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This is Why You Can’t Out-Earn Your Bad Spending Habits – Episode 243


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If you never examine how you spend money, there’s really no reason to make a financial plan. 

On this episode of the Dentist Money™ Show, Reese and Ryan dissect the pros and cons of budgeting and spending. It may not sound fun, but when it comes to holistic financial planning, talking about where spending fits is not a conversation you should ever avoid.

Your attitudes about spending will change as you progress through your career. Whether you’re a penny-pinching student or a top earner, every lifestyle step, every movement towards a more enjoyable life still requires that you check your limits.

 


 

Podcast Transcript

Ryan Isaac:
Hey, everybody, welcome to the Dentist Money Show. Thanks for tuning in and joining us on another episode. Today Reese and I talk about one of the most important pieces of someone’s financial life, but probably the one we all want to ignore the most. We’re talking of course about spending and budgeting. Are you worried about your budget? Are you worried about your spending? Today’s episode is for you. Thanks for joining us. Thanks for tuning in. Enjoy the show.

Announcer:
Consultant an advisor or conduct your own due diligence when making financial decisions. General principles discussed during this program do not constitute personal advice. This program is furnished by Dentist Advisors, a registered investment advisor. This is Dentist Money. Now, here’s your host, Reese Harper.

Reese Harper:
Welcome to the Dentist Money Show, where we help dentists make smart financial decisions. I’m your host Reese Harper here with my trusty old cohost, Sir Ryan Isaac.

Ryan Isaac:
It’s good to be here. It’s good to be trusty as always, as they say.

Reese Harper:
We missed you up in the mountains this week, young man. The mountains are alive. Lot of pretty flowers, mountain bluebells, and the wildflowers. The mountains are blooming across the Wasatch Crest.

Ryan Isaac:
Oh, the Crest. We need to ride the Crest soon. Shout out to any mountain bikers listening right now. There is a trail in the Salt Lake City mountains called the Wasatch Crest. If you make it out that way, let us know. We will join you.

Reese Harper:
If you get stuck and you want to ride the Crest, just call us. If you want to ride Deer Crest, if you want to ride Road to WOS, if you want to hit Jeremy Ranch, if you want to hit Flying Dog, if you want to hit Pioneer, Armstrong trail, you just name it, we will take you there.

Ryan Isaac:
We will go. I have good memories of the Dog. So I got a little story today. We’re going to be talking about… It’s our annual check-in of one of the most important financial topics that is also one of the ones no one really wants to deal with that often, which is spending. It’s the S word, man. It matters so much in personal finance and retirement planning, and it’s so much bigger than just trying to micromanage what your spouse is doing and fighting about the old budget, but it’s just the lamest thing ever to talk about and work on. But that’s what we’re going to talk about today.

Ryan Isaac:
So got a story, though. I was talking to a client recently and if anybody can turn this into an actual country song, there’s going to be some kind of prize for this. If you can do it, Reese, actually, if you had time to make a jingle. So I’m talking to a client, and we’re going through a little bit of his post-COVID cash flow. We’re getting savings started back up. We’re going to pay off some debts. And one of the debts he wants to pay off is a credit card from a recent home purchase, moved into the house and you know when you move into a house, you got to buy stuff, right? You got to get stuff.

Reese Harper:
Ten-four, yep.

Ryan Isaac:
Yeah. You know the drill. So one of things-

Reese Harper:
Like furniture. Got to fill that garage up. Fill that storage up. Hey, our storage is empty. We got to fill something there.

Ryan Isaac:
Fill storage. Oh, we got four extra rooms now. We better fill them with furniture no one ever will sit on. So one of the things on the credit card from the home purchase was cupboards and there was this line he said. He’s like, “There’s just one thing that’s bothering me. I want to pay off. I got cupboards on a credit card.” And I thought that sounds like the best financial country song that would ever be made is cupboards on a credit card. And I can just hear the chorus in my head. And if anyone can write a country song titled Cupboards on a Credit Card, you might be able to.

Reese Harper:
I like this.

Ryan Isaac:
I don’t know if you have any time.

Reese Harper:
Country music is just really the heart of America, isn’t it?

Ryan Isaac:
And there’s nothing more American than putting stuff on a credit card, am I right?

Reese Harper:
Yeah, totally. Okay. I got to tell you one story before we jump into this before the pivot because you’ll appreciate it. Yesterday I was gallivanting around one of my favorite vacations cities in the United States, which happens to be just in my backyard, Park City Main Street, in Park City, Utah.

Ryan Isaac:
You gallivant there. It’s like a trot.

Reese Harper:
Yeah, it’s just a place I find myself often. Anyway, I’m listening to this bluegrass guitar player on Main Street. He’s just really good. He had a harmonica guitar combo. His iPad was up on his mic stand. He’s doing third vocal splits and just singing live. And he had a lot of cool technology. It was rocking. It was a really great one-man band kind of thing. And I was like, mountains, bluegrass. It felt like the appropriate vibe.

Reese Harper:
Then I was walking down the street and there’s just this really old school country-sounding Vince Gill, George Strait…

Ryan Isaac:
Yeah, the classics.

Reese Harper:
And it just didn’t fit very well with how I was feeling. And no one was sitting by this person that… Well, like dude, what… This is like 1990. You’re stuck in 1992. And the cool bluegrass Mumford & Sons vibe, he’s getting all the attention.

Ryan Isaac:
Yeah, it’s a little indie.

Reese Harper:
And I just felt so bad. And he was parked outside of a leather store. You know those leather stores?

Ryan Isaac:
Yeah, you get some leather work done.

Reese Harper:
And I’m like, okay, this used to exist where it’s like, you could get a leather jacket, leather hat, leather pants.

Ryan Isaac:
Chaps.

Reese Harper:
Leather chaps. It’s not like I’m making fun of it. It just felt so out of place. I had just walked from this… Outside of this bluegrass singer, they’re serving organic local foods…

Ryan Isaac:
There’s like goat cheese on weird fruits.

Reese Harper:
Super hip. Then it’s like this guy’s just trying to get an audience.

Ryan Isaac:
With CBD watermelon.

Reese Harper:
He’s trying to get a line dance started. He was trying to start a line dance outside of the leather store. And I’m just like, somebody help this cat out. He’s in the wrong city in the wrong decade.

Ryan Isaac:
He missed it.

Reese Harper:
Anyway, I just thought that was an important segue into our topic today.

Ryan Isaac:
Well, here’s the question that-

Reese Harper:
Don’t spend your money folks on the wrong stuff. I don’t know. I’m trying to pivot this story.

Ryan Isaac:
That was good, man. Well, and I guess that’s a good point, man, is we all, whether it’s bluegrass gear or cupboards on a credit card…

Reese Harper:
Leather chaps.

Ryan Isaac:
Leather chaps. I bet if we went to the… Shout out to the Dentist Advisors Facebook group, if we all went there and put the craziest thing we’ve ever put on a credit card, I bet it would be a funny thread. Maybe we’ll start this when the episode comes out. But that’s the thing. That’s how we behave. We spend money. That’s what we do as people, as human beings and the moral-

Reese Harper:
Well isn’t that the point? We forget sometimes, the point of this is so that we can have a little bit of fun.

Ryan Isaac:
Yes.

Reese Harper:
Why do I work? Okay, a secondary reason is so that I can build financial security one day and maybe consider retirement.

Ryan Isaac:
But what’s the primary reason?

Reese Harper:
But I’m working so I can vacation. I’m working so I can buy my tasty food and get the car I want to drive, have my house, maybe a dog.

Ryan Isaac:
Oh, you got it. You do have a dog now.

Reese Harper:
That’s a rotating topic every few years for you to reconsider. So ultimately, we want our stuff. You either you want money so you can buy things. You want money so you can go places. You want money so you can be entertained. You want toys. Sometimes it’s apparel. Sometimes it’s food. I ate at Grappa Italian on Saturday night. I tell you it was money ball [inaudible 00:00:08:23]. So tasty. My thing is food. I spend a fair amount of money on food over the weekend.

Ryan Isaac:
That’s why I like traveling with you.

Reese Harper:
Most people would be like, “Dude, your weekend restaurant splurging is like my monthly grocery bill.”

Ryan Isaac:
That’s what you like.

Reese Harper:
I struggle with this.

Ryan Isaac:
That’s fair.

Reese Harper:
I don’t struggle with it. I consciously choose that. I drive a Ford truck, so I can-

Ryan Isaac:
So I can spend a months’ worth of groceries over the weekend at a restaurant. But you bring up a good…

Reese Harper:
I don’t have a new Tesla. I don’t have one. That’s just my choice.

Ryan Isaac:
But that’s such a good point. And I think that’d be a great first point to make is so many people get the impression that maybe financial organization or financial discipline… The point of financial planning, the point of retirement planning is to scrimp and save and be miserable until you’re 65. And then hopefully you still have a lot of health and time left and relationships left over-

Reese Harper:
Scrap it together real quick.

Ryan Isaac:
Yeah, and maybe still enjoy that future. And I think that’s just such a good point is we are very big advocates of making the now worthwhile and worth living and fun and happy and exciting and whatever that means for you. That’s a huge driver for me for helping people. It’s not so that people can be rich in 30 years. It’s so they can be happy today and enjoy all the stuff along the way. So I think that’s a great first point to make about just the topic of spending and budgeting in general.

Reese Harper:
We acknowledge folks that it’s like… And you should be able to enjoy it, but it’s important to acknowledge that left to our own devices, you’ll never be able to make enough money. You’ll never be able to make enough, no matter how much you make.

Ryan Isaac:
Out earn your bad spending.

Reese Harper:
Yeah. And I always say you can’t out workout out a bad diet.

Ryan Isaac:
Yeah, you can’t. I’ve seen people try.

Reese Harper:
That’s the truth. I’ve really tried.

Ryan Isaac:
I’ve got friends at the gym who try it. It’s like the fourth hour of the day.

Reese Harper:
You cannot out-earn your spending. It just doesn’t happen. At some point, you have to have some discipline. People are going to naturally push their spending to the max in terms of… They’re just going to clear out their bank account and so good financial planning imposes just some soft restrictions or some accountability. And it doesn’t have to be just on your monthly budget. Sometimes it’s on the big stuff.

Reese Harper:
You can’t afford to live in that house. I’ve had many a people not hire me because that is the advice I gave them. I probably had… I can think of five pretty major conversations I’ve had with people that the reason they reached out was because they were about to buy a new home. Make a big lifestyle adjustment. And they wanted to know if it was okay.

Ryan Isaac:
And you’re like, no.

Reese Harper:
Right. And I’m like, “I wouldn’t do that if I were you. That will really put a lot of pressure on your practice and your life because it’s not just the new payment.” They’re like, “Well, the payments only…”

Ryan Isaac:
A couple thousand a month.

Reese Harper:
“It’s only double what it was and I can totally afford that.” And I’m like, “Well, you’re just heading down… This is a lot bigger than that. Trust me.”

Ryan Isaac:
It’s more than payment.

Reese Harper:
This house needs to be filled up. This house will come with a new neighborhood, new friends, a new lifestyle that your income isn’t going to support. And so don’t do it. And then they never hired me. And they bought the house.

Ryan Isaac:
And hired you later? That’s also happened like five years later.

Reese Harper:
Yeah, then they come back and hire you later to clean up the mess. “I know what you said. I shouldn’t have done this.”

Ryan Isaac:
Yeah, they put us behind. And shout out to the people who did that.

Reese Harper:
And they rehired us. Good for them. Coming back.

Ryan Isaac:
Get back on track.

Reese Harper:
I’m like, it’s time.

Ryan Isaac:
Funny you say that because I think someone listening might be like, well, there’s got to be a certain income point. What if you made a million dollars a year? Personal income, a million bucks. You can’t outspend a million bucks. Have you seen clients who make seven figures spend seven figures? I have.

Reese Harper:
COVID was a nasty time for a lot of seven-figure earners. I can tell you that. Because with seven figures income comes a significant six-figure tax bill and it’s always a surprise and no one ever wants that surprise. When your income starts to get higher, certain things feel like entitlements to some people that just don’t to others. As your income rises, things that used to not be a big deal or things that used to be a huge deal, that you used to stress out about. I remember, I went out to… Like I was telling you, Grappa on Saturday with my wife. Great dinner. I didn’t think about it. I still don’t know what that meal cost.

Ryan Isaac:
And that would have been like a once in a… Like an annual anniversary date.

Reese Harper:
That was an anniversary thing.

Ryan Isaac:
And you knew what you spent after that anniversary date.

Reese Harper:
And it stressed me out and I was like, oh man, we probably shouldn’t have done that.

Ryan Isaac:
Now you’re just signing the bill.

Reese Harper:
And Barbie’s like dessert. We won’t do that again. Let’s skip next year. We don’t need to… Anytime a ticket was over a hundred dollars. It was nuts.

Ryan Isaac:
But everyone goes through that. Don’t you think? When you’re in college to your residency, in your first job and your new ownership. You always get through those thresholds. It’s a second car in the family. It’s a house that fits everyone finally. It’s a vacation where you don’t have to share three people to a bed finally. Everyone blows through those thresholds where you’re now spending what you once thought was insane to spend. And that’s the point is there isn’t a point of income where that no longer happens. You just keep doing it. You just keep spending.

Reese Harper:
Okay. People still don’t agree with you. They’re like there isn’t a point or there is a point though, Ryan. Like a million dollars of personal income. Okay. We will tell you objectively, a million dollars of personal income is probably harder to live within your means. It’s probably more difficult because you start thinking-

Ryan Isaac:
Well, vacations are now like $75,000 vacations and it’s just like fine. 50 grand.

Reese Harper:
People are joking and smiling. That’s not the average listener here, Ryan.

Ryan Isaac:
No.

Reese Harper:
But that does happen folks.

Ryan Isaac:
That’s not my vacation.

Reese Harper:
I don’t know how that happens, but it does. Well, I do actually know, but here’s the thing that’s even worse. You can make hundreds of millions of dollars. You can be worth billions of dollars and be broke.

Ryan Isaac:
Well, we see it with athletes, Hollywood.

Reese Harper:
Over personal spending alone. For example, I know someone who is worth probably between 150 and $200 million, and I know that they’re illiquid as can be, but they have a lot of cool stuff. They’ve got a $11 million yacht. It’s pretty nice.

Ryan Isaac:
It sounds nice.

Reese Harper:
They do have a seven and a half to $9 million plane. They have about six properties, and they got 10 grand in an IRA. That’s their liquidity.

Ryan Isaac:
That’s tight.

Reese Harper:
I also know of a situation with someone who’s worth billions. And I can tell you that I don’t have a personal, intimate understanding of this financial statement, but based on what I know about what they own, I can kind of add it up in the… I tend to do that, unfortunately. Ryan might try to measure someone’s ability to squat when he sees something.

Ryan Isaac:
It’s possible. Macro intake or something.

Reese Harper:
And I’m trying to do their personal financial statement in my head, figuring out if they’re illiquid or not. Anyway, a private island, for example, does cost quite a bit. And that is a personal spending item that some people use to get out of COVID. A small mountain that you buy for yourself. These are two examples of things I have seen done in the last three months that have nearly wiped people out, and they were preferences. It’s just, they may not have earned it.

Ryan Isaac:
You’re saying the scale, it’s just… Yeah. The spending just gets bigger. So let’s take a quick break right there. And when we come back, I want to talk about some of the underappreciated points of spending and one of the better ways to control it instead of micromanaging the old budget.

Ryan Isaac:
Hey, Matt, what do you like to drink or snack on when we do our webinars every month?

Matt Mulcock:
Yeah. That’s a good question. I’m usually hitting a Red Bull, but it’s hard because there’s an evening webinar.

Ryan Isaac:
Yeah. These evening webinars taking place 6:30 PM Mountain Standard Time.

Matt Mulcock:
Mountain time.

Ryan Isaac:
Once a month.

Matt Mulcock:
Where do you find it?

Ryan Isaac:
Well, if you’d like to find the webinar or you’d like to register for it, you go to dentistadvisers.com/webinar, or just go to the website and click on webinars under the education tab.

Matt Mulcock:
It’s a good time.

Ryan Isaac:
It’s a great time. What kind of things do we cover in our webinar, Matt?

Matt Mulcock:
So each month we’re going to hit an element, right? So it’s going to be some component of your financial life. We’re going to dive a little bit deeper than we would like on the Dentist Money Show. We’re going to draw pictures. There’s live polls. You can ask questions.

Ryan Isaac:
It’s a great time.

Matt Mulcock:
Yeah. It’s a good time.

Ryan Isaac:
Well, we’d love to see you in attendance at one of our fantastic webinars. Just go to dentistadvisers.com. Sign up today for the next one. Thank you very much.

Ryan Isaac:
Let’s talk first about one of the things I don’t think people realize about spending. I think when people talk about their spending, their monthly budget, it feels like this short term thing. We’ve got to get the budget. We spent too much on groceries last week, or went out to dinner too much or went shopping too much. But I don’t think there is this relation to net worth and what higher spending means. The strain it puts on your net worth. How much bigger it needs to be in the future for you to be financially secure.

Ryan Isaac:
So let’s talk a bit, and this will relate to one thing that we measure for clients in our elements planning system called Total Term, which is just a measure. It’s a formula that tells us at what point your net worth is big enough to sustain the spending you’re used to living on. So let’s just start there. Any thoughts on, in that formula, it’s just basically net worth divided by spending. Spending is the denominator. So the bigger that number gets, the bigger the net worth you need to maintain your spending one day. So let’s just start there. I don’t think people realize how much spending plays into net worth in retirement calculations. What do you think?

Reese Harper:
Well, let’s take an example. Let’s say someone has a net worth of $2 million. Let’s say someone has a net worth of a million dollars, and they spend a hundred thousand a year. That’d be a total term score of a 10. But another person in that same situation who, instead of spending a hundred thousand dollars, spends $200,000, only has a net worth or a total term score of a five, meaning one person can last for about five years and the other person could last for about 10 years.

Reese Harper:
If you’re some kind of a Russian billionaire that has a $400 million yacht that you like to sail around to film festivals around the world, which is a thing. I was just looking at really expensive yachts the other day trying to… I was trying to figure out how illiquid this billionaire was and I was trying to calculate things and I saw the yacht. Expensive yachts can range anywhere from like 150 to like $550 million, depending on what you buy. They’re like small cities. It’s crazy, but they’re purchased quite a bit. Jeff Bezos has a really nice one. I think it’s called the Flying Fox or something like that.

Ryan Isaac:
Well, you got to expense it. I think more stressful might be naming it. That’s a lot of pressure. What do you name it?

Reese Harper:
Like Octopus. I saw one called Octopus, and I was like, dude, a $400 million yacht named Octopus. You got to come up with something better than that. So you can take the math of this stuff. You can say, look… In my own case, I’ve told people before, it’d be nice to have a swimming pool one day. I would love to have that. But my utility bill’s probably five or $600 less a month because I don’t have a pool. And so over a calendar year, my total term score or the amount of money, the wealth I have to have to support my preferences, would be a much higher number.

Reese Harper:
So your spending is everything. Got off the phone this morning with a young dentist. He just told me… Not young. He’s probably in his forties.

Ryan Isaac:
Hey, that’s young for me. That’s young these days.

Reese Harper:
I’m saying that is Ryan and I’s ages.

Ryan Isaac:
We’re going to call it young.

Reese Harper:
We want to believe we’re like really young.

Ryan Isaac:
We’re calling it young just for everyone listening.

Reese Harper:
So he had gotten to a point where work was starting to become optional, but after talking about his financial statement, I was like, “Well, how’s that possible? Don’t you need to work a little bit longer?” He’s like, “No, we only spend 3,800 a month.” I was like, “Oh man, okay. You have two kids and you’re really conservative and you’re literally living on $3,800 a month and you have a paid-off house that’s a $200,000 house and yeah, you are, you’re done.” And he was like, that’s his choice. That’s Ryan’s general nutrition bill for his workout routine.

Ryan Isaac:
Yes. Feel those squats.

Reese Harper:
If it’s even quite that high. It’s like, everyone’s got their preferences. The more your spending is, the more your net worth has to be to support that. And it’s a habit that you don’t really change. Do you have a lot of clients that are getting rid of their second home, their vacation property? I would say 10% of people have to. But if people had their druthers no one would.

Ryan Isaac:
No one would. Most of my clients are still in the young age. I’m going to call it young now, forties and fifties. But there are quite a few people who have delayed the big plans that they once had in their thirties for like the huge renovation. They’ve got the beach house, and they were going to just deck it out. Like a million dollar renovation project. And now there’s like 50 grand went into it, and they’re like, it’s good enough.

Reese Harper:
We’re good to go.

Ryan Isaac:
It’s okay. We’re going to deal with it.

Reese Harper:
I think it’s just important to remember every lifestyle step that you take, every little movement towards a little bit more comfortable life, a little bit more enjoyable life, there’s a price to pay and you cannot out earn it. At some point, you have to determine where your limits are. I would say that has to be a more frequent discussion than once every few years. It’s something you have to check yourself on more frequently than that.

Ryan Isaac:
Yeah. And if anyone wants to reference the schedule, the system that we’re talking about and how frequent we revisit this, you can go to dentistadvisers.com and check out the elements tab. There’s 12 of these blocks that are elements, and these are all different financial subjects. One of them is this net worth divided by spending element. This feature of your financial well-being. And that’s the main one that tells somebody where they’re at and where they’re headed. And your spending… It’s the denominator in the equation. So the fluctuation of that denominator will change that score dramatically.

Ryan Isaac:
And that changes how long you have to work, how much money you have to save, the returns you need on your investments, in order to pull off the retirement you’re hoping for. It’ll affect the money you leave to heirs or kids or charities. It’ll affect the amount of insurance you carry. So it’s a really big deal. So you can go to dentistadvisor.com, check out the elements and that one that we’re talking to is called Total Term. There’s videos, podcasts on that subject. But it’s a big one.

Ryan Isaac:
Let’s take a quick break. When we come back I want to hit on one last thing, which is in my mind the best way to budget without having to budget. So we’ll do that when we come back.

Ryan Isaac:
We wanted to take a break for just a second to remind you how easy it is to book a free consultation with one of our dental-specific advisors. What you do is you go to dentistadvisors.com and you’ll see a big green button that says Book Free Consultation.

Reese Harper:
Can’t miss it.

Ryan Isaac:
Click that button and book a time that works for you or you can just call us at 833-DDS-PLAN. Let’s start a conversation about how we can help you with your finances.

Ryan Isaac:
Maybe the ugliest word in personal finance that no one really wants to talk about is the B-word, which is the old budget. Having been a former Dave Ramsey disciple myself, early in the days, like the budget. I just hear that word and a lot of emotion attached to that. I think it’s a myth in personal finance that getting the budget under control is the main way to save your financial self. I think that’s the pressure we all feel. Like if I just get this budget in control, then everything will be okay.

Ryan Isaac:
But the truth is the budget is like a crash diet a lot of times. You can tell yourself you’re never going to eat sugar again for the rest of your life. And you might be able to swing it for a month.

Reese Harper:
And many do.

Ryan Isaac:
And many do, but you’re going to eat sugar later in your life. Micromanaging your family’s budget to death is not a sustainable practice. It’s just not. You do need to track it. You do need to know what it is and you do need to have some accountability and limits to it, but in my opinion-

Reese Harper:
Okay, let’s define that just a little more. What Ryan is saying because he’s talked about this a lot and probably skipping over a couple of details.

Ryan Isaac:
Skippedy-skip. Gallivanting over details.

Reese Harper:
What we’re saying is sitting down and keeping track of everything to the penny and setting specific budgets for each category of personal spending i.e. There’s a restaurant and dining out budget that’s different from groceries that’s maybe different from fast food. We have our fast food quick drive-thru budget, and then we have our groceries or our dining out. And we’re going to track all of that, and we’re going to hold ourselves to a budget.

Reese Harper:
It’s a lot of time invested is what we’re saying. It requires hours and hours. What we typically see is that early in people’s lives, when money is really tight, that is when they generally go that direction because you’re forced to do that. Why? Because you’re going to lose your home, and they’re going to take away your car. And so you get scared and you budget like that. And Dave Ramsey’s audience generally tends to be people that are a little bit more worried about their next paycheck. And that’s a great audience that he serves and I’m grateful that’s happening. Our audience tends to be people that were starving, eating ramen noodles for their entire time during dental school and residency. Maybe they lightened up.

Ryan Isaac:
Just took more loans and paid better.

Reese Harper:
Then they just go and step right into money that’s more than they’ve ever had. And it’s more like a professional athlete than not. In those cases, we think it’s good to budget in the early years but what Ryan’s saying… I’m trying to just highlight the difference here between being really granular like you’re saying and obsessed about budgeting. That won’t last forever. It’s not a sustainable practice, but we think you should do it early in your career a little bit to get a sense for what it’s like and how it feels.

Ryan Isaac:
Should experience it a few times. A couple times a year.

Reese Harper:
At some point, there’s a better way. And what were you going to say the better way is?

Ryan Isaac:
My suggestion is to do the reverse of the budget, which is to force automated savings with a good degree of accountability, preferably to another human before you even think about the budget. What I’m saying is, consult with somebody, ideally a financial advisor that knows your whole comprehensive overall situation about what an ideal savings rate would be. Even a challenging one for your current income. And that’s going to change. An ideal savings rate on 150 is different than 450 and that’s different than a million, but find a challenging savings rate that is going to make sense for your situation and push that. Automate it first before anything else.

Ryan Isaac:
And what I’ve found to be true is that even… And everyone’s personality is different with a budget, but there’s some personalities that are really… They’re just really anxious about the monthly budget and the monthly spending. They can’t stop thinking about their bank accounts and what got spent yesterday. Some people just obsessively check that stuff. And even for those people, I found that once they’ve established an automated, healthy savings rate, it really chills them out a lot. They just get this freedom to go.

Ryan Isaac:
It may take a little bit, but they’re just like, “Oh, I really don’t have to micromanage. It doesn’t matter what we spend on vacation, right?” I’m like, “No. You have a 30% savings rate, which is killer for your income.” Like, well, “I went to the golf shop, bought some new stuff and my wife went shopping, and she bought some stuff, and we got stuff for the kids. You’re saying it doesn’t matter.” I’m like, “It doesn’t matter because you’re saving enough money. Your savings rate is healthy and it’s putting you on track to build a big enough net worth.” That might seem simple, but it’s also not an easy job to pull off long term, maintaining a savings rate. It’s a very big job. It’s very behavior-driven and accountability is the main ingredient to making it happen over a long period of time.

Reese Harper:
Yeah. I think that’s great insight.

Ryan Isaac:
So the invitation would be if this is something which is everybody… You’re thinking about a lot. You have a lot of anxiety around struggling with the budget, the savings, how to make one work. That’s what we specialize in. That’s our expertise. That’s the whole element system that we build is to build enough organization and accountability, to making sure a healthy savings rate happens for a long period of time. And that’s the key ingredient to future financial success in my opinion.

Ryan Isaac:
So a couple things you can do if you’d like to reach out and get some help with that. One of the easiest ones to go to the website, schedule a consultation, book a free chat with one of our advisors. So dentistadviser.com. Click on the Book Free Consultation button, or you can reach out and ask us a question in our Facebook group. It’s dentistadvisors.com/group. That’s our Dentist Advisors Facebook group, or shoot us messages over social. We’ll be happy to answer it, but those are some ways you can get in touch and ask some questions. Check out the element system. It’ll keep the organization and the accountability happening, and thanks everyone for tuning in. Thanks for the support. And we’ll catch you next time.

Reese Harper:
Carry on.

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