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Game Over: Common Traps That Kill Financial Progress – Episode 178

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Scorpions, snakes, and tar pits. Or how to avoid financial booby traps during your career.

On this episode of the Dentist Money™ Show, Reese and Ryan look at some of their favorite video games and liken their dangers to the financial pitfalls you might face as your career unfolds.

The complexity of your financial planning decisions builds as your income increases and your net worth expands. Reese and Ryan reveal how overcomplicating your finances during any stage of your career can slow down net worth growth.  

To learn how to navigate through the obstacles of personal finance and advance to the next level:

Podcast Transcript:

Reese Harper: Hey guys, Reese Harper here. Thanks again for tuning in to the Dentist Money Show. Today, Ryan and I dig back deep into the archives and talk about some of our favorite old school video games. We compare those to the roadblocks, there’s a lot of Dentist’s face at various stages of their career, early stage, mid stage, late-career expansion, and so on. I think you’ll really appreciate some of the insights that we’ve been able to gain from interacting with a lot of different dentists at a lot of different stages. So thanks again tuning in. I hope you enjoy the show.

Speaker: Consultant advisor, conduct your own due diligence when making financial decisions. General principals 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 trusty old cohost Sir Ryan Isaac.

Ryan Isaac: Oh, it’s good to be next to you Reese. Good to see you today.

Reese Harper: You and I’ve got some catching up to do on this fine warm afternoon because I’ve decided to break out chimes again.

Ryan Isaac: Oh, I’ve seen that on the shelf.

Reese Harper: That was a little bit flat there on that third one. Now this is a special greeting to our audience that means today is a special edition. It’s a special edition of the Dentist Money Show.

Ryan Isaac: It is special.

Reese Harper: C E & G are the three notes we’ve heard. C for chi, which means that we’re zen and balanced and ready to throw down some excellent content that we’ve been preparing.[crosstalk] the longest outlines I think I’ve ever seen for a show that we’ve done together. And this thing is prepped and rock and ready to go.

Ryan Isaac: It’s pretty in depth. The outline is actually called a treaty.

Reese Harper: Oh, it’s a treaty. Okay.

Ryan Isaac: Or a treatise.

Reese Harper: A treatise. Okay.

Ryan Isaac: Yes, I have a treatise, but to start the treatise, you have a story that I don’t know about that intrigued me that you were talking about. Something about video games and I hope it’s like old video games. Or they’re cool new ones?

Reese Harper: I thought you were going to say cool old ones or lame new ones. I mean I [inaudible] your perspective.

Ryan Isaac: I agree with that. But we’re old.

Reese Harper: I do like old video games or do you want new ones?

Ryan Isaac: Yes. I don’t know.

Reese Harper: Because I will tailor this analogy to you based on your profits.

Ryan Isaac: I grew up… no, my first gaming system was the original Atari with the joystick and the orange button and Pitfall Harry and Frogger and all that stuff. So you can tailor it to that.

Reese Harper: What’s your favorite video game that you can recall from your childhood?

Ryan Isaac: It was for sure Pitfall Harry.

Reese Harper: Okay.

Ryan Isaac: Yeah. No question.

Reese Harper: Okay. In pitfall Harry-

Ryan Isaac: Pitfall Harry though I think Pitfall Harry.

Reese Harper: I mean, we’re going to go down this road. You wanted it. Now, for those of you don’t know, can you please describe the Atari game Pitfall Harry to the audience? We’re not planning this. Okay. But for Ryan to learn and get things through his thick skull.

Ryan Isaac: Yes.

Reese Harper: Sometimes we have to break it down-

Ryan Isaac: Simply.

Reese Harper: … to where he can relate to this. So tell us about Pitfall Harry from Atari.

Ryan Isaac: Yeah, well it’s got to be explained in terms of 80s memorabilia and nostalgia. So Pitfall Harry, you got this little… I mean it’s all like eight bit characters and he’s in a jungle and I’m just like closing my eyes thinking about this, but the ground is like kind of this orange dirt color. And then there’s like this jungle background and it’s 2D, you go from left to right and every… as you clear a board, it just moves over and you just go from left to right again and you have to jump on floating logs and you have to jump on alligator heads. You have to swing across vines and just kind of like clear little gaps. And there might’ve been some other obstacles, but that’s all I remember from it, but I’ve loved that game.

Reese Harper: Yeah. It’s had many innovation since then. They’ve advanced the game.There’ve been multiple Pitfall Harry’s in subsequent years. Activision continued to push out more versions of that game. But anyway-

Ryan Isaac: Now I’m looking at… Oh, you could go underground. Now I’m looking at some screenshots of this. You could go underground-

Reese Harper: There’s scorpions.

Ryan Isaac: Oh, and there was those tar pits.

Reese Harper: Weren’t there scorpions underground?

Ryan Isaac: Yes, there were scorpions underground. Now I’m seeing that.

Reese Harper: Yes. There’s snakes above the ground, scorpions underground. Now here’s the thing.

Ryan Isaac: Snakes.

Reese Harper: As Pitfall Harry progressed throughout his young life, the more you go through different levels, you actually you level up. You get some things. You start moving a little bit faster. The pace at which you can move and it’s this very primitive. Okay. But there was a few feature ups that you could get. You unlock some stuff, different critters that could attack you. He got… the more points you earn, the faster you could run, you could start running. I think if you pushed two buttons, you could start running eventually. There was… the point here is as he progressed he’s unlocking a lot of different things. My analogy, and my game was more of my son’s present day, Fortnite, Livelihood.

Ryan Isaac: Yield Fortnite.

Reese Harper: Or what’s the other one? Clash Royale. Clash Royale.

Ryan Isaac: I don’t know man. We’re still playing Barbie in my house.

Reese Harper: Anyway, you unlock a lot things in these games. Clothing, hats, special powers, friends. A lot of our audiences, it’d be like you’re butchering it. I love my Fortnite and I’m like, okay [crosstalk] I’m just-

Ryan Isaac: Someone out there has like a [inaudible] headset.

Reese Harper: I’ll just keep working here to subsidize all the video game players and work extra hours. All right. Anyway, I’m not old. I’m old and cranky like that.

Ryan Isaac: You’re old and you’re like yelling about video games. It’s the definition of old and cranky.

Reese Harper: Classic, classic old guy. So the point is in most of these games, as you progress, you unlock things and in financial planning, this is a very, very similar experience to Pitfall Harry, which is surprising that we’re doing this off the cuff, and totally, I’m making this up on the fly with your video game choice.

Ryan Isaac: I’m happy though. I appreciate it.

Reese Harper: But if you think about it and see what happens typically is as in Pitfall Harry, as he progresses the animals start varying, there becomes more animal species, more traps, more holes in the ground. He’s swinging across-

Ryan Isaac: More tar pits.

Reese Harper: A lot more tar pits. It gets wild. And the further he goes in his progression, the more life gets in attack mode on him. And if you just get out of dental school and you’ve got your negative $500,000 student loan debt, as you progress like little scorpion start to appear in your life, sometimes bigger tar pits and alligators and new critters that were not there before to attack and-

Ryan Isaac: Quelled up snakes. Were there barrels?

Reese Harper: Yeah. There were some barrels [crosstalk].

Ryan Isaac: That role just randomly in the jungle.

Reese Harper: Of course there’s round rollers. That’s where Donkey Kong got the barrel idea from was from Pitfall Harry.

Ryan Isaac: Stole it. They’re like, oh, you know how those barrels run naturally through the jungle-

Reese Harper: Yes.

Ryan Isaac: And they jump over.

Reese Harper: Exactly. So the point, my analogy here is as your net worth goes up, as you progress in net worth and as your income climbs, you’re going to unlock a lot of monsters. There’s a lot of they just show up and then you’re like, “Where did this scarfian come from?” I thought I was just doing the alligator navs and tar pits. Now there’s scorpions and now there’s this weird rat that like, I’m not sure if it’s a rat or a raccoon, but it’s like, “Where did that guy come from?” And now there’s an ostrich. I thought those were friendly birds, and it’s like attacking me. This is how it goes. And I think the important thing to remember is that at certain stages in your progression of your personal finances, you will make assumptions about the way things are going to be.
Meaning you will… in some cases, you’ll over complicate your assumption about the future. You’ll think you’re coming up on a giant tar pit and it’s really just a little puddle of rain or you’re going to have a situation where you’re underestimating the complexity about what you’re going to go through and not planning adequately for that. And I think what we’re going to talk today about is how it’s important to really have the appropriate amount of planning, and the proper amount of effort for the time that you’re in your progression in it. And I just think that there’s just the wrong time and the wrong advice or the right advice at the wrong time that can really trip people up. So how would you summarize our conversation for today? Or maybe want to talk about Pitfall Harry?

Ryan Isaac: Yeah. Well, mostly just want to talk about Pitfall. You kind of just said it, it’s like if you have to jump across a tar pit, you better have a vine.

Reese Harper: Yes.

Ryan Isaac: You know, if that’s the phase you’re in, you better have a vine. If you’re trying to jump without a vine, you’re not going to make it. But I think that’s kind of what we wanted to hit today was what… based on the type of phase someone’s at in your career. And we kind of have some parameters, because we’re trying to size, put clients in the right places with the right advisors and the right service models. Something we’re actively talking about a lot lately too. How do you know like what phase you’re in and how should… what expectations should somebody have from a financial advisor at different phases because, and we’ll get into this later, like personality types, but a lot of times people get ahead of themselves, like trying to worry about things that are further down the road instead of the things that are more urgent or higher priorities right now.
So I thought maybe we could hit, we don’t have to go in depth on like what it’s like to live in each phase of a dentist’s career. But maybe how would you describe some of the parameters for, that if we caught this up in say three different phases of a dentist career life, how would we define some of those basic parameters and what are some of the most urgent planning things they should be worrying about? What kind of expectations should they have from a financial advisor? We could start with some of the early-

Reese Harper: Yeah. The early years.

Ryan Isaac: Like new Grad.

Reese Harper: Well I think let’s go back and forth on this. Tell me one thing that you would really like to see a young dentist accomplish as a high priority item. And then I’ll give one.

Ryan Isaac: I would say, I would really like to see laser focus around the direction, like the beginning direction of the career. There’s so many moving pieces, you know, there’s like, where am I going to live and am I going to move and should I buy a house and what about all this debt and shouldn’t I start investing? I’m supposed to do that. But I think the business will be the engine that drives everything eventually. So getting that right from the beginning I think should be the highest priority, which is a matter of spending the right amount of liquidity, doing it and the right amount of time and attention and maybe it’s going to require some like, mentoring and some associate work that will lead to that. But that’s what I would say. Right off the bat, I would like to see that be the highest priority is what’s the career path going to be?

Reese Harper: Okay. I think I would say that. I think that would be a really… that’s something that’s top of mind for me. And I would also add, maybe another dimension of that would just be adequately investing in your career/practice at an early age and not being distracted by other things. You know, it’s interesting like how in the financial planning community, like unlike us I think they are very interested in just… they’ve got to find a place to sell their products. Any person with the product’s got to find a place to sell it. And it doesn’t matter what your age is or where you’re at, they just, it’s all you know to a hammer, everything’s a nail. Right? And so-

Ryan Isaac: A buyer is a buyer.

Reese Harper: I feel like too many times younger dentists get sidetracked in things that aren’t maximizing your income and maximizing the practice opportunity that you have. To me, that’s like building the right team, that’s getting the right location, that’s determining whether you’re going to, actually get completely full with production. Personally before you add an associate or if you want to add an associate, or where you want to… the type of dentistry that you want to practice, and maximizing your clinical ability, determining what your practice mix of procedures is going to look like and whether you’re going to be fee for service or are you going to be dependent on insurance for a certain amount of your production.
These things are like so critical and they often require money and cash and a commitment of either making less money because you’re going to invest in that or you’re going to take some of your cash and deploy it into marketing or coaching or consulting or… and I feel like too many people just don’t get that right out of the gate. They don’t adequately invest in getting the foundation right. And as you know, your lifetime earnings, what you’re going to earn throughout your lifetime is highly dependent on… like you’ve just add up the amount of money you’re going to earn every year and you say that’s someone’s lifetime earnings, and whoever maximizes that in the early years has it like an exponentially higher lifetime earnings. Could be millions of dollars more than they earn over their lifetime. And that’s the… you can’t, there’s no amount of investment returns that can make up for or no amount of tax reduction strategy that you can do to make up for lower income.

Ryan Isaac: Yeah. Getting to a higher income as fast as possible. So if we’re talking about the demographic of this, maybe the financial demographic of this person, it’s probably very likely a negative net worth, right?

Reese Harper: Yep.

Ryan Isaac: Probably income below two to 250 and below. Some of the big decisions coming up or like the questions they’re asking this phase are, should I buy a practice or start one up? Should I become a partner or be alone? What do I do with this debt? Should I start investing? How should I buy a house? Should I wait to buy a house? Those are some of the questions. That’s kind of the financial profile of this person. What kind of like expectations, if this person’s going to say, “I think I want a financial advisor, or I need people around me.” Because there’s more than just a financial adviser, this person’s going to be interacting with.
This’ll be some of the first time they’ll have an introduction to a CPA. They’ll probably be working with attorneys for the first time, as they negotiate contracts. Could be brokers, and maybe consultants as they start up a practice. So this is the first time they’re starting to interact with some of their advisors. If they’re specifically thinking about a financial adviser, what would you say are good expectations that this person in this phase should have with a financial advisor relationship? What should they they want for to get out of it?

Reese Harper: I was talking about this earlier today with someone on our development team trying to talk about what the expectations that a young person should have about interacting with any kind of financial person. You know, because in the past what’s happened is as long as someone’s selling you a financial product, like life insurance or some… or a mutual fund or something, they can get paid a commission and then they can talk to you and be able to afford to do that. And that’s not good that the person that you’re trying to get advice from, the only way they can afford to talk to you is if they sell you something so that they can sit down with you. The point is that, there’s this friction between like humans that are very expensive to talk to. Any human, like anyone who’s smart, the smarter they are… I was just on the phone with Bruce Baird today, Productive Dentist Academy. Shout out to Bruce.

Ryan Isaac: A shout out to Bruce.

Reese Harper: If I was a dentist and I was like looking at how to improve my practice and I could talk to Bruce, what would I be willing to pay Bruce? Well, to talk to Bruce directly if I could have him in a dedicated relationship. I mean I’m going to pay him three to four times what I’d be willing to pay another average dentist. Right. Because Bruce is an excellent communicator. He’s great at…

Ryan Isaac: And how many and how many situations has he seen just like yours?

Reese Harper: Yeah. Like if I’m a new dentists, like Bruce comes at a much higher cost than maybe my buddy who’s doing a scratch start. Right?

Ryan Isaac: Yeah.

Reese Harper: And I know willing to pay for it. I mean I will be willing to pay thousands of dollars an hour in order to talk to Bruce if he’ll give me a reasonable amount of time, maybe not just like a one hour stint but like if I can get it. But the problem is you can’t because his time to him is probably worth 5,000 an hour. And so you know like buy Indian that becomes like cost prohibitive for you and you’re like, “I don’t know if I want to.”

Ryan Isaac: Yeah.

Reese Harper: Because and my point is that what I’m making is, I have no idea what Bruce would actually take for on an hourly rate. So shout out to Bruce.

Ryan Isaac: He’s like 5 I’m ten.

Reese Harper: He’s like, dude, I’ll take five. You have to talk to him. And the point I was making is that he’s got a really productive practice and that generates a lot of revenue per hour. And for him to take time out of that it’s going to be expensive and humans costs a lot to talk to. And so financial planners like they typically have like big barriers to entry to get to a good one. It’s like, well you got to have 1 million bucks, you have $3 million or I’ll say a big you have a big life insurance policy and maybe I’ll talk to you. And then-

Ryan Isaac: That’s probably not.

Reese Harper: That’s not. But that’s not great. That’s not good. Because like there’s this whole segment of the market that’s not getting access to the people. So here’s the truth about… and there’s good news. I mean technology is changing the future and it’ll help, but right now there’s a massive amount in financial planning there’s a massive amount of cost associated with organizing and just organizing all of your crap together. Like getting all your crap organized into a place where anyone could even reasonably give you good advice. Like that takes a lot of time and it’s very expensive. And if humans are doing that… and that’s not even the best thing that humans are good at.
They’re not even the best at organizing stuff. Like we’re better. If you look at the financial planning steps that me and you always talk about, there’s organized, there’s analyzed, there’s decide and act. There’s like kind of these a lot of steps in financial planning that are either one of those four. Humans are great at deciding and acting, but they’re not great at organizing. Computers are actually way better at organizing and humans depend on computers all the time to organize stuff.
And computers are better at analyzing things too. Not like in depth analysis, but analyzing whether somethings totally red flag or not computers pretty good at that.

Ryan Isaac: Numbers to numbers.

Reese Harper: Yeah. And so I think that’s kind of what should a young person’s expectation be of a financial planner at that stage. Well, man, if humans are good at advice and helping you decide things, that’s the place where you should spend money for humans. If you want a small amount of exposure or some exposure, just make sure you’re getting exposure for someone who’s giving you, helping you decide things and take action and then unfortunately you’re going to have to bear the burden until with technology as it improves, it’ll get better. But you got to kind of like get yourself organized and you’ve got to learn what that means and help under… you’re going to need a little bit of help with that.
Firms like ours, we’ve got price points that kind of can approach what a young person needs, to get some advice and help. But man, I just think that for the most part, like you shouldn’t have expectations of getting a ton of human time at that stage of your life because you can’t really afford it and you probably shouldn’t be spending a ton of money on advice at that stage. You should probably be spending money on getting that practice as large and getting that… If you’re going to spend money on advice, it should be related to growing your assets, right? Growing your business asset.
I think you always should have a financial advisor in your court, but the level in which you can afford to engage them in the expectations you should have for that person, that they should grow as your net worth and income grow. Right? As we said with Pitfall Harry as you go along further in the game, as you start having more spiders and more scorpions that get shown up in your life, that’s when you need to have an advisor really start taking over some of that responsibility because you’re going to get in into a bind.

Ryan Isaac: Yeah. So if you’re speaking then just directly to kind of that demographic of newer dentists, then you would say, “Try to use technology as much as you can to keep yourself organized and just like your data in one place.” And there’s a lot of spending trackers and net worth tracker you can build. We know people who pretty obsessively build their own spreadsheets and there’s technology that can do that. But, I guess we both agreed in the beginning of that, really focusing on the practice is kind of like that’s where all of your… that’s where the bulk of your attention and probably your money should go.

Reese Harper: Yeah. I mean, if you can make your income go from 250 to 275 or 250 to three or you go from 175 to two and a quarter even, or just the more your income can improve at that stage, that’s where you’d want to put your focus, and build. And what I mean is at the point you have a meaningful amount of liquidity, right? This would be like my barometer of saying you’ve gone past the point of you’re now good. If you’ve gotten… if you have several, you’ve got hundreds of thousands of dollars, a few hundred thousand of liquidity in banks between personal and practice checking and you are starting to just continue to see your cashflow pile up and you’re going, I think I’m like, I think my practice is firing on all cylinders. Meaning I like the size of it, I like where I’m at, I like what’s happening.
I think you’re at a point where you are at a slightly different phase. To me it’s all about how much liquidity do we have? How close are you to the capacity level of where you want to be in your own income, right? How close do you to success level as you’re going to define it? Are you halfway there? Ae you three quarters of the way there? You 70% of the way there. I think that’s the kind of that sort of the stage ends. I guess what I’m saying, that first phase of life.

Ryan Isaac: Okay. That’s where that ends. And then the next phase would be kind of a more typical interaction that we see, which is someone that you could consider like, not beginning of career, but kind of been in their practice for a while. They probably own a practice. Some people stay in this, we could call it a middle phase if you want for their whole career. We’d say a net worth is positive. You’re probably getting close to $1 million net worth. If you you add up everything. Income starting to get above the 350 to 400 mark. Owning a practice, there’s like after your spending and your taxes and your debts, like there’s still money left over every month that’s got to go somewhere.
You build up liquidity quicker. That’s kind of like this middle phase and some people go whole successful career in that phase and that’s great. But that’s the kind of second phase of you’re talking about, right? Where now you’re starting to say, “Okay, now I’ve got more options. I have more liquidity, I can get more advice. My complexity has now risen though?

Reese Harper: Yeah.

Ryan Isaac: With a high… I guess that’s the whole point of this with higher net worth and higher income is usually the two driving factors that probably drive what like 80 to 90% of complexity.

Reese Harper: Yeah. The spiders and Scorpions start appearing right as income and net worth rises and-

Ryan Isaac: It’s in vines and ladders now

Reese Harper: You’ll notice the problems start to become like once you have extra money start to pile up, you start going where should I put this, you start filling a burden around. I should be doing something with this. I should be paying down my debts. I should be doing something. I would resist the temptation to do something when you’re in phase one until you’re really, I would like to see people get to the point where they’re 70 or 80% of the way to their income goals before they leave phase one and start focusing on anything but the practice. Like get to the point where you’re really doing well before you start going, “Well, it’s time now to start taking my cash and investing it outside of my practice.
Just get your liquidity up in those first few years and get your income as high as it can go before you start doing anything too intense with investing. In that first stage though. I mean, there’s still like, yes, Basic IRA’s basic Roth IRA’s, basic wiping out any credit card debt that you’ve had or basic small student loans that are not part of your big traunch, but you’re just got a high balance, small one. I mean, there’s some little financial planning stuff you can do, but don’t do any of that at the expense of passing up on the right education that you need. Like attend events, attend courses, attend team building events, attend continuing education seminars by a variety of groups.
Do online courses, do e-learning, like invest in marketing, invest in a marketing consultant, invest in a coach, invest in consulting. Like that’s the time to do it early in your career. It will pay off. And sometimes it’s frustrating because you won’t find the person every time, but that shouldn’t mean that the right person doesn’t exist. You can find them. You just need to do your proper due diligence and get the right team in place.

Ryan Isaac: Yeah. You know, one thing I’ve been thinking about lately, and maybe you could speak to this in your own experience too, is kind of like, if you think of this lever on one side you have time and on one side you have um, money. And in the beginning of career, it’s just tilted in favor of the time. Like you have so much time and such, a lot less money early in career and you can usually your family is younger. A lot of times you can still be renting. Like your expenses are lower, you can spend a lot of time in that early phase, that’s the trade off you have. But when you get to kind of like the second phase, that’s when you start to notice things shifting. Like you’re making more and more money. You’re also spending more. Outside of the practice life is usually busier and more complicated.
You just have more things going on. You probably in home ownership, your family’s probably growing and you’re starting to notice like, “Oh, I’m almost getting to the point where I have more money than I have time now.” And that shift from like tons of time till less and less time. That’s where more human interaction for the simple stuff too, right? Organizing and analyzing and then deciding and acting, that’s where that person could get more benefit because those are just things that will go by the wayside. Like you’re not going to keep your own spreadsheets at some point.

Reese Harper: Yeah.

Ryan Isaac: Most people. [inaudible] shout out to the few like Excel junkies that are Sunday nights are like up [inaudible].

Reese Harper: That’s a good point. I think that’s it. Just those are your two levers. You’ve got time and money and eventually time starts to become spread so thin. It’s funny, like I value time so much at this stage that even little things, things that I thought used to be about the advice are now about the time. So like in the past, the reason I didn’t hire a personal trainer, was because I felt like I could download an app and get the answers of-

Ryan Isaac: Well, you can.

Reese Harper: I felt like that was why I… that’s why I was going to do it. That was my framework. And I was like, but I can, I know how to… all these workouts are like online and they’re free in this app and I can… and now it’s honestly like, it’s funny, I was joking with Matt this morning, shout out to Matt Gluckman.

Ryan Isaac: Yeah.

Reese Harper: I’m like, you know, the reason that’s been really hard for me to not have a trainer isn’t because of the knowledge I’m getting from him, which is substantial. And the workout plan, which is helpful. It’s because like it will take me twice as long to work out without him. I have to haul the weights around and put them away. I have to haul the weights back out. I go get the dumbbells, I have to get the… I don’t have to do that at all with him. The key is moving everything around. So I have to look at my time and I have to go, I get a 30 minute workout. Like I could in 30 to 35 minutes, 40 minutes of working out. I can get probably the equivalent of an hour and a half or an hour and 40 minutes of what it would have taken me previously because I’m like hauling crap around the gym.
I’m moving from station to station. I’m thinking about what I got to do. I’m like having to like… and then they made me this little shake in the morning. They hand me this like green… They’re just doing like my spinach, my kale drinks in the morning and everything.

Ryan Isaac: It is your shake sir.

Reese Harper: My point was like, and then, okay, now that everyone’s like thinking I’m some Pre Madonna and you got-

Ryan Isaac: Well, you got to be so big city.

Reese Harper: Well you got to be so busy. I’m just making the point that like I don’t think… My hourly timeframe like isn’t insanely high. Okay. But I’m analyzing things about time that I just was never thinking about before. And it’s a natural thing. It’s not like I don’t have time to haul my weights around. It’s just like, it’s an actual thing that wasn’t even on the radar before. It wasn’t, I didn’t even realize that like a trainer might save you time based on the fact that they’re planning things out for you and helping. Like he’s making sure I’m just moving from station to station so fast.

Ryan Isaac: You know the crazy thing about that though is that’s just during the act portion of your working out. Think about like the deciding and analyzing part of it.

Reese Harper: Yes.

Ryan Isaac: Yes. You can get 80% of what your trainer would program for free on the internet, but you would spend hours like sorting through it. Like, you know, I’m not feeling lunges tomorrow so I’m going switch to presses.

Reese Harper: You’re right. [crosstalk].

Ryan Isaac: And you’re like, you’re like you know it’s like the burpees [inaudible].

Reese Harper: Think about all that.

Ryan Isaac: You would. You waste so much time.

Reese Harper: And it really at some point in your life in finance, that’s when you get to this point. You’re just like, you know what, like I’m wasting so much time and I’m not even good at this and I’m spending all my time on it. And that’s when I think, not all my time, but a lot of your time. I’ve met people where they really feel like they have to do it because I don’t think they’ve met someone they can trust and I don’t think they’ve met someone they feel comfortable working with in a lot of cases, but isn’t that kind of crazy like that at some point, even the things you thought, the point I was making as the things I thought were about the knowledge or the workout routine, that was also about time and I never really thought about how much time it would be saving me. I think a lot of services are like that.

Ryan Isaac: Yeah. Until you get to a point, I mean there’s a lot of people listening who know what it feels like to go like one hour. Yeah, I’d kill to have one hour. Just give me an hour back. Like an hour. That’s a big deal.

Reese Harper: Like today, I would love to have an hour and I know a lot of people are that same way. It’s like my every hour of my day, every hour is booked, right from 6:30 AM to 6:30 PM and I know a lot of dentists feel that same way, but it’s just patient schedule every day. It’s just like you don’t have that hour once you… if you’ve done it right like you are giving people the advice at the beginning, like invest all in the practice, like grow that thing. If you do that right, you will have no time pretty soon. And that’s when I think this is obvious kind of second stage kicks in and for some people that happens in their first year, I mean the scratch start there [crosstalk] I mean you buy into it, you buy and you acquire your way into that.

Ryan Isaac: Yeah. I think it’s interesting and other non financial things during that kind of phase in life too. I mean usually if you have kids, your kids getting older and as kids get older it just gets busier and more expensive and you start realizing like, “Oh I need to spend some time with these humans, or I’m going to screw them up pretty bad.” So, you know that’s when you-

Reese Harper: Your family and your kids, your parents start aging-

Ryan Isaac: That’s a good point.

Reese Harper: Your grandparents are passing away or getting close or you’re just at a point where you’re like, dude, these people that I love, I don’t see them at all. And it’s crazy, but you start running the math and you start just going that our, what’s it worth to me to be able to spend one hour with my kid. Like I took off Friday of last week, to go spend time with my two boys. And I know it costs me a lot, but like, it was so worth it. And you’ll do anything to have that day uninterrupted if you can to just not have it be burdened by other things. And that, that’s that stage that’s at phase two. It’s the people you want time with and the focus that you want to continue to put back in that private business, that dental practice.

Ryan Isaac: Yeah. What about, while we’re kind of in this phase right now, what about services that you get from a financial adviser in this period of time and this period of time we’re talking about income above… I don’t know, what would you say? Income’s probably like north of 350 to four, pretty consistently liquidities in the multiple hundreds of thousands across bank accounts in investment.

Reese Harper: Yeah. Lately I’ve been hesitant to place an income number on it just because, I don’t know.

Ryan Isaac: Well, you could spend like very little and save a ton.

Reese Harper: Yeah.

Ryan Isaac: That’s possible. I know people [inaudible].

Reese Harper: The higher your income is, the more likely you are at this stage.

Ryan Isaac: Yeah.

Reese Harper: Right. For sure.

Ryan Isaac: Yeah. I guess what I’m asking too is what kind of things should people expect to do with their planning and their engagement with a financial planner versus… because we do also meet people who are in this phase and there’s like a very long list of very appropriate things that they need to be working on. But then sometimes there’s things that are not appropriate or there’s just not the right time to worry about some of these things because it’s still the wrong face. Kind of like being in the first phase and worrying about something later on down the road. Maybe we want to touch.

Reese Harper: Yeah. We were saying first phase it’s like keep the focus on the practice and build the liquidity and don’t do anything for a while. Like that’s basically what we’re saying don’t do anything but build the asset for a while. Don’t be be obsessed about like some financial decision you have to make just focus on the practice get your liquidity up and then once your time starts becoming at a point where you feel like there’s a premium, then there’s some financial actions to take that are more… but in that early stage they’re still advice you should get but it’s not so much action. No, like large volume of actions. Phase two, I mean there’s a ton of action to take. You’re going to have a very specific debt reduction plan, very specific tax plan. You have a very specific investment plan, very specific retirement account contribution strategy, you have a very specific set of insurance policy adjustments that have to be made on an annual basis.
It gets crazy how many things start to get unlocked and you’re like each one of these I used to be able to do in like five minutes and now each one of them is three or four hours long.

Ryan Isaac: Just thinking about it as like a few hours and then you’re just not even action.

Reese Harper: Yes. So you don’t organize anything cause you barely have any time. You’re analyzing stuff only when red flags come up in your life and you have to analyze it, but you’re not doing any kind of proactive calendar that would actually get it all done. And then you’re not really deciding things. You are just kind of by default letting things happen-

Ryan Isaac: Skipping the act.

Reese Harper: And you’re skipping right to the act and you’re just like, anyone who gives me something I can do that’s fast, I’ll do it.

Ryan Isaac: Just get it done.

Reese Harper: Yeah. And then that’s a not a good a good place to be, but you’re looking, you should be really focused on a lot of these big muscle, we call them big muscle group, kind of fundamental financial planning. Things like building the right savings strategy, controlling and monitoring personal spending, tracking your net worth really accurately, making sure you have the not too much liquidity and bank accounts and you’re spreading that and getting those assets growing right. In the first phase, we don’t really care if you have a little bit too much in liquidity in the bank because you just never know when you’re going to need to hire like a really expensive person and run a loss or like expand to a new location or maybe you decide you wanting to like have an associate come in earlier than you thought, having a little too much liquidity in the early years it’s fine.
Once you get to stage two, you want to dial that liquidity in a lot. You don’t want to carry too much cash, have too much cash, drag excess bank account balances that are making your net worth grow slower. This second stage is like hyper busy and I think what you’re asking is what do you not want to do?

Ryan Isaac: Yeah. What or somebody of the things that you-

Reese Harper: What you do not want to do. Don’t over assume that you’re now at the point of… Colin Cowherd has a fun word he likes to use for people that after they get through sports. He calls them, they go into the mogul stage and he’s always talked about the mogul stage.

Ryan Isaac: It’s like Tommy Haverford on Parks and Rec.

Reese Harper: Yeah. It’s like-

Ryan Isaac: Tommy’s Moguls.

Reese Harper: You’re a mogul stage. It’s like you’re now you’re like Lebron James according to Colin Cowherd, not me. Is that the mogul stage, which is like you did the basketball thing. Now you’re just about that you’re trying to do the films and you’re trying to establish a marketing agency. You need to blaze pizza and you’re all over the place. You’re a mogul.
I think some people haven’t maximized dentistry. They haven’t built their opportunity out enough, but they’re jumping into mogul stage, like real early, like big words, fancy investments that no one’s heard of. Tax strategy that no one’s heard of but them and a couple of close friends that haven’t been audited yet. And, there’s just like a lot of… you can sense it and a lot of people get into that stage real early, before the fundamentals are in place. They don’t have a really clear net worth statement, no clear entity flowchart, no estate plan, no calendar of financial planning tasks that they’re completing.
They’re not even getting the normal deductions they should get that are like written in law as obvious places to defer taxes and just save taxes that they’re perceived [crosstalk].

Ryan Isaac: Or don’t have that much [inaudible].

Reese Harper: They’re pursuing a captive insurance agency before they’ve even done an HSA contribution and they’re not even maximum 401k out, but they’ve got it captive. I think like word of caution here is there’s a time to be a mogul and dude, we’re respectful of that person. We have clients in that stage. It’s awesome to see them succeed at that level. Different financial strategies open up different complexity, opens up more snakes, more scorpions, more tar pits.
But let’s just be cautious before we assume that we’re there. If you’ve got a $500,000 net worth and $100,000 of liquidity, you’re not a mogul yet. All right. There’s an income level-

Ryan Isaac: You’re a great person, and you’re a valuable human being, and we love you.

Reese Harper: We love you.

Ryan Isaac: But you are not a mogul.

Reese Harper: But you are not a mogul.

Ryan Isaac: We’re going to print those t-shirts. You are not a mogul.

Reese Harper: At our event, we are not throwing an event here, we’re going to start bringing t-shirts around

Ryan Isaac: Six cannon.

Reese Harper: One will be I am a mogul and one will be I’m not a mogul.

Ryan Isaac: And segregate the others.

Reese Harper: And we don’t know. We’ll just get throw them out randomly.

Ryan Isaac: Just put them on. Yeah. Okay. I think that’s a good way to put it. So let’s maybe like wrap up a final phase that, and it’s fair to say many people, I guess the other part of that is most dentists just on average don’t become moguls either. Most dentists just live really great lives and build really tremendously awesome careers and still don’t become moguls. We would like, What would you define, how would you define the dentist mogul? What kind of a… I know there’s no perfect clear income or net worth, but what are some benchmarks you could say like, Okay.

Reese Harper: Stage two or stage three for the mogul. Stage three?

Ryan Isaac: Yeah. Stage three. How would you define some stage three mogul status?

Reese Harper: Well, I think… Here’s how I would view. When you no longer feel like or want to or need to earn a living need.

Ryan Isaac: Need.

Reese Harper: You no longer need to earn a living as a practicing dentist because your business, your practices or your dental business of some kind or non dental business of some kind is generating enough income for you to make work optional. That’s a totally different stage that requires-

Ryan Isaac: You need to find out that total term.

Reese Harper: Yeah.

Ryan Isaac: [inaudible] total term.

Reese Harper: A total term for those of you who don’t know, is your net worth divided by your annual spending? Like when that exceeds 50, you’re really definitely in a different stage of complexity that you can consider a lot. You have to consider a lot more options at that stage. I don’t know if that’s exactly at a total terms score of 50 or if it’s in the 40s for some people or 60s, but the characteristics are more like… the characteristics of that person are, they are financially independent. And they’re not in a position where they have to work for a wage, that’s a different stage of complexity that requires an entirely different set of planning tools and different investments that are available to that type of person. And I don’t think it’s like [crosstalk] it’s not the best thing.
It’s just like… I was talking to someone this morning about Steve Jobs and Larry H. Miller, both two people who I respect and, and both of those people we’re moguls, right? And we are using mogul as a made up word like we just came up with today. Mogul isn’t… that’s calling cowards word for Lebron James and sports people. We don’t use this word, all right?

Ryan Isaac: That was not ours. But it fits.

Reese Harper: There is a level of person whose wealth is at a point where they just… they have a very different profile and they’re not always the happiest person. I mean, Steve Jobs would be the first one to tell you. He told his family and kids and it’s like there’s-

Ryan Isaac: If you don’t have to get there. That’s not the mogul state, if you want to call it that or this third stage. It’s not… that’s not the end destination goal.

Reese Harper: No.

Ryan Isaac: You don’t have to get there and most people don’t anyway.

Reese Harper: But I’m grateful for the people that do.

Ryan Isaac: Yes, for sure.

Reese Harper: I mean without those people, we have no economy and I’m just like, I at least I wouldn’t have any movie theaters in the State of Utah right now. Thanks to Larry H. Megaplex.

Ryan Isaac: Not good ones [inaudible] you have seats that lay all the way backwards and hold all your food.

Reese Harper: I saw a Cheetos popcorn last week. I was like, what? I’m already saying no to the popcorn because I can’t have that anymore. Now I’ve got to say no to Cheetos popcorn. It was literally like popcorn with Cheetos mixed in it and then Cheeto flavoring on the regular popcorn.

Ryan Isaac: Wow!

Reese Harper: That was intense.

Ryan Isaac: I like that. I like that.

Reese Harper: That was intense. Cheeto butter.

Ryan Isaac: Yeah. But the world needs… the Cheeto butter popcorn would not exist without the moguls.

Reese Harper: Yeah. You needed that guy to come around. Shout out rest his soul. He did pass away at an early age due to massive coronary heart problems due to the Cheeto popcorn.

Ryan Isaac: Due to becoming a mogul.

Reese Harper: Okay.

Ryan Isaac: Yeah.

Reese Harper: But I really respect both of these people, Steve Jobs, Larry H. Miller, like you need those people, grateful for them. Ryan we’re not passing judgment on what stage of life you should pursue. Okay. All we’re saying is there are financial, there’s an order of financial planning complexity that corresponds to your net worth and income level and the best way for you to proceed to the next stage if you so desire to proceed to that stage is doing things in the right order. We’ll always be… everyone’s got to be making some financial planning decisions that correspond to where they’re at in their net worth and income stage. And you screw things up when you start to get overly complicated or that’s basically it. If you over complicate the stage that you’re in. Your net worth won’t grow as fast.

Ryan Isaac: Yeah, I like it. All right, well thanks Reese for bringing in the Pitfall Harry for me though. That was some 80s nostalgia. I appreciate that.

Reese Harper: Well, we’re going to do a final sign out for me and then you can let our listeners go with a warning about, that’s C for chi. I want everyone to be peaceful and have a great recentering moment.

Ryan Isaac: A great centering moment. If you would like to get great and centered and get your chi on financially, give us a call sometime. 833 DDS plan. Or if you’d like to schedule a time to chat with one of our advisors, go to, click on book free consultation and find an appointment that’ll work for you. You can also jump into our free Facebook group, more members are joining. Everyday I see the new member requests like the groups growing and there’s questions and there’s good discussions. That’s join us in there. Thanks for listening everyone. Talk to you later.

Reese Harper: Carry on.

Practice Value, Behavioral Finance

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