How Do You Know When Enough Is Enough? – Episode #632

On this episode of the Dentist Money Show, New York Times Columnist Carl Richards, CFP® joins Matt to explore the deeper side of financial planning and how to align money with what truly matters. Carl discusses the complexities of uncovering personal values, the importance of experimentation in financial planning, and how a statement of financial purpose can serve as your guide. They highlight why societal pressures can lead to financial dissatisfaction and why your skills are your greatest asset. Tune in to learn how to shift your focus and build a financial life that truly reflects your values.

Carl Richards, CFP® will be a keynote speaker at the 2025 Dentist Money Summit June 20-21 in Park City, UT. Join us to hear him and other amazing featured speakers to help you navigate the now. Register HERE (clients of Dentist Advisors receive complimentary registration at checkout).

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Podcast Transcript

Intro: Hello, everybody. Welcome back to another episode of the dentist money show brought to you by dentist advisors. We have an amazing show today where I get the opportunity to interview Carl Richards, soon to be three time author. Speaker, former sketch guy from the New York Times, and actually a former advisor himself. And we cover a ton of different topics. he previews the things he’s going to talk about at our Dentist Money Summit coming up in June. He’s one of our keynote speakers. Carl is just incredible with the stories he has, the wisdom he shares and the experience that he has to, to bring to the audience. So we have an amazing discussion and we cover all sorts of topics around. How do you know when enough is enough, how to simplify your financial life and understanding your why and making money more meaningful in your life. You are not going to want to miss this and also not going to want to miss Carl at the Dentist Money Summit. As always, we hope you get something out of this and we hope you enjoy the show.

Matt Mulcock: There’s a story, Carl, that I’ve never forgotten that you told on a podcast. You probably told this story many times, but it was years ago when I heard it. It was you sitting on a chairlift talking to someone. Do you remember this story?

Carl Richards: Yeah,

Matt Mulcock: And can, can you, can you tell that story?

Carl Richards: Yeah. So, we don’t live too far. I mean, anybody who lives in Salt Lake, you know, we live in park city. Anybody who lives in this area doesn’t live too far from a ski resort and skiing is spending time in the mountains mainly with my family is sort of what, you know, that’s my primary value. And so I try to get up in the mountains all the time. And so one winter day, Nobody from the family could go, so I just ran up to a ski resort close to the house to take a lap or two. You know, when you have a season pass and you live that close, you can just go for an hour or two. And I got on the chairlift, and I was, I was single, so I got on with somebody else, and the person asked what I did, and I told them that I ran a financial planning company at the time, this was years ago. And they said, oh, I’m in the same, we’re in the same industry. And they found out a bit about my firm. They, you know, we, in all industries we have questions we sometimes ask. Like shortcut questions to figure out, like. I mean, I would imagine that dentists have some questions, like how many chairs or, you know, how many employees or something.

Yeah, there’s some question, you know, in our industry, there’s a question we often ask to, like, quickly gauge, try to quickly gauge this metric of how successful you are, and I, I, he asked that question, I told him, and he said, because this guy works for a big firm that we would all recognize, and I had worked for a big firm, too, and I had started my own, and He said, uh, when I told him, when I answered the question, he said, oh, so you run a cute lifestyle business. And I, and, and that’s a, in our industry, that’s sort of a, a almost like a little derogatory comment that people make. people who haven’t quite matured yet, make that, that comment sometimes. And I was feeling a little bit more, I, I’m not normally this way, but I was feeling a little bit more sarcastic that day. And I, I, I thought for a minute. And this was a, I can’t remember if it was a Tuesday or Thursday, let’s just go with Thursday. It was a Thursday. And I remember saying, cause I, you know, already gathered that this guy was on vacation from somewhere else, Chicago or something. And I remember I said, Hey, just a quick reminder, um, you’re on vacation. This is just Thursday for me. And that sort of ended, ended

Matt Mulcock: I’m sure.

Carl Richards: It was, it was to me, that was just a really good reminder, like independent of industries or anything else. It’s just a really good reminder of like. Gosh, it turns out we can all decide what we really value most and most of the pain in my life has come from and will continue to come from when I misalign those things. When I, like, try to live somebody else’s life or somebody else’s goals because that’s what all the cool kids are doing. You know, and then I wake up and go, gosh, that’s not really that important to me. That thing, you know, whatever that thing is and the thing to remember, too This is not what you asked But the thing to remember about about these these priorities we place is that the only ones that matter are yours And and yours are different from everybody else’s like it’s easy for me to say like a really fancy car is silly But that’s just because I don’t like them. You know, like, if that’s your thing, that’s totally okay. The question becomes, the problem comes not from whether it’s a car or ski resort. It’s from misalignment, like living somebody else’s goals. So, um, anyway, that’s that story.

Matt Mulcock: I’m so glad this is I was, I’ve been thinking about this and I was actually at the gym this morning going through some stuff in my mind for this discussion. And I was like, I’m gonna ask him this. And you did not disappoint by telling that story and all the different threads we could pull on from there. I want to circle back to the core values and the statement of financial purpose, which I know you alluded to. I reference this. That again, I’m going to come back to that, but I want to come, I want to pull on this thread here around living someone else’s goals and this idea of misalignment. There’s so many different ways we could take this, but I want to focus on how do you uncover this of like, am I misaligned? First of all, like you might feel it. How do you know if you’re living someone else’s goals versus living your, what’s the work to be done there?

Carl Richards: Yeah. It’s, it’s really hard. Like, that’s the first thing to just like extend some real deep grace to yourself and empathy and room because it’s really hard. And the reason it’s really hard, a lot of this goes back to Rene Girard’s work around mimetic desire.

Matt Mulcock: Yes. Thank you. Yes.

Carl Richards: Yeah. Right. Like we are, we actually don’t know what we desire. Like from the youngest age, we’re desire mimicking machines, which is where mimetic comes from. So you think about that from the youngest age, like the, you look to your mom to figure out what it is you should want. And that just now just blow that out 20 years and add Instagram. And you sort of like getting clear about what you want versus what other people want, or what you’re supposed to want, or what your parents want you to want. It’s really challenging. So the way, so that’s like, that’s why it’s a problem. The way, the only way I’ve found is to practice, right? Just, just try. In fact, here’s a really great story. Morgan Housel, which I’m sure most of your listeners will have read, Psychology of Money. Um, He, he was on, we were having this conversation on a podcast I do called 50 Fires. He and his wife came on and we were talking about this experiment that he runs every once in a while since we’ve already talked about cars. He feels like he should be a car guy, right? So this is this memetic thing. He, he was a valet in, Somewhere in L. A. when he was in college. He, like, he feels like he should be a car guy.

And he’s got enough money now that he could buy whatever car he wanted, right? So every once in a while, he, when he’s traveling for work and he needs to rent a car, every once in a while, he’ll just, at the Hertz counter, he’ll just say, You know what? Why don’t you just give me the Porsche? Cost him an extra couple hundred dollars for the day. And he says that, he said that, um, it, he, most of the time he doesn’t even get it off the lot. Before he’s like, man, this is beautiful, it’s amazing, but I’m just not into it. You know, I’m just not into it. And, and he makes it clear, like, if I was, I would buy one. And I’d have no shame about it. So I think that’s a really good example of just running little experiments to figure out what you’re desiring. Here’s another one. I had somebody come to me saying, look, I, I need five million dollars and a sailboat. Like that was like the, this, and in my mind, like I’ve done this so many times now that there’s this pattern recognition of, like I just say to myself, well, okay, like, like, what I say out loud is, wow, that’s a really specific goal.

Let’s talk about it a little bit. And, you know, it’s like. Have you ever been on a sailboat, you know, and that’s a kind of a silly example of like well You know what if you thought sailboats were important you could run a pretty cheap experiment, right? Like go spend an hour Oh, did you like that? Go spend a half day. Oh, did you like that? Go out for two or three days So I think that’s how we do it and you pay attention to how it feels last example We used to think that, my wife and I used to, like, we had this goal of having deeper relationships with our friends. And, so we would go for a while, we used to be very intentional about, like, inviting some friends to dinner and a movie. And then we, after doing that a couple of times, we were like, that’s so interesting. Like, our, what’s our value? Well, the value we’re trying to express is connection with friends. So, What was it about going to a noisy restaurant and then a place you don’t talk in the movie theater that thought we were going to express our values?

So we just sort of paid attention and we were like, let’s try something different. So we invited people over. We bought all the ingredients. Invited people to our house. We told them to come, plan on being here for three hours. We made dinner together. Talked, sat around the table, and I mean it turns out it’s a double win because it turns out it was a little bit less expensive but that’s not what mattered, it was just an experiment to see, and then remember, sorry long winded answer Matt, but remember these values, these values change, right? Something that was incredibly important to you in one phase of your life might, at least the way you express it, maybe the value, connection with friends might still be very important. Now I express that largely through backcountry skiing with friends. So the answer to your question is experiment, like practice. It’s Morgan’s example is great because it’s like a couple extra a hundred dollars to save yourself a real big mistake. I just had somebody else on the podcast who bought a Porsche and it’s like, but you know, she didn’t run the experiment first.

Matt Mulcock: Yeah, such good practical tips there. I can’t help but think of the work of, I want to say, Dan Gilbert, design your life, design your life. He talks about prototyping and, when you’re going through that, Carl, I can’t help but think. Of how many times I’ve seen like this, specifically the example you mentioned around, I need 5 million in a sailboat, right? I hear that you were a former financial advisor. You’ve spoken to 10 X, the people I have in this, in this realm. but I can’t help but sit here and think about And I, I’m trying to find words to, to articulate this, but how we like the idea of things, or we think, we think we’re going to be a different person in the future something I’ve been thinking about and writing about lately just to myself is money. And I want to hear what you think about this. Money just magnifies who you are and scales what you do. So, so meaning like if you’re not a salesperson, Boat person. Now, why would you be winning in the future if you’re not disciplined with money now? Why would you be in the future? I wanna get your thoughts on just that idea and have you seen that in your own work that we think we’re gonna somehow be different like when we’re retired or when we get this, this kinda this all be happy win syndrome?

Carl Richards: Yeah, I mean there’s a couple of things there like one is, I think that idea of magnifying’s Barring a Intentional intervention. Yeah money just magnifies things right like if you’re An unhappy jerk with a little money, you’re going to be a bigger unhappy jerk with a lot of money, like to be very blunt,

Matt Mulcock: Yeah. Yeah.

Carl Richards: And if you’re insecure with money, more money won’t solve that problem, which is really fascinating. It’s just a different kind of work. And so, I think, but that, but there can be this opportunity to say, I was just working on, I’m just wrapping up my, My book that’s gonna come out in October, and it’s a hundred essays, and I literally, just right before we got on this call, I, I hit save on the hundredth, which I’m super jazzed

Matt Mulcock: Is this number, book number three for you?

Carl Richards: Three, uh, haven’t published one in ten years, but it’s time. So, but one of the things I was just working on was this idea that, um, this idea that, what we think we want in the future will always change. And so the idea of having a really strong goal, to me, goals are really important, but they’re important because they’re strong opinions loosely held. And so you can get, if you do it right, you can, the goal still becomes important, but you can start running these little experiments to see what is it that matters to me. And, and it could be. You know, we just spent four years living in New Zealand, you know, and I thought we would maybe would never come back and that we would be moving, you know, like that that would, but it now feels like, oh man, the kids are close. We have one daughter that just returned to Utah to go to med school and like, like, and they love it here. They come here often. So we’re like, okay, for the next foreseeable future, we’re here. Well, that’s not what I thought was going to happen. Even a year ago. And ten weeks before we moved to New Zealand, that idea hadn’t crossed our minds.

So I think the idea of sort of being open to change and committed to goals, like we can hold those things in our minds at the same time. And that tension, we shouldn’t actually try to resolve that tension. That tension is the creative tension that makes for a good life.

Matt Mulcock: Yeah. That’s a good, a great point is what you just said there at the end is not trying to solve the tension, or solve like it being a problem. It’s what drives it forward. And you mentioned something just now that you said earlier, I want to, I want to drill in on wow, pun intended with our audience, um, about this idea of changing but I know I want to relate to relate this. I want to circle back what I mentioned earlier of your statement of financial purpose. This is something, Carl, what you don’t know is you’re on, you unknowingly are one of my senses, just so you know. I should have started with that. Maybe. Um, I referenced you a lot and you wrote a while ago, a long time ago, I think of the one page financial plan. And again, you podcasted about this. your financial purpose, is if I don’t, I hope I get this right. Time with family, mostly outside. Is that right? So I guess so to drill in on this. Has that changed? And if not, what has changed? And how have what are practical things that people out there are listening? Like, how do you balance of like, what, what is supposed to change, like, meaning goals? And then what are things that don’t ever change that guide you?

Carl Richards: That’s a super good question. So it might be helpful just to like think about a statement of financial purpose. To me, I think of this as almost like a pyramid. You can think of it as Maslow’s hierarchy, like that same kind of a pyramid. And at the top we have products like financial products. You could also put markets and you know, the economy like, but products and most of what we talk about in personal finance, if you go into the bookstore, you turn on the financial pornography network is about product, product, product, product. And then, and then, but, but it’s actually the least important part of the whole process. it’s important, but it’s the least important part. But underneath that, you have process, right? Like what’s the financial planning process? What’s the investment process? But underneath that, you probably had a plan, hopefully.

And that’s where I thought it stopped until, this would probably be like nine years ago, eight or nine years ago. I was, I can remember exactly where I was walking. Um, in New Zealand, listening to a podcast, and I was trying to figure out why, and largely this was to answer your same question, which was like, when do you change your investments? Why do people make such, why do we humans, all of us, me for sure, make such crazy decisions with investments? And I was like, well, it’s because It’s really hard to say no to something unless you have a much deeper yes. And I was like, okay, what’s the deeper yes? I was like, okay, a plan. But I, I was pretty convinced there was something under a plan.

And I’ve heard in our industry, you know, people talk about value sometimes and I love that. But I, I was reading some research around the idea of purpose, and so that’s when I came up with the idea of like, statement of financial purpose. So some examples, mine is, time with my family, mainly outside, and service in my community. Once I wrote that on a piece of paper and stuck it on the wall, it became the filter through which I made other decisions. So like the, you know, the cool neighbor who’s starting the restaurant and asked me if I want to invest in it. Well, I can look at the thing and be like, does that help me get closer to time with my family?

Probably not. Like, okay, no. Right? So, that’s how, that’s what that’s, that’s what a statement of financial purpose is. It’s just like, I could tell you Jerry and Vera, clients of mine, said, I never want to be a burden to the kids. Right? And, and I’d like to spend some money on the grandkids while I’m alive. and I could give you, I could give you hundreds of examples. So, time with my family, mainly outside in service in my community. That hasn’t changed for, cause that was in one page plan, so that hasn’t changed for 12, 12 years. Now the expression of it has changed. So if you move up a little bit, like, how am I gonna, what does that look like tactically? Well, You know, when we lived in New Zealand, we were doing different things than when we live in Utah. sometimes the kids are around, sometimes they aren’t. time with my family, sometimes now I just try to get my 25 year old, super hard charging, backcountry adventure ski daughter to sit on the porch with me for a few minutes.

Like, can we just talk, you know? So, so I think, like, the expression of those values, and could someday that change? Sure it could. I mean, I don’t, I don’t see it because it could be like, it could even be gardening, right? Like it wasn’t necessarily like Climbing really hard things or skiing really steep slopes. It was just time outside. So, now then the changing of goals, because here’s what we do, and especially like smart audiences like yours. You’ll have an investment plan, and the investments will get scary. That’s what I call it. Like, a scary market will show up and they’ll wiggle a whole bunch. They’ll move up and down. And if that investment plan is linked, if the investment decisions are linked to your goals, then the chances are a really good financial planner works with you to design that investment plan. Right? And those investments were built on the weighty evidence of history to give you the greatest chance of meeting your goals. And they took into account scary markets. Because guess what? Scary markets are littered in history. So the numbers we’re using We knew this scary market would come. We just didn’t know when or how or why, right? Which is not to diminish the scariness of it. It’s still scary. But what we tend to do is say like, oh, never mind.

I want to change my goals. Like, make me more conservative. I want to get out. Like, well, you may not reach your goals. I don’t care. I’m changing my goals. So that tension’s hard to balance. Like, I think Knowing, I’ve had goals I’ve certainly had to change and they were smart changes. So knowing the difference between now is the time to stick to it, you know, be a little disciplined. Because you don’t change your goals when things are hard. That’s not the right, I, you know the distinction I made, make Matt is the difference between heavy and hard.

Matt Mulcock: Oh, tell me more about that. Yeah.

Carl Richards: I’m not sure it’s exactly right, but I’ve been saying it for years. It’s like, if I, if I’m feeling myself like, forcing and gritting my teeth and I’m kind of miserable, I do lots of hard things. In fact, my favorite things to do are hard. And I’m sometimes even miserable while doing it, but I’m often still smiling. So, I try to pay attention between that, like, forcing. You know, like, if I’m using words like force, or grit my teeth, Here’s another way to think about it. I love this idea, too. Like, if it’s right, if it’s the right thing.

So you do all this analysis in your head, you like, study it out in your mind, right? You consider every alternative. And then you come up with an idea, but you still don’t know if it was right. I think of it as a puzzle piece. Like if it still feels like I’m trying to jam a puzzle piece in the wrong spot, I feel like blocked. Then I’m like, maybe that’s not right. If I feel tailwind, that’s what I often refer to it as like tailwind in the form of maybe a little bit of energy, often people resources kind of show up as like, Oh, I kind of feel like I should keep going that way. that’s where you shift from head. Spreadsheet to intuition and heart and good planning, I think helps with that process. Like you can run all this, you know this, you can run all the spreadsheets in the world for your clients and then still say, Hey, you know, we could do either one of these, which one feels right. And I think we need to be better in our financial decision making of. Layering on the, which one feels right after all the homework, which one feels right.

Matt Mulcock: Yeah, I love that. I mean, there’s so many different ways you could, we could express this lately. What I’ve been saying is the balance of the philosophy of money and the physics of money. There’s two sides of it. Speaking of Morgan Housel, I know he talks a lot about the rational versus the reasonable, um, or what you just said, like the head and the heart. I feel like. One of the challenges is and I know I knew this is where the conversation was going to go Just knowing like your work and reading your books and hearing you on podcasts of this I think you are so good at expressing the heart side of it I think you’ve said in the past many many times and I feel the same way like The physics, the spreadsheet stuff like Yeah, that’s table stakes. Like, yeah. Any financial planner is going to, any quality financial advisor is gonna know that stuff. Um, and should, one of the challenges, Carl, that I, I know we face and I want to, I wanna speak to some of the dentists out there, maybe listening and, and reference some of the eye rolls I get sometimes when I bring up, like speaking somewhere around core values and statement of financial purpose and, and the squishy kinda heart emotional stuff. What are the challenges you have? Had to overcome in like those tough meetings when you get the engineer or the the really type a dentist It’s like cool. Cool. Just give me the best returns How do you break down those walls and an express and show the critical? Part of this has to come first. What what are your thoughts on that?

Carl Richards: Yeah. So I like, first of all, I feel like I could go toe to toe with anybody on the investment process. And I felt like I could, like, I have as big a calculator as anybody in the industry. Like I can, like I know how to do that stuff and I feel like. Financial advisors should feel that way, like the, at least the financial advisor, even if you’re on a team, like you may have one financial advisor who focuses on the hardcore technical aspect of, of planning, which is really, really important, but somebody should feel that way. So, in no ways do we want to diminish those technical skills, but they are, in my mind, I mean, in our industry, speaking broadly, and you know, just, To be candid, speaking broadly of our industry, they’re not table stakes. Like most people don’t technically know what they’re doing. And that’s why I always claim, right. That’s why I always

Matt Mulcock: Take it for granted. Maybe. Yeah.

Carl Richards: Yeah, real financial planners, real financial planners are insanely technical, technically competent, right. They’re professionals. And. Then the big question is, and I love, like I work with engineers, venture capital, private, like some of my favorite people are really technical people. And the question you always have to ask is like, and what are you doing this for? Right? Like that question of returns for what? You know, and here’s the, here’s what I, I’m seeing this more often. The most common conversation I’m involved in right now is typically for me, it’s been mostly men. It’s probably because I’m male and they’re reaching out to me for a purpose. Between 45 and 55, they are on a vacation in Park City, they have read some of my work, they know I live here, they send an email. Can we get together for coffee or breakfast or lunch or something? We go meet, they look around to make sure no one’s listening, and then they show me some proof of having won, right?

Income statement, balance sheet, they make some statement. I sold my business for this, or I make this. Then they look around again to make sure no one’s listening, and they say, Is this all it was for? Right? Like, what, what did I do all this for? And I think this speaks to the problem that money is of no value if it doesn’t enhance meaning in our lives. And what Covey said was, like, the last thing you want to do is spend your whole life climbing a ladder only to find out it’s leaning against the wrong wall. And the data’s clear. Like, most people feel like the ladder’s leaning against the wrong wall. What am I doing this for? And so I think that idea, outperforming the market, having the best investment, those are not financial goals. Because you can never actually win that game. Like, there’s no, there’s no, what, And this is the last example I’ll give you, Matt. Like, imagine if you’re 70 and you outperform the market. Every quarter for the last 20 years, which let’s just pretend like that would be possible. Imagine you did it.

Matt Mulcock: Your peer Lynch. Yeah.

Carl Richards: Yeah There’s still a chance you didn’t meet your goals. Like it’s possible that would you be happy? No, like okay now imagine you never quite outpour your investments did fine. Your investments did average You never outperform the market, but you met every one of your goals, right? It’s it’s progress towards goals that matter It’s not investment returns Now investment returns are part of it and I don’t want to shy away from it. Like I’ll totally, again, like I feel like I’m can absolutely defend the investment process I believe in. So anyway, I hope that’s helpful.

Matt Mulcock: It is super helpful because I think in our industry, this example is perfect where we still get questions at times. I think we’ve done a pretty good job of trying to emphasize this on our content. And a lot of times clients will call me when markets are scary, like what’s happening right now. And they’re like, Hey, I know your answer. I know what you’re going to say. Right. But I still want to talk it out. But what is so pervasive in our industry? Yeah. to your point is this comparison to the S& P 500. It’s like, we’re supposed to just compare everything to the S& P 500. Did I, did you beat it? Did you not? I actually had this recently with a client, a progress call, and a client said to me, we were reviewing returns, reviewing their progress. They’re killing it. Everything’s moving smoothly with everything they’re doing. And he says to me, well, I guess I should check and see if I beat the S& P 500. And I’m like, why? What’s the point of that? And, you know, I didn’t say it like that, but I’m thinking to myself, why? I think it’s like programmed into us to compare ourselves to arbitrary benchmarks.

Carl Richards: Yeah. And I think like, look, I have deep empathy for your audience believing that that’s in that like investment performance is really important. Like we. And again, I’m using this term industry. I think there’s a real difference between 95 percent of the industry and the work that you guys do. But as an industry, and we’re part of that industry, we have trained people to believe that that’s important, right?

That’s all the Financial Pornography Network talks about. It’s all the, like, anything you read, we’ve trained people to think that that’s important. And I think that’s why people are mostly dissatisfied. with their financial experiences, it ends up being a, a never ending hamster wheel of chasing performance. And, but I guess like the empathy piece, it makes total sense. Like if you’re going to hire a new basketball coach at the University of Utah for instance, and it makes sense to look at their track record and expect that to continue, right? If you go to, if you go get your MBA, it’s like NBA 101. If you have three divisions of a business and one is doing well, two divisions of a business. One is doing well and one is doing poorly. You kill the one that’s doing poorly and you invest those resources in the one that’s doing well. So it’s reasonable for that to be in our brains. But we just have to shift. It’s not about outperformance or underperformance. It’s about like that doesn’t matter. The investment returns matter, right? We got to have a defensible investment process, but it only matters to the degree that it influences our behavior. And that it influences our success, successful progress towards our goals. It’s the context that matters.

Matt Mulcock: Yeah, love that. I want to come back to, to this example you gave it. Cause I, it’s, it struck me because I hear this stuff all the time, meaning the example of these, super successful people that are coming to you, making their statement or showing you proof of that, like they’ve won the game. maybe the game of status or the game of wealth or whatever and they say, is this all this is for, what do you say to them? How does that conversation go from there? Cause I I’ve heard this too, so many times from, from clients or dentists otherwise.

Carl Richards: Yeah, I mean, I have learned to ask more questions. Yeah, like, tell me more about that. Like, seems like that’s, sounds like that’s a really important question to you right now. Like, tell me more. Like, where’s that question coming from? you know, I would just probably lean back and pause for a minute, and then just say, I would probably just say, in that scenario, when somebody asks that question, I would probably simply say, Tell me more. And then just open a bunch of space for the conversation. Well, you know, and I’ve never had it not happen where people, like, they’ve clearly thought about it. Geez, I, you know, my kids don’t even like to talk to me. My, you know, purple hair and nose ring, you know, whatever. Like, like, they don’t even want to talk to me anymore. I, my wife and I are, it’s really strained or my husband, he doesn’t even, you know, he’s always off skiing with his friends. To use a very personal example. I’m just

Matt Mulcock: Yeah,

Carl Richards: But, so like, like, what, so like allowing people to talk about it. And then I just love questions around, well, gosh, what, you know, What have you thought of in terms of, you know, that, that, what that leads to eventually is some serious discussion around experiment design, you know, like the kind of trade off financial planning we talked about earlier. Like, well, gosh, what is important to you? What have you learned through that? Oh, I thought, you know, working 70 hours a week was the thing I was supposed to do and yeah, it just, it turns out I did it and it just feels hollow now. Like, oh gosh, what have you thought of as solutions? You know, first of all, I get that. You know, like just making space for those kind of conversations and realizing that’s actually at the heart of financial. I don’t know how you build a financial plan without knowing. if you were my finance, if my financial planner, her name’s Christy, if Christy did not know that time with my family out, mainly outside was not the most important thing to me, I don’t know how she would build a financial plan. I don’t know how she’d help me make very specific tactical decisions without that information.

Matt Mulcock: To keep coming back to that. Yeah, you, by the way, I want to be thoughtful of time. I know you got, you got some places to be,

Carl Richards: No worries.

Matt Mulcock: Doing okay. You built a career, you built a business and a framework around taking complex financial topics and Distilling them down into simple again simple frameworks and concepts Going back to your work is that the sketch guy for the New York Times? Can you talk a little bit about the the power of simplicity and the challenges there that I think a lot of our audience face? specifically around The richer I get, the more complex I should be. So I think, uh, whether someone’s going to say it like that or not, I think that we see this bear out in actions. I need that, you know, I’m rich now. I need this fancy thing where there’d be consumer, but it’s more specifically around like investing. Can you talk a little bit about that? Like the power of simplicity and why you’re so passionate about keeping things simple.

Carl Richards: Yeah, I think the, mean, it’s always a challenge, right? Because there are, I can’t remember, Hinkle’s, I can’t remember what that quote was, that there are elegantly simple, beautiful solution, solutions that are wrong, you know? So, so, but this tendency towards complexity, I call it complexity drift. I think that comes from just a confusion between simplistic and elegantly simple. And simplistic is before you’ve considered, I think of it as like a, I just have a sketch of this, like if you just imagine a, a line being drawn across the page and then it gets to the middle of the page and it starts to double back on itself so you, it ends up looking like a giant ball of yarn. And then the line comes out the other side. Well, On the left hand side, before we’ve gone through the ball of yarn, that’s simplistic. And there are plenty of people offering simplistic solutions to financial problems. But then when you get in the middle, like the job of a real financial advisor is to understand all the nuance and edge case, right, to like thoroughly diagnose a client, to really spend, and your, your audience totally relate to this, right? They spend a bunch of time checking, particularly a challenging case, like checking things, running tests, looking at x rays, having people think, like think through things, and then after they’ve considered all that stuff, they may even go look at new literature. They may ask some other Doctors, they may call a specialist.

After looking at all that stuff, often there’s a very simple, elegantly simple solution. Like, we’re gonna do this. Well, I don’t really want my dentist taking me through that complexity in the middle. And what Oliver Wendell Holmes said is he, he, he said he wouldn’t give a fig for the simplicity on this side of complexity. But he’d give his right arm for the simplicity on the other side. And so I think often what we, so that’s the first thing that’s important is understanding that elegant simplicity is actually really, really hard. It involves a bunch of editing and distilling and consideration, nuance, edge cases, all of that stuff. And then saying, after all of that, right, and with the client, with a client, what that looks like is like, after everything I know about you and what I’ve heard and what you’ve told me, This is what I think we should do. And that this, you know, with a doctor, that this is often a prescription you can’t even read.

And you go to the pharmacy and you fill it. Well, why do you fill it? Because you’ve, you felt thoroughly diagnosed, right? And so if you don’t feel thoroughly diagnosed, well, then of course. Now, then the second thing I just want to talk about quickly is complexity drift. I think we think that when we get more money, and I’ve seen this so many times, like I I’ve, I’ve done a bunch of like family office slash university endowment audit kind of work where we go in and see, and the complexity never adds value. It just doesn’t add value.

Matt Mulcock: Yeah, it’s cost though.

Carl Richards: It adds tons of cost, it makes you feel good, and, and again, I want to emphasize something, that’s actually okay. Like, if, if you, if you want the t shirt that says I have 12 people in my family office, so you can wear it around, that’s, I’m being really sarcastic, but it’s actually okay. It, you just need to realize, like, that’s what you’re paying for, is a, a form of entertainment, a way to keep yourself busy. And, I think We’re often scared. Like, I think we’re often, like, the reason we keep ourselves busy and we keep layering complexity onto things is because we’re scared of what we’ll find out if we’re not. It’s not that it’s adding any value, it’s just that it’s serving, it’s like watching a movie. You know, like it’s going to Vegas, like, Netflix, like, that’s fine. If that’s what it’s for, but just realize, is it entertainment? Or is it good financial decision making?

Matt Mulcock: Yeah. And I often think about that situation too. It’s like, is this serving your true wealth goals, which again, to quote Morgan Housel, wealth is what you don’t see, or is this serving the status chasing part of your life, which by the way, don’t get it twisted. Every single one of us has some level of that draw to chasing status. Um, so I think about this too, of that. I love that the t shirt with, I have my, I have 12 people in my family office. We see this in dentistry a lot. And we want to have, again, empathy for people, but we, we see a lot of like, all right, I’m going to go get into real estate and ask one question as to like, Oh, what does that mean?

Or, or tell me more about that. Well, I don’t know. It just, it’s, it feels sophisticated. It feels like my next move. And I think there’s a huge, huge distinction that I think you’re addressing right now is like. The importance of having decisions grounded in my financial purpose and my personal goals and my ability to build wealth is what you don’t see behind closed doors. You know, you’re not showing people your balance sheet, I guess, unless they’re coming to coffee with you. Um, or are you chasing status and you’re trying to impress other people? I mean, there’s a huge difference there

Carl Richards: Yeah, yeah. It’s, there’s one thing that’s really important here. Your audience is used to being really successful. They’re also used to, like, figuring things out. And I think dentists are particularly this way. Like, maybe orthopedic surgeons, too. Like, tinkering, figuring things out. You know, like, I mean, a lot of the dentists I know are also, like, could build, like, I have my buddy who’s a dentist. He’s built his own airplane, you know, like. Figuring things out. my dentist, she, yeah, she is always doing all these extra other things. And so it’s, it’s easy to apply that. It’s easy to see why you could apply that same lens to money that the, and, and there’s actually a lot you can do, right? The challenge of course is that we all have these blind spots. And by definition, you can’t see your own, so you don’t really get financial advice because you, because you couldn’t, because you’re not smart enough to do it yourself, like that, that’s not why you don’t get it. You get it because it’s not you. And, see, I had an investment banking friend who was at a big firm that everybody would recognize, super successful, he worked in like distressed equity, like, I mean, this guy knew how to invest. And I asked him why he had a financial planner, and he was like, of all the people, I would be unqualified to give advice, financial advice to, it would be me.

Matt Mulcock: Myself.

Carl Richards: Myself. And so, and then the other thing about real estate and restaurants, which I think is just fascinating to me is like most of the people I know, and this applies specifically because I worked with a lot of dentists and a lot of ER docs, most of them would trade just having their money back for their own investment experience. And if you just sort of, if you just look around, like how has that worked for people? It’s generally hasn’t worked. It turns out that these things. Running a restaurant, of all things, like running a restaurant and real estate aren’t actually that easy. They seem really easy because all we ever hear about are the success stories. We, it’s called survivor, survivor bias, right? Like we don’t hear about all the failures. And so just like, to me, the best advice to high income, highly skilled, skilled people I’ve ever seen is just like take all that energy into making the, your number one asset. Is you and it’s the net present value of your future earnings Is your number one asset as a dentist. And it’s, no matter what your spouse tells you, it’s actually decreasing in, with time. Because you just have one less year. That’s all. And so, the key is, like, maximize the value of that asset, and then throw stuff over the wall, and make sure it doesn’t get lost. Right? Like, make sure it doesn’t get lost. If you do that, like, you’re gonna win the game.

You know? So anyway.

Matt Mulcock: I’m so glad you said that Carl, because this is so confused. And we try to share this over and over and over again, is that building wealth, getting rich, whatever you want to call it is exactly what you’re saying. And for our audience dentists, it’s, you’re going to build wealth, the maximum. Or the highest probability of you building wealth is extreme focus on you, your skill set, your human capital, your ability to build wealth with your practice, or if you’re in a career associate with just your hands and ability to produce.

How you keep wealth is by throwing things over the wall to your point and doing it in a very, intentional way and diversifying into different assets. that is a huge distinction that might sound simple. But so many people take that for granted. They think that real estate is going to be the answer to my, what my passive income journey or my, my, my ability to build wealth. No, you, your skillset, your extreme intentional focus. On your skill set. And I love this, the net present value. Now we’re getting really nerdy, uh, two financial advisors getting nerdy. Um, so I just, I love that you said that. I want to kind of wrap this up with a, with the broad topic, which is going to be, you’re obviously speaking at our summit.

We are so excited to have you. we were, just so you know, Pete behind the dentist advisor’s curtain. We were, dare we say giddy when Carl Richards decided to agree to come speak at our, our second annual summit. the theme of our summit being, planned for the present. and I want to finish with this, this topic here of just, I think this challenge that we face and you’ve, you’ve already alluded to it, but this challenge that we all face, but I know dentists in particular face, because they’re so forward looking, so goal oriented. It’s really, really easy to get lost into the future. so I want to kind of circle back to what we were talking about earlier and finish with this. How do you find this balance of living in the moment, planning for the present, knowing what’s enough versus looking forward? And again, this is a theme of financial planning, I think in general, how do you find this balance or how do you help people find this balance?

Carl Richards: Yeah. Yeah. I’ve thought a lot about this. I, I think, I I used to joke that, I wanted to have, that we should have financial planning hats and that we should make them as ugly as possible so that we don’t want to wear them very often, right? And, and sort of the idea behind that is like every once in a while take those things out, put them on, okay, let’s, let’s do the thing, you know, whether that’s quarterly or annually or semi annually, like let’s really, I used to think about it as like the annual state of the plan. You know, like let’s look at it and then as soon as we can, let’s put that thing back in the drawer and get back to our lives. And I think with successful, driven people like your audience, It’s a real challenge. It’s, we’re always focused on the distant horizon. And you’ve been doing this since maybe all the way, maybe junior high, but certainly high school, right? Like, in high school you had to get an AP class, and then you had to get into dental school was just a, you know, like, then my, I’m gonna start my own practice, and then I’m gonna pay off the thing, and then I’m gonna do that, and like, it’s just always next, next, next, and you know what? Part of that’s a really important part of life.

Like, I just met somebody who’s 93, started his own venture capital firm, and he’s only making 20 year investments, right? Like, I really want to hang out with that guy. And, so I think you can hold this tension that I want the future to be better, bigger, more meaningful than my past. And I want to live today at the same time. Like, I think about it with my relationship with my wife. Like, my relationship with my wife has never been better ever. And I sure hope it’s better tomorrow. And the, like, the day I stop saying, I sure hope it’s better tomorrow, like, think of that with your kids. Like, my relationship with my son’s never been better.

And I sure hope it’s better tomorrow. And so I think we can hold both of those. And so one exercise or practice is just to intentionally build in times to, like, you’re focused on rowing to that distant shore. Right? Looking forward, just like building intentional times to stop and like turn around and be like, Oh my gosh, look how far we’ve come. And maybe it, and none of us are very good at this. Somebody just said this to me. I was, I told somebody I was going to finish. My draft turn in my book to the publisher by Friday, and they’re like I hope you’re celebrating this weekend And I was like I had not even considered that like of course we should

Matt Mulcock: You were just head down

Carl Richards: Yeah of course I was like no I gotta like I was even actually thinking of the next one You know like so I think just intentionally built being better about celebrating things Hitting milestones, enjoying things, like for crying out loud, like, and I’m speaking to myself mainly, like, when the kid sits down and wants to talk. Like, I watch my wife, she’s a really successful interior designer. She spends half her day, like, when the phone rings and it’s one of our kids, she just sets stuff down and goes and sits in the corner and is on the phone. And I’m like, I gotta get stuff done. I think she’s got it right, you know, like. Like, what are the things we’re going to really matter?

And those are built brick by brick by brick. You can’t wake up at age 58 and say, Oh, cool, I have time now. Hey, everybody, I have time now. Like, they don’t know who you are or what you want to do. They have nothing in common. So, like, I think it’s getting better about that. And I am noticing it feels like we’re getting better at this. It feels like. I hope that’s true.

Matt Mulcock: I think it is true. I think it’s, there’s more, the more emphasis on this, which I think is great. You’ve used a word multiple times throughout this discussion, which is this tension. And I love this is like, cause I think you’re acknowledging it’s okay to, you’re acknowledging both sides of the equation. Like there is a tension there, especially with dentists. Like, don’t stop being who you are. Don’t stop being this. You know, really productive, really successful goals driven person. I love what you’re saying. It’s like, just embrace the tension. Take a step back every once in a while, notice your progress. Cause if you keep raising the bar without looking back, you’re just never going to notice your progress, which I think is one of the reasons why we see people end up being discontent when they achieve whatever goal they set. They just keep raising that bar and they’re not looking back. They’re not stopping to celebrate. So I think that’s really important advice that you’re giving there, Carl. I love that.

Carl Richards: Yeah, it’s also helpful to, like, maybe cultivate the type of relationship with spouse and kids and friends that they can remind you to. You know, you’re a hard charging dentist. Wouldn’t it be great if your husband knew that it was okay to say, Hey, you know, put that away. You know, like, and, and can you imagine, like, that’s, that you’re in the middle of inauthentic, it’s like you’re in the middle of smoking a cigarette and somebody tells you to stop smoking. It doesn’t go very well. But that’s why I’m saying, like, intentionally cultivate, try to cultivate a relationship where somebody, and, and, and often that’s also an implied role that a good financial advisor can take of like, sometimes it’s like a punch in the nose and often it’s an empathetic hug, it’s like gently.

Exposing inauthentic behavior. Like, hey, I thought you told me this was important to you. Um, but you seem to be taking on more hours at work or more whatever. I thought you said you wanted to coach your daughter’s soccer team. You know, like, let’s talk about that. Like, no judgment, just, this is what you told me, and your behavior’s not matching. So being able to find the kind of people in your life and cultivate the kind of people in your life that will expose inauthentic behavior, sometimes with a punch, sometimes with a punch in the nose, and often with an empathetic hug, that’s, that’s gold to me. Like, those people, those people in my life are so valuable.

Matt Mulcock: I couldn’t agree more. I think an accountability and that challenging is a critical role of an advisor or just anyone in your life. Like you said, friends, family. For me, it’s my five year old daughter. Whenever I am getting lost on my phone and she’s, you know, we’re hanging out. She always said, and she’s so good about this. Daddy, no phones. And I’m like, Oh my gosh, you’re totally right. So Carl, um, I think I know the answer to this. but, just knowing, knowing you and how, how genuine and authentic you are and how you come with just fresh new ideas. But, anything you want to share about what you’re going to be speaking about a little, a little, I mean, I’m sure a lot of stuff we talked about today, but just anything specific you want to kind of tease people with of like what you’re going to be speaking about at the summit, just general ideas that you, that you have that you want to share.

Carl Richards: Yeah. The three secrets to high performing stocks,

Matt Mulcock: There you go. That we’re going to end it there. Everybody. Yeah.

Carl Richards: How to invest in

Matt Mulcock: They don’t want you to know. Yeah.

Carl Richards: Yeah, what, what, what the, well, wall street doesn’t want you to

Matt Mulcock: Yeah, exactly.

Carl Richards: No, I think we’ll just have more conversation about like, Hey, why does all this matter? And how, how can we, and I just want to be really clear. Like I feel like technically, I’m as hard charging as anybody. Like I’m okay with that. And, what’s it all for? You know, like, why are we doing this in the first place? And so, I think, um, if we can have more of that conversation, and I’ll be bringing, I’ll be bringing a bunch of sketches from the new book, so you’re one of the, one of the, yeah, pretty close to one of the first people, where the book will be, like, typeset and done. Like, there won’t be any changes I can make by then. So we’ll talk about that. Yeah, I’m really excited, I’m really excited to be there.

Matt Mulcock: Can’t wait to have you, Carl. It’s going to be so fun. speaking of book, so it’s coming out in October. Where can people find it? Can they pre order it?

Carl Richards: Yeah, it’s, it’s already, the cover’s not right, but it’s already up on Amazon pre order. So it’s, it’s called Your Money, Reimagining Wealth Through Simple Sketches. And so you can, it, I’m sure it’s there on Amazon, but it will certainly be there in the next week or two.

Matt Mulcock: Okay, everyone, by the time this comes out in the next couple of weeks, I’m sure it’ll be ready to go. So definitely pre order it. Carl, we are so grateful for your time that you, that you gave us today and very much looking forward to hearing you at the Dentist Money Summit. I can only imagine how many people are out there listening, now hearing this and saying, I gotta get there. If you’re not, I don’t know what to tell you. Come to the dentist money summit, listen to Carl and our other amazing speakers. If you have any questions on that, dentistmoneysummit. com Carl outside of the book anywhere else someone can, can reach you if they want to know more of your work.

Carl Richards: Yeah, I mean, probably the easiest place is, and there will be more announcements about the book. You just get, we do, I do a weekly letter. So if you go to behaviorgap. com and subscribe to the weekly letter, it’s probably the best thing.

Matt Mulcock: Awesome. Well, Carl, thanks again. everyone. Thank you for listening until next time. Bye bye.

Carl Richards: Yep. Cheers, Matt.

Keywords: financial planning, personal values, misalignment, financial purpose, goal setting, money management, life experiments, investment strategy, investment performance, simplicity, wealth building, personal goals, life balance, financial literacy, behavioral finance.

Behavioral Finance, Tracking Progress, Work Life Balance