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Should You Listen to an Advisor Who Earns Less Than You? – Episode 275


Should You Listen to an Advisor Who Earns Less Than You?

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You make a high income, should you only get financial advice from someone who makes as much—or more?

Many people can offer you a financial opinion, but for advice, should you only trust someone who understands your level of wealth because they have it too? On this episode of the Dentist Money™ Show Ryan and Matt talk about high-income dentists and who should be advising them.

It’s a discussion that reveals the broad scope of advice that can come from the world of financial advisors. Who understands your practice demands, lifestyle, and financial issues the best? And the answer is…

 


 

Podcast Transcript

Ryan Isaac:
Hey everybody. Welcome to another episode of the Dentist Money Show. Matt and I talk about a pretty common question that we hear sometimes from high-income earning dentists or people with high net worths, and the question is, “Should I only get financial advice for people who make as much money as I do?” Very logical question, and we talk about the kind of read between the lines on that question, and we give some advice on how you actually can make sure that you’re really getting good financial advice and steps to take.

Ryan Isaac:
So thanks for tuning in and thanks for joining us on the show today. If you have any questions that you’d like to ask us personally, go to dentistadvisors.com. Click on the Book Free Consultation link and schedule a consultation with one of our dental-specific non-commission fiduciary financial advisors today, or go to the Facebook group, Dentist Advisors Discussion Group on Facebook. Post a question, we’ll post an answer. Anyway, thanks for tuning in and enjoy the show.

Announcer:
Consult an advisor or conduct your own due diligence when making financial decisions. General principles discussed during this program do not constitute personal advice. This program is furnished by Dentist Advisors, a registered investment advisor. This is Dentist Money. Now here’s your host, Ryan Isaac.

Ryan Isaac:
And welcome to the Dentist Money Show, where we help dentists make smart financial decisions and, dare I say, avoid painful financial consequences. I am Ryan Isaac, and I’m here with the Hollywood mountain, Matt Mulcock. What is up, Matt? How you doing?

Matt Mulcock:
Yo Ryan. It’s great to be here as always. Again, I’m going to keep doing this as long as you keep failing to do this. You’re the host of the Dentist Money Show and you are Sir Ryan Isaac.

Ryan Isaac:
Sir.

Matt Mulcock:
I’m sorry, I’m not going to get away with it.

Ryan Isaac:
I have actually called on clients’ offices before, and office managers have answered and asked if it was Sir Ryan when I was calling. Like that’s actually happened, which just… it’s life completing. And by the way…

Matt Mulcock:
Well you know, just while we’re on that topic, I’ve had clients lately emailing me with the subject-

Ryan Isaac:
No way.

Matt Mulcock:
… saying, “Mountain Matt.” Or when I get on the phone with them, they’re like, “Hey Mountain Matt.” “Oh, it’s Matt the Mountain,” and I’m like, “Thanks, Ryan.”

Ryan Isaac:
Amazing. Yours is better than mine. I’m reading a book on negotiations right now and like human communication, and I’m just reminded that as human beings, we are more inclined to try to avoid losses than try to acquire any kind of wins or gains. So that’s why we want to remind… The tagline for five years has been Dentist Money Show: helping dentists make smart financial decisions, but it’s very important to realize that it’s not just about making good financial decisions. It’s about avoiding the bad ones.

Matt Mulcock:
So true.

Ryan Isaac:
And unfortunately in our role as financial advisors, not only with clients, which is a lot less frequent, but when we take new phone calls from people who are calling to learn about us, ask questions, interview us, that kind of stuff, we get the opportunity hear a lot of financial decisions, and some are not great and it’s painful. It’s hard to watch some [crosstalk 00:03:08]-

Matt Mulcock:
It hurts us. It hurts us to hear.

Ryan Isaac:
It does, man. It’s hard too because sometimes enough bad decisions or just poor decisions or uninformed decisions, they add up long enough and if it goes unchecked long enough in life, it’s hard because sometimes as an advisor… and I wonder if dentists go through this, when they see certain cases that have just been ignored for too long… you’re kind of just like, “I don’t know what to do. Like, I don’t know how to fix this. There’s not enough time left to fix this problem,” you know? Or I can’t make you double your income tomorrow, which is what this is going to take, you know?

Matt Mulcock:
Yup.

Ryan Isaac:
Just probably the hardest one for me when the answer is just you need to earn more money, but you’re really close to being done anyway and that’s not going to happen. And I don’t know what to do, you know?

Matt Mulcock:
Yeah.

Ryan Isaac:
It makes me sad. So not only helping dentists [crosstalk 00:03:59]-

Matt Mulcock:
Man, you started this off on a really down…

Ryan Isaac:
But this is real, all right.

Matt Mulcock:
I know.

Ryan Isaac:
This is real, and we help you make good financial decisions but we also want to help you avoid the bad ones because…

Matt Mulcock:
Avoid the disaster.

Ryan Isaac:
It’s like teeth, man. If you ignore them for too long and they pile up it gets expensive and pretty bad, and sometimes irreversible damage occurs, you know? So let’s work together guys. Let’s make good and avoid bad ones, okay? Jeez, Ryan.

Matt Mulcock:
Gosh, Ryan.

Ryan Isaac:
[crosstalk 00:04:24] be happier.

Matt Mulcock:
Bring this back around, get back to positivity.

Ryan Isaac:
So we’ve got a topic for you today that is… it’s a really good question when it gets asked, and it’s a really intuitive question. It makes sense to me, and on some levels I agree with it because it’s just how humans are. We like to relate to other humans that are like us, but it’s pretty nuanced question and it’s a little more complex than people think. The question that was asked recently, and very worth talking about, was “Should I only take financial advice from people who make as much money as I do?”

Matt Mulcock:
Was it framed that way, or did we just change it up a little?

Ryan Isaac:
That is the nice version of the question.

Matt Mulcock:
I think it was more of a statement than it was a question, let’s just be honest.

Ryan Isaac:
“These idiots don’t make my kind of income. Why should I listen to them?”

Matt Mulcock:
“These idiots don’t make as much money as me.”

Ryan Isaac:
That was more the statement but the question underlying, giving the benefit of the doubt… Yeah, it was a statement. The question for him is, “Should I take advice from people who don’t make as much money as I do?” And we’re going to talk about that today and we’re going to talk about some of the… maybe read between the lines a little bit and give you… I don’t know if there’s great data.

Ryan Isaac:
I was actually researching. I was trying to find famous public stories of famous people or celebrities or athletes who give each other financial advice that might not have been great, and I found some like nuanced ones. It was like eh, it wasn’t enough to…

Matt Mulcock:
I’m sure there’s got to be some stories out there.

Ryan Isaac:
I mean, yeah. So that’s the question, okay, and we’ll paint the picture here a little bit. There’s a sub-question to this, which actually wasn’t a question. It was a statement.

Matt Mulcock:
Also not a question.

Ryan Isaac:
I love [inaudible 00:06:06]. It’s so true. This didn’t come in the form of a question.

Matt Mulcock:
We changed it. We’re just giving you a peek behind the curtain.

Ryan Isaac:
Yeah. This was a Facebook comment, which is not surprising, but that’s okay. It provided good content, give us an opportunity to educate a little bit. The other like sub-statement here, or question, as we’ll pose, it was something like, “Hey, once I reach a certain point of really high income and a lot of net worth and liquidity, shouldn’t I graduate, you know? Shouldn’t I move on from all of these easy, simple kind of investment strategies?”

Matt Mulcock:
Like, “At this point I’m above you peons, Ryan and Matt.”

Ryan Isaac:
That was kind of the tone.

Matt Mulcock:
“What you guys talk about is awesome. Good job for the preschoolers.”

Ryan Isaac:
Your stuff… Yeah.

Matt Mulcock:
“But us PhDs over here… ”

Ryan Isaac:
“The big boys need to like… Where’s the sandbox I go play in when I become the big boy on the playground?”

Matt Mulcock:
“You’re having fun in the kiddie pool. I want to go to the deep end.”

Ryan Isaac:
So this whole, “Is there a certain point where the kind of general financial advice no longer applies to me and I need to move on to more sophisticated, complex, fancy… call them what you want kind of things.” So those are the two things we’re going to talk about today. So first of all let’s just circle back and I’ll ask you, Matt: what do you think is some of the underlying just human psychology or need here, when someone’s just saying, “Should I talk to somebody who makes as much money as I do?”

Ryan Isaac:
What do you think… maybe not this comment or specifically, but a rational dentist asking this question?

Matt Mulcock:
We’re joking obviously, but there is… like, I understand it, right? You and I did a Facebook Live on this. We talked about this where it I think it is a rational first reaction to say, “Man, shouldn’t I be talking to someone that’s in my same… ”

Ryan Isaac:
“Will they get me?”

Matt Mulcock:
I think that’s where it comes from, is like, “They get me,” yeah. If I make a million dollars and you make a million dollars, you get me. So I get it from that context, for sure. That would be your first human reaction.

Ryan Isaac:
Yeah. Human connection. Just relation.

Matt Mulcock:
Yeah, exactly. Human connection. Exactly.

Ryan Isaac:
Yeah, I think that’s fair. We do that in all parts of our life. We look for people who look like us, talk like us, think like us, act like us, and we relate to that, and then we like to mostly just get our biases confirmed. That’s mostly what we’re looking for.

Matt Mulcock:
Yeah, exactly.

Ryan Isaac:
That’s mostly what’s happening, but we like to just relate to the people around us. So let’s get a little context here to answer the question of… I’ll just give a simple answer to the question, “If a dentist makes a million dollars a year, do they need to find a financial advisor? Do they have to get advice from someone who makes a million dollars a year?” I’ll say no, like hard no. Most definitely not. You do not need to, and I’ll even throw in there a hot take, controversial take, coming your way.

Matt Mulcock:
Hot take, take hot. Here it comes.

Ryan Isaac:
Sometimes some of the worst advice I’ve seen given to high-net worth, high-income earning clients has been from their high-net worth, high-income friends. Like some of the worst, least applicable stuff.

Matt Mulcock:
Oh yeah.

Ryan Isaac:
And I kind of want to just tell a really quick story here, and I hope everyone forgives me for just always talking about whatever’s going on in my life personally. It’s kind of like what we do here. We’re like, “Hey, I’m just going to relate every story to something I’m going through.” But I was buying a surfboard-

Matt Mulcock:
The people love it.

Ryan Isaac:
I hope so.

Matt Mulcock:
Give the people what they want.

Ryan Isaac:
And if not, it’s our show, so…

Matt Mulcock:
It’s our show, so deal with it.

Ryan Isaac:
But stay stick around, okay? This will be helpful.

Matt Mulcock:
But also hang out just till the end. Till the end.

Ryan Isaac:
Also don’t leave. Please don’t leave.

Matt Mulcock:
Don’t leave us. Don’t leave us, please.

Ryan Isaac:
I was buying a surfboard recently and I’m pretty new to the sport and the life of surfing, and I’m on the phone with a very well-known surf-making shop in California. And they’ve been around since the 1950s, I think, making surfboards. They’re kind of perfected one style of… I was buying a longboard. So they’re kind of just known for the stuff that they make, and I’m talking to this girl in their shop and she clearly is very smart and knows… She’s been surfing for a long time, she’s been in the industry.

Ryan Isaac:
She knows her stuff, and we’re going through some stuff and she’s asking me questions and I say this thing, and I started a sentence where I said, “Okay, so my friend, who’s a really good surfer for a long time, was telling me that… ” and like dot, dot, dot. And I wasn’t even halfway and she just stopped me, and she’s like, “Look, I’m just going to stop you right there and I’m just going to tell you candidly, in my experience, unless your friend is exactly your age, exactly your experience, exactly your height, weight, athletic ability, if your tendons are made the exact same way, if your femurs are the same length and you know, all these things, unless that’s the case… ” Which it’s clearly not, then she’s like, “your friends don’t know you.”

Matt Mulcock:
Yeah.

Ryan Isaac:
I was like, “Oh, man.” That was just such a good epiphany. My friends don’t know me. Not in that way. And then she proceeded to give me some like data. She was using mathematical things and data and numbers and measurements to really give me the right outcome, which by the way, was very different. The outcome was very different. What I ended up buying than what I was recommended by a friend-

Matt Mulcock:
From your friend.

Ryan Isaac:
… who weighs 50 pounds less than I do and has surfed for 15 years, and has a different style and preference and experience. And fast forward, I got the board and it’s amazing. And the second I touched it I was like, “She was right.” She was totally right. And so when I had that conversation and then we got this question/statement, I really thought about that concept, like your friends don’t know you, and your friends aren’t exactly like you. And look, circling back to this question then, should a dentist…

Ryan Isaac:
And we’re just using a high income of a million bucks because it’s a lot of money and that’s a high benchmark for personal income. We’re not talking about collections. We’re talking about personal income, like on your tax return.

Matt Mulcock:
Oh, man.

Ryan Isaac:
Remember when you hit that?

Matt Mulcock:
I remember when I first hit that. Yeah, man. It’s a good day.

Ryan Isaac:
Remember like… It was like ’06 for you? You hit like your first million dollar [crosstalk 00:11:48].

Matt Mulcock:
Yeah, something like that. Yeah. I was just coming out of college. Yeah, it felt really good.

Ryan Isaac:
Give or take some zeros; we don’t know. It’s fine.

Matt Mulcock:
Give or take, yeah.

Ryan Isaac:
And so we’re using that as a benchmark, but if a dentist making a million bucks a year or more is asking that question, we’re saying we get it, but here’s the nuance. And I gave my answer: no, I don’t think it’s necessary that you need to go find someone else who makes what you make to get good advice, and I’ve seen some of the poorest advice be given from people who do make a lot of money, have a lot of net worth. So before we move on to that, what do you think Matt? Like what’s your take on all that?

Matt Mulcock:
Yeah. I mean I could give the same just quick answer. It doesn’t matter. I’d say that that person that makes a lot of money is good at making a lot of money, and there’s various ways that they could do that. Someone with a high income has obviously figured out how to create a high income. That doesn’t mean they’re good with money or that they know you and your situation, right? Like high income does not equate to you’re smart with money.

Ryan Isaac:
What to do with it, now.

Matt Mulcock:
I know plenty of… Yeah, what to do with it now. I know plenty of people who make a lot of money that aren’t good with money.

Ryan Isaac:
Well, has anyone ever heard of an athlete or a celebrity make a lot of money and not end up with any later?

Matt Mulcock:
Yup. So I actually was thinking of this, Ryan, after we did the Live and then obviously we were talking about doing this podcast. I was thinking, my wife and I are always just completely… the best word I can use-

Ryan Isaac:
Don’t get in trouble, here.

Matt Mulcock:
… is flabbergasted.

Ryan Isaac:
Okay.

Matt Mulcock:
Flabbergasted, right? We are so blown away at the top YouTube earners every single year. This is really random, but stick with me for just one second.

Ryan Isaac:
I like it. I like random. Let’s do it.

Matt Mulcock:
The top 10 YouTube earners… and I don’t know them all, like detail off the top of my head, but I do know for sure that in 2019, the number one YouTube earner was an eight year old.

Ryan Isaac:
Oh, the toy kid that opens toys?

Matt Mulcock:
The toy kid. Exactly. He unwraps toys. He made like $5 million in income that year, or his guardians did. His parents did, thanks to him.

Ryan Isaac:
He won’t see it.

Matt Mulcock:
He won’t see it. So I just was thinking about it. I’m like, so if you’re making this blanket statement/question that we turned it into of saying like, “Don’t I have to talk to someone that makes as much money as me?” I’m like, “Sure, let me connect you with this eight-year-old who unwraps toys on YouTube and let him give you advice.”

Ryan Isaac:
Or the athlete that made a hundred times what you made in one year and blew every penny of it and then some, and one owes the IRS now.

Matt Mulcock:
Exactly. I mean something along the lines of like 80% of professional athletes, NFL, NBA I know for sure, it’s a very ridiculously high number, those athletes are broke within like three years of retiring.

Ryan Isaac:
It’s crazy.

Matt Mulcock:
So high income does not mean you have an aptitude for money or what to do with your money, once you get it.

Ryan Isaac:
… with it once you get it. So I think those are the two points… You made that one perfectly. Just because you made it does not mean someone is qualified to know what to do with it after they’ve made it. Those are two totally different things.

Matt Mulcock:
Totally, yeah.

Ryan Isaac:
And number two would be just because you made it in one area doesn’t mean you’re an expert in another. Kind of correlated.

Matt Mulcock:
Exactly. Yeah. Totally non-correlated.

Ryan Isaac:
Yeah, and I want to throw a little bit of a twist in here and it’s just kind of like a little PSA here, public service announcement… in case there’s any questions on what PSA stands for. I don’t know if there are or not. PSA, that was an old thing we grew up with, like a public… Remember that?

Matt Mulcock:
Yeah, yeah.

Ryan Isaac:
Do they have public service announcements anymore?

Matt Mulcock:
I don’t think so.

Ryan Isaac:
[crosstalk 00:15:15] like the more you know. It’d be like, you should read books.

Matt Mulcock:
We have a commercial now that’s a public service announcement.

Ryan Isaac:
It’s wild. Oh yeah, we do.

Matt Mulcock:
Yeah, yeah.

Ryan Isaac:
Anyway, so here’s what I would say, is more than just that, what we’re talking about is some very large cases of fraud, embezzlement, Ponzi schemes that I have seen in my career that have happened to dentists have occurred from people who they didn’t initially maliciously start out to be a fraudster. What they did is they made a lot of money in one career, and, you know, they sold a piece of software. They ran a law firm and sold… like something. They just made a lot of money in one career, retired early with a giant chunk of liquidity, and wanted to do something else and they jumped into another area that they were not an expert.

Ryan Isaac:
And they had the money to facilitate a little bit of playing around. They had some walking around money.

Matt Mulcock:
Some walking around money.

Ryan Isaac:
[crosstalk 00:16:09] favorite line ever. Had some walking around money, but they jumped into something else that was not their area of expertise. They they developed solar farms or they developed raw land for commercial construction, or like you name it, you know? They tried something else they weren’t an expert at. They just had the money that made them feel like they could. And I’ve seen men, more than I could remember or count, where it began like that and a dentists gave them money, and it ended up not only losing money at best case scenario, just losing money.

Ryan Isaac:
Just saying like, “Yeah, looks like we didn’t know what we were doing. Sorry it didn’t work. Your money’s gone.”

Matt Mulcock:
Yeah. Weird.

Ryan Isaac:
But those people, like a lot of Ponzis, they don’t start that way and they think they can fix it. They think they can turn the ship around, so then it turns into a Ponzi scheme.

Matt Mulcock:
Then they start to feel desperation.

Ryan Isaac:
Yup. They gather more money until they’re caught and then it just sucks for everybody. And I’ll just say that happened so many times where it was some person who made a lot of money in one career and then jumped to another one without the right… Now you can make a lot of money from a career, jump to another place, get a big team of experienced people, like build a company and a team and then pull something off. Like of course you can do that, but they didn’t do that.

Ryan Isaac:
And so I’ve seen this same kind of attitude where the assumption that making a lot of money in one area correlates to another bleed into some really big messes, unfortunately, you know?

Matt Mulcock:
Yeah. Well, and I’ll take it even a little bit more detailed than this when we talk about… because I think the context you’re giving is like a friend, right?

Ryan Isaac:
Yeah.

Matt Mulcock:
Or like someone you just happen to know that makes a lot of money that branches out.

Ryan Isaac:
Yup.

Matt Mulcock:
The context of this commenter, again, turned into this question. And I’ve heard this before. We’ve heard this before. This isn’t the first time that like we’ve had this pushback on us of like, “Well, don’t I have to… ” The context I think he or she was getting at was, “Shouldn’t I talk to an advisor that makes more money than me?” Right?

Ryan Isaac:
Yeah.

Matt Mulcock:
Or at least maybe they were not taking it there, but I’m going to take it there.

Ryan Isaac:
Yeah, yeah, yeah. Well that’s good context, Matt. I think that’s a good perspective.

Matt Mulcock:
Yeah. So if you’re saying that I need an advisor that makes more money than me, I know of a lot of advisors that make a lot more money than Ryan or I doing things very differently than us, and I can tell you that right now that… I’ll even say this: if we wanted to make more money, we could do things very differently and make a lot more money, meaning sell products.

Ryan Isaac:
Sell stuff. You bring up a really good point I don’t think a lot of people know about, which is the upper end of income as a financial advisor is not usually… it’s usually just product sales. I mean that’s the truth. It’s insurance or annuities for the upper end. And this excludes, I guess, like people who raise money for private funds, private investments; that’s not really advice, right?

Ryan Isaac:
It’s crazy because in our firm we have five or six advisors with Haas and some of them are in the younger parts of their career, you know? Handful of years into their career, and we meet all the time. We talk case studies back and forth and as the resonant old guy, I watch our new advisors give advice to their clients and we talk about the cases they’re working on, and this is like high quality… they’re delivering really, really high quality, good, sound, predictable, sustainable financial advice to people.

Ryan Isaac:
And they’re delivering it to, in some cases, very high income earners; people with very high net worths, you know? Someone in the comments said you can try to find that, or you can find an advisor, like running a good system and process with the right incentives. Non-commission. A fiduciary, right? A comprehensive person that works with a hundred people who make a million dollars.

Ryan Isaac:
So the advisor doesn’t make that, but he might have seen a hundred people that make a million dollars and given them and interacted and been a part of their financial decision making process.

Matt Mulcock:
Such a good point.

Ryan Isaac:
It was a awesome… Shout-out to Richard.

Matt Mulcock:
Yeah, Richard knows what’s up.

Ryan Isaac:
I mean we don’t need to name all names, but Richard, he knew…

Matt Mulcock:
Richard gets a name.

Ryan Isaac:
Richard gets the first name shout-out.

Matt Mulcock:
Richard gets a call out, yes.

Ryan Isaac:
So that was a great point, you know? And that kind of goes back to another question people have about hiring dental-specific professionals in their lives, and what’s the outcome or why do you do that? And that’s why; because one person gets to see over and over one type of profession over and over again, and kind of just reaps the benefits of watching lots of people make the same decisions over and over again. And it’s very valuable.

Ryan Isaac:
It’s why people are specialists in dentistry, too. If you’re only doing your root canals every single day, chances are you’re going to be pretty good at being an expert on root canals. I mean and that’s just the way it goes.

Matt Mulcock:
Yeah. I mean of the 10 things to look for in getting advice from someone, I don’t even think their income should make the list. I wouldn’t say…

Ryan Isaac:
Yeah. I don’t think so. Now, how they get their income-

Matt Mulcock:
The way they’re paid… Yes. Yes.

Ryan Isaac:
I was just going to say yeah, I think on our website we actually have something that’s like 10 questions… If you go to dentistadvisors.com and go to the search bar and just type in “10 questions,” we have podcasts… So here’s what’s kind of cool, is we have some downloads about what kind of questions to ask a financial advisor, kind of walk you through some of this stuff. It’s at dentistadvisors.com.

Ryan Isaac:
We actually also did a podcast… This is probably like two years ago, where we answered the questions ourselves on our own show. So we post the questions, ask a financial advisor this stuff, and then we answer them ourselves. I think to wrap up that segment, and we’ll just hit a quick commercial, I think the emphasis is there are some things you can look out for when you do select who you’re going to get advice from, and man, friends and family…

Ryan Isaac:
Like the woman at a surfboard shop, she knew. She’s like, “Your friends aren’t you, so just don’t wry about it,” you know? And listen to someone who’s-

Matt Mulcock:
Yeah, and she had seen how many people?

Ryan Isaac:
Yes. Were me and her the same? No.

Matt Mulcock:
No.

Ryan Isaac:
I guarantee you I’ve got like a hundred pounds on her, you know? Like were not the same people. She’s way more experienced. She could probably shred and I can’t hardly do anything, but she had seen hundreds of people buy and ride and shape surfboards. So it’s like her experience and insight was just… And I’m looking at the surfboard right now next to me in my room, and I’m just so happy it’s-

Matt Mulcock:
And it makes you happy.

Ryan Isaac:
It does make me happy. Smell the wax.

Matt Mulcock:
It brings a warm and fuzzy feeling to your heart.

Ryan Isaac:
Just smell it. It’s amazing. So right off the top of the bat, find someone who is a non-commission advisor. Find someone who’s a fiduciary. Find somebody who’s comprehensive. That means they’re not just going to set up an investment account and call that a plan, or sell you some insurance, call that a plan. Although if you find a non-commission fiduciary, they’re probably not going to sell you insurance anyway.

Matt Mulcock:
Yeah, exactly.

Ryan Isaac:
And then go to dentistadvisors.com. Go download the 10 questions to ask, and then find the podcast too and we’ll run it back. We’ll do that too. So let’s take a quick break, Matt, and then let’s come back and answer the second part of that question, which is at what point do I graduate to the fancy stuff? We’ll hit that when we come back.

Ryan Isaac:
Matt, it’s time.

Matt Mulcock:
Time for what, Ryan?

Ryan Isaac:
It’s time to book a free consultation at dentistadvisors.com. Just click on the big Book Free Consultation button on the homepage and talk to one of our friendly advisors today.

Ryan Isaac:
The second part of this was this assumption, and this could probably be a standalone topic for another time too that we can dive into more, but this person was saying, “Look, with my level of income and my level of liquidity and net worth, the opportunities that I have out there, all this general financial advice like savings rates and debt reduction… ”

Matt Mulcock:
Stocks and bonds.

Ryan Isaac:
[crosstalk 00:23:50] stocks and bonds, portfolios, diversification.

Matt Mulcock:
What boring crap.

Ryan Isaac:
Yeah. The insinuation was like, “At some point that doesn’t apply to me anymore because of how much wealth I have.” So full stop, Matt, what do you think about that comment?

Matt Mulcock:
Yeah, so…

Ryan Isaac:
You’re just like [crosstalk 00:24:11].

Matt Mulcock:
My first response on the Live was I laughed at this one.

Ryan Isaac:
You did, yeah.

Matt Mulcock:
And again, I genuinely… like, I get it. I genuinely get this one as well, the mindset of tying my level of wealth to sophistication, right? Being like, “I make too much money to deal with that globally diversified bunch of index funds.”

Ryan Isaac:
“I need something else.”

Matt Mulcock:
“I need something more than that.” And I get that. I think that’s human nature, to think that I’m above and beyond.

Ryan Isaac:
Does a person who has a very high income, a lot of liquidity, a high net worth, need to go seek out more complex, higher risk types of investments? No. You don’t need to and I could supply lots of evidence and show you. Well, I wouldn’t because it’s private, okay, but it’s people’s lives, but I could show you people who are in that same kind of financial situation and they have relatively really simple situations.

Ryan Isaac:
They have giant accounts with very simple, low cost, globally diversified portfolios that they saved money into and they just stick to it for long periods of time. They’ve got a practice. They might have a building, they might have a house that’s paid off. They might have some trinket-y fun hobby little things, but that’s it, you know? Like that’s their thing and there’s no need. Like they don’t have a need.

Ryan Isaac:
They have liquidity, they have money, they have net worth. They could be retired yesterday if they wanted to and they’re financially independent; work is already optional. It’s a want thing. It’s a personality trait that drives this-

Matt Mulcock:
Personality.

Ryan Isaac:
… because you can also find people in the same financial boat, same income, net worth, liquidity, who have tons of complexity. They have things spread out all over the place, and that’s not wrong either. The other one’s not right. It’s just it’s not a need. I guess that’s the main point we want to drive home. There’s not a need. And so if there’s this assumption that you have to or you need to, that’s false.

Ryan Isaac:
You can, but you don’t need to.

Matt Mulcock:
Yeah. That’s the key point. I think, again, the way that it was framed in that discussion board…

Ryan Isaac:
… -ish, thing, kind of. Yeah.

Matt Mulcock:
What? Yeah, yeah. The way it was framed was like that’s little league stuff, and like, “I’m above that now.” But that’s the way I took it, right? Which again, I’m not offended by that in any way, but I just wanted to be clear…

Ryan Isaac:
I think it’s common. That’s a common thought. Like, “That’s for the small guys.”

Matt Mulcock:
It is common and again, I understand it. When I get to that point talk to me then, right? When I’m a multi-multimillionaire and hanging out with Jeff Bezos.

Ryan Isaac:
There you go. That’s who you’d hang out with if you were super rich?

Matt Mulcock:
That’s like billionaires… Well, not millionaire. I’d have to be a billionaire, so I’d probably call up Bezos and see what’s up.

Ryan Isaac:
“So what are you doing?”

Matt Mulcock:
But again, it was being kind of implied that that’s little league stuff, and I liked the way you framed it; want versus need. Because like you, I have plenty of people that I work with that have massively larger net worths than I ever will, my guess, and they’re pretty basic, right?

Ryan Isaac:
Yeah, simple.

Matt Mulcock:
Like real estate, their investment portfolios that are rather large in a globally diversified, low cost portfolio. They’ve got either one or two, maybe three, locations. So they’ve got the private business check, they’ve got the real estate box checked. And I’m not talking complex real estate stuff.

Ryan Isaac:
[crosstalk 00:27:29] a building or a house.

Matt Mulcock:
I’m talking like they own their buildings and a house, maybe a couple of real estate… er, investment properties. Pretty basic stuff.

Ryan Isaac:
Yeah, simple.

Matt Mulcock:
And then they have their massively large brokerage accounts and retirement accounts. So again, I liked the way that’s framed, like it’s a want versus need. Do you need it? Absolutely not. You do not need anything beyond what we talk about every single day.

Ryan Isaac:
No, and that’s what’s cool. That’s what I like about, is it’s accessible to everyone. It’s accessible to the person starting out at the first day of their jobs, an associate putting some money in a 401k, and it’s accessible to the early retiree 55-year-old with 20 million bucks in the bank and you know, you can do it too. I mean you can just keep doing it and you could die doing that, and pass it all along and you’ll have good returns, and you’ll have liquidity, and access to your money, and you can spend your time and attention in other places if you want to.

Ryan Isaac:
But yeah, it’s want and a need, because it’s personality driven. The people who have more complexity and they want to.

Matt Mulcock:
They’ve chosen that.

Ryan Isaac:
Which I think is a whole other subject in itself, and it’s really fascinating. It’s probably a deep psychological thing because sometimes people might just have an interest. It might be a social pressure, like they just want to appear fancy and sophisticated, you know?

Matt Mulcock:
That’s such a good point. They start maybe running in different circles, right? Or there are people around them that all their friends and family or people that they’ve associated with maybe are in a similar situation. They’ve just kind of come up together and now they see their friends doing things that they’re like, “Oh, maybe I want to do that.” And they start to hear things and they…

Ryan Isaac:
[crosstalk 00:29:00]. We all do that though, folks.

Matt Mulcock:
All of us, yes.

Ryan Isaac:
The people we surround ourselves with, we just imitate each other. I mean so we’re all doing that.

Matt Mulcock:
Yes. Just remember comparison is the thief of joy and you’ll be much happier in your life.

Ryan Isaac:
It is. And no one purposely… I mean, some people keep up with the Joneses on purpose, but like we all subconsciously do it. So whoever we’re around, we’ll just start to buy the stuff they buy and do the stuff they do. Like that’s what we’ll do. So yeah, I think that’s totally good. Matt, thanks for covering this question/comment with us today.

Ryan Isaac:
I think it’s a really good one and the moral of the story is there’s good ways to decipher whether or not you’re going to get real quality, repeatable, sustainable, legit financial advice and the income of the advice giver isn’t at the top of that list, or maybe even on the list at all. So everyone thanks for tuning in and thanks for listening. If you have some questions for people who might not make a million bucks a year, but-

Matt Mulcock:
Just below that. I’m getting there.

Ryan Isaac:
… but who really know how to help dentists make smart financial decisions and avoid painful ones, you can go to dentistadvisors.com, click on the Book Free Consultation link and schedule a phone call with one of our dental-specific advisors, who are also very friendly people. Or if you just want to post a question real quick, like just post in, get out, put it in…

Matt Mulcock:
Or make a comment. Or make a comment.

Ryan Isaac:
Make a comment.

Matt Mulcock:
You can make a snide remark. We love it.

Ryan Isaac:
You can do it.

Matt Mulcock:
We’ll make a whole podcast about.

Ryan Isaac:
We will. We’ll talk about you in a positive light while educating others. That’s what we’ll do, okay?

Matt Mulcock:
Very positive, yes.

Ryan Isaac:
Go to Facebook and just search for the Dentist Advisors Discussion Group. Go in there and post a question. Matt and I will answer it in a video, because we like answering questions. Really cool. So thanks for joining us, thanks for being here, and everyone have a great day. We’ll catch you next time.

 

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