How Much Should a Dentist Be Saving?

Using a real client case study, Matt, Will, and Jake explore why the standard “save 20%” rule isn’t always the right answer, how savings goals should evolve over time, and what actually counts as saving. They also discuss the relationship between saving and spending, the role of brokerage accounts and retirement plans, and how to build a financial strategy that supports both future security and present-day enjoyment. Whether you’re early in your career or already building significant wealth, tune in to this episode to help you think more intentionally about your savings plan.

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Podcast Transcript

Matt Mulcock: Welcome back to the Dentist money show where we help Dentist make smart financial decisions. am Matt and here with the dream team guys here with the brain will and hot take Jake. How are you guys?

Jake: I feel great. I’m ready to go. I love being here. Yeah.

Will: Doing, doing good. Yeah.

Matt Mulcock: He’s jacked up. Will, you gonna match the energy or what? Let’s talk about savings. That was better. That was better. Okay. Well, at the time of this recording, let’s see, we got to talk about, we just finished our first cohort of Launchpad. I will say for the expectations we had guys smashing success, but we had a really ⁓ solid.

Will: Let’s go. Let’s talk. Let’s freaking podcast.

Matt Mulcock: first class, ⁓ for, Launchpad, we are going to be re-releasing this in September for a second class. I don’t remember the exact date. want to say September 18th. we’ve made a ton of changes to this all for the better. We’ve shortened the class overall. It’s going to be eight weeks this time. If you have any questions on this, you can go to dentistmoneylaunchpad.com to check out the information and, ⁓ sign up for the wait list if you have any questions on that. So we’d love to have you. You guys were part of the launch pad. Any thoughts you want to add to that? It’s amazing.

Jake: It was great. Yeah, I think we each had a course. did insurance was my little lesson, my class, I think we’re calling right that I that I spoke on. It’s fun. It’s just great to get a deep dive on all these individual topics that we have great place to show up and ask questions and be interactive. It was fun. Yeah.

Matt Mulcock: Yeah.

Will: Yeah. And it’s low pressure, right? You can watch, if you can’t make the live, you can watch the recording. I’ve always said like, this is stuff that you should be learning in high school and in college and frankly in dental school, how to, you know, just the FAQs and do’s and don’ts of money, which they don’t really, I mean, you have health classes and history classes, but they don’t teach you how to invest or how to pay taxes or what a mortgage it like, there’s just no basic, there’s a very few basic financial guidelines, which I think is an awesome foundation that Launchpad helps build.

Matt Mulcock: Yeah. Yeah. That’s, that was the goal and trying to build that everything we do is it as with this podcast, everything is a foundation of education and that this speaks to that. So again, if you have questions on that Dentist money launch pad.com. check it out. We’d love to have you sign up, ⁓ or just give more information on that. So let’s jump in guys today. ⁓ this comes from a personal client story just recently that happened. Jake, we talked about this a little bit on the. Recent two cents, this will come out way after that episode comes out. And we wanted to do a deeper dive into savings. And again, the origins of this came from my client who’s I’ll just kind of give you the general profile. Very successful for, he’s, he’s young. So he’s, he’s a younger guy. He’s built multiple locations. He’s already been able to save a ton of money. So he’s built up a pretty sizable portfolio across. You know, 401k he’s built up some, some Roth doing back door Roths and then a pretty sizable brokerage account along with two really thriving locations. Uh, he came to me recently and just asked a really nuanced question around just how much more does he need to actually be saving into his specifically, let’s say like his brokerage account. He’s going to keep maxing out his 401k cause it’s through his payroll. He’s like, I don’t want to mess with that, but he started asking questions around. I built up a pretty sizable portfolio. So I’ll just tell you it’s, it’s seven figures. So he’s just over seven figures. And again, he’s, he’s young. still in his thirties. And he was just like, I’ve got, I’m investing back in my businesses. doing more expansion. I’ve still got these big debt payments. Like at what point can I maybe shut this off or, just lower, like, do I, can I lower below the 20 % mark that he’s been really focused on hitting? Like is that his question was, do I have to keep doing this year and year in, year out, year in, year out? And I thought it was really cool because I’m like, this is, there’s a lot of nuance to this. And we talk all the time on our show about hitting 20%, hitting 20%. But then when he brought this up, I was like, okay, this is actually really great. Like, let’s talk about this in a deeper sense of what is savings, where should savings be going? What’s the percentage you should be hitting? Just get more specific with it. So any thoughts you guys have initially just. On this topic or, that kind of framing.

Jake: I’m curious, do you know why he was wanting to lower his savings? Did he have spending goals in mind or lifestyle goals that he wanted to do or is he just asking generally?

Matt Mulcock: Yeah, I think kind of a combination. So his, his wife, teet, you know, they’re always kind of teeter. She works as well. ⁓ kind of always kicking on the idea. Can she stop working? Which would lower their income, obviously, and maybe tighten things a little bit more lifestyle things, you know, adjustments. and then just like deploying cashflow elsewhere, like specifically and continuing to expand the practice. He’s a huge listener of the show and a big fan of ours and he’s He’s always kind of had in his mind, like I have to hit 20%. So he was almost asking for permission. Like, Hey, is it okay if I lower this? So it was kind of a combination Jake of lifestyle. Other other, and he also wants to be more aggressive with his debt now. So he wants to pay down debt a little bit faster. So there’s kind of some other things he wants to do with his cash.

Will: Which technically kind of is like a savings vehicle in a way. But yeah, I mean, my thoughts just go to you. said it, it depends. It’s there’s nuance to it. Almost all financial questions. You can almost answer all of them with it depends because there’s a lot of things that we need to know about his life and his situation and when he wants to retire and when he wants to be, you know, all of these different variables that you could toggle on yes or no. And it would depend on the answer would then become more.

Matt Mulcock: That’s what we want to talk about. Yep.

Will: So it could change throughout his life too. he, and right now he could say, well, I’m thinking of this. And in five years, he could have a different, different route that he wants to go. So very dynamic.

Matt Mulcock: Yep. Totally. Yeah. Very dynamic. this is, and I’m glad you brought that up, Will, because there, that inherently is one of the issues with general advice is our boy Taylor says that we, have to speak in generalities and try to get as nuanced as we can with case studies or different examples. But you’re right. Every single person’s situation is completely different. But we thought

Will: Well, that’s why the 20 % too is general advice, right? Like that’s just general advice. It’s not bad advice, but it’s maybe not the best advice for your situation.

Matt Mulcock: Yep. Yeah. So I’ll just say, I’ll, I’ll spoil this for his situation. And he and I are going to be talking here soon, ⁓ to get more detailed, but based on his figures, based on his life, based on his numbers and based on the fact that he’s done an incredible job building this sizable portfolio at such a young age, and he’s still kicking off a ton of cashflow. He actually has the ability to now at this point, actually reduce below 20 % from a, again, we’ll get more into the details of like, traditional savings and let’s say a brokerage account and those kinds of things. Because as long as he’s not touching this portfolio that he has, and he’s letting this ride for the next 25, 30 plus years, he’s going to be completely fine. But that’s the advantage of he’s been saving up to this point far more than 20%. He’s built up a really big portfolio for his age.

Will: Exactly.

Jake: Yeah, that’s the pitch for Save Early and Often. Right, he got to a point where he has options now in the future where if they do want to increase lifestyle, there’s different goals, paying off debt, doesn’t want to save as much. He did a lot of the heavy lifting early on. He compounder just work in his favor. And now with this balance, it’ll just keep growing for him. So it’s cool. That’s the advertisement. That’s the pitch for Save Early and Often.

Matt Mulcock: Yep. Yep. Exactly. So with that, we wanted to dive into it, do a deeper dive into savings, what it actually means and kind of the main point of this is how much should you actually be saving for your situation? We’re never going to be able to hit every single person situation, but again, the goal here is to be doing a deeper dive. So we want to set this up for someone to share my screen. So for all my YouTube, watchers, we are in YouTube now. Shout out, like, like, and subscribe.

Jake: Yeah, we’re on YouTube now, everyone looking at our pretty faces.

Will: Shout out. Yeah.

Matt Mulcock: So if you are on YouTube and if you’re listening, we’re going to do our best job to also describe this if you’re driving in the car. So you’re not completely lost, but I will show a visual here. Can you guys see that? Okay. Can you see my screen? ⁓ the motto is from since, since COVID, every single call. Yeah. so one of the set this up savings fits into a bigger kind of, ⁓ foundational.

Jake: You

Will: Thanks.

Jake: It’s horrible. I do it every call still. It’s terrible habit. It’s terrible.

Matt Mulcock: chart that we use around kind of key indicators of your financial health. So for our OG listeners, ⁓ you probably are familiar with elements. We still use the same exact framework. We’ve just kind of rebranded it to be more dental specific, fresh and adaptable say guys with new colors and new names around each of these indicators. We call this our financial hygiene chart. So the hygiene chart again is these key indicators to deliver advice and organize our clients around the things that matter around their financial health. So we’re trying to answer some key questions when it comes to this. So number one, am I using my income wisely? Number two, do I have the right mix of assets? Number three, am I protecting my wealth properly? And then number four, everything feeds into, am I in track to make work optional? ⁓ Where savings fits is in the question around, am I using my income wisely? So You know, really what it comes down to is, there’s only four places to put your money. You can save it. You can spend it. It goes towards debt, goes towards taxes. Saving specifically is all around how much of your money is going towards your future self. Anything else you guys want to add to any of this?

Jake: No, I don’t think people realize that often of your money can really only go one of four places like that’s it. This is not rocket science here. Savings, taxes, debt or spending. We’re going to talk about savings today and we’ll talk about that number and deeper dive into what savings means and where this should be going and try and give you as much nuance and context as possible. But ⁓ that’s the big one is saving as I’m looking at those four cash flow numbers. If you want to call them, I think saving is the most important. If you have a really healthy savings number. I really don’t care all that much what everything else is doing. Yeah, maybe with debt, like we can talk about that might be the one, but like really, if you have a healthy savings rate, everything else should fall into place for you. So yeah.

Matt Mulcock: Yeah, it’s kind of the classic, you know, try cliche advice, but it’s cliche for a reason of like pay yourself first, right? If you’ve taken care of your savings, kind of all the rest of your cashflow takes care of itself. So I totally agree. Will.

Will: I just think it’s fun. It’s always fun to get with a new client and go through that first breakdown of here’s what your cashflow looks like and here’s how your personal life fits into these four buckets and what percentages are going to each bucket. It’s always super enlightening. Like Jake said, it’s not rocket science. It’s more like a behavioral science, of course, but knowing those numbers, they’re not super complicated numbers. You just have to know what they are and it empowers so many other decisions in your life that you can then… you know, decide how you want to attack them and how you want to go after either reducing spending, increasing savings, increasing income, figuring out if you’re paying too much in taxes, if your debt is kind of hamstringing you, those kinds of things, you know, it empowers all of these decisions, but you got to know your numbers first. if you’re not, if you don’t know that those numbers and you’re not working with us, then that’s the, that’s the first, that’s where you start.

Matt Mulcock: Yeah. Yeah. And by the way, this is all on our website, right? So you can go to our website. We encourage people, if you’re doing this on your own, great. The information is not the value here. Like we put it all out there of how to calculate these things, how to put it all together. So yeah, there’s a really great point. as you said, the focus today being savings, ⁓ let’s, I want to dispel a myth or kind of this rule of thumb that we hear a lot that’s out there. Jake, you have data on this. I believe just from your writing, do you know roughly where the average savings rate is for the average American?

Jake: Yeah, surprisingly or maybe not surprisingly, it stayed like the same for the past like 50 years. It has not moved. It hovers between three and four percent pretty much always. ⁓ There was like a real big spike during COVID, which I think every graph is thrown off by COVID, but really like three to four percent historically is where America falls in average savings rate.

Matt Mulcock: Yeah. Yeah. And, and I think the, one of the inherent issues when it comes to, we talk about general advice, but, uh, when you talk, so I think there’s kind of this inherent or there’s a myth out there that’s like save 10 % and you’ll be fine. And if you compare this to the average, what you just said, the average American saving three to 4 % saving 10 % for the, if you’re getting to that point is you’re killing it. You’re killing it. The problem is the average American household is, is $80,000 a year, roughly.

Jake: Yep, yep, most recent numbers.

Matt Mulcock: The typical dentist, at least that we work with is four to five times that. So to say save 10 % of your income, you’ll be fine. That’s just not the case. That’s not going to work. Will, do you have any thoughts on that?

Will: Yeah. I mean, this is, this is why being dental specific helps us because there there’s, there’s reasons why dentists are different. And it’s because you kind of get a later start. You have a more complex life. Like you said, you have higher income. You may have higher spending habits just to just. You will. Yeah. Just from data that we have. Yeah. I’d said that once in a presentation and somebody like, press me on it. I was like, just trust me. We, we see a lot of dental.

Matt Mulcock: You will, you do. If you’re listening, you do. Yeah.

Jake: We have data, right? We can speak to that again. We have like our subset of clients that we work with, which is a growing sample size of dendros across the country. Our median spending last year was 19, 20,000, right? Per household about. Again, if you look at median average numbers for Americans, it’s about seven grand, six to $7,000 a month. And so it is far higher just from not only an income point of view, but a spending point of view from like our clients that we work with in the average American.

Matt Mulcock: Yeah, about 19,000 per month. Yeah, which there’s nothing wrong with that, right? You’re dealing with bigger numbers across the board. Bigger income means bigger spending in most cases.

Will: And this is always what gets people when, it’s again, feels obvious, but the more you spend, the more you need and the less you have to save. And so it’s this double-edged sword where it’s like, yeah, you can spend more money because your income has jumped up. But then it’s like, all right, well, actually you have to have a higher savings rate, which those are counterintuitive because if you spend more than you, that percentage of burn rate goes up and the savings rate percentage kind of has to typically go down, but then you have less money to save.

Matt Mulcock: Goes down.

Will: And if you spend more in retirement, that you want to keep that spending the same, you actually need to need more money. So it’s this double whammy.

Matt Mulcock: Yep. Yeah.

Jake: It’s hard to talk about savings without also talking about spending, right? Same wavelength there. They’re just so intertwined. It’s just they’re really like they go hand in hand. You’re spending your savings. Again, Will, you talked about it. We don’t need to read or rate too much because spending determines how much you can save. Then spending also determines how much you need to save. And so yeah, hand in hand, they go together.

Matt Mulcock: I was literally just going to, I’m so same brain cell. Go ahead, Jake.

Will: you

Matt Mulcock: Yeah. Well, and the other thing I was going to add to that too is, ⁓ I think people like, I think people want to separate these over the course of your life of like savings and spending is, two different things, which yes, on a, like as you’re accumulating wealth, they are, but ultimately everything is meant to be spent.

Jake: There’s the next thing I was gonna say. Matt, this is terrible podcasting. We’re just like patting each other on the back here.

Matt Mulcock: well look at us. Look at us. It’s… You’re totally right! my gosh, brilliant point! ⁓

Will: You guys are idiots. I was going to make a completely counter argument.

Jake: Every dollar will eventually be spent. think that’s a great point, man. I’m not to cut you off here. Saving is just deferred spending for the future. It’s like not going to not spend now so I can hopefully spend in the future and I don’t need to maybe work for that. It’s all spending. All of your money will eventually be spent at some point, whether by you, by your kids or somebody else. It’s all spending in the end. It’s just financial planning is just figuring out how like smooth out that spending life curve and making sure that we can

Matt Mulcock: You or someone else. Yep.

Jake: You know, do things at different points of your life. But it’s when you think about it that way, it’s the same. Yes, spending and saving are the same.

Will: I love Matt. love like back kind of back to your client story where he’s like, well, maybe my wife wants to stop working. Maybe we want to increase lifestyle. I’ve had plenty of client conversations where it’s a similar case as yours. And maybe they’re a little further along, but they’ve got this 40 % savings rate. And this is rare, but it’s a funny spot to be in as a financial advisor to tell the client, Hey, you should be spending more money. And that, know, because yes, you’re deferring this, you’re spent, you’re saving so that you can defer spending the future, but

Matt Mulcock: Yeah.

Will: You’re going to, if you keep at this same clip, you’re going to have too much. And so, and there’s other conversations with maybe clients that aren’t doing as well, but, they’re like in this prime of their life with their kids and they’re like, we really want to go to Disneyland. And it’s like spend, spend the money. Let me. All right.

Matt Mulcock: This is going to be a podcast where Jake and I gang up on you.

Jake: Is Disneyland your, is Disneyland, is that your default? Like yeah, everyone just wants to, why wouldn’t you want to go to Disneyland more during the year?

Will: If you have young kids, I think you do. ⁓ I’ll die on that hill. Maybe you are a young dad and you want to take a week off to go play Pebble Beach.

Matt Mulcock: Yeah. Yeah.

Jake: about that recently too. Yeah. Is Pebble Beach worth it? That’s my thing is I actually don’t know if it’s worth it would be my hot take.

Will: You

Matt Mulcock: we’re getting jaker. We can’t, we can’t get Jake going.

Will: You can’t get him fired up. Back to the point is, you know, spending, if you’re going to defer the spending later and you said it, Matt, either you spend it or your kids are going to spend it at a client who has way too much money, a lot of money. And, you know, I hit an, told him, I was like, if you don’t start flying first class, your kids and your grandkids will. So, and he’s a more frugal type person. And so it’s It’s the setting of like, we got to figure out how to your guys’s point, how these work in tandem so that we can start designing your life around how you want it to end, how much you want to die with or be left with. And maybe your client’s point, like if he’s fine to work for a handful more years, then he can take his foot off the gas on spending. But if he told you he wanted to retire next year and sell his offices, he ha he can’t take his foot off the gas. He’s got to continue to go.

Matt Mulcock: Yep. Yeah, exactly. And I think why this, this, this mindset is so important. And cause I think there’s an underlying underrated risk here that we’ve seen, right? We’ve seen, ⁓ where if you don’t have the mindset of these things are intertwined, you can become obsessed with savings. And if you think of them, you, and we get it, you accumulate wealth for 30 plus years.

Will: Savings. Yeah, it’s like a default mode.

Matt Mulcock: One of the biggest risks there as advisors that we see is, and you’ve alluded to this, Will, is getting people to spend their money. And it’s a, it’s a mindset. So if you can have that mindset now of like, I’m saving to spend, these are the same thing. I like what you said, Jake, this is just deferred spending and hopefully intentionally aligned with your values, aligned with the life you’re trying to live and, and, know, uh, enjoy with your family. But I think this idea of like, these are not separate things is critical to get that in your mind. When it comes time to when you’ve hung the hand piece up, you’ve sold your practices, you’ve got this big pile of money to then start taking from. You’ve got to be training yourself of like, this is why I did it. Cause we’ve seen dentists struggle with that emotionally, mentally of like actually starting to spend their money.

Jake: Yeah, the hard thing is you rarely see anyone in the middle. I think of this equation where like there’s like people who are naturally good spenders and they’re fine spending other money and they’ve always struggled to save. They’re going to struggle maybe to get some good financial independence number. And then on the other end of the spectrum, you have the people who are really great savers. They save 20 plus percent, you know, time before 40 % crazy numbers and they’re always going to have a hard time spending, even when they get there. But it’s like, it’s those frugal habits that got them to an awesome place. Like it’s hard to distinguish those two because it’s like, can’t blame you for your frugality because it’s what got you here. It’s made you successful and it’s hard to change our minds over time, which we can keep working on. yeah, it’s, humans are interesting.

Will: It’s- Yeah. That’s the point though, is you gotta have a healthy, like having a healthy relationship with savings is a good problem to have maybe, but you also have to have a healthy relationship with spending and they’re intertwined.

Matt Mulcock: Yeah. Well, it’s funny. You’re highlighting this, Jake. I’ve always said this, that this paradox it’s created around this personality of the, the people, the person who has the personality to retire early because they’ve been so frugal and they’ve saved is the same personality that will never enjoy it. Right? Like truly the P the person who’s like going to retire at 40 and be into financial independent is not the personality that’s going to be like kicking up on a beach somewhere, hanging out.

Jake: Yeah, yeah.

Matt Mulcock: They’re just never going to actually do it because of their personality. like you said, humans are just interesting creatures. ⁓ let’s jump to what actually counts as savings. I think this gets mixed up sometimes. What do we count? How would we define savings?

Jake: We are, yeah.

Will: Long. So this is long term, right? This is kind of the point, right? It’s always deferred spending, but we usually counted as long-term stuff. So in order to get credit, you know, for the savings rate, the percentage that we put on your scorecard, ⁓ we don’t really give you credit for like saving into a savings account for a pool you’re trying to build next year. ⁓ that doesn’t, that’s, that’s so short-term that it doesn’t count for savings rate, but if this is retirement spending, so of course any retirement account, 401ks IRAs. HSAs, any long-term brokerage accounts that we think are going to be there for a while. ⁓ Obviously principal portion of debt pay down, so extra debt payments, which I think we can spend a little more time on, but that’s essentially increasing your net worth by decreasing the amount of principal on your debt. And we’ll give you credit for that in savings because it’s basically a way to save your money.

Matt Mulcock: The internal DA battles have been fought over that exact one, but Jake, any thoughts?

Jake: Yeah, I’m probably a miser. Like people, the listeners like this, what counts as saving what doesn’t. I really think my definition would be any money you’re putting into income producing assets, really. So that would be like any stocks you’re buying, anything you’re buying in the practice and real estate. Really, that’s it. Like that’s kind of like if you’re putting money into those things, I’ll count it to savings. Anything else? You like we have a list here, Matt, I think you put together like paying off your car.

Matt Mulcock: Yep. Yep.

Jake: I don’t think that’s just kind of later on spending like will you mention the pool saving up for vacations, saving up for a new couch or new carpet that you’re getting. I even included in this like children future costs like savings like saving for college, saving for weddings, saving for kids cars. Like I would not include that. Like that is deferred spending that is not going to your own retirement. You’re not retiring off those assets. Any 529s or minor Roth IRAs you’re doing for your children.

Will: Yeah, that’s a bit-

Jake: It’s kind of your kid savings. That’s not your savings. So I actually wouldn’t even put that on there. Am I being too much of a Scrooge here?

Matt Mulcock: Yeah. No, we’ve talked about this of like, want to show that our current belief on something like that is we just had a review of this as we’re building out this new kind of revamped scorecard is we still count kid savings in like the savings number, but we would not count that in your retirement readiness number. We would remove it from that because it’s not to your point, Jake, it’s not going to you in the future. You’ve just designated that for your children. There’s nothing wrong with that at all. It comes down to where you want to put your money. Uh, and if that’s the case, great, but we have to look at that with some nuance, the same thing with extra debt payments. Uh, I technically would look at that as savings and here’s the distinction I would make. So regular debt payments, like your standard payment, let’s say you’re building loan right now is $5,000 and you’re paying $6,000. The $5,000 cannot be turned off. can’t just say, I’m going to stop making that payment, which means that’s not savings, but the thousand dollars extra can be turned off at any point and put somewhere else. I would count that as savings, but we battled this internally. Do you guys have a different view on that?

Jake: My caveats would be I actually wouldn’t include like student loan extra debt payments and towards savings because you’re not building equity and an asset they are going to use for yourself down the road. So sorry. mean it’s a good thing to do. Like if you want to make extra debt payments to your student loans do that. It’s a good like financial move. I just wouldn’t put it in your savings right percentage. Same with a house I’d probably be picky on where it’s like extra house paid debt payments is we’re usually never accessing that equity yet. That’s somewhere to live. You’re going to pay up. I wouldn’t put that in there. But that’s your point. If you’re making extra debt payments on a practice building mortgage that you have or maybe an investment property, I would account those because you’re building equity and income producing asset. But maybe the student loans and house. I don’t think I would.

Matt Mulcock: I’m smiling because of how you guys remember the, battles we had eight, seven, eight years ago in the old office up in the original nest with all of us having these conversations. There’s so many, like, I truly say like, well, I say like fun discussions we’d have of like, we were getting heated, but not really. It was just kind of like we were having our opinions, but it just makes me smile thinking back to that. Go ahead.

Will: yeah. nuances. I’ll just say usually we want like if in a real client scenario, we’re usually trying to have a client hit 20%. Again, that’s kind of the blanket percentage that we’re trying to have people hit. ⁓ And it’s unique in each case, but we usually try to have somebody hit 20 % before we discuss the extra debt payments. Usually the extra debt payments are not like the core plan, unless it’s a really unique case. Usually we want to save into like Jake said, income producing assets or long-term retirement assets first. And if they’re as extra above the 20, then we can get creative with where it wants to go.

Matt Mulcock: Yep. Yeah. Go ahead, Jake. Yeah. I think I like that income producing assets. think a really simple way to look at this too, is if you’re out there doing this on your own, totally great. If you’re thinking about what, how to categorize this, I’ve always said to really high level, like, is this increasing? Is this something that’s increasing my, my net worth? Right. Like with this excess cash, like if you, if you look at, but even that gets tricky because to your point,

Jake: No, I agree. Don’t have anything add there.

Will: student loans,

Jake: Because student loans technically does. Paying off student loans increases your net worth. It does.

Will: increase your net worth, mortgage, yeah. Those all increase.

Matt Mulcock: Well, student loans and then your home. Yeah. So that’s where I, here’s where I’d say that’s where you start. And then you have to kind of filter from there. Right. So the reason I bring that up is we hear this a lot from people who say, ⁓ I’m saving for this big vacation to Disney world, not Disneyland, but Disney world. Yeah. At the end of this year, like we’re doing a big family trip for Christmas to Disney world. So I’m putting away probably like.

Will: Let’s go.

Matt Mulcock: A hundred thousand dollars, let’s be real. but some, crazy that, that to us, to your, you guys both said it, the starting point, and maybe this is more of like a decision tree of like the first question is, does this increase my net worth? The answer to that question right there is no. Okay. Well, not savings. it, I’m actually kind of liking this. Then the answer is yes, it does. Okay. Well, then is it going into your home or extra debt payments? And you’ve got to kind of like, maybe we should build this.

Jake: Might not be enough.

Matt Mulcock: Should build a decision tree for savings. We’re doing this on the fly. Okay. We’re going to figure that out later. Anything else you guys would add to definition of savings?

Will: Yeah, I’d like it.

Jake: You You could.

Will: I just think it’s important to acknowledge that not all places that you save money are equal. just because you have a 20 % savings rate, make an extra debt payments on your house.

Jake: You’re not growing wealth in the same way as you could in other places. ⁓ So it is important to know.

Will: We wouldn’t. Exactly. Yeah, right. Which I think

Matt Mulcock: in a usable asset, correct? Yeah.

Will: is a comment like, if it were up to, you know, maybe my father in law, his generation, it’d be like, yeah, pay off your mortgage at all costs. And that’s technically he would have a 20 % savings rate in that scenario. But we’ll get into this, I assume, obviously, but like, sure. So it’s different. It’s different. Yeah, right.

Jake: They also had 17 % interest rates maybe in the 80s, right? Which is a different conversation, yeah.

Matt Mulcock: Yep. Yeah, so true. Which Jake, you’re flexing a 2.9, I think.

Jake: Sure,

Will: He was nervous about it.

Jake: I am. Again, my caveat is that I did not do anything to get that. The universe gifted me that when I decided to buy a house. Just straight luck.

Matt Mulcock: Yeah. Yep. no, think that these are great distinctions to make. And again, we’re highlighting, this is really nuanced and not as simple as it seems. let’s talk about where the savings rate should be. I think speaking of nuance, this is where I think a lot of dentists get tripped up who listened to us. I think a lot of times dentists feel bad. Like depending on their stage of career, they feel bad where we talk about 20 % is kind of the line we always, we always hit, but So what we don’t want to have happen is a dentist out there who’s 29 years old, just graduated down school, just getting into their practice or just getting into associateship being nowhere close to that feeling guilty or like they’re doing something wrong. What do you guys say to this of like where this rate should be?

Jake: I’ll be maybe the bad guy here and you guys can maybe be softer on this. really don’t think you should really try not to dip below a 10 % savings rate would kind of be my baseline. I really think that we should all strive for that. It’s like no matter what’s happening in our career stage or lives and it’s going to come and go. I kind of like 10 % as a baseline. I think most dentists should be able to save 10 % of their income pretty much at any point in their career, even just starting out. I like that 10 % is like, let’s shoot for this as a baseline. And then as you’re getting into your career, feet are in the, we paid off some loans, practice debts going away, student loans, that makes it more difficult. We can move up into that, you know, closer to 20 % things there. I kind of, with a lot of the people I work with, I really want to try and get to 10%, like almost at all times. You guys can tell me if I’m wrong there, but I really like to anchor to that.

Matt Mulcock: I mean, it’s a fair guideline, Will.

Will: I don’t think it’s a, yeah, I don’t think that’s a bad idea. I think it’s good to have a habit established. think to Matt’s point, there are different life cycles and stages of a dentist and early career. Sometimes that just isn’t possible to have your, you’re, literally spending everything you make. And to those people, I usually say, let’s start with like a hundred dollars a month, $500 a month, something even aside from the percentage, just something semi-meaningful to build the habit of like, we do a monthly savings draft and that’s what we do. And we’re going to do it in perpetuity. We’ll change the amount up and down based on where we think we should be. But the life cycle of a dentist, we always say this is, I always use the word exponential, right? If you think of like an exponential line, ⁓ it just takes a minute to get going. You start your career, you have higher debt payments, you have lower income, and you’re starting a family potentially. And it’s just like kind of busy time.

Matt Mulcock: Build the habit.

Will: And so it’s harder to build your net worth in those first five to 10 years in most cases than it is the second 10, 10, you know, 10 years, right. And usually at about 10 years is when your main practice debt, if you did own a practice, that’s usually when it drops off like right at about 10 years, right. And so you get a meaningful boost there. You kind of hit your plateau on income, your practices humming. So it’s very natural and normal to hit a lower savings rate earlier in career and understand that later in your career you’re going to make up some

Matt Mulcock: Yeah. Yeah. I love that. And I, I agree. There should be some level of baseline. And I think it’s good to have an aspirational goal of like, I think 10 % is a fair. I don’t think you’re being, yeah. I don’t think you’re being, I don’t think you’re being mean at all. Uh, I do think there are situations just to play the other side of this, of, reality where, uh, well, and let me ask, let me throw this out to you as a scenario. As we talk about what actually savings is mixing with what this percentage should be. Uh,

Jake: Save 10 % people. Come on. You can do it.

Matt Mulcock: Let’s say new associate or new dentist who’s trying to get into a practice, ⁓ who’s just piling up cash right now to then like, they’re not putting it anywhere other than just cash, right? ⁓ to buy a practice, even if that doesn’t go towards a down payment, what do you, you guys count that as savings, right?

Jake: Yes, savings. I would say yes, this is like your savings fund that you’re using to purchase probably the best asset you will buy in your career. I would count the 100 % in early credit and it’s trying to save up 50 grand, 60 grand in cash for a practice purchase. I would count it 100%.

Matt Mulcock: Yeah, well, you as well.

Will: Yeah. Yeah. And usually after you usually don’t need it as a down payment, obviously, but usually then it either morphs into an emergency fund or you can take a chunk and move it into another investment if you’d like to.

Matt Mulcock: Yep. Yep. I agree. ⁓ yeah. So I think that’s a good, a worthy baseline to have Jake. I agree.

Jake: And can I just say if you’re struggling to get there, which a lot of people are, do not feel bad if you’re listening to this, you’re like, man, I don’t know if I’m getting closer. That is fine. But I would say the things to consider is if you’re struggling like to get to that 10%, I think oftentimes with the dentist that I work with, who are again, maybe early your career stage, their income’s not high enough. I like very rarely do I see like a huge spending problem. like, I have student loans and they have a practice loan payment. And I still think you should be able to save 10 % even with all those extra debt payments and things if you have the appropriate level of income. And again, I think sometimes it’s a hard conversation to have with dentists is like you didn’t become a dentist and take on all the student just to make this amount of money. You might need to just like have the hard conversation. You need to get your hands beat up or work an extra day or like incomes oftentimes is the biggest problem I’ve found for early credit. So not reaching those savings goals rather than like a spending or other debt issue.

Matt Mulcock: Yeah. I just did a podcast interview with, um, Jeff and Zoloni on his show, the debt free doctor. want to say a shout out to him. He’s a great guy. Uh, he asked me the very end. What’s the number one piece of advice you would give to a younger dentist? And I said, get your income up. Did I, did I nail that? Would you guys based on what you’re saying, Jake, I’m kind of like, that’s a, we’re on the same page. was like, grow your income early and often.

Will: Nailed it.

Jake: yes. Easier said than done. I would just say maybe I would throw concrete numbers here like I’ll talk to someone else like you kind of did not go to dental school and do all this work to make $200,000 a year. Right, especially with where student loans and things are these days, you kind of need to make more to make everything fit financially. And so yes, increase your income, increase your income, that should be your focus early on.

Matt Mulcock: That should be your focus. Easier said than done. Yes. Yeah.

Will: That’s the engine that’s going to drive all of this anyways. If your income stays lower throughout your career, you’re always going to be fighting this battle to increase spending and savings, and it’s going to be tough.

Jake: Dirty secret of personal finance, easy to save when you make a lot of money. All right. That’s just the thing there. They don’t tell you that in your CNBC article or like cut out your lattes. Just like make a lot like the people who save a lot tend to make a lot, unfortunately. Yeah.

Matt Mulcock: Yeah, it’s so true. It’s kind of true. It’s kind of true. I’m actually glad you guys went in here because, uh, the whole point. Like you kind of alluded to this, will have like that back half of career. You’re putting away a lot of money. You’re your loans are paid off. But the whole point of this as a dentist is you’re building up this engine, right? Being hopefully your practice. We really advocate for private practice ownership, but the whole point of this, when it comes to saving and investing that wealth outside of your practice is really to de-risk your position over time and to make it where you’re not getting to a place where you are trying to make work optional, trying to retire and 80 % of your life or your balance sheet is in your practice. Like that’s kind of the whole point of this. And I think that’s what you’re saying, Jake, like, can you get 10 % early and then grow it from there to that truly is a de-risker over the course of your life and career, if you can do that.

Jake: You’re hedging against your like a sickness coming or your body breaking down. Like we may plan on working till 60 or 70, but sometimes our bodies don’t always cooperate and the landscape changes. And yes, saving is a form of risk mitigation. You’re building up assets so you’re not reliant just on your business.

Matt Mulcock: Yep. Yeah, definitely. ⁓ well you alluded to this, the, we’ve kind of talked about kind of the three big buckets, but where should savings actually be going? What’s the, we, we talked about this of like, what do, what do we define as savings? And there’s some nuance there. What’s a really simple way to look at this of like where your savings should actually be going.

Will: Yeah, I mean the main things you’re going to hear a lot throughout your life are pre-tax and after-tax. And there’s kind of some nuance there obviously, any of your, a lot of retirement accounts have two options, ⁓ traditional and Roth. And then traditional being the pre-tax portion of it, meaning you don’t pay taxes now if you put the money into that account, you skip on the taxes and you pay taxes later. And then Roth being you actually pay the taxes now and you don’t pay any taxes later on any of the principal or the growth. Those are reserved for 401ks and IRAs basically. And there’s limits on how much you can put in each year. And again, it’s, it’s a very nuanced conversation with your planner and your CPA around which one you should be doing, when and why, and obviously running scenarios on that. Very good places to save money because there’s a reason they put limits on them is because they give you tax advantages be one thing if they just said, as much money as you want in these that you could take all the tax advantages, but there’s a reason the government puts limits on these accounts. that’s the main, those are two really main areas you can save is in retirement accounts. And that would kind of get to get back to our financial hygiene chart. That would be what’s called qualified term. ⁓ and then the other place you can save is really just after tax accounts, right? Like brokerage accounts. This is for if you’re trying to put money into the stock market or bond market. You can have an after tax account that’s a brokerage account. pay tax on it. Your money is in that account is essentially just like a savings account and any growth is taxed to capital gains later on.

Matt Mulcock: Yeah. Love it. Jake, anything you’d add to this? I’d say we’re such big, we’re such big proponents. Like people ask us a lot. Why are we such big advocates for the stock market? would say there’s only three places you can invest your money broadly. Private markets, public markets and real estate. why are we such big proponents of the public markets within these vehicles you’re talking about? Well, the answer to that is because the typical dentist practice owner.

Jake: No.

Matt Mulcock: Whose mid-career is so over indexed already in private businesses being their practice and then real estate, usually their home and then often they’ll own their own building. And so for you to catch up and balance out that, you know, that net worth statement takes a long time. Will, you just said it, there’s, there’s limitations on how much you could even put into these accounts. This is why a brokerage account is I think one of the most, if not the most underrated tool in the tool chest for a dentist of building up those assets. And again, de-risking your overall position and maximizing your options down the road. ⁓ we are such big advocates for this. There’s to me, these are the top places you should be saving your money and like stop overthinking it.

Will: And that’s kind of where we said, ⁓ like saving 20 % in your extra debt payments on your mortgage is not the same as maxing your backdoor Roth, maxing your 401k. Like we have, we’ve put together a thing for a bunch of presentations that we’ve done, ⁓ called a savings waterfall. And it’s essentially you think of your, your money, your extra income that you have set aside to save as water and it’s flowing into buckets. And every time a bucket’s filled up, then it flows into another bucket and it’s kind of this waterfall process down until it lands in a bucket that you can’t fill up, which would be a brokerage account or an extra debt payment. along that way, there’s about five or six buckets that you can fill up, which would be the match that you’re getting on the 401k and then your IRA and then your HSA probably, and I don’t know if I’m hitting the waterfall exactly right, and then potentially your 401k employee contribution then the brokerage account, then extra debt payments. Like that would be kind of the cadence here. Jake, did I butcher that?

Jake: Yeah, we don’t need to go through dead water. No, you didn’t. I mean, those are all great places to save your money. You probably want to put. Yeah, you are generally right. That’s good.

Matt Mulcock: Yeah

Will: Again, nuance. It’s not like a, it’s not a one size fits all thing that you should follow every year of your life, but it, you know, there’s some, some reasons why you would follow a structure similar to

Matt Mulcock: Well, and to Jake’s point earlier, like the goal is that you’re going to be making enough money as a practice owner that you would, yes, you’d follow this waterfall, but you’re going to fill up the buckets of retirement accounts, ideally each year, and then have access funds to leftover to invest elsewhere, which in our, in our opinion, most times more times than not, it’s going to go into a brokerage account, super underrated tool there to again, yeah, brokerage accounts are incredible ways to balance out your overall

Jake: Procure accounts are awesome.

Matt Mulcock: That worth statement when you’ve got so much sitting in your practice and your, ⁓ like I’d say you’re building. think it’s a really good nuance, Will, that you just mentioned of why we say this is not all created equal. Like extra debt payments technically would be considered savings, but not as valuable as let’s say those dollars going into a brokerage account for that exact reason. They’re, completely different assets with different risk profiles, depending on your balance sheet. That’s a real, so that’s, like that you brought that up. Anything else you’d say about where money should be going or the importance of like these different buckets or just cash or savings in general.

Jake: Would you guys consider buying like a CBCT for the practice savings?

Matt Mulcock: Good question. Will you say no?

Will: I think so.

Matt Mulcock: I would say probably not.

Will: It’s a depreciating asset. Like it’s, I think it’s outside the purview of long-term savings. You’re not going to like use the CVCT and sell it at a profit. It’s going to allow you to make more income, but I wouldn’t look at it as savings.

Matt Mulcock: Yeah.

Jake: Yeah, that’s I think that’s probably right. I just my default whenever Dentist come to me and said, well, should I do this for the practice or can I buy this? It’s hard for me to say no. Honestly, as our advisor, because like this is your wealth building machine. And if this is going to make your life easier, bring in more patients or increase your productivity, like do that thing. Like it’s probably worth it as an investment, like whatever equipment or things that you may need. There’s a limit you can go there. But I think that’s probably the right nuances. Maybe not savings, but it’s it’s hard for me like

Will: Yeah.

Jake: That’s a great place to put some extra funds to grow the business.

Will: That would be a reason that we would be okay with your savings rate dipping is if you are reinvesting in the business in something that’s going to increase your income over time.

Matt Mulcock: Yeah,

Jake: Yeah. Yeah.

Matt Mulcock: yeah, yeah, I would agree with that. I feel like it’s not savings, but it is a savings enhancer, we’ll say it can lead to more savings in the future. So, ⁓

Will: Yeah. The only other thing I’ll add is there’s again, I didn’t mention this, but money that you put away in retirement accounts, you can’t touch so your 60. And this is why we’re big proponents of a brokerage account is it’s liquid. You can access it. You can use it for a lot of different reasons. It’s meant for the longterm, but it can be used throughout your life to help along the way. Yeah.

Jake: You can take a loan against it. The

Matt Mulcock: Yep. Yeah,

Jake: The reins

Matt Mulcock: You can be your own bank, I dare say.

Jake: Most most retirees you’re only paying like 15 % at most on that like it’s pretty awesome. Pretty awesome gig.

Will: Yeah. Yeah.

Matt Mulcock: Brokerage accounts are awesome okay. Let’s talk, ⁓ well, you alluded to this earlier a little bit, Jake, you’ve mentioned this too around, like, this is a behavioral problem more than anything. Oftentimes if you’re, could be an income problem and you got to focus on that. But oftentimes we see where dentists are not saving enough. a lot of times this comes down to the, to the behavioral side. What are your guys’s thoughts on this of what holds dentists back from being able to actually hit the numbers that we, highlight?

Jake: I don’t know. Savings is hard. I’ve talked about those numbers like Americans average is three to 4%. That’s brought up by the high savers. The median savings rate in America is zero. Right. So the middle person America is saving nothing. I think we all know dentists who are making really great incomes and still struggling to put away a few thousand dollars a month towards saving. It’s really hard to do. It’s hard as humans. I’ve gotten this all the time where I meet with people and they’ll say, I know I’ve needed to save and invest for 15 years but I can never just get around to it. Like, I know I need to do it. Like this is common knowledge. I know I need to do this, but there’s always some excuse, something that comes up, something I need to buy, some vacation, something at the practice, some family member needs something. It’s like, I’ll always get to it next year. I’ll get to it next year before you know it again, like 10, 15 years have passed. And so it is truly a behavioral thing. That’s kind of why we tout ourselves sometimes with the behavioral coaching aspect of things is sometimes it’s nice to have someone kick you in the butt to get you started on those savings goals just helps like having accountability partner. ⁓ There’s probably a myriad of reasons why people don’t save, but like first and foremost, it’s just hard to do. It’s hard for us to build the habit of setting money aside.

Matt Mulcock: Yeah, I totally agree, Will.

Will: Yeah, it’s perfect because I mean, everyone feel every time there’s always a long list of reasons that you don’t, you shouldn’t save. And there’s a lot of things you can spend your money on, or you can just leave it in cash. Like there’s always ways that you can like avoid savings and it’s more comfortable maybe to not have to save the, the solution here. I think the easiest solution is make it foolproof, make it an emotional, make it automated exactly. So you don’t have to even think about it. Right. So

Jake: Automated here.

Will: Do set the right amount that works for your situation that hopefully gets you to a percentage that you’re shooting for and let it go. Let it just do its thing. And then income comes in, the savings goes out. You can spend with like Jake to Jake’s point back when we were talking about the breakdown of percentages. If you have a solid savings rate, spending debt and taxes can kind of fall in line and you can do whatever you want with the rest of the money that you’ve got.

Jake: I don’t care what your tax rate is crazily enough. If you’re saving a good amount. Anyway, that’s a whole different conversation.

Matt Mulcock: There’s one of my favorite simple lines from my favorite show of all time shrinking. Shout out. It is. I stand by that. I die on that Hill. Shrinking is incredible. ⁓ there’s a line from that. One of the most powerful scenes, Harrison Ford is talking to, ⁓ I lost, ⁓ the one of the patient’s names anyway. And he was asking him like, how do I, how do I do this? How do I do what you’re telling me to do? Like improve my life. And he just says, do the work.

Jake: Favorite show of all time, huh?

Will: Get on.

Jake: okay.

Matt Mulcock: And I’m like, hold on, it’s so simple, but so true. And what’s what you guys are highlighting is there’s so many excuses of why not to save or, know, like, ⁓ I’ll do this next year when I sell my practice or when this happens or I get this associate. There’s obviously the lifestyle creep aspect. It’s just, it’s super easy to be disciplined in the future and justify your pre your present decisions. But it’s like, you just got to do the work and there’s really practical, easy ways to do this. Simple ways to do this. Will you’re highlighting the most simple way to do this is just make it automatic, build that habit. Start now. don’t care if you’re, don’t give yourself an out. Don’t give yourself an out. ⁓ don’t care if you’re 50 and you’re like, I should have done this 20 years ago. What’s the point now? There’s always a point. Do it like set it up now and

Will: Don’t give yourself an out. Don’t make it. Yeah.

Jake: Yeah.

Will: Your future self will be so grateful that you took action, right? And you kicking the can down the road or hitting excuses, like that’s fine. Whatever the, the sign filled day, day Jerry and night Jerry or whatever. It’s kind of like the night that the, my future self will figure this out or pay for this in a way. Right. But, that that’s, that’s kind of unfair to your future self. And it’s important to understand that you do it taking action today is going to.

Matt Mulcock: Yeah, yeah.

Will: Be so meaningful for not only you, but your family and everyone in the future.

Matt Mulcock: Yeah. And I’ll say this too. I think your present self will thank you as well. Like the, especially Jake, the one, you, the, the store you highlighted are just the general kind of caricature of the dentist who’s saying, man, I know I should have been doing this 10 or 15 years ago. I know every year I should do this. That wears on you. Like that can wear on you. ⁓ and I think it actually, not only does it, your future self thank you, but I think once you start the habit and build the system and start doing it. Even though the future self can enjoy the dollars, your present self will enjoy the burden lifted. So I think that’s a huge underrated piece.

Jake: They’ve had studies on this. I’ve written about it like this psychological they like test people like stress levels. If you have a certain amount of savings, you’re saving amount of per month that goes way down. They interviewed people during COVID of like how stressed did you feel with X amount of money versus people who felt stressed with a different higher amount of money. And yes, like having savings and growing your net worth liquid net worth especially like liquid assets reduces current stress levels, not just for some future self. You’ll feel better about things. Yeah.

Matt Mulcock: Yeah.

Jake: Just present day benefits.

Will: A lot of, mean, the anxiety is the definition is like worry about an uncertain future. Right. And I think that there is a lot of people with financial anxiety around like, what does the future hold? I genuinely think you control what you can control is a big thing for us and you can control putting money away so that it can reduce your current anxiety and allow you to live a more full life now. Right. Because you know that you’re taking care of what’s to come.

Matt Mulcock: Yep. Yeah. Yeah, I love that. You’re exactly right. You can enjoy everything more now with that burden and that stress kind of gone, knowing you’re doing the right thing for the future. I love that. All right, let’s wrap this up guys. Any final takeaways, thoughts, ⁓ words of wisdom for the good people on savings.

Jake: We didn’t want to get to these questions, huh? I like these questions that you had in here. We’re fun.

Matt Mulcock: we can get to these. I know let’s do it. Let’s do it. There’s a little Q and a. Okay. Let’s do it. ⁓ I like this. was going to, I think this is a good way to wrap it up. Okay. So quick hitters. Okay. So I’m 38 just bought my second practice drowning in debt. Should I even be saving right now?

Jake: No, was just, they’re interesting to me. These ones that you put together. Let’s go quick. I just wanted to comment on some of these. Yeah, why’d you buy the second practice buddy? That’d be my question there. Just kidding. Yeah, why’d you buy the second practice? Different podcasts there. Yeah, save, of course. Five, 10 % get something put away. Do it.

Matt Mulcock: Yeah. That’s why you wanted to hit these. Yeah. Yep. Yeah, I think we’ll all let you go. Any thoughts?

Will: Again, we kind of hit this with, I buy this equipment for my office? Invest in the practice. If the second location was the right move, make it the right move and try to save at the same time. It’s probably not the second location and the debt that’s killing your savings. There’s probably some spending issues going on and other things happening. So yeah, don’t save it.

Jake: If you’re thinking about

Matt Mulcock: You should.

Jake: A second location, let’s talk about it. Let’s talk about the second location.

Matt Mulcock: Yeah. Yeah. Talk. Talk to us. Yeah. I like that. Uh, just with this, that said really quick though, we’ve highlighted this so many times that I think it’s worth repeating. Your debt is not what’s stressing you out. It’s your lack of liquidity. If you don’t have liquidity, if you don’t have a, whether it in a brokerage account or cash in the bank, whatever, that’s what’s causing your stress. It’s not your debt loads. And I please challenge us on this. If there’s a dentist out there.

Will: Yeah.

Matt Mulcock: They wants to tell us something different, but I would dare say 100 % of dentists would say, Dentist A has a bunch of debt, no cash. Dentist B has the same amount of debt, but a bunch of cash or a big brokerage account. Dentist B is far less stressed, even if they have the same, same level of debt. Uh, okay. My CPA says max out the 401k my buddy. It’s always a buddy. My buddy says do real estate. What should I do?

Jake: Yeah, Max the 401k. I’ll just give my 401k spilt here. They’re incredible 401ks are awesome of all the fancy tax benefits and strategies out there I’m just gonna tell you right now. None of them be at a 401k. Just gonna say that they don’t and yes, like there’s awesome Like we are not anti real estate invest in the investment property if you want to do that, that’s awesome I’m saying from a tax point of view if you’re trying to like save money for the future and save on taxes 401ks are incredible It’s like the only place where you can get a tax benefit and hold on to your money

Matt Mulcock: That’s the key.

Jake: You kind of can with real estate in some small scenarios. can usually like again, we don’t need to go into the whole real estate tax deduction upfront cost segregation type of But I’m telling you a 401k is going to do the job for you better than that real estate property for me like tax and savings point of view. If you just like a property because you want to invest in it great do that. But 401k’s are awesome.

Matt Mulcock: Yeah. Will, any thoughts?

Will: I will say that sometimes the advice you get from your CPA can be advice tailored to reduce your tax liability. ⁓ And so maybe maxing the 401k isn’t the right move for you. ⁓ And it’s more of just, it’s not the real estate. If you’re giving an option A or B to this question, yeah, we would probably say max the 401k. However, some years it might not make sense to max the 401k if you’re like, struggling with liquidity or things like that and you don’t want to take all of your extra income and throw it in an account you can’t touch until you’re 60. So…

Matt Mulcock: Yep. Love it.

Jake: nicely said.

Matt Mulcock: Yeah. Very great point. last one, I make 600 grand a year, ⁓ and somehow have only $40,000 in savings. What’s wrong with me?

Jake: Nothing. You’re beautiful and amazing ⁓ and worthwhile. The best time to say was yesterday. The next best time is today, right? Just get going. That be what I say. Yeah.

Will: You probably spend too much money. Yeah.

Matt Mulcock: Yeah. Yeah. You there’s nothing wrong with you. It’s not a character problem. It’s not a character issue, but there’s certainly our balance sheet issues or income state issues. We would not, we need, we’d need to evaluate and chances are you spend too much money. So you probably live in a good life, but it’s a hard conversation to have for sure. But if you’re making 600 grand and only have 40 grand in savings, you. Yeah, that’s exactly right. You’ve you’ve.

Jake: Yeah, it’s a hard conversation to have, yeah. not an income problem.

Matt Mulcock: You’ve gotten to a place of making the income you need to save meaningful money. You’re just spending too much. So anything else you guys would add to that? Will anything? No, I’m glad you did that. I’m glad you, you, ⁓ yeah, that’s good. That’s good. So now let’s do the wrap up. ⁓ any final words of wisdom for you guys or anything to wrap this episode up?

Jake: Thanks for indulging me there.

Will: I like a little lightning round to finish it off. Yeah, let’s go.

Jake: Yeah. Yeah.

Will: I always say, I mean, my thing I always say on a podcast is enjoy the ride. Like don’t, don’t get too wrapped up and taken like it’s important to take this very seriously and save money and set yourself up for the future, but enjoy it, enjoy it along the way. And that’s kind what we talked about it sometimes as counterintuitive feels saving money actually helps you enjoy the here and now even more. So

Matt Mulcock: Yeah. Love it. Jake.

Jake: I got nothing else other than Shrieking’s a good show. I’m surprised it’s your favorite of all time.

Matt Mulcock: What’s your favorite show of all time?

Jake: Shoot. ⁓

Matt Mulcock: I mean, the first four and a half seasons or five seasons of Game of Thrones is up there for me. Yeah. Parks and Recs up there for me.

Jake: The office maybe? I think it’s perfect. really love Game of Thrones. I really love succession. ⁓ I think Breaking Bad is perfect. know, all the stereotypical, those are like the greatest shows.

Matt Mulcock: Yeah. Will?

Will: Can I hit you guys with something? not gonna, gonna just, cause of this actually, I just remembered that I read this and I wanted to say it. ⁓ Penny, my eight year old brought home a book from the library. She just checks out a library book every week from her school library. You guys, like, do you guys remember Shel Silverstein?

Matt Mulcock: No, should I?

Jake: No clue what you’re saying.

Will: Well, it’s like the poem. It’s like books with little poems. And it’s I can’t remember exactly what it is. Anyway, she brought home this book. And so I was just reading her these poems that are night and there was one called The Clockman. And it says, How much will you pay for an extra day? The Clockman asked the child not one penny. The answer came from my days are as many as smiles. How much will you pay for an extra day? He asked when the child was grown, maybe a dollar, maybe less for I’ve plenty of days on my own.

Matt Mulcock: Mmm.

Jake: I’m not that sophisticated, I don’t think.

Will: of my own, how many, how much will you pay for an extra day? He asked when the time came to die, all the pearls and all of the seas and all of the stars in the sky. And I, I just love that one because it’s like the future is never promised. And when you get old, as you get older, you realize you would trade any amount of money to have more time and enjoy another day on this great earth, this amazing life that you have. So don’t take it for granted.

Matt Mulcock: Whew, that hurts.

Jake: Don’t say, okay, well fine. Don’t say anything that 10 % thing I saying. Just forget about that.

Will: Don’t save your money. Yeah.

Matt Mulcock: Yeah, no, but I think I love that will and I think because back to what we said near the beginning, which is saving and spending are the same thing. And it’s important to understand why you’re saving. And I think if you put more time and energy into that, do the work of understanding why you’re saving. I think it becomes easier to save more motivating to save and, and easier to maybe break through that attrition of why you’re not saving. So I think those all go hand in hand. Jake, anything else you want to add to that? I mean, we’ll just rock this in the face with a poem.

Jake: You guys all said it. I have nothing to add.

Will: Office is the best show. That’s all, I’ll just say that real quick.

Matt Mulcock: Okay. Okay. That’s fair. That’s totally fair. ⁓ all different opinions. think I just, right now I’d say shrinking. It’s the, I think it’s the perfect show for me. It’s amazing. ⁓ okay guys, thanks for doing this. Everyone. Thank you for listening. If you are listening to this and thinking, I need help with this, whether it be savings or, or anything to do with your finances, we are here to help. can go to dentistadvisors.com click on the book free consultation button, talk to one of our friendly advisors.

Jake: I love it, I like the take. Yeah, yeah.

Matt Mulcock: And Jake will happily tell you that you’re not saving enough. we need, I’m just kidding. We would be happy to talk to you and, uh, and help you with anything to do with money. uh, give us a call. with that guys, thanks for being here. Thanks for sharing your words of wisdom. Everyone. Thanks for listening till next time. Take care. Bye bye.

Jake: With pleasure.

Keywords: savings, dentist savings, savings rate, financial independence, cash flow management, investing for dentists

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