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3 Critical Ingredients for Your Decision-Making Recipe – Episode 156

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Learn how to take your decision making beyond the pros and cons. You hear it at the beginning of every show: “We help dentists make smart financial decisions.” In this episode of Dentist Money, Reese and Ryan (with a shout out to Benjamin Franklin), dive into the decision-making process. You’ll learn how a combination of information, well-defined processes, and personal accountability lead to more confidence and better outcomes. Plus, you’ll hear them discuss if and when it makes sense to trust your personal instincts.

Show Notes:

The Way to Wealth by Ben Franklin

Podcast Transcript:

Reese Harper: Welcome to Dentist Money, I’m your host, Reese Harper. You hear it on every show, and if you’re a frequent listener, the title of this episode, Making Smart Financial Decisions, should have a super familiar ring to it. Today, Ryan and I discuss the actual processes involved in financial decision making. We cover the significance of data and analysis but we also talk about gut instinct, and if it has a place in making smart financial and investment decisions.

Reese Harper: We’ll also share a few ideas on some decision theories, and the importance of accountability. We also talk about Benjamin Franklin, and favorite book that I want you to read. Helping dentists make smart financial decisions is part of our mission at Dentist Advisors, and an overarching theme for this show. We thought it was about time it got its own episode. Make sure and check out our new Facebook group at, it’s free to sign up. It’s a great way to give us any of your financial questions.

Reese Harper: When you’re ready to book a free consultation, just go to and click “book free consultation”. Make sure and check out the calendar that’s there, you’ll be able to pick a time that works for your schedule on a day off or a time that’s convenient for you, or you can just call us at 833-DDS-PLAN. Enjoy the show.

Speaker: Consult an advisor or conduct your own due diligence when making financial decisions. General principles discussed during this program do not constitute personal advice. This program is furnished by Dentist Advisors, a registered investment advisor.

Speaker: This is Dentist Money. Now, here’s your host, Reese Harper.

Reese Harper: Welcome to the Dentist Money show, where we help dentists make smart financial decisions. I’m your host, Reese Harper, here with my trusty old co-host in the middle of the snow, sir Ryan Isaac.

Ryan Isaac: Yeah, we are in the middle of the snow. You have the boots.

Reese Harper: No boots today, and I’m eating a protein bar.

Ryan Isaac: For those of you who can’t see the outfit, today we’ve got a puffy coat on Reese and a pair of leather boots with red laces.

Reese Harper: They’re mountain climbers.

Ryan Isaac: They’re mountain climbing boots, they look like you could chase down a fire without slipping on the ice at the same time.

Jen: Did you climb the mountain in those this morning, or do you have specific [crosstalk].

Ryan Isaac: No, I used traditional ski equipment.

Reese Harper: Now this morning, you did a little of the ski as they call it.

Ryan Isaac: I had to have my merrells on to hike.

Reese Harper: So I was going to ask, do you take lifts up or do you, what are the-

Ryan Isaac: It depends on the time of the day.

Reese Harper: I don’t know what the experienced cool skiers call it. You put on your skins and you walk up. What is it called?

Ryan Isaac: Well I prefer downhill skiing. If it’s available, I like to ride the lifts.

Reese Harper: It’s not?

Ryan Isaac: Not until nine AM.

Reese Harper: Like I’m going to go at five.

Ryan Isaac: If you’re going to at five or six or get up and not miss any of your work day, then you’re going to have to be able to either use snowshoes and hike, you’re going to have to wear split boards, which is kind of like two snowboards and you hike with those, it’s kind of cool. You can cross country ski.

Reese Harper: How do you climb up? You walk up?

Ryan Isaac: No, if you have snowshoes on the bag of your pack, if you’re a snowboarder, that’s typically a good way to go.

Reese Harper: I’m still confused, what did you do this morning?

Ryan Isaac: Oh I skied this morning I had to use snowshoes to hike.

Reese Harper: Oh, you snowshoed up and then you put them in the pack and then you go down. And I assume that’s a one time trip?

Ryan Isaac: It depends how much time you have.

Reese Harper: You want to climb high enough that it’s worth it.

Ryan Isaac: Over the weekend, we had several feet of new snow.

Reese Harper: Oh it was a lot. Come visit us.

Ryan Isaac: Yeah last night-

Reese Harper: Unless you’re listening to this in July, then still visit, we can go mountain biking.

Jen: Come hike, yeah [crosstalk].

Ryan Isaac: Last night there was probably a foot, so another foot last night.

Reese Harper: Pow alert.

Ryan Isaac: Anyone who wanted to catch a little bit of that pow had to get up and go get it.

Reese Harper: So this is just fascinating. How high do you hike up there?

Ryan Isaac: Until you’re-

Reese Harper: Dead?

Ryan Isaac: Until your blood, sorry what is it when you’re at 180 or 190? Your blood-

Reese Harper: Your blood pressure.

Ryan Isaac: Your blood pressure. Until your heart’s beating so fast that you’re kind of like [crosstalk] it’s getting a little dangerous.

Reese Harper: Were you solo? Was there any other mountain folk?

Ryan Isaac: I went alone.

Jen: Are you wearing an avalanche thing? What are they called?

Ryan Isaac: It’s not avalanche territory yet this early in the season. We only have a 90 inch base, 100 inch base.

Reese Harper: Famous last words from a pre-avalanche hiker.

Ryan Isaac: I do have an avalanche pack, a self-deploying avalanche balloon that shoots out of the top of my backpack.

Reese Harper: We should just deploy it in the parking lot one day anyway. That’s something I can see happening on the office.

Ryan Isaac: It’s expensive to do that, it’s kind of a one-time thing.

Reese Harper: You don’t repack it. It’s fine. Maybe we’ll just do it anyway.

Ryan Isaac: So I think this is a great segue though, which is-

Reese Harper: Inventions.

Ryan Isaac: -if you need the boots and the puffy jacket to get through the snow, and inventing your way up the top of the mountain, then we have a podcast today for you.

Reese Harper: Exactly. So over the weekend, I was reading an article about someone famous. But this person is famous for quite a few really cool reasons. This person is Benjamin Franklin. Invented a lot of really cool things. Off the top of your head, what are some things you think he’s known for?

Ryan Isaac: The traditional kite?

Reese Harper: The traditional kite. I actually don’t know if he invented the kite, he sure used it to conduct electricity.

Ryan Isaac: If you were on Family Feud right now and they’re like “Top five, did people say kite? Is kite on there?” [crosstalk] now why do we think of him as the kite? [crosstalk] with the weather and electricity and such. I would say the second thing I would guess would be glasses, is that it?

Reese Harper: Yeah, bifocals. But do you remember there was a commercial here in Salt Lake City for years, probably early 2000s or even 90s that was like, America’s Best, and it was Benjamin Franklin?

Ryan Isaac: I do not remember this.

Reese Harper: You don’t remember that? You don’t Jen?

Jen: I don’t remember, no. What was it for?

Reese Harper: You guys weren’t watching School House Rock.

Jen: Maybe.

Reese Harper: It was an eye glass company here, America’s Best.

Ryan Isaac: Okay, bored already.

Reese Harper: All right, so here’s some of these. These are kind of cool. The lighting rod, which is where the kite thing came from.

Ryan Isaac: Lighting rod?

Reese Harper: Here’s one for you. He invented this thing called the glass armonica. Have you head about this instrument?

Ryan Isaac: No I haven’t.

Reese Harper: I YouTubed it and I found a guy dressed like Benjamin Franklin playing the Dance of the Sugar Plum fairies on the glass harmonica. Picture this big tube of glass with different cylinder sizes, but it’s all in one long thing. You know who you can spin your finger around real good China and [crosstalk] it’s that but it’s horizontal and it slowly spins, you just touch your finger on these different places and he played The Dance of the Sugar Plum Fairy, dressed like Benjamin Franklin.

Ryan Isaac: No way.

Jen: So we’ll include that in the show notes.

Reese Harper: Can you?

Jen: Yeah.

Reese Harper: In the show notes, look for this.

Jen: Let’s just end the podcast now and we’ll just send that to our listeners.

Reese Harper: He invented a new kind of [crosstalk] stove that replaced fireplaces, it circulated air, the lighting rod which I said, streetlamps, bifocals, you said. Oh this is a big one, really popular though, the urinary catheter.

Ryan Isaac: Seriously, he invented a catheter?

Reese Harper: Yeah, he invented the urinary catheter, as opposed to a different catheter, I don’t know.

Ryan Isaac: What year was this? 1700s?

Reese Harper: I don’t have that data. I think he was alive in the 1700s.

Ryan Isaac: Yeah it was late 1700s, right?

Reese Harper: Yes.

Ryan Isaac: Because I think the catheter actually was used a lot in the early 1800s. I remember watching this documentary about people during the gold rush and breathing in, last week I was in Scottsdale and I did this trip out to the Gold Field gold mines.

Reese Harper: Oh yeah.

Ryan Isaac: And I went to the Musical Instrument Museum in Scottsdale.

Reese Harper: You went there?

Ryan Isaac: They weren’t featuring Benjamin Franklin’s horizontal glass thing.

Reese Harper: Armonica.

Ryan Isaac: The armonica.

Reese Harper: Not to be confused with the harmonica.

Ryan Isaac: Anyway, a multicultural experience here. We went through Gold Field to check out this gold mine and there was a lot of people that were breathing in, back in the day, they didn’t know that breathing in straight metals with no-

Reese Harper: Powderized metal [crosstalk].

Ryan Isaac: That didn’t know that it was bad for you. They were blowing up sticks of dynamite into gold bricks, and inhaling it and such. And so apparently that caused a lot of problems with people’s ability to urinate.

Reese Harper: Oh and then the catheter helped.

Ryan Isaac: The catheter was a huge invention, but it was one of the most feared, it was feared more than wild Bill Hitchcock or Hitcock, however you say it. It was a very feared creature, I’m just saying.

Reese Harper: One of the word outlaws of the old west was the catheter.

Ryan Isaac: The worst outlaw of the old west was the catheter, little known fact.

Jen: 1752.

Reese Harper: 1752.

Jen: 1752.

Ryan Isaac: So I think it actually was a pretty big invention, maybe one of the most important on your list. I think it’s better than the armonica.

Reese Harper: It could be.

Ryan Isaac: If you’re talking about useful application here-

Reese Harper: How about swim fins? He invented swim fins, the odometer.

Ryan Isaac: Are you talking about flippers?

Reese Harper: Yes.

Ryan Isaac: In the ocean and such?

Reese Harper: In pools, in oceans, in bodies of water.

Ryan Isaac: Whoever puts flippers on in a pool, that would be the guy that you guys kind of [crosstalk] poke fun at.

Reese Harper: Stay away from that guy, don’t invite that guy to a pool party.

Ryan Isaac: Unless he’s under the age of 12, you let him get by with that. But if he’s an adult.

Reese Harper: He’s 37 and he comes with a snorkel and flippers and you’re like, it’s a small pool, sir.

Ryan Isaac: This is not made for spelunking or snorkeling or deep diving.

Reese Harper: You can spelunk in a pool.

Ryan Isaac: It’s a three foot pool, sir.

Reese Harper: All right, here’s what we’re getting at. This is what spurred the whole conversation, now that we’re 10 minutes into this, the whole podcast for today.

Jen: It’s fine.

Reese Harper: There was another thing he invented, he invented something else that I did not know. And it came from a conversation. He had a friend named Joseph Priestley, not to be confused with Jason Priestley from 90201, and Joseph Priestley had written to Benjamin Franklin. He said, I have this huge career decision to make. He was a scientist and a writer and a philosopher. Anyway, Benjamin Franklin, this is his quote and it’s a little advanced. “But he said in the affair of so much importance to you, wherein you ask my advice, I cannot, for want of suvision premises, advise you what to determine. But if you please, I will tell you how”.
So he says basically, I’m not going to tell you what to decide but I’m going to tell you how. And then what he invented in this letter, is he laid out the pros and cons method of decision making. So chalk another invention up to Benjamin Franklin, that’s the birth of pros vs cons.

Ryan Isaac: That’s cool.

Reese Harper: Yeah, I had no idea. This guys turns out though, Joseph Priestley, he discovered oxygen. He was the guy who discovered the element of oxygen in this new career.

Ryan Isaac: That’s cool.

Reese Harper: That’s how it turned out.

Ryan Isaac: But Benjamin Franklin is more famous.

Reese Harper: He’s way more famous, because he invented the catheter, scene.

Ryan Isaac: And a lot of other stuff.

Reese Harper: So anyway, this got me thinking. I was reading this article, it was really fascinating, I had no idea he invented the pros and cons. But this got me thinking, we start every show with the famous line now where we help dentists make smart financial decisions. And I started thinking about the process of decision making.
And I started doing a lot of research on all of these different ways that people say are good processes for decision making. And I came to the conclusion, we’re going to talk about today, that there are three pieces to good decision making. Now we’re going to talk today about how these relate to making smart financial decisions.

Ryan Isaac: I want to guess what I think they are.

Reese Harper: Go ahead.

Ryan Isaac: A home grown meal, roasted on an open flame.

Reese Harper: Go on, you’ve hit number one.

Ryan Isaac: Do not make decisions while you’re angry, in peaceful circumstances, and upon horseback. Those would be the three.

Reese Harper: Those are really close.

Ryan Isaac: They’re not even in your top 10.

Reese Harper: One of them was made yesterday, I texted you. We were talking about the podcast topic and you said, “I’m angry, I’m not going to give you my opinion right now, talk to me later”.

Ryan Isaac: So temperament may have been one of them.

Reese Harper: So I think that’s a good part of it.

Ryan Isaac: Jokes aside, tell me the real top three.

Reese Harper: Data and information, having a process, and accountability.

Ryan Isaac: So I need numbers and statistics and data. I need my numbers.

Reese Harper: You need your numbers.

Ryan Isaac: I got to have a method.

Reese Harper: A method for sorting through the information.

Ryan Isaac: And a third?

Reese Harper: Accountability.

Ryan Isaac: Like a human?

Reese Harper: Follow through. It could be.

Ryan Isaac: Or someone else.

Reese Harper: Something, someone else.

Ryan Isaac: Someone else.

Reese Harper: We’ll go through some cool statistics about that, yeah.

Ryan Isaac: Okay, I like this. Now these are your opinions. This isn’t Benjamin Franklin’s list.

Reese Harper: No, we’re past that.

Ryan Isaac: This is your list.

Reese Harper: This is my list.

Ryan Isaac: Which I would put it slightly higher than Benjamin Franklin’s.

Reese Harper: Pros versus cons?

Ryan Isaac: Yeah because I think you’re a more evolved species.

Reese Harper: I’m slightly more evolved than Benjamin Franklin. No one has ever told me that, I agree with it [crosstalk] thank you. On the air, thank you.
Well we’ll start with data, and again we’re going to tie this into the context of how we’re helping dentists make smart financial decisions and how data plays a part of this. Here’s question I like to start with, this is my anecdotal opinion from lots of conversations, I think dentists make a lot of decisions without any data or with very limited information. Do you think this is true and why do you think that is?

Ryan Isaac: You sent me this list this morning, you didn’t send me the list, you sent me the topic, that’s all I knew. And I started doing some immediate list-making myself. And the number one thing that I was going to put on the list, because your topic that you sent me was something to the effect of, how do people make decisions. And I saw you posted it on the Facebook group this morning, shout out to

Reese Harper: Go check out the group, go vote, it’s going to be still there.

Ryan Isaac: Check it out. I saw that you posted a question on there this morning. You said, what are the things that are important in making decisions. And absent from this list was the most common one that I felt like happens.

Reese Harper: I can still add one.

Ryan Isaac: Which is, there is no method. It’s random. Completely based on the feeling or emotion-

Reese Harper: Instinct, no that was one, instinct.

Ryan Isaac: That I have, you had instinct on there?

Reese Harper: Well I tried to word it so I didn’t sound like I was disparaging, I didn’t want to call it gut feeling and put it in quotation marks, like, you idiot, don’t pick this one. It was instinct [crosstalk].

Ryan Isaac: I think that one is a very common one.

Reese Harper: Oh for sure.

Ryan Isaac: Don’t make me have a process, I just made a decision, and I’m going to throw myself deep under the bus, in a rut, in the mud. Sometimes as a manager, this is why I have Dr. Justin [Copier] who doesn’t make decisions in less than, I don’t know, I’m throwing him under the bus a little bit here [crosstalk] he has a two week turn around time on most major decisions at a minimum.

Reese Harper: Very methodical.

Ryan Isaac: You can’t get him to get you an opinion.

Reese Harper: I know, I asked him where he wanted to eat lunch the other day and it was a couple days.

Ryan Isaac: I’ll get back with you.

Reese Harper: Yeah we went two days later.

Ryan Isaac: He makes the best decisions but he has a process-

Reese Harper: And he never gets mad, I don’t think Justin is ever mad.

Ryan Isaac: He doesn’t get upset. This is a good person that you want in your manager seat. COO, CEO type, very solid. But my personality tends to want to move faster than that. So a lot of dentists tend to be quite ambitious and they want to grow and they want to build their practice. I would throw myself into that camp. And sometimes, especially in my past life, prior to maybe the last five years, I made decisions a lot more based on emotion.
I didn’t let things play out. Right now, I honestly like to watch and observe more than I like to make a decision. Because your initial reaction is usually not the right one, right out of the gate. And even a day or two days, a week, a month lets a ton of information pass by. And I found that a lot of times, what happens if people make decisions too quickly based on these instincts or we’ll call it gut feel or emotion, they’re kind of bouncing around like the ping pong ball inside of that lottery machine, in the great state of Idaho’s-

Reese Harper: Yeah I’m familiar with that, I played every year.

Ryan Isaac: Great state of Idaho. But that things is just bouncing around [crosstalk] like crazy, it’s random. And I feel like it’s not a straight trajectory. We don’t move things forward. And so I think if you don’t want to be bouncing around like a ping pong ball, you’ve got to take a little bit more of this process in mind, like you’re talking about. Data, which I liked, and then having accountability. I think the most important is from third parties, but we’ll go through these one by one.

Reese Harper: We will. You’re just reminding me, this morning I was listening to a new podcast I found, it’s this guy named Shane Perish, he has this podcast called the Knowledge Project, and his website is called Farnam Street Blog, have you guys heard of that before?

Ryan Isaac: No.

Reese Harper: It’s psychology thinking, decision making processes, that kind of stuff. He had this guest on who’s head of global finance at Credit Suisse, he’s an author. His name, I’m going to mess up his last name, it’s Michael Mauboussin. He was talking about he studies this, its kind of one of his fields of expertise, and he was saying how that’s probably the major component in most decision making, is gut instinct and feel. But he says you have to distinguish in that realm of feeling between expertise and experience, because people will take, I have experience in this area. He meant experience meaning an opinion.

Ryan Isaac: Like you’ve been in the business for a while or you’ve been [crosstalk].

Reese Harper: I have an opinion on this thing. But even experience is different from having expertise, and he defined expertise as a process that can be replicated or a system that can replicated so you can drive multiple decisions through that same process every single time. So he kind of differentiated between those two things too.

Ryan Isaac: What experience can’t give you, experience doesn’t give you expertise a lot of the time. It just is experience. And it might be based on a very small sample set of your own experience in your own ZIP code, in your own area, your unique circumstances.

Reese Harper: The instinct, the gut feeling thing leaves us open to behavioral biases, big time.

Ryan Isaac: We all feel like our own experience is definitive of the world, of people around us. This happened to me, so this is the way things are.

Reese Harper: Clearly this is how you think too.

Ryan Isaac: Our lives are all kind of based on our own experience and we shouldn’t rush to develop expertise based on our own experience because that’s not necessarily the right expertise.

Reese Harper: It’s really interesting, this guest on the podcast was saying too that instinct and gut feeling can be trained, and you can get good at using it. But it usually works better in, I’m not going to remember the way he described it, but in situations that are very linear, that play out in a linear way. He said for example, like playing chess. You can use some instinct playing chess because the outcomes and the rewards and consequences are immediate. It’s a very linear thing.
But he says, when other things get thrown into the mix, like when variables get thrown in the mix, which is basically dealing with any human issue, running a business or anything, that’s when instinct gets muddy.

Ryan Isaac: And here’s an example I’d like to throw out there, this is coming to mind based on my experience this week. I have a calendar, I have my dates, I have my agenda, I have my things I want to get done in a week. You’re a dentist, you’ve got your whole week schedule blocked out, right? You’ve got your patient schedule. And you’ve got this idea of what the week is going to be like.
But then in the case of a dear friend of ours that’s a client, a deer runs through the front window of your dental practice.

Reese Harper: Just comes crashing in, looking for something to eat [crosstalk] just a hungry deer.

Ryan Isaac: And you’re like, what do I do now? Now experience/expertise has to come into play. You’ve got to decide, what do I do now? Let’s maybe make a more rational example of you’re about to buy a house and interest rates go up a bunch, and it changes your whole financing picture. Or the lender that you’re going to lend with gives you some new information that you didn’t have. Or you have an associate that leaves or you have a hygienist that is no longer able to work for you. You get injured. You have a family emergency. The weather takes out your Tuesday.
These are the kind of things where I get thrown into a place where sometimes my personal experience or biases can kind of make me less efficient as a manger. When things go different, when things get twisted, when you have a unique variable that comes into play, what do you resort back to? And typically people resort back to whatever they did during the past, what their previous experience has been. And sometimes those things happen quite often, where it throws off your perfect plan and you get thrown into a situation where you have to call an audible and you’ve got to make a decision.
And I find that often times, that’s where it’s really important to have data and accountability, these other two factors that we talked about, because they allow you to break away from your mold and say, what’s the right decision to make here? And honestly the more I’ve grown and the bigger our business has become, the less dependent on my own experience I am. I trust my experience, I value it.

Reese Harper: It helps you filter through data and information.

Ryan Isaac: I have very strong opinions, as you know.

Reese Harper: You do.

Ryan Isaac: They’re loosely held, I’d like to say, as just a word that David Weiss used a year ago, I really liked. I have these strong opinions but they’re loosely held, and they’re highly dependent on hearing from my team on what they think we should do and what next steps should be, or my wife or my friends. But I’m not so rigid that my own-

Reese Harper: That takes so much practice though to have a conviction but then to have it loosely held where you an entertain opposing thoughts. That’s hard to do.

Ryan Isaac: It takes a lot of practice.

Reese Harper: It’s just against human nature to do that, it’s really hard to do that.

Ryan Isaac: And I think it’s just a valuable skill to work on.

Reese Harper: So I was curious, I found this study by this company called business intelligence. They just basically do surveys on this stuff. But I was curious, I think I know why dentists make decisions without data. But I found this study and I was curious why organizations and companies, it was an international study, why they tend to make decisions without data.
The number one reason 50% of people surveyed said that it just wasn’t available. They just didn’t flat out have it. 40% said that the quality of data was not good enough. 39% said gut feel and experience was good enough, didn’t need it. 40%, this is a few thousand different business, and they were like, it’s too expensive to get the information, not presented in a way that’s useful.
Anyway, any more comments? I want to move onto process because that’s kind of how to actually use the data.

Ryan Isaac: I think data in our financial planning process-

Reese Harper: Yeah I was going to bring that up.

Ryan Isaac: We’ve got, this work I’m doing right now with David, the biggest thing we’ve been trying to get to is how can we… because decision making doesn’t happen when you want it to. It happens randomly. You’ll have a decision to make. Last week I had to make a decision about what to do with some of my liquidity. I also had to make a decision about a car. I also had to make a decision about how to finance the remodel of our house.
All of those things weren’t things I could say-

Reese Harper: Here’s the schedule of when we’re going to decide.

Ryan Isaac: -here’s the schedule of when it’s going to happen.

Reese Harper: Next Thursday.

Ryan Isaac: And the data I needed to make those decisions, part of it was my current DTI, part of it was my income for the year, part of it was looking at my balances in all my different accounts.

Reese Harper: Housing construction costs, 10 different options on the remodel.

Ryan Isaac: Capital gains on my investment accounts. I was looking at whether, I had to look at whether I was going to do charitable contributions this year with my stocks, or if I was going to sell those and use those for some of the liquidity that I was going to use for the remodel. There was a bunch of decisions. And if I didn’t have the system that we’ve created ready for me to reference, then it would have taken me, and granted I’ve done it so many times, a lot of the stuff is in my head because of how many times my own personal plan and all my data is really readily available in my brain, because I look at it a lot through a good system.

Reese Harper: You could recite it, like show Pan 17th.

Ryan Isaac: I just enjoy looking at it more than most people with their stuff, because it’s something that, it’s a more interesting thing.

Reese Harper: You’re a nerd.

Ryan Isaac: I’m a nerd about money, all right?

Reese Harper: That’s fair, all right.

Ryan Isaac: But I still feel like without that system though, I would have not made decisions as good as I made last week, because it would have taken too long. I was too busy, I wouldn’t have wanted to gather everything up.

Reese Harper: Yeah that’s a good point.

Ryan Isaac: And so I don’t think-

Reese Harper: It’s a pain.

Ryan Isaac: It is a pain, and that’s the biggest reason why people don’t, in my opinion, when it comes to personal finance. Business finance, the example I used, there’s a little bit of a different nuance there because the data points are moving targets, but personal finance, there are these 200 pieces of data you got to track every year.

Reese Harper: It’s more normal in business to know that you hire a bookkeeper and you hire a CPA and there’s kind of a baseline level of, here’s some metrics about your business. There’s some available data. But that standard does not exist on the personal finance side.

Ryan Isaac: And I just felt like if we can get to the point, which is what we’re trying to get to where all the information is really accessible, it’s organized, it’s complete, it’s holistic, there’s all of it accessible in a really easy to understand format, which I think we’ve been able to do quite well and we’re improving on that, I think that’s what helps you be able to make good decisions using data, and it’s really a problem of organization. It’s not a problem of wanting.
People want to make decisions with data but it’s just a pain to get it all. And they stop about halfway through. They’ll go find one or two data points that they need to kind of get [crosstalk] it feels like enough, and then they’re like, let’s go with. And that effects your net worth. Why does this matter? Because your wealth will grow slower, and your net worth will grow slower, if you’re not optimizing the decision making throughout your life. And you can’t optimize your decisions unless you have access to the information.

Reese Harper: So I would say, if anyone would like to know how we think about what data should be used when making financial decisions for a dentist, we can go to our website,, click on the services tab where it says “elements”. Elements is our table of data that’s 12 parent categories that are kind of the categories that house these two, 300 different tasks that should happen during the year. But those are the 12 parent categories of data we feel like a dentist should track and that we do track for our clients.
So here’s the bigger question. There are people who make decisions with data that still make bad decisions. So I have a story here about a study, I’m curious about your thoughts here. This study is really fascinating, but why is that? We know that better decisions will be made with data than with gut feeling all the time, but why do people still make poor decisions even with data? And having a lot of data is the opposite of the gut feel, it’s like paralysis by too much information.

Ryan Isaac: I don’t think people, different decisions need to be made with a different, each decision has its own process. So there’s a book that I’ve referenced before by Anthony Ulwick called Jobs to be Done, and he has this decision tree. He calls it a job map. Each big project or big thing you’re trying to do has lots of little jobs. And for example, like in my case last week, I was talking about how much money should I put down on the house, or how much liquidity should I donate to charity for my investment accounts versus cash?
These are not the same decision. Those two examples, of charitable donation and of house down payment, they require a different job map, a different process to follow. And sometimes how people make a decision is not a good process. So they think they’re following a process because they’re looking at some data, but they don’t realize the steps that need to be put into place to make that decision. For example, in any decision that you’re trying to make, sometimes you have organization steps that are like, which data points do you need to be referencing.
Then you have analysis steps. What are we comparing here? If I’m going to decide which loan I should pick for my equipment loan, do you know that you should be referencing your tax return? Do you know that you should be referencing your retirement account balances? Are those data points that you are even thinking about or are you just looking at interest rate? Or are you just looking at term or pre-payment penalty?

Reese Harper: Yeah, a monthly payment.

Ryan Isaac: Those are all some of the things you should be looking at, but they’re not everything, because there’s an optimal combination of steps that you should follow to make that decision about the loan. And the ones you think you should follow are probably not the full, holistic, comprehensive scope around each decision that’s to be made.
And so the best process, in my opinion, the best process for decision making is specific to the job you’re trying to get done. So if you’ve never done it before-

Reese Harper: That’s a good point, that’s the expertise thing.

Ryan Isaac: If you’ve never made the decision and this is your first time, you’re not likely going to do all of the related steps to get that job map completely and accurately done. You’re just going to grab one or two of the data points [crosstalk].

Reese Harper: Kind of intuitive things.

Ryan Isaac: There’s organized steps, they’re analyzed steps, they’re decide steps, there’s actions to take, there’s follow through. There’s all these different types of steps within a job map you have to follow, and most people won’t know if they skipped an organized step or skipped an analyzed step or maybe they didn’t make the decision properly, or they never took action, they didn’t follow through.
So in my experience, I would be one thing. I’m sure you’ll tackle this from a different angle so I’m curious to see how you would approach it. But that’s kind of one of the reasons I think people don’t succeed even though they have information in front of them. They’re not following the appropriate way of making the decision.

Reese Harper: The method, the process, the procedure of it.

Ryan Isaac: It’s very specific to the job you’re trying to get done, it’s not generic. There isn’t one process you can follow to make all decisions. And so if you’ve never done it before, you’re not likely going to get it right, and that’s why it’s really important.

Reese Harper: Like what you’re saying, in our case, if we’re tracking 12 different areas of dentist finances and decisions, there’s going to be at least 12 different processes in each of those areas too.

Ryan Isaac: Yeah and there are hundreds of little jobs and they all follow different maps to do in personal finance. Maximizing your tax deductions follows a different job map than-

Reese Harper: And there’s probably 10 different subcategories of that too.

Ryan Isaac: Yeah than minimizing your interest rate or saving more money or spending less, or getting my estate planning done. They’re different jobs and if you have never completed that stuff before well, you won’t know the steps to take and you’re just going to do it improperly. It’s kind of like doing an exercise at the gym. If someone tells you, here’s a picture, and just go and do this squat. I know because I tried it and you’re a much more experienced exerciser than me. When I was first sent to Cross Fit and someone said, “Here’s how to do it, here’s a picture”, or you just squat, but this on your back and bend your knees and just stand up again.

Reese Harper: That’s the basics of a squat.

Ryan Isaac: I would get a back injury or I would not feel good or I would feel like maybe the whole bar would crush me to the ground and people would poke fun at me and call me names.

Reese Harper: All of the above.

Ryan Isaac: Maybe that all happened, maybe this is a very personal experience [crosstalk].

Reese Harper: Very detailed, that’s a very personal story.

Ryan Isaac: But it’s because I didn’t know how to do the job. I had the data and I had the step in front of me and I [crosstalk].

Reese Harper: The process for it, because there’s 10 steps in that process.

Ryan Isaac: And I’m better at it now than I was then because I’ve done it maybe 1000 times. Because the first few times-

Reese Harper: That’s respectable, 1000 squats, I respect that.

Ryan Isaac: I’m just saying, look at all the jobs about financial planning. Most of these are once or twice in a life time kind of jobs, or once or twice a year, so you only do them 20 times in a lifetime. And most people that are self-directing, they’re only doing these jobs once every five years [crosstalk].

Reese Harper: And it’s hit or miss.

Ryan Isaac: You’re not going to do it good. It’s too much to master really well on your own.

Reese Harper: You just don’t have enough exposure to it.

Ryan Isaac: You’ve got to have that third one of accountability a little bit, even if you’re not outsourcing this, you have to know the steps to complete.

Reese Harper: So there’s this study, it’s these two guys, Lovalo and the other guy’s name is Oliver. And anyway, they did this study where they studied a couple thousand major business decisions over five years. They went to executives and it was a five year study on what they categorize as major decisions that these executives had to make.
And they were trying to do a few things, a few that we’ve already touched on. How many of these decisions were made instinct versus having data, and how did that turn out. So what they found was most decisions were, including data and information, most executives in this study were saying, of course we need data, we can’t make gut instinct decisions at this level.
So most of them had data, but the results of the survey was that only 28% of the executives surveyed thought they actually made good decisions. The majority thought when they actually saw the results and then could compare them back to the process and the data and how they made the decision, less than a third actually thought they made a good decision. Because in hindsight, they could see clearly, there was a better course of action we could have taken.
So what the research found though was kind of what we’re talking about. Contrary to what you think, just having a lot of data is not really the main key ingredient to making a good decision. It’s this whole process thing you’re talking about. And they found in their study, they said that process mattered more than just data analysis by a factor of six to one. So that was the main driver in the outcomes here. So what they found is there was a few factors for a better process.
One of them was that contrarian viewpoints were discussed openly. And these are a few keys I’ll talk about that should exist in every process. There should be contrarian viewpoints. So it should be, what else could be done? So if you’re making a decision on your investment account for example, or you’ve got 250 grand setting in practice chequing, and you’re saying, where should I put this? When you make a decision, part of that decision making process should be asking, what’s contrary to this? If the decision isn’t going to pay off my student loan, what else could I do with that? That’s one key of it.
You can jump in any time if you want too. Number two was to purposely search for conflicting evidence, not just assume that the conclusion you came to was it. Try to find conflicting evidence. And number three was identify weaknesses in the working theories that you have out of this process. So try to fight the conclusion a little bit, play devil’s advocate a little bit, try to find some contrary opinions and approaches.

Ryan Isaac: When you talk about process, you’re saying these executives in this case study weren’t getting the results they want. I think that’s kind of where we find ourselves with personal finances. A large portion of the population says, “I have no idea, I’m just going to have someone else deal with it for me”. Then there’s a chunk that’s saying, I kind of want to be involved a little bit because I just want to be kind of involved. And then a big chunk is like, I want to do everything on my own, I kind of want it to be more private and this is all my financial picture that I’m keeping to myself.

Reese Harper: Yeah, it’s my thing.

Ryan Isaac: And I feel like the truth is, all three of those types of people, we all have the same number of jobs that have to be done on all of our financial plans.

Reese Harper: Someone’s got to do them.

Ryan Isaac: Someone has to do tax and legal, and we’ve got to minimize interest expense, we’ve got to pay down our debt, we’ve got to buy real estate [crosstalk] properly, we’ve got to track our net worth, we have to make sure our accounting is dialed in, we’ve got to make sure that we have the right mix of retirement accounts and after tax investments and build our businesses properly. And sometimes shift where we’re putting money from personal savings to business growth to real estate.
The list goes on and it’s not an easy list. And so I think, just don’t take the message that the market sometimes gives you, the sales message, “If you just buy this thing then everything is going to be okay”.

Reese Harper: And they know what they’re doing.

Ryan Isaac: If you just do this, it’s going to be fine. Just buy this cheap index fund and everything is going to be fine. Someone, you or someone, has to be doing the jobs. You can’t get in shape without doing the exercise or eating properly. And you’re not going to have healthy net worth growth unless you’re completing all of the jobs.
If you’re not doing them, then they won’t happen and you’re not going to grow your net worth properly. And I just feel like it’s important.

Reese Harper: I was just going to give a little shout out, we did a whole podcast on these jobs and it was episode 148, What Does Financial Planning Even Mean, where we kind of covered this in depth. I hear this sometimes too, I’m curious what you think. Sometimes we’ll get a good outcome out of a process or a decision we made, but a good outcome doesn’t always necessarily mean you made a good choice.
For example, we’re 10 years into a pretty decent market run. There’s been some down years that most people don’t remember even though that happened, but it’s been a good collective nine or 10 years. And if people have been involved, especially if they’re new, during any point of this time, some people have made investment decisions that paid off despite not being great decisions, but stuff just grew anyway. Kind of lucky. And so I kind of just wanted to hit that point a little bit.
The outcome doesn’t necessarily reflect on the quality of the process. A good result doesn’t mean you made a good decision. And I think you got to be careful with that too because we see that sometimes. This worked out, I did this thing and it turned out fine. That wasn’t a good decision though.

Ryan Isaac: I would say yeah, and in the same context, a bad decision or a bad outcome doesn’t necessarily [crosstalk] mean it was a bad process that you went through to get that result. I know a lot of people who go through a really great process, make a good decision, make the best decision [crosstalk] and get all of the information that was available-

Reese Harper: And it didn’t turn out.

Ryan Isaac: -and the outcome just isn’t that great. And I would rather trust a process that led me to the right decision using the right data-

Reese Harper: With a less favorable outcome.

Ryan Isaac: -with a less favorable outcome, because that translates into more of a repeatable, long term [crosstalk] sustainable success rate.

Reese Harper: I kind of just started thinking of, it’s 5:30 in the morning, it’s cold, it’s windy, it’s snowy, and you’re like, I’m going to go to the gym, or I’m going to go ski or something. If someone is waiting for you at the ski lift or at the gym, you know they’re waiting for you, the chances of you actually showing up, despite how you feel, you’re tired, you’re cold, you don’t feel good, you don’t feel like it, they’re a lot higher than if nobody knows you’re showing up.
No one’s waiting for you at the gym or no one’s waiting for you at the lift or at the trail or anything. This idea of accountability, there’s a lot of really great data. I found this study from the American Society of Training and Development. They did a study on accountability and they found that you have 65% chance of completing a goal if you commit to someone. And if you have a specific accountability appointment, like accountability is happening on timed intervals, with a person you’ve committed to, you’ll increase your chance of success by up to 95%.

Ryan Isaac: I completely agree with that. It’s the reason that we structured our planning process and our data gathering and everything the way we have. We’ve created these monthly time intervals where both financial advisors and clients have to be accountable to some of the most important measures that will drive their financial wealth, their overall net worth growth and financial security.
And we’ve consciously put these in place because we know that without people having to have that moment of, we’ll call it reckoning, with another human, I know if you take two people, one person is a total bogle head, genius financial manager, Master’s in Finance dentist. They’ve had their MBA and they went to dental school and they love money. And then you have someone who is a complete artist. Money is depressing, they love the work that they’re doing [crosstalk].

Reese Harper: No interest in it, don’t want to spend any time on it.

Ryan Isaac: I know that if you take data and process and accountability and you give it to that person who has no interest, and the person who has a ton of knowledge didn’t follow the same process, I like the results, I like the odds-

Reese Harper: The chances of that.

Ryan Isaac: -the chances of the person with no financial background. I really do. I know that just because they’re accountable, because they’re following a process and because they are tracking all their information properly, the results are going to be better. Like you said at the beginning, it’s a real skill to have strong opinions loosely held, and I’m working on that a lot because I still have not perfected it and I just want to keep working on that.
But it’s really been the difference maker in seeing a business grow and then seeing maybe me hold it back sometimes. Because if you are the person that always has the answers and you’re holding on that tight and you’re that convinced that your answer are always the right way, it’ll never become what it could be if you just let go a little bit.

Reese Harper: Some of these studies, there’s a whole section on executive leadership, and how decisions are made by a team depending on how strongly the perceived leader or the leader expresses his or her opinion about it. And the tree of decision making branches pretty differently depending on how strongly that opinion gets voiced, it’s really fascinating.

Ryan Isaac: So let’s summarize this by just saying, it’s okay to have strong opinions and not hold onto them too tightly because I think this data is critical, this process is critical, and then having accountability to another human [crosstalk].

Reese Harper: And you keep saying human.

Ryan Isaac: Other human beings are by far the highest success piece of accountability you an inject into your life. Another human being is so much better than just a piece of technology, that’s my view. And I feel like you have to have, it doesn’t matter what it is. Piano lessons, math tutoring, coaching, personal training and fitness, psychology, pick a skill, pick a service. Pick anything. If you can find a way, as a business owner, to involve humans in this accountability, your success rates, your outcomes are going to be so much better.
It’s just very expensive, that’s why people don’t do it.

Reese Harper: And that’s why technology gets invented because it seems like, we’ll just do this cheap, have accountability to the app that’s going to remind you, and then you just shut off your reminders and then delete the app. You know what MyFitnessPal, I’m on vacation right now MyFitnessPal, and you’re getting deleted from my phone until I come back.

Ryan Isaac: Yeah, and the truth is-

Reese Harper: I don’t care.

Ryan Isaac: -but that vacation is probably the most critical time where you’re going to [crosstalk] go off the rails.

Reese Harper: Yeah some good learning.

Ryan Isaac: Your workouts are gone, you’re not going to eat well, it’s all gone. And if you had a person who was just like, “Hey, let’s check in just once while you’re gone”, it’ll make a huge difference in, if you come back and you’ve gained 10 pounds or not [crosstalk].

Reese Harper: It might be a very happy 10 pounds.

Ryan Isaac: I’m not saying that everyone wants that. It’s a bit annoying sometimes.

Reese Harper: That’s true.

Ryan Isaac: No one really likes, no teenager wants mom and dad there all the time, holding them accountable to every decision. And as adults, we don’t like it either. We want autonomy-

Reese Harper: And some personalities are different than others too.

Ryan Isaac: But I’m just arguing about results. I’m saying, the mere fact that our financial advisors measure savings rates on a percentage basis, and once a year they report back to a client the percentage that they saved, where it went, and exactly how that changed year over year, I’m confident that that is one of the primary reasons our clients are so successful with the very high percentage of savings that they commit to. Because even if it’s just a little bit of subconscious in the back of their mind going, “Someone else is looking at this”.

Reese Harper: Spending is the same thing.

Ryan Isaac: Yeah, someone’s looking at this. And the best coaches, the best advisors, the best psychologists, they don’t beat you up over stuff. They’ll never beat you up over it, but they’re there as a supportive anchor to help hold you accountable to make those little adjustments. And they don’t judge you, they’re not going to be jerks about it.

Reese Harper: Just giving you some frameworks and process and feedback.

Ryan Isaac: If you don’t report it to them-

Reese Harper: Like Ben Franklin and his buddy, I’m not going to tell you what to do but look, here’s some feedback. Here’s how to think about it.

Ryan Isaac: I love human interaction when it comes to accountability [crosstalk] technology is a part of it, but I just think, you take away the human, we are social creatures. We love our friends and family, we love social media. The reason we love social media is because it’s so human, it’s our lives there. And I just think we do better when we have other people helping us in our lives. I don’t think we do very good in isolation. I don’t think we do great solitarily.

Reese Harper: I don’t think we do either, I totally agree with that in every area of human life too.

Ryan Isaac: Almost everything.

Reese Harper: Pick something.

Ryan Isaac: Alone is not a very productive place to be.

Reese Harper: I like that, that’s a good quote to end on actually, I think Benjamin Franklin said that. Alone is not a very productive place to be.

Ryan Isaac: I don’t know if he did say that.

Reese Harper: Shout out to Ben Franklin for the catheter and the pro and con method. If you want to double check your process for decision making, or you’d like to know how to have better data or organization, check out our website at You can talk to someone about that, one of our dental specific advisors, just click on the button on the website that says “book a free consultation” and you can schedule an appointment with one of our advisors any time you want.
Or you can call or text us at 833-DDS-PLAN. And please join our Facebook group. It’s growing, we got good questions, we got good banter. Once a weekend, people are posting pictures of what they’re doing.

Ryan Isaac: I’m going to go on there later today and I’m going to post something very good on there, and it’s going to be about Benjamin Franklin, so you better tune in.

Reese Harper: Tune in and check it out.

Ryan Isaac: My favorite Ben Franklin book on financial planning and wealth management, is going to be in the Facebook group. It is my favorite book of financial ideas and it’s from Ben Franklin and it was written in 1758. Its going to be on the Facebook.

Reese Harper: This didn’t even get brought up in the beginning, but I appreciate it. Thank you very much, thanks for listening, talk to you later.

Ryan Isaac: Carry on.

Behavioral Finance

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