apply to me!” Au contraire! The sooner you can learn to manage any money, whether it is $180,000 in debt or $1.8 million in profit, the better off you will be.

The first step in managing money is learning how to budget. My favorite way to do this is to automate. If I can automate something in my life, I am going to do it. There are several apps that connect all your bank, credit card, investment and loan accounts. Some popular ones are Copilot, Monarch Money and YNAB. My advice: Pick one. They all work and will show you where your money is going. You’ll probably be disappointed when you see how much you spend in certain categories. While in dental school and early in your career, budgeting is crucial. Less spending in school means fewer loans, and less spending after school means faster debt repayment. Set monthly goals for groceries, gas, student loans, fun and all your other expenses.

The next step is saving money. My recommendation: Include your savings goal in your budget. If you don’t allocate it, you’ll spend it. But where should savings go? This is when people get scared and think they need a financial adviser. The answer depends. But one category is non-negotiable: You need an emergency fund. You never know when things will go wrong. You may lose your job, your car may break down, or your dog may need emergency surgery. You need at least three months of essential expenses saved. Since you’ve been budgeting, you know this number. Rather than letting it sit in a checking account where it earns little or no interest, consider putting it in a money market account that offers better returns while still keeping it accessible for emergencies.

Financial Independence

Once your emergency fund is set, the fun begins. You get to decide where your money goes. I had a financial adviser because I thought investing was complicated and didn’t want to lose my hard-earned money. What I didn’t realize was how much my adviser was making off my investments. That led me to read everything I could about finance. I got deep into the Financial Independence, Retire Early (FIRE) movement, which led me to the concept of financial independence (FI). As I learned more, I started thinking differently about my financial future. I realized that FI isn’t just about retiring early — it’s about having the freedom to make choices based on what I want to do, not what I have to do. My goal is to reach FI in 15 years, by age 45, so that I have the flexibility to continue practicing dentistry because I enjoy it, not because I need the paycheck.

Now, you might be thinking: “Wait, is he crazy? What will he do for 50 years if he isn’t working?” My answer: whatever I want. People hesitate to pursue FI because they don’t fully understand it. A general rule for determining your FI number is 25 times your expected annual expenses. If you need $60,000 per year to maintain your lifestyle, you need $1.5 million to reach FI. If you need $40,000, you need $1 million. FI isn’t as complicated as some financial advisers make it seem. And if your financial adviser says it’s too complex, ask them to do a molar root canal on No. 31 in a patient with an 8-millimeter opening and a tongue the size of Manhattan. Then they’ll know complicated. Managing money is far simpler than many things we do every day in dentistry.

How to Take Ownership of Your Investments

When I decided to take control of my finances, I knew I needed to educate myself first. I wasn’t looking for a complicated system or some secret formula — I just wanted a straightforward approach that made sense. I read Mr. Money Mustache’s article, “The Shockingly Simple Math Behind Early Retirement,” and thought, “No way, it’s harder than that!” Then I read “The Simple Path to Wealth” by J.L. Collins; “White Coat Investor” by James Dahle, MD; and “Rich Dad Poor Dad” by Robert Kiyosaki and Sharon Lechter. I also listened to “The Financial Independence Podcast” and “Mad Fientist.” The more I read, the more I realized that managing my own money was not as intimidating as I had thought. Within a month, I had absorbed enough knowledge to feel confident in making my own financial decisions, and I knew it was time to take full ownership of my investments.

So, where do you put your savings? After reading those books and listening to the podcasts, you’ll have a solid understanding.

But, here’s a spoiler: Investing is boring and simple. The best approach? Low-cost index funds. Any major institution like Vanguard or Fidelity offers them. You can research further, but a total stock market index fund is a common recommendation for beginners. At this point, the key is to take action. You don’t need to have everything figured out right away, but, the sooner you start, the more time your money has to grow.

While I felt comfortable taking control of my finances and parting ways with my financial adviser, that doesn’t mean financial advisers are bad. There are plenty of great ones who can provide value, especially for those who don’t have the time or interest to manage their investments. I just wanted to take control of my money and future. I encourage you to do your own research and, if needed, consult with a financial professional to determine the best path for you.

Taking control of your finances doesn’t mean making drastic changes overnight. Start with small steps. Track your spending, set a savings goal, and learn the basics of investing. You don’t need to be a financial expert to build wealth. You just need a plan, some discipline and the willingness to take the first step. Mastering your finances is a lot like mastering dentistry. At first, it feels overwhelming. There’s a learning curve, some trial and error, and a lot of people telling you what you should and shouldn’t do. But, just like perfecting a crown prep or nailing the art of patient communication, the more you practice, the more confident you become. Money is simply another tool — learn to use it well, and it can give you the freedom to design the life you want.

Clayton Sorrells, DDS, is a new dentist and previous AGD chapter president at Louisiana State University School of Dentistry. To comment on this article, email impact@agd.org.