The Critical Link Between Lifestyle and Retirement – Episode #389

“How much money do I need to retire?” That answer varies depending on who you ask. Retirement experts will offer various rules of thumb about how much the average American needs … but how much does that average American think they need? On this Dentist Money™ Show Ryan and Matt offer what they believe is a fair answer for dentists, and what variables make the answer unique to each dentist.

 

 

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Podcast Transcript

Ryan Isaac:
Hello everybody. Welcome back to another episode of The Dentist Money Show, brought to you by Dentist Advisors, a no commission fee only fiduciary, comprehensive financial advisor just for all dentists all over the country. Check us out, dentistadvisors.com. Today on the show, Matt and I are tackling a new article that came out that we both posted to each other and said, we gotta talk about this. The article is about how much money the average American thinks they need to retire comfortably, and what we think about how that number relates to dentist retirement, what that means for net worth building and spending, and all the fun stuff that comes along with that. Fun discussion with Matt in studio. Mind you, very good time. If you have any questions for us about your retirement number, all you have to do is go to dentistadvisors.com, click the book free consultation button. Let’s have a chat. We’re happy to point you in the right direction and answer your money questions. We love doing that. Thanks for being here and enjoy the show.

Jess Reynolds:
Hey, there, it’s Jess with Dentist Advisors. Did you know we recently launched a new service called the Dentist Money Membership? It’s an affordable way to support your personal financial strategy with cutting edge technology and guidance from dental focused CFP advisors. The Dentist Money membership includes the Elements Financial Monitoring app, an annual financial checkup, CE courses, an automated investment platform, and more. To learn more about the Dentist Money membership and to get started, go visit dentistadvisors.com/money.

Announcer:
Consulting Advisor. Conduct your own due diligence when making financial decisions. General principals 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, Ryan Isaac.

Ryan Isaac:
Welcome to the Dentist Money Show, where we help dentists make smart financial decisions. I’m your host Ryan and I’m here in studio with Matt Mauck. What’s happening buddy.

Matt Mulcock:
Hello Ryan. I want to point out that I’ve got a toy story. I’ve got a toy story bandaid on my finger from a cut that I had earlier today, my daughter made me put it on. You’ve got colorful fingernails. So we are…

Ryan Isaac:
The camera’s going, I do, I have four pink fingernails and a purple thumb. And they’re growing out though, because this is a week old. These are what are known Matt as gel nails. It’s a matte finish. It’s a matte finish of a gel nail and usually they will peel off a lot sooner than this, but they’re going strong. But it’s time.

Matt Mulcock:
So the gel, the, these are meant to last longer than normal.

Ryan Isaac:
I don’t know. I usually peel them ’cause I like peeling things. It’s kind of like yeah you know, like peel it off. But, yeah, every time my daughters paint, they make me, they don’t make me, I like to get them painted now.

Matt Mulcock:
I mean, and you’ve got only on the one hand.

Ryan Isaac:
Yeah. It’s just feels like asymmetrical and cool. I don’t know, I kinda like that.

Matt Mulcock:
That’s the punk rock coming out.

Ryan Isaac:
It feels punk rock.

Matt Mulcock:
Yeah.

Ryan Isaac:
At 43, which I’m not sure you’re supposed to do anymore. But anyway. Okay. Good to be here in studio, dude. It’s been a long time.

Matt Mulcock:
It does feel good.

Ryan Isaac:
Yeah, it’s been a while.

Matt Mulcock:
And I came at the perfect time.

Ryan Isaac:
71 in Salt Lake City. Although, it’s funny, I lived here my whole life and I remember this time of year when it, someone would be like, it’s nice outside. I’d be like, yeah, but it’s almost May. So it’s supposed to be nice outside.

Matt Mulcock:
It’s supposed to be, and it…

Ryan Isaac:
But there’s a point where it’s not braggable anymore.

Matt Mulcock:
No. [laughter] This year it is.

Ryan Isaac:
Yeah. This year is so crazy.

Matt Mulcock:
Because this year is busy, so crazy with the winter.

Ryan Isaac:
So insane. But it is. I brought the California sunshine with me, man. It feels good to be here. Okay. We have a fun topic today. It’s funny because you sent me an article that I had saved on my vast list of articles to talk about. And I was like, oh, we’re on the same page. This is really cool. We’re gonna talk about this article today came out. It was Bloomberg, right? Same one.

Matt Mulcock:
Yeah. Bloomberg.

Ryan Isaac:
Okay.

Matt Mulcock:
I was like I hope we’re on the same one.

[laughter]

Ryan Isaac:
Yeah, it’s the same topic, but different media outlets cover them.

Matt Mulcock:
Oh yeah. Yeah.

Ryan Isaac:
They’re like repurpose it, but it’s, how much do investors say they need to retire? I don’t wanna say the rest of it ’cause that’s a giveaway. But there’s a number in here, but first of all, I just wanna talk about how you do this all the time. Our advisors do this all the time. I was on the phone this week or last week with a client and we were going over his number. He’s a newer client. We were loading him up in the Elements app and looking at all the scores and his total term and his net worth and his spending and he’s in his ’40s and his total term was like a, it was almost his age. It was like a 42 or 43 total term.

Matt Mulcock:
Killing it.

Ryan Isaac:
Killing it. Now the caveat is his net worth is actually fairly in line with averages for his age group and his demographic. But his spending number was so low and is so low that he’s like retired. And this was a total, this is one of those things where they know they’re doing well. They’re going along, but they’re like, am I doing okay? Is it really working? And then you put in the number, they’re like, oh.

Matt Mulcock:
And has been a consistent spending number for them for like several years?

Ryan Isaac:
Yeah. Yeah.

Matt Mulcock:
So they think this is sustainable.

Ryan Isaac:
This is sustainable. Now, some caveats on this person, it’s dual income household. Income is above average. What our client average one we just did on our.

Matt Mulcock:
For income?

Ryan Isaac:
For income.

Matt Mulcock:
I think it’s five.

Ryan Isaac:
Was it five?

Matt Mulcock:
I think it was right, wasn’t it?

Ryan Isaac:
I thought it was in the fours.

Matt Mulcock:
Maybe high fours, low fives.

Ryan Isaac:
Yeah. Between 4.50 and five is probably the way to call it. So it was above that average. And a spouse income too. They had done a really good job of getting rid of expensive debts along the way, but their spending just wasn’t high. It wasn’t high spending.

Matt Mulcock:
Which is some, it’s funny ’cause we talk about this people all the time, right? Where it’s the answer they don’t want to hear. But it’s like…

Ryan Isaac:
No, I know.

Matt Mulcock:
Spending is everything.

Ryan Isaac:
That’s your retirement.

Matt Mulcock:
That is the main factor here.

Ryan Isaac:
Unfortunately, it’s kind of depressing to think about. What was our average spending when we ran the wraps… It had come down over the last year.

Matt Mulcock:
Yeah. It come down. So in 20…

Ryan Isaac:
It’s like 16.

Matt Mulcock:
In 2021. It was like 18.5 a month. We just did it again and I think it was around like 16.5 big drop. Because our demographic had gotten a little younger.

Ryan Isaac:
Yeah. So I think we’re gonna doing some math on this podcast too. I kinda like doing this live math. But anyway, the, you sent this article, I’d seen this too and thought this was a really interesting thing. The rest of the title is how much do investors say they need to retire, at least $3 million? Now, the respondents from this, survey are not dentists mostly.

Matt Mulcock:
Yeah. I don’t think it, I guess none.

Ryan Isaac:
If you were asking average dentist, like Ballpark, Hey, how much money do you need to retire? Like in net worth, what? Like what do people say normally?

Matt Mulcock:
Yeah, it’s funny, I was gonna bring this out of like the funniest answers we’ve heard before. Like we’ve talked.

Ryan Isaac:
Like there’s outlandish, like okay, I got it.

Matt Mulcock:
It ridiculous. Where it’s like that makes no sense. Why not just say a billion dollars. Like I’ve heard some crazy things.

Ryan Isaac:
You’re getting Dr. Evil at this point, like 1 trillion. Yeah.

Matt Mulcock:
I think it’s highest you’ve heard is a $100 million. I’ve heard a $100 million.

Ryan Isaac:
A $100 million. Round… Big round 10s, 50, 10, 20.

Matt Mulcock:
Exactly, I think if I had to guess, or just going anecdotally, I would say the average of what I hear the most is somewhere between $5 and $10 million.

Ryan Isaac:
Yeah. I would agree.

Matt Mulcock:
On average is what I hear from, I’ll say this from a reasonable like level headed dentist. Who’s approaching this? So like.

Ryan Isaac:
Yeah. What’s some math.

Matt Mulcock:
Pragmatically and or even just trying to saying like, again, they’re trying to be reasonable.

Ryan Isaac:
What seems right.

Matt Mulcock:
They, I think the answer probably is somewhere between $5 and $10 million is what we hear most of the time.

Ryan Isaac:
I was just gonna ask though, do you think that’s based on a calculation from your…

Matt Mulcock:
No.

Ryan Isaac:
Okay.

Matt Mulcock:
No, no, no, no. I think most of them…

Ryan Isaac:
It just seems like it’s big enough.

Matt Mulcock:
Unless they’ve been listening to us for a while.

Ryan Isaac:
Then they probably have a number.

Matt Mulcock:
I think most of the time they’re just thinking, oh yeah, that sounds about right.

Ryan Isaac:
You know, this is tangential. We won’t spend time on this, but it.

Matt Mulcock:
Tangential.

Ryan Isaac:
Which is we know we don’t wanna do this.

Matt Mulcock:
Great word.

Ryan Isaac:
Yeah you like that?

Matt Mulcock:
Gosh, I love that.

Ryan Isaac:
Actually, there was like a Ken Garf billboard about tangential conversations and they listen.

Matt Mulcock:
It’s amazing. I love it.

Ryan Isaac:
Like they’re all ears or something. Isn’t that their campaign?

Matt Mulcock:
Yeah. Something like that.

Ryan Isaac:
I think I stole it from them. I just drove in. But this, it’s funny ’cause when people ask about how much life insurance they should have, they usually pick a number that’s like half that. Which is funny ’cause it’s the same scenario. It’s like if something happened to you, if you’re the primary, income earner in the family, if something happens to you, you’re essentially trying to set up your family for like a retirement scenario. Where they have enough money to just keep spending indefinitely. But people will say like, I need like $5, $6, $7, $10 million to retire. But like, well how much life insurance do you think you need though?

Matt Mulcock:
Oh, like a million.

Ryan Isaac:
A million dollars [laughter]

Matt Mulcock:
It’s like Oh, okay. Doesn’t… Yeah, that’s a good point.

Ryan Isaac:
It’s interesting, huh? Like they’re, people’s brains will immediately go to a pretty big chunk of money when it comes to thinking about retirement because I think, I don’t know why, maybe they just picture it lasting for longer, being more fun, extravagant.

Matt Mulcock:
For sure.

Ryan Isaac:
There’s hope involved.

Matt Mulcock:
It’s more optimistic. It’s more fun to think about retirement and freedom and all that. You think about a life insurance, you think of dying.

Ryan Isaac:
Yeah. You’re like, what’s the minimum I have to spend to even think about this problem?

Matt Mulcock:
And they think of that specifically as a just it’s straight up a cost that they don’t want.

Ryan Isaac:
Its just a cost.

Matt Mulcock:
It’s a cost for something that they don’t want to even think about.

Ryan Isaac:
Yeah. Anyway, I don’t wanna pull us on…

Matt Mulcock:
That’s a good point though.

Ryan Isaac:
Tangential…

Matt Mulcock:
That’s a good tangential.

Ryan Isaac:
Train tracks. But it is interesting how people think about that. So if you’re considering life insurance and you’re trying to think about that, keep it in the same space as your brain as what would it take to retire?

Matt Mulcock:
Honestly, that’s what you’re doing and if the younger you are, the younger your kids are. That’s really what you’re doing. And then if you think about it, the savings that you think of, like the savings for retirement that you’re making, you’re like buying down that life insurance need over time.

Ryan Isaac:
Oh yeah.

Matt Mulcock:
And that’s the goal.

Ryan Isaac:
It’d be nice.

Matt Mulcock:
This is an insurance bond like, this is a good point. Like I like that you’re ready to tell.

Ryan Isaac:
Eventually like you, yeah… As your net worth goes up, start getting rid of some insurance. Term insurance.

Matt Mulcock:
Term.

Ryan Isaac:
Just if we’re just being clear if anyone…

Matt Mulcock:
99% of your term.

Ryan Isaac:
All right. So back to this article then. Interesting that people said $3 million. Is there anything you wanna state out of the gate about this article as you read through this like big picture, high level overview and I thought we could kind of just go through the paragraphs ’cause they’re kind of interesting. Some of the numbers that were broken down in the end of it, it actually gets into people’s portfolios and their behavior with portfolios and what they expect out of market. See this was written, can you see a date on yours? Oh…

Matt Mulcock:
February.

Ryan Isaac:
Yeah 2023. So this was written just in February, 2023. We’re recording this in April, 2023. And so this had some interesting, what’s… Not projections but some forward looking thoughts about markets and portfolios.

Matt Mulcock:
They like into like how do you feel about the market and the future and all that kind of stuff.

Ryan Isaac:
So really, okay. So this article starts by saying the answer is actually between $3 and $5 million. According to this worldwide study that they did in I don’t know what M… See I’m at the age now where like I’m reading, but then I got pull it close and be like M L I V poll survey. I don’t know what this group is. About a third of investors said it was at 3 million and roughly another third of five million, which means another third somewhere.

Matt Mulcock:
Another third. Somewhere in between there.

Ryan Isaac:
20 million. A hundred million.

Matt Mulcock:
Yeah, I guess love that.

Ryan Isaac:
Another third.

Matt Mulcock:
And they actually break down the numbers here.

Ryan Isaac:
Yeah. So give us some insight on that. Like what are we seeing in there?

Matt Mulcock:
I thought it was interesting here they give again this whole chart from Bloomberg. They’re breaking down like those numbers that you just said, like again third… Three million, A third of five million. I thought it was interesting though, the most people that said five million were in the US so…

Ryan Isaac:
I don’t think I caught that part actually.

Matt Mulcock:
Yeah ’cause they break it down, they color code it the most people by a pretty wide margin, right? That’s how I’m reading this is… Yeah, the blue. Yeah, that’s… So a good chunk of the $5 million answer was in the US. But the most, more than $20 million answer was in the Middle East.

Ryan Isaac:
Oil money.

Matt Mulcock:
Yeah. The oil money.

Ryan Isaac:
Oil country. Okay, my chart wasn’t loading. That’s why that’s really funny. Okay, So now I’m looking at that. Yeah, that’s really interesting. So I mean most of our listeners actually, I don’t know, I haven’t run the demographics or had Tad do that before. Most of our listeners I think are in the United States.

Matt Mulcock:
I would imagine, probably US. I think we get some Canada. But I think majority gotta be US.

Ryan Isaac:
Shout out to Canada. We actually, I actually did have a phone call with an Australian doc once who listened to the show and we had to coordinate the… And of course the whole time…

Matt Mulcock:
Please tell me you recorded it ’cause I’ll stroll on accent.

Ryan Isaac:
Probably still in there.

Matt Mulcock:
Unequivocally objectively the best accent.

Ryan Isaac:
Sorry.

Matt Mulcock:
Sorry.

Ryan Isaac:
It’s the best accent in the world.

Matt Mulcock:
It really is.

Ryan Isaac:
The whole time. I was just like, you’re so cool.

[laughter]

Ryan Isaac:
I don’t even know you.

Matt Mulcock:
You’re like…

Ryan Isaac:
You’re so cool.

Matt Mulcock:
I’m not even listening to what you’re saying, By the end you’re like, Wait, what did you say?

Ryan Isaac:
I was stereotyping how cool this person was, you know what I’m talking about? Anyway, I don’t know man. This is actually kind of, it feels pretty relevant to a dental community in the United States if the majority of the respondents in this survey are saying $5 million. Okay. So here is a few points, well, I guess maybe let’s give our audience what do you want them to take from this well like, what do you, what’s the message you want to convey? I can tell you what I want to convey from going over this.

Matt Mulcock:
So the first thing that came to me, and as we talk about this generally about like, how much do I need to retire, there’s some really, I guess what I’d want people to do is take a little bit more, take it a step further than just like the first number that pops into your head. And we talk about this all the time. Anyone that listens to this show or has listened to the show is gonna, we already mentioned it earlier, is the total term figure, it doesn’t take a ton of time or brain power to like put just one step further of thought into this like, meaning if someone walks up to you on the street and says, “how much do you think you need to retire?” Most people are gonna, again, have a number they’re anchored to, but it’s like, take one step further and just think to yourself, okay, how much do I spend? What is like, you just take that calculation. So again, total term as a reminder is your net worth divided by your annual spending. So in this case, let’s just use these numbers as an example. Let’s say $3 million is the number and you’re retiring today. To get a 30 total term at $3 million net worth, that means you’re spending about a $100,000 a year.

Ryan Isaac:
Yep. Which most dentists are not.

Matt Mulcock:
Most dentists are spending about double that.

Ryan Isaac:
Except the one client will just give it a…

Matt Mulcock:
I was gonna say.

Ryan Isaac:
75 shooting high.

Matt Mulcock:
Come on How is that even possible? So they have no debt.

Ryan Isaac:
They paid off a lot of their debt. Most of their debt. They still have a pretty big size business loan. Income’s high, it’s again another tangent, but the whole like, debt versus investing is a choice most people have to make choosing between those two things.

Matt Mulcock:
This dentist didn’t have to.

Ryan Isaac:
Unless your income’s pretty dang high.

Matt Mulcock:
Yeah, yeah.

Ryan Isaac:
But really, but that’s not the most relevant part though A dentist with high income, a dentist with a seven figure income even, that’s not the most relevant, interesting part to me. Because usually spending keeps up with those incomes.

Matt Mulcock:
That’s…

[overlapping conversation]

Ryan Isaac:
To the tune of almost a third of income is being spent by people just generally. You make a million dollars cool. Good for you. But statistically you’re probably spending like $300,000, $350,000 a year.

Matt Mulcock:
Yeah sorry, we’re getting tangential there.

Ryan Isaac:
No, like but this is case study actually.

Matt Mulcock:
I’m curious about this ’cause I actually think this sounds weird, but I think it’s true, I actually think one of the issues that is underrated in our industry, especially when you’re working with someone who’s been with you for a long time into retirement, I actually think one of the issues is getting them to spend money at a certain point.

Ryan Isaac:
This might be one of those cases.

Matt Mulcock:
So that’s what I’m curious about is do you feel like one of the pro, ’cause when I hear that income well above average, plenty of money, they’re already retired.

Ryan Isaac:
No, 42. Middle of career.

Matt Mulcock:
Oh…

Ryan Isaac:
Just still going, wondering if they can be done and I’m like your total term’s like your age.

Matt Mulcock:
Yeah yeah okay.

Ryan Isaac:
[laughter] Your total term is a 42, you’re 42.

Matt Mulcock:
So I would imagine that that person, that your biggest hurdle or like talking point with them right now is like start enjoying some of this.

Ryan Isaac:
Behaviorally. That’s really interesting.

Matt Mulcock:
Behaviorally…

Ryan Isaac:
I kind of wanted to talk about that as part of one of my takeaways too. Is the behavior of spending money along the way you gotta enjoy this stuff along the way to a certain responsible degree, but then yeah, into retirement too. I don’t know, we’re pretty new in the relationship. So we’ll see behaviorally where they land. Now here’s another thing too, is a significant part of that, and I don’t, if the total term was a 42 maybe, it’s still a chunk, six or seven points of that was primary residence, which we don’t want to count. We don’t want to count, like we don’t want to count on your home equity for part of your retirement. You can, you can use it.

Matt Mulcock:
We would default as removing that as possible.

Ryan Isaac:
Yeah Default. So if I subtract that out, he’s somewhere in the mid thirties for a total term.

Matt Mulcock:
But still he’s 42 years old.

[laughter]

Ryan Isaac:
Yeah and his goal is 55 and I’m like here to tell you some good news, boss.

Matt Mulcock:
Yeah Wow.

Ryan Isaac:
Yeah. So, anyway, yeah. Low spender behavioral that’s gonna be really interesting to see. You’re saying, just to say that back to you, you’re saying that you see that as one of the most, not one of the most, but one important piece of wealth creation is being able to, enjoy the spending of it. Do you think that’s a bigger problem than… I think it’s a bigger problem than people realize. People are not able to spend and use the net worth and the income that they’ve worked so hard for.

Matt Mulcock:
I think that is a definitely a bigger problem than people give it credit where we talk about this all the time. Balance over burnout. This actually, I think their traditional advisor, a traditional approach to this, financial planning is look at this in stages. Like right now I’m in accumulation stage, I am saving as much money as I can to like one day enjoy it. That’s a very traditional view. Where I’m like, I don’t know, maybe the older I get and like some of the stuff that’s personally happened in my life over the last couple years I’ve started to like change my view of this a little bit and we’ve also started leaning more into this approach of maybe you should be like I think the value of financial planning is almost more like enjoy the moment along like it’s more about enjoying the moment.

Ryan Isaac:
Oh totally.

Matt Mulcock:
More than anything. It’s like by taking care of the stuff for your future, systematizing as much as possible it allows you to enjoy the moment, but part of enjoying the moment is spending your money, and not scrolling away every dime for some one day. But so I think that’s a big mindset shift for some people.

Ryan Isaac:
I think it’s more people than I ever realized that have a problem spending their money. We’ve been talking about this a lot lately. Reese talked about this on, I don’t know what episode, it was like three or four episodes ago. We talked about how values align with your money decisions. And that’s been on my mind so much lately about… And I think this becomes… I’m just projecting because this is the phase of life I’m in.

Matt Mulcock:
You love projecting.

Ryan Isaac:
Yeah, I do like projecting on people my own trauma and issues [laughter] and opinions. No, but I think you hit different phases in life earlier there’s a lot of hustle and it’s busy, but there’s a point… My experience has been like you start to hit like mid, what’s considered midlife and you start thinking like, “Oh yeah, are my money decisions actually aligning with what’s important to me?” And this whole concept of even knowing what your values are, not that there’s like a static list, it’s unchanging, but at that point in your life, what do you value? Look at a list of 50 values. If I gave the website right now, I’d probably mess it up, but I think it’s getelements.com/value-cards.

Matt Mulcock:
Dash cards. Yeah.

Ryan Isaac:
Not underscore, but dash cards, getelements.com/value-cards.

Matt Mulcock:
Value dash cards. Yep. By the way, we’re gonna work on creating more of a dentist advisor/dentist money branded values.

Ryan Isaac:
Yeah, that’s coming.

Matt Mulcock:
That’s coming.

Ryan Isaac:
That’s coming. A little insight into the brainchild of Matt Mulcock. But, yeah, I go there. It only works on a laptop as of right now, not a cell phone. But… A cell phone. Does anyone say cell phone anymore?

Matt Mulcock:
No. You just aged yourself.

Ryan Isaac:
My daughter calls me Boomer all the time. I’m not even a boomer. She calls me boomer all the time. [laughter] I’ll take it.

Matt Mulcock:
They’re just phones now.

Ryan Isaac:
Yeah, they’re just phones.

Matt Mulcock:
‘Cause you’re implying… [laughter]

Ryan Isaac:
There’s no distinction.

Matt Mulcock:
Yeah. [laughter] You’re implying that there’s a landline, like, “Call me on my cell phone.”

Ryan Isaac:
As opposed to the landline.

Matt Mulcock:
Yeah. [laughter]

Ryan Isaac:
Fax me. Fine. Fax me.

Matt Mulcock:
I’m gonna go ahead and record that on my VHS.

Ryan Isaac:
Gosh. It works on a laptop. But go there, if that’s the right URL, and rank your values. You know, there’s probably 30 or 40, maybe more at this point, values there, and it allows you to rank them in a pyramid. I think there’s 10 total, and they start you like the top one, top three, top four, whatever. But it’s been a fun exercise I’ve been trying to do with clients and myself and try to say like, “Am I making financial decisions that align with these values?” It’s actually important to me at this point in my life knowing that 10 years ago they were different, 10 years ago, they’ll probably be different again.

Ryan Isaac:
But like, personally when I did mine, my top of the pyramid, number one value is fun. That’s it. That’s my highest driving factor in all of my entire life, all my relationships. And so I can see… And that’s been pretty steady over my life. But I can see times where I’ve not made financial decisions that have aligned with that. And what’s interesting is the cheapest I’ve ever lived and the most extra income I’ve had to save and have left over were times when I wasn’t aligning with that. I’m in a point in life now where I’ve chosen to live in a place that sucks most of my money out of my bank account before I get a chance to just enjoy it and smell it and sniff it and swim in it. [laughter] But those money decisions…

Matt Mulcock:
Sniff it.

Ryan Isaac:
Yeah. [chuckle] Do you sniff your money? [laughter]

Matt Mulcock:
Sometimes, but not usually. Yeah.

Ryan Isaac:
I don’t recommend it. I think there’s a lot of micro worms on there or something. [laughter] But…

Matt Mulcock:
This is why I don’t carry cash. I’m too tempted. I’m gonna sniff it.

Ryan Isaac:
It’s so gross. You sniff it all day.

Matt Mulcock:
So I just have to avoid that.

Ryan Isaac:
You’re a money sniffer.

Matt Mulcock:
I have to avoid having cash on me.

Ryan Isaac:
You’re a cash sniffer.

Matt Mulcock:
Otherwise, my wife walks in and I’m sniffing cash. [laughter]

Ryan Isaac:
She’s like, “Not again.”

Matt Mulcock:
“No.”

Ryan Isaac:
“Now we gotta get you back to the treatment center.” [laughter] Yeah. Well, like, I’m in a point in my life now where I’m like, “Oh, I’m spending more than I ever have.” But it aligns with my top value. Now I have to balance that with like, “Mmh, am I still saving? Am I still trying to do something for my 60-year-old self that’s gonna want some money and not wanna keep working for another 20 years?” Yeah, but that’s the balance. So that’s just my experience lately.

Ryan Isaac:
Reese talked about this recently, we’ve been talking about this is a big subject, Do your values at this point in your life align with the money decisions that you’re making? And when they don’t, that’s when people get in a lot of stress. They get really just anxious and stressed out because they might be killing it, amassing lots of wealth, piling away cash, investing, buying real estate, growing practices, but still not addressing the actual value in their life. And so all this accumulation, kind of to your point, isn’t being channeled into something that actually makes them happy and fulfilled.

Matt Mulcock:
Yeah. Well, it’s funny that you bring that up. I knew we were gonna get to this when we talked about this a while ago.

Ryan Isaac:
I didn’t. I had no idea where we were gonna go up with that.

Matt Mulcock:
I mean, I kinda had a feeling we’d get to this. [laughter]

Ryan Isaac:
Okay, good, good. Yeah, good.

Matt Mulcock:
‘Cause… And to your point, or to your question earlier of like biggest takeaways when we first see this, you’re alluding to this right now, which is something we’ve talked a lot about. And again, Reese mentioned this on that podcast a little bit ago of like, I think most people think to the… Like the title of this article and this survey was, “How much do you need to retire?”

Ryan Isaac:
Yeah.

Matt Mulcock:
I think most people think that is the question when it comes to financial planning. Wouldn’t you say like…

Ryan Isaac:
Yeah, they think that’s the biggest.

Matt Mulcock:
They think that is what defines this whole process of like, well, when will I have enough.

Ryan Isaac:
Figure out that number.

Matt Mulcock:
Figure out my number. And I actually don’t think it is.

Ryan Isaac:
Okay.

Matt Mulcock:
And this is something I’ve kind of come to over the course of my career and stuff that you’re alluding to now around aligning your values. I actually don’t think this is the question that should to define your wealth journey or all of your financial planning and all that.

Ryan Isaac:
That sounds like a hot take.

Matt Mulcock:
Yeah, maybe it is. [laughter]

[applause]

Matt Mulcock:
A lot of podcasts are gonna have a soundboard, but just so you guys know…

Ryan Isaac:
I have an app on my phone.

Matt Mulcock:
On his cell phone, on his cell phone, he pulled out… [laughter] He had just a little app.

Ryan Isaac:
Just a side note, I have that app on my phone for when I drop off my kids somewhere. And I hook it into my Bluetooth in my car and I crank it up really loud and they hit the air horn.

Matt Mulcock:
Every time?

Ryan Isaac:
The hype horn. Yeah. And they’re just like so dumb. Anyway. [chuckle]

Matt Mulcock:
Do they hate you for that?

Ryan Isaac:
They think it’s… One of them thinks it’s hilarious.

Matt Mulcock:
Yeah.

Ryan Isaac:
Okay. I wanna repeat what you just said though. You think… In financial plan, you think that a lot of people assume the ultimate question in financial planning that’s gonna maybe solve their problems, give them closure, give them a roadmap, make them feel good, is tell me my number that I need and then the rest will take care of itself and we’re fine. And you’re saying you don’t think that’s it?

Matt Mulcock:
No, I think it… And I don’t wanna get or throw out all this confusion there or mix this up. I’m not saying it’s not an important question.

Ryan Isaac:
Yeah. Yeah.

Matt Mulcock:
I think it is an important question. It’s something we talk about all the time, total term. We’ve put a lot of effort into simplifying this down.

Ryan Isaac:
Yeah, it’s probably one of the most important indicators on our whole system.

Matt Mulcock:
Yeah, and I still think it is, very important.

Ryan Isaac:
Yeah, totally.

Matt Mulcock:
I just don’t think it is the question that should define your approach to all of this, money, creating wealth, planning for all this. I think a more appropriate question is what you’re talking about. Well, let me back up. I think why this can create a little bit of a problem and why I don’t think it should be the question is because it creates this like someday mentality. Like it creates this anxiety around like, “I’m spending too much,” right?

Ryan Isaac:
Yeah.

Matt Mulcock:
Because, well, I need to figure out again to this question, how much do investors say they need to retire? If you focus too much… If you put that at the top of the pyramid, you default to this, what Reese alluded to the other day or the other podcast, is like this wealth optimization approach.

Ryan Isaac:
Yeah, as the main focal point of your whole life.

Matt Mulcock:
As the main driver, focal focal point. I think a better question is something that should define your approach to all of this is something along the lines of, “Am I managing my money in a way that improves my life?”

Ryan Isaac:
When you say managing, I think people might think of investment portfolio only, but you’re thinking of something broader.

Matt Mulcock:
No, much broader.

Ryan Isaac:
Yeah.

Matt Mulcock:
Just, “Am I… ” Is it maybe a better word.

Ryan Isaac:
Interacting with?

Matt Mulcock:
Am I approaching my money…

Ryan Isaac:
Okay.

Matt Mulcock:
“Am I approaching my money in a way that that improves my life?” Or, rephrase it any way you want. But it’s more about a combination. Because if you approach it, to me, more broadly in that type of question, it’s not saying you shouldn’t think about the future. You should.

Ryan Isaac:
No. No. Yeah.

Matt Mulcock:
Part of managing, or approaching, or… What was the word you just used?

Ryan Isaac:
I don’t even know. Interacting.

Matt Mulcock:
Interacting with money. Like part of interacting with your money in a way that improves your life is still thinking about the future. You still have to have a savings draft, you still have to be thinking about your entire life.

Ryan Isaac:
Yeah.

Matt Mulcock:
But if you phrase it like this question, and what I think a lot of people think about is when you think about how much do I need to retire, the only framing there is the future. I think if you broaden out that question to more, is this just improving my life in general? It’s more now and the future.

Ryan Isaac:
Your phrase was am I managing money the right way to improve my now and integrating with your future interacting with money.

Matt Mulcock:
Yeah.

Ryan Isaac:
That encompasses like how you, how do you treat debt?

Matt Mulcock:
Yeah.

Ryan Isaac:
How does it work for your personality to work with debt? Are you the high stress, I hate debt personality, then you’re gonna have to address that, part of it might be a little education on why you might not have to be so scared about debt, but part of that might be allocating some money to getting rid of it faster.

Matt Mulcock:
Yep.

Ryan Isaac:
So you can sleep better. For many, many people, I’d say the majority of people that’s keeping high amounts of liquidity around not dumping everything into debt reduction or illiquid assets. Like how even if your entire future is gonna be built on building companies or real estate assets, having liquidity, accessible liquidity is gonna be a way to interact with your money in a way that’s gonna help you sleep at night.

Matt Mulcock:
Yeah.

Ryan Isaac:
It’s gonna be your spending, what you spend your money on. Like, do you need a cheap house and expensive vacations or the other way around?

Matt Mulcock:
Yeah.

Ryan Isaac:
You know.

Matt Mulcock:
But it’s to your point, you need to take time to take a step back, evaluate your values and say, what do I value?

Ryan Isaac:
Yeah.

Matt Mulcock:
Like you’re saying you moved to California and on a spreadsheet that wasn’t the right move.

Ryan Isaac:
It hurt.

Matt Mulcock:
Right?

Ryan Isaac:
Yeah.

Matt Mulcock:
Like if I was just looking at your spreadsheet, I’d be like…

Ryan Isaac:
If it was, well, what’s if it was maximizing for wealth accumulation…

Matt Mulcock:
Yeah, just if it was wealth optimization it could not be the right move.

Ryan Isaac:
Yeah. No way. No way. No, no.

Matt Mulcock:
You’d be like go move to South Dakota actually, and…

Ryan Isaac:
Yeah.

Matt Mulcock:
You know, so, but you aligned your values with your top value being fun.

Ryan Isaac:
Yeah.

Matt Mulcock:
You are, obsessed is a negative connotation. [laughter]

Ryan Isaac:
Yeah. I’ll take it though.

Matt Mulcock:
I feel like what would you passionate…

Ryan Isaac:
Yeah.

Matt Mulcock:
Extremely passionate about surfing.

Ryan Isaac:
Yeah.

Matt Mulcock:
So you said, all right, I’m gonna go take, make this trade off this wealth optimization trade off to go move to a place that it maximizes my fun for me and my family. Right?

Ryan Isaac:
Yeah. Now part of that too, I mean we, we talk to our clients about how they, man so much of this has to do with your career though too.

Matt Mulcock:
Yeah.

Ryan Isaac:
I currently really love what I do and I hope to do it for a long time. Many dentists feel the same way.

Matt Mulcock:
Yeah.

Ryan Isaac:
Many dentists do not. So part of that too is you have to look at yourself and be like, “Well, okay, if you’re gonna make a financial decision that might extend your career, ’cause you’re gonna have to work longer. You need a longer runway to earn more money because you’re gonna choose to spend it somewhere along the way to bring you fulfillment, happiness, whatever it is. Health, part of that is like alignment of your career. Like, are you okay? Are you a dentist doing five days of clinical and you freaking hate clinical dentistry? [laughter]

Matt Mulcock:
You better make a change real quick.

Ryan Isaac:
Yeah. Are you a dentist doing like no clinical and you have five locations, but you hate managing and HR and training and leadership and dealing with the business, then you have to align what’s happening with your career. I think one of the biggest killers to a dentist’s financial picture is not being aligned with what they really want out of their career.

Matt Mulcock:
Yeah.

Ryan Isaac:
Luckily dentistry these days has so many options of how you can be an owner, be a clinician, be an artist, be a marketer, be an influencer, be a leader…

Matt Mulcock:
Consultant.

Ryan Isaac:
You can do so many things. You have partners, co-owners, like you can work for a corp… Like whatever, but aligning that is gonna maybe have one of the most consequential biggest impacts to how you do the rest of your money. How you interact with the rest of your finances. And I just think that that’s really important too. ‘Cause if you’re like, I need out yesterday, but then you’re choosing to make lifestyle choices that make you spend a lot of money. You’re that’s…

Matt Mulcock:
There’s a misalignment somewhere.

Ryan Isaac:
Yeah. Huge misalignment that’s gonna come at a crossroads really fast and ugly head on collision.

Matt Mulcock:
And to your point of the dentist, we’ve talked, we’ve, you and I have talked to many of them. The dentists who are working five days a week, clinically, they absolutely hate it. They’re grinding themselves down to like complete burnout.

Ryan Isaac:
Yeah.

Matt Mulcock:
And, but when you bring that up, they say, “well, I just gotta keep grinding ’cause to this one day, like my retirement portfolio looks great.”

Ryan Isaac:
One day. Yeah.

Matt Mulcock:
But again, this comes back to why this question in my opinion is not the question is for that exact example. If you’re grinding it out five days a week, I guess I should be careful here ’cause maybe your number one value is wealth.

Ryan Isaac:
Yeah.

Matt Mulcock:
Maybe your number one value is…

Ryan Isaac:
There’s no judgment of what it should be. Yeah.

Matt Mulcock:
I’m not saying what it should be.

Ryan Isaac:
Yeah.

Matt Mulcock:
But if it’s not and if you’re not taking that time to sit back and say, “What are my values? What am I actually doing this for?” First step number one would be do that exercise.

Ryan Isaac:
Yeah.

Matt Mulcock:
Go through that and see where the misalignment is, and then approach it more from a broader perspective rather than just how much do I need to retire.

Ryan Isaac:
Yeah, 100%. And I’d rather see somebody take a pay cut and extend their career by 10 years.

Matt Mulcock:
Yeah. And enjoy their life…

Ryan Isaac:
And enjoy it.

Matt Mulcock:
More along the way.

Ryan Isaac:
Relieve their stress, take stuff off their plate. That is just a burden and nothing else. And this isn’t to say you don’t go through phases, early, mid-career, late career where you just gotta put your head down and grind.

Matt Mulcock:
Yeah.

Ryan Isaac:
So there’s a thing called the withdrawal rate in our industry. And it’s just the… What percentage of your portfolio could you pull out every year sustainably and not run out of money? Historically that’s been around a four. We’ve pegged our targets a little under that even to accommodate and account for all kinds of life changes that could happen. And the fact that dentists spend more money than the average person by a long shot. But the new targets from the same person, William, sir William was like four, seven, five.

Matt Mulcock:
Something like it was… Yeah, between four and five.

Ryan Isaac:
Almost 5% Yeah.

Matt Mulcock:
It was higher than four. Lower than five.

Ryan Isaac:
Yeah. It was really close to five. What that means is let’s go to this $5 million number if you have a $5 million, let’s just keep this really simple, but people’s balance sheets are more complex because you’ll have a business to sell. You might have a building, you might have some rental properties, some rental income, you’ll have some social security income. You might choose to sell or liquidate or keep the income on those. You’ll have like a portfolio, but let’s just say you’ve got $5 million in a portfolio.

Matt Mulcock:
Nothing else.

Ryan Isaac:
Nothing else.

Matt Mulcock:
Yeah.

Ryan Isaac:
Like you’ve liquidated and it’s all sitting there. You live in your house, everything’s paid off. You got $5 million in your portfolio.

Matt Mulcock:
You have no passive income.

Ryan Isaac:
No passive. Oh my gosh, dude.

Matt Mulcock:
How dare you sir?

Ryan Isaac:
Did you just say passive income?

Matt Mulcock:
I said it.

Ryan Isaac:
Did you say tax free Passive income?

Matt Mulcock:
Tax free. Passive income.

Ryan Isaac:
Instant tax free passive income.

Matt Mulcock:
Instant.

Ryan Isaac:
Did you say that?

Matt Mulcock:
You can be your own bank even maybe. [laughter]

Ryan Isaac:
Yeah, I did. Oh my gosh.

Matt Mulcock:
So in this case, you’re not your own bank and you don’t have passive income.

Ryan Isaac:
Except for you do. Except it’s sitting in a brokerage account kicking you out income passively. And you can be your own bank and lend against it if you want. Except you are.

Matt Mulcock:
Except you are those things. Okay.

Ryan Isaac:
So let’s say this is the, just to keep it easy though, that $5 million, if you wanted to say according to the withdrawal rate history academically over time, you could pull out somewhere between $200,000 to $250,000 a year indefinitely, and you will pass on that $5 million. And the way that the assumptions worked were always like close to something like a 60-40 portfolio. Weren’t they? Pretty close to that?

Matt Mulcock:
Yeah. Yeah.

Ryan Isaac:
Moderately…

Matt Mulcock:
I think those numbers were all based off 60-40.

Ryan Isaac:
Yeah. The point is, that that’s how the math works, in these calculations. And when people throw out these numbers, I need three, I need five. It’s just, well based on, anywhere from three and a half to say up maybe up to four and a half percent, maybe five, just depending how old you are.

Matt Mulcock:
Yep.

Ryan Isaac:
If that, if whatever number that kicks out is enough to cover your spending, then good for you.

Matt Mulcock:
Yeah.

Ryan Isaac:
That’s great. Here, here’s a caveat though. We set our targets in the total term for a 30 or above, not including the house that’s the most conservative. That’s like, you could retire with $5 million and you kick out whatever your $200,000 a year or something. That means you’re dying with the $5 million and it couldn’t even add, like a lot of the models show it actually would grow.

Matt Mulcock:
Actually growing.

Ryan Isaac:
It actually grows.

Matt Mulcock:
And, yeah. And in a lot of the models…

Ryan Isaac:
When I put this into Monte Carlo, this drives me kind of crazy with Monte Carlo. I’m gonna be honest because I was just doing this for a client, just retired, sold a practice. Has a net worth a little higher than this number? It’s sub 10, but it’s above five. And spends, it’s got his spendings like $240,000 a year. Right. Pretty kind of average.

Matt Mulcock:
Says they’re gonna have like $50 million.

Ryan Isaac:
Yeah.

Matt Mulcock:
Yeah.

Ryan Isaac:
Yeah. It’s really stupid.

Matt Mulcock:
Yeah.

Ryan Isaac:
We’re gonna take this, $6 or $7 million and somehow by 95 it’s gonna be like $29 million.

Matt Mulcock:
Yeah.

Ryan Isaac:
And I’m putting in like high inflation growing withdrawal rate.

Matt Mulcock:
Yeah.

Ryan Isaac:
Like conservative portfolio and I’m, this guy’s gonna have $30 million when he dies.

Matt Mulcock:
Yeah. Yeah.

Ryan Isaac:
Maybe he will. [laughter]

Matt Mulcock:
Possibly.

Ryan Isaac:
It kind of drives me a little crazy though.

Matt Mulcock:
Yeah. And it’s, I think…

Ryan Isaac:
It drives me nuts.

Matt Mulcock:
It’s a good point. And then the key there is just do you, do we feel confident you can walk away despite what you may or may have in the future?

Ryan Isaac:
Yeah.

Matt Mulcock:
To your point, if you are…

Ryan Isaac:
Now.

Matt Mulcock:
Going off a 3.3% withdrawal rate, chances are you’re gonna have a decent chunk of money when you die.

Ryan Isaac:
It’ll sustain. Here’s where I was going with this though. You don’t… That was, that’s our like conservative, like bench of like starting point for total term, but you don’t have to do that, right?

Matt Mulcock:
Yeah. I know.

Ryan Isaac:
You’ve always said the retirement or the work optional conversation starts at?

Matt Mulcock:
I’d say in the low 20s.

Ryan Isaac:
Yeah.

Matt Mulcock:
Even at 20s.

Ryan Isaac:
Explain that a little bit. What, do you, why are you saying that? What do you mean by that?

Matt Mulcock:
Yeah, so I think that’s first of all, as you hit a 20 total term, or I’d say the low-ish 20, so it, the conversation would start at 20. And when I say the conversation, I mean, let’s start talking about, the reality of you actually exiting, right?

Ryan Isaac:
Yeah.

Matt Mulcock:
You actually getting into retirement at 20. And the reason I say that is ’cause chances are you’re at the latter part of your career. We see all the time where, the biggest savings happening, is happening at the latter part of someone’s career. The biggest additions to that total term number are happening in the latter part of their career.

Ryan Isaac:
Like 50 plus usually.

Matt Mulcock:
Yeah. Which actually makes a lot of sense.

Ryan Isaac:
Totally.

Matt Mulcock:
Because their debt is usually much lower or if not gone, their earnings at a high all time high.

Ryan Isaac:
Yep.

Matt Mulcock:
Their kids are usually. Again, we’re talking about like the…

Ryan Isaac:
Typical.

Matt Mulcock:
Typical situation. Kids are usually off on their own now. So there’s a, bigger opportunity to be putting away a lot more money. So the conversation starts at 20. The withdrawal rate out of 20 total term is a five, right? A 5% based on what you were just saying.

Ryan Isaac:
Yeah.

Matt Mulcock:
At 25 it’s a four, and then at a 30 it’s 3.3.

Ryan Isaac:
3.3, yeah.

Matt Mulcock:
So as you get to a 5% withdrawal rate, the conversation starts even possibly to retirement because that person may not wanna leave a legacy.

Ryan Isaac:
Exactly.

Matt Mulcock:
So they…

Ryan Isaac:
That might not be your biggest value or goal.

Matt Mulcock:
So that might say, I’ve had this where people say, my kid, I’m gonna die with my last dollar on my deathbed.

Ryan Isaac:
Wasn’t there a book about that Die With Zero.

Matt Mulcock:
Die With Zero, yeah. I’ve been getting… For some reason it’s funny how these books all of a sudden start like making the rounds.

Ryan Isaac:
They start trending back.

Matt Mulcock:
‘Cause that book’s been out for a bit. And it’s a good book. As long as you don’t take them to the biggest extreme of that book, it’s pretty extreme. But some of the core points of it are really good. But it’s weird how books start to make rounds ’cause that book is making rounds right now in the general space, I’m getting like…

Ryan Isaac:
You hear a lot about it.

Matt Mulcock:
Like texts and emails about it.

Ryan Isaac:
You heard about this?

Matt Mulcock:
Yeah, I’m like this book came out three years ago I think.

Ryan Isaac:
So that’s an interesting conversation, I think about, if I just look at my parents, this is an easy way for me to be in those shoes and I think if my dad was saying, my mom and dad were saying, Hey, would you rather us like just like live a little but not, and not leave anything behind you here or very, very little or would you rather us live a life that leaves more behind? I’ll be like, Spend everything.

0:38:11.7 MM: Everything.

Ryan Isaac:
Yeah.

0:38:12.8 MM: Enjoy it.

Ryan Isaac:
Enjoy it.

0:38:13.9 MM: You earned it.

Ryan Isaac:
All the, I think…

Matt Mulcock:
Maybe enjoy it with us, cool, if you wanna do that.

Ryan Isaac:
Take me…

Matt Mulcock:
Sure.

Ryan Isaac:
If there’s like a surf place you wanna take a family.

Matt Mulcock:
Take me on a trip every once in a while, yeah.

Ryan Isaac:
Warm ocean, I guess I’ll go with you guys, but yeah, your values might not be to purposely keep, hold down your spending in order to save more, to pass it along, now some people are gonna be in the boat where they can spend whatever they want and still pass on millions of dollars, you know congratulations, that’s like a really cool, unique thing that you were able to build. But not everyone will be there and not everyone cares to get there.

Matt Mulcock:
Yeah.

Ryan Isaac:
And that’s why the… We were talking about this earlier, the house equity conversation kind of comes back into play because that’s part of your, that is part of your nest egg. It’s probably not the first thing you want to attack, but like you can spend that.

Matt Mulcock:
But it could be your legacy nest egg as well…

Ryan Isaac:
Totally could be.

Matt Mulcock:
Meaning if you have, let’s say you have a 20 or a 22 outside of your home.

Ryan Isaac:
Oh, there you go.

Matt Mulcock:
And you say, ah, I do wanna leave something to my kids, but…

Ryan Isaac:
There you go.

Matt Mulcock:
My number one priority is enjoying it and if I leave something great, well great, your house could be that legacy you leave, and then everything else you go enjoy and spend.

Ryan Isaac:
Just do some estate planning so they’re not fighting about who’s gonna live there and just make it so they have to sell it.

Matt Mulcock:
Yeah, exactly.

Ryan Isaac:
Anyway, that… I wanted to give some context around that, and I’m glad you brought up. I think that’s just an important part to talk about, not everyone cares about having the highest total terms so that they leave it all behind, that doesn’t matter.

Matt Mulcock:
And again, it comes back to values. Like, have… And that’s why I say that conversation starts at 20 ’cause at 20 it’s like, “Okay, legacy or no legacy that, if that person has told me they don’t care about leaving a legacy, okay, well you don’t need to get to a 30 then, let’s not even focus on 30. Let’s say over the next, if you’re at a 20 over the next one to three years, we’re gonna start working on like an exit plan at this point and maybe you get maybe a max outta the 22, 23. Maybe a 25, great, you’re there.

Ryan Isaac:
You’re there, and it’s dependent on age too. So in the last little while I’ve had with all these DSO buyouts, I’ve had a few clients who were kind of large size specialists where they’ve got, they had some offers on the table from DSOs that were… They were, retirement money in their 40s. They’re 43, 44 years old and they’ve got an offer on the table to be done completely. What was interesting though, when we’d run the math, it would put them at about a 30 total term, I can think of three examples, they all declined it, by the way. Which is really interesting.

Matt Mulcock:
They all declined the offers?

Ryan Isaac:
Declined the offers.

Matt Mulcock:
Oh, interesting.

Ryan Isaac:
And just kept going. But in these examples, I was uncomfortable at a 30, when you’re 44 years old, or 43 years old, the math still works, but when you potentially could live a half a century, there is such an unbelievable amount of question marks of things that could happen in your life.

Matt Mulcock:
So many more variables.

Ryan Isaac:
Yeah, variables that can change, these people have toddlers at home still, you know. And I’m like, “First of all, congratulations, you not only built a great business, but you just happen to be lucky enough to do it at a time when people are throwing around multiples like this that have never been seen before and won’t in the future.”

Matt Mulcock:
And probably never will.

Ryan Isaac:
Yeah, like, it’s just how lucky. But I was uncomfortable with it only being out of 30 or close to a 30, it when you’re 40 years old, just because you have so much time ahead of you, the reverse of that is, you hit a 20 total term, but you’re in your 60s. And we know statistically at least spending will continue to be the same in your 60s, maybe in your 70s, but then really kind of slow down into your 70s and 80s. So if you got a 20 total term and you’re in your mid 60s, early 60s, that conversation’s totally possible and…

Matt Mulcock:
Yeah you’re alluding to a 44-year-old that say retires right?

Ryan Isaac:
Dude, how many things can happen in your life from 44 on? And you’ve got toddlers in the house?

Matt Mulcock:
For sure, not to mention the…

Ryan Isaac:
It’s like wild.

Matt Mulcock:
You make a good point when you’re 60 or 65 at like, we’ll call it typical retirement age, a dentist is what, 69?

Ryan Isaac:Yeah.

Matt Mulcock:
On average. But somewhere in your 60s, you’ve gone through enough of life and your kids are now, if you have kids, you’ve been able to figure out where you’re spending at least your baseline spending is when you’re 44 and have toddlers.

Ryan Isaac:
You have no idea.

Matt Mulcock:
You have no… I have toddlers, and I’m not even close to the most expensive part of my kid’s life…

Ryan Isaac:
No you’re not…

Matt Mulcock:
Which is gonna be what, teenage high school years.

Ryan Isaac:
I think so, but then I hear from people who are empty nesters who say that it’s more expensive when they leave the house, and I’m just so depressed.

[laughter]

Matt Mulcock:
More expensive with the kids?

Ryan Isaac:
Yeah.

Matt Mulcock:
I guess that’s a choice though.

Ryan Isaac:
That’s a dang choice you’re making.

Matt Mulcock:
That’s a choice, yeah.

Ryan Isaac:
I hope [laughter]

Matt Mulcock:
‘Cause I feel like, and maybe I’m wrong here, I don’t have them yet. From what I have observed, I think teenage years, junior high through high school…

Ryan Isaac:
It’s so expensive man.

Matt Mulcock:
It’s by far the most expensive with your kids.

Ryan Isaac:
You just burn cash, you just burn it.

Matt Mulcock:
So to that point is like, if you’re 44 with young kids, there’s no way you have a reasonable baseline of what spendings going to be like for the next 50 years of your life.

Ryan Isaac:
No, you don’t know.

Matt Mulcock:
There’s no way.

Ryan Isaac:
No, that’s such a good point, you just haven’t arrived. Like it’s still fluctuating so much, you’re still moving around.

Matt Mulcock:
Yes.

Ryan Isaac:
You’re still having like giant events in your life that you didn’t know were coming and not like that doesn’t happen later. But from the ages of mid 40s to mid 60s, I’m assuming ’cause I’m not there yet, that there’s still a lot of life to pass by where that just gets a little bit more sure on your spending.

Matt Mulcock:
I’m gonna get in trouble for this. But you know what, let’s do it, I’ve already dropped a hot take, let’s get even hotter.

Ryan Isaac:
Okay.

Matt Mulcock:
This is alluding to, this is 22…

Ryan Isaac:
I was gonna say on the hot take horn, but I won’t. Just one horn per episode.

Matt Mulcock:
What we’re speaking to right now, I’m just gonna drop this real quick. I’m gonna get beat up later. [laughter] Someone’s gonna show up at the office door, and we’re gonna fight.

Ryan Isaac:
At the flag pole?

Matt Mulcock:
At the flag pole.

Ryan Isaac:
Alright.

Matt Mulcock:
This is why the FIRE… And it’s actually dissipated, I think alot of it…

Ryan Isaac:
Oh, the FIRE movement?

Matt Mulcock:
The FIRE movement is so dumb.

Ryan Isaac:
Not everyone knows FIRE meaning.

Matt Mulcock:
Meaning Financial Independence Retire Early, it’s a bunch of 25 year olds who are basically saying…

Ryan Isaac:
High hopes, dude.

Matt Mulcock:
And again, it’s one of those things like take some pieces of it. I think it’s great, but it’s like, if you spend $10,000 or $5000 a month or $4000 a month, all you need is a million dollars and then you can live the rest of your life and it’s like you’re 26 years old, there’s no possible way you even know what you want out of life, for the rest of your life.

Ryan Isaac:
Oh dude, oh man.

Matt Mulcock:
To like, have this FIRE approach.

Ryan Isaac:
Some people might be able to pull that off.

Matt Mulcock:
Maybe, but I’m gonna say majority of people, and maybe I’m projecting here, I’m totally open to being told I’m projecting. But I think the majority of people, that doesn’t work like where you’re gonna hit financial independence at age 25.

Ryan Isaac:
That’s hard.

Matt Mulcock:
And just chill the rest of your life.

Ryan Isaac:
And never not spend more than $5000 a month.

Matt Mulcock:
Exactly.

Ryan Isaac:
Go to Panama, maybe that’s true. El Salvador or something, maybe, I don’t know. I don’t even think Costa Rica’s cheap anymore.

Matt Mulcock:
No, I don’t think it is at all.

Ryan Isaac:
I don’t, we’re speaking to the dental community in America, that’s just really hard to do in America. If we were to circle this up, circle the wagons, wrap it up, put a bow, stick a pin…

Matt Mulcock:
Put a bow.

Ryan Isaac:
Put it on a shelf, ship it off, express overnight delivery…

Matt Mulcock:
Close it up.

Ryan Isaac:
Close it up. Here’s what my takeaway would be from this is, I read this article and I just thought about our audience and our clients and I like a $5 million number if you had to throw one out.

Matt Mulcock:
Sure.

Ryan Isaac:
I don’t love a $3 million number for dentists.

Matt Mulcock:
No, it’s too low.

Ryan Isaac:
I think that’s gonna be too low for most dentists. I love a $5 million number, mathematically, I was just running these numbers here over like a 25 year career, it doesn’t happen like this from day one, but if you save between $5000 and $6000 a month over a 25 year career at a very moderate rate of return, like sub double digits, like single digit return, you can amass that much money just in your savings.

Matt Mulcock:
Just in like a brokerage account.

Ryan Isaac:
In a brokerage account, in a conservative portfolio that you don’t even get what the market’s getting. No secret investments, no home runs, no private equity, like opportunities of the rich and the wealthy and the famous…

Matt Mulcock:
Sounds pretty boring to me.

Ryan Isaac:
The most boring stuff, like someone can hit that saving $5000 or $6000 a month, no one does that right out of the gate day one of dentistry but later on they save much more than that. I’m just saying on average, right?

Matt Mulcock:
Yep, yep.

Ryan Isaac:
So it’s just such an attainable thing, but then if you look at the average dentist balance sheet. They have retirement plans, they have usually an office building or some commercial real estate or other rental real estate, they’ve got a practice. I remember the day when it was a very common mentality and I respected it where people say, I want to do retirement calculations based on not selling my practice and I think that was more common because one generation ago, a few decades ago, people were ending their dental careers by just letting it fizzle out. They just let that million dollar practice just start declining until they’re doing $200,000 a year on half a day a week and then they just like close up shop and yeah.

Matt Mulcock:
Ride off on the sunset.

Ryan Isaac:
And then they just like, lock the door.

Matt Mulcock:
Hop on the horse.

Ryan Isaac:
Yeah, hop on the horse, get it up.

Matt Mulcock:
Yeah, hop on the horse and ride off into the sunset.

Ryan Isaac:
Kitty up, just kick it.

Matt Mulcock:
Yeah. [laughter]

Ryan Isaac:
Pull on the bridle is that what you do?

Matt Mulcock:
The bridle?

Ryan Isaac:
Is there a bridle? [laughter]

Matt Mulcock:
I think so.

Ryan Isaac:
I don’t know.

Matt Mulcock:
I don’t think you pull on it though.

Ryan Isaac:
I don’t think you pull a bridle. I think that used to be a mentality, these days, I think people realize that the business they’re building, it’s gonna be worth something especially if you keep reinvesting in it and it’s worth not avoiding debt like the plague to keep reinvesting your business, keep a value there. It’s, my point is hitting a five million net worth probably seems insane, but that is not hard for a lot of dentists to do. You can save your way there pretty easily just with average income, average spending, but you’ll have other assets too. So that was my takeaway, I think that’s a really rational number in that $5 million range for most dentists, I think.

Matt Mulcock:
Yeah, I think that’s so true, it’s a simple and like obvious path to I think five million.

Ryan Isaac:
Yeah, and safe.

Matt Mulcock:
And safe, yeah.

Ryan Isaac:
That’s what I love about is any, it’s accessible to everybody, dude. Anyone can do it, you don’t have to be special, you don’t have to have special access. You don’t have to be smart at all [laughter] You don’t even have to do it yourself, you can outsource all of that stuff, you don’t have to have access to things that only the rich and wealthy have access to, you don’t have to do, it’s just like anyone can do it.

Matt Mulcock:
Yeah, the formula is there for the taking, it’s…

Ryan Isaac:
Anyone, it’s simple, yes, yes.

Matt Mulcock:
Other than needing some accountability or maybe a recheck every once in a while.

Ryan Isaac:
Yeah. Well, how hard is it to actually save $5000 or $6000 a year for 25 years?

Matt Mulcock:
Well exactly…

Ryan Isaac:
It’s really, really hard behaviorally, that’s…

Matt Mulcock:
And actually stick to it.

Ryan Isaac:
That’s the problem, yeah.

Matt Mulcock:
Yeah. I agree. I think for me, I mean, I alluded to it earlier, I mean, I totally agree with you first of all, I think five million, if you’re just gonna use a default number right now, I’d say five million’s a good default. Just say five million bucks, that’s what we’re shooting for generally. My takeaway from this is what I already mentioned earlier, like, it’s a good question to be asking this, I think it’s, but I caution people to not become too obsessed with this question and there’s a lot of other questions to be asking.

Ryan Isaac:
Oh, I love it.

Matt Mulcock:
Along the way, and I think like even the term retirement, like what does retirement mean?

Ryan Isaac:
Yeah, what does it mean to you?

Matt Mulcock:
What does it even mean? That’s one of the things I looked at too. I’m like, we use this word retirement, great, but like, what does that even mean to you? And then, we’ll do another podcast on this later, but, and I’m gonna tease it, can I tease it?

Ryan Isaac:
Yeah, dude all day.

Matt Mulcock:
I think we tease, I’m gonna tease this where I think there’s non-financial risks that people don’t think about when they talk about retirement.

Ryan Isaac:
Ooh, that’s the headline.

Matt Mulcock:
A lot of non-financial risks.

Ryan Isaac:
I like that.

Matt Mulcock:
So, we’ll, I’m gonna use that.

Ryan Isaac:
That’s the headline, okay.

Matt Mulcock:
And we’ll do next time.

Ryan Isaac:
Well, let’s do it in like five minutes.

Matt Mulcock:
Perfect. [laughter]

Ryan Isaac:
Alright, well thanks Matt, it’s good to be here in the studio finally for once.

Matt Mulcock:
Yeah, thanks Ryan.

Ryan Isaac:
Thanks everyone for tuning in.

Matt Mulcock:
Feels good to breathe the same air as you.

Ryan Isaac:
Hope so.

Matt Mulcock:
Yes.

Ryan Isaac:
I’ll brush my teeth next time. But anyway, if you have any questions, dentistadvisors.com, we’d love to chat with you, we’ll catch you next time on another episode of the Dentist Money Show, goodbye now.

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