Scary Money Myths Every Dentist Should Avoid: Part 1 – Episode #699

On this episode of the Dentist Money Show, Matt and Ryan discuss some of the most common financial myths that often mislead dentists. From misconceptions about the stock market and market timing to the belief that maxing out a 401k is enough for retirement. They break down why these myths persist and how they can undermine long-term financial health. Tune in to hear why strategies like diversification, maintaining liquidity, and following a disciplined investment plan are important for financial growth.

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Podcast Transcript

Ryan Isaac: Welcome to the Dentist Money Show, where we help dentists make smart financial decisions. I’m your host, often referred to as Sir Ryan Isaac, and I’m here with Matt, the Mountain Mulcock What’s up, Matt? In my next career, I am going to go for like, what’s like the third junior NHL league? I’m gonna be an announcer in the hockey ring, and like the third lowest tier.

Matt Mulcock: Wow. Wow. That was like a, intro me for like a, a sporting event. I wouldn’t even, I don’t even know what that would be, like, AAA baseball, but for hockey. Yeah. But lower.

Ryan Isaac: I’m just guessing. I don’t even know. I just want to drive a Zamboni. Yeah, but lower and for hockey. But lower and I know nothing about hockey either.

Matt Mulcock: You’d kill it. You’d do great.

Ryan Isaac: I would. Matt, in the interest of making our marketing team happy and our audience too, we’re gonna get right into this. What are we doing today? This is a cool thing, I think. I’m excited for this.

Matt Mulcock: Yeah. So, we have decided, we realized, we’ve been doing this for almost 10 years, the podcast and built a ton of content. And we, thought, well, why don’t we go back and start refreshing some of the podcasts and seeing.

Ryan Isaac: Mm-hmm. Mm-hmm. Yeah, revisit.

Matt Mulcock: Revisiting some of the, some of the topics that we hit and seeing what’s has stayed held true. What are still beliefs that we have? What are things that need to be changed? And so we’ve started doing this. We’re kind of, I’m calling this out of nowhere, just from the, from the hip, from the hip, the re the refresh series. We’re going to call this the reef podcast refresh series. just made remix. there you go. That’s even better. Remix the remix series.

Ryan Isaac: Yeah. Yeah. Okay, marketing loves when we do this, by the way. Go ahead. Yeah. Ooh, remix. I like remix, yeah. Remix, yeah.

Matt Mulcock: so yeah, so we went back, we have a list. pulled like 80 plus shows and we’re just kind of going through and rebuilding outlines. And this episode we’re going to talk about today about money myths was the second ever podcast topic that you and Reese hit 10 years ago.

Ryan Isaac: Yeah. Yeah. Yeah. And a shout out to Justin. We used to call him Q in the studio and I don’t remember where Q comes from other than maybe James Bond. Well, it’s, it’s question. You’re right. Because there’s Q in the James Bond series is like sidekick helper. but it was questioned. Yeah. Q in the studio and he would, Justin would sit in the corner. Everything was scripted. Even the, if you want to call them jokes, they were, our jokes were scripted.

Matt Mulcock: Yep. I think it was the question. It stood for like question guy. Yeah. Everyone’s like, yeah, we could tell.

Ryan Isaac: It’s so bad. And then he would hold up an iPad with a timer running and we would, I think we’re, we stuck to like, if you can believe this, 25 minutes, we actually were hitting 25 minute episodes. Honestly, maybe. so shout out to Justin. used to sit in the corner queue with us. We had our script. I mean, imagine reading a script with Reese Harper. Can we just like give a little like reverence for what that was like? It was amazing, I’d be like looking at my lines and then I’d say it and I look at his next and I’m like,

Matt Mulcock: People were like, could you get back to that please? That’d be wonderful. my gosh. Yeah. Incredible. Incredible.

Ryan Isaac: That’s not your line. Like, wait, hold on. That’s where we, yeah, shocking. It was so good, so good. All right, well, so these, the top, how many? The top six money myths. And so this was from 2015 when we put this together, is what you’re saying. this is, okay, yeah, and this is a test. Like, do we still believe this stuff? I really like this because we do reserve the right to change our minds at any given point.

Matt Mulcock: Yeah. It’s like, what are you, we’re going off script. So, so funny. We’re gonna talk about six money myths that dentists still believe. Yeah. I made a couple of edits. Yep. Yeah. Yeah, of course. We always deserve that right. Even in the middle of the show, we do. Yeah, middle of a sentence, I might.

Ryan Isaac: Yeah, don’t hold us accountable for anything. In the middle of a sentence. ⁓ Yeah, let’s get into it. Well, hold on. Yeah, well, let’s get into this part. You wrote some codes. Were these from the original? Some of these fun, like kind of interesting myths?

Matt Mulcock: Yeah. So then I added a couple, but yeah, some of these fun myths were right from the transcript that you guys talked about. I added one just for you. I added one just for you. You, you see that? Okay. So here’s the first one. some fun myths that, I still believe this for sure. That, gum stays in your stomach for up to seven years. If you swallow it.

Ryan Isaac: Okay, hit him, hit him. I’m just gonna… Okay, I see it. Go, just go. Yeah, just go. I still believe this first one. This isn’t… I was just on an airplane and I’m like, I wanna eat this cookie and I’m like, where do I put my gum? don’t have any where like convenient put it. And I’m like, I’m not gonna swallow it. This thing’s gonna be in my stomach for seven years.

Matt Mulcock: It’s funny how like things that you’re told when as a kid, I remember being told this at elementary school and I was like, crap, I’ve swallowed a lot of gum in my life. Where does it go?

Ryan Isaac: Why do you think parents and or teachers or adults didn’t want a swallowing gum? Did they believe? They probably believed it.

Matt Mulcock: I think they probably just believed like overall the bit it’s not good for you to like swallow something that doesn’t break down in your mouth. But yeah, we, we talked about this Ryan, right? So how crazy is it growing up in the era that we grew up in pre social media, pre internet, pre phones, like I remember the days of no phones, right? adult like maintaining no cell phones.

Ryan Isaac: You would make us sick. Yeah. As a parent, you don’t want a little kid with a tummy ache. mean, that’s just disaster. It’s going to ruin your day. Yeah. ⁓ yeah, I know you’re going to this. I know you’re going to this

Matt Mulcock: how in the world did things cross countries across the world generations of like, know very specific, we’re not going to reference them today, but they’re very specific rumors that would go around about like fame celebrities and famous people. Like that was just a big worldwide game of telephone.

Ryan Isaac: Across the country, generations. How? about celebrities. How did it get from third grade in Jim Bridger Elementary in West Jordan, Utah, where I attended, all the way, and then across to Rhode Island and down into Florida and Kentucky, the rumors got around. I don’t know. Okay, so the gum, the gum’s not, so it’s not true. mean, like,

Matt Mulcock: To Salt Lake City. Yeah, but it did. Yes. The mist, the rumors. Okay. not true. I think it’s they digest the same as anything else. So gum. Like I’m going to look at this. Okay. Next one. This one hurts. I’m sorry. I added this one. I added this one for you. Shaving makes your hair grow back thicker.

Ryan Isaac: Are you eating ice? It’s like funny because I don’t believe you. No, I like this. So is this not true?

Matt Mulcock: Not true. It’s not true. So sorry.

Ryan Isaac: I mean, okay, I’m the best experiment. I’ve been shaving my head for literally 20 years. if that were true, I would be the best. I would be the case study. I would have Italian soccer player hair. I would. I’d literally have Italian. You know when they like tie it back with a shoelace? Like it’s so cool. Yeah. No, this doesn’t work. Okay.

Matt Mulcock: You’d have the thickest hair ever. Yeah. Yeah. You would. you’re. Yeah. You’re like, I’m not jealous at all. ⁓ okay. Next myth. you lose 80 % of your heat through your head. That is apparently not true. I don’t know where you lose it. I think just your whole body, but, you do not, you do not lose it through your head 80%.

Ryan Isaac: Oof. Again, moms were just trying to get us to put on hats in the wintertime. Like what?

Matt Mulcock: Exactly. These are, these are what our friend, our friend Carl Richards would say are righteous tricks. They’re, they’re, they’re trying, we’re just trying to, especially the gum one. And then this one is just parents doing their best to trick their kids into doing what they should be doing anyway.

Ryan Isaac: Yeah, I’m going to throw another one on here in a minute. I’ll just do it right now. And this might actually be true. do my mom used to tell me that if I messed with bees, they like had this signal where they’d send the whole hive to come get you. If you messed with one, do you, you do. Okay, hold on. We’re pulling up chatty G. Hey chat, is it true? Or is it a myth that, if you mess with one bee, there’s a signal that goes out to the whole hive and they’ll come get you. Was that a childhood myth from the eighties?

Matt Mulcock: Yes. Yes.

Ryan Isaac: Alright, let’s see what Chatty G says. Okay, Chatty G says, it’s thinking. It’s you two? The B-Myth?

Matt Mulcock: We’re gonna see what it says. yeah. I was, yeah, go ahead. So what does it say?

Ryan Isaac: You’re talking about the old beehive revenge signal myth. This is one of those things that started as a kid’s story. It does release pheromones when they sting to attract nearby bees. There’s no radio-like signal where it came from. like, was, yeah, it’s a myth. They do release a chemical alarm signal when they sting, which can make nearby bees defensive, but not an alert for an attack. It can make nearby bees defensive. Little bit of a truth there. Moms just didn’t want to stung.

Matt Mulcock: Got it. So I was told that if you killed or her to be your mess with the same thing, it would send a message out and the more would come. was absolutely told this. Yeah. In fact, I took truth be told, truth be told, no joke. I was at the park with my kids the other day B was messing with me and I had a hat on like I do now. And I took my hat off and I smacked it, hit to the ground and I killed it. and, and well, yes. And then I was like, man, our other B’s gonna start coming after me. So yeah, totally.

Ryan Isaac: I still believe this and then you start looking over your shoulder.

Matt Mulcock: Totally believe that one.

Ryan Isaac: Okay, All right, one more.

Matt Mulcock: Last one, you, this one, for sure believed, ⁓ and still to kind of do, you have to wait 30 minutes to swim after eating or you’ll cramp and drown. again, mom’s just keeping the kids safe.

Ryan Isaac: Okay. Mom’s keeping it, I eat so many calories before I go out and serve, because I’m gonna be hungry and cold, so, all right. All right, so the point, these are all myths, the point being, clearly, even average-ly intelligent adults, average-ly educated adults, such as, I’ll just say me, I feel like that’s the generation, that’s generous, we carry myths with us in all kinds of scenarios, like ridiculous, unimportant, like,

Matt Mulcock: Yeah. Yeah, of course. Yeah. So these are all myths. Is that what we’re calling us average? I mean, I appreciate that. Thank you. I appreciate that. Yeah.

Ryan Isaac: We just do. We pick them up from culture, how we’re raised, what society, whatever, we carry them with us. It is no different when it comes to money and finance. And almost it’s worse, to be honest. It can be, they’re higher and yeah, and we, all of us do it. We have like money myths that we carry and we carry them around and then we behave accordingly to our own detriment quite often. And we don’t even know. That’s the whole point.

Matt Mulcock: Yep. It is worse. Well, consequences are higher. Yeah. Cause if you, if you think about these myths that we just highlighted, they’re fun. They’re just kind of like, yeah, they’re from our childhood, the gum in your stomach, your hair will grow back thicker. If you shave like the 30 minutes after swimming type of thing, like these are all just kind of fun and consequential, very low risk, low consequence myths. They’re harmless. and they’re just kind of fun growing up in like, I believe that too. I believe the bees would come attack me if, know, if I, if I stepped on one. So, but the,

Ryan Isaac: Mm-hmm. Yep.

Matt Mulcock: What we’re going to talk about today to your point, Ryan is these are more dangerous. Like the, the money miss that we carry with us and that we hear dentists carry with them, the misunderstandings around these things have like really, really significant consequences, ⁓ and can really hold you back from the ultimate goal, which is how do we make work optional as soon as possible? And a lot of times these myths that we carry can be really, really detrimental to that plan.

Ryan Isaac: Yeah totally agree. and also I like that this is in here. I don’t know if this was from before, maybe it was. This is with Justin. just used to have really good outlines. We have a fix. We have a myth, points of the myth and a fix for each myth. A myth and a fix, as they say.

Matt Mulcock: Yeah. Fixing all of them myth and

Ryan Isaac: What is myth one?

Matt Mulcock: So money myth number one, the dentist still believe the stock market is a casino or the stock market is rigged. what say you, ⁓ I hear some iteration of that or implication that is made around that quite often. just a general overall fear of the stock market still very much prevails. Although let’s talk about this for a second, Ryan, what has changed since you guys recorded this exact topic 10 years ago, the rise of, crypto and these other assets like this.

Ryan Isaac: How often do hear that? quite often. Mm-hmm. Mm-hmm.

Matt Mulcock: Have, I think, and I want to ask you, I feel like there is still fear around the stock market, no question. But I also feel like there’s this kind of, especially with the younger crowd of like the stock market’s like boring kind of unk stuff. that’s what, you know, that’s what like you old curmudgeon guys are into. We’re into the new age stuff. I think that’s actually a pretty new concept.

Ryan Isaac: Yes, was, yeah. There we go.  It’s changing. I love that we’re revisiting. Your idea was genius. It’s all your idea. Great job. Revisiting this stuff is gonna be so much fun because it has changed. In 2015 when we recorded this, it was a ways after the financial collapse of 08, but the after effects of 08 lasted into the 20 teens easily. And there were so many stories of retirees at that time whose retirement blew up. Because of the stock market crash, but that wasn’t because stock markets crashed and never recovered. It was because they were overly concentrated in too few assets, which made them end up perpetuating this story and this myth that the stock market is a total crap shoot. It’s a complete casino and it’s a total gamble. It was, it used to be more prevalent as some of those people are exiting the market and the voices and the places we get

Matt Mulcock: Yep, exactly.

Ryan Isaac: Information is changing too. That’s probably the biggest part. We don’t, as a society, unless you’re over a certain age, I don’t, we don’t turn on CNBC like we used to. It’s like everything’s coming from TikTok. yeah, so the ideas, the way the information is delivered, I think you’re right. I think the stock market is almost deemed boring, not fast enough. And ⁓ these new, they’re not big enough.

Matt Mulcock: It’s so true. Social media. Yeah. Returns aren’t big enough. Yep.

Ryan Isaac: And these new asset classes are every place some of that. So it’s an interesting myth. It does exist I do hear this still often But it’s different than it used to be so interesting. Geez

Matt Mulcock: I think it is different, but it is still very much approached with a misunderstanding of what it is either way, whether you’re on the side of it’s boring and not fast paced enough, or it’s just rigged. It’s just a casino. grew, I think I’ve shared this before. I grew up on this myth in my own life, my own life. My, yeah, my dad’s a real estate guy built everything he’s done wealth wise, pretty much in real estate.

Ryan Isaac: Mm-hmm. Yeah. yeah. You’ve talked about this.

Matt Mulcock: and so growing up, remember as a kid, he would tell me the stock market’s rigged at the stock market’s just gambling. And I came to found it, find out later as I got into what I am in now, after multiple conversations with him over the years that he was carrying with him, a specific experience of taking some money that he had earned through other things and put it into a few penny stocks that ended up blowing up and. I’m like, it’s just interesting hearing that and how many times I think about how many times dentists are out there just going like where these myths come from matter, right? Digging into where they come from actually matter. Why do you believe that the stock market is a casino? Most of the time is going to come from either your own personal experience or someone that like your parents or someone told you.

Ryan Isaac: Yep, totally man. Yeah, and again, we carry these things for a variety of reasons, but they’re they stick with us. Let’s go. There’s some really good points here. Let’s go through some of these. Why I guess this myth exists or like what, you know, what are the discrepancy? One of them is that owning companies in this again, interesting owning companies in the stock market does not sound the same as it’s not gambling. That’s not what that is. Now we say this later, owning one company.

Matt Mulcock: No.

Ryan Isaac: With too much of your wealth or too big of a share of your net worth, that is a gamble. That’s a different kind of gamble. Owning a company is not gambling. Explain that. What does that mean?

Matt Mulcock: Yeah. So I think this is the fundamental aspect of where people misunderstand what the market is. And I think it’s important as we talk about this is the distinction between investing and trading, right? If you’re going to treat like there is a definitely a possibility of you treating the stock market like a casino. If you’re going to be trading everything we talk about is investing, which comes down to what you’re saying, which is, ⁓ like at its core, what

Ryan Isaac: Mm-hmm. Yeah.

Matt Mulcock: When you buy shares in something or when you put money into the stock market as this general term, like what are you actually doing? Well, you’re buying actual shares. are becoming a co-owner in a business. Like I think people, although that sounds obvious when we talk about it, I don’t know if that’s how people act or that’s that they don’t think about it like that. Yeah, exactly.

Ryan Isaac: And It doesn’t, yeah. Yeah. It’s not clonking to you. Yeah. Yeah. It’s not. Yeah. People don’t think of, you’re right. People don’t really attribute it to actually owning a real life asset that you have a real claim to. I don’t blame people for thinking that because it does feel very removed and it’s digital. you know, now it’s, it’s, everything’s digital and everything’s transactional digitally, but yeah, yeah, it makes sense.

Matt Mulcock: Yeah. Well, if you think about it, it’s actually the exact opposite. When we talk about investing is the whole point of investing is setting yourself up for what we would call, expected returns, right? Positive expected returns. It’s all just a matter of playing probabilities. But when you talk about gambling, gambling always has a net negative, rate of return, right? Or expected return.

Ryan Isaac: Yeah. Uh-huh. That’s what’s interesting. Yeah, that’s what’s expected return. I mean, every game, every casino game. we did this on another episode too where I listed all of the probabilities of every game. Yeah, all of them have an expected return over time favoring the house. Clearly. I mean, we all know this, but still engage. It’s literally the opposite. Now, any one single given company, maybe not.

Matt Mulcock: The probabilities. Yep. For you to lose. Yes. Yep. the market’s the exact opposite. Sure.

Ryan Isaac: Just because of how long companies survive and do and don’t go out of business. again, we’ll hit this in the fix, but the market, especially as a whole, is the complete opposite. do you have any these stats off the top of your head or maybe just close to like any given 10 year period of time in the history of the market or 12 or 15 or 20 year period, rolling period? Do you have any of those stats top like close?

Matt Mulcock: Yep. Yeah. I’ll give us, I can give us a general range. don’t have them exactly in front of me, but, um, on any given day in the stock market. let’s just use the S and P as an example is where we have most of the data on, on any given day. it’s 65 to 70 % chance. It’s going to be positive, a positive day. So the odds already are in your favor.

Ryan Isaac: Yeah.

Matt Mulcock: You go out to five years, it turns into something like 85%. You go out to 10 years, it’s 95%. There’s never been a 12 year rolling average of net negative returns on the S &P F 100 ever. 20 years beyond something in the, think 30 years, if I remember correctly at 30 years, the lowest ever average rate of return, any rolling 30 year period is 8%.

Ryan Isaac: Yeah. 12. Yeah, which, which put your money in, put it a normal amount of money in at a 8 % average return for 30 years and see what the compounding looks like on the it’s it’s astronomical. It is actually insane. And it’s worth, but that seems like a long period of time. That’s a long period of time to hold money. get it. But also the actual investing life of the typical dentist starts in their thirties and will last into your eighties or beyond or generations beyond. So you have a half a century investing timeframe.

Matt Mulcock: The highest is 14. Yep. It’s insane. Yeah. Yeah.

Ryan Isaac: It looks different, know, times when you’re adding and taking away and times when there’s no more income. Yes, but I mean, you’ve got 50, 60 years of investing time ahead of you. So these stats absolutely matter. And they’re the complete opposite from a casino. I’m glad you said that. That’s really.

Matt Mulcock: We did a, we did a, I think I wrote an article about this, I believe. And I think we did a show on this, which we said, it’s actually interesting because we talked about how, I think the title of the article is something like investing is gambling and you are the house. Meaning like when you look at those numbers, it actually is gambling. Sure. We’ll call it that, but you’re the house. If you do it right, you’re actually putting the odds in your favor. If you do this the right way, you are the house.

Ryan Isaac: Mm. Yeah, and you are the house. It’s so cool. That’s exactly what happens. Do you want to talk about how some of this myth is perpetuated because people equate the price of a stock with the value of a stock kind of goes hand in hand with like you own a company, you have actual claims with the price is not the value. What does that mean?

Matt Mulcock: Was kind of like trying to reverse that mindset. Yeah. Yeah, no, it’s, it’s not. Again, if you talk about price, it’s like the, the price is what, is, the kind of outward, thing that you were always seeing and hearing about, right? But it has nothing to do with the underlying value of the company, the actual company itself that you own. take Apple, for example, you, you own Apple in your portfolio, let’s say. And my guess is if you have any assets in the stock market, you own, you own Apple. Like the value that you actually own is being a co-owner of that.

Ryan Isaac: Yeah. You do. You and Apple. Yeah, yeah, you and Apple.

Matt Mulcock: Is the operations and the value like the, what, what Apple is actually doing in its business and its actual operations. It’s got thousands and thousands of employees. It’s building products. It’s it’s it’s adding value back to the world. Like the price itself is going to go up and down in the short term. That doesn’t mean it’s the actual value of the business that you have over time.

Ryan Isaac: Yeah, I over time and when you think about it in terms you put this in here too when you think about in terms of other assets Where this plays out more logically, let’s say a piece of real estate or the the dental practice that you own Not you Matt the people listening, of course, you know ⁓ You know that the the daily value of those things fluctuates based on did your roof just leak was there a flood in your office did your

Matt Mulcock: I wish.

Ryan Isaac: Main office manager that held everything together for 20 years to quit on you. The value can fluctuate any given day, but there’s no market pricing at 24-7 like the stock market. And you know in your head, you’re like, well, collections went down or we shut down because there was a flood in the office. And I know that practice is worth less this month because collections went down, but over time, I’m not worried about it. That’s the same in the stock market. It’s just easier to get in and out of, so we don’t really treat it that way.

Matt Mulcock: It’s so true. It’s a great point. And I think why we’ve talked about this in the past as well, that the transparency of the stock market of its pricing is a gift and a curse. ⁓

Ryan Isaac: Same Yeah, it’s one of the risks of investing in stocks is that you have to deal with a liquid transparent market, which is, it’s actually, it’s a benefit, FYI. That’s a huge, it’s a huge benefit, but it’s different and you do have to deal with it.

Matt Mulcock: It is. Huge benefit. But it magnifies the, it magnifies the risk of behavioral missteps. Right? So because you talk about, like, you just use private business, you know, practice or let’s say real estate, the stock market, the stock market as an asset class is better than real estate. saying, and I’m putting, I’m putting my flag in the ground and I will continue to do that. They’re coming for me. ⁓ Come at me. You can, that’s okay.

Ryan Isaac: Yeah. Dude, they’re coming for you. That’s Matt. That’s Matt Molcock. lives in Salt Lake City, Utah.

Matt Mulcock: The stock, the stock market equities as a whole are more passive, dare I say, than, real estate, ⁓ better returns overall, right. Statistically smaller, lower barrier to entry easier, much easier to diversify. Like pretty much everything across the board, liquidity, transparency, all these things. Equities are a better asset class than real estate. That’s to me, that’s just an easy fact.

Ryan Isaac: Yeah, yeah. Yes, statistically, yes. Not even close. Yeah, not even close. Yeah. Yeah. Yes, yeah. Statistically, is it as fun? No. Does it feel as nice or as special? No. Is it as interesting? Probably not. You know, no.

Matt Mulcock: No. Yep. No, but, but here’s what I’ll say. Real estate, will, if you’re able to get into it and the adult lot of Dennis can talk about barrier to entry, have a lot of cash, income. What happens with real estate and I will give real estate the plug here for sure is once you’re in it, you have, you’re in the confines of how, no, how difficult it is to transact in it. Meaning the more friction there is in that transaction.

Ryan Isaac: Mm-hmm.

Matt Mulcock: So if something goes wrong, it’s like, well, I can’t just push a button and sell my building so that you, you absolutely would.

Ryan Isaac: Yeah, because you would, by the way, if there was a button on your iPhone to get rid of that freaking building every time something broke or went wrong or a tenant left or like the root, we all would. We’d be like, push. I’m a renter now. Screw this. Yeah. yeah. Yeah, we would.

Matt Mulcock: Yes. You all would. Yep. Exactly. So because of that real estate does get a nod on the behavioral side because of the obstacles that are in that way, but equities are a better asset class.

Ryan Isaac: How is someone I mean I know the answer this but really like there’s some smart how is someone not? Come up with a market to like shell sell shares fractional shares of real estate that you own at the push of a button when you’re bored of it like That’s gotta be I mean, there’s just two there’s just too much like you know what I mean like you own a house and you’re like You know what not feeling it this this year I would like a little how I’d like to raise a little cash and offload a little burden

Matt Mulcock: I think there’s platforms that are doing that. ⁓ yeah. It’s happening. Yeah, it’s really tough because of, the, the, it’s lending liquidity. It’s, tough. Yep.

Ryan Isaac: Get rid of a little equity. It’s lending. It’s liens, it’s ownership, it’s lending. That’s why it’s because most real estate is leveraged. And so that’s too big of a burden. I answered my own question. I already knew. Okay. Should we do the second myth? Do you think? with the fix.

Matt Mulcock: Shoot. we, should we, mean, yeah, we should get to the fix. Let’s hit the fix and we’re going to speed this up. Ryan. This is what we do. we could, should we, should we just like make, should we just do this?

Ryan Isaac: They don’t want a part two, right? Three and three? I mean, if like, we’re not wasting time. This isn’t banter. It’s not me and you trying to like laugh about, you know, Gen Z slang. I mean, we’re having a good time. Let’s go three and three. Watch us. It’s our show.

Matt Mulcock: Sometimes it is. Yeah. Should we do, we could do three and three. Okay. Three and three. Hey, watch We’ll go through and three. All right. The fix to myth. Number one is, so diversifying, right? So you have to diversify, that that’s the foundational fundamental piece of, of a portfolio. And I’ll say there’s actually a couple of others asset allocation, right? So the mix of assets you have.

Ryan Isaac: Yeah.

Matt Mulcock: Diversification. how well, like you said it earlier, perfectly. There’s a huge difference in owning one specific company that provides all of the risks of that one company screwing up and going to zero is very possible. ⁓ we’ve seen this with long standing companies think like GE out of nowhere, Kodak.

Ryan Isaac: Totally, yeah. Oh yeah. Out of nowhere. Something comes out of nowhere that the government decides to like not like this company anymore for any given reasons. It’s happened all over the place for decades. And then all of a sudden they lose contracts, they lose funding, they lose regulation, things that prop them up. mean, things can come out of absolutely nowhere. So totally. Yep.

Matt Mulcock: Yep. So diversification rebalancing strategy, right? Is key there. and so, so, so having those fundamental aspects of a portfolio is, the fix to removing the casino like aspect of it or flipping it on its head and you becoming the house. Right. and then, the other parts I’d say here would be following what we would call an IPS or an investment policy statements or having just, it’s basically just saying having a strategy that fits.

Ryan Isaac: Mm-hmm. Yeah. Yep.

Matt Mulcock: Within your overall plan and then actually giving it time and contributing to your accounts on a regular basis. Giving it time.

Ryan Isaac: That’s the fix. Like you were saying earlier, any given 30 year period or even 12 year period, it’s just, know, just going back really fast, the fix of diversification though, this is what’s really interesting is it still takes some precision and strategy to diversify a portfolio the right way because it’s not just a lot of stocks, it’s the type of stocks and it’s where they’re located and it’s the right balance of those things because you can still, without really knowing, you can still gamble even when you think you’re diversifying. For example, the average American’s portfolio is way overly tilted to US stocks. They think it’s diversified and it’s better than one stock by a long shot for sure, but you can still be missing the mark a little bit even when you feel like you’re diversified. there is, this takes some thought, this takes some process, this usually takes someone who knows what they’re doing. But that is absolutely the fix. That’s how you get and it’s not hard to do. It’s like you said earlier It’s the easiest asset class in the world not even close to be diversified in it’s so easy. Yeah, so easy. Okay Yep, uh-huh. Yep Me too Yeah, 30 minutes in let’s go myth number two out of six as if we’re gonna hit six today. Come on

Matt Mulcock: 100%. Yeah. 100%. And to get access to returns from all over the world. Right. So that’s, that’s a huge part of it. okay. Myth number two, you want to hit this one?

Ryan Isaac: You can time the market. Yeah, okay. So this one still is completely prevalent, completely in society and it’s alive and well. And I was gonna say maybe more than ever, but probably not more than ever. Market timing was the birth of the stock market in the first place. The only way to have access to stocks not even that long ago, relatively, was calling a broker, someone who’s physically standing in a stock exchange.

Matt Mulcock: 100 % alive and well alive and well

Ryan Isaac: and getting sold something based on some kind of timing aspect. I market timing was the way to invest forever and a lot of people still do it. Having said that, it’s as prevalent as ever and it could be more so just because of the way we consume information. What do you think about that? Is it still, it’s common, yes, but is it like more common than ever that people feel like you can time the market? Or is that generational?

Matt Mulcock: Yeah. No, no, I think this is actually worse than ever before. ⁓ that people think, I just think, to your, think you gave a great example of it used to be the, the, access to the market and your ability to attempt to time things was through a broker, right? Like we’re talking back in like the eighties and even in the night, like

Ryan Isaac: Okay, explain. Yeah, mm-hmm. Yeah, yep. Totally.

Matt Mulcock: Discount brokers, call them like retail brokers really started to become prevalent with the age of the internet, like in the nineties. Right. So prior to that, yes, it was like the only way you did it is if your broker called you up and was trying to sell you on something right. And making a big fat commission. ⁓ now. Big fat commission. Exactly. ABCs, baby always be closing. but now we are.

Ryan Isaac: Yep. A BFC as they call it. It’s like the BFG, but it’s a BFC. Maybe it’s always because it’s so.

Matt Mulcock: I kind of look at it as like, just like everyone thinks they’re a journalist because they have a phone, right? Everyone. So everyone now thinks or reality TV star, cause they can post them whatever their opinion is on the dumbest crap ever. but same thing with this is like now everyone thinks like it’s, I think the access is what makes it worse than ever. The, accessibility to click a button right on your phone because you saw something on Tik TOK two seconds before. I think it’s probably worse than ever before.

Ryan Isaac: Or reality TV star because we can… yeah. Yeah. Yeah. Yeah. And the spotlight, the social media shines on the rare anomalies of like guessing and stock picking, you know, like the meme stocks on Reddit, you know, it just, the stories, I mean, we’re talking, know, two or three stocks over the last couple of years that have just done astronomical crazy weird things and then randos, you know.

Matt Mulcock: Yeah. The stories. Yeah.

Ryan Isaac: made a ton of money without any process or skill or it’s just pure luck or whatever. Those things are amplified so much that, you know, it’s just the story seems it is more, it’s more accessible. It’s everywhere. Yeah. Yep.

Matt Mulcock: It’s so true. It’s so true, which, leads into our bias of thinking it’s like you said, it’s more prevalent than it actually is. Like you hear a lot more about the winners, through the platforms of social media for sure.

Ryan Isaac: Yeah, totally. Okay, so a couple of things here when we’re talking about timing. mean, these are things where these are time tested principles. We’re always talking to clients about this. These are some of the things that our own investment philosophy is based on, which is not market timing. talk about timing requires two perfect guesses. You know, getting out of something and then getting back into something. Talk about those two. They are very different the very different feelings, different, a different, totally different sense of momentum and a completely different mindset that you have to be in to do each one of those.

Matt Mulcock: Yep. Yeah, I’ll just say on this one. If you just don’t do it. Like if you think you can do like, no, I’m just saying if you think you can do this, like there is so much unequivocal, there’s mountains of data that will tell you, you cannot do this. You will not. It’s all the data that will.

Ryan Isaac: Let’s save some time, yeah. it’s all the data. It’s all the data. It’s all the data. And yeah, it’s all the data. And it’s the data coming from the tippy top tip, what is Tip of the spirit pinnacle of the mountain in our industry, like the big hedge funds, their own data shows year after year after year. They don’t do it either. They don’t beat basic indexes either, the majority of their industry and not over time at all whatsoever.

Matt Mulcock: Yeah, no they don’t. No. It’s something like 85 plus percent of professional money managers who manage mutual funds do not even beat the S and P 500 or don’t even beat their benchmark. And, one thing I’ll say on this is that’s how it should be. Like it should be really, really hard. Right. It should be like, it should be, it should be really hard to play in the MBA. Like it should be really, really hard to be a quarterback in the NFL. Like.

Ryan Isaac: Every year. Yes. Yes. That’s such a good point. That’s such a good point. It should be that way. Yeah. huh. Yeah. Yeah. And the rewards, the rewards should be out of control. Yeah, they should. Yeah.

Matt Mulcock: That’s exactly what we’re talking about is like the odds of you. Astronomical. They should be, but I’m sorry if you are an ortho with two locations running a practice, managing a team and HR and marketing and doing your like you’re in a whole life. You’ve got kids, you’ve got hobbies, you’re doing like, you are not going to beat.

Ryan Isaac: And a whole life and everything, yep. Yeah.

Matt Mulcock: The top 1.1 point or 0.11 % of people who are actually maybe timing things.

Ryan Isaac: Yeah, the literal PhDs who work 80 hours a week on one company’s financials to like, yeah, I mean, it’s not gonna happen. That’s such a good point. I am always, the conversations, I actually kind of enjoy them. They’re good learning lessons. I’ll just speak to one recently. What was earlier this year? And you and Jake called this. Remember earlier this year, the tariff stuff and the market is going down and a lot of stuff going on. What did you and Jake say? No, we’re gonna end it. We’re gonna end it positive.

Matt Mulcock: Yeah. Well, yeah, it was just, was the lowest. was like down 20 % in April and Jake and I, Jake and I were like, this doesn’t seem like it’s going to hold. we, Jake and I have Jake and I called on the podcast. We hope it holds true that we’d see double digit returns this year. Yeah.

Ryan Isaac: You’re like. Yeah. After like 10 days. It’s not gonna, not gonna hold. that was it? Okay, I love it. I love it. I’d like a lot of our advisors probably had a handful of conversations with clients, especially clients with bigger account balances, maybe older clients at that time. It’s always interesting to revisit that mindset of what it feels like. Okay, this is what I was getting at. The urge to sell and get out of something is always built on the momentum and like the things you’re feeling, the energy of the news. That’s what it’s always built on. And it’s always fear. Of course, it’s always fear. It’s understandable, completely understandable. get it. And that signal feels like a no-brainer. In the moment, it feels like a no-brainer. In hindsight, it definitely was not. It always feels like a no-brainer. Even if that were true, which is not, it’s not a no-brainer. feels like, things feel so obvious trying to get out of markets. Getting back into markets requires, and if you look at any,

Matt Mulcock: Yep. Always.

Ryan Isaac: Period of time where markets bottomed and then you go to the day that it bottomed and then when it started, it’s rise back up. The news and the sentiment and all of the energy of everything going on in the world and the markets at that time was still really bad. Doomsday, you have to like, it’s weird to think that the same environment that created your fear and your urgency to get out of something is still going to exist and it might even be even worse because now you’re at the bottom of a slide of a sell-off.

Matt Mulcock: Really bad, doomsday.

Ryan Isaac: You now have to take that same energy and environment and you have to switch your entire thinking and all of your feelings and emotions and reactions and everything 180 degrees. And you have to do the opposite of what felt so obvious before because now you have to get in somehow when the news is still horrible and the outlook is still bleak and things still aren’t gonna, there’s nothing giving you hope. You have to flip a switch and get back in when it’s still the same environment. That is. a near impossible task for a human to pull off. And we know that computers can’t either, obviously still, because that’s how the biggest traders are doing it, is with computers and it’s still not working either. It’s a fascinating, it’s just a fascinating like psychological place to be in. Two different mentalities, incredible discipline that you have to pull off perfectly in the same negative fearful environment. And it’s just so, so hard to do.

Matt Mulcock: It’s so true. Yeah. Well, and think what that entails to do that. Let’s say you did it successfully. What that implies by you out there, like by you saying, yeah, I still think I can do it. ⁓ what you are implying is that you know more than the collective of the entirety of the market, which all the super computers, all the PhDs, all the investors out there that dedicate their entire life.

Ryan Isaac: Yeah, yeah. Yeah, uh-huh. Yeah.

Matt Mulcock: To like all the people that are dedicating teams to doing this, that you are saying again, by saying, I, okay, I hear you, but I think I can still do this. you are literally claiming that, know, more than the entirety of the market, which is just probability wise. If you just think about it that way, it’s just not possible. It’s not no, no, I don’t need, I’m not even, Hey, I’ll say this dentist. You’re closer than me. Probably.

Ryan Isaac: Mm-hmm. Yeah, yeah. It’s just not possible. Yeah, it’s not a shot. This isn’t an insult. None of us are there. Way closer. Way closer than me.

Matt Mulcock: So if you’re gonna say like, where am I on the podium? I’m ahead of Matt.

Ryan Isaac: Yeah. Now the, well, we’ll get there to the fix. I was going to say the good news of all this stuff. is there anything else you want to say about the timing of two perfect decisions or, know, anything around that before we get to the fix or, or, you know, you put it in the notes here, the bias of hindsight, the benefit of hindsight, what that feels like.

Matt Mulcock: Yeah, this, just, I just think I like that we put this in here about the bias, the hindsight bias. And you said it earlier of like, always seems so obvious after the fact. And I think that’s actually one of the problems is a couple of things. our brains are really good at tricking us, really good at tricking us. And we’re really always good. All of us are really good at telling ourselves stories. And one of the stories we tell ourselves when it comes to big events or like market pullbacks or whatever.

Ryan Isaac: Totally.

Matt Mulcock: Man, I totally knew that was going to happen. And we actually believe it. Um, the other part of this is, clout chasers out there that are leaning into telling you that, uh, they just, they love being negative. They love telling you like, Oh man, this conspiracy theories are this next big, this next 08, 09 is going to be even worse. It’s going to wipe out all the global equity and the, I’ve heard it all and

Ryan Isaac: yeah, yeah. Yeah.

Matt Mulcock: It literally, it’s just cloud chasers going for attention or trying to sell your course. Yep.

Ryan Isaac: Sell books and courses. What’s so interesting about that and we’ve been in this industry for a long time It’s so funny there’s people who build entire careers on constant negativity and doomsday and Never get called out for they don’t stop like they don’t get canceled, you know And then like once out of every 15 years, they’re right for a minute And then it’s just like boom book sales like whatever courses

Matt Mulcock: No. Yeah.

Ryan Isaac: It’s so fascinating that they just keep doing it until they get it right. Like after getting it wrong 100 times, then they like hit one. It’s really fascinating, but it’s in people’s entire careers. Journalists, writers, bloggers. Or it never happens. Yeah.

Matt Mulcock: Or they, or they never hit and they just keep doing it and people keep still how people are still listening to Robert Kawasaki. Like blows my mind. The guy says the craziest stuff. And he wrote a book 30 years ago that people are like, yeah, that was a good book though. It’s like, yeah, but the guy has lost his mind and no one ever calls him out. Everyone’s just like, anyway.

Ryan Isaac: Yeah, we can, I’m not sure. Now we’re going to, now this is the segment of the Dennis Money Show where we, we, we reflect on the state of humanity’s consciousness and how well we take in information and research and data and make decisions based on that research and data and information. We’ll, we’ll pause that part of that. We’ll pause that segment. The, let’s give me my fix.

Matt Mulcock:  Yeah, exactly. We’ll pause that part of the show and move on to the fix of myth number two.

Ryan Isaac: What’s the fix for timing the market, Matt, for all this stuff?

Matt Mulcock: I’d say overall we can get into kind of the details of this, but I would say the biggest thing is you have to have a system, for investing. So you have to systematize this as much as you possibly can. And this is the risk of sounding self-serving, doesn’t have to be us could be anyone, but having a high quality advisor team between you and that big mistake. It can be massively consequential and like really detrimental to you. you know, setting yourself back for years and if not decades, one, one, one big mistake, one poor time, one click of that button can, yeah, can, can offset your years and decades of work. So having a system, having a someone in your, in between you, and pushing that button is, critical. I think part of that system is making sure you’ve got.

Ryan Isaac: Yeah we all know that. huh. Years. Years.

Matt Mulcock: Proper liquidity, we’ve talked about this a lot, ⁓ is making sure that you’ve got enough liquidity in the business and you’ve got an emergency fund at home to kind of act as, that margin of safety. So you’re not freaking out being like, this is my life savings here going down 20%.

Ryan Isaac: Mm-hmm. Yeah. Yeah, totally. I’m reminded I was just sending this, a copy of this, which is so cool that it still exists. One of our oldest pieces of content. It’s a, can get this on our website for free. It’s an e-guide. Go to the dentistadvisors.com, educational library, e-guides. It’s called the seven big mistakes that dentists make that wreck or ruin retirement. I probably should know since I just downloaded it. Yeah, wreck retirement.

Matt Mulcock: Yep. I think it’s a wreck.

Ryan Isaac: These are just, everything you’re saying are just some of the biggest things that just happen in over and over repeatedly in dentist financial investing picture. Holding too much cash, know, not doing that the right way, not proper allocation, assuming that you just set up some accounts and throw an S &P fund in there and then just like maybe a couple individual companies and that’s fine. you have to build, I don’t know, man, I wonder what you think about this. I love that our industry as a whole is building momentum and leaning towards like a simplicity, long-term, low cost, diversified portfolios that hold for a long period of time with a healthy savings. I’m glad we’re leaning more that way in our industry and generally speaking in financial education. I do sometimes think though that that oversimplifies the job. You know what I mean?

Matt Mulcock: Totally. Yep.

Ryan Isaac: It’s not as simple as opening one account, throwing random amounts of money in there whenever you feel like it into an SMP fund and then just be, a target day fund and be like, that’s my retirement plan. It’s still, people still frequently, I’m not trying to disparage, this is just what happens. If mess up even simple diversification or not enough rebalancing or not paying attention to how you’re way too conservative in that account or you’re way too aggressive at that point in your life or you hold way too much cash, it’s still there’s still some strategy and some stuff that has to happen, even building a low cost diversified portfolio that’s rebalanced frequently and saved into frequently. But that is the fix. finding a partner to do that well with and stay on top of it, maintain it well, that is the fix to the timing on this stuff. Yeah.

Matt Mulcock: I’m glad you said that Ryan, because we just did this. We do this for quite a bit where dentists, really large portfolio, we’re in talks, we’re discussing them coming on board with dentists advisors. And so we go through, you know, part of the process, a lot of times, especially in these cases where they have quite a large portfolio that they want to bring over to us to have us manage. We do kind of some pre-work and say, well, we’ll do a comparative analysis and see kind of how you’re invested in.

Ryan Isaac: Mm-hmm.

Matt Mulcock: And what we would do different possibly, and just kind of give you a breakdown. And to that exact point, you just mentioned of even basics of diversification. This was a professional money manager that we just did a review. I’m not going to name names, but a professional money manager, we reviewed it with Robbie and we just talked this morning and he’s like, Ooh, this is like, this is not great. Like they’re, they’re just fundamentally from a diversification standpoint. He pointed out three or four different things. He’s like, I would tell them this.

Ryan Isaac: Yeah, oh, hmm. Yeah, yeah, yeah. Mm.

Matt Mulcock: Just go tell them this, regardless of whether or not they’re going to just go do it or go tell your guy to go fix this. Cause these are some really, really big problems that it’s very obvious what has happened in their case, which was a set it and forget it type strategy. And to your point, I think sometimes we do a disservice of saying low cost index funds. Like that’s all it takes. It takes active work, even if it’s not actively managed.

Ryan Isaac: Go do it. Yeah, yeah. Yeah, and actively traded. Yeah, there’s this in between where, no, don’t day trade in time markets, but the answer to that is not simply chucking a target date fund into something and then just leaving it forever or randomly putting money into it and never, there’s still work to be done. It’s not the work people, it’s not the sexy work of 10 screens and yelling stock orders back and forth on the phone, which does sound fun. I mean, just once, once in my life. But.

Matt Mulcock: It does sound amazing. Yeah.

Ryan Isaac: There is an in-between land in there that is, crucial to get right because again, a common mistake is building a portfolio that you think is diversified or you think will be the type of portfolio that can last through market fluctuations. And then it turns out that it’s not. you’ve gone 10 years and you’re like, that’s a lot of time to make up.

Matt Mulcock: Yep. One of the things we’ve said, Robbie and I internally that would define like our approach to investing to this point is we’ve kind of found, think an intersection, we think it does require an intersection of kind of passive philosophy and active implementation. So it’s not, it’s yeah, it’s not just you, we don’t believe that the best way to do this is just buy the S and P and sit on it. We don’t. No, it’s a passive philosophy.

Ryan Isaac: Mm-hmm. Yeah. ⁓ I like that. that’s cool. Yeah, it’s not active versus passive. Say that again. It’s it’s a,

Matt Mulcock: With active implementation. So that’s, that’s the way we approach this with our internal like money management, investment management. ⁓ and so again, do we say buying the S and P and sitting on it for the next 30 years, that’s better than trying to day trade accounts a hundred percent. But does that mean that just sitting in on the S and P is the optimal way to do this? No, we don’t believe that there’s other ways that we think are more optimal.

Ryan Isaac: Freak, that’s nice. Please, yes, uh-huh, yeah.

Matt Mulcock: The last part of this fix I’d say of myth number two, is just please try to, as best you possibly can ignore these financial media outlets, people telling you and trying to make you believe you can time things, talking about tactics of like, this stock now, like just

Ryan Isaac: Yeah.

Matt Mulcock: Try the best you can to ignore that kind of stuff.

Ryan Isaac: Yeah, yep. Okay, so for the third myth of our three myths on this episode.

Matt Mulcock: Cause we’re doing part one, three of six.

Ryan Isaac: You guys, look, we haven’t strayed too far. We’ve stayed on topic. There’s more to say here than there was 10 years ago. Or we just don’t have Justin sitting in the room forcing us to stick to the script. That’s really what’s going on. Myth number three. I love this one. And it kind of speaks to what we just recorded about yesterday that’ll come out soon. Myth number three is that maxing out my 401k means I’m saving enough. That’s enough.

Matt Mulcock: I don’t feel like we have, think we’re just trying to trying to pack in a lot of value. That’s what it is.

Ryan Isaac: Yeah, yeah, I’ve got a 401k. I’m maxing that out. I’m thinking, okay, a couple of things. Like part of me goes, all right, why did we put this in here? There is, there’s like conventional financial wisdom or advice, you know, over the generations, like save 10%. That’s been a huge one, obviously. Save 10%, which I mean, it’s still like twice the national savings rate average. So, you know, if you did that, you’d be doubling the national average. Save 10 % or just like, you know, max out a retirement plan.

Matt Mulcock: Always, yep. Yeah, better than zero, yeah.

Ryan Isaac: Those great pieces of advice. mean, everyone would be better off. Like every worker in this country would be better off if they, if we had the, if everyone had the chance to max out a retirement plan of work and get a match and do that for a 30 year career. I mean, it would be amazing, right? But for a dentist, it’s just different. I mean, it’s, it’s the principle why we built an entire company around dentists because financial decisions in so many aspects are just different for dentists. It’s just the way it is. So I think, you know, this myth exists in here because it is conventional financial advice and wisdom, but it’s not enough for a dentist. ⁓ If we did the math on, you know, the average maximums of a 401k over a whole career and maxing that out, it’s just highly likely, unless that dentist is an anomaly and keeps their spending means very below average for a dentist, that that balance at the end is gonna be enough for them to fully live the lifestyle they’re used to. They just have to do a lot of cutting.

Matt Mulcock: Yeah.

Ryan Isaac: Or hope that other assets along the way grew maybe disproportionately large. But that’s why it is in here because, okay, so why is this in here? Traditional financial advice or conventional wisdom does not always apply to a dentist. And there’s probably a few of them here. What stands out to you? Like, what do you think about when you hear this part of the myth or this myth?

Matt Mulcock: I mean, I think, I think you summed it up. Great. I truly don’t have too much to add. There is just the 401k. We think it’s a great tool to use. I think it’s a misconception or, you’re selling yourself short as a dentist. If you think that’s all you need, it’s, it’s, it’s a part of a much bigger plan that you should be looking at. and if we’re talking specifically like saving for getting towards retirement,

Ryan Isaac: Yeah.

Matt Mulcock: It’s much broader. need to look at your overall like cashflow and your actual savings rate. And to your point, Ryan, the, because there’s a limit on what you can put into a 401k chances are that limits based on what a dentist on average spends and the lifestyle they’ve become accustomed to a 401k in most cases, just not going to do it. It’s not going to be the only thing.

Ryan Isaac: Yeah. Well, and so here’s, totally man. And I was just running some math here, just thinking about this and, yeah, I ran and it’s just as hard as the 401k limits are changing. They used to be much lower and they’re getting higher. So I like, I try to put in like, what’s an average, it would be a very, very high average. I’d have to go find the data and find what is the real average of 401k over the last 30 years. What’s the average limit in there? What would you think it even is? If you average the last 30 years of 401k limits, what do think that average would even be? Under 20, right?

Matt Mulcock: yeah. Yeah. yeah, because we just hit over 20 within the last, yeah, I think.

Ryan Isaac: handful of years. mean, would it be like, is 18 too generous to say like 18,000 on average?

Matt Mulcock: I was going to over the last 30 years, I was going to say 15. Yeah. But yeah, do like 17, 18.

Ryan Isaac: Okay, I’m gonna go like, let’s go 17. Let’s just be very generous here. But my thinking is still not even gonna be, okay, so I did 25 years of an average of $17,000 a year. Now there’s a match in there too that’s gonna be helpful. And an 8 % rate of return, you’re gonna get over a million dollars in that over a 25 year career. That’s a good size balance and it’s likely to be higher based on how you invest the length of time and match in there. It’s likely to be higher. Here’s the problem with my thinking though, is dentists typically do not start out with enough cashflow to max out a 401k day one of their careers. They don’t start out with that. so typically dentist momentum, like financial momentum is delayed. It’s very heavy on the backend if they do things right, but it’s like negative on the front end. There’s a lot of catching up that has to be done in the backend, which is why

Matt Mulcock: Back end, yep.

Ryan Isaac: Plans that have limits, just not, you can’t build up enough wealth in there because of the limits. Also, we just talked about this yesterday, dentists need liquidity in their lives almost constantly. There’s just a huge list of reasons why dentists need access to money throughout their whole career. You can’t have all of your money be sitting in a 401k as a dentist. You will get, you’ll get, it’ll bite you. It’ll bite you in the behind.

Matt Mulcock: Totally agree.

Ryan Isaac: At

Matt Mulcock: Yep.

Ryan Isaac: Some point where you need cash, you need access to money. And so dentists also need to be saving outside of their 401k. So those two things alone make my math, thinking out loud with my math, not realistic, you know? If you could day one, if you could day one at the beginning of a 25 year career, max out a 401k and get your match with the practice sale at the end, you’d probably have close to enough, but it’s not reality. You can’t do that. It’s just not reality for the average dentist.

Matt Mulcock: Yeah, yeah. I like what you said earlier. And I think just is worth reiterating that this myth embodies. I, this is why I know why you guys put it in the original outline and talked about it. And I think it still holds true today is this myth embodies, how dentists are just different than the typical American. Like, yeah.

Ryan Isaac: Yeah, that’s the old like American pension way. Like you get a job, you just get your pension, you just start it on day one and then 40 years later on retirement, it’s enough. With social security and you’re good.

Matt Mulcock: Yeah, or just like, yeah, or just like the typical American, the average American, what they spend, what they make, what they save, like a 401k, if you’re maxing out every year for a typical American or you’re going, you’re putting money in and getting a match. And I think for the typical American, that actually works over 30 years.

Ryan Isaac: It would over 30 years because a typical American needs far less money to live on average than a dentist.

Matt Mulcock: Way less money, but when you’re spending on average 18 to 20 grand a month, which is just to get by a 401k, it’s just the number, the math is not math thing on that. If you’re spending five grand a month on average, or that’s your typical lifestyle. Great. Okay. Then a 401k can do the job, but it’s for the typical dentist is just not, it’s not going to work. You need much more than that.

Ryan Isaac: Just to get by. It’s not math thing. Yeah, you just need more. Mm hmm. Seven. Yeah. Yeah. Yeah. And it’s kind of, you do, and it’s kind of like, I’m thinking about this spending now, another topic, it’s kind of unfair to dentists. Like you think about so much of their spending is like loan and debt repayments, you know? And it’s for sure lifestyle. regardless of where the spending goes, you know, with or within their control, we get used to the money that leaves our bank accounts, no matter where it’s going. It doesn’t matter if it’s taxes, mandatory debt payments, or just fund spending or utilities.

We get used to the amount of money that has to go out every month. So when that drops off, it doesn’t magically end back up in savings. Like we’re just used to spending it. So the person who’s used to spending 18 grand on average over a whole life of working career doesn’t drop to seven grand a month of spending. You just don’t, you just don’t. Your brain’s wired for 18, you figured out a way to spend 18. So the fix to this, I loved what you put in your…

Matt Mulcock: No, you don’t do it. You don’t do that.

Ryan Isaac: Might’ve been your chatty G, but I like that you wrote this in here. The real driver is its savings rate. And you said it’s a savings rate that’s relative to your income because your spending is relative to your income. So a million dollar earner is gonna be spending more money typically on average than someone who’s earning 300 grand. So your savings rate has to be relative to income because your spending is too. That was great. Great line, Matt. Great line, yeah, it’s good.

Matt Mulcock: Exactly. Yeah, it’s a, a, and it, thank you. Thank you. ⁓ it’s a, it’s a percentage, right? That’s why we look, do everything on cashflow based on percentage. Cause the example you just gave million dollar earner might be spending 250 grand a year. Right. Which is even more than like the associate down the street makes, right. But as a percentage of their income, it’s actually really reasonable. So it’s pretty low. So low, that’s a low spending number. So exactly. but.

Ryan Isaac: Yeah. Yeah. Pretty low, 250 on a million dollar income? That’d be a low spending number. I’d be like, you guys are killing it, good job. Yeah.

Matt Mulcock: Same thing with savings. Like you need to focus on the broader number of like, is my percentage of income going towards my future self? ⁓ and then the last thing we just said is like, okay, if a 401k doesn’t do it, we got to layer accounts in and you said it putting precedent on liquidity. Right. First and foremost. like cash and then brokerage accounts, building those up retirement plans using Roth and other accounts. you’re the typical dentist by the time they’re mid-career and beyond, you’re going to have.

Ryan Isaac: Mm-hmm. Yeah, yeah. Have to. Yep.

Matt Mulcock: Multiple different accounts, multiple account types, and you should, and you should be putting money in all of them.

Ryan Isaac: Yeah, and you should, yep. Yeah. And you’ll utilize them all ⁓ along the way, differently for what they’re designed for, but you’ll use them. yeah.

Matt Mulcock: Yep. Yeah. Okay, Ryan, we got through three minutes today. Part one. Yeah, I can. I’m jacked up on it.

Ryan Isaac: Can you imagine doing three more? We wouldn’t do it justice. We wouldn’t do it justice if we had to go three more right now.

Matt Mulcock: I love how you started this off with the good old days and you’re like, yeah, we used to do 25 minute episodes. We’re the worst. We’ve only gotten worse. we’re not like a fine wine. We’d not get better with age, apparently. Yeah.

Ryan Isaac: can’t even imagine. have no idea. We are. We did not age better. No, it doesn’t taste better later on. It was better 10 years ago. Matt, thanks for going through that and getting us back to these roots. It’s fun to explore where we used to be 10 years ago and just to see generally what’s changed in the economy, what’s changed in generational shifts in money, what’s changed in technology, what’s changed in… I was even thinking, I’m sure we’re to go there. We did an episode not too long ago where we revisited the standard 4 % withdrawal rule.

Matt Mulcock: Yeah, it was great.

Ryan Isaac: Which had been updated at that time. And now you were just sending me stuff the other day. That’s like, that’s outdated too. Even some of the more. So good. So, all right. Parting words, Matt, don’t squash bees, like kill wasps, I would say, but like the honeybees, like if you can let them go, like they’re, they’re Wasp, a hornet, like F F those guys, you know, no, they’re, they’re great. They’re fuzzy. Yeah.

Matt Mulcock: Yeah, we’re going to do another one on that. yeah. I don’t, sorry. I should have rephrased the very beginning. It was a, it was a hornet. It was a hornet. Yeah. Not a bee. don’t. Yeah. I don’t kill honeybees. No, never. But a hornet, you’re dead every time. Every time. Dead. You’re dead. ⁓ I’ll just say this. If this was helpful, if this was helpful to you and you think there’s a dentist out there that needs to hear it, we’d love for you to share the episode. We want to, we want to share the good word and, and, and just kind of.

Ryan Isaac: Every time you, why do you exist Hornet? Yeah, Jeremy, okay. Yeah, thanks.

Matt Mulcock: Help, hopefully add value to the dental community. So we’d love for you to share the episode and then, what else, what else, Ryan, what are the final words?

Ryan Isaac: Mm-hmm. Yep. Well, I know some of you have questions. You want to chat about it. You want to run some scenarios by us. And luckily for you, you can do that. DennisAdvisor.com. have free consultation appointments all week. And so find one that works for you. Let’s have a chat. Tell us your story. We will always answer your questions, point you in the right direction, connect you with the right people, and just make sure that you’re taken care of. That’s what we’ll do. Get on our calendar and let’s have a chat. So let’s do it. Okay. Thanks for listening. Thanks, Matty. Appreciate it.

Matt Mulcock: Boo yah.

Ryan Isaac: Have a good weekend, everybody. Bye bye.

Matt Mulcock: Thanks, Ryan.

Keywords: dentists, financial decisions, money myths, stock market, 401k, financial planning, investing, retirement, financial education, wealth management

Behavioral Finance, Finance 101