Dentistry has long been viewed as a clear path to lasting wealth, but it’s not always so simple. Many high-earning dental professionals are carrying massive student debt, juggling multimillion-dollar business loans — or chasing investment opportunities that can backfire.

Just ask Dr. Sunny Pahouja.

The 42-year-old Ohio dentist earns a salary in the mid-six figures, owns rental properties and has built an investment portfolio worth millions alongside his wife, according to a recent report from The Wall Street Journal (1).

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Yet despite his financial success, Pahouja expects to lose roughly 80% of a $250,000 investment he poured into multifamily real estate deals pitched by a company marketing “passive real estate for physicians, by physicians.”

“It was a big lesson learned on my end,” Pahouja told The Wall Street Journal. “There were a lot of things we just didn’t see coming.”

His experience is a reminder that even high earners can have financial challenges — and get burned by attractive promises.

Dentists may appear wealthy on paper, but many actually start adulthood deeply underwater.

Pahouja graduated from dental school in 2011 and was carrying approximately $250,000 in student debt.

According to the American Dental Association, more than two-thirds of new dentists in 2022 started their careers owing roughly $290,000 in student loans for their dental education. (2)

Then comes the next expensive step: buying or building a practice.

After working as an employee for three years, Pahouja purchased a dental practice and the building it was in, taking on another $1.5 million loan. Dentists launching practices from scratch are now often borrowing between $3 million and $3.5 million, according to Live Oak Bank healthcare financing executive Lindsay Harkey, who serves a lot of dental practices.

While buying or building a practice, there are climbing operating costs to deal with. Construction expenses, hygienist wages and pricey dental technologies are all eating into margins. According to the American Dental Association Health Policy Institute, inflation-adjusted median net income for general dentists fell 13.2% between the 2015–2019 period and the 2020–2024 period. (3)

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Dental Economics (4) says many dentists build wealth through a mix of practice ownership, real estate, retirement accounts and stock-market investing, though some also pursue riskier bets such as crypto and private real-estate, according to The Wall Street Journal.

Pahouja is part of the self-directed crowd. Despite outreach from firms including Morgan Stanley and Merrill, he says he ignores most adviser calls, telling The Wall Street Journal, “If it’s really important they’ll leave a message,” (1)

He also runs a Facebook group with more than 26,000 dentists discussing strategies ranging from boosting practice profits to using backdoor Roth IRAs.

Between 2020 and 2022, Pahouja invested in five multifamily housing deals through Ascent Equity Group, a Colorado-based real estate firm founded by a physician and marketed specifically toward other medical professionals.

Then interest rates skyrocketed.

As the Federal Reserve aggressively raised rates beginning in 2022, the projects became distressed, crushing investor returns. Pahouja now expects most of his original investment to disappear.

The failed investment highlights a growing financial pressure point among America’s so-called “moderate millionaires”, which are households with between $1 million and $30 million in investable assets. According to consulting firm Capgemini, wealth in that group surged 52% between 2018 and 2024, reaching $20.2 trillion. (1)

Pahouja’s story is just one example of affluent professionals who may have high incomes, but also limited liquidity and little margin for error when it comes to major investing mistakes.

Chris Sands, partner at dental accounting firm Pro-Fi 20/20 Dental CPAs, said that many dentists underestimate how much retirement planning they still need to do despite their earnings. (1)

Instead of building diversified long-term portfolios, some are chasing speculative real estate syndications or investing in questionable private ventures, Sands said.

“A lot of dentists want to throw a dart and hope they hit it rich,” he warned. (1)

That appetite for big returns has also made dentists attractive targets for aggressive investment marketers and, in some cases, outright scams.

Here are some red flags investors can watch out for, from the U.S. Securities and Exchange Commission: (5)

Investments marketed to specific professions (“for doctors,” “for dentists” or “exclusive physician opportunities”)

Promises of passive income with limited downside risk

Heavy reliance on debt financing in a high-interest-rate environment

Limited liquidity or restrictions on withdrawals

No independent third-party oversight

Elie Engler of Ashford Advisors told the Journal he generally recommends younger dental-practice owners focus first on traditional stock-and-bond investing until they’ve built up significant liquid assets.

Some dentists eventually branch into alternative investments successfully, but only after their practices and retirement savings are already established.

Detroit-area periodontists Drs. Monish Bhola and Shilpa Kolhatkar, for example, didn’t begin investing in hedge funds, private credit and private equity until they had already built substantial wealth and worked with advisers for years.

“We started off with index funds,” Bhola told The Wall Street Journal. “At this stage, once the business has grown, our risk tolerance is much higher.”

For Pahouja, the painful real estate loss hasn’t derailed his long-term finances — but it did change the way he evaluates investment pitches.

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The Wall Street Journal (1); American Dental Association (2); American Dental Association (3); Dental Economics (4); U.S. Securities and Exchange Commission (5)

This article originally appeared on Moneywise.com under the title: 'Throw a dart and hope': Ohio dentist worth millions expects to lose $200,000 in a 'for physicians, by physicians’ deal

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