What Pine Forests Can Teach Us About the Price of Money (and What It Means for Buying a Dental Practice in 2026)

Warren Buffett once put it simply: interest rates are to asset prices what gravity is to the apple. When rates are low, the pull is weak and prices float upward. When rates rise, gravity reasserts itself and values come back to earth. It’s a memorable line, but it raises an obvious question that most investors never stop to ask: why does interest exist in the first place?

One answer turns out to be older than banking, older than money itself, and it’s hiding in something as unglamorous as a stand of pine trees. Understanding it also happens to explain, very concretely, why a dentist buying a practice today is looking at financing costs in the high single digits to low double digits rather than the near-zero rates of a decade ago.

The Origin of Interest: Time, Not Just Risk

Most people assume interest is simply the price of risk — a lender charges more because the borrower might not pay them back. That’s part of the story, but it’s not the root of it. Interest exists even between parties who trust each other completely, because interest is fundamentally the price of time.

A dollar today can be planted, invested, or put to work immediately. A dollar promised a year from now cannot. Economists call this “time preference” — the near-universal human tendency to value a resource available now more than the identical resource available later. If you doubt this is real, ask yourself whether you’d rather have $10,000 today or $10,000 in five years. Almost no one chooses to wait for free.

Interest, then, is the compensation that bridges that gap. It’s what a lender demands to give up the use of their capital today in exchange for more of it later. Strip away banks, currencies, and central banks, and the phenomenon still exists — which is exactly what economists in the late 1800s set out to prove using, of all things, a forest.

The Forest Growth Theory of Interest

Long before anyone talks about SBA loan rates or Federal Reserve policy, economists needed a way to explain where interest “naturally” comes from, independent of any banking system. The classic thought experiment — explored by economists like Eugen von Böhm-Bawerk and later formalized by Irving Fisher — imagines an economy with a single capital asset: a growing forest.

Here’s the logic. A young forest of trees adds wood volume every year. In its early decades, that growth rate might run 8% to 10% annually — young trees pack on mass quickly. As the forest matures, growth slows to 2% or 3%, then eventually levels off entirely once the trees reach biological maturity.

Now imagine you own that forest. Should you cut it down and sell the timber today, or wait a year and let it keep growing? The answer depends entirely on the forest’s current growth rate compared to what else you could do with your money. If the forest is growing at 8% a year and you could only earn 4% elsewhere, you let it grow. If the forest’s growth has slowed to 2% and you could earn 6% investing the proceeds elsewhere, you cut it down now.

This is the elegant insight: the biological growth rate of a real, physical asset sets a natural benchmark for the interest rate. Capital doesn’t need money to be productive — trees, herds, orchards, and vineyards all compound value on their own, purely through time and biology. Money-based interest rates are, in a sense, a human invention layered on top of a phenomenon nature already demonstrates. This forestry framing captures something economists have leaned on for over a century: that interest isn’t an artificial tax dreamed up by bankers, but a reflection of the real, physical return available from letting productive capital compound over time.

This is also why interest rates rarely stay at zero for long. Just as an old-growth forest’s slowing growth rate eventually forces a decision, an economy flooded with cheap capital eventually finds that real returns on higher priced assets are lower than what investors expect, and rates adjust upward to match reality — which is precisely what’s played out since 2022.

From Pine Forest Theory to Dentistry: 2026 Practice Acquisition Rates

This isn’t just an academic exercise. It shows up directly in what it costs a dentist to buy a practice today.

SBA 7(a) base rates through the first half of 2026 have generally been priced at Prime plus roughly 2.25 to 2.75 percentage points, with Prime sitting near 6.75%, putting a fully amortizing, SBA-financed single-office acquisition around 9 to 9.5%. Other lenders quote a somewhat wider band, with specialty dental lenders offering acquisition loans starting around 8.5% APR for qualified buyers, with 100% financing available to borrowers with strong credit.

Conventional (non-SBA) bank financing tends to run a bit lower, generally landing in the 7% to 9% range, though it usually comes with a shorter runway and less flexible terms than the SBA product. Realistically, most dentists buying a practice in 2026 should budget for something in the 8% to 11% range, depending on down payment size, credit profile, and whether real estate is bundled into the deal.

Lenders aren’t just looking at the rate in isolation, either — they’re underwriting the deal the same way our forester decided whether to cut the timber. The key metric is Debt Service Coverage Ratio (DSCR): does the practice generate enough cash flow, after a market-rate owner salary is backed out, to comfortably cover the loan payment? Recent industry data on dental acquisition term sheets puts the median DSCR at origination around 1.38, with SBA 7(a) deals averaging slightly higher than conventional loans. A practice returning cash flow greater than the loan’s interest rate is the modern equivalent of a fast-growing young forest — worth financing and holding. 

Gravity Always Wins Eventually

Buffett’s gravity metaphor and the forest growth model are really describing the same force from two different angles. Low interest rates let asset prices — and acquisition multiples — float upward, unmoored from the underlying growth rate of the asset itself. But that gap never lasts. Eventually, financing costs and real productive growth realign, whether the asset in question is a stock, a stand of timber, or a dental practice.

For a dentist evaluating a purchase today, the practical takeaway is simple: don’t price a practice as if capital is free. Underwrite it the way the forest owner underwrites the decision to cut or wait — compare the practice’s real cash flow and growth potential to the cost of the money you’re borrowing to buy it. Do that, and the “curious” idea of interest stops feeling abstract and starts looking exactly like what it’s always been: the price of time, made visible.