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5 Money Mistakes That Plague Dentists – Episode #410


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Owning a practice can result in the accumulation of great wealth for a dentist. Unfortunately, these five financial blunders can derail that money train. On this Dentist Money™ Show, Ryan and Richard Low, of Shared Practices, take a hard look at mistakes that interrupt wealth accumulation—and why today’s dentist needs an incredible level of practice and personal organization.

 

 

 


Podcast Transcript

Ryan Isaac:
Hey everybody. Welcome back to another episode of the Dentist Money Show, brought to you by Dentist Advisors, a no commission fee only fiduciary, comprehensive financial advisor just for dentists all over the country. Check us out at dentistadvisors.com. Today on the show we do part two with Richard Low. He and I are doing a simulcast of our podcast at Dentist Money Show and the Shared Practices Podcast. And today the question was, what are some top reasons why dentists lose their wealth or stop making progress in wealth building? I think we named five with a few subcategories.

Ryan Isaac:
And again, this was really cool because I have a chance to share our perspective as advisors. And then Richard being, a dentist, a practice owner and being in that world gets to share his perspective. I learned a lot. I think you will too. Thanks, Richard, for your time. Again, I loved this format. It was super fun and really cool. We’ll do it again. If you have any questions for us, go to dentistadvisors.com. You can book a free consultation. We love answering your money questions and pointing you in the right direction. Thanks for being here. Enjoy the show.

Announcer:
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 our registered investment advisor.

Dr. Richard Low:
Welcome back to the Shared Practices and Dentist Money Show Collaboration. Back with my co-host here, sir. Ryan Isaac. Ryan.

Ryan Isaac:
Yes.

Dr. Richard Low:
How’s it going?

Ryan Isaac:
It’s good. I think I said this last time. Not many people call me sir these days, and I like that. Thank you.

Dr. Richard Low:
No, I can [0:01:57.0] ____ on the podcast. Thank you.

Ryan Isaac:
I can’t unhear it either after the years with Reese. I can’t unhear it either, so it’s good to be here. Thanks, man. I’m excited.

Dr. Richard Low:
Shout out to Reese.

Ryan Isaac:
Yes, always dude.

Dr. Richard Low:
Love me some Reese.

Ryan Isaac:
Yeah.

Dr. Richard Low:
Well, the last episode, at least on our end on Shared Practices. I got a lot of feedback. I got some texts from people who really enjoyed our last episode on the ways that dentists actually gain wealth.

Ryan Isaac:
Yeah.

Dr. Richard Low:
On your perspective of just kind of having seen the backend, you get to see when the money comes in and when the money grows.

Ryan Isaac:
Yeah, what do people do.

Dr. Richard Low:
Over the years of a client’s life. So you’ve got a perspective that I think a lot of people don’t ’cause everyone else hears the social media version of their wealth and all that. And you get the real picture.

Ryan Isaac:
Yeah. It’s actually is probably one of my favorite things about my career. I mean, I’ve been a financial advisor for 15 years and that doesn’t make me some financial whizz. I wish it did. Wish I was independently wealthy and knew how to pick stocks. No one saw coming and choose the crypto that no one knew about. But really what it’s just done is give me a front row seat to watching human behavior and money interact and collide. Recently I’ve been having some discussions like… Just with friends, with one friend in particular about, how did she put it? She put it, she called it money wounds. She’s like a coach and a therapist and so, she kind of frames everything as trauma wounding, whatever. And she was calling her own money experience as a child, her money wounds.

Ryan Isaac:
And I was like, oh man. Yeah. I see that play out in so many different ways and it’s so fascinating. It’s just given me some ideas to think about. I don’t know, I kind of want to go find a psychologist to have on the show a lot and just talk about money wounds. ‘Cause it’s crazy man. Someone will grow up like really poor and they will… Two people, like two siblings will grow up in the same household to say, really poor one of them will become an overachieving entrepreneur. Make so much money, gobs and gobs of money and just can’t get enough, can’t stop working, can’t get enough money.

Dr. Richard Low:
Right.

Ryan Isaac:
Maybe even struggle to spend it, hoards the money. The other person will, could end up being a crazy spender. Can’t even get over a small hump, a ceiling of income in their career, can’t make progress, can’t unstick themselves from the mental place that they’re in from their childhood, from money and finances and the stresses of it. It’s just the baggage we carry psychologically from money from our childhood and our past and all of our experiences is so fascinating. I’m not qualified to diagnose that at all.

Dr. Richard Low:
Yeah.

Ryan Isaac:
But it is fascinating. So anyway…

Dr. Richard Low:
Well…

Ryan Isaac:
That’s what I’ve been thinking about lately.

Dr. Richard Low:
And I almost think that there’s some people who’ve had too many money wounds and trauma that then informs their motives, their work ethic, their risk tolerance, their investment style. But then also some people maybe haven’t experienced any money wounds.

Ryan Isaac:
Yeah.

Dr. Richard Low:
And then they therefore are a little bit oblivious to…

Ryan Isaac:
Sure.

Dr. Richard Low:
Like the exposure they’re setting themselves up for.

Ryan Isaac:
Yeah.

Dr. Richard Low:
There’s both sides of it. You need the right number of pokes and prods to have a…

Ryan Isaac:
Dude.

Dr. Richard Low:
Risk profile that is both reasonable but also aggressive enough for your needs.

Ryan Isaac:
Totally. Yeah. You totally do. And the thing that strikes me, and I’ve learned this through my own experiences in personal coaching therapy is, most of the time we’re not even aware of the patterns we’re in. Like, we don’t even know…

Dr. Richard Low:
Right.

Ryan Isaac:
Dude, we don’t even know. It takes a third party who’s not emotionally involved in our lives to just be objectively an observer and call us out on things and help us notice things that we don’t even notice. So, we might be in a money pattern for our entire lives that’s based on something from our childhood we don’t even realize.

Ryan Isaac:
And it’s affecting the way that we’re showing up at work or with our team, or the constant overspending or the constant underspending or the reason why we’re bouncing from investment idea to investment idea. And we can just never seem to stick with anything long enough or save any money. Like a lot of these times we don’t even know what’s playing out in our own brains and it takes a third party to help us realize that.

Dr. Richard Low:
Oh, for sure.

Ryan Isaac:
Which is tough.

Dr. Richard Low:
And I’ve even noticed some dumb patterns of mine of researching purchases is a dopamine seeking behavior of mine.

Ryan Isaac:
You’re an over-researcher?

Dr. Richard Low:
And if I… I’m an over-researcher. I get a lot of fun out of like…

Ryan Isaac:
Me too.

Dr. Richard Low:
And I [0:06:32.0] ____ right before our call I was researching cold plunges versus massage chairs and neither of which is gonna really change my life. But I’ve noticed that if I quit playing video games which is my default bad habit I’ll substitute it with researching purchases that are unnecessary.

Ryan Isaac:
Yeah.

Dr. Richard Low:
So it’s kind of like, maybe I should just keep playing video games ’cause I’d spend less money…

Ryan Isaac:
Maybe.

Dr. Richard Low:
Versus taking that out and all of a sudden I start seeking dopamine in more expensive venues.

Ryan Isaac:
It’s crazy. And we won’t realize it until we either do something that affects us so much not in a positive way. We won’t really learn from really overly positive experiences. So if we have really risky financial behavior for example and we get lucky and we place some bet on some investment and we get lucky and it turns out really good for us we’re not gonna learn anything. We’re not gonna question anything. We’re just gonna think we’re geniuses.

Dr. Richard Low:
Right.

Ryan Isaac:
It’s either until someone calls us out or until we experience something painful enough that we’ll notice but we just don’t, we notice man. That’s just, anyway that’s really fascinating to me. In these conversations I’m having lately. And dude, I’m an old man. I’m midlife mid-career and so I’m experiencing things like I have a different mentality about money and savings and career and retirement than I did 10 years ago and 20 years ago certainly and that’s just a fascinating human experience I guess to navigate it with money.

Dr. Richard Low:
There’s our next two episodes which is how did you think about money 10 years ago versus now? The Ryan Isaac edition and then we’ll do the Richard Low edition.

Ryan Isaac:
Let’s do that.

Dr. Richard Low:
And it’d be a lot of fun.

Ryan Isaac:
Okay, I like that.

Dr. Richard Low:
This topic of how do they actually gain wealth. The backside of that is I wanted to see your perspective on how dentists on average either lose wealth or stop gaining wealth. So what are the major setbacks both from an investment perspective, from a lifestyle personal perspective and also from a practice perspective? What are the things that stop dentists in their tracks from making progress on gaining wealth overall?

Dr. Richard Low:
So I’ll leave it up to you. Which do you think is more interesting to talk about the investment front, bad investments, overly risky. The personal front of here are the devastating personal events that tend to set dentists back on the wealth gaining or from the dental practice side where does the running of a dental business get dentists in trouble? And slow or halt or go backwards their financial progress.

Ryan Isaac:
How about I list a few and then let’s dive into them and then I wanna hear what you have to say.

Dr. Richard Low:
Okay.

Ryan Isaac:
So here are the ones that are, I think are the top after watching dentists all these years make financial decisions here. These are what I think are the some of the top mistakes somewhere on our website now that I’m thinking about it. I think Reese wrote this. There’s a PDF download. It’s really cool design that I think it’s called the top. I’ll find this later. It’s the top seven mistakes dentists make that Ruin your Retirement or something that.

Dr. Richard Low:
Right.

Ryan Isaac:
It’s on dentistadvisors.com somewhere. Reese wrote it. It’s really good. It still stands to this day. Here’s how I would list these. I would say number one, number one most common problem that dentists face in their financial lives that either gets rid of wealth or stops their progress is just simply being unorganized in their financial life.

Ryan Isaac:
And what I mean by that, we built a whole business around organizing people just organizing data like you knowing little dumb things that maybe people don’t think are very important but just having a big big picture of what’s happening in your whole life at any given point. What insurance policies do you have? What are the rates on your loans right now? How much did your net worth grow in the last three months or the last quarter? How much of that is liquid? How much of that is in real estate? What did you pay in taxes last year? What did you earn last year? What did you save last year? What are you spending every month? There’s all of these metric data points that they’re not very sexy and they’re kind of boring and it’s kind of not a very fun top mistake to talk about.

Dr. Richard Low:
Yeah.

Ryan Isaac:
But it’s true. I think it’s the single biggest problem dentists face financially because most dentists especially owners they have so much going on that if there’s not a high level of organization in their financial lives what they’ll do they have to you have to make so many decisions constantly on so many different fronts and different ones. I mean from the real estate that you practice in to the purchase of new hand pieces to hiring or firing someone or a new marketing plan, like the scope of your decisions is so broad. And the more successful you are as a dentist the less time that you have. And it’s highly likely that most dentists just don’t have a lot of interest in any anyway. So when there’s low levels of organization that also means there’s probably low levels of accountability to any data.

Ryan Isaac:
And then what we end up doing is just a very human thing is we just make financial decisions based on highly emotional situations. Whatever stresses us the most or makes us the most anxious or whatever we’re the most greedy and excited about in the moment. We end up making those financial decisions and then we call it random acts of finance. So you do that over a 30 year career and you’ll just find that you didn’t really get very far. You made a lot of money, you built a big business and then you’re just well where’s all… Where’s my wealth? So that’d be one. I think that’s a huge one. On the practice front.

Dr. Richard Low:
Okay. Can I respond to that one?

Ryan Isaac:
Do you wanna go one at a time? Let’s go one at a time. Yeah.

Ryan Isaac:
Let’s go one at a time because you talk for a minute so I’m like okay now. [0:12:08.9] ____.

Ryan Isaac:
Yeah, go. Yeah. So what’s say ye to that?

Dr. Richard Low:
So for me the how this feels is the which is dumb when I talk about finance, my first thought shouldn’t be how this feels but I really do feel like so much of this comes into it of how it feels to be managing your money. That lack of organization comes with a little bit of an overwhelm of like, ugh this is a thing I don’t wanna look at. This is that mess in the corner.

Ryan Isaac:
The garage.

Dr. Richard Low:
Of the garage. The stack of papers in my office sitting right over here off camera. That I need to get through and tackle and organize and file and I just don’t want to. And so because it’s a lot of work because it’s something that I don’t feel confident and well organized around it kind of makes it default more stressful to make any financial decisions because it’s like I don’t really know what’s going on. And also there’s this… There’s the movie Peter Rabbit. This is shows that I’m a…

Ryan Isaac:
Wow Yes. Yeah, no.

Dr. Richard Low:
Parent of three girls here. There’s a pig in Peter, all the animals talk. There’s a pig in Peter Rabbit who’s like, the diet starts now, and then he like eats something. And then he says now, and then he eats something else, and then he says now.

Ryan Isaac:
Yeah.

Dr. Richard Low:
So it’s like, I know I’m going to probably get organized and disciplined about my finances, but I’m not yet. So like…

Ryan Isaac:
Tomorrow.

Dr. Richard Low:
We’re just gonna spend a little bit more now, and it’ll work out later once I start saving more and aggressive. You procrastinate.

Ryan Isaac:
Yes.

Dr. Richard Low:
The right financial moves and the flip side of having, worked with you guys and gotten organized on all this, is that, When I do spend money now, I don’t feel this underlying angst of like, am I doing enough? Is this bad? Do I need to be like I don’t need to text Will my advisor and be like, “Hey, Will can I buy this?” I’ve done that a few things with like car type stuff.

Ryan Isaac:
Yeah.

Dr. Richard Low:
A year and a half ago, but now it’s okay, no, I know my savings rate’s good. I know we’re organized. I know where we’re going and therefore, and everything that I should be saving is on auto draft and now I don’t feel guilty or stressed about. Is it okay to buy stuff and spend stuff? Because there is guidelines and a framework and guardrails to how much damage I can do to my personal financial situation through spending.

Ryan Isaac:
Yeah, I think that you put that so well when we put off organizing ourselves, and it could be your health, it could literally be the garage or the desk or the inbox. When we put that off, we just, we keep gathering anxiety and on one sense, it does feel good to just ignore it and just keep pushing and doing what you’re used to doing. Keep spending money, keep buying stuff, like whatever. But on the other hand, I’ve found that when people get organized, even if the data after being organized tells us, “Hey, you’re not in a good spot. You’re spending too much. Your net worth’s not good. You’re not saving,” that actually has less anxiety. Than the other way when they thought there’s just that, I don’t know what’s going on. I’ll just keep spinning.

Dr. Richard Low:
Yeah.

Ryan Isaac:
There’s less anxiety just knowing, even if it’s not great news, because now at least you have the power to know what something is and you can do something about it. And I’ve watched this play out so many times that I think that is a more freeing sensation. Then the other one where you just keep looking at the stack of the papers and you’re like, I’ll just keep behaving my normal way. What you said I really love too, is when people know that they’re saving enough money, they’re gonna hit their goals. You don’t have to feel guilt about spending, and if you’re a high earner, like you should enjoy spending your money. You’re not supposed to save all of it. You’re supposed to enjoy.

Dr. Richard Low:
You’re talking about emotional wounds and like childhood baggage.

Ryan Isaac:
Yeah.

Dr. Richard Low:
There’s a lot to unpack there too, for a lot of people of like, What is normal and what is okay, and what is allowed, and what’s too much. And what’s excessive and all that.

Ryan Isaac:
Well, if you’re a dentist and you’re a first generation dentist and you didn’t see what that career can provide and you came from very meager, humble beginnings and then all of a sudden you’ve got big houses and vacations and cars and nice stuff, that could feel really weird. There’s a surprising amount of people who struggle to spend money actually like a surprising…

Dr. Richard Low:
Yeah.

Ryan Isaac:
Amount of people who struggle to spend money. I love your input around the, was it weird in the beginning though, like from your perspective, just trying to organize all this stuff and look at some of these numbers. You’re kind of a numbers person anyway. This is stuff you do for fun…

Dr. Richard Low:
I like this.

Ryan Isaac:
On a Friday night.

Dr. Richard Low:
Right. I was reading, like getting all my hands on as many investment books as I could in dental school and undergrad before I’d run into you. But I actually think. For a long time, investing felt like this big thing that I needed to figure out, and it was very overwhelming and scary because of stock market and, buys and puts and all these other things. And then once I came across like Jack Bogle and index fund investing and dollar cost averaging. My brain was able to like, okay relax in regards to that and say, okay, there are are ways to do this that aren’t gambling, that aren’t labor intensive. I don’t have to maintain stock picking for an entire career.

Ryan Isaac:
Yeah.

Dr. Richard Low:
Now, it kind of shifted ’cause it’s like now it’s more behavioral. It’s like, Okay, the actual investing is not the problem. The actual problem is what is the appropriate amount for me for my short term, here’s what my immediate financial needs are in the next couple years. Here’s what my long-term horizon is. Here’s what my eventual financial needs are, and then the behavioral side of getting myself to do the right things and ride the course through the bumps of the markets.

Dr. Richard Low:
It shifted from I need to figure out this investing problem to win on the investing front and more of a, Okay, I need a framework for deciding how and when to invest and how much and staying the course. And so I was really excited and that’s why when I stumbled across you guys and your methodology and your framework and the elements it just is like a sigh of relief.

Ryan Isaac:
Yeah.

Dr. Richard Low:
And so it wasn’t weird for me to get organized about all this stuff. I’m like okay understand the purpose and this makes sense and I love it.

Ryan Isaac:
I was gonna say number two, let’s talk about investing mistakes as one of the big ones that killed wealth as like a big problem. You kept saying this behavior and you said like, stay the course or something.

Dr. Richard Low:
Yes.

Ryan Isaac:
Lame phrases that no one wants to hear. Probably the biggest problem around investment mistakes, certainly I’ve seen a fair, unfortunate amount of fraud, embezzlement, Ponzi schemes that people have been involved in. Certainly people do jump into things that they don’t fully understand and they don’t understand the risks, and they lose lots of money doing that. I have seen that. But I think the bigger problem around investing that really kills wealth or kills progress is just not sticking to something long enough. And what I think is the issue, and I’m glad you said it the way you said it, was, I think the issue is just education. People get really overwhelmed with what they think something is supposed to be, whether it’s building practices, investing in real estate, or investing in stocks. There’s unfortunately in the way that we do education in society, there’s just a very low amount of financial education for people. And so it becomes very overwhelming, very scary. And almost like mythological, like the stock market, [laughter] like, what is this?

Ryan Isaac:
And then you hear what people talk about it on social media and in friend groups, and you’re like, that just seems like an insane casino and I have no idea what’s going on. And nothing will ever happen. So one of the biggest problems I see is people don’t take the time either themselves, which is hard, or hiring someone to help them get educated and then stick to something.

Ryan Isaac:
And you said it too, it’s not that investing in a low cost diversified portfolio for decades is technically hard. It’s not technically hard. There’s apps on your iPhone that’ll do it pretty fine for you. It’s that as humans sticking to something is just our curse. It’s like, is getting healthier or losing a little bit of weight? Is it technically that hard? Like technically no. Like, it’s just like food intake and some movement. [laughter]

Ryan Isaac:
And put your calories and move around and track them. [0:20:58.3] ____.

Dr. Richard Low:
It’s just calories in it, calories out. It’s movement. It’s some basic principles about like fitness or muscle or whatever. Technically it’s not that hard, but can you maintain a healthy lifestyle of food and movement and exercise for six months, 12, five years, 10 years, 20 years? That’s the hard part because humans, we just don’t stick to stuff unless we have something making us. So, on the investment, I’m glad you brought it up that way and I’d be curious to hear, you kind of said some of it, but maybe your path to education like feeling more educated and more comfortable or what gets you… What helps you stick to something like not get bored with it.

Ryan Isaac:
So I think dentists get bored, they master things really well and then they just like get bored and then go take risks that are unnecessary and not needed and kind of blow up progress that they’ve made for a decade.

Dr. Richard Low:
And I think it’s really funny because I think the safe path to invest and grow wealth is so unsexy.

Ryan Isaac:
Yeah. [laughter]

Dr. Richard Low:
And some people need, they need, like, they need to win. They need to beat the market. They need to be better than average. They need to come out ahead. There needs to be a secret. This needs to be faster. And the most extreme example of this was, we were working with a marketing company that… A little interesting marketing company that kind of a mistake in my Shared Practices history of someone that we kind of worked with. And I was out with them at a California city, I won’t say which city ’cause it’ll start to narrow down who this could be, meeting the founders and owners of this marketing company. I met one of the founders seemed pretty normal, pretty reasonable. The second one seemed like a pretty interesting character. And we’re at dinner at this nice restaurant kind of in a fancy area of a California metro. And he pulls out a bag of cash, a backpack of $50,000… Oh no. A backpack of like cash and starts counting out $50,000 and gives it to one of the employees. Like one of his lackeys, one of his guys here at the marketing company, I think one of the sales guys. And he goes, “Okay, I need you to take the PJ, the private jet to Vegas and put this bet on this situation.”

Ryan Isaac:
Oh, this is a real story. What?

Dr. Richard Low:
This is a real story of, I’ve never seen a backpack with this much cash in my life. And we’re at a restaurant and he is just counting out stacks. And he then goes on to talk about his sports betting as investing, like for him, that was his investment vehicle was sports betting. And he had a whole framework and he had a whole way. And I just kind of looked at him and I was like, so regular stock market investing just seems like it would be way too boring and slow for me.

Ryan Isaac:
Yeah. Yeah.

Dr. Richard Low:
And he was just like, absolutely.

Ryan Isaac:
Yeah, totally.

Dr. Richard Low:
Like he had no shame about like, he’s like, no. Like why would I do that when I can make way more money, way faster betting on the right team in sports betting. And, it just made me realize that, number one, he had a marketing business that just was putting off so much cash that he could do whatever the heck he wanted and it was gonna work out. But number two, this guy’s, stomach for risk but also appetite for excitement. And appetite for irrational returns was just so high. This was addicting. I mean, it was gambling. It’s gambling. [laughter] But that was his investment vehicle.

Dr. Richard Low:
And I think some people can become… I think on one front side of it, dentists, because we make so much money and that can erase some of our mistakes that as you invest, ugh, it’s probably gonna work out okay. Then you can convince yourself it’s okay to take these highly risky bets and it’s more fun and it’s more exciting. And you hear about the people who’ve done it, who bought into this hotel or did this thing and how well it turned out for them. So I think that bright shiny object syndrome in dentistry there’s more base level like fire for you to play with because you’ve got a higher income to work with.

Dr. Richard Low:
And so the excitement chasing side of things might be one reason that people kind of go into bad investments is they just, it’s too boring to do the stock market thing. And then on the other side, and I know you probably have some comments on this, on the other side, I won’t move into this yet, I’ll let you respond, is the emotional side of the family investments, the people who come and appeal to you because you’re a dentist and you have money and they’ve got some exciting new investment.

Ryan Isaac:
Yeah.

Dr. Richard Low:
And then you kind of feel bad or involved or you wanna be in on the ground floor and there becomes this emotional relationship piece that pulls people into bad investments. So I think those two sides of why dentists invest in things they shouldn’t are very much behavioral in that either they have an appetite for risk and excitement, or they get pulled into emotional relationship based type investments and they feel like guilty or they should or they just are chasing that excitement on these, well this isn’t a stock market deal, this is like a private, you’re on the ground floor type deal.

Ryan Isaac:
Yeah.

Dr. Richard Low:
So those are my thoughts on where dentists go wrong.

Ryan Isaac:
Okay. So two things I’m thinking about when you’re saying that. Number one, I’m kind of just trying to reflect on my responsibility and what is our responsibility as an industry of financial advisors. Well, recognizing that still the majority of industry, of financial advisors is mostly just salespeople on commission.

Dr. Richard Low:
Right. And that’s my third one is, and what…

Ryan Isaac:
Okay.

Dr. Richard Low:
Why, one of the questions I asked you is, do you guys sell whole life insurance or insurance products as part of your investing mix? Is the dentists end up buying investment products that are not in their best interest, at levels that are not appropriate for them. That would be a third, much more mundane, much less risky, but more just like you’ve sunk a bunch of money in something that’s…

Ryan Isaac:
Slow burn. Yeah.

Dr. Richard Low:
Slow and not really growing for, you’re not really working for you the way that it should.

Ryan Isaac:
We’ll do an insurance episode sometime.

Dr. Richard Low:
Yes. Oh. Absolutely.

Ryan Isaac:
So I’m just thinking about, I guess those of us in the industry who aren’t on commission selling products, I feel like we have a responsibility that’s still kind of new in the industry. And this isn’t just on the advisor because it’s all… It’s the responsibility of the relationship, the client and the advisor. But if I have a client who prefers to go to Vegas instead of something that might be a little more time tested and in dentistry, if you’re doing a halfway decent job, you don’t even need big returns to have money later on in your life. You just don’t, you make enough money. And you said it too, there is kind of a downside to making a lot of money as a dentist because it does desensitize you to money mistakes because you’re like “eh, I’ll just make more.”

Dr. Richard Low:
Yeah.

Ryan Isaac:
But it makes me just question and think about and reflect on the responsibility of the relationship between a client and advisor for, what should I do in that case for somebody who prefers that kind of a lifestyle? Now, I don’t think my job is to talk them out of it necessarily. I don’t think my job is to frame anything in that discussion around, you’re wrong and here’s the right way to do it, like stocks are the right way or real estate’s the right way. But I do think it’s our responsibility to have the skillset and the, I don’t know, the mental wherewithal, the emotional intelligence to walk someone through questions to help them find the answers in themselves. I do find that most of the time, unless it’s something really technical, most clients going through big decisions, they know the answers, the answer is in themselves, they know the answers.

Ryan Isaac:
But you have to be a participating partner in that discussion to help them discover that. And I’ve been in some great discussions in my career like that, one very recently actually. It was, let’s just say someone who had an unfortunate life situation ended up with a lot of money on her plate and was getting pitched. So this is your second point, was getting pitched from some neighborhood people of influence on some investments that she did not feel good about, understand, couldn’t explain to someone else, and had very big red flag questions about this person’s just behavior as a human, but she was gonna do it anyway. And the discussion was fantastic. I didn’t tell her something she didn’t know, but we spent a good hour just asking questions, trying to get her to check in with herself, how’s she feeling about certain things? Or she’d bring something up about this guy’s out of the blue, kind of extreme temper tantrums, in public. And I’d be, wait, hold on, tell me about that. What do you mean?

Dr. Richard Low:
 Right.

Ryan Isaac:
She ended up with a great solution for herself and I think saved herself from a really risky scenario. However, that whole discussion just makes me think that our industry is, in terms of the planning non-salesy side is very early. It’s still new, it’s in its infancy. And we have a lot of ways to go to become people who are more like coaches and therapists in that we’re here to be participating in question asking and discovery together and not just telling people what to do. Granted, there are some times where I’m, don’t do that.

Dr. Richard Low:
Right.

Ryan Isaac:
Don’t do that. Dentists get hit up all the time by patients, employees, spouses of employees, community, everyone comes outta the woodwork for a dentist. You have constantly growing steady, high income and lots of free cash flow. What does it feel like to you? On the other, on my side of things, I hear people bring this stuff to me. My brother-in-law, my patient’s husband, my whatever brought me this thing. They oftentimes can’t really even explain what the thing is or the risks. They might just have some numbers in their head about a return that’s really good or something. Or this person’s like a big baller in the community and they’ve done really good in this other area of life and I trust them or something. And so I hear that side of it, but I’m always wondering, what does it feel like to you as a dentist when a patient brings you something or a spouse or a family member of a team, someone on your team or someone in your community that maybe you respect or maybe they’re in a position of power and it… What does that feel like to you?

Ryan Isaac:
‘Cause that’s a very, very common thing and dentist… It’s crazy. A dentist will be like, “I don’t know about putting this a 100 grand into a low cost diversified portfolio, that really scares me.” And then the brother-in-law calls tomorrow and is like, “I have this crazy idea that I can’t even explain to you. And it’s super high risk.” And the dentist is, let’s go. Here’s my money. So it’s a weird… There’s obviously a very emotionally complex dynamic there. What is it like when you get this stuff on your plate?

Dr. Richard Low:
Well, I’ll say this. I think I’m not a good representation of this happening to a lot of dentists ’cause number one, I…

Ryan Isaac:
Okay. ‘Cause you’re like cold-hearted and you’re like, I don’t care. I’m not doing it. [laughter]

Dr. Richard Low:
No, I’m fairly skeptical. I am the wet blanket of the six partners at Shared Practices, I am the like, really, like, are we really gonna do this? Are we really gonna try and open 20 offices in one year? Which we are now doing despite my like, skepticism of it.

Ryan Isaac:
Yeah. I can relate to that. Yeah.

Dr. Richard Low:
In the first place. And I also poking holes in business ideas. If someone comes to me even with a podcast idea, like, I’m gonna push back and be like, okay, what’s your actual audience? Like, what are their real needs? What problem are you solving for them? And then if you’re gonna turn this into a business, what is the angle on how to turn this podcast into a business? So I think I also haven’t been solicited a lot. I think I was in the army for a while. People knew I had the podcast and I had a lot going on. And so I just haven’t been hit up for money quite enough. Just we’re putting that out there now. If people wanna start hitting me up for money after this episode.

Ryan Isaac:
Leave your, yeah. Contact Richard if you have some business ideas, and especially if they’re like super sketchy ones, just reach out.

Dr. Richard Low:
Yeah. Sketchy ones. Bring them. But I think from talking with people, I think this even goes into the insurance issue where it’s like someone’s brother-in-law. It’s always the brother-in-law.

Ryan Isaac:
Always the brother-in-law. We rail on brother-in-law all the time. I have some good brothers-in-law in my family, but we always… [laughter] It is though, it’s always the insurance brother-in-law. It’s like every time…

Dr. Richard Low:
It’s the insurance brother-in-law. It’s, it falls in the same category of like, I think I trust this person. And the thing is that these people, whether it’s a bad or risky investment, or it’s a whole life insurance product, the person themselves, they actually think they’re doing you a favor…

Ryan Isaac:
Yeah, a lot times.

Dr. Richard Low:
They really they have convinced themselves… A lot of times. A lot of times they think that like, this is actually a really good deal. This is a really good investment opportunity. This is a really good product that’s gonna help you build wealth. So like, you don’t get the vibes of like, this person’s trying…

Ryan Isaac:
Totally.

Dr. Richard Low:
To screw me out of my money. You get the vibes of like, this person caress and they think they’re trying to help. But the lack of education on your part and the lack of knowledge. ‘Cause sometimes you can’t know these investment opportunities, what they’re gonna turn into, how risky they really are. I think you have to treat those as, investment opportunities that are outside of the stock market and outside of dentistry, outside of real estate, or outside of something you have true expertise in. You have to look at it as like, if this went to zero, am I okay with that?

Ryan Isaac:
That’s it. Yep.

Dr. Richard Low:
And if the answer is yes then and you’re doing enough stuff over here that’s like the core of your plan and strategy, this is extra excess savings, then sure. But like mentally you just have to have said, I’m assuming this is going to zero. I’m not gonna tell the person that up front, but mentally, if this is gonna burn a relationship or go through the costs of this going to zero. And if you’re okay with all those costs and you still wanna move forward with that opportunity. Sure. Go ahead.

Ryan Isaac:
Can I ask you a question on that? Maybe you can ask some… Add some insight here. In enough occasions that it feels like kind of a thing over my career, there have been times where a client will be way more upset or just uneasy or skeptical about let’s say their 401k. Just kind of doing what stock markets do in short periods of time. A little bit up, little bit down, a little bit flat, boring, 6, 7%, whatever, like eight. Something. I’ll hear them vocalize and feel more unease around that. And then they’ll go drop quarter million dollars and lose it all. It will go to zero on some crazy speculative thing and they’ll literally just be like, “Yeah, I knew what I was doing. So it was like, it’s fine” [laughter] And I’m like, wait, you lost 100% of the money and your 401k is growing at like 7.6% and it’s boring and it’s kind of annoying and it’s only been like five years, but like, you’re not even bothered by that. Or are they? Do you have any insight into that? Is it like a mental thing where it’s like so bad that you’re just almost laughing about it? Like what is it?

Dr. Richard Low:
Yeah. You have to emotionally like…

Ryan Isaac:
Detach?

Dr. Richard Low:
Wall off the wound and detach from it and move forward versus money that you still stand to risk losing. It’s the fear of loss versus the loss.

Ryan Isaac:
It’s already gone?

Dr. Richard Low:
Has already occurred.

Ryan Isaac:
That’s gotta be it.

Dr. Richard Low:
I think that’s gotta be it.

Ryan Isaac:
It’s just like, ’cause I’m surprised sometimes at how little emotion is shown over some big losses. Even fraudulent ones where people took advantage of them. In the meantime a struggling stock market is just the bane of their existence. [laughter] And I’m like, wait, this thing’s actually gonna still be here in 20 years and it’s gonna grow positively. Like for sure. Unless the world ends, so.

Dr. Richard Low:
Right.

[pause]

Ryan Isaac:
That’s really interesting.

Dr. Richard Low:
Well I wanna ask you this, ’cause my perceptions coming into this interview, my thoughts on what are the things that actually on a major scale stop or reverse wealth growth for a dentist, going down this mental list, I had a few things we haven’t talked about and I wanted to hear your perspective on them. So number one would be, in my mind, I’m gonna do these real quick. I’m not gonna get down the road on any of these.

Ryan Isaac:
That’s right.

Dr. Richard Low:
‘Cause I wanna hear, I wanna hear what you actually have seen on your end divorce being a big one. Number one, buying the wrong practice or kind of on your main vehicle of investment going wrong, whether it’s a failed startup, you’ve bought the wrong practice. Major like, illness or disability that stops you from practicing and you kind of lose your income as a dentist. And then the last one would be continuous scaling of lifestyle, but not matching of savings rate. And it’s just all burn. It’s all it all comes in. It all goes out. And, but you haven’t built anything. And actually to maintain that lifestyle, you need to have saved more. And so it’s an more unrealistic unbalance of your burn rate versus what’s coming in versus what you need to be saving. So it’s the lifestyle.

Ryan Isaac:
I’ll say that one’s the actually most dangerous for sure. Not even a question compared to the other ones. Not even a question. Lifestyle creep and not adjusting your savings as your income goes up and only spending more as your income goes up is by far no question. Like one of the top three mistakes dentists make. No question. For sure. And it’s a slow burn. It’s not that it’s Netflix or some lattes.

Dr. Richard Low:
It’s the trips. It’s the car. It’s the second loan.

Ryan Isaac:
It’s the trips, it’s that next loan. It’s like we can afford that payment. We can afford that payment. Everyone buys a house outside of their price range, by the way, everybody.

Ryan Isaac:
Like there’s probably maybe 1% of the population who doesn’t. We all do this. We have a budget, we have a monthly plan, we have a down payment plan, and then we price above that. And we just squeeze into it every time. Like everyone freaking does it, man. But so spending more over the years without accounting for trying to save more. And the dangerous part about that is that our spending doesn’t magically decrease when we retire one day. It just doesn’t drop off a cliff and go away. It keeps going. And oftentimes right after retirement, if we’re still physically healthy, we end up spending even more because we have time on our hands and we spend more.

Ryan Isaac:
So the problem is if we’re getting more and more used to higher and higher spending every year, but we’re not keeping up with our savings, we’re not gonna have enough money to keep spending like that in the future. So that for sure is the most dangerous one on the list. No question. Like top three.

Dr. Richard Low:
Okay.

Ryan Isaac:
Going back in reverse order though, from the beginning, divorce. I think statistically divorce is more common in the first early years of a marriage. I think that’s true. I interviewed a divorce attorney like last year. We went through all this. But in those early years, usually not a lot of wealth and income that is super impactful if that’s what happens. However I am seeing a lot of client divorces in their like ’40s, like mid career, mid to late ’40s. And that becomes a lot more devastating financially. No question for sure. I don’t really know what to say about that because that’s a whole… [laughter]

Dr. Richard Low:
It’s not a financial issue.But it is something that I feel like…

Ryan Isaac:
Yeah. It affects you.

Dr. Richard Low:
It can pause and reverse things.

Ryan Isaac:
It will totally change the course of your financial life, totally. Buying the wrong practice, maybe it’s a little bit of unfair self-selection and the people who hire us. But I haven’t seen too many careers or financial lives be derailed from buying the wrong practice. Certainly I’ve seen people buy the next practice, like they have one successful one and they go to number two like too quickly or without preparation or good groundwork. And I’ve seen that be a problem for people, like the first time they dip a toe into a second location. I’ve seen that for sure. So growth in any business is always a thing. That I think is an issue. But it’s not as common as maybe you see. Again, the people who hire us typically aren’t struggling in their careers when they hire us. So that doesn’t feel as common. And then like death or disability, especially disability, something that prevents you from working. I haven’t seen a lot of.

Ryan Isaac:
In my 15 years, I’ve only seen… I could count them on one hand, people who have had to use their disability policies and they were all short-term. I’ve known one dentist who got cancer and had to like totally bow out. But he’s still around, he beat it, he’s doing good. But I think he had to totally bow out and he had disability insurance and then it was what it was.

Dr. Richard Low:
I think that one is only devastating if you weren’t organized and you didn’t have [0:42:27.6] ____.

Ryan Isaac:
Yeah. Which is the problem, it’s the thing. People don’t usually carry enough disability insurance to keep up with their… They’ll buy it in college and they’ll be like, I got like six or seven grand and they’re spending like 18 a month. [chuckle] It’s like, that’s not gonna be good. So those are things that should be reviewed by a non-commission based person. You should review insurance with someone who isn’t selling it, which is hard to do in this industry. We do that. We review insurance and we don’t make any money on it. But those are mistakes people make. But that whole list though, the most preventable and the thing you have the most control over for sure is the spending. Like spending too much and not letting your savings increase either.

Dr. Richard Low:
Is there anything that I missed? Like if you… I want you to like pause and think back. Have you ever seen a client growing wealth and then they either lose money or they stop that we didn’t hit? And maybe we’ve run out of time today and we have to talk about it later.

Ryan Isaac:
No this is… I was, this was one of my main points. It’s on the business side. And it’s… This feels so broad. We should probably do a whole episode on this. The topic would just be a person who is not in touch enough with their business. They don’t know their P&L. They’re not watched.

Dr. Richard Low:
The delegation, the abdication. Like I’m just like, oh yeah, my OM has that. I’m not gonna worry abou that.

Ryan Isaac:
I don’t know, we’re not collecting. No, no, there’s money in the checking account. Like people who are not, who don’t have a handle on the business side of dentistry. I don’t think, and you would know more than I would, but I don’t think the career of dentistry anymore is like it was even 10 years ago, where as long as like you got a few chairs and you’re just like a nice person in the community and you do some good clinical work that you’re just always going to be fine. I think the business acumen and savvy of people in like marketing and growth and strategy and hiring is so much higher and just so different than it ever used to be. It’s like all of like the business side of a lot of other industries finally got into dentistry. And now you actually have to be a good business person.

Dr. Richard Low:
The half-hearted business owner is no longer a thing in the industry.

Ryan Isaac:
Yeah, I just don’t think you can do it anymore.

Dr. Richard Low:
You can’t be just, I’m a clinician and not really a business owner. You have to either be…

Ryan Isaac:
Maybe in like a small town for a while.

Dr. Richard Low:
You can be… Yeah, sure. If you’re super rural and the demand or whatever, you either have to be all in on being a practice owner or just like don’t be a practice owner. Just work for someone else and do dentistry.

Ryan Isaac:
Yeah, just have a killer job for someone who is really good at business. And that doesn’t mean that if you don’t like it or you’re not good at the business side of things that you can’t be one, it just means you have to learn how to delegate and get smart people around you who do like those jobs and who are good at them. But even just at a basic level, a dentist who is not reviewing their P&L at least once a year and just seeing what’s going on with the flow of their money in their practice, which I think is very common. Most dentists, like you’re not on this list ’cause you like to nerd out on these things. So you don’t count, Richard. Most dentists…

Dr. Richard Low:
I like P&L.

Ryan Isaac:
Yeah, I do too, man. I love a good P&L. I like looking at a P&L on a tax return. I would never be a CPA. Shout out to CPAs, that’s just not my bag. I would rather look at a P&L on a tax return. Over like an investment account any day. It’s fascinating. I do think it is probably the most important thing to a dentist, but it might be one of the least… The things that get the least amount of their attention.

Ryan Isaac:
And I think it’s because most people don’t have a high interest in it, don’t know where to begin, don’t know how to think about their financials, or they think that because they have a CPA who files a tax return, that somehow that’s their CPA’s job. But the reality is, even many great CPAs out there, the business model of being an accountant or just filing tax returns is you usually file like hundreds and hundreds of people. You don’t have time to do consulting throughout the year in addition to that, and I think a lot of dentists think their CPA’s gonna sit down and walk them through their P&L occasionally, and it doesn’t happen with…

Dr. Richard Low:
Yeah.

Ryan Isaac:
Some CPAs are fantastic at that and they have great reporting and all that kind stuff. But at a basic level, just not knowing your own P&L by spending time on it at least once per year, I think is a huge mistake. And it’s one of the top ones for sure. But we could do a whole thing on the business side of dentistry and what that means nowadays and how that’s a mistake if you’re not on the top of your game or how people around you who are at the top of their game helping you.

Dr. Richard Low:
And this is a teaser for an episode that you’re gonna have here soon with George.

Ryan Isaac:
Yes.

Dr. Richard Low:
One of the things that we’ve found through our coaching is that a P&L is a retrospective look at how your business spent money. It is not a perspective. Look at how your business…

Ryan Isaac:
Yeah. Yes.

Dr. Richard Low:
Is growing. And it is metrics, it is data. It’s better than nothing. But we actually think that there is some danger in letting the P&L drive the ship. And also being the gold standard benchmark that everyone uses to look at your business and know what you’re doing. ‘Cause the reality is, P&L is are gonna widely differ if you’re in a growth mode, if you are expanding, if you’re in a different market. So we love both P&Ls from the due diligence, like making sure you’re running a good business, but we also think that they can be dangerous, and that’s why coaching and metrics from a business aspect…

Ryan Isaac:
Yes.

Dr. Richard Low:
Are gonna drive the growth of your business far more than what the accountant says.

Ryan Isaac:
Yeah. So, George, do you wanna drop the… It’s a book, It’s a book. Do you wanna…

Dr. Richard Low:
Yeah, yeah. No, we’re gonna be talking about our book Dental Moneyball that George has written and just like the movie and bestselling New York Times bestselling book Moneyball, it’s about the introduction of data analytics and how that has changed the business of dentistry just like it did in baseball. Like it’s done in the NBA, like it’s done in different sports. And it’s phenomenal. I’m excited for it to come out later on this summer, our publisher went bankrupt. And so we’ve…

Ryan Isaac:
Okay. [laughter]

Dr. Richard Low:
Finished writing the book, but we don’t have a release date on the actual published physical book. But we do have a PDF download if people go to Dental Moneyball, the book crap dentalmoneyballbook.com. That’s what is the url.

Ryan Isaac:
Dental Moneyball book. Okay. Yeah. We’ll have George on then very, very soon. Either the next couple weeks. And I like that you said that and that’s what I was alluding to as well, is that’s a very big topic. Not staying on top of being a good business person in a dental practice that you own. It’s very broad and it’s just so different than it was not even that long ago. It’s so different now.

Dr. Richard Low:
Let’s do it a quick one minute recap and then wrap this up because I know you probably gonna be off [0:48:46.0] ____.

Ryan Isaac:
I can do this all day, but Yeah. We should stop at some point.

Dr. Richard Low:
This is fantastic. So top, I’m gonna say top…

Ryan Isaac:
Okay. Yeah.

Dr. Richard Low:
Five reasons that dentists lose money. Number one, would you put the disorganization or the lifestyle creep?

Ryan Isaac:
I would put those one and two.

Dr. Richard Low:
As one and two?

Ryan Isaac:
Yeah.

Dr. Richard Low:
So the disorganization followed by the sheer volume of money coming in and the lifestyle creep that can and consume all of that without [0:49:14.4] ____.

Ryan Isaac:
One and two. If I had to rank them.

Dr. Richard Low:
One and two.

Ryan Isaac:
Three would be the business side. Very close to two.

Dr. Richard Low:
Neglecting.

Ryan Isaac:
Yeah.

Dr. Richard Low:
Neglecting the business side of dentistry.

Ryan Isaac:
You can probably Swap those of two and three. But yeah.

Dr. Richard Low:
And then I would say number four would be bad investments.

Ryan Isaac:
Yes.

Dr. Richard Low:
So money is put in the wrong categories. And then number five would be the unplanned life events and other stuff that can go wrong between divorce disability other things that you can’t always control for. But if you were organized, at least you can have some shields or barriers against.

Ryan Isaac:
You can hedge against those. Yes. Through liquidity, insurance, business planning, estate planning, all that kind of stuff. Partnerships. Yep. Exactly.

Dr. Richard Low:
We did it. This was great.

Ryan Isaac:
This is so good. We have so many more of these to do, but thanks for doing this with me again. I really appreciate it. For our audience, where do they contact you?

Dr. Richard Low:
Yeah. Sharedpractices.com. Listen to the rest of the podcast if you’re listening to this on the Dentist Money Show and vice versa, if you’re listening to this on Shared Practices, go hop on the Dentist Money Show as well as dentistadvisors.com. Is that the url?

Ryan Isaac:
That’s it. There we go, man.

Dr. Richard Low:
Awesome.

Ryan Isaac:
Thank you so much, buddy.

Dr. Richard Low:
Ryan, thank you for coming on This is fun.

Ryan Isaac:
Anytime. We’ll catch you next time.

Dr. Richard Low:
Hey, we’ll talk to you next time on the Shared Practices and Dentist Money Show Podcast.

Ryan Isaac:
Bye bye.

Dr. Richard Low:
See you.

Behavioral Finance, Getting Organized

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