What Dentists Want to Know — Listener Q&A – Episode 220

What do DSOs, Dave Ramsey, and financial stress have in common? 

The last Q&A episode of the Dentist Money™ Show was several months ago. Since then the pile of good questions has grown, and we’ve picked a couple interesting winners. 

“How do you deal with management issues that are part of working in a big DSO? Should you just work for yourself instead of enduring the hassle?” How about, “Is stress a requirement for financial growth?” Plus, Reese and Ryan deconstruct why Dave Ramsey’s “Baby Steps” don’t all work for dentists. 

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Podcast Transcript

Ryan Isaac:
Hello Dentist Money Show listeners. This is Ryan Isaac. We got a great episode for you today. Reese and I scoured the seven seas of the internet. We dawned our pirate belts and captain hats and swords and swash buckles and we found the most exciting and profound and thought provoking questions on the internet about finances and money and investing and debt and spending, all those great things. And we answer your questions and added our thoughts on this episode of The Dentist Money Show.

Ryan Isaac:
As a reminder, go to the Facebook group, dentistadvisors.com/group. Post your questions in there. We will answer them directly and we will likely use it as content for the show. So thanks again for tuning in. Thanks for listening. We really appreciate it. Enjoy the show

Announcer:
Consultant 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. 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 my trusty old co-host, sir Ryan Issac.

Ryan Isaac:
And we’re back with another feature installment of The Dentist Money Show.

Reese Harper:
That’s @sirryanissac on Instagram and @reeseharpercfp on Instagram, where we are now on social media, which is a big deal for us.

Ryan Isaac:
We just joined social media. Have you heard of this?

Reese Harper:
Have you heard of the new social media, we are now a part of?

Ryan Isaac:
Find me on LinkedIn. Let’s connect.

Reese Harper:
Yeah.

Ryan Isaac:
Send me a in message.

Reese Harper:
I wanted to chime in and get you in your zone today.

Ryan Isaac:
Yeah, that does it.

Reese Harper:
That is a, that’s a C.

Ryan Isaac:
It does it.

Reese Harper:
And give you an E, real quick.

Ryan Isaac:
Okay.

Reese Harper:
And a G, to center yourself for this episode.

Ryan Isaac:
Yeah, that feels right.

Reese Harper:
Did you get your MxPx tickets bought?

Ryan Isaac:
Yeah, so shout out to the inner punk rockers in anybody. My 18 year old self is so excited that in April, Reese and I and a small group of old man friends, will be seeing MxPx and Slick Shoes live in Salt Lake City, April 10th.

Reese Harper:
And we are not being sponsored by that ad.

Ryan Isaac:
And I’m so excited.

Reese Harper:
We wanted… We asked, when reached out and said, hey, do you guys want us to sponsor this concert on The Dentist Money Show and-

Ryan Isaac:
Mike Herrera of MxPx is like, “No, I don’t want that. I don’t want that.”

Reese Harper:
The audience, it’s wrong audience, he said.

Ryan Isaac:
Look, a little trivia, okay. The last time I saw MxPx in Salt Lake City was also in April. It was April of 1999. It was the first show my little punk band ever played and we recorded. So we recorded four songs on a four track recorder. This is actually how long ago this was.

Reese Harper:
This is an actual true story folks.

Ryan Isaac:
There was no garage band. There was no Macbook that you could just do stuff. We had a four track.

Reese Harper:
Apple will be releasing this video feature about Ryan’s band on their new Apple TV Plus…

Ryan Isaac:
It’s going to be a documentary.

Reese Harper:
Right after the Beastie Boys story that’s launching next month. It’s sir Ryan Isaac’s band.

Ryan Isaac:
They’ve got to know, we recorded four-

Reese Harper:
What was the name of the band again?

Ryan Isaac:
ECO.

Reese Harper:
ECO.

Ryan Isaac:
Yeah.

Reese Harper:
And then unfortunately, an electric lawn mower company came out of the blue and stole the brand.

Ryan Isaac:
We didn’t have the money to fight them on that, but that’s fine. But we recorded some tapes. Our drummer passed this cassette tape through a chain link fence to the lead singer of MxPx at a Blink 182 concert that they played at.

Ryan Isaac:
And then one day, months later we were practicing in his house, the singer of MxPx, Mike he calls. He says, “Hey, this is Mike, do you want to play with us when we come to town?” Blew our minds. We were just like out of control, excited. And that was our first show we ever played and it was in Salt Lake City and 20 years later, man.

Reese Harper:
It was the first show.

Ryan Isaac:
20 years later.

Reese Harper:
But not the last, but not the last.

Ryan Isaac:
It was the biggest, the first and the biggest.

Reese Harper:
It was the first and the only thing I’ve ever done was in a public forum, I mean in terms of public appearances.

Ryan Isaac:
It’s like 5,000 people there. We peaked on our first show at never… We peaked on her first show. We should’ve just quit.

Reese Harper:
Someone would say the market didn’t respond.

Ryan Isaac:
No. Yeah.

Reese Harper:
We didn’t think so. We did not, we didn’t believe that.

Ryan Isaac:
I didn’t care and I have YouTube videos to prove it. All right.

Reese Harper:
You kept going. Proved it.

Ryan Isaac:
That’s, I’m excited.

Reese Harper:
Well, that’s our lead in.

Ryan Isaac:
That’s the lead in.

Reese Harper:
If you’re… Speaking of bands and speaking of being in the bands.

Ryan Isaac:
Speaking on these things. I got some [inaudible 00:04:41]

Reese Harper:
We have a lot of… I’d like to say The Dentist Money Show is also become sort of a band if you will, a band of followers, a band of people on the internet that gather together and collaborate to get answers to their questions.

Reese Harper:
And today my friends, we have some of the lead guitarists and drummers and bass players in our band who have given us some real gems to go with and we’re going to kick it off.

Ryan Isaac:
I love this analogies.

Reese Harper:
Our first question starts with a C.

Ryan Isaac:
So, the first shout out though is our Facebook group where we get a lot of this content. Please just go post questions. Anything you can think of? We’ll answer them directly and we’ll usually use them in content. So dentistadvisors.com/group.

Reese Harper:
And if you’re scared. Okay. Some of these are coming from our direct Instagram, so go just follow @sirryanissac or @reeseharpercfp on Instagram and just send us the question directly, because we will anonymize this.

Ryan Isaac:
We will anonymize, which is the technical term for make private. Anyway, also shout out to the Dental Investment Group, because there’s a lot of great questions on there and Sonny’s doing a great job.

Reese Harper:
My man, Sonny P.

Ryan Isaac:
My man, Sonny. So first question-

Reese Harper:
Trying to keep it civil.

Ryan Isaac:
Yeah, that is always the… [inaudible 00:05:57]

Reese Harper:
Trying to keep it civil. It’s difficult sometimes

Ryan Isaac:
First question. We’ve got someone working for a DSO who does not like the micro managing environment of that DSO, which I guess-

Reese Harper:
Oh, interesting.

Ryan Isaac:
Pausing there. I’m going to assume that that’s not a blanket statement that applies to every DSO, because I think some people have great DSO jobs, but this particular one doesn’t like the way that management is run in micro managing things. That’s the term they use.

Ryan Isaac:
Income’s good. It’s like North of 275 just under 300, so great income or working a full week though.

Reese Harper:
Shoot, that’s plenty.

Ryan Isaac:
Shoot.

Reese Harper:
Plenty echoing.

Ryan Isaac:
They’re looking. However, to purchase a practice. They’ve got half a million bucks on a home loan. They’ve got 300 grand student loans. The practice, they want to buy is 750. Couple questions here. These are, here’s the meat. All right, that was the potatoes. Here’s the meat.

Reese Harper:
Mashed potatoes and gravy, Mr. Murray.

Ryan Isaac:
Sweet potato.

Reese Harper:
That’s a…

Ryan Isaac:
Mashed, sweet [inaudible 00:06:53]

Reese Harper:
Sorry that was a, one of a B [inaudible 00:06:54] reference from Groundhog Day, kind of a leftover moment from the Super bowl.

Ryan Isaac:
Did you see, that was so good. Genius.

Reese Harper:
I was moving forward.

Ryan Isaac:
Questions here. Is it better to have cash as I’m moving from the DSO associate job into purchasing a practice or is it better to pay down my debts before I do this? Follow up question to that is, if it is better to have cash, how much cash?

Ryan Isaac:
So I guess we’re going to point out that you were saying this before. A lot of times people jump in and just give it an immediate answer. But sometimes the right answer is I need more information. So, I’d be curious before you answer, what, what else would you want to know about this?

Reese Harper:
Can you like sometimes when you repeat listener questions you go like a hundred miles an hour and even I’m confused.

Ryan Isaac:
Okay.

Reese Harper:
So just repeat it one more time for the slow man, because I heard I got this money, they got this cash and I’m either going to pay down my prac… I’m going to pay it on my student loan or I’m going to save it up for the down payment on a future practice. Is that what you said?

Ryan Isaac:
It wasn’t as specific. It’s basically I’m an associate making good money, but I’m going to buy a practice and before I do to get ready, we don’t know what this means because we don’t know if it’s going into down payment, going into real estate. If it’s liquidity for something, we don’t know. But they’re asking to get ready for this transition from associate to practice owner, is a better to get rid of my debts or is it better to just have cash on hand as I go into this?

Ryan Isaac:
Hey, Matt, what do you like to drink or snack on when we do our webinars every month?

Matt Mulcock:
Yeah, that’s a good question. I’m usually hitting a Red Bull, but it’s hard because it’s an evening webinar. Yeah.

Ryan Isaac:
These evening webinars taking place, 6:30 PM mountain standard time.

Matt Mulcock:
Mountain time.

Ryan Isaac:
Once a month.

Matt Mulcock:
Where do you find it?

Ryan Isaac:
Well, if you’d like to find the webinar or you’d like to register for it, you go to dentistadvisors.com/webinar or just go to the website and click on webinars under the education.

Matt Mulcock:
It’s a good time.

Ryan Isaac:
It’s a great time. What kind of things do we cover in our webinar, Matt?

Matt Mulcock:
So each month we’re going to hit an element, right? So it’s going to be some component of your financial life. We’re going to dive a little bit deeper than we would like on the Dentist Money Show, right? We get to draw pictures. There’s live polls. You can ask questions.

Ryan Isaac:
It’s a great time.

Matt Mulcock:
Yeah, it’s a good time.

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

Reese Harper:
All right, first piece of advice here. This is the first one I noticed.

Ryan Isaac:
That was as slow as I can do it by the way.

Reese Harper:
That was really helpful. Thank you for, for the commoner here.

Ryan Isaac:
Thank you for slowing me down.

Reese Harper:
The commoner here. So I feel like we got to pause on the first line.

Ryan Isaac:
Okay.

Reese Harper:
The, I’m part of this micro managing DSO culture and I’m not liking it.

Ryan Isaac:
Yeah.

Reese Harper:
Now, just for the goodness of the world here, have you brought this up directly to the person at the DSO who can actually make a difference in the culture?

Ryan Isaac:
You know you’re starting to…

Reese Harper:
I just want you to, I want you to go to that manager and just say, “Frankly, I’m very grateful for my job, but I’m concerned about the culture here and I feel sometimes I’m being micro managed and it’s uncomfortable and I’m sure you don’t want that to happen, but I would like to let you know that it makes me feel less likely to want to stay here longterm. So, and I’m very…” Why am I giving you this advice

Ryan Isaac:
Well Reese, it sounds like you’re referencing Episode 207, how to turn your employees into teammates where you’re talking about one of the five dysfunctions of a team, which is a lack of direct communication.

Reese Harper:
It’s a fear of conflict.

Ryan Isaac:
A fear of conflict. Conflict is scary, man.

Reese Harper:
It is, but… Man.

Ryan Isaac:
You don’t want to hurt people’s feelings or make them feel bad or criticize someone.

Reese Harper:
They’re doing their best. And I know you’re doing your best and sometimes there’s just a communication gap. And maybe by you bringing up this issue in a constructive, positive way, you might walk out of that meeting feeling like this is a really good fit and you might be able to work another year or two and make even more money and they might actually bonus in you and put you in a position of leadership because you had courage to make a change to the culture and-

Ryan Isaac:
How would you begin that? Okay, so how would you start that conversation off with, I’ve got a tip actually, I learned a tip from someone on how to have a start hard conversations, but how would you start that?

Reese Harper:
Well, I would start by saying I have something that I want to share that I’m a, I’ve been a little bit worried about and I, I’m, I’ve thought about it for a while and it’s important to me that I share this with you. I would kind of like set the stage for “Hey, I’m about to tell you something that’s going to be hard.”

Reese Harper:
Then I would go in and say the things that you like about what’s been going on, some positive things that you have appreciated about the job, the position, the company culture. Then I would share the thing that I’m concerned about. This is kind of like you warm people up so they know what’s coming and then you share the things that you’ve liked about your experience.

Ryan Isaac:
Yeah, so it’s not all negative.

Reese Harper:
So they’re legitimate and authentic, so it’s not all negative. And then you share your constructive point of view and I, but be very direct about the point of view. Don’t walk, don’t wallflower and kind of half bake it. You have to say what it is that you don’t like.

Reese Harper:
Like my manager has been talking to me in a way that feels aggressive and has me feeling like I don’t have control over my clinical recommendations and treating my own patients. And something really direct, not just like I don’t really, things are not feeling great around here.

Ryan Isaac:
And the way, and you’d say… The way I would describe this to someone else is I feel micromanaged, because just say the word, tell them the way you feel.

Reese Harper:
Yeah.

Ryan Isaac:
The way I would describe this…

Reese Harper:
The way that I would feel like this is just, I feel micromanaged and I don’t like the way I feel.

Ryan Isaac::
I like that. It’s a good tip.

Reese Harper:
And if the, if the manager starts being defensive and if they start getting angry and if they start yelling or telling you to, you just need to stay focused and try to, they try to minimize your concern, then you know, you’re really in a culture that just isn’t going to go anywhere.

Ryan Isaac:
I mean is there a little allowance for that? Because people and humans are just really messy. So is there a little allowance for the initial… Everyone volleys their first shots and then it just gets panic mode and there’s a little bit of a war, but then if it settles, right, right.

Reese Harper:
I would practice it a few… If a person, some people are not very responsive to this kind of feedback and so if you struggle with it and they get a couple of opportunities and you can tell that they’re just not interested in your feedback. And even after you said, Hey, the next time I would go to them if they didn’t resolve and I would just tell them, “Hey, I’ve read this book about teams and I really want to have a strong of a team as possible. It’s Patrick Lencioni’s Five Dysfunctions of Team and here’s a book. I just want you to read the first couple of chapters and because I think it would really help our team.”

Reese Harper:
And if they still are unwilling to do that and don’t want to know and don’t get on and they don’t…

Ryan Isaac:
They don’t want to help the team.

Reese Harper:
Then you know, it’s just like, well, got to move on. Got to build your own team. You’re going to have to go find a better team. You’re going to have to find a team that you feel comfortable with.

Reese Harper:
So that’s where I would start just cause I’m like-

Ryan Isaac:
You never know. Maybe that… Yeah.

Reese Harper:
Sometimes yes, sometimes you’re in a good spot and for your personality there might even be a reason you’re there that really is authentic and organic to what you want to do. And as you, as you hit a point of tension, I think it’s better to try to embrace the tension and directly confront it and be courageous about having that conversation so that you can see maybe there’s an opportunity for you to grow.

Ryan Isaac:
I like that.

Reese Harper:
Anyway, then second one is what do I do with this money in this particular example.

Ryan Isaac:
Well, assuming you’re going to go. Yeah.

Reese Harper:
Yeah. In this particular example, I would definitely hold onto my cash and be preparing for the future and I definitely wouldn’t want to pay down any debt right now. I don’t know if that’s the exact answer but…

Ryan Isaac:
Well, that’s the question. Yeah, and the other followup to that is if that if holding on a cash is the answer, how much cash, what makes sense?

Reese Harper:
Well, what I can tell you is if you’re going to go into practice ownership, it depends on the followup questions would be do you own a house yet? If you do own a house, do you like that house?

Ryan Isaac:
Yeah. Are you going to move? When you buy a practice.

Reese Harper:
Are you going to move, and are you going to have a new house when you buy a practice. Is this that you’re, okay, I’m going to be here for 20 years house or is this the you’re, you’re, you’re waiting to dump it house so you can get to the real house.

Reese Harper:
Do you want to have a practice that’s just you as a lifestyle practice or do you have ambitions to have a little bit larger practice with at least one associate? Or maybe a larger vision cause you don’t like the culture that you’ve been exhibiting in this DSO and you want to go build your own larger organization. The bigger your ambitions are, the more I’d say you got to keep that cash all around.

Ryan Isaac:
The minimum would be what does a bank want to se when you ask them for a loan. It’s going to be like 50 to 100 grand.

Reese Harper:
The minimum would be… I mean the minimum’s, whatever you can cobble together that…

Ryan Isaac:
Beg them to lend money.

Reese Harper:
That we don’t know what the minimum will be. But I think the question really is, at what point do I have enough and I can start paying down debt, right? That’s really kind of what someone’s thinking in their head. At what point is it enough? And I’d say, well, if you had two years worth of personal spending, I would say that’s probably enough. And you’re probably consider paying down some debt. One year’s worth of personal spending. I don’t think that’s quite enough. If you’re trying to be forward looking and think about planning for the future.

Reese Harper:
So cash is [inaudible 00:17:05] when you’re young. I know that it doesn’t make as much money as the student loan interest, but Dave Ramsey and I advise a different customer.

Ryan Isaac:
Yes, you do.

Reese Harper:
We are advising the entre-professional dentists that is trying to expand their net worth and create an asset that’s not just an income stream for them to, that they show up and work at and you can’t… His first tip, if you look at the baby steps, I saw those posted.

Ryan Isaac:
Oh, cool. All right.

Reese Harper:
And…

Ryan Isaac:
I went through, Hey, I went through them at one point in my life. I did baby steps. It felt good, man. I mean when you’re, when it’s that simple and non-complex, it feels great.

Reese Harper:
Yep. Do you know what the first baby step is?

Ryan Isaac:
Save a thousand dollars.

Reese Harper:
Yeah. Save a thousand dollars and I’m just saying-

Ryan Isaac:
I didn’t Google that, I remember it.

Reese Harper:
That is a very reasonable baby step for the average American, but for someone who’s interest on their student loan is accumulating at twice that per month.

Ryan Isaac:
Yeah.

Reese Harper:
When they graduate, that is not a very, a reasonable level of liquidity. Okay.

Ryan Isaac:
A tad bit more, as they say.

Reese Harper:
And then baby step number two, you want to know baby step number two is?

Ryan Isaac:
I think it’s pay down your consumer debt, like credit cards.

Reese Harper:
Pay off all debt, except the house.

Ryan Isaac:
That’s no baby step baby.

Reese Harper:
That’s no baby step for dentist.

Ryan Isaac:
That’s a giant leap for womankind.

Reese Harper:
It’s like, Oh, okay, that’s a nine year plan.

Ryan Isaac:
But all debt, the building, the practice, the half a million dollar student loan, the CERIC.

Reese Harper:
Yeah.

Ryan Isaac:
All right.

Reese Harper:
So baby step number three, save 3%… Save three months of expenses in a fully funded emergency fund.

Ryan Isaac:
Okay.

Reese Harper:
I like that as the step number one for our dentists. So baby, step number one is you forget about paying off all debt except for the house initially and forget about a thousand dollars because your student loans are going backwards faster than that every month.

Ryan Isaac:
Yeah.

Reese Harper:
But start with a three month emergency fund. I like that. And, but I would… If I’m planning on going into entrepreneurship, I don’t think I end at three months. I think I still accumulate to a minimum of a year and… It’s just different. It just shows who at different audiences, like his step number four is invest 15% of your household income into retirement, right. I think that’s great.

Ryan Isaac:
Yeah.

Reese Harper:
But dentists saving 15% won’t be retiring on time. It’s not enough.

Ryan Isaac:
Or the way that they want to.

Reese Harper:
Yeah. The, based on the way they’re used to living and so they’re going to have to be closer to 20 to 22% and anyway, bottom line is you probably, if you don’t know where you’re going to live and you don’t know what house you’re going to own? You don’t know what practice you’re going to be in. I would just feel really good if you had more cash and I don’t really…

Reese Harper:
I feel if your debt balances are extremely high, I’m talking like [inaudible 00:20:32] dual income couples that both became specialists. I saw, I met one the other day and they’ve got a North of $1 million in student loan debt between both of them.

Ryan Isaac:
Right.

Reese Harper:
You’ve seen that case before. That’s a different perspective. I might actually encourage that person to hack away at their student loans for while…

Ryan Isaac:
Dedicate a little more, sure.

Reese Harper:
And continue in the DSO job just to get the thing under control. Get the, get it under wraps and maybe only keep six months worth of an emergency fund while we hack down the student loans.

Reese Harper:
But if you’re like a normal single, graduate and you want to go on to practice ownership, I think you’ve got to push pause button on the debt reduction. Your thoughts, your answers. What would you say?

Ryan Isaac:
You said them. There you have it. I think that’s…

Reese Harper:
You agree?

Ryan Isaac:
I think that’s great man. I think liquidity is the ultimate priority wen you make any big decision in life. Whether it’s, you’re going to change jobs, move States, buy a different house, start a business.

Reese Harper:
Expand a business, hire an associate.

Ryan Isaac:
I mean, there’s just nothing that gives you more options than liquidity. And I think that’s like the-

Reese Harper:
Ah, here’s another one.

Ryan Isaac:
Okay, okay.

Reese Harper:
Buying equity inside of a business where you are an associate. That happened this year. I’ve seen several people do that.

Ryan Isaac:
So instead of leaving, they’re just like, how can I make my work environment more ideal and I want to own, I want to be a partial owner.

Reese Harper:
Yes. If you have… Liquidity caries… Liquidity is the only way that that happens too.

Ryan Isaac:
It is and but this goes, that goes back to hard conversations.

Reese Harper:
Difficult conversations.

Ryan Isaac:
All right.

Reese Harper:
Yep.

Ryan Isaac:
Anything else you want to say about that was a great question.

Reese Harper:
No, that’s a good question. Thank you.

Ryan Isaac:
I like that with just… Geez, it just felt good. I feel satiated. Like a good meal.

Reese Harper:
I think we just need to give that a G.

Ryan Isaac:
Let’s hit that with the little G.

Reese Harper:
Gravitas.

Ryan Isaac:
By the way, what is your favorite thing to eat lately? You’ve got a new restaurant you’ve been hitting.

Reese Harper:
Do you… You should have been my Super Bowl part.

Ryan Isaac:
I saw pictures of the Super Bowl party man. You got a spread. That was qualified as a spread.

Reese Harper:
I made four types of wings. Smoked four types of wings.

Ryan Isaac:
Smoked them on the Traeger?

Reese Harper:
Yeah. And I had some, I had four types of sauces that went with those and two types of chicken.

Ryan Isaac:
Dang.

Reese Harper:
Just to test different farms.

Ryan Isaac:
I’m starving.

Reese Harper:
And I really tried out the…

Ryan Isaac:
Test different farms?

Reese Harper:
Yeah. I got these organic chicken wings from Sprouts that were like really expensive, but they were a whole wing. So you have the drumstick and then you have the second section and then you have the flat.

Reese Harper:
Anyone who’s done wings before, who knows what I’m talking about. [inaudible 00:23:14] You’re the… I’m a big drumstick. I’m a first section of the wing kind of guy. I, the second section is great too. It’s more dark meat, but the flat, you just kind of get rid of it and you chop it off.

Reese Harper:
And so Sprout sells these packages of the full wing and you kind of have to separate them yourselves.

Ryan Isaac:
I don’t know, I’m not a wing separator.

Reese Harper:
And they’re very, they were very, they’re very, they’re much better that way because they have, there’s a bigger connected piece and it’s not getting, it’s staying connected longer and it’s fresh or they’re never frozen. That kind of a thing. And I bought this big bag from Costco. It was not good.

Reese Harper:
It said antibiotics, no antibiotics ever in the chicken. So my wife let me get it. She’s like, “Fine.” [crosstalk 00:24:01] She’s very like… She hates antibiotics in her meat. She’s really smart with wellness and she helps me find the healthy meat for myself a lot. But it’s kind of interesting her, she led me to the right place, man.

Ryan Isaac:
This is an inadvertent advertisement for Dentist Advisers and I’ll just as a plug say that if anyone thinks about wing meat this much, you know they’ve thought about the financial planning process a lot too, okay.

Ryan Isaac:
If this is a glimpse-

Reese Harper:
Are you telling me that our listeners are in good hands?

Ryan Isaac:
This is a glimpse into Reece Harper’s brain, and please don’t assume that it stops at wing meat.

Reese Harper:
Oh, good.

Ryan Isaac:
The testing, the analysis and the obsessive questioning expands to all areas and it’s a-

Reese Harper:
You’re kind.

Ryan Isaac:
Blood into the business.

Reese Harper:
For some people that’s a weakness in our particular business. It happens [inaudible 00:24:59]

Ryan Isaac:
It creates a lot of good stuff.

Ryan Isaac:
Like what you hear on The Dentist Money Show.

Reese Harper:
I do.

Ryan Isaac:
Then set up a free consultation. There is no obligation and let’s chat about how we can help you make a better plan for your future.

Ryan Isaac:
All you do is go to the website at dentistadvisors.com. Click the big green button, book free consultation or call us at 833-DDS-PLAN.

Ryan Isaac:
Question number two for today. Here’s what we’re going to hit. This is…

Reese Harper:
The pork shoulder. Let’s go into the pork shoulder, question number two.

Ryan Isaac:
The pork shoulder of questions.

Reese Harper:
I didn’t even tell you, I did do the Boston pork butt.

Ryan Isaac:
Oh, you did Boston butt?

Reese Harper:
It was 16 hour smoke, but it was really tasty. I had leftovers last night cause it was so good.

Ryan Isaac:
I haven’t done a butt yet.

Reese Harper:
We’re going to the question now. I’m sorry, listeners.

Ryan Isaac:
Well, we’re on the shoulder. This question is the shoulder.

Reese Harper:
We went from wing to shoulder, here we go.

Ryan Isaac:
This is such a good question, man. Here’s the main question. I’ll give you some details of it. The main question though, this is a quote, is stress, a requirement for financial growth?

Ryan Isaac:
And so here’s this person, okay. They’re in their young thirties they graduated a few years ago.

Reese Harper:
Such a great question.

Ryan Isaac:
They’ve got a new baby which can’t be overlooked in this question. It might not be the things they think are causing them stress. It might be the new baby, but we’ll get there.

Reese Harper:
That baby action.

Ryan Isaac:
They’ve described their situation, they’ve got a good job, they’ve described their situation is finally getting ahead and breathing easier. Bought first piece of real estate, maxing out retirement contributions, but as soon as I start buying investments and putting money in different places, they said, these are quotes, air quotes now, “Poof. The tightness returns like the stress comes back.” As soon as they start, they start getting liquidity and money and then they got to like put it back out into investment. Some real estate, some retirement plans, “Poof. The stress is back. The tightness returns.” Which actually sounds like a great star Wars title, the tightness returns. I like that. If George Lucas and Disney happen to be listening, which I think every once in a…

Reese Harper:
They often do.

Ryan Isaac:
They catch a few a month.

Reese Harper:
The Dentist Money Show is an inspiration for Disney plus.

Ryan Isaac:
So, I’ll repeat, are you the, you’re like, I would love to see a baby Reese, like old man version, but baby Yoda version of Reese. That’d be kind of cool.

Reese Harper:
No, I can’t… What I mean I don’t know if we can do that. Let’s answer this question using Yoda.

Ryan Isaac:
Is stress a requirement for financial growth is the main question. That’s the situation. I’ll stop. There’s a few, there’s three or four more questions leading up to this but I’ll stop there.

Reese Harper:
Is stress a requirement of financial growth, you see.

Reese Harper:
That-

Ryan Isaac:
We did it.

Reese Harper:
That is the question.

Ryan Isaac:
We went there. That is the question.

Reese Harper:
Here’s the interesting thing for me.

Reese Harper:
I mean it, I’m curious what this person’s try… It really is going to depend on what this person’s trying to do with their career. I think that has to do with the level of stress that they feel, because stress, financial stress can manifest itself in different ways based on your personality.

Reese Harper:
Some people are going to feel stressed, because they don’t have enough liquidity and they’re in… In this case he’s investing it and exposing it to the market in volatility and maybe putting it into real estate and there’s not as much liquidity potentially that for that person to feel like… Liquidity, meaning they feel like they don’t have access to enough cash. They don’t feel like they’re just comfortable and the solution just might be we’ll build up some more liquid reserves. Maybe you’re the type of person that needs a six to nine month emergency fund of cash and money market, right. Or you need a year right to feel okay about your situation.

Reese Harper:
So first thing I would say is liquidity is often a good, a great indicator. Lack of liquidity is a great indicator of whether you’re… Is your stress driven by liquidity or not? You need to have that conversation. That is the first point.

Reese Harper:
Last week in our advisor training that I had with all of our advisors, we debated this thing for an hour and a half. Is there a two month emergency fund? Is the emergency fund four months, is it one month, is it six months? Is it a year? This is really critical and where does it go? Where do you put it? When does it become okay to not store the emergency fund and a money market account, but you can put it in stocks.

Reese Harper:
If you have $1 million in stocks in the equity markets, like in the S&O 500, do you even need a six month emergency fund anymore? Well, some people feel like they do.

Ryan Isaac:
Yeah. Personality.

Reese Harper:
But you literally have a $1 million there.

Ryan Isaac:
Mathematically, you don’t

Reese Harper:
Mathematically, you don’t.

Ryan Isaac:
You’re okay.

Reese Harper:
But it’s like, no, I need that. And so a good financial plan, kind of like a good workout, kind of like a good nutrition program, it really has to be optimized for someone’s emotional tolerance for uncertainty and risk and liquidity.

Ryan Isaac:
And usually we’re not good at analyzing our own emotional tolerance on things.

Reese Harper:
No. So I would definitely not want this person to say well, financial anxiety is just the cost of growth, and I’ve got to be stressed out or I’m never going to grow.

Ryan Isaac:
There’s some truth to that though, right? I mean stress-

Reese Harper:
I wouldn’t want them to say that as absolute…

Ryan Isaac:
Forever.

Reese Harper:
Because it may not be true.

Ryan Isaac:
Yeah, I don’t believe that for a bit.

Reese Harper:
Entirely.

Ryan Isaac:
I agree.

Reese Harper:
I haven’t experienced that as a… It’s not a constant. It’s not a constant, so if it-

Ryan Isaac:
But it is a requirement to begin, don’t you think? A fitness journey, a business a savings plan. It’s a requirement to start.

Reese Harper:
Well, it’s a requirement to jump into a new level too. And he’s starting a new level right now, which is his first maybe set of investment accounts or his first property. That will take a while to get adjusted to before you’re feeling less stressed. And if your stress doesn’t go down ever, it’s probably because you’re not liquid enough. Probably need to just build up more liquid reserves, stop investing for a little while, build up a little more liquidity and then find that point where you’re like, okay, I feel good now, because there is a point where-

Ryan Isaac:
Yeah, maybe the real estate was too soon. Should have kept [crosstalk 00:31:18]

Reese Harper:
Maybe the real estate was a little too soon, but that’s okay. Try to build up liquidity a little bit more or maybe retirement plan is too early. Build up some more liquidity.

Ryan Isaac:
Dang. That’s a sick answer.

Reese Harper:
The second thing I would say though is this. If you are… sometimes people feel financial anxiety not because of liquidity. It’s because they don’t have the right resources around them to achieve what they’re trying to accomplish in their business or their practice.

Reese Harper:
So I have a lot of clients who, liquidity isn’t really the driver of financial stress. It’s like they can operate on nothing. Their income is super high, right? Really high income. But they operate on very little amounts of cash in their practice checking or their business and their personal finances. They just don’t seem to, that doesn’t seem to stress them out.

Ryan Isaac:
But they don’t have a key office manager or a lead hygienist?

Reese Harper:
But they’re, but they are stressed because they’re just frustrated that they don’t have the right team around them. And that gives them financial anxiety. Because I’m like, “Geez, I’m never going to be able to have a healthy practice. I’m never going to be able to grow the way I want to grow. I’m never, this is never going to get bigger than me and I’m fighting to make this work, but I can’t.”

Reese Harper:
Is liquidity related to this? Yes, because you need liquidity in order to be able to hire these right people. But they don’t think of it in terms of liquidity. They think of in terms of the people that they need. And really it is closely linked to… Right now, whatever you’re doing and that in that scenario that makes you not have enough money to hire the right people. You either have the wrong people on the bus and you have to make an adjustment. You have to build up some cash and lower your lifestyle expenses. You’ve got to divest yourself of something that you know is the hardest thing to do, which is sometimes you got to rent a cheap house for five years. I don’t know what your answer’s going to be, but I know there is an answer. Some are as hard as, sorry, you’re going to have to not have lifestyle that you want for a while, while you get to a healthier place.

Ryan Isaac:
Could some of it be non-financial too? I mean how often did we go through things that we, money is such an easy thing to blame, right?

Reese Harper:
Yeah.

Ryan Isaac:
And maybe it’s the new baby or maybe it’s physical health or maybe it’s a personal relationship that’s strained and stressing you out somewhere else and money fills… Money’s so easy to blame. Just get so mad at the budget when it’s not that.

Reese Harper:
We can list a few other things.

Ryan Isaac:
It would just be interesting to explore that.

Reese Harper:
Sometimes it can be marital tension around the money or lack of alignment in your relationship around money. It can be health, it can be family, it can be just a difficult employee or a team member that you’re trying to work through things with. But I do think the common ground here is there is a, there’s a balance between liquidity and how much access to cash you have and the stress you feel. They are closely related and I think they’re really important.

Ryan Isaac:
So look, we just got done. I mean, I don’t know if you meant to plug it or not, but January was our liquidity month for every client of our firm. If you go to our website, dentistadvisors.com, go click on the elements. You’ll see-

Reese Harper:
E for elements.

Ryan Isaac:
Yeah, is that an E? We don’t even have an E on that.

Reese Harper:
That’s an E. C, E, G.

Ryan Isaac:
C, E, G. Of course. C, E, G. Shout out CEG. Go to the website, click on the elements tab and you’ll see this calendar, it looks like a elements periodic table, but it’s a calendar of subjects that we tackle on a monthly basis. And January was liquidity month and we measure this.

Ryan Isaac:
What we’re measuring is, all the assets someone has and what portion of their net worth does that make up? Is it 10% is it 1%. How many years worth of liquidity based on their spending do they have?

Ryan Isaac:
There’s all these measurements that will tell us. I mean it’s kind of interesting. It’d be really fun to have people like rank their stress levels and then just score everyone’s liquidity rate. Are you a sub one? Are you a three?

Reese Harper:
We’ll get there one day.

Ryan Isaac:
That’d be cool.

Reese Harper:
Yeah, it’s really critical-

Ryan Isaac:
Because it would tell a story. It would tell a story.

Reese Harper:
We want you to have a healthy and less stressful life. Our whole corporate vision is helping people establish these really good habits so that they can live more present every day in their lives. And this is a critical topic, so thanks for the question.

Ryan Isaac:
Great.

Reese Harper:
It’s great.

Ryan Isaac:
Great question. And another plug I guess I’ll say as we wrap things up here is every month we do webinars on one of these subjects, like a deep dive. So this’ll probably come out later. But in… We’ll have our liquidity webinar coming up here in the next few weeks. It’ll be February of 2020, and it just go to a dentistadvisors.com/events, you’ll see these webinars coming up where we tackle these subjects.

Ryan Isaac:
If you ever want to chat with us, ask a question to one of our other trustee and very nice and totally friendly and competent advisors. Go to dentistadvisors.com, click on the book free consultation link and book a call with us or post a question in our Facebook group and connect with us on social media, dentistadvisers.com/group or if your question’s like really private and you don’t want to ask it in public, just direct message, me and Reese.

Ryan Isaac:
Reese on Instagram, they can find you where? What’s your Instagram?

Reese Harper:
@reeseharpercfp.

Ryan Isaac:
He used to be different than that or @reeseharpercfp.

Reese Harper:
Yeah, but I changed it.

Ryan Isaac:
It’s fine. Very professional now.

Reese Harper:
Because it’s easier. Yeah, like a professional.

Ryan Isaac:
You are a professional. I am sir Ryan Issac. Messages. Thanks again for tuning in. Thanks for listening. Let’s hit a little C.

Reese Harper:
Carry on.

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