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Dr. Justin Short, founder and creator of “The Lifestyle Practice,” and co-author of the new book “The Titans of Dentistry: How the Top Performers Think and Act Differently,” is Reese’s guest on this episode of Dentist Money™. Reese and Justin discuss the top traits and skills it takes to move into the top 10% of dentists – and Justin shares the good, bad, and ugly moments that shaped his career path and led him to both personal and professional success. Find out if you’ve got what it takes to be a top dental practitioner.
Reese Harper: Hey Dentist Money listeners, it’s Reese Harper here. For today’s show I had the opportunity to interview Dr. Justin Short, the founder and creator of the Lifestyle Practice. Justin is the co-author with Dr. David Maloley of a new book called, The Titans of Dentistry, How the Top Performers Think and Act Differently. During our interview Justin shares some of the skills and traits the best dentists in the business apply to their practices. Because he was able to interview so many top dentists, Justin has some great insight into what pushes them to the top of their game.
Reese Harper: Listen in to discover some interesting ideas that can help you move your practice up the ladder of success. Make sure and check out our new Facebook group at dentistadvisors.com/group, and be sure to signup there. It’s a great way to give us your financial questions and have some dialog on specific issues that matter to you right now.
Reese Harper: When you’re ready to book a free consultation, just do it at dentistadvisors.com. You can checkout the calendar and find a spot the works for you. You could also just give us call at 833-DDS-Plan. Enjoy the show.
Speaker: Consult an advisor or conduct your own due diligence when making financial decisions. General principles discussed during this program do not constitute personal advice. This program is furnished by Dentist Advisors, a registered investment advisor.
Speaker: This is Dentist Money. Now, here’s your host, Reese Harper.
Reese Harper: Welcome to the Dentist Money Show, where we help dentists make smart financial decisions. I’m your host, Reese Harper, here with Dr. Justin Short. Justin, welcome to the show.
Dr Justin Short: Reese, thank you for having me. I’m honored.
Reese Harper: Thanks man. Yeah, you have just wrapped up, not so recently, but recently a book with a friend of ours on the show, Dr. David Maloley, and I just thought it would be awesome to have you on, especially after the book’s been released, so we can talk about that and your experience as a practice owner, and coach and consultant. I just think you’re going to be able to add a lot of value to our listeners, so I really appreciate you dedicating the time today.
Dr Justin Short: Sure, I hope I can.
Reese Harper: I’d like to start, the book itself was largely, for those of you who are unfamiliar with the book, it’s currently the number one dental book on Amazon and it’s called, The Titans of Dentistry. It’s how the top performers think and act differently. I just thought a good question to ask you, in the context of having done all the research for the book and compiled all the stories and ideas is that what really separates, in your mind, the top we’ll call it decile or 10% of dentists from maybe the bottom 90?
Dr Justin Short: I think the book really illustrates this really good and I personally believe what separates the top 10% from the bottom 90 is two things. Proper mindset being one and a willingness to work hard. I think, like I said, I think the book illustrates this very well because when Dave and I started our research for Titans of Dentistry and we were interviewing some of these top performers in our industry and people I have looked up to even some before dental school.
I naively thought that these people pretty much just walked on water. That there was magic in this group and these doctors had a clear shot to the top with no roadblocks, no set backs and just had an innate leg up on everyone else. What we found interviewing all these doctors, what we thought couldn’t be further from the truth. What they all had in common was that they actually did all have their own set backs. Some had cancer, divorce, suspended licenses. One lost a finger. You name it, they had the same challenges all of us dentists have.
But what they also have in common is a relentless mindset. They were hustlers. I think that’s what we really love. Same thing, I notice the same thing day in, day out with my clients. After each call with clients, I give them a list of action items to work on throughout the month. Some call me two weeks later and be like, “List done coach. What else you got for me?” Then I have some who we talk to a month later and they’re only halfway through. It’s not really hard to pick out the ones who are going to be most successful.
Reese Harper: Let’s go back a little bit. When you say mindset, sometimes that can be thrown around by a lot of people. Is the nuance you’re emphasizing there this grit and determination, this relentlessness you just mentioned? Is that the mindset you’re talking about or is there other dimensions to that?
Dr Justin Short: Sure. I agree. I hear it thrown around the same way you do, I’m sure.
Reese Harper: Got to have a mindset. Got to get that mindset going. Sometimes it’s hard to know what specific attributes we’re talking about.
Dr Justin Short: Right. I have a mindset, what are you talking about? Just like you said, grit, relentlessness, proactive. Like nothing’s going to stop me kind of thing. I think that’s one in the mindset of anything’s really possible. I think a lot, when they get out of dental school, they’re thinking man, if I can make $300,000 a year, that would be off the charts amazing instead of thinking, you know what? $300,000 is great. It’s awesome, but what if I wanted to make $500,000 or a million? That mindset where anything is possible if you’re willing to work for it.
Reese Harper: I’ve never been able to really get in shape until I got a trainer. I think for a lot of people that might be the case. Once you have accountability or someone in an area of your life that you might not be strong in. That’s a lot of the reason why people hire a financial advisor or a coach or a personal trainer. Just that human connection and he was talking to me about grit and determination this morning. I was pushing some prowler across the gym floor. He’s like, “Come on. One more set.” When we got done, we were talking about grit and determination because he was emphasizing how my last set, he saw some spark light in order for me to finish it. He’s like, “I can’t coach that very often into people.” He’s like, “It’s not easy. You can coach it. You totally can, but it’s difficult.”
Dr Justin Short: I think that’s one missed number that people look at coaching as. For instance, let’s just take you for example. I’m sure, deep down, you knew to get in really good shape you had to eat right and you had to bust your butt in the gym. But, it’s not like the coach is bringing that to you, like Reese, you may not know this, but you’ve got to eat healthy and you’ve got to work out.
Reese Harper: It wasn’t new information completely. Not entirely.
Dr Justin Short: Sometimes there is. They may tell you, well if you eat this way …
Reese Harper: You’re right. Yeah. You’re right. There is some nuance.
Dr Justin Short: Same thing with dental coaching. It’s not that I always come in and bring absolutely like, “You never knew this. You never knew you had to get your expenses down or produce more.” But it’s almost hard to explain. There’s almost a magic in that relationship sometimes from the mentor-mentee. I had used Bill Blatchford probably 12, 13 years ago now, when we worked one-on-one.
Reese Harper: How long was the relationship for? The coaching relationship? A year? Six months?
Dr Justin Short: I think it was about 12 months. We maintained our friendship beyond, but it wasn’t necessarily that he brought me all this great new material, but because I was an eager student willing to take it in, willing to learn, it provided that catalyst or whatever that is to really help propel or push me beyond what I think I would have gone with my own abilities. Helped me break through that glass then, and it’s hard to put into words sometimes.
Reese Harper: There’s this book that was written by a guy that, it’s called Jobs to be Done. His name is Anthony Ulwick and he has this theory that there’s this big picture job in anything that people are trying to get done and there’s a bunch of related jobs. For example, dental coaching’s big job would be like probably the way to describe it might be help the dentist and the practice move forward in a positive worth direction or improve the practice and the personal life of the dentist. That’s the big picture goal.
There’s all these little related jobs. Sometimes hundreds. Might have to do with some stuff in the practice or some stuff in his personal life and I feel like the coach has a better, has a different ability to step outside and see all of the jobs, all of the related jobs below the main job and bring all of them into view. Contextualize the big picture. I feel like sometimes the person has a really hard time doing that.
It’s hard to see every related job that needs to be completed so that the big job actually works so that you’re really happy and the practice really is moving forward and your personal life is in check and everything’s balanced. It’s really hard and I feel like coaches have the unemotional objective ability to understand all the jobs better than the dentist and they can sit back and look at it and go, “You’re not really addressing these three or four critical jobs that you’re missing over here. You’re not even talking about them.”
Dentists or any of us, like in my example of the health and wellness, I knew nutrition was important and I knew exercise was important, but actually didn’t realize what I was doing wrong with my exercise and what jobs I was missing and I didn’t realize my nutrition was actually, I thought it was good, but it was really bad. I thought I was doing some meditation and some time off and not working super intense and I thought my schedule was good and I thought my sleep patterns were good, but they weren’t. They actually weren’t.
I was missing a lot of core, these related jobs and so I wasn’t getting the progress I wanted. I feel like coaches have the ability to step outside, look at the big picture and then find the gaps in a way that it’s hard to do on your own. That’s one suggestion I would offer. I’m curious if you resonate with that and what came to mind as I was sharing those.
Dr Justin Short: One thing that helped me is actually I have been a dentist before. I’ve built two practices. I’ve sold two practices. I’ve dealt with the team. I’ve dealt with patients that no one wants to actually see. I’ve dealt with everything. Every insecurity, struggle, whatever that dentists have, I’ve had that. Being able to know, be that third party that you had the luxury of stepping back and looking objectively at the whole picture, it definitely helps you. Gives you a different, more strategic vantage point that I think that you get when you’re right in the midst of the storm.
Reese Harper: In the midst of it.
Dr Justin Short: I kind of look-
Reese Harper: What else do you think that coaching does besides that? What else does it do that you found to be valuable for your clients?
Dr Justin Short: I think it helps a lot of the things we’ve already touched on. I think motivation is good. Pushing beyond what someone else may have thought was possible. I look at it as a bowling alley. The pins are the goal and the coach adds if you had bumpers in each of the gutter because we all tend to go off course. We get sidetracked, we lose focus. Bottom line, no matter who you are, you’ve got a limited amount of bandwidth for your focus. You can only focus on so many things.
One of my biggest jobs I feel as a coach is making sure that we’re focusing on the right things as we progress down the lane. One example, just talking to a client late last night, his practice is doing well. First year out, first year in his practice. He’s netting a lot. Almost $100,000 a month. But, the practice isn’t perfect. There’s still issues. However, that being said, when you’re making that kind of money, those issues become much less of an emergency kind of thing.
Every practice has its issues. Susie Upfront is showing up late. Okay, that’s an issue. Let’s deal with it. However, it’s not make or break, life or death when you focus on the right things and your collections are where they need to be. As opposed to someone who’s struggling to make ends every month, those little things become much more mortal and in fact, they can hurt you much more, but when you focus on the right things, for instance getting the production collections up, you can weather those little storms. It’s no big deal. You don’t lose sleep at night. That is one thing. Keep the focus where it needs to be. Focus on the first things first and then work our way up from there.
Reese Harper: I’ve heard you talk about the fact that you were able to get in a position to become, we’ll call it financially free or financially independent at a pretty early age. You’re in your late 30s. You’re at a point where work is optional for you. What got you to that point and I’d like to ask a few questions about this topic because it’s an interesting one to me.
Dr Justin Short: First, I’ve got to give credit where credit is due. I’ve been blessed to have incredible people around me. I have two great teams at both the offices. I didn’t own them very long at the same time, but over my career, I had two separate offices. I have a very supportive wife and that pushes me. Allows me to do my thing without saying, “Oh, I don’t know if you should try that. I don’t know if you should do that.” She’s basically like your track record’s decent, go ahead and do your thing.
From there, frankly I worked very hard. In my practices, starting out, I was the one staying up late after my family went to bed, preparing handouts for my team meetings. In the beginning, I was the guy getting up early to work on my verbiage to discuss treatment of patients. I’d listen to old Dick Barnes CD’s or Paul Homoly CD’s in the car on repeat until I knew them verbatim. That’s just me. I wasn’t going to be content having an average life or practice and I worked very hard to make sure that didn’t happen.
As a result, my practices grew and with that capital my practice gained. I paid off debts and I invested in real estate. At one point we had over 65 rental units and since I’ve sold some to pay off others, but I knew to get up out of the game earlier in life, to pursue things I loved even more than dentistry, I was going to need to have a passive income. I learned all I could about creating a real estate portfolio. Again, I was the guy, every single night for 10 years, regardless if I was sick, tired, vacation, I would research the target zip codes I wanted to invest in so that I could get a leg up so to speak on my competition.
I’m not patting myself on the back or inferring those things made me a better person or more virtuous than anyone else. No way. But, for me, I knew it’s what I needed to do and it never felt like work per se because what I was working towards was so exciting to me. I think that was a big part.
Reese Harper: Tell me a little bit about the age that you started practicing dentistry. What age were you when you got into dentistry?
Dr Justin Short: I graduated when I was 26. It looks like May, June of ’95 I believe.
Reese Harper: Then what did you do for the first couple years?
Dr Justin Short: For the first couple months, first three months actually, I worked as an associate. Quickly realized it was not all I thought it was going to be. I think that happens a fair amount. I also realized I wasn’t good associate material. From there, and this was right in that core area where I thought I wanted to practice, I had a 10-mile non-compete. I knew if I got a job 10 miles from there, I could potentially be out 20 miles the target area. I ended up finding a job in a government Medicaid clinic, about an hour and a half away and I did that for probably five or six months until, during that time I was trying to find a practice for me to purchase. I did. I think by maybe April of the year after I graduated is when I closed on my first practice.
Reese Harper: Okay. That was about, we’re talking a year after graduation?
Dr Justin Short: Yeah. A little bit less, but right around there.
Reese Harper: What was the size of the practice that you … what was the size when you acquired it?
Dr Justin Short: It was three ops, three team members and it was producing roughly, producing, collecting $600,000 in a small town, probably about 45 minutes outside of St. Louis. Bread and butter so throughout the year it was people and it was good.
Reese Harper: You grew that practice from when to when? We’re at 1996 now roughly to when?
Dr Justin Short: 2006 actually. 2006-
Reese Harper: So 10 years?
Dr Justin Short: … and then I sold it in the beginning of 2011.
Reese Harper: Oh, I must have got my numbers wrong because you, I thought you said you got out of dental school in ’95 and then acquired the practice in ’96. Was I wrong on that?
Dr Justin Short: You were, but it may have been my fault.
Reese Harper: Okay, so 2005 you got out of school and then 2006 is when you acquired the practice.
Dr Justin Short: Right.
Reese Harper: Okay and then you sold it in?
Dr Justin Short: Then two thousand, I believe it was the beginning of 2011, I had sold it.
Reese Harper: Okay, so about five years roughly of building it.
Dr Justin Short: Right.
Reese Harper: I don’t know if this is public information. If you’ve shared it before, but would you feel … Was it a private sale or was it to a larger group or was it–
Dr Justin Short: Yeah, it was a private sale. It was to another dentist. He wanted to buy it as a second office. We had grown it, we went from, when I purchased four days, $600,000, three ops, three team members. When I sold it, we were still at three ops, three team members. We had cut out a day a week. We went from four days to three days in office, doubled the vacation from four to eight weeks and we were just shy, barely touching 1.3 million when I sold it in 2011.
Reese Harper: Cool. That’s a lot for three ops. It’s interesting because I think there are these, I mean this example of a practice is you’re optimal high efficiency, low overhead, you’re using this asset. This cost. This equipment, this rent or the building that you owned. You got some overhead there, but when you have a small operation like that, sometimes it can be uncomfortable to work in. A lot of dentists will immediately go and say I need more space. That’s a very common conclusion is I’ve got to move and I’ve got to get more space because we can’t fit in here.
I guess how do you coach people through that because you lived through what were probably pretty tight quarters. Do you remember how many square feet the three ops were?
Dr Justin Short: I don’t know. It was a converted old house, so there were actually steps up. It was clean, it was nice, but it wasn’t luxury. You actually had steps up to the operatory and the one bathroom was like right between all the operatories, so that was always awkward.
Reese Harper: That’s awesome. Good for you dude. Good for you. That’s cool. I just got out of a situation like that or I was with a client in a situation like that and I just couldn’t help but give him a high-five and smile. It is awkward to work in tight quarters like that.
Dr Justin Short: I agree. I hear it all the time. People think they automatically need more and people email me or call me or whatever. Hey, I’ve got three ops. Do you think I need five ops? I don’t know. It depends. I know it’s possible to do out of three ops. Are you doing that already? People think oh, I’m doing 503 ops, I’ve got to get more ops. To me, I do my best to help them, step back. Let’s evaluate the whole situation and not expand or fall into the trap of keeping up with the Jones’. Or you need more. Until we hit that capacity, we’re like yes. You’ve gotten to that point. You’ve milked all that you can from the cow that you have, now it’s time to go get a bigger cow.
Reese Harper: Yeah. Tell me a little bit about the … You sell the practice. You have a liquidity event. Along the way, did you acquire the second practice or did you acquire it after you had sold the first one?
Dr Justin Short: There’s good, bad and ugly in my story. This is definitely the ugliest. In 2009, I purchased-
Reese Harper: Thank you for sharing an ugly. You share an ugly, I’ll share an ugly, okay? The audience wants to hear the ugly too.
Dr Justin Short: For me it was definitely an ugly time of life, but it was a great trial by fire learning lesson as well. I look back and I wouldn’t trade it. So, 2009, the end of 2009, I purchased another practice. Things were going really well in my first practice so I had this grand idea, you know, 29 years old, that I’m going to go buy another practice. I’m going to put an associate in there. Never going to go there. I’m going to show up and collect a check for 10 grand every month and it’s going to run on autopilot.
What an idiot through process that was looking back. What I did, I did exactly what my plan, part of my plan was. I bought the practice. It was in another part of St. Louis. Probably about a 45 minute drive. Three ops, three team members again. I was familiar with the setup and I put a new grad in there and said, “Here you go.” The practice was doing roughly 700,000 a year.
That was the end of 2009. 2010, I was on my second associate. The practice grossed 425,000.
Reese Harper: Did you buy it with liquidity or did you finance it when you bought it?
Dr Justin Short: I financed it.
Reese Harper: You were feeling like this thing is upside down a little bit on me. At this point you were probably, did you owe almost as much as it was worth or maybe owed even more than it was worth?
Dr Justin Short: I owed more than it was worth because I remember contacting the broker who sold it to me and was like, “Bro, you sell this for what I owe?”
Reese Harper: What are our options, yeah.
Dr Justin Short: Yeah because instead of stopping by to pick up a check, I was stopping by to drop off checks of 10,000 plus just to keep the place afloat. I didn’t want to cut hours. It wasn’t anyone else’s fault but mine. I wasn’t being a leader of that practice. What I did after much deliberation was I decided that basically if this practice is going down, it’s going to go down with me leading it. I sold the first practice and jumped into the second one, beginning of 2011. There’s an overlap, probably about three months where I was working both practices two and a half days a week. Quickly realized that’s not going to work.
I sold the first one. Collected the equity, put it in the bank and then started hammering basically from scratch, just like I did on the first practice. I just took it back to the basics. They were working four days a week. I cut out Thursdays and made that, that was our strictly our team training day. I’d stay up late Tuesday, Wednesday night preparing handouts. Preparing this training manual essentially for my team members. We just started with the basics and worked our way up. In 2011, we jumped back up to 700,000, working three days a week instead of four. When I sold it, October of last year, 2017, we were grossing right about two million. That’s with me taking 10 to 12 weeks off and life was good.
Again, it was going back to the basics, focusing on the things that needed to be focused on first. The things that us, as dentists, do day in and day out, 15 times a day, nailing the simple things. That’s always been my core. Nail the simple things first and then work your way out and get more fancier from there.
Reese Harper: Did you feel like the sale of the practice, the original practice, was somewhat triggered by the need to focus on the other one? What was the driver in there?
Dr Justin Short: I wouldn’t say somewhat. I would say 100%. The first one I really looked at as, being young, I looked at it as my golden goose. Was I ever going to get back to that point? But I knew I couldn’t keep up, I wasn’t going to be able to keep up two and a half days here, driving over to the other practice, going two and a half days there. It just wasn’t long term, not how I wanted my life to look.
Reese Harper: You consolidated your effort. You consolidated your focus and you went and executed really well. It paid off. How many people do you think stay in that limbo land in the middle?
Dr Justin Short: I’d say too many. It would be hard to quantify, but I think it’s the same thing for me. I had to fight fear. Wrestle with fear a lot of, I basically had to, and I don’t want this to sound prideful in any way because it was, there was a lot of fear involved. But I had to bet on myself. I had to take the leap of faith that the skills I had learned and used to build the first practice would translate in work at the other practice. I had to take that leap of faith that it wasn’t patients or locations, demographic or an inherently bad team. I had to take it that it wasn’t being elaborate. That they weren’t focusing on the right things and that was a semi gamble because I took some money and I put it in the bank as a safety net from the first one.
But, it was still a nerve wracking time to really, until that proof of concept was there. Until I could see that yes, it is working. The gamble, so to speak paid off.
Reese Harper: Was your wife working during this time as well? Were you the only bread winner?
Dr Justin Short: She worked. When she got her degree, she worked at Boeing for five years, but I think by then she had stopped.
Reese Harper: She was done by two thousand and-
Dr Justin Short: Maybe 2008-ish. I think she was stopped.
Reese Harper: You were really the only bread winner at that point when you made that transition.
Dr Justin Short: Right. The pressure was definitely on me.
Reese Harper: There was that added to the pressure.
Dr Justin Short: I believe we had one, I guess we had two of our three children by then. I’m not a huge believer of spending every dime you make and just expanding your life until it’s out of control, but we lived within our means, but we still had a nice house. We had a lake house. We had boats, we had blah, blah, blah. There was definitely pressure, but-
Reese Harper: Yeah, there was a lifestyle to, a comfortable lifestyle to keep up with at some level, right? I would imagine though, so what did you do with your extra money? When you were earning your money from let’s say from 2005 and six, you’re probably just getting off the ground and your wife was working a little bit. You guys might have been able to save some. Did you pay it on your student loans? Did you build some cash up in the practice first? Did you buy your first rental property? What did you do with your extra money?
Dr Justin Short: Buy a little bit of all the above. I don’t really go hardcore to one end of the spectrum one way or the other like you’ve got put every dime into expanding the real estate side, nor do I subscribe to the thought that you’ve got to put all of your money into the reducing debt side. I’ve always tried to split the difference there. I’ve tried to pay off debt as we went along and I also tried to expand the real estate, so I know definitely a decent chunk of money went to buying rental properties.
I always tried to buy them well. I tried to put 20% down because I have a low threshold to be able to sleep at night. I knew-
Reese Harper: Were you purchasing them in the Midwest, in Missouri itself or in surrounding states primarily?
Dr Justin Short: I focused in Missouri. In St. Louis and I’d invest in three separate zip codes. Period.
Reese Harper: Yeah. That particular time frame of real estate investing was quite unusual in terms of the opportunities on the market in the Midwest and that was one of the best, from two thousand and we’ll call it seven, to 2011 was probably one of the best buying periods that we’ve seen in 40 years. I would say.
Dr Justin Short: I wish I had the capital then that I do later on in my career.
Reese Harper: Yeah, of course. Hindsight 20/20 dude. It’s like being at the bottom of the tech crisis and having millions of dollars liquidity and then putting it into the NASDAQ. It’s like, that was real estate seven, ’08, ’09, 2010, 2011. But sometimes we don’t get to control when we have the liquidity. Sometimes that’s out of our control. You did incredibly well in this asset class.
I think it’s important too for people to see that same thing you did in ’05, ’06, ’07, ’08, 09, 2010, 2011. If someone has just a little bit of liquidity today, that they might actually not be getting the same value that you did during that time period, and I don’t think you were trying to take a gamble. You were just trying to do what was a balanced plan at the time. It just so happens that balanced plan was incredibly successful and sometimes we don’t get to control the … I’m not saying that the market timing is the reason for your success, at all. But it plays a factor in wealth creation for a lot of people. In your case, real estate had a factor to play. Most of it was your tenacity, hard work, discipline, living not high on the hog, but trying to build wealth in a balanced way.
For other people it might be like they get a 20 times EBIT on their practice exit because a DSO’s got raised capital, and they’ve got total liquidity, and they’re just looking to write a check and somebody else might have got really lucky on a bitcoin trade. It wouldn’t have happened in the last 12 months, but, sometimes it’s hard to see other peoples success and contextualize it and go, “Can I replicate that? Is that replicatable?” I just want you to talk about that a little bit.
Dr Justin Short: Yeah. 100%. Timing falls in the things, luck. A little bit of luck falls into things. I think another lucky thing for me is that in hindsight I look back and I’m glad I didn’t have the capital say in 2004, 2005, 2006 because the story could have ended much differently. Right.
Reese Harper: You’d have been loaded up. You’d been barely getting back to your evaluations. That you needed to be at in property and that’s where a lot of listeners are right now. They’re like, “Dude, I bought that dream apartment condo in November of ’07. That’s when I bought it.” Timing and … It’s the same in the stock market though too. I have clients who started with me in March of ’09. March of ’09 is their first time they start buying index funds. They’re just thinking I’m a genius, they’re a genius.
Dr Justin Short: [crosstalk].
Reese Harper: I try to temper that emotional experience because I have clients who just started three months ago. They feel like the stock market’s the worst thing that’s ever been invented. Real estate, you’ll hear people that are like, “I made all my money in real estate,” and then you’ll hear people like, “Real estate’s been the worst thing that I’ve ever done.” I think people need to realize that each of these asset classes, whether it’s stocks or real estate or practice ownership or municipal bonds or all of these things go through cycles. You’re holding period sometimes just needs to be a little longer based on your entry point. You need to not beat yourself up over it. You’re still doing a good thing if you bought a rental property in 2007 in November. That was still a good choice as long as you had the liquidity, and you had the means, and you were trying to diversify, and it was a piece of your portfolio.
That’s not a bad decision. You just happened to start at a time that was probably the worst time you could have possibly started in the last 60 years. But that’s not your fault. You weren’t dumb. You didn’t misread the market. You could beat yourself up over it all day long, but I don’t think people should beat themselves too much over timing because they can’t control timing that often. I think it’s okay to beat yourself up over lack of work ethic or grit or spending too much or not saving enough. Those are okay things to beat yourself up over, but don’t do it over timing because you can’t really control that. There’s different perspectives out there. I’m not the only one with a view. You might have a different point of view.
I feel like people come to me, and they hate the things they’ve invested in because the timing wasn’t ideal. That real estate portfolio that you bought in November of ’07, if you hold it until 2023, you’re going to have a very similar return than the person who bought it in ’03 or ’02. It just takes a little longer for that average return to get to the expected normal range.
Dr Justin Short: Everyone’s a genius in a rising market.
Reese Harper: Yeah, but good for you for being diversified and actually just being balanced. It sounds like, you could have done just the opposite though, you could have paid off all your student loans. Paid off all your practice debt. Paid off your house. Pay cash for everything, and you would have never owned any assets and that would have significantly jeopardized your net worth.
Dr Justin Short: That’s how I looked at it. If I was trying to get rid of debt and I needed this mountain of cash that I could pull 4% a year from forever until I passed on, that mountain would have to be pretty big. When I can have a certain amount, for me, it was much easier to get to a point where we have a certain amount coming in each month that would support our life and our lifestyle. That was a much more obtainable goal for me as opposed to I’ve got to get to 10 million and then I can start pulling out 4% and then I can retire, blah, blah, blah. It would have taken me a long, long time if I ever got there.
For me, the passive income route seemed easier. I think another blessing for me or maybe it wasn’t such a blessing, but during that time when properties really went on sale, right after the crash. I was going through that time. It was about the same time I was robbing Peter to pay Paul to keep both practices afloat. I also missed out when it wouldn’t have been really bad to get in and I also missed out on a chunk of in hindsight, it would have been really good to be in. There’s give and takes.
You’ve got to be wise. I think if you’re really being honest with yourself, even though I didn’t know much about the market when I started out in let’s say, 2006 or 2007, there was something in the back of my mind, even though I wanted to get in on the hype. Same thing with bitcoin. Something in the back of my mind told me, “You know what? Something’s off here.” Watching property value increase 20% a year end over end. Even though I wanted to turn that off, and I wanted to say, “This is the best investment ever. You got to get in.” Something in the back of me told me something’s not right. It can’t keep doing this forever. Yes, they’re saving their slot, but I think you also got to be as wise as you can with the cards you’re dealt and the same thing with bitcoin. You realize that this thing continues the way it’s going, bitcoin’s going to be a billion dollars within four months and that’s not going to happen.
Reese Harper: Yeah. I think there’s some simple math you can apply to certain investments that definitely allow you to be cautious, for sure. I went to a concert a couple nights ago and it was a Josh Groban concert. I’m a, I don’t know, I’m an arts fan and some people probably, you love the guy or you hate the guy. He stands out in today’s pop culture. He wrote a song about anxiety and depression on his last album and one of the lines that he wrote in there, he said, “Life’s not always as we planned it, but we grow stronger when we break.” I really like that a lot and I feel like you’ve been through a lot of ups and downs. I can tell you’ve grown stronger through those experiences. It’s an important take away.
I think today, to summarize this conversation about grit and perseverance, you can see that Justin’s definitely someone that’s grown stronger as he’s broken, to use Josh Groban’s line. I’ll let you finish with the last words man. You have a really good, you’ve got a successful coaching business, you’ve had a great experience building practices. You’ve got a book that’s really successful right now. Appreciate you coming on. I appreciate you being candid and letting people see your story. I’ll just let you finish with some parting thoughts you may have.
Dr Justin Short: I think I’m in agreement with what you said, even though during that so called crisis where I was robbing Peter to pay Paul to keep it afloat, there in the midst of it, it sucked horribly. It was a very challenging time, but like most things in life, as the great Josh Groban put it, you learn, looking back, I wouldn’t trade it because that built my character, it built my fortitude. It’s helped me help other dentists now in our relationships and give some insight when they have gone through similar things. It built my confidence to know that these principles that I had gained or believed in, they work. When you start at the simple and you build that practice up, so I definitely would not trade it.
Reese Harper: I really appreciate you sharing your truth with everyone and your experiences. There’s a lot to cover. I think we should make this an annual tradition.
Dr Justin Short: That’s fine with me.
Reese Harper: I look forward to catching up with you soon. Thanks Justin.
Reese Harper: Thanks to Justin for spending a few minutes with me. His book, The Titans of Dentistry is currently the number one book on dentistry on Amazon. To learn more about Justin and his lifestyle practice academy, you can go to his website at thelifestylepractice.com. When you’re ready to book a free consultation, just go to dentistadvisors.com and click “Book free consultation.” You can find a time on our calendar that works for you or just call us at 833-DDS-Plan.Cash Management, Real Estate, Practice Value, Practice Management, Getting Organized