Oct. 26, 2016
Practice ownership continues to be the path to greater financial gain for optometrists, Jobson Optical Research’s 2016 ECP Compensation Study shows. The average compensation reported for employed optometrists was $108,673. The average total compensation of optometrists who are owner/partners for 2015 was reported as $142,136.The compensation for this group would include any salary they may have assigned themselves.
Click HERE to purchase Jobson Optical Research’s 2016 ECP Compensation Study.
How would you like to make an additional $7 million on top of your wage over a 40-year career? Here’s how to do it.
Let’s start with the income difference between the average owner/partner optometrist and the average employed optometrist. The compensation numbers are: $142,136 – $108,673 = $33,463. The average owner/partner optometrist makes $33,463 more per year than the average employed optometrist. What impact does a $33,463 difference per year have over a 40-year career for the owner/partner optometrist?
Let’s calculate the raw numbers: $33,463 x 40 years = $1,338,520. Over a 40-year career, the $33,463 difference per year means the average owner/partner optometrist will make $1.3 thousand more than the employed optometrist. That’s a significant number.
Now, let’s consider what would happen if the owner/partner invested the $33,463 difference per year have over a 40-year career with an average return of 7 percent per year. You can see from the report below that the average owner/partner would have an additional $7,181,480 before taxes and inflation. That’s not just a significant number, that’s an impressive number.
This is the perfect time to consider becoming an owner/partner in an eyecare practice. Baby Boomers (born between the years 1946 and 1964) are the second largest demographic in the U.S. In the year 2016, the Baby Boomers are between 52 and 70 years old. That means the youngest of the Baby Boomers are in their peak earning years for eyecare doctors, and the oldest should be retiring. That’s the perfect sweet spot to either buy-out or buy-into a Baby Boomer’s eyecare practice.
Here are two more reasons to either buy-out or buy-into an eyecare practice now. With so many eyecare doctors being Baby Boomers, that makes it a buyers’ market. In a buyers’ market, the buyer has an advantage. Because so many practices are for sale, or will soon be up for sale, this is the best time to buy. Another factor to consider is that money is relatively cheap right now. So, not only is it a buyers’ market, but this is the best time to get a loan at reasonable rates.
Make that decision today to take the first step toward practice ownership. Be proactive instead of reactive, and make that extra $7 million yours.