Are Dentists Keeping Their Finances Too Simple?

On this episode of The Dentist Money Show, Matt and Will explore the hidden costs of oversimplifying your finances. They discuss where simplicity can be helpful, where it can become a limitation, and how dentists can find the right balance between staying organized and optimizing financial opportunities. From cash management and investing to tax planning, insurance, and practice decisions, they share examples of where “keeping it simple” can quietly leave money on the table.

Related Readings

How Dentists Can Build Smart Financial Systems

---

Podcast Transcript

Matt Mulcock: Welcome back to the Dentist Money Show where we help Dentist make smart financial decisions. I am a guy named Matt here with the brain. Will Gochnour Will, how are you? Where did that come from? Was that Ryan?

Will: Doing good, doing great. Ryan’s, I don’t know. was some like, it’s the roots run deep. It’s some Lil Dicky was like a rapper that did something with brain. It was, yeah. Right. Yeah. There you go. Yeah.

Matt Mulcock: Yeah. yeah. ⁓ yes. The song with the brain. Yeah. Yeah. Yeah. That’s he’s like rapping to his brain. Yeah. That’s so funny. it’s funny how these little, yeah, we’re not sure. Well, ⁓ I still, again, I still have people say things about them. It’s funny how about the mountain. It’s funny how these little nicknames that come organically are just out of nowhere. And we’re like, where did this even come from?

Will: I still don’t really know how that applies to me, but yeah.

Matt Mulcock: Like it like sticks in people’s minds and like doesn’t go away for years. So, well, you’re not the brain. Taylor’s Tay-Tay. So he hates that. It is kind of cool. It is kind of cool. you’ve been Disneyland lately. What’s that? What’d you go to a couple of weeks ago? Yeah. Yeah. For those of you that, for those of you that don’t know, will is.

Will: Yeah. Yeah. That, yeah, I’ll take the brain. The brain kind of sounds cool. It could be anything, yeah. Went last, yeah, two weekends ago. It a good time, a great time.

Matt Mulcock: We have a split down the middle divide in our team at Dentist advisors on Disneyland, avid Disneyland people like, well, well as the leader of the, you’re the ringleader of the Disneyland crew. You have, honestly, I think in a battle, you guys would win. You guys have more heart in it. And then we have the anti Disney people. Maybe I lead that crew. I don’t know, but we always battle this of like Disneyland and then.

Will: I’m kind of the ringleader of that crew, yeah. We got some loyal people though. We might… Yeah, we’d probably win. You might, you might.

Matt Mulcock: you had gone a couple weeks ago. Of course he’s in Disneyland. think you go, how many times a year do you go?

Will: I mean, we’re probably averaging at least twice. Yeah. Yeah, it’s pretty solid. No, I’m not there yet. I would be if I lived in California, I would be, but yeah. Yeah. Right. That might be on my ⁓ bucket list.

Matt Mulcock: Yeah, that’s pretty solid. Are you seasoned pass holder? Okay. You’re you’ll you’ll get there. Sure. I know people who don’t live in California who are seasoned pass holders because they go so much. That’s my nightmare, dude. That is my nightmare, but we digress. ⁓ okay. Today’s topic super, I think interesting. You, you brought this topic. want to ask you, so we’re talking about kind of the hidden cost of when things become too simple, or maybe put another way where thinking about keeping things simple, maybe goes too far. ⁓ I think this is a really interesting kind of counterintuitive way to look at this. And we’re, there’s a lot of different places we can take this, but tell me from your perspective, like where did this come from? Where are the, cause you brought this topic. You brought the outline, which I think is great. What were the origins and just where is your mindset at these coming from client conversations, just something happening in your life. What’s the origin of this for you?

Will: Yeah, it’s a lot of client conversations for sure. this is, mean, I was just thinking about it because we, we tend to, we, we believe this, this is something that we definitely believe is that keeping things simple in your financial life, it that, that’s a, that’s, that’s good advice. That’s good personal financial advice. ⁓ generally speaking, right? Like in a general sense, keeping things simple, not getting too over complicated and not having, you know,

Matt Mulcock: Yep. Generally speaking. Yep.

Will: Money all over the place and different investments and accounts and things like from an organization perspective, keeping it simple, I think is an amazing place to start. I think where my brain went with this is that’s an amazing place to start. It doesn’t mean it’s an amazing place to finish. as you, life of a dentist is just inherently complex. I think that’s why our firm exists, right? ⁓ Because we know that and that’s something that we can hang our cap on is the life of a dentist. Financial life of a dentist is inherently complex and you just have more debt. have more ⁓ bank accounts. have, you own a business, you most own a business that, you know, just create this complexity of business owner, clinician, et cetera. So keeping things simple is the, is the starting point, but I think at some point it can become a limitation at higher income and complexity levels to the point where You don’t want to just keep things simple forever because there are ways. The word I would use is optimize. Like how do we, how do we get, how do we marry, marry simplicity and optimization.

Matt Mulcock: Yeah, I love that. And when we, when you sent this to me, we were talking about it before, you know, reviewing it before we record or started recording what I thought of a couple of things, but so number one, the difference between simplistic and simple or simplistic and simplicity. like to use that word simplicity. I think there’s a difference there. ⁓ Carl Richard has talked a lot about this. The other thing that I thought about is I kind of look at this as you said, generally this is good advice and we’ve We’ve really talked and kind of like focused on this a lot over the years of this idea of simplicity or keeping things simple. but there’s the other thing I thought of is kind of like this idea. The other word you use is optimization. It’s kind of like these two things are on a teeter totter. And the idea is trying to balance the two and realize that there’s a lot of things that you should dentists should probably like, we talked to Dentist a lot where it’s like, You’re overthinking this man. Like you got to just keep things more simple, but also not at the cost of the things that you should be optimizing for. Like it’s kind of threading a needle. And so we’re acknowledging it’s tough. It’s tough to find that balance. And part of this, I guess the third part of this is some of this is just personality, like knowing who you are. Right. Like I think that’s a huge part of this and underrated part of money in general is what is your personality? What is your approach? Because both optimization and keeping things simple can go too far.

Will: Right. I think I have a client who, awesome client, one of my great clients, recently implemented Profit First. And this is something that we see a lot. don’t know. I mean, I don’t know if we want to spend some time going through a Profit Firsts, but it’s a very common, ⁓ it’s not just dentistry. It’s all across, you know, basically small business, business owners. And it was a book, maybe you know the background more than me.

Matt Mulcock: Yep. ⁓ great example here. Yeah, we totally can. Sure. Mike, Mike McCallewitz, think he’s a CPA. Yeah.

Will: So it’s a framework of how money comes into your business and how you hold it inside of your business and what accounts it goes in. And essentially, kind of boiling it down to the nuts and bolts is you have like five different areas that your money goes and you allocate it based on percentages. There’s like OPEX, owners comp, ⁓ taxes, and a couple others, profit, right?

Matt Mulcock: tax profit yep

Will: And so, I mean, this is one thing that I think to your point, the personality goes a long way here because this does not work for every single dentist. just doesn’t. And we see some try to implement it that don’t have the ability or the drive to keep up with it and like stay dialed in on it. And it just becomes a disaster, a turnover complication. And it’s just a mess. There’s money in all these different accounts. We don’t really know why. In that case, I would tell that client to keep it simple have one business checking account. However, there are lots of clients who can execute on it in a way that makes it very, in a sense, it optimizes their cash position in their business, right?

Matt Mulcock: Yep. Yep. I’ve seen both as well. Yeah. We’ve seen the profits first approach. have different examples on both ends of the spectrum to your point. A couple that come to mind right now, one in particular comes to mind. She is so dialed in on profits first profit first. She loves it. She’s done it for years. It helps her sleep at night. She’s, you know, for her personality, it works amazing. I have other people who I’ve seen over the years, read the book get super inspired and motivated to open up the accounts and they get it all together and three months in, it’s a disaster and they’re way worse off than they were before. So I think that’s a good place to start. This is just kind of knowing who you are, knowing, acknowledging, we’re acknowledging, this is a threading the needle situation, but we thought it would be a good idea to talk more like we. We don’t talk enough about where does keeping it too simple go too far. So let’s, let’s back up a little bit. Will, where, where does this idea of simplicity or keeping it simple, where does that actually work? Like what, what are the benefits that we’ve talked about so much around keeping it simple? Let’s talk about that first.

Will: Yeah, I said this, think already, but I think I like the works at first, I think I think it’s the great starting point of as you’re building your your financial foundation, your net worth right as you’re getting started out, like, don’t go and open, you know, 15 bank accounts and try to, you know, organize everything in a complicated manner. Just keep it very simple, keep it clean. So you know where your money is, where it’s going, and it’s easy to track, right? So I don’t necessarily think that only applies to at the beginning, but I think that’s where it works is just if you don’t have as many things going on in your life, it can reduce anxiety over decisions that you have to make, you know, and it can ⁓ help you avoid missing something or having an account out there that you don’t know where it is. I think it’s more just at first, it kind of helps you stay organized, which we’re obviously big proponents of and keeping it simple makes it cleaner.

Matt Mulcock: Yeah. And when you say that, when you go through this too, and as we’ve been thinking about this prior to even recording the other theme that I think is important here that I love, like, and I love these notes you put together because the other main theme of this, think is, and I think what you’re hitting on there is sequencing matters. Like, I think what you’re saying and tell me if I’m wrong, but I think what we see a lot is the early practice owner, thinking about like, Optimization decisions when they haven’t even nailed down the simple stuff first. and I’m trying to think of an example, but trying to like optimize their P and L or, or saying like, I need to have these seven different accounts to your point. It’s like, man, let’s just keep, let’s back up. Let’s keep things simple. That’s the right decision. That’s an optimization decision when you’re like in foundational mode, let’s just focus on keeping things simple. The C I think the sequencing here is really important.

Will: Yeah, I would say like exactly right. Like you know, first year of practice ownership, you’re trying to get, you know, four new pieces of equipment. You have four new loans and maybe this is necessary. Maybe it’s unnecessary. You’re trying to implement all these tax strategies. You already have a 401k before it’s too early. Like it’s all these things that you’re just trying to rush to get moving where I think some patience in the early part of your career will go a long way to the point where you then are ready to start, like you said, sequencing and layering on. And it’s like building this

Matt Mulcock: Yeah. Yep.

Will: I always think of it as you have a really solid, simple foundation and then you can build from there. And you’ll add on complexity as you go, but it’s not gonna tip over the tower.

Matt Mulcock: Yeah, I’ve said this before fitness analogy, weird, never do that. But I think a lot of things relate to fitness and nutrition. ⁓ but I’ve said this before, I think it’s kind of the equivalent of someone who is, let’s say 40 or 50 pounds overweight and hasn’t been in the gym for five years researching what is Chris Hemsworth’s supplement routine. It’s like, that’s not going to matter. Like, ⁓ so here’s the thing. Chris Hemsworth supplement routine could be helpful. And is probably a good thing to know down the road. You’re 50 pounds overweight and haven’t been in the gym for five years. Go for a walk. Like I think it’s, again, it’s this idea of sequencing. again, I love the, now are the examples you’re giving of what we see like 401k is a great thing. Might not be the right thing for you in your life. So I just thought it made sense for a second to think about a lot of this, the backbone of this. One of the themes is between

Will: Yeah.

Matt Mulcock: this teeter totter of simple versus optimization. A lot of it just comes down to where are you in your career and your life? So understanding that I think is critical. So let’s jump to the meat of this, the meat on the bone, as they say in the corporate world. Like let’s give some specific examples of things that you’ve seen Will around where does simplicity cost dentists? Where does it go too far?

Will: You know, I think the theme here is maybe just, well, I guess I’ll plug a financial advisor, not specifically us, but just any accountability partner that will help you. And right. Us analyze and understand what’s going on so that you can start to make decisions. We, you know, I put together in these notes, a couple of like, I think quotes that we’ve just heard over the years, right. From people that may be.

Matt Mulcock: I mean us, but yeah, there’s other ones out there.

Will: Either most, most of these people are either like prospects or just thinking that they’re doing great. And so like the first one is just defaulting to, we’re doing great. Like we’re doing just fine. We’re able to cover our expenses and they’re not really thinking about how to optimize, right? Keeping it simple in that sense is you’re just blindly ignoring all the things that you could be doing to get ahead financially. Right. And so that’s clearly an oversimplification is saying I’m doing just fine. And then like a secondarily.

Matt Mulcock: Yep, yep.

Will: Secondary piece of that would be, my 401k is my financial plan. I fund my 401k every year, so I should be all set for retirement. Just simple, right? That’s a fine thing to do. Probably not enough.

Matt Mulcock: Yeah. Yeah. Well, and when you say those ones, if you think about this, it’s like, what are we just being naive to or being lazy with in the name of like keeping quote unquote, keeping things simple. Right. It’s like, ⁓ yeah, I I’m keeping it simple. I, but really you’re hiding behind that because you don’t really want to go like you’re either there’s a money story there where you’re there’s something holding you back from diving in deeper into it very possible and very, that happens a lot. Or it’s just like being naive to it or just like, I’m lazy or not even lazy. Maybe it’s just like, I’m too busy. So I’m going to just be like, yeah, I’m keeping it simple because you’re just too busy and you don’t, there’s too much attrition there to like break through.

Will: Yeah. Yeah. Yeah, I agree. One thing we hear a ton is I’m just reinvesting in the practice. I think that one’s a funny one because it’s good. These are all things that are like, yeah, these are good things. I think there’s a cost of oversimplification there where if all you’re doing with your extra money is like, I’m just putting it back in the practice, we’re going to do marketing and that. That’s great. You should do that. However, you should have a plan for not that being the blanket statement, like financial plan for you.

Matt Mulcock: Yeah, yeah.

Will: And there could be optimization there for yes, let’s reinvest in the practice, but then it’s not over reinvest in the practice. I feel like there’s a lot of people who over reinvest in the practice for the sake of reinvesting in the practice.

Matt Mulcock: Yeah. Yep. Yeah. And again, it’s the, you’re saying there, what I’m hearing is like a key word we use a lot is intention. What is the intention behind this? Cause again, on its face, that’s a great thing. We are, that’s the foundation of what we encourage our clients to be thinking about. It’s kind of funny. We’re talking about all this stuff and I’m like, we say this stuff. We say,

Will: All the time. I think we have multiple presentations that say keep things simple.

Matt Mulcock: Yeah. Yeah. And that’s why I like this topic is it’s kind of giving the, the counterpoint or the, where our general advice can go too far. Shout out Taylor Sutterfield who says great general advice is terrible specific advice. And I think we’re just trying to give the other side of this of calling ourselves out of the things that we’ve said in the past. Cause when you say reinvest in the practice, one of the core tenants of our business and core pieces of advice we’re giving Dentist out there is You should be investing in your practice early and often. That is the engine that drives all of your wealth that builds all of your wealth, taken too far with.

Will: You’re just throwing money at marketing because that’s your plan and you don’t really know the ROI, but that’s just, got to reinvest in the marketing to get more butts in chairs.

Matt Mulcock: Exactly. Yep. Well, and to find that intersection of saying, I’m reinvesting in the practice, but if you stopped and asked yourself, what does that mean? And how do I know what’s working? So marketing is a great example you just gave. I’m reinvesting back in the practice with marketing. Awesome. What KPIs are you tracking there? What’s your cost of patient acquisition? What, know, how, how do you know what is, what is your ROI on those dollars spent? If you can’t answer those types of questions. Then how do you even know what if those months, if those dollars are not better spent somewhere else, you don’t even know the opportunity cost until you’ve established the intention and some, some optimization type of, ⁓ strategies or plan or system around that. You got to go beyond just the statement of like, I’m investing back on the practice. It’s like, I bought this piece of equipment. I bought this Eric, I bought this whatever it is, this print, you know, three, three D printer, whatever it’s like. Cool. What does that mean? What is that going to do for you in your practice? What does it mean for your, your bottom line? You’ve got to go further there. It’s kind of finding the intersection on this teeter totter. ⁓ what else do you hear? What else, where else does this go too far?

Will: I mean, just some other things that I thought of was, you know, I’ll retire some, it’s the same, I’ll find my 401k or time someday. That’s not a clear financial goal. It’s not a plan. Avoiding conversation with spouse was one that I came up with. I think, I think that simplicity just, it’s, I think it creates, allows you to check out mentally sometimes like oversimplification could just be like, yeah, I’m not going to.

Matt Mulcock: Let’s talk about that one avoidance.

Will: avoidance, right? And I’ll retire. That’s kind of to the point. I’ll retire someday, I’ll get there someday. And I’m not going to worry about this now. To me, that’s, that’s neglecting ability to optimize. No matter where you are in your financial life, you can optimize something you can you really can you can if you don’t if your income isn’t high enough to save a ton of money. Well, you could theoretically optimize your budget and spending and try to get it down so that there is some room for savings there’s plenty of things that you can do. ⁓ That simplicity sometimes I think can be a cop-out.

Matt Mulcock: Yeah. Yeah. I think, I think that is totally true, especially when you talk about you bring up, that’s why I wanted to spend some time on the talking to your spouse or partner about money. Because I think you wrote in here, avoiding, avoiding conversations around, like, I don’t, I don’t even put that under the category of keeping things simple. That truly is just avoiding a hard conversation or something you don’t want to, you don’t want to do. And we acknowledge it’s hard. Like it’s hard. It’s funny, Will, how many times have you had a client? Cause we encourage all of our clients, especially early on, but even at least once a year, we meet with our clients multiple times a year, but at least once a year, it’s bring your spouse or partner to the meeting at least. How many times have you had someone say something to the effect of we’ve never talked about this before, or this is like, creates this out. How many times has that happened for you?

Will: yeah. Like one in 50 % of the time, feel like one in every two conversations has something like that.

Matt Mulcock: Yeah. It’s just like, I never knew you thought that or, or, know, this underrated aspect of having a third party in your life to me is it facilitates conversations you would have never otherwise had ever. You would have never been forced to kind of like bring this up stuff up with your spouse or partner. Simple. It is actually relatively simple, but it doesn’t mean it’s easy. It’s difficult. ⁓

Will: Yeah. Yeah. Yep.

Matt Mulcock: So anything else you’d say about the spouse conversation or partner conversation?

Will: No, think it’s just, I think, I think the reason I put that on there was simplicity or I’m just reinvent like these, could kind of hide behind some of these things, I think in a way where you can just use it as a shield to say, I don’t want to make decisions right now because I’m keeping things simple or I’m reinvesting the practice or whatever. So.

Matt Mulcock: Yep. Yep. Totally. I agree another one you put on here that I think is really critical to talk about is cash, keeping things in cash. ⁓ and then kind of along with that, I think you just kind of alluded to this, but specifically around cash is this analysis paralysis. It’s just easier or more, it’s more simple. It’s simpler to just keep my money in a high old savings account as opposed to invest it.

Will: I mean, I think this is probably, this probably should have been at the top of the list because it’s, think the one we see the most where it’s like that. The simple thing is just I’m making money. I’ll just keep it in my business checking account and we’ll leave it there. Like that’s the genesis of a lot of our clients is I’m sitting on too much cash. And to me, that’s where optimization really shines, really, really shines because you can come in and say this cat having too much cash is never a bad thing, but it’s definitely not.

Matt Mulcock: Yeah.

Will: the optimized thing. ⁓ you know, that’s to me, that’s the perfect example of like, good, not great. ⁓ And optimization really can do a number on extra cash. that tells all you need to know about if you’re doing the right things to optimize is if you have a really clear cut cash ⁓ target in your bank accounts, in your business account, in your personal account, and you’re avoiding, we call it cash drag, where

Matt Mulcock: Yep.

Will: The lack of a financial plan always causes cash drag because you just don’t, like, you don’t know what to do. You have analysis paralysis. You don’t know, I be putting money here or here? I’m funding my 401k and that’s getting covered, but now I have all this cash building up. I don’t really know what to do with it. I’ll just reinvest the practice, you know?

Matt Mulcock: Yeah. Yeah. It feels, it feels more simple. I feel simpler. It feels safer. It feels like this, I’ve had clients or Dentist out there, not even like I’ve had clients tell me this, but we try to push back on this. So this like coziness that cash brings this false sense of security, which in the short term, it very much is safer or feel safer over long-term. It’s actually quite the opposite to your point over time. I mean, it is not drastic to say cash drag over the course of a dentist’s career and life is a multi six figure could be literally a seven figure mistake. Like depending on the dollars we’re talking about, but we’ve seen this where if you extrapolated over the 30 year period, the amount of cash that some dentists are holding now, if they were to carry that forward, we’re talking literally multiple six figures or higher. Of a mistake that optimization can actually have a meaningful difference in your life. It’s huge. ⁓ let’s talk about invest. So kind of this leads into, ⁓ investing and this idea of again, avoiding, you can put deeper planning and, ⁓ more detail focused on investing. Talk, talk about that.

Will: Mm-hmm. Yeah. Yeah, you’ve talked about this before we got on and I really thought this was a super prudent. I just think this is so applicable to this conversation because you said we all, we, we told this line, we walked this tight rope of, you know, keeping investment simple. Cause that’s one of our tenants is like, don’t go out and buy a hundred thousand individual stocks and go try to day trade and all that stuff. Like it is very important to keep the investment simple. However, again, we told this line of like, It’s not like we’re just buying an S &P 500 fund and forgetting about it for 30 years. That is oversimplification. Or just buying a Target A fund, you’re a 401k and leaving it there. That truly is the oversimplification. And I think it would be good to call it out that that’s not what we do.

Matt Mulcock: Yeah. Yeah, totally. We’ve done a disservice to, I’ve acknowledged this on other podcasts and maybe that’s going too far. I’ll say maybe it’s being dramatic, but I think we’ve, we’ve gone, we’ve been guilty of going too far of people walking away from our podcast, sometimes thinking that we’re advocating for a set it and forget it S and P strategy. I think the nuance here is it’s a, it’s kind of this idea of like good, better, best. If you’re, it’s kind of this, what are you comparing it to? So if I’m talking to a day trader or a dentist who thinks they can day trade, and that’s going to be a successful strategy over the next 30 years. And you compare that to them taking those same dollars and same efforts and just putting it into an S and P fund and letting it sit. The S and P is going to win almost every time. And so we would say in that case, yes, compared to what? But that doesn’t mean we advocate for, that when Dentist hire us that we’re just like, yep, S and P said it and forget it guys. That’s what we’re doing. That’s not actually the best approach. are far more optimized and systematic in our approach. And so again, general advice, if we’re out there saying, if good, better, best, like you’re better off S and P or index funding compared to trying to pick some stocks on your own for a while or for the rest of your career but it doesn’t mean it’s the best advice or the best thing to do. It’s a little far too simple, a little bit too simple for us.

Will: Yeah. Yep. Yeah, I think we get lumped in with passive investing, which is partially true. But the word we use a lot for it is strategic investing, And systematic, right? And I think there’s a middle ground there. We’re not obviously doing any sort of day trading or anything like that, but it’s just a little more nuanced with global diversification, rebalancing, asset allocation. There’s lots of things that we do on a daily basis that makes it so that

Matt Mulcock: Yeah. Or strategic systematic.

Will: that it’s not just click a button once and leave it in there forever.

Matt Mulcock: Yeah, you tell Robbie we’re passive and he’ll tell you something. Yeah, he’ll fight you. But one thing we’ve said a lot is we have a ⁓ passive overall philosophy in the sense of what passive means out there in the market, which is own the market. Like we believe that, but we go much further even in that sense of S &P 500 to set it and forget it. Like that’s not what our approach is. We are own the global market. And even that is far more nuanced than just own one.

Will: He’ll fight you, yeah.

Matt Mulcock: index in one part of the market. Like that in and of itself is a fundamental flaw of this passive idea, but passive philosophy is our approach, but active implementation. That to us is kind of the definition of marrying from the investment perspective, marrying the two simple and then optimize like finding that intersection is, is that as a passive philosophy, but active implementation. Rabih is anything but passive as far as what he’s doing with our, money we’re managing. Anything else you want to say on the investing side on the, on this front?

Will: No, I think that probably hits it.

Matt Mulcock: another one that you talk about here and I think should we should spend some time on is again, this idea of where simplicity goes too far as costing dentists is this idea. This is going to be a good one. Well, this, could go on this for a bit and there’s so much nuance to this, but tax planning and, end of the structuring. Well, let’s talk about this.

Will: Yeah, this isn’t funny because you said at the beginning, it’s like threading a needle, right? I look at it as I think of like a spectrum where you can go too far on this spectrum. A hundred percent. You can go way too far on this spectrum, but also just not ever asking a question or trying to optimize or do things that can save you money that are out there. That’s oversimplification. So to me, there’s, there’s a somewhere in the middle where you’re optimizing without going too far. Tax planning is a perfect, perfect one to talk about entity structure, et cetera. You know, you think of things that common strategies that dentists do to save money on taxes, like putting kids on payroll, like renting out their house to the office under the Augusta rule. Like there’s things that feel like pretty low hanging fruit and obviously consult with your CPA and a lot of this, these decisions ⁓ and follow their guidance for the ultimate you what’s above board, what’s, what’s in the gray area versus, you know, not, but, you know, I would say there’s a lot of low hanging fruit that if you’re just not either you or your CPA or not doing it, there’s, there is room for optimization.

Matt Mulcock: Yeah, I totally agree. think this comes back to this idea of sequencing and focusing on the right things at the right time. I had a dentist a while back. It was kind of interesting on a consult call was talking about taxes and tax strategy. And they were bringing up things like the R and D tax credit and conservation easements and some of these classic kind of gray area type things that we hear. And so we just were chatting and I asked some questions and I was like, so tell me about So, I acknowledge, I’m like, yeah, there’s certainly things to be doing for sure on the kind of tactics or optimization kind of category. ⁓ tell me about your retirement plan at your office. And he was like, I don’t have one. And I was like, okay. All right. ⁓ tell me about like, well, these other things like, tell me, are you utilizing the Augusta rule? He’s like, what’s that? Do you have kids on pay? So he had no kids on payroll. So to your point, it’s finding this balance in that case for him, he had skipped over the simple low hanging fruit and was jumping straight to optimization. And we’ve seen, we’ve seen the opposite. So again, it’s finding this balance around tax planning and kind of the fundamental things. again, you can either be too optimized or too simple in your thinking here.

Will: And I think it’s exactly right. The second part of this, that was the next item was insurance. And I think that’s the same exact thing where you can get too far on the spectrum of optimizing your insurance for sure. And that usually looks like buying insurance policies that you don’t need. ⁓ But there’s more optimization than just buying a $1 million 10-year term and calling it good, which I think is the oversimplification portion of this.

Matt Mulcock: Yep. Yep.

Will: There’s somewhere in the middle where you have ladder term policies that cover your net worth at certain intervals and will drop off when your net worth hits certain numbers. And it’s a good strategy and it’s a little more nuanced and definitely optimized, but it’s not getting too far as to say, got to go have three variable universal life policies that are going to do all this stuff.

Matt Mulcock: Yep. Yeah. We we’ve said this over the years for a long time. One of our mottos is balance over burnout. And I think there’s kind of this idea of that kind of speaks to what you’re saying here. What we’re saying throughout this entire discussion is balance is key. Finding this middle ground. And again, it’s funny, even as we talk through this, like, we’ve talked so much. I’m being, being like really honest and candid here of we’ve talked so much about being like pulling people away from the optimization type stuff and focusing on being simple. I’m having actually a hard time like focusing on like, where does this go too far? Cause it does. But even right now I’m, I’m finding myself talk speaking against optimization rather than keeping things too simple. Does that make sense? So it’s, it’s actually kind of interesting, ⁓ on the tax planning. I want to come back for a second. Anything else you’d want to say on the, the tax planning front?

Will: No, what do you, do you have something else on that?

Matt Mulcock: from, no, no, I just think that, I mean, that’s a whole other, we’ve done so many episodes on this, on the tax planning and the, ⁓ the end of the structure side. I do think that one, we just need to further emphasize that, ⁓ being too, being too simple or again, I just think of this idea of like being naive, being naive and thinking your CPA.

Will: Yeah.

Matt Mulcock: the, the, whatever CPA you’re working with is just like, if they’re just filing your taxes and it’s like, yeah, I have a CPA there. I file every year. We’re good to go. There’s so much more that goes into tax planning. That’s that’s not tactical. It’s are you meeting regularly with your CPA and are there such a difference between filing and actually planning beyond tactics. It’s just, you keeping up on your, your numbers? Are you tracking your numbers every single quarter and adjusting your vouchers? Like what you’re paying on a quarterly basis. Like that’s part of tax planning. Optimization.

Will: Optimization and that will trickle over into your other financial life because you won’t have to pull money out of a brokerage account to pay a tax bill and all those things.

Matt Mulcock: Yep. Yep. We had a conversation yesterday and our mastermind tailored an incredible job with, with the team, our, our in-house masters in accounting. But we were talking with some of our younger, newer advisors and sharing some ideas around this exact thing, entity structuring, and then specifically around what happens to a lot of dentists when it comes to tax planning, which is they buy a practice or they do a startup, whatever they invest heavily in a practice. They have massive depreciation early on, because maybe their CPA, the conversation was really around, you take 179? This is internal, but do you take 179 or do you stretch out your amortization and appreciation over its natural schedule? Whether it be like 15 years or, you know, four to six, depending on, depending on the category. And we, as we were talking through this again, just back to this idea of tax planning, I was like, I said, I said something to the effect of like,

Will: Four to six, yeah.

Matt Mulcock: There’s so much here to think about just in this one topic for a practice owner around how to plan out cash flows, how to match up that depreciation with your debt schedule, with your retirement planning, ⁓ you know, your retirement accounts with just your overall, like your liquidity. There’s so much that goes into this. And we’ve seen so many times that dentists have massive depreciation in year one through five, and then it eventually starts to fall off. They haven’t planned for it. And then they immediately think, am I making less money? What’s happening with my business, my practice? I feel like I don’t have any cash leftover. It’s like, because you were not planning out that schedule and how it impacts everything else in your life. You were thinking about it too simply.

Will: Yeah. Yeah, definitely the 179 just blanket statement. Take 179 if you can take it is an oversimplification, right?

Matt Mulcock: Such and that’s a huge one. Huge one.

Will: And I think like as you’re talking, it’s just kind of hitting me that it’s not necessarily that you need to like over optimize and think of all the things you just need to have a plan like that. That’s all that solves all of these oversimplifications is if you have a plan, whether it’s a tax plan, a financial plan, a savings plan, a workout, a workout and fitness plan. Like if you have a plan and you can stick to a plan, you have an accountability partner helping you stick to a plan, then you will opt you will be optimized.

Matt Mulcock: Yep. Yeah. Here’s another one really quick. Just on that, just when we talk about like 179 is oversimplification. Here’s another one. S-corp. S-corp, ⁓ electing S-corp. Just assuming I’ve I’ve had, I’ve had CPAs. Just, it’s just like, that’s just what you do. Yep. Click S-corp no matter what in year one or year two, whatever, without any thought into what implicate, what are the implications of that?

Will: When you elect it,

Matt Mulcock: What are the trade-offs I’m making here of electing S corp? And we’ve seen some massive mistakes from dentists where who CPAs have recommended, ⁓ S corp far too early and creating a ton of issues. That’s a, that’s like a top three one for me, actually of an oversimplified blanket statement or blanket approach of just like, yeah, I liked S corp cause everyone does. It’s like, that’s what dentists do, but

Will: Yeah, right. Yeah, that’s what dentists

Matt Mulcock: I actually think there’s so much more optimization that needs to go into that decision.

Will: Yeah, yeah, that’s a really good one.

Matt Mulcock: 179 S corp. Those are huge ones for us. okay. We talked to insurance, ⁓ anything else on the insurance front of where we get to some, think you’re right. We get too simple on that approach as well. Another one that comes to mind just really quick would be, not tracking your home value. You know, we’ve seen home values grow up quite a bit over the last five to seven years, things like your home coverage.

Will: Yeah.

Matt Mulcock: Your homeowner’s policy and how that interacts with your umbrella coverage. And one can negate the other. Like if you don’t have enough of that basic coverage of homeowners, it can actually make it your umbrella policy basically negated. ⁓ and so things like that, that again, we don’t want to overthink this, but we also don’t want you to underthink it and lead to some catastrophic issue. There’s a, there’s a middle ground there. So yeah, don’t underthink. Yeah. Yeah.

Will: I think that’s a perfect way to say it. Don’t overthink, but don’t underthink.

Matt Mulcock: okay. Let’s jump into, as we kind of like start kind of winding this down, but I think there’s an important added context here being, as you put it, TikTok advice. Let’s talk about that for a sec.

Will: Yeah, I just think we, I mean, this ties a little bit into AI, which we’ll get into, I think, in a little bit. But I think my thought here is that a lot of this stuff is getting taken at face value and a lot of answers are being trusted way too much and too quickly. And like the fact that you can watch a TikTok and that just becomes like you just read the book on that topic. And that’s the truth. That’s like the truth.

Matt Mulcock: Too quickly. Yeah.

Will: And you just take it for again, face value and that’s it is what it is. And I’m going to do this and I don’t know why anyone doesn’t do this. And it just, it’s never going to be a good source of getting real good, knowledgeable advice. And, ⁓ maybe like, maybe if you’re, I don’t know, learning how to do something on tick tock, like, I don’t know. I fixed a, I watched a tick tock on how to fix it. My toilet the other night, frankly, which is kind of awesome, but I don’t think it’s going to be great for financial advice. So.

Matt Mulcock: Yeah. Yeah. Yeah. I, that’s a really good distinction to make there, well, cause I’ve actually used YouTube in the past. I’m not on tick tock, but similar type thing. YouTube is incredible for like how to videos, cooking a meal, fixing a toilet. Yeah. Transactional type things. I think it’s actually really great. Anything that comes down to, uh, that requires

Will: Cook a meal, yeah. Work out. Right.

Matt Mulcock: a high level of like nuance or variability, which is all money is, is there’s so much variability. There’s, despite what people think finance is a soft science, it is not a hard science. It is not physics. There’s, there are physics to it for sure. I shouldn’t say that money is a blend of physics and philosophy, but we’re a lot like, you’re not going to find the answers to your specific. And let’s do like, how much can I contribute to a Roth?

Will: Yeah.

Matt Mulcock: That’s a toilet fixed category of money, but what you, how to design your life and your plan and all the different intricacies of this. Like you’re not going to find that on YouTube or tick-tock. So.

Will: Yeah. Yeah. I think it’s just the, there’s a lot of surface level guidance and I think we’ve become a little over relying on it. And I think AI does this as well. I’ve seen, you know, obviously I think most people who are listening to this podcast have tried AI in some way, shape or form or used it. And it’s, it’s really awesome. Like there’s so many good things that can come from it. I’ve seen it be pretty harmful for a lot of, for actually a couple of financial decisions, like in two specific cases I can think of where one of them, I put something in there and it gave a completely wrong answer that I was like, this, if a client would have blindly trusted this, it would have actually been like a horrific thing for them. And then the other one where a client did it and it, yeah, it just gave, it taught them how to do this backdoor strategy the wrong way, right? And it.

Matt Mulcock: Yeah, it didn’t it was not it forgot the prorata distribution rule or something.

Will: It just did. So I think to the point of simplicity is I don’t think the client fed them enough in the prompt to understand the entire financial picture. So then the prompt that they got back was oversimplified and it told them they could do this. If they would have done that, it would have, there would have been some things that would have been missed. So again, I think AI is going to have an amazing place in our world in the future and it’s going to enable a lot of things. However, I do think there’s, there’s still going to be a place.

Matt Mulcock: Yeah.

Will: for people who know, who have a deep knowledge on the topic to be able to utilize AI to enhance, you know, what they’re doing. So.

Matt Mulcock: Yeah, totally agree. We’ve, we’ve talked a lot about AI internally. We’re building out a whole AI committee. We’re implementing AI as we speak and trying to find the right balance of it. So we have full believers in the use of AI and that’s only going to grow for us of like our use of it. But it’s a great point. It has its limitations and it’s just a tool. just a tool that if used improperly can lead to really bad results. And you’ve just highlighted a couple of examples of that, of if you treat it too simply or too simplistically, you’re going to get simplistic answers that are probably not totally accurate. So that’s a good point. ⁓ I think just the, this, topic of like social media, Tik TOK, whatever general advice. I think the risk of this going too far to your point of people taking these answers too quickly is I think this feeds the fire of laziness. As the kids call it, I think brain rot.

Will: Yeah.

Matt Mulcock: It’s like you were losing, I worry we’re losing the ability to like to stop and actually think and critically and push back. Right. Yeah. Right. Something. Cause it’s so, it’s so easy just to like, write me this and not think about it again. And I think that has ripple effects into things. If you’re using it for things like financial planning. Again, there’s some basic things that can certainly help with it’s a more detailed Google.

Will: critically write something and yeah.

Matt Mulcock: think that’s great for Google things, chat, GPT or whatever it is. think can take that even further, but there’s a point where it stops. And I don’t know if people understand what that line is so much. go, go to anything else.

Will: I’m sure we’ll have more to say on that topic. TBD. Yeah, I feel like we’re at the beginning, but yeah, it’s cool.

Matt Mulcock: TBD. Yeah, for sure. Okay. So let’s, I think we kind of get to like the, the so what part of this, right? Of how do we find the balance? How do we strike this balance of finding the intersection between simple and optimized? What are your thoughts on that? Well,

Will: Yeah, I just think it’s good for a dentist to acknowledge that your life is complex and be okay with that and know that it’s 100 % okay to have seven figures in debt. It’s 100 % okay to have multiple bank accounts. The trick is, are you addressing it or not? Are you doing something about it? Are you ignoring it? Are you taking the horse by the reins and making sure that you’re optimizing to the extent that you can? Whether you’re doing that or you’re having an advisor help you do that, that’s step one. how we start to marry simplicity and optimization is just knowing that it’s there and being aware of it and having a good plan in place to combat any sort of oversimplification or overcomplication and finding that happy medium.

Matt Mulcock: Yeah. Yeah. And it’s tough. We’re acknowledging it’s tough. think a lot of this is personality driven. As we’ve mentioned, it’s knowing who you like knowing how you are being honest with yourself. I think is really critical here of, of what are you more prone to do? And I think as we’ve talked about throughout this discussion is, ⁓ are you, are you using being simple as a crutch and it’s kind of like,

Will: Crunch.

Matt Mulcock: Are you hiding behind the, whole, this wall of I’m keeping things simple mainly because you just want to avoid what feels like hard work. What feels like something that maybe is the unknown stepping into the unknown or just not wanting to do it. Cause you’re busy and you get home every day and you’re like, I don’t want to look at that. I don’t want to have that conversation. I’m tired. I get that. We, I totally understand that, but I think it’s acknowledging what is. What is truly intentional? Like what is truly being intentionally implemented as a simple process or plan, right? Versus I’m just being lazy or I’m just tired or I don’t want to think about that. Like avoidance I think is critical. ⁓ what are some practical takeaways here? Well, from your perspective, how do like we give someone, you know, this whole idea of like, what do do with my hands here?

Will: Yeah.

Matt Mulcock: Like how do we actually give someone, give dentists out there listening like, okay, we acknowledge it’s balanced. It’s tricky. It’s a middle ground. It’s a teacher taught or whatever. How do we actually give people practical frameworks or a takeaway for this?

Will: Yeah, I think ask yourself like maybe some signs you’re doing things to simply are you feel like you’re missing out on opportunities. You feel like you have a lot of blind spots. You feel like you should be doing more with what you have. You have a lot of cash, those kind of things. I think we said a lot of things that maybe one or more of them would have been like, oh yeah, that’s me. That’s not to say that’s a bad thing. It’s just maybe that will tell you, okay, there is some action I can take. Now probably is the time, there’s no better time to take action than now. So that’s that again, some of those things may have spoken to you today and hopefully that’s a little kick in the pants you need to get going. I think some other signs that you’re too complex would be that they’re like, if you can’t clearly explain, you know, your financial situation to somebody or, you you, you, you’re just confused by it all the time or you don’t have any idea what’s going on with places that you’re keeping money. ⁓ That usually means you’ve over engineered something that’s time to walk it back. So I think ask yourself, have a little self check in. That’s the first practical thing that I would say you would work is understand like, where do you think I land on this spectrum? Am I doing everything to optimize to be in that center that I want to be in? Do I have a plan in place? I think you hit the nail on the head, honestly, is just intentionality. having that, what do do with my hands is like, figure making a list of where things you places in your life you think you could optimize and then talking to either an advisor or figuring out yourself on intentionality about where that complexity doesn’t mean you need to go every single thing in your life to make it more complicated to try to optimize. Just pick something that you think you can do better at and start there.

Matt Mulcock: Yeah. Yeah. I think that’s great. And you, mentioned something on your two that I think is worth emphasizing is leveraging, uh, delegation, leveraging team in areas and specialized areas that you want to optimize, but maybe you’re not equipped to actually do that. Uh, I think one of the biggest mistakes Dentist make is, uh, is confusing their very driven, specific knowledge. Like they’re very driven personality and success that’s come from their ability to like, ⁓ you know, they’re, they’re super smart. They’re, they’ve been able to build something great. They have all this knowledge. And a lot of times I think they assume that that knowledge just translates to everything. And I think that’s a huge blind spot for a lot of dentists. So I think delegating and leveraging a team in areas that require maybe more specialized.

Will: Yeah.

Matt Mulcock: Knowledge and optimization. So a really obvious one is taxes and bookkeeping. Don’t be doing that yourself, especially as a practice owner, please. ⁓ Obviously, you know, we’re, we’re, can acknowledge our bias here, but I really do think there’s so much to be done on like the investment front or just overall, all the jobs that we’ve done on the financial planning side of things that require finding this balance we’ve talked about this intersection of simple a simple foundation, but like an optimized approach. ⁓ it’s, think it’s very valuable to have a team in your corner to help with that on that front.

Will: Love that. And like you highlighted, I mean, there’s something in everybody’s life, including mine, that like, if the optimization happened and it was the right type of optimization, it could mean. Lots and lots of money. know, like you said, six, seven figures, if like those things were just taken care of earlier rather than ignored until later, you know, and I think the long-term impact of small optimizations over time is, the power of this conversation.

Matt Mulcock: Yep. Yeah, totally. Sorry. You just said something that triggered really quick note on this. think that wraps, does wraps this up. think is, think one of another mistake Dentist make, ⁓ on a consciously unconsciously is because they make on average three to four times the average American. And they, you know, they know that they know they make a lot of money. ⁓ like they look at their situation, like, don’t know how much exactly I make, but I know I make a lot.

Will: Yeah.

Matt Mulcock: I think that leads to this simple mindset of I’ll figure the money stuff out later. I think that’s a real issue. And so I think when you said that, I was like, I think that’s a huge issue issue for a lot of dentists is like unconsciously saying or avert, but a lot of times it’s unconscious. Like, I’ll just figure this out later. It’s all good. I make 500 grand. I’m sure it’ll, it’ll work out. It’s like, might not, it might not.

Will: Yeah.

Matt Mulcock: Okay, we’ll wrap it up for us. Any other final thoughts to conclude this topic?

Will: No, I just think simplicity is awesome. We’re big proponents of simplicity to an extent. ⁓ However, we are also huge on the optimization side. That’s literally our job is to help people optimize their finances, take them from point A to point Z in the path of least resistance. You’re going to get, as a dentist, you are going to get to point Z in some way, or form. If you look at a map and you’re working through retirement, you’ll probably get there at some point that, like you said, there’s high enough income that some dentists will just stumble into retirement. However, our job is to help you get there fastest, to help you get there with the least roadblocks, the least detours, and make it so that it’s easy and also optimized.

Matt Mulcock: Yeah. Love it. Love it. ⁓ so if you’re out there listening, well, to your point, if you’re out there hearing something triggered and you’re like, that’s me, ⁓ that’s probably a good sign that you want to talk to somebody. And we are very much here to help. talked to hundreds of dentists all over the country every single year. ⁓ we’re talking to dentists literally at this point daily that are, ⁓ wanting help with these things that we discussed around finding this balance of Am I being too simple? Where, what am I missing? I don’t, I hear this a lot. I don’t even know what I don’t know that kind of stuff. Or I feel disorganized. Uh, we are here to help. We would love to talk to you, hear your story, point you in the right direction. Uh, help you with these things that you’re struggling with in your financial life. We are here to help denisadvisors.com click on the book free consultation button. Uh, and then of course, coming up here, this will be coming out, I believe in may, uh, we are going to be about a month out from or less from the Dentist Money Summit. It is not too late if you’re hearing this and you want to come listen to amazing speakers on leadership and really all around just living on your terms, practicing on your terms. It’s going to be an amazing time. June 11th to the 13th, Midway Utah. We’d love to have you out. For now, Will, thanks for being here, putting all of this all together and sharing your wisdom. Everyone, thanks for listening. Till next time. Take care. Bye-bye.

Keywords:financial planning, simplicity, optimization, dentists, investing, tax planning, behavioral finance, financial strategy, practice management, wealth building

Finance 101, Getting Organized