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How a Dental-Specific Advisor Can Give You an Advantage – Episode 250


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When it comes to the unknown, look to people who’ve been there before.

On this episode of the Dentist Money™ Show, Ryan and Matt discuss the reasons why getting dental-specific financial advice is preferable to getting financial advice from a generalist advisor. 

Dentists are expertly trained clinicians who often carry the weight of running a small business and all that goes with it. That entrepreneur/professional combination often results in very unique financial challenges. If dentists are different, are there advantages to getting financial advice from someone who understands their issues?

 


 

Podcast Transcript

Ryan Isaac:
Hey, Dentist Money Show listeners. Thanks for tuning in. We’ve got an excellent episode for you today. Me and Matt are talking about what makes a niche financial advisor important to a dentist. Talking about all the ways dentists are different, and how a financial advisor who’s been there, done that, seen it all, can help you make the smart financial decisions you’ll have over your whole life and career. Thanks for tuning in. If you have any questions, go to dentistadvisors.com, click on Book Free Consultation, schedule a chat with us. Enjoy the show.

Announcer:
Consultant advisor, 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, Ryan Isaac.

Ryan Isaac:
And welcome to the Dentist Money Show where we help dentists make smart financial decisions. I’m Ryan Isaac, sometimes involuntarily referred to as Sir Ryan Isaac. And I’m joined by the best guy in the world, smartest financial advisor at Dentist Advisors, Mr. Matt Mulcock. What’s up, man?

Matt Mulcock:
You are setting me up for failure. Let’s just say that.

Ryan Isaac:
No, that was-

Matt Mulcock:
It makes me feel really good, but my wife wants to, in fact, my wife recently has been like, “Oh, you’ve been on the podcast. I want to listen to them.” And I’m like, “There’s a rivalry here with Ryan and you with who thinks I’m…”

Ryan Isaac:
She’d be like, “yeah, I’ve heard him talk before. We’re good.”

Matt Mulcock:
Yeah. Yeah, exactly.

Ryan Isaac:
But I think Matt is great. It’s great to have Matt on the show, and we’ll be looking forward to more Matt on the show. [foreign language 00:01:34]?

Matt Mulcock:
[foreign language 00:01:36].

Ryan Isaac:
We learned a new word. Anyone who speaks [crosstalk 00:01:39], tell me if I said that right. We were watching a clip of Parks and Rec of their public radio. And they said that. And then we tried to work it in.

Matt Mulcock:
What was the other word?

Ryan Isaac:
Well, that was like how Americans [crosstalk 00:01:50].

Matt Mulcock:
That’s how we say it.

Ryan Isaac:
Yeah.

Matt Mulcock:
Yeah.

Ryan Isaac:
Matt, so this is September?

Matt Mulcock:
It is. Yep

Ryan Isaac:
Yeah, September 2020. I recently got on a plane for the first time in a while. When’s the last time-

Matt Mulcock:
It gave you a big COVID hug?

Ryan Isaac:
Yeah. When is the last time you were on a plane?

Matt Mulcock:
Oh my gosh.

Ryan Isaac:
It’s been a while.

Matt Mulcock:
I honestly don’t even remember. Probably… I don’t even know. Wow. Flying-

Ryan Isaac:
Probably early 2020.

Matt Mulcock:
Had to have been. [crosstalk 00:02:20] Maybe I haven’t been on a plane this year. I don’t think I have.

Ryan Isaac:
Maybe not. So I just flew here, Phoenix to Salt Lake. Shout out to Phoenix.

Matt Mulcock:
How many people were on the plane?

Ryan Isaac:
Middle rows are still empty. But it was full, other than that.

Matt Mulcock:
Everyone had a mask?

Ryan Isaac:
Everyone had a mask.

Matt Mulcock:
Yeah. It is required.

Ryan Isaac:
It is required.

Matt Mulcock:
Yeah.

Ryan Isaac:
It is required. All right. I’ve got a question for you. I think everyone’s been in this situation that’s ever been on a plane. So imagine you’re up in the air, as planes are.

Matt Mulcock:
Absolutely. They’re on the ground, then they’re in the air.

Ryan Isaac:
Then they’re in the air, then they’re on the ground again.

Matt Mulcock:
Yeah.

Ryan Isaac:
Hopefully in that order, and softly. So you’re in the air and it starts rocking a little bi, it’s shaky.

Matt Mulcock:
Gets a little scary.

Ryan Isaac:
It banks. You can feel your stomach drop like a roller coaster. I always think every time I feel your stomach kind of gets that feeling when you drop, in an airplane that must be like hundreds of feet at once.

Matt Mulcock:
It has to be.

Ryan Isaac:
It’s got to be, like a roller coaster. You get that feeling on a roller coaster. You’d be like, “I wonder how far we just dropped,” in the airplane because it’s relative. I’m what, 30,000 feet in the air?

Matt Mulcock:
Yeah, 30,000 feet.

Ryan Isaac:
Anyway, so you’re sitting there, the turbulence, the lights, the beeps, it shakes, it’s going side to side, it’s dipping. What are your reactions? Instinctually, what do you do when, more than a shake, enough to make you go, “What’s going on?” What are your reactions? Where do you turn? What do you do?

Matt Mulcock:
The first thing I’m doing is just grabbing onto like the…

Ryan Isaac:
So you hold tighter?

Matt Mulcock:
Yeah, totally. It’s my first thing. I try not to, it depends on who’s around me, too. Like if my wife’s there-

Ryan Isaac:
On a side note, I do the same thing too. I’ll reach down and I’ll tighten my seat belt and I’m like, “What did that do?” It’s already on [crosstalk 00:04:06].

Matt Mulcock:
Pull your helmet out. Put your helmet on.

Ryan Isaac:
I don’t know. Okay. Anything else that comes to mind? [crosstalk 00:04:10] You grab the side.

Matt Mulcock:
I tend to look for the flight attendants to see what’s going on with them. If they’re calm, I’m like, “Okay.” But they are going to have the first, if something’s going on, they’re going to know.

Ryan Isaac:
They would know.

Matt Mulcock:
They’re going to know. And you’re going to see in their face something’s wrong. So I’m going to look at them initially.

Ryan Isaac:
Because they would know like, “Oh, this ain’t normal.”

Matt Mulcock:
For sure.

Ryan Isaac:
Yeah. They would know that. Have you ever seen one freak out by the way? I don’t think I have seen them rush to their seat and be like, “oh crap, oh crap.”

Matt Mulcock:
Like sprinting down. Like “Everyone stay calm!” Yeah, no, I haven’t seen that.

Ryan Isaac:
Everyone stay calm as they’re sprinting.

Matt Mulcock:
As she’s sprinting.

Ryan Isaac:
Knocking drinks over.

Matt Mulcock:
Shoving people out of the way

Ryan Isaac:
All right. Anything else? Anything else that comes to mind that you do? You grab on, you looked at the flight attendant. Anything else? No right or wrong answer. I’m not pressuring you here so calm down, but I’m just saying.

Matt Mulcock:
Yeah, no. I mean maybe put my shoes back on. I don’t know.

Ryan Isaac:
Get ready?

Matt Mulcock:
I just-

Ryan Isaac:
Isn’t that funny, the stuff we do? I always like to look out the window to see the landscape. Like if we tilted or it feels like we’re dropping, you look out the window like, “Are we dropping?” Like I’d be able to tell.

Matt Mulcock:
You’re in the cloud, you have no idea.

Ryan Isaac:
You have no idea. So today we’re talking about, why would you hire a financial advisor who’s a dentist-only financial advisor? And to be more helpful to our audience, I would say why would you hire anyone in your life as a dentist who is a niche, dental, specific person? Right? Because, I was on a podcast, a couple… I don’t even think it’s come out yet. It was Shared Practices. Shout out to the Shared Practices crew, our guys over there. They had this question where they were like, “Hey Ryan, why do people hire your firm?” And to answer that, I kind of just backed up a little bit and said, “Well, let’s just talk about who dentists need to hire in general. What kind of people that they need around them in general during their career?”

Matt Mulcock:
Who’s their team?

Ryan Isaac:
Yeah, who’s their team, and then why would you hire someone that says they’re dental specific? So we kind of went on that topic, but that’s what we’re going to talk about today. But I wanted to point out, because as I was flying here, the same thing happened. Turbulence out of Phoenix was crazy. And landing, I swear, landing in Salt Lake City. It’s always turbulent there.

Matt Mulcock:
Yeah. I feel like it is. It’s something with the air pressure. Yeah.

Ryan Isaac:
The altitude or something in the mountains. Right. But the same thing. So I always tighten my seat belt as if that’s going to save me if we hit the ground

Matt Mulcock:
It might, you never know, put your shoes on. You’re going to be fine.

Ryan Isaac:
I always look out the window as if like I’m going to gauge like, Oh, well the horizons still looks okay out my window. So we’re probably okay.”

Matt Mulcock:
We’re fine.

Ryan Isaac:
We’re fine.

Matt Mulcock:
The flight attendant’s sweating lightly

Ryan Isaac:
But I always say what you said. I think this is the most… I looked this up and it’s a pretty universal thing, reaction. People look to the flight attendant.

Matt Mulcock:
That’s something people do?

Ryan Isaac:
Yeah. Are you serious? Yeah.

Matt Mulcock:
I do it. I’m just saying I’m glad.

Ryan Isaac:
It’s very common, most common reaction.

Matt Mulcock:
I’m average. We’ve already determined. So that’s good.

Ryan Isaac:
If you’re scared on an airplane and it’s bumpy, people look to the flight attendant. And so I asked the question to myself, as I was thinking about this podcast, when we’re going to talk about hiring a niche advisor as a dentist, “Why do we look? Why do we look at the flight attendant?” So why in your head, you look at the flight attendant, shaky, you grab the seats and then you look over up the aisle and you look at the flight attendant. Why do you do that?

Matt Mulcock:
I just feel like they are going to know what’s going on. They should know.

Ryan Isaac:
You’re on your fourth flight in a couple of years. And they’re on their 400th flight.

Matt Mulcock:
Yeah, right. Probably that month.

Ryan Isaac:
That month, right. So that’s what we’re going to talk about. And that’s the story that was in my head. I’m like, we’ve looked to people that have been there before, and we gauge their reaction, and we gauge their advice and their signals on how should I react? Like I’m on a plane rarely, that person’s daily. So I’m going to just look at them and see, what is she saying about this? What is he doing right now? Is he sprinting down the aisle trying to grab the seatbelt? Or is she calmly sitting there joking. I always like when I look ahead and they’re joking back and forth to each other, like, Oh, they’re fine.

Matt Mulcock:
No big deal.

Ryan Isaac:
Or they’re crazy, like they don’t care. S.

Matt Mulcock:
That’s a good point.

Ryan Isaac:
So we’re going to take a quick break, but we’re going to start breaking down, we’re going to talk about, we’re going to back up and ask the question that I was asking on Shared Practices, which is, “Why would someone hire a niche financial advisor that only works with dentists?” We’ll make that a broad question. Why would you hire a niche CPA or niche attorney? But we’ll answer this in the terms of, what makes it a dentist different? And why would you want to look at somebody, during certain times of your career, that’s seen it hundreds of times, as opposed to just one or two, or single digit number of times. Take a quick break, and we’ll pick up there when we get back.

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 it’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 dentistadvisors.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:
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, right? We get to draw pictures, there’s live polls. You can ask questions.

Ryan Isaac:
It’s great time.

Matt Mulcock:
Yeah. It’s a good time.

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

Ryan Isaac:
All right. And we are back from this break where, by the way, we were talking with our podcast producer and he says that his reaction during turbulence is to fall asleep.

Matt Mulcock:
Like a baby.

Ryan Isaac:
Like a baby.

Matt Mulcock:
It’s my first response.

Ryan Isaac:
Like a baby being rocked asleep. So I guess not everyone’s looking to the flight attendant.

Matt Mulcock:
I don’t think I’ve ever heard that before.

Ryan Isaac:
I think that’s an anomaly. We’re not going to use that as an example.

Matt Mulcock:
Yeah, that’s incredible.

Ryan Isaac:
Okay, let’s try to answer this question by giving some context. I thought I’d just go through a list of things that, why is a dentist different? And maybe that’s an obvious question to someone listening to this. There’s so many things that make us different, but I think a lot of dentists genuinely wonder what does make us different than an average someone else.

Matt Mulcock:
I’ve gotten that question before. Consultation call or just at an event or something

Ryan Isaac:
Why are we different? Why did you pick dentists? What’s so different about a dentist? So I’ve just got some categories that we’ll kind of run through and subcategories of those that make a dentist very different than the average. Even if you compare to someone else who’s like same income, same tax bracket, all that kind of, same net worth. There’s just so many different things about a dentist that make it very different. So, and then maybe you have some too, and we’ll just kind of go back and forth.

Matt Mulcock:
I’m sure we have the same list.

Ryan Isaac:
We’ve been doing this for awhile and-

Matt Mulcock:
We’ve been on 400 flights this week. So we’re good.

Ryan Isaac:
That’s exactly the point. All right. Yeah, I guess if we just redo this podcast and be like, “We are your flight attendants for this flight. We hope you enjoy the next 32 minutes.”

Matt Mulcock:
Yeah. Or maybe you’re listening to this on a flight in the middle of turbulence and you’re looking at the flight attendant right now.

Ryan Isaac:
Just look at us. It’s all good. We’re calm.

Matt Mulcock:
Yeah. Just listen to our voices.

Ryan Isaac:
All right. So number one, I think, and I was sharing on the other podcast the other day was, right off of the bat, dentists are very different. Well, I guess even you could just say they’re very different in education, right? Their educational track is much longer than the average person, and it’s pretty grueling. But I was going to say right off the bat, dentists are different in their debt loads. And if you think about, especially dentists nowadays, I mean, if you’re listening to this, and you’ve graduated in the last five years, to say that you have half a million dollars in student loans, doesn’t even make anyone blink an eye anymore.

Matt Mulcock:
Not at all.

Ryan Isaac:
I remember when we started this business and I remember talking to clients for some of the first time about their debt and I’m talking like, ’06, ’07. And they’d be like, “Yeah, I’ve got 150 in debt. 200 grand in debt.” Blew my mind. I thought, “How on earth can you have that much in debt?” Now, if there’s any non dentists listening, then just reach out to your dentist next time and thank them, okay? For going through what they’ve gone through. Because now most dentists coming out of school with more debt than the nicest house, most people ever own. I mean, unless you’re in the coast.

Matt Mulcock:
Yeah. People in Southern California, in New York right now are like, “What are you talking about?”

Ryan Isaac:
They’re like, “I’ve got five dentist student loans in my house.”

Matt Mulcock:
Exactly.

Ryan Isaac:
I’ve got five dentists [crosstalk 00:12:57] That should be the new, how you flex on people on your mortgage is like, how many dentists are in your house? I’ve got a five dentist house.

Matt Mulcock:
I could’ve gone to dental school five times in this thing.

Ryan Isaac:
That’s the new flex. So right off the bat, dentists are coming out of school with this debt load. That’s more than the average person’s dream home. And that’s just coming out of school. Most dentists also pursue a career, which this is a different point we might make, but pursue a career where owning a business is kind of the common way. And it’s kind of the goal for most dentists, right?

Matt Mulcock:
Yeah. I think it still is. Yeah.

Ryan Isaac:
Yeah.

Matt Mulcock:
It’s changing a little bit.

Ryan Isaac:
A little bit. There’s more options now before, but it’s the most common thing is that you want to own a practice. And so, before you even go buy your business, you’re already in the hole that much. And then when you add a mortgage on top of that and you add a business, I mean, you can add a business loan on top of that, of another… It could be as cheap as a few hundred thousand dollars, it could be half a million dollars, it could be seven figures. And then some other things. That’s the first thing that came to my mind is, before the career even begins, day one, you have more debt than any other average person will have throughout their entire lives, more than likely. Anything that you want to… I don’t know if that was on your list or not.

Matt Mulcock:
That was number one for me too.

Ryan Isaac:
So here’s the question is, what are the different… In your mind, Matt, or your experience, what are the decisions that are different for a dentist throughout their career that are different in debt decisions? Or that makes their situation different because of all this debt?

Matt Mulcock:
Yeah. I think the fact that the debt load is so high, again, it’s this, you kind of have to have it to get to where you are in your career early, early on. It’s kind of this recognition that you’re going to carry that a lot longer in life, most likely, right? And you’re going to have to. Because like you said, if you’re going to be a business owner, that should be your priority. Growing that income, growing that practice. And that decision to kind of push off that debt extended it out, carry it longer in your life. I’m not going to say in every case is the right way, but in most cases, it’s going to be the right way to do it. So I think the psychological impact that can have-

Ryan Isaac:
I’m glad you said that.

Matt Mulcock:
Yeah, I think that’s something that, again, something we see all the time is like how to approach that from a psychological and emotional perspective. And reaffirming to them, like this is the right move, carrying this debt, extending it out. Maybe not worrying about the interest rate for right now or the payment or whatever. Focus on your business first, other things.

Ryan Isaac:
You bring up such a good point. I’m glad you said that. Because think about the pressure of carrying that much extra debt before you even get to begin your career, ,in a lot of cases, start your family decide where you’re going to live, get your first house, whatever. You’ve already got crushing amounts of debt. The most average people would just be like, “This is insane.”

Matt Mulcock:
Blow their minds.

Ryan Isaac:
It’d blow their minds. So you’re already beginning in a position where your future decision-making is going to be more heavily weighted with emotion and pressure and stress and anxiety than one of your peers. Even in the same income range, or even in a similar field of income range or something, you’re already dealing with an amount of pressure that your peers don’t feel. In our process, if you want to know what we’re talking about, you can follow along on the website, dentistadvisors.com, click on elements. There’s this thing that we do once a year, we dedicated an entire month to this subject of debt. And you can go to the elements page and click on debt rate. It’s in the middle row of these little boxes, the third one over, I don’t know what color is it? It’s on your shirt right now. Green? It’s probably green.

Matt Mulcock:
It’s green. It should be red.

Ryan Isaac:
Yeah. I was just thinking that it should be red. We’re always in the design process.

Matt Mulcock:
It’s always evolving.

Ryan Isaac:
So, this really different though. Every single year, we spend an entire month analyzing the interest rates, and the terms, and the payments, and the remaining amount of interest for every client. And we look at it and we go, “Can we get a better rate today? Can we combine some loans? Should we start paying extra on some of these things?” That’s just a unique piece of financial planning that most other people, even peers with similar income, similar net worth, will not likely have to deal with. But it’s very likely that a dentist could refinance loans literally every year in order to keep lowering payments, or lowering interest, or speeding up debt reduction. And maybe we’re a little bit biased over the last, I don’t know, since we started this business rates have just kept going down. So I imagine at some point refinances won’t be as common. But I mean, we’ve been refinancing loans since ’06. Not we, I mean, we’ve been helping dentists find a good lender to do that.

Ryan Isaac:
So from a financial planning perspective, that’s just such a unique thing, that’s an activity you should be going through. Imagine if you’re a dentist and you started on your 15 year loan and your practice, your 20 year building loan, and you never refinanced again, you started at five, six or seven percent interest rates. I mean, you’re leaving tens of thousands, probably hundreds of thousands of dollars a day.

Matt Mulcock:
It could be hundreds of thousands. Yeah.

Ryan Isaac:
I mean, I will say from my experience over the years, every year when we run this month and dentists take a look at their new debt, I mean, dozens and dozens of people end up refinancing probably millions of dollars in debt and probably saving multiple six figures in interest, easily. Let’s hit one on your list, Matt. What’s one you want to bring up, something that makes it a dentist different that’ll alter their financial planning.

Matt Mulcock:
Yeah. I think it is along the same lines, but with the schooling, and how long it takes, but you hit it a little bit in your first comment, where they come out and they’re kind of this… More than any profession out there, even most MDs. They’re this hybrid right there. We call them entre professionals, right? Because again, for the most part, owning a practice is going to be the end goal. So they come out, they’re a clinician, right? But they’re also a business owner. So again, we’ve coined this term entre professional. No other industry really deals with this. Again, there might be some MDs out there, yes, I know. But it’s the norm for the dental space. So it brings challenges and things that nobody has to deal with. You’re running this business, and by the way, most of the time it’s getting better, but you’re not taught how to be a business owner or no finance or no one-

Ryan Isaac:
Not part of the 10 years or half a million dollars training.

Matt Mulcock:
You’re coming out of school with 500 grand in debt. And you don’t know how to run a business. And what’s the first thing you’re doing in the first two years usually? You’re buying-

Ryan Isaac:
And the most important things you’ll do. I hate to say, I don’t know, someone fight me on this, but some of the most important decisions you’ll make are business decisions, not just clinical decisions early in your career. I mean, they’re just so crucial. So I guess going back to the flight attendant analogy though, is when these things come up, like if you’re dealing with your debt or you’re dealing with career decisions that are dramatically different than most other people have to deal with, because not only do you have to fix teeth well, but you have to train people and run marketing, and manage a P&L.

Matt Mulcock:
Yeah, you’re HR, you’re marketing, you’re sales. Yeah.

Ryan Isaac:
So when you have questions about these things. And you… It’s, again, when there’s turbulence on the plane, when there’s turbulence in your debt and there’s turbulence in your business decision-making. Things you have to deal with, the hundreds of decisions you’ll have to deal with as a business owner. You want to be able to turn to the person who’s seen it hundreds of times too, and go… When you’re freaked out about your debt load, or, “Man, I’m about to take on a partner. Is this normal? Do other people go through this?” You don’t want the flight attendant to turn around and be like, “Bro, I don’t know. I don’t really fly that much.”

Matt Mulcock:
“I have no idea what’s going on. Haven’t heard from the pilot in like 30 minutes.”

Ryan Isaac:
Can you imagine if you look at the flight attendant and you’re like, “Are you scared?” And they’re like, “I don’t know. I don’t really do this that often.”

Matt Mulcock:
“I haven’t seen this ever.”

Ryan Isaac:
That would be a huge problem, man. I think that’s a good one. Let’s take a quick break, mostly because I need to wet the whistle and stretch the quads and then we’ll be right back.

Ryan Isaac:
As you’ve listened to our podcast, maybe there’s a question about your finances you’ve wanted to ask. It’s easy to get an answer. All you do is just pick up that phone, give us a call at 833-DDS-PLAN to set up a consultation. Or if you don’t want to call us, you can just go to the website at sentistadvisors.com, click the book free consultation button and set it up. It’s free. Do it today.

Ryan Isaac:
Okay. A whistle wetted. We’re back in the whistle’s wetted.

Matt Mulcock:
My dad says that a lot, “I’m going to wet my whistle.”

Ryan Isaac:
I just don’t, I think that’s probably a dad phrase that should be retired permanently.

Matt Mulcock:
I don’t know. I feel like-

Ryan Isaac:
Let’s just mark this as the last time that it’ll ever be said.

Matt Mulcock:
I don’t know, I feel lik I’m going to start saying it more.

Ryan Isaac:
As the resident old guy in the company, I have reserved the right to continue to say weird dad things.

Matt Mulcock:
Here’s the thing, I’m still a new dad. I’m still in the new dad phase. I feel like I want to take advantage of the dad jokes and the dad things I can say now, for at least a little bit.

Ryan Isaac:
Well you can use that one then.

Matt Mulcock:
I’m going to use that.

Ryan Isaac:
Let’s talk about spending. I think the last time we measured this… So again, spending, if you go to dentistadvisors.com, click on elements. Spending is a subject that we spend an entire month on every year.

Matt Mulcock:
It’s pink

Ryan Isaac:
It’s pink, probably.

Matt Mulcock:
I mean, it’s pink on this shirt. I think it’s kind of a pink.

Ryan Isaac:
Yeah, it’s a -ish color. If you go there, this is also another subject of financial planning we spend an entire month on. And a very common question, I think everyone wants to know, but of course it comes up with dentists is, “Do I spend too much money?” Or commonly, because we also double as marriage counselors, “Does my spouse spend too much money?” And actually it doesn’t usually come in question form. It’s usually a statement, “My spouse too much money.”

Matt Mulcock:
And they’re hiring you to tell them that.

Ryan Isaac:
Yeah, so that comes as a statement. And the actual question is, “Can you help them fix it? Can you stop them?”

Matt Mulcock:
Yeah, that’s true. It’s a statement-

Ryan Isaac:
Then a question.

Matt Mulcock:
And then it’s like, “Can you help me?”

Ryan Isaac:
But the question is, “Do I spend too much money?” And again, if you don’t watch the way a dentist spends their money, you might be blown away by how much money gets spent. So the last time we ran this element for our clients and did the average, it’s been increasing, obviously. I think the average used to be around 15,000. It’s closer to 17 or 18 now.

Matt Mulcock:
It’ll be interesting to see 2020.

Ryan Isaac:
Yeah. I don’t know. Maybe everyone out there hiring us are just big spenders and you’re skewing the averages, guys. So, if you are-

Matt Mulcock:
Do you think listeners right now are like, “What the…”

Ryan Isaac:
Maybe.

Matt Mulcock:
I bet not.

Ryan Isaac:
I don’t know, man. I mean, and that’s the thing. It goes back to the amount of debt dentists carry and well, I guess we might as well hit it right now in income. So according to Census Bureau studies, which I think there’s a flaw in the methodology here, dentists are rated as the number two occupation for highest earning occupation in the country. The methodology though is by taking W2 income, publishes payroll data-

Matt Mulcock:
Which is dumb.

Ryan Isaac:
Which a dentist’s total income, it doesn’t come from all W2. So if I had to just, if I was a betting man, which I’m definitely not-

Matt Mulcock:
What is that number by the way, do you know?

Ryan Isaac:
What? The average?

Matt Mulcock:
It’s like 200 or something or-

Ryan Isaac:
I think it’s high one hundreds.

Matt Mulcock:
So that’s way too low.

Ryan Isaac:
Way too low. Now for a brand new associate, it’d be like, “Yeah, that’s what I make.” But across all the country, and especially all the business owners, most dentists are taking most of their income from net distributions of net income. So I would argue, if I were a betting man, which I’m not.

Matt Mulcock:
You’re not?

Ryan Isaac:
No, I don’t know how to play any good casino games.

Matt Mulcock:
Yeah. You’re not like a fantasy football guy?

Ryan Isaac:
No, I don’t know how to even begin

Matt Mulcock:
Because betting is now legal.

Ryan Isaac:
It is now legal. I don’t even know where to begin with that stuff. But if I were, I would say that actually, dentists are the number one income category in the country, as an occupation. So what does that entail though? The more, and I don’t know if this is human nature or it’s the American way, but the more money we make, the more we spend.

Matt Mulcock:
Absolutely.

Ryan Isaac:
I mean, this happens to everybody and dentists are no exception. So when you say the average dentist is spending 18 grand a month or 17 grand a month, the people that we work with, I would easily be willing to say that the average dentist is, in the whole country, all 200,000 dentists, is not spending less. The average is not less than 12,000.

Matt Mulcock:
No way.

Ryan Isaac:
I would say the average has got to be pretty representative of what we’re collecting. And if our average is going up, but we’re getting more clients than we’ve ever had, then the average is probably holding pretty true for the group.

Matt Mulcock:
We have a big enough client base that we can kind of use that as a-

Ryan Isaac:
Now our clients, obviously the bias is skewed by people who would hire a financial advisor, which might skew towards wealthier, higher income people. But anyway, the point is, if you’re asking that question about yourself, “Do I spend too much money? Is this adversely affecting me the way I spend,” or “Does my spouse spend too much money,” or “They do spend too much money, can you stop it?” You want to ask that question to someone who’s seen hundreds of dentists spend their money and what they spend their money on. That’s not to say that we’re creeping in the transaction history, I don’t got time for that.

Matt Mulcock:
Only on a weekend when I’m bored.

Ryan Isaac:
I don’t got time for that. And I don’t care. But if you’ve watched a dentist, and dentists, hundreds of them spend money over years and years of career, you’re just in much better position to either tell someone, “Yes, and here’s what we can do,” or “No, but you know, we got to watch these other categories.” Now, if you didn’t know that, let’s say a dentist went to their friend next door who’s, I don’t know, a sales employee at some-

Matt Mulcock:
We’re not going to name names.

Ryan Isaac:
Printer company. That seems generic. Dunder Mifflin printers, Sabre.

Matt Mulcock:
I like that.

Ryan Isaac:
They’re a printer salesman for Sabre printers and they say, “Yeah, I, we spend $17,000 a month.” I think their neighbor would just, their jaw would be on the floor. But I mean, if you tell an advisor that that’s seen dentist spend money for long time, again, it’s the flight attendant. They’re not shocked. They’re not freaking out. They’re like, okay. The advisor’s going to say, “Well, that’s an interesting piece of data, but let’s look at these other five pieces of data.” Because that’s really going to tell the story, right? Where else is your money going? What’s your savings rate? So, anyway, spending’s a really fascinating piece that I don’t think, I mean, dentists know, but I’m not sure they think about that as, “Oh, that’s a unique thing that really drives my financial planning in a very different way.” Because we only work with dentists, and we only hire people who want to work with dentists, and we only build marketing for dentists, and we only build systems and process for dentists. That’s all we learn about. Those are the only shows we go to. Those are the only events we attend. We’ve built an entire-

Matt Mulcock:
It’s exiting too.

Ryan Isaac:
It’s fascinating. So, if a dentist asked that, “Matt, do I spend too much money?” Well, there’s one data input there, right? Well, what do you spend? It’s 16,500 a month. Okay. Well one data point tells you that’s kind of in line with average, but as a dental specific financial advisor, you go, “I also know what savings rates should accompany the income you’re at.” And I know that because I only work with dentists and that’s all I’ve seen people do.

Matt Mulcock:
And what collections numbers, you’re going to have to see-

Ryan Isaac:
What’s the profitability-

Matt Mulcock:
What’s the average profitability collection. You’re thinking about all these things.

Ryan Isaac:
Yeah, there’s all these things. And so, because you’re in a firm that only builds systems to track… Now you can actually give a better answer than “I think,” or “Yeah, that sounds about right for your income.” But now you can go, “Well, that’s average to your peers, but what’s your savings rate and your income and your collections? Oh, you’re making 400, but you’re only saving 12%. Well, something’s too high and it could be you’re spending. Something’s wrong there.” Right? And you’ll have the tools necessary to answer the questions in more depth and give more context, which leads to better answers. It leads to better decision-making, more rational, less emotional decision-making than if you don’t see that stuff that often, and you only stop there. “I think 16 is a lot, I don’t know.”

Matt Mulcock:
Sounds good.

Ryan Isaac:
Sounds good. Sounds about right.

Matt Mulcock:
I’d like that life.

Ryan Isaac:
I think you make a lot of money. You’re probably fine.

Matt Mulcock:
Yeah, exactly.

Ryan Isaac:
Okay, let’s hit two more that I think are big differentiators. Dentists want to know about their investments, how to invest money, how to grow their net worth. And so, let’s just strictly talk about dentists who are choosing to be public market investors. You’re going to own stocks and bonds, mutual funds, and you’re going to have 401ks, and IRAs, and brokerage accounts. How are dentists different than the average person when it comes to investment accounts? And maybe, well, I don’t want to put words in your mouth. How are they different when it comes to investment accounts and investing money in public markets, stock market?

Matt Mulcock:
Yeah, I think there’s a couple of things. First of all, the timing, like where they are… And this kind of comes back to the debt discussion as well. For them to even have extra money to invest, I think is going to be much different than their peers.

Ryan Isaac:
So when they actually start, most dentists do start saving money later than their peers in their life. Which, what does that mean? You got to save more than if you’d started earlier.

Matt Mulcock:
Usually saving more. And I just think, again-

Ryan Isaac:
It’s a good point.

Matt Mulcock:
They’re seeing their peers investing, they’re hearing things from friends, whatever they’re investing, and the dentist is sitting here being like, “Man, I’m still, you know, paying off my-

Ryan Isaac:
I’m still waiting.

Matt Mulcock:
I’m still waiting. I’m getting my business started or whatever, so I think the timing is a big one. The other thing for me that comes to mind, you might be thinking something different, but what I was thinking about this was, the dental space is a small world, Right?

Ryan Isaac:
We’re a tight family,

Matt Mulcock:
We’re a tight, tight family. And things get kind of out there, and you start to hear these different themes with investing. Whether it be, right now 2020, it’s day trading. For a while-

Ryan Isaac:
It’s just some wild stuff.

Matt Mulcock:
It’s just some options, whatever. So you start to hear these themes. I feel like, I don’t think this is probably unique just to dentistry, but I feel like it is. It’s a small world. You start to hear the same kind of things that they’re hearing out in these events they’re doing.

Ryan Isaac:
It’s a good point.

Matt Mulcock:
Right? So, I think that impacts them as well. They feel drawn to these certain things like hot stock tip type of things.

Ryan Isaac:
We talked about income and the high income earners. Not only is income high, but it’s steady and it’s consistent. Dentists are massive targets to be pitched anything. Which again, if you are going to bring a deal, right? Someone comes to you with something that’s non-conventional, and they’re like, “Do you want to invest in this? Will you give me money to start this company?” It’s ideal that you run that idea past someone who’s seen it multiple times, right? Like Matt, have you ever seen a dentist give a family member money for a startup?

Matt Mulcock:
Yes. And it always ends poorly.

Ryan Isaac:
Have you seen a dentist invest in restaurants? Have you seen dentists buy raw land for oil drilling? Have you seen dentists buy gold? And…

Matt Mulcock:
Have you seen a dentist with their brother-in-law coming to them about some options trading strategy?

Ryan Isaac:
It’s always the brother-in-law.

Matt Mulcock:
It’s always the brother-in-law.

Ryan Isaac:
But yes, yes, yes, yes, yes. I mean, that’s the point is you want to run that idea past someone who’s seen other dentists have unconventional pitches on things to invest their money in. But back to investment accounts. Here’s what’s interesting about a dentist. If you ask maybe an average… I don’t like the word, I don’t mean average. If you ask a financial advisor, or a CPA about something like where to invest money, right? If they’re working with just more average people, not dentists, it’s really common to hear something like, “Well, you put your money in your 401k and then, well, there’s nowhere else to put it after that. So I don’t know. You just like pay down your debt or something.”

Matt Mulcock:
Yeah.

Ryan Isaac:
Right?

Matt Mulcock:
Yep.

Ryan Isaac:
It’s not, I guess here’s what I’m saying. It’s not normal for most people to have the kind of money leftover in raw dollar amounts that dentists do. And so, we could tell you that the average dentist we work with ends up having probably half a dozen different investment accounts in their life. Easily.

Matt Mulcock:
Easily. You’re maxing out your 401k pretty easy. And then you’re going to have-

Ryan Isaac:
There’s still-

Matt Mulcock:
Tons of money left over

Ryan Isaac:
Most dentists have more money than can fit in a 401k. So over a whole career, you’ll have Roths and regular IRAs, you’ll have 401ks and profit sharing. Maybe you’ll have a pension plan, but because you most likely have more money than can fit in those things, you also have after-tax accounts. And that’s something that the average person doesn’t have. Most people, if they actually save money, which a lot of Americans don’t save money, they do it in their retirement plan at work. But it’s not-

Matt Mulcock:
They’ll get the match.

Ryan Isaac:
Yeah, they’ll get the match, but it’s not normal to be like, “Oh, I maxed it out, got my match at work. And I still have like tons of money to save.” That’s not normal. But it’s very normal, that’s like the standard for a dentist. So I think about this, I’m like, “Man, well, dentists end up having half a dozen or more investment accounts. By the time they’re done working.” All of those have different time horizons because, also, dentists own businesses that can sell for chunks of money, provide liquidity, right when they’re done working, which means you don’t have to access a lot of these accounts right off the bat.

Matt Mulcock:
Well, again, coming back to the difference we said, you’re a business owner. You’re investing in this private business that a typical, average person out there that’s working a normal job, they don’t have that opportunity to be invested in a private business.

Ryan Isaac:
No, it’s not. It’s not an opportunity. And so for a lot of people who retire, every account they’ve got, the clock starts right when they’re done working. If you’ve got a Roth and an IRA and a 401k and then a savings account, all of those are fair game immediately because you need all the money. For a dentist half the time… I mean, that’s a fake statistic half the time, I just said. I have no idea the amount of time.

Matt Mulcock:
Just go with it.

Ryan Isaac:
It’s an expression, guys. Half the time.

Matt Mulcock:
Wet your whistle, half the time.

Ryan Isaac:
Yeah, do that. It’s very common that a dentist gets to retirement, sells the practice, sells a building, has a chunk of cash after tax money. It’s cash already. They don’t need the 401k. They don’t need the IRA. A lot of times they don’t even need the brokerage account. And that might provide an extra five, 10, 20 years. You might have accounts you will never touch in your lifetime that are strictly going to be passed on for inheritance.

Matt Mulcock:
Hey, maybe you sell your business. You work one day a week in your practice. Is this what you’re going to get to?

Ryan Isaac:
It’s exactly it.

Matt Mulcock:
I didn’t want to steal your thunder.

Ryan Isaac:
That’s an awesome phrase too. I mean, how do you steal thunder?

Matt Mulcock:
I don’t know but I feel like I just did.

Ryan Isaac:
I think you’re a Greek God, maybe you steal thunder. But I mean, so think about that. If you have all these different accounts with different time horizons, that the average person does not have to face this decision, that means you should invest them differently. And that means that you probably should be pushed to be a little uncomfortable by your financial advisor who’s seen this hundreds of times, to be a little more aggressive in the accounts they know that you’re not going to touch for a long time. And unless your financial advisor also has incredible amounts of data and tracking on you, they won’t be able to tell you that you’re not going to touch that account, therefore, you should be more aggressive in it. They just got to know a lot of stuff about you. The thing you were just going to say… Well, elaborate on what you were just saying about the longevity of a career. Because I think this is, this will be our final point. I think this makes a giant difference in financial planning for dentists.

Matt Mulcock:
Yeah. I mean, again, comes back to the difference with their investment approach. We’ve talked about this a lot. What a cool profession it is that you can sell your private business that you’ve invested 30 years in. You can step away from that business, have a huge liquidity event, not touch any of the money that you’ve been transitioning from your human capital to your financial capital. Right? You don’t have to touch that. You can work one day a week, maybe a day and a half a week, travel to Bora Bora whenever you want, and still make six figures. Right? It just gives you such an advantage, right? But like you said, it also changes the way you approach investing compared to the average person.

Ryan Isaac:
Yeah it totally does. I think one of the greatest financial planning tools dentists have in their control is the ability to keep working. Whenever I hear a dentist making decisions that puts them either on a path of longevity or burnout, I’m like, “Man, just err on the side of longevity.” Because even if you’re making 50 grand a year, which as a dentist is not hard to do. Even if you’re making 50 grand a year at some point in your sixties or even your seventies, that is a big amount of pressure taken off of your investment accounts. And it could be the make or break for your future or the inheritances you want to pass along to your heirs one day.

Ryan Isaac:
So longevity in the career of dentistry, it’s a huge financial planning tool that should be considered. If you’re listening to this and you relate to this stuff, right? I go, “Yeah, I think I am pretty different.” And the people around me, I want them to be the flight attendant that’s been on thousands of flights before. So if I get nervous, or bumpy, or stressed, or I’m worried, or feeling insecure, which is 2020, that was the motto. Worried, insecure, anxious, unsteady, turbulent, scared.

Matt Mulcock:
Who do you turn to in 2020?

Ryan Isaac:
I don’t know. Us, okay? Then you want the person that’s been on thousands of flights, okay? And that’s the point of this episode, is that’s the argument for why you hire a niche person. Does hiring a niche person mean that there’s hidden secrets? Here’s what I think the problem, the mentality of this is, sometimes people have this impression. I’ll hear this with CPAs a lot, with dentists hiring dental CPAs. Well, if I hire a dental CPA, does that mean that they know things other CPAs don’t?

Matt Mulcock:
They’re going to have a secret.

Ryan Isaac:
That’s not the point. Maybe, yes, some things. Yes, they will know some things, but the point is they have context and experience that others don’t. So when you go through all those times, you’re running it past someone who’s seen it way more times than you or the average person will have seen it. But to your point, we are going to be financial advisors till we’re old and dying and have no more whistles to wet, basically.

Matt Mulcock:
It’s going to be a long time for you, because you’re going to be in peak physical condition. [crosstalk 00:39:12] a long time.

Ryan Isaac:
I’ve hurt my back a lot lately, so I’m starting to question that in my 40th year of this life. But, here’s the deal. If you want to chat with us about this stuff, if you’ve got questions, you relate to these topics, and you’re finally like, “All right, I need someone who’s seen this stuff, that’s taken a thousand flights in my corner.” Go to dentistadvisors.com, click on the book free consultation button. You might get me or Matt on the phone or someone even better.

Matt Mulcock:
Chances of getting someone better than me is high.

Ryan Isaac:
People are manning the phones, we’re standing by.

Matt Mulcock:
Ask for Ryan.

Ryan Isaac:
If you want. But, if you want to shoot us a question, you can go to dentistadvisors.com/group. That’s our Facebook group. Post a question there. We do Facebook lives. We answer questions on the podcast all the time. So, anyway, thanks for listening. Thanks for tuning in and for all the support. Matt, thanks for being here. And yeah, we’ll catch you next time. Carry on.

 

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