StudentDC Interactive

I wondered when several students talked to me about the “new” transition loans for health care proviers.  So I talked with someone at Wells Fargo.  Here is the deal:

These are nothing more than “unsecured” (no collateral) personal loans or lines of credit.  The “hidden” cost is the interest rates - depending on a lot of factors, including your credit rating, the rate is over 11 percent.  Yikes! 

Think carefully about adding another loan to your credit rating just before you go to the bank.  Instead of taking on more high-interest debt, cut back on your expectations, borrow less money, live frugally for a couple of years. 

If it seems too good to be true, it probably is!

Chiropractors aren’t the only business owners who haven’t figured out the difference between independent contractors and employees. FedEx was classifying their drivers as independent contractors, but they wanted control over them (which means ‘employee’). The company is now the subject of a class action suit by drivers. Read this blog from my friend Kelly at TaxGirl.com to get a better understanding about this issue.

There is not a week that goes by that I don’t get at least one contract that shows a basic misunderstanding of the “independent contrator” status. If you have a contract you want me to look at, I would be happy to do that. Note that I’m not an attorney, and I’m not giving legal advice; I’m just giving you my opinion and pointing out issues that need clarified.

I am not sure where this loan started, or who is funding it, but it’s a great idea.

Students have been telling me they can get a “transition” loan of up to $15,000 from NELNA or Key Bank.  The loan is a variable rate, right now at 11.5%, with a 20-year term.

I will keep you posted as I find out more information.

As usual, it depends.  It depends on the area where you’re working, and on the doctor who is hiring you and the number of other associates in that practice, and the experience the doctor has had with previous associates. 

Many associates receive a base pay with bonuses for higher levels of collections.  Some doctors pay only incentive/bonus, which is pretty tough for someone starting out.

According to the Chiropractic Economics latest pay and expenses survey, the average associate makes about $60,000.  But “average” is a tricky word.  My father used to tell me, “If your head is in the oven and your feet are in the freezer, on average, you’re comfortable.”  Some associates are making a lot more than $60,000 and I know for certain that many are making a lot less.

If I were considering going into an associate position, here are the two questions I would ask:

1.  Is the base enough for me to live on, including my student loan payments?  Consider that in any one month you might not bring in enough patients to get the additional incentive. 

2.  Can I make more working on my own?  Never forget that you are bringing in patients for someone else.  The phrase “you can’t take it with you” applies here.  This is a very complicated question, but keep asking it and thinking about it. 

Set yourself a time limit, and then move on, if you’re not making enough or you think you’re ready.)

What do YOU think is a reasonable amount for an associate to be paid?  Let me know your comments. 

If someone said, “I have the perfect practice for you to purchase, but you have to act TODAY,” would you be ready?  It might happen; as a matter of fact, it did happen to a new DC I know.  She was ready because:

Her business plan was prepared (in general, not the specifics of this business)

Her credit rating was impeccable

She had established a relationship with a bank

She had lined up a CPA and, most important, an attorney

Her bank gave her a letter telling the seller that she was approved for the loan.  She is in the proces of working with her attorney to put together a preliminary contract.  She is in a position to take over the business early next year.

If you found the perfect practice to buy and you had to act quickly, would you be ready?  Think about it.  Then go through the list above, check StudentDC.com for specifics on

• checking your credit
• finding a CPA and attorney
• preparing your business plan
• working with a bank, and …

Go for it!