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Scary Tales of a Dentist’s Financial Troubles – Episode 204

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Things that may frighten you about finances … and the things that should really scare you.

On a Halloween edition of the Dentist Money™ Show, Reese and Ryan talk about some of the spooky things about finances that tend to scare people—things that might not actually be all that frightening. Then they turn their attention to the things that should really unnerve them.

If you’re worried about debt, down markets, and recessions, your concerns would be better placed by worrying about low profitability, fraud, and losing money through speculation. Listen in as Reese and Ryan explain why.

Podcast Transcript

Ryan Isaac: Hey Dentist Money show listeners, this is Ryan Isaac. Thanks for joining us for another episode. Today on the show we talk about what are some financial signs that are actually scary. You know the kind of things that make you wonder if you’re headed in the right direction, if something’s wrong or if everything’s going okay. There’s some things honestly that seem like they’re scary, but they’re really not, and we talk about those, but then we dive into other signs that are actually pointing to some scary financial future outcomes, things that we should be worried about. We get that question a lot. I throw out a few. Reese throws out a few. We make fun of my unhealthy fear of razorblades and apples, but all in all, we have a great Halloween time. Thanks for listening. Thanks for tuning in. 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 or registered investment advisor. This is Dentist Money. Now here’s your host, Reese Harper.

Reese Harper: Welcome to the Dentist Money show where we help dentists make smart financial decisions. I’m your trusty old host, Reese Harper here with my cohost sir Ryan Issac.

Ryan Isaac: So you just bestowed the trustee that is normally attributed to me to yourself.

Reese Harper: Normally I do that, but today I want it to be trustee.

Ryan Isaac: It’s a weird week.

Reese Harper: Yeah, it’s a weird week. It is, what kind of week is it?

Ryan Isaac: It’s a scary week. It’s Halloween week.

Reese Harper: My kid asked me-

Ryan Isaac: Halloween week.

Reese Harper: … what I was going to be for Halloween when we just moved into our house and I’m living in boxes and I don’t know that I have the energy to put on a costume. So what I’m doing is I’m going to wear a fedora that I bought in Mexico and just put on a nice Hawaiian kind of Cuban maybe shirt and a fedora.

Ryan Isaac: Cuban vibe. I think when this episode airs, somebody please request in the Facebook group, so That’s our Facebook group. Someone needs to request the picture of vacation Reese with fedora. I’m going to black and white edit that photo with like some kind of… It looks like a cologne or a cigarette or a cigar ad. It’s really classy.

Reese Harper: I’m a nonsmoker, which Bryant surprise you-

Ryan Isaac: Not a big cigar guy.

Reese Harper: But I was looking for the bubble gum cigars-

Ryan Isaac: Oh, you were?

Reese Harper: … [crosstalk 00:02:38] child for my costume for Halloween I couldn’t find. I think they’re kind of outdated. I don’t feel like-

Ryan Isaac: That’s found upon. Like fake cigars for children. Not cool anymore.

Reese Harper: I was just joking with my personal trainer yesterday in the morning. I told him about a new startup business I was working on that I thought was like, I just kept a straight face, like the whole time-

Ryan Isaac: Dead [crosstalk 00:03:01].

Reese Harper: I said, “It’s been a long time since cigarettes have been really on trend.” And he’s like, “What do you mean like vaping?” I’m like, “No, like traditional Marlboro man camel cigarettes.” I said, “I want to kind of go back to like an artisan vibe, like locally handcrafted cigarettes…” And I think the youth are really going to pick up on this. It’s kind of a cool hip and trendy thing for the kids. I just held it together the whole time and he just looked so scared.

Ryan Isaac: He’s like, “I’m going to fire you.”

Reese Harper: And I was like, “Dude, are you serious? Do you think I’m actually going to do that?” Isn’t a really great experience for me to start my day off with the personal trainer talking about an artisan cigarette-

Ryan Isaac: [crosstalk 00:03:55] for kids.

Reese Harper: … For the kids.

Ryan Isaac: For the kids. It’s the younger generation, they missed out on a whole classy few decades of artisan cigarette smoking.

Reese Harper: They missed out on it. Like the Marlboro man was like a real important American figure.

Ryan Isaac: He was an American icon. That’s true. He was actually kind of like a role model that you looked up to, Marlboro man.

Reese Harper: I figured it’s important to address all of that because-

Ryan Isaac: It’s costly.

Reese Harper: … it was a scary moment. It was a dark and scary moment when-

Ryan Isaac: It’s part of your costume.

Reese Harper: Anyway, it’s Halloween week and today we’ve got a theme that kind of rolls down that directly-

Ryan Isaac: Yeah, well this will come out… When you listen to this, this will be post Halloween, but just know we were in the Halloween traditional spirit at time of recording. We were feeling it. This time last year actually we were wearing, you were in a monkey suit and I was in a banana suit I think this time last year, we dropped the ball. [crosstalk 00:04:50].

Reese Harper: There’s a significant high percentage chance that that will actually be my costume again this year-

Ryan Isaac: The monkey suit, yeah that’s cool.

Reese Harper: … because I saw it yesterday, I’m like, “I could wear that. I could do.”

Ryan Isaac: I could don that again. Every time this year I’m guilty of doing a thing that I think a lot of parents do, when your kids come home with their candy buckets. Do you do the thing, the parent thing? Do you check candy buckets?

Reese Harper: Yes, I check the candy buckets-

Ryan Isaac: Do you-

Reese Harper: … we want to make sure there’s no cigarettes in there and stuff.

Ryan Isaac: No, no insane neighbor put artisan cigarettes in your kids. So do you really like have the kids-

Reese Harper: Yeah, we do. My wife is like one of my biggest inspirations because she’s like caused me to actually have a healthy diet and life and she has a like balance… I think the kids like turn in some of their candy for gifts/money. There’s an incentive to not eat it. All of it. It’s like you pick out your top 20 items or-

Ryan Isaac: Yeah, and they turn in the rest.

Reese Harper: Yeah. And then kids usually eat a ton right before they pick out their top 20. So they’ll like, all right.

Ryan Isaac: [crosstalk 00:06:11] the system. Do you check for elicit drug laced candy bars or razorblades and apples?

Reese Harper: Dude, you must live in the freaking ghetto. My neighbors are like handmade, like soups, dude. I’m getting like organic tomato soup-

Ryan Isaac: Bread bowls.

Reese Harper: Bread bowls, artisan sourdough. Like they’re not handing out razorblades in my neighborhood. No, [crosstalk 00:06:41].

Ryan Isaac: I live on eight mile. I mean, shout out to my neighborhood.

Reese Harper: Dude, you just said something that says more about your neighborhood than I think your neighbors.

Ryan Isaac: You know the… It’s like-

Reese Harper: Are you worried that there’s guns like in your Halloween candy? [crosstalk 00:06:57].

Ryan Isaac: There’s so many guns on the streets at my hood.

Reese Harper: You know the switch blade that can just like be there-

Ryan Isaac: They just drop in there inadvertently.

Reese Harper: No.

Ryan Isaac: Like how did this gun get in my kids bag.

Reese Harper: Yeah. To go along with your angle here, yeah. I’m really worried about all that. I’m just kidding.

Ryan Isaac: I’m not questioning my real estate choices.

Reese Harper: It’s all right. No. My kid has a peanut allergy and yeah, I check his bag for peanuts.

Ryan Isaac: That’s a lot of peanut candy.

Reese Harper: Yeah. Like he can eat like Laffy Taffy Smarties and an occasional sweet tart. Like that is his option. That’s kids.

Ryan Isaac: There’s this thing called… It’s a real thing.

Reese Harper: All right.

Ryan Isaac: It’s my defense now. Now I’m defending myself for the rest of the podcast through studies and data. This’ an awkward position to be in to start this thing, but there’s this thing called, it’s actually like a field of study, which is so funny to me. There’s this an entire blog by this guy named Joel Best. He’s a professor of sociology and I think Delaware. Anyway, he writes this blog that he updates every year with news stories called Halloween sadism and it’s kind of like this decades old thing where random news stories usually that ended up having nothing to do with Halloween kind of leak into the Halloween news cycle. And there’s these scares… Over the decades there’s been these like random scares of people putting bad things in kids Halloween, that’s where like, the whole… Oh, the razor, I don’t know why it was a razor blade to be honest. Maybe they are like easy to hide in I don’t know what-

Reese Harper: Razor blades.

Ryan Isaac: … but it’s a thing.

Reese Harper: It’s a thing. I’m not questioning it and even like I would… Now you’re making me worry like, yeah, like I’m worried now.

Ryan Isaac: Yeah, so I mean like-

Reese Harper: The occasional dynamite stick in whatever.

Ryan Isaac: Stick of TNT, good old TNT in your kid’s bag.

Reese Harper: Jeez man. I’m not going out tonight. We’re ordering Papa John’s. Oh wait, I don’t even know if I can like maybe-

Ryan Isaac: Check the Papa John’s. You don’t know what [crosstalk 00:09:13].

Reese Harper: … watch out that little like bell peppers. Not actually a real bell pepper. It’s a razor blade.

Matt Mulcock: Hi Dentist Money show listeners. It’s Matt Mulcock from Dentist advisors. I want to invite you to join Ryan, Isaac and me for our monthly webinar series where we tackle one of the 12 key financial elements of a healthy financial plan. The content will feel a lot like the Dentist Money show, but offers you the opportunity to ask questions, answer real time polls, and get it behind the scenes view on how we help clients make smart financial decisions. You can register to attend for free by visiting Hope to see you there.

Ryan Isaac: So here’s the tie in for today, which actually ties into a question that I’ve received kind of a little bit more frequently lately. And I thought it was a really super good question. And the tie in is that sometimes there’s things that seem scary like, “Oh, this is pointing to something that’s dangerous or scary and turns out not to be.” Like these fake Halloween myths of sharp objects and poison and kids candy bags. But on the flip side, there are sometimes things that are legitimately scary that you should be worried about. And I guess for the record, Dentist Advisors setting the record straight, we should not be worried about our kids’ Halloween candy bags. I guess that’s what we’re saying.

Reese Harper: Yeah, that’s not the thing to worry about. The question is what should you actually be scared of to worry about Halloween?

Ryan Isaac: I’m going to jump… So here’s the tie into the question that I’ve received a few times lately. It’s such a good question. I’ve been asked, “Hey Ryan, what are some of the signs of a Dentist you cannot help?” Like what are some of the scary signs that you see in a Dentist financial or business situation that really do point to something that can’t be fixed or like are a legitimate problem that you and your firm cannot help with? It’s outside your realm, your scope or it’s too far gone. So I wanted to start first with… And you add some here too.

Ryan Isaac: I want to start first with a couple things that I think are frequently pointed to as scary things that I don’t think are a big problem. And then then we’ll just talk about the reverse, which are things that we have seen like signs in a Dentist financial life that things are actually not good, that are legitimately scary. So the things that people think are scary that I don’t think are a big deal, our number one, I would say debt. Like that’s a common thing where people are like, “I have a lot of debt, therefore I’m in a bad situation.”

Reese Harper: Yeah. Last night, I like wrote an email to dentist. Their question to me, well should I do this? I don’t think I should do it because I have to take on more debt to do it. And I was like, “Oh, that’s…” To them, that was really scary. And to me I’m like, in anything you want to do that’s going to make money will either require you to take on debt or invest in stock. There’s only two ways to buy something or to grow something. And you can either use debt or you can invest cash and essentially buy stock like and it doesn’t scare me. And that just the existence of debt is what was scaring this email or this client, and like you’re saying that on its face, that’s not scary. Now there’s a debt to income ratio, that might be scary, but just debt is not in and of itself scary.

Ryan Isaac: Second thing I thought of was pretty common, stock market decline. Like as an indicator that everything’s wrong and something’s wrong. Like markets are declining, therefore there are problems. Something’s longterm wrong. And that’s totally not… We’ve addressed this at LinkedIn, and other podcasts that average bear market, the average like long stock market declines last about 18 months. Stock markets going through cyclical declines are not an indication of something that’s longterm, like a problem. Another one-

Reese Harper: It is a healthy sign of a vibrant economy when you have periods of growth followed by periods of decline because what’s happening there is like the economy is like cleaning itself up. You know, it’s like we-

Ryan Isaac: Now that would be different though. Like holding a globally diversified low cost portfolio of going through market declines is one thing versus an overly concentrated in a too risky position, lack of diversification that’s rapidly declining. That could be.

Reese Harper: Yeah, if you own blockbuster video, 18-

Ryan Isaac: I think there’s one left actually-

Reese Harper: … 18 years ago. The minute you saw a blockbuster start to go down 60% and you heard about the advent of the internet, like that’s something could be wrong and that could be scary. Let’s just say that could be scary.

Ryan Isaac: It could be. Now, if blockbuster was one of 14,000 companies that you own in a portfolio and it was like 0.002% of your overall holdings, it doesn’t matter. But if it’s like 70% of what you hold, then that could be a problem. I think I did read actually an article that I think there’s one left. And do you remember like a Friday or Saturday night at blockbuster? The experience of wandering the aisles looking at the videotape covers was part of the movie night experience.

Reese Harper: Yeah. It was like, let’s go do this. We’re going to walk around, look at covers, like figure out what we’re going to enjoy.

Ryan Isaac: All right. Just one more, I was thinking of that people sometimes think is like a bad sign, a bad omen, but… Oh, which I think is, isn’t that a Halloween movie? The Omen?

Reese Harper: Mm-hmm (affirmative).

Ryan Isaac: I think that’s a Halloween movie.

Reese Harper: I like watching stuff like that. It’s scary.

Ryan Isaac: I don’t have, it’s kind of like my tolerance for spicy food. I don’t have a tolerance for scary movies at all.

Reese Harper: Yeah, dude.

Ryan Isaac: I bawl out quickly.

Reese Harper: It’s surprised me like tacos so much because like you can’t handle the spice. You like your carne asada, you’re kind of like keep it with taco.

Ryan Isaac: It’s pretty chill. I was going to say when people comment that they don’t own the building they practice in, is if that’s like a bad sign of a unhealthy picture. Like I don’t know my building, I don’t know how I’m going to do it, I don’t own the building. [crosstalk 00:15:41], that doesn’t mean anything, but now-

Reese Harper: [crosstalk 00:15:44] are top four.

Ryan Isaac: Those are like some pretty common things that are not scary that like people say a lot but you know at face value you don’t have to inherently worry about them because they’re probably not the indicator. Now I’ve got a list here. We agreed to come to this podcast with secret lists. So I’m curious to see what is on your mind.

Reese Harper: Well I have-

Ryan Isaac: Should we go one for one?

Reese Harper: Yeah, let’s do a one for one. Now, in fairness to the audience, my list… Ryan has actually thought about his list. My list is going to be a little more ad hoc in the brain.

Ryan Isaac: I like that.

Reese Harper: Okay, so you say yours and I’m going to say my list.

Ryan Isaac: Is real emotion.

Reese Harper: Again, you said two things. I’m trying to get this in my head. You said things that we can’t help with because they’re so scary that there’s no hope for us to help. And then you said things that you’re legitimately worried about-

Ryan Isaac: Let’s make this easier. No, let’s make this easier. Things that are legitimately, that are like actual signs of trouble. When you say the stock market declines, it’s not necessarily a sign of trouble or I don’t own a building, but these are things I think are really [crosstalk 00:16:54] signs of trouble.

Reese Harper: Thing that I’m worried about. Scary.

Ryan Isaac: No particular order. But this is the first one on my list that I wrote down was, consistently declining production. So at the heart of everything, a business… This is a question I get like, “Ryan who is a client that’s hard to help?” Like what’s… When people are like, “Can you help me? Is my situation unique? Am I okay? Who are people hard to help?” And this is always at the top of my list of people who are hard for us to help. Like being their financial planner is when at the very center of all financial things in a Dentist’s life, if the business is slowly declining in production and dying out, like mid career, that’s probably one of my top concerns. If something that’s an actual real problem needs to be fixed immediately, that can signal a lot about things down the line.

Reese Harper: And how much would you consider decline?

Ryan Isaac: I don’t know. I haven’t thought about that.

Reese Harper: Okay. I don’t want to push you too hard on it. I would say-

Ryan Isaac: But I want to make up an answer.

Reese Harper: … I don’t think you’re… If I had to project there, I don’t think you’d be that concerned if it was like, “Hey, I’ve got five operatories and I’m doing 2 million in collections-”

Ryan Isaac: And I’m maxed out on space and I don’t want another location [crosstalk 00:18:24].

Reese Harper: No, I went to 1.9 and now 2.1 or… Even if you are like I’m at 800,000 on four ops and now I’m at 750 and now I’m at 850. But if you went from 800 to 750-

Ryan Isaac: To six.

Reese Harper: … to 700 to 650-

Ryan Isaac: Patterns.

Reese Harper: … massive [crosstalk 00:18:43].

Ryan Isaac: No fluctuations in like a provider… A insurance payment changed-

Reese Harper: Like 5% to 8%, kind of thing. If you’re like 10% decline, that’s how I would kind of like… If I’m going to throw a number at it randomly, I would say if I see a 10% decline in collections-

Ryan Isaac: It makes you wonder why. And then if you see it two years in a row and then three, and you’ve seen that before.

Reese Harper: Even one year. If I saw one year, 10% decline in collections, I’d be like, “What happened?”

Ryan Isaac: There’s got to be a good reason for this.

Reese Harper: 2% or 3% I’d be like, eh, just could have been, you went on a long vacation. 6%, 7% I’d actually probably ask some harder questions. [crosstalk 00:19:29].

Ryan Isaac: That would be one sign of like if that’s happening-

Reese Harper: And here’s another one. Here’s [crosstalk 00:19:38]-

Ryan Isaac: You go one for one.

Reese Harper: My number one thing, if I was meeting someone from scratch, it’s different than if they’re an existing client.

Ryan Isaac: Yeah. You don’t know pattern-

Reese Harper: So they might be both. I’m going to have to provide contexts. If I had never met someone and when I met them for the first time, I saw their cashflow and all of their liquid and free cash flow was going towards any like one thing. So like if all of… If you’re making average income and all of your free cashflow, meaning all of your income that you have disposable, you are putting all towards one item. I start to wonder why did that happen? Because typically that’s a sign to me that someone hasn’t actually been that well-educated on the importance of meaning… Like one item would be like I do residential rental real estate or like I invest of my free cashflow, is going towards this life insurance policy. Or all of my free cash flow’s going towards this annuity or all of my free cash flows going towards my 401k and that’s it. I’m not mad or angry. I’m just concerned-

Ryan Isaac: [crosstalk 00:21:08] balanced there.

Reese Harper: I’m concerned because, even if you’re like a real estate focused investor, I want to kind of feel like you’re not going all into one asset or even if you’re investing in the stock market, I want to know you’ve got some after tax and some pretax and some qualified, some… It’s a nice mixture here. I want to know that if you are investing in a life insurance policy, it’s a small portion maybe of your entire picture and it’s not like overly dominant because I’m worried that someone… That’d be a big sign for me. I don’t like seeing people have such a simplistic view of where all their cash is going because that’s a sign to me that like we’re not being balanced.

Ryan Isaac: Okay, let me back up on a little bit of this too. Let’s just hit really high level. Who do people turn to to fix some of these problems? So if you have consistently declining or rapidly declining production, that is most definitely get a highly qualified, experienced consultant in there to have a look at the business immediately. Is that the first place you can go talk to someone to talk to you?

Reese Harper: Yeah, I would have someone… You probably know yourself best that the doctor knows themselves best. They know which area of their practice is probably causing this. They’ll know if its staffing, they’ll know if it’s insurance and collections, AR, they’ll know if it has to do with their-

Ryan Isaac: [crosstalk 00:22:36].

Reese Harper: … clinical kind of mix and maybe competition in the neighborhood or… You’re going to have a sign and then the consultant that you select needs to be able to demonstrate to you some scenarios in which they have improved that particular situation or that they’ve experienced that situation. If they can’t demonstrate to you in a time or two in recent memory when they’ve gone through this and helped someone, they’re probably not the right consultant. So you need to have a chance to make sure that they have experienced what you’re wanting them to do.

Ryan Isaac: The one you brought up, that’s a great job for a competent financial advisor to handle.

Reese Harper: Yes.

Ryan Isaac: So being too imbalanced, disproportional and where your cash flow goes every year, that is like a bread and butter core foundational job of… I mean, that’s what we work on. Where does your money go and why is it going there and are we being the most efficient as we possibly can with where our money’s going?

Reese Harper: What’s your next one?

Ryan Isaac: Next one. I know you’ve seen this a couple of times. Have you ever met anyone? Yes, you have. When you meet somebody who is hiding accounts from a spouse.

Reese Harper: Oh yeah. That’s a tough one. This happens and sadly, it happens quite often. Like hiding things from people that you’re married to, and not telling them about it. We got to have a conversation about this.

Ryan Isaac: There’s some deeper… I mean, and have we been asked?

Reese Harper: Well, saying like legally. Even if you don’t care about the health of your marriage, which we’re assuming you might… That most of you probably will want-

Ryan Isaac: Make the assumption that you do-

Reese Harper: That you do.

Ryan Isaac: … even if you don’t.

Reese Harper: Even if you don’t, I’m saying you got to be careful about this because you could straight up like have some legal trouble on your… If you went through a divorce, heaven forbid that you got in a really… It was really messy and angry and a kind of a violent outcome, you’re going to be in trouble potentially with the law. You got to just kind of like money is what it is. I think the best approach in life is just air your dirty laundry all the time-

Ryan Isaac: Publicly.

Reese Harper: … publicly.

Ryan Isaac: On social media.

Reese Harper: And make sure that people know. Just be a little more transparent. I would just-

Ryan Isaac: Yeah. I would say this extends to, because you’ve seen it before, business partners too.

Reese Harper: Yeah. Just own it. People will forgive you just, own it.

Ryan Isaac: What’s the thing there? Is it therapy? Is that the… It’s not an advisor or… Because I’ve seen that where, these aren’t clients but I have met people-

Reese Harper: There’s no shame in therapy at all. I mean-

Ryan Isaac: No, no, I’m saying but that’s probably where you should maybe go-

Reese Harper: I think you should start having a conversation-

Ryan Isaac: … It’s in a personal relationship.

Reese Harper: … if you’re having a tough time having that conversation directly with someone, then it’s okay to bring in a third party and just say, “Hey, I got to have someone mediate this conversation because I know it’s going to be harder.”

Ryan Isaac: You like what you hear on the Dentist Money show.

Reese Harper: I do.

Ryan Isaac: Then set up a free consultation. There is no obligation and let’s chat about how we can help you make a better plan for your future. All you do is go to the website at Click the big green button, book free consultation or call us at 833 DDS plan. Okay, you want to throw another one out there.

Reese Harper: Yeah, a big one for me would be not declining collections as much as profitability of the practice that’s South of 10%.

Ryan Isaac: Yeah, this was one of mine too [crosstalk 00:26:26].

Reese Harper: The way I would look at this is whatever the fair market rate is for you and your city for a lot of GPs it will be, in that high 20s to 30% range of production. Like that’s what you should be making to just do the work. And if you’re a specialist, it could be… If you’re an orthodontist, you could be looking at a daily rate, oral surgery or [Peto 00:26:52] might have a higher percentage, whatever you get paid as a producer, that’s what you should get paid. Whether you’re an associate or whether you’re an owner, like you got to get paid for your production.

Reese Harper: That should be in your regular, no matter how you do your accounting, you should just be able to look at this and say, “Well, I should be getting paid this much just for the job that I do.” The question is how much is left over. After you get paid for the job that you’re just doing, how much is leftover? The scary thing for me is in many cases there’s nothing left over. And that to me just says, dude, why are you holding all this debt and owning this business? I mean, you could just get paid this much just to be an associate. And that’s a good signal for a lot of people that they may be better off being a part of a DSO or maybe taking a job as an associate or like if you’ve worked on this thing for 10 years.

Reese Harper: Last night I had a conversation with somebody and it’s like, they know what they’re supposed to do to get their profitability up, or at least they don’t know. They’re being told by a lot of experts of what to do time and time and time again. But five, six, seven, eight years is passing and it doesn’t really matter how much advice they’re getting from people. Nothing’s changing. That’s a sign of like you could be in over your head with practice ownership. Like it’s okay that that’s, you’re struggling, but like, just dump the thing and get a job. Just take the pressure off. I mean, if you’re going to make the same amount of money working for someone else doing production or you’re going to-

Ryan Isaac: Go work for someone else to do production.

Reese Harper: Yeah. The struggle is not really worth it if the business isn’t healthy and you’re not getting above and beyond normal cashflow for-

Ryan Isaac: Or don’t get out of ownership completely, but join some kind of a group where there’s group ownership. [crosstalk 00:28:43].

Reese Harper: That’s what I meant. I think yeah, through that DSL idea out there, that’s true. You might be able to… Or do practice like you said, a large group. Is that what you’re saying?

Ryan Isaac: Yeah, I can think of a couple clients who were kind of on their own solo burnt-out hating the management side, struggling with profitability and income for that very reason joined. But they didn’t want to be an associate for the rest of their career. It’s a long time. So they joined either another existing large group or they merged into a larger group where there’s four or five, six other partners that are handling some of those duties that they hated. So they could still produce, make good production income, but then have a piece of the pie, that didn’t stress them out as much and they still had some ownership in something and some control and direction.

Reese Harper: Yes. I think the thing that we’re saying is-

Ryan Isaac: A lot of options.

Reese Harper: … low profitability is just a sign that you need to do something different.

Ryan Isaac: Yeah. And that’s a legitimate… When you see that happening year over year, that is scary. When you said it’s a sign… Like every time we keep saying it’s a sign, I keep thinking of a who was the comedian, here’s your sign, who was that guy? Here’s your sign.

Reese Harper: Oh dude.

Ryan Isaac: It might be a [crosstalk 00:29:50]. Goes up Foxworthy.

Reese Harper: Oh, that’s Foxworthy.

Ryan Isaac: If this wasn’t Halloween that’s what the story of what I’ve used in the beginning. Is somehow Foxworthy jokes. Shout out to Foxworthy.

Reese Harper: What’s your next one? I gave mine.

Ryan Isaac: I think this applies to both people you’ve known for a long time and people that you’re meeting for the first time that you just are hearing stories are, there are certain personalities that over and over and over again, they will keep making very high risk, speculative bets with their money. It can take any form, could be business deals, investments, spending, whatever. You know when you meet those people that are like, “Yeah, I just lost multiple six figures in this thing and I’m going to do this other thing now and I’m going to do this other thing.”

Ryan Isaac: It’s like this repeating every quarter, every six months. There’s another like extremely out of balance, high risk, speculative place that they’re going to throw money. And it’s a personality thing-

Reese Harper: That’s a personality profile that is like, it’s the gambler in Russ Alan Prince’s personality study. Like there’s personality types around money and one of them is this gambler personality. They’re wired to like want to speculate, and it’s hard. I have a few client relationships that I’ve had for a long time that have this personality trait and I think in order to effectively move in a healthy direction for those types of people, you have to mix gambling with some consistent. You can’t just like, it’s like someone who loves-

Ryan Isaac: You can’t say no forever to yourself.

Reese Harper: Like someone who’s been like straight up eating white bread and sugar for 20 years, you can’t tell him like overnight, “You’re done son.”

Ryan Isaac: Never again. You’re done. No more white bread for you.

Reese Harper: I like white bread though.

Ryan Isaac: That’s very specific… I used to eat-

Reese Harper: This is me.

Ryan Isaac: … I call them bread balls when I was a teenager.

Reese Harper: You can’t take it away from me completely. Like I’m not going to be like no more gluten overnight.

Ryan Isaac: Yeah. That’s not a good life for that personality.

Reese Harper: But like you can’t tell me to start limiting it. You can tell me to start backing off of it.

Ryan Isaac: Well, here’s the thing, does that personality ever achieve balance on their own? No.

Reese Harper: No.

Ryan Isaac: Never. It’s always a third party human being, not an app. It’s a third party human being that gets involved, spends hours of their life with you-

Reese Harper: Well, most people-

Ryan Isaac: … help you to achieve balance.

Reese Harper: … have imbalance and that imbalance is difficult to regulate without a third party human. I think it’s tough. You need a counselor, you need a shrink, you need a consultant, you need a financial advisor and every one of these professionals should have the heart of someone who cares. Who wants to help. Anyway, I want to throw out another one. What was it? The one you just did was, you’re just constantly finding the thing. The red flag for me would be someone I meet that says… Like every three months in the finance world there’s a new hot topic. And so, if I… Like right now, if I heard the word-

Ryan Isaac: [inaudible 00:33:09].

Reese Harper: … syndicate.

Ryan Isaac: Yes. Ding, ding, ding, ding, ding. We need like a bell and a buzzer going off. Yes. That’s it. The syndicate life.

Reese Harper: This is the last three months people. If you’re thinking syndicate today, you probably don’t really… You’re probably in this timeframe of this concept, which I’m talking about. Now prior to that. Syndicate’s not always been the thing, but right now that’s the word I’m getting emailed the most. All right. What’s another word that you’d say is either current now or was current recently?

Ryan Isaac: I knew you’re going to ask and now I’m just trying to think of what was hot, like-

Reese Harper: I would just say like, right, let’s say another one. Let’s say infinite banking or I’m a wealth factory. If I hear wealth factory then I’m thinking, okay, well is that the brand wealth factory? Because-

Ryan Isaac: Is that me? I’m a human wealth factory.

Reese Harper: Basically, there’s this concept of infinite banking that it has to do with insurance and it sometimes has a new label every once in a while. It goes-

Ryan Isaac: Oh, I have heard lately the Rich Man’s Roth.

Reese Harper: The Rich Man’s Roth. There you go baby. And it’s like-

Ryan Isaac: I wore that t-shirt.

Reese Harper: It’s always like something that is the same thing with a new name.

Ryan Isaac: Yeah. It’s just marketing.

Reese Harper: Like what’s a syndicate? Well a syndicate is-

Ryan Isaac: A group.

Reese Harper: … it’s like a syndicate just means like a thing, a group. And it’s typically some kind of a real estate transaction that involves multiple people like putting money together to-

Ryan Isaac: Isn’t that Vanguard rate? Isn’t that a pretty big syndicate?

Reese Harper: Yeah, there’s an actual index fund that’s been doing that for like 40 years and-

Ryan Isaac: With great returns actually-

Reese Harper: And there’s private-

Ryan Isaac: … returns.

Reese Harper: Anyway, there’s a lot of ways to invest in a group in real estate. But the specific thing, the specific concept right now is a hot topic. And it doesn’t mean it’s bad. It just means that, when I see people leading with the buzz name or the hot name, what I hear in my head is like, I wonder how much they know about this thing and if they’re actually getting screwed by somebody else.

Reese Harper: Because I’m worried that someone else is going to take advantage of their lack of knowledge, get them to do something dumb. But that thing could be a good thing. Many times you could be perfectly naive about something and it ends up being a good investment, but most of the time it tends to be that the more naive someone is about something, the more they’re kind of like following the bandwagon of the name or thinking that they’re onto something, they can get taken advantage of. And so that scares me for them. I just worry that someone might do something that will hurt them.

Ryan Isaac: And that’s it. That’s the bottom line. I mean that’s the thing I always want to stress too when I have these conversations. It’s not about like discrediting the other party or being right about something or that everything that is new or flashy is always an issue or a problem. It’s just that you just really… People get taken advantage of with their money all the time. In a position like ours in a fiduciary role where we kind of see so much of the whole picture in someone’s life, it’s a constant worry. Embezzlement, fraud, scams, wastes of money. You just worry for people so much because you see how hard they work and how one big mistake can set you back quite a while.

Reese Harper: Yeah. Well, one thing that really scares me is when I reach out to… Like when we get a new client, I always reach out to their network of advisors because it’s our job as a holistic financial advisor to try to run point between the professional team. We’re trying to like do our best. It’s difficult. It’s hurting cats sometimes, but we’re trying to collaborate with the CPA, the attorney, the office manager, the consultant, we’re trying to collaborate with his professional team. If I reach out to this professional team and I have someone be very defensive with me or very protective-

Ryan Isaac: Okay, I love this.

Reese Harper: … or very scared or try to show boat or flex.

Ryan Isaac: Flex on you. I hate the flex.

Reese Harper: It’s like I am worried because now I feel like what I’m smelling is someone who feels like they’re insecure.

Ryan Isaac: They’re getting caught.

Reese Harper: They’re may be getting caught and I’m just here to tell you that I have personal experience of actually, not only catching or discovering embezzlement, fraud, theft, tax evasion, tax fraud, like there are… I have very specific examples, many of which unfortunately, it’s difficult to share publicly and disclose that there are many, many cases, perhaps the scariest thing of my entire list here is this one that I’m… For my clients… I know I’m not probably going to catch everything because it’s really hard. I’m doing my best, but we’re not perfect. But I really to make sure that there’s no bad apples in the mix of advisors and professional advisors and it’s easier for me to smell that than it is for the client because they’re emotionally-

Ryan Isaac: Kind of in it.

Reese Harper: They’re in it. And I’m like-

Ryan Isaac: A lot of times it’s a family member or an office manager that’s been there for decades or it’s kind of just subconsciously, you just don’t want to know and this is human nature.

Reese Harper: And a lot of this stuff actually happens where you’re just too close to the action that you don’t really see that the person you’re maybe interacting with actually, they’re just like a bad egg. And not always like intentionally bad. Like they think they’re a good person, but they just stole $500,000 from you. Like that’s an actual case in the last 60 days that we’ve seen. Like a sociopathic wealth advisor thinks that they’re a good person and that they deserve this money of yours and they stole it.

Ryan Isaac: Go back in the archives, listen to the interview I did with David Harris from Prosperident and the shocking amount of cases of embezzlement and how many of those people feel entitled to what they did for one reason or another.

Reese Harper: And this’ll happen. You could see this in… I’ve seen it. It’s less common with CPAs because they don’t have control of assets. I’ve seen it happen with CPAs involved in bookkeeping. I’ve seen it happen in financial advisors who are responsible for managing assets. And I’ve seen it happen with the office employees. I’ve got firsthand experience in all these cases, and attorneys who have been involved in the business in a fairly formal way. They’re even exploiting the practice owner for their own personal gain. But man, like it’s helpful to let professionals into your life that can examine other people in your circle. That’s why corporations build a board of advisors, not a person of advisors.

Reese Harper: They build a board and they make that board meet and they make that board look at each other and ask questions, disclose things, interact and in a financial advisor’s job for a small business owner is to facilitate at a smaller level, that kind of exposure, like expose all of the goodness that’s happening. And occasionally there’ll be a red flag there that the group can collectively sniff out. It’s not a financial advisor’s job. We’re not the smartest person, but we’re kind of facilitating the exposure of all of the main players and raising a red flag when we see something. And usually if two people on your board or if your CPA and your advisor or your attorney, and your CPA or your financial planner, and your consultant are telling you the same thing, it’s likely that there really is an issue there. So that’s probably my scariest one for today, but I think it’s worth sharing.

Ryan Isaac: Well, let’s end on that. That is frightening and it’s common. I think that’s probably the scariest part about it, it’s how common it is. So, thanks for listening today. We hope we didn’t frighten people too much-

Reese Harper: But enough-

Ryan Isaac: … but there’s… Or maybe we did frighten you into doing something about it. Go fix it. So if you want to talk about yours, any of these… If any of these things like strike a nerve as we’re saying them, like, ah, crap, that’s me, then just go to the website, go to, click the book free consultation button and let’s have a chat. Let’s talk about your situation. There might be an easy fix or it might be a more complicated fix, but I guess the principal would be like, some of these things need to be fixed quickly and immediately or else they can lead to a lot bigger things. So book a consultation, go to our Facebook group. We take a lot of these questions from there. That’s and you can also call and text us. We still getting calls and texts every once in awhile. 833 DDS plans such a thing. We do that. So however you like to do that, reach out. Let’s have a chat. Thanks for listening. We’ll catch you next time.

Reese Harper: Carry on.

Behavioral Finance

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