Ophthalmology Business

OCT 2013

Ophthalmology Business is focused on business topics relevant to the entrepreneurial ophthalmologist. It offers editorial, opinion, and practical tips for physicians running an ophthalmic practice. It is a companion publication of EyeWorld.

Issue link: http://digital.ophthalmologybusiness.org/i/197424

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continued from page 17 ble potential for growth, you will get competitive rates of return. Currently, many accounts are paying 3–4.5% tax-free, with a guarantee usually on the order of 1–2%. These rates could go up and they could go down. However, you will never lose the money in your PCR. As you build your PCR, your account continues to grow. Another potential limitation is time. It typically takes four to nine years to build a really effective PCR. eral capacity; however, for the sake of staying focused on this article, we can discuss that another time. Put simply, you lien your PCR to access the cash, saving you money off of the top and buying you tons of opportunity in the future. Then what? You reduce the lien by paying it down and you choose the amount you would have paid had you leased the equipment—the same $8,500 per month for 60 months. It typically takes four to nine years to build a really effective PCR. This is not a structured loan. You can skip payments for a very long time if you must. How does it work? After you have built your collateral capacity sufficiently, say by saving $100,000 per annum, you will have approximately $745,000 in seven years. This money will continue to compound at a solid rate. Now, let's say you need to purchase a new laser with a price tag of $375,000. It has a technological life of five years. Had you leased this, the payments might cost you $8,500 per month and it would likely be near obsolete five years from purchase. Now that you will pay cash (not your cash), you have negotiated the price down to $350,000. This is already a savings of $25,000. That savings can earn a significant amount of interest for you, adding again to your already growing collat- 18 What if you skip a payment? Not a problem. This is not a structured loan. You can skip payments for a very long time if you must. It is better, though, not to. Soon you have the original $700,000 in your account, plus the interest it earned, plus the amount you used to reduce the lien, totaling a whopping $1,050,000. To review: • You have all the money you put into the account. • You have all the payments you would have paid to a bank or leasing company. • You own the equipment. Ophthalmology Business • October 2013 Rather than benefiting the banks or the leasing company, you build your personal wealth and security by using the safe and tax-advantaged Private Capital Reserve strategy. You can achieve this by simply utilizing the power of the velocity of money multiplier to your benefit. Rather than benefiting the banks or the leasing company, you build your personal wealth and security by using the safe and tax-advantaged Private Capital Reserve strategy. We're talking about your practice and your passion; doesn't it make sense to pay yourself for growing it? OB Dr. Levin is CEO and managing director, Summit Wealth Partners, Orlando, Fla. He can be contacted at MLevin@mysummitwealth.com.

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