The Impact of “The Woozle Effect” on Your Finances – Episode #398

Have you heard financial claims repeated so often you know they must be true—yet those claims lack any supporting evidence. They are financial woozles. On this episode of the Dentist Money™ Show, Ryan and Matt shine the light on several financial woozles that could prove costly if you continue to believe them. When you don’t understand the truth, mistakes will always happen.

 

 

 

---

Podcast Transcript

Ryan Isaac:
Hey, welcome back to another episode of the Dentist Money Show, brought to you by Dentist Advisors, a fee-only fiduciary, comprehensive financial advisor just for dentists all over the country. Check us out at dentistadvisors.com. Today on the show, Matt is talking about a famous song from Winnie the Pooh, “Heffalumps and Woozles”, and what that has to do with financial decision-making in your lives. Very fun conversation, very eye-opening and enlightening. Thanks Matt, for your time and your energy today. Loved it. Thank you all for joining us today. If you have any questions for us, the easiest thing to do is go to dentistadvisors.com. Click the Book Free Consultation link and have a chat with one of our friendly dental-specific, hear that, it’s dental-only financial advisor, we will point you in the right direction and answer your money questions. Thanks for being here. Enjoy the show.

[music]

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

[music]

Ryan Isaac:
Welcome to the Dentist Money Show, where we help dentists make smart financial decisions. I’m Ryan and I’m here with Matt and we welcome you all. Thanks for being here. Hey, Matty. What’s happening?

Matt Mulcock:
Hey, Ryan. This feels good, man. It’s been a while.

Ryan Isaac:
Feels right.

Matt Mulcock:
I feel like I’ve missed you.

Ryan Isaac:
I know, I know.

Matt Mulcock:
I mean, I feel like I’ve missed you, meaning I have missed you. It’s not like I feel like I’ve missed you.

Ryan Isaac:
You really actually have.

Matt Mulcock:
I just have missed you. I feel like we haven’t recorded for a while.

Ryan Isaac:
We haven’t. ‘Cause we did a bunch in studio when I was in Utah, and then we’re gonna do it again soon.

Matt Mulcock:
We did pile them up, and then you had some interviews and…

Ryan Isaac:
It’s been a while. We’re back.

Matt Mulcock:
It’s good to be here. It’s good to be back.

Ryan Isaac:
So today we’re gonna talk about something that has to do with one of my favorite all-time children’s cartoons and songs. And I feel like there’s a few versions of this. Maybe it’s on the old one. But no, it’s on the new one, too. So in the middle of Winnie the Pooh, they go searching for something. It was one of the… They go searching because they see a handwritten note that’s spelled incorrectly. Pooh leaves a note and it says… What does it… It says, “Woozle”.

Matt Mulcock:
Yeah, Woozle.

Ryan Isaac:
But what is it really supposed to say? It says something else. Anyway.

Matt Mulcock:
I honestly don’t… I don’t even know…

Ryan Isaac:
The middle of Winnie the Pooh, they’re searching and they’re really scared and a whole song comes on. It’s a whole thing of Heffalumps and Woozles. And any one of little kids…

Matt Mulcock:
Do you wanna sing it?

Ryan Isaac:
Heffalumps and Woozle are very confusel. I love it, so good.

Matt Mulcock:
Confusels.

Ryan Isaac:
Confusels. And Matt, if you were a better father and would take your kids to Disneyland more often, you would know in the middle of the…

Matt Mulcock:
You could have just ended that with if you were a better father.

Ryan Isaac:
Dot, dot, dot.

Matt Mulcock:
Dot, dot, dot.

Ryan Isaac:
You would know in the middle of the Pooh ride that Heffalumps and Woozles, it’s a theme. It’s in the middle of the ride. Anyway, you hit me…

Matt Mulcock:
At Disneyland?

Ryan Isaac:
Yeah, Disneyland.

Matt Mulcock:
Oh, God.

Ryan Isaac:
You gotta go there. You gotta go there. You hit me today with this Woozle thing which I had only ever heard from Winnie the Pooh. But there’s this thing called the Woozle effect you’re going to describe for us. It’s based on Heffalumps and Woozles from Winnie the Pooh, apparently.

Matt Mulcock:
Yeah.

Ryan Isaac:
But you hit me with this today because we were on the subject of one of our favorite subjects in the world, the thing that does not get you mad or doesn’t make anyone excited at all, and that subject is passive income.

Matt Mulcock:
Oh, boy.

Ryan Isaac:
And just how easy it is to just go purchase immediate tax-free passive income that starts paying you dividends tomorrow. And you started talking about the Woozle effect. And so you’re gonna explain what this is, and then we are gonna talk about some of our top financial Woozles. [laughter] I just think it’s so cool.

Matt Mulcock:
That we’re all chasing.

Ryan Isaac:
We’re all chasing and we’re all doing this, okay. So we’re not just judging. We all do this to some degree. So, first of all, what is the Woozle effect? Where does this come from? Who started this? Someone had kids.

Matt Mulcock:
Someone had to have had kids. I don’t know that… I don’t… Truly don’t know. I think it came from the 1970s specifically, but I don’t know like…

Ryan Isaac:
By the way… Oh sorry, really fast, by the way, Heffalumps and Woozles Disney Studio Chorus was released in 1992. So this goes way back. It’s in the new Pooh movies, but it’s old, old, old, too.

Matt Mulcock:
You said 1992?

Ryan Isaac:
1992. I was a wee 12 years old.

Matt Mulcock:
Got it. So then obviously the Woozle effect, the other origins don’t come from 1970. I just totally made that up.

Ryan Isaac:
Okay. Yeah.

Matt Mulcock:
Here we are. So, yeah, so to your point though, it came from Winnie the Pooh, Woozle effect, or referring to Woozles, where Winnie the Pooh and Piglet were hunting, as you were mentioning…

Ryan Isaac:
Yes.

Matt Mulcock:
For Woozles. Well, it ends up being that they just… And then Christopher Robins comes and tells them, “You’re just… ” Because they’re following tracks and they think they’re following Woozle tracks. So they’re searching around for these Woozles. And then Christopher Robins comes and he is like, “Oh, hey, these are actually your own tracks.”

Ryan Isaac:
Dang it.

Matt Mulcock:
And he says it really nicely, I’m sure. And…

Ryan Isaac:
Christopher Robins is really nice.

Matt Mulcock:
He’s a nice little guy.

Ryan Isaac:
Yeah, he is. Yeah.

Matt Mulcock:
A nice guy.

Ryan Isaac:
It does beg some questions, but we’ll just… We’ll skip those for now.

Matt Mulcock:
Yeah. Yes.

Ryan Isaac:
Go ahead. Yeah.

Matt Mulcock:
So the whole… So that’s where it comes from is that they think they’re searching for something, but they’re really just walking in circles, right? So…

Ryan Isaac:
And Heffalumps is like child vernacular for elephants, Heffalumps, elephants, and Woozles is for weasels because the little characters…

Matt Mulcock:
Oh, there you go.

Ryan Isaac:
It’s elephants and weasels, but it’s children talking, so it’s Heffalumps and Woozles.

Matt Mulcock:
Got it.

Ryan Isaac:
Which is kind of cute.

Matt Mulcock:
Yeah, it’s really cute, actually.

Ryan Isaac:
It is really cute. Okay.

Matt Mulcock:
We can only say that ’cause we got a little kid. Well, I have little kids…

Ryan Isaac:
No dude, it is cute.

Matt Mulcock:
You have kids.

Ryan Isaac:
They’re still little kids to me.

Matt Mulcock:
They’re still little kids to you, yeah.

Ryan Isaac:
Three of them are in high school, but [laughter] they’re still little kids to me. Alright, anyway.

Matt Mulcock:
So, okay. How does this apply to real life? Where does this come from? Again, Winnie the Pooh, but where this is really… Where this started was really in scientific research and now it’s expanded beyond that. But it started in scientific research. And what the idea is, when there’s a citation of some kind or something cited from a study, and this is why I say it started kind of in the scientific community and has since expanded, but when there’s something cited in a scientific study and that study is deeply flawed or that citation is deeply flawed, either it’s a full-on lie or it was just like the methodology was never truly tested or whatever, but something from that citation is pulled or is constantly repeated, so it gets into the narrative of society. And again, it’s a misquoted or false citation, but it’s been repeated so many times…

Ryan Isaac:
That it’s just believable, it’s accepted.

Matt Mulcock:
That it just starts to get taken as fact. Yes.

Ryan Isaac:
Huh. I bet there’s a lot of things… I bet there’s a lot of quotes that we say and use all the time that aren’t the real thing, all the time.

Matt Mulcock:
Oh, definitely. I’m sure.

Ryan Isaac:
That’s probably… It’ll be a fun list to make, actually. Okay. So that’s interesting.

Matt Mulcock:
And so, this is now kind of… This is now referenced to law and politics. We are not gonna go there people, but I think you can imagine, if you just imagine the things that get cited in politics that fall under the Woozle effect. It’s like people cite certain things, certain statistics or certain studies that are deeply flawed that no one has gone back and been like, “Hey, this is not correct.” It just… It gets repeated and repeated over and over and over again in the media or social media or whatever.

Ryan Isaac:
Totally.

Matt Mulcock:
That’s the Woozle effect. So, I’ll give you a non-political example that I think this is…

Ryan Isaac:
Politics would be really easy.

Matt Mulcock:
Very neutral, yeah.

Ryan Isaac:
Low-hanging fruit, but we won’t go there.

Matt Mulcock:
Yes.

Ryan Isaac:
Yeah.

Matt Mulcock:
But I was thinking about this and I was like, “Okay, what’s an example we could give to kind of bring this home?” If you think back to, I think it was probably somewhere around the ’80s or ’90s in nutrition where there was like…

Ryan Isaac:
Oh, are you gonna talk about the fat craze?

Matt Mulcock:
Yes. Yeah. So the whole battle with the non-fat, right?

Ryan Isaac:
Non-fat foods.

Matt Mulcock:
Non-fat food. [laughter]

Ryan Isaac:
Non-fat potato chips.

Matt Mulcock:
Exactly. So there’s a lot of nuance to that whole campaign.

Ryan Isaac:
Totally, yeah.

Matt Mulcock:
But I think it’s an example of the Woozle effect. There was like one or two studies that started, that got cited around fat and it being really bad for you and it took hold of the narrative in the ’80s and ’90s. So I don’t know the exact timeframe, but somewhere in that timeframe.

Ryan Isaac:
It’s exactly when it was, yeah.

Matt Mulcock:
Yeah. And so it took effect. And again, it was the Woozle effect. It was these deeply flawed studies that kept getting cited over and over and over again.

Ryan Isaac:
And then people just did it.

Matt Mulcock:
And people just did it. And then all of a sudden the food companies… And again, there’s a lot of nuance to this, but I was thinking about it, I’m like, “That’s probably the most neutral non-political example I can give of the Woozle effect.”

Ryan Isaac:
I was gonna say, although one of the funny things about that, the history of that story about the non-fat craze in foods was some of the early adopters that were pushing it were government officials that were meeting in Washington all the time, having food brought in and catered.

Matt Mulcock:
Yeah.

Ryan Isaac:
And because of these studies, it probably originated out of someone connected in Washington, they started ordering non-fat or low-fat foods, which is what… But what everyone swung to was high carb…

Matt Mulcock:
Yeah, sugar.

Ryan Isaac:
High chemical, high sugar foods.

Matt Mulcock:
Yeah, of course.

Ryan Isaac:
So we traded fats for carbs and sugars.

Matt Mulcock:
Yes.

Ryan Isaac:
And that’s done us well for the last 40 years.

[laughter]

Matt Mulcock:
Yeah. Well, and so that’s…

Ryan Isaac:
Here we are, folks.

Matt Mulcock:
Here we are. And so I think that’s…

Ryan Isaac:
Is anyone shocked?

Matt Mulcock:
That’s kind of the whole point, right, is like this citation or this misleading “fact” takes hold. And then the… I think the biggest thing is like the consequences, once it takes hold in the narrative or like the public narrative or the public sphere, that’s what we’re talking about here is like, what are these things that can fall under the Woozle? What are these Woozles that are either simplified versions of the truth at the best case, the worst case, they’re just straight up lies.

Ryan Isaac:
Totally.

Matt Mulcock:
And then once they take hold, it’s like, man, the consequences, to your point, look at the health sense that craze started.

Ryan Isaac:
Yeah, hasn’t gotten better.

Matt Mulcock:
We are still recovering from that campaign, I think.

Ryan Isaac:
Yeah. Recovering would be a strong word.

Matt Mulcock:
Yeah. Attempting to recover. [laughter]

Ryan Isaac:
I think we’re still trending. Yeah, it’s still just trending, unfortunately.

Matt Mulcock:
Yes. Yeah, unfortunately.

Ryan Isaac:
Yeah, totally, man. So that’s a really good description of a Woozle effect and it makes you wonder if sometimes maybe the Woozle begins as actual good data. Maybe it does.

Matt Mulcock:
Yeah.

Ryan Isaac:
I’m sure that’s happened a lot, but it just never gets checked or cited or re-looked at again, re-examined, a new pair of eyes doesn’t look at it again, and it just keeps going and going and going and… I don’t know. And maybe… And I was just gonna say too, maybe some of that has to do with like, there’s something about… Like in the non-fat solution, for example, there’s something about that that made it just seem like, “Oh, that’s the problem? Cool, easy. So I’ll just eat these chips that say non-fat chips.”

Matt Mulcock:
Yeah.

Ryan Isaac:
There’s something… And that goes again… That goes to our human nature probably of wanting stuff that’s just… We just like easy answers, right? It didn’t require a lot of work like, “Oh, I just cut that out, and then everything’s totally fine.”

Matt Mulcock:
Yeah, just take this pill.

Ryan Isaac:
Yeah, just take the pill. It kind of has that kind of like… It has that kind of feeling to it. Like it just… It was easy. That was an easy solution. It came out of somewhere, it seemed credible, and it was an easy solution to fix all the problems and then we just grasped onto it. We do that as humans. That’s normal.

Matt Mulcock:
Yeah.

Ryan Isaac:
Yeah.

Matt Mulcock:
Totally. I mean, I said this a couple weeks ago on one of our other shows that we want things to make sense and stories make sense and really simplified definitions or generalized statements make sense. And again, once it takes hold and people reference it over and over and over again, it’s really hard to go back on it.

Ryan Isaac:
Yeah, it just… It’s its own beast.

Matt Mulcock:
Yeah, exactly.

Ryan Isaac:
Its own gravity.

Matt Mulcock:
Yep.

Ryan Isaac:
There’s also something my brain… I know what it’s really called ’cause I read it, but I wanted to call it the Mandalorian effect, but it’s totally not, it’s the Brandolini’s Law. [laughter]

Matt Mulcock:
Yeah.

Ryan Isaac:
Does that… Mandalorian effect, so dumb. Does that apply here?

Matt Mulcock:
I’ve not watched that yet. I need to. I know. I knew you were gonna give me that look. I need to watch it. I’ve heard it’s great.

Ryan Isaac:
The Mandalorian is really good, dude.

Matt Mulcock:
I’ve heard it’s great.

Ryan Isaac:
Does that… Is that applicable here? You were talking about that? Do you wanna bring it up?

Matt Mulcock:
I think it absolutely is. Yeah…

Ryan Isaac:
‘Cause you brought that up earlier. I thought it was really good.

Matt Mulcock:
Yeah. When we were talking about this, this popped in my head as well as we were going back and forth on the Woozle effect. And I thought of Brandolini’s Law. So the law states that the amount of time and energy that’s required to refute bullshit is an order of magnitude greater than to produce it. So simply put, it’s like, once a lie takes hold in society, it’s really, really hard to refute it or to…

Ryan Isaac:
To put it back in the bottle.

Matt Mulcock:
Yeah, exactly. Once that… As I’ve said before, once that toothpaste is squeezed out of that tube, good luck putting it back.

Ryan Isaac:
Well, think about, I mean, just our previous example, that’s still… It’s still pretty prevalent, like low fat stuff. Not that extreme amounts of fat or the wrong kinds of fat aren’t bad for you. It’s nuance, like you said. But that’s still prevalent.

Matt Mulcock:
Absolutely.

Ryan Isaac:
That’s still a common thing actually, unfortunately. Okay.

Matt Mulcock:
Yeah. Or think about, if we’re just going along the lines of nutrition, the taglines you see on labels now, just certain things that take hold, it’s not just low fat, it’s gluten-free, or it’s what, the organic or stuff like that.

Ryan Isaac:
Sure.

Matt Mulcock:
It’s kind of the same stuff. But yeah, so Brandolini’s Law I think goes really along with the Woozle effect. And again, just simply saying…

Ryan Isaac:
So I’m gonna state that back. Brandolini’s Law just says, once something’s out there and it’s got its own kind of life force, it takes more energy to refute that thing than it did to create it in the first place.

Matt Mulcock:
Yes.

Ryan Isaac:
Is that what it is?

Matt Mulcock:
An order of magnitude greater to basically reverse the lie once it’s been told…

Ryan Isaac:
To reverse it. Oh, yeah.

Matt Mulcock:
Even with the truth, right? And I’m sorry that I had to use some poor language there. It’s like when a kid swears, right? When a kid…

Ryan Isaac:
Did you?

Matt Mulcock:
I did, yeah. I used the…

Ryan Isaac:
Oh, I don’t remember. I’m desensitized now. Tad will edit it.

Matt Mulcock:
Tad can edit it. But again, I’m quoting the actual law.

Ryan Isaac:
Oh, that’s the actual law. Oh.

Matt Mulcock:
It’s the actual law.

Ryan Isaac:
Cool, okay.

Matt Mulcock:
And so it’s like when a kid swears and they’re like, “Mom, dad, I was quoting.”

Ryan Isaac:
“I was just reading.”

Matt Mulcock:
“I didn’t say it. I was just reading or I was telling you what my friend said. I didn’t say it. I’m quoting.”

Ryan Isaac:
You’re like, “Come on.”

Matt Mulcock:
Yeah.

Ryan Isaac:
Okay. So with that in mind, Brandolini, we gotta put some work in now because Brandolini’s Law is in effect. Some Woozle, some personal finance Woozles.

Matt Mulcock:
Yeah.

Ryan Isaac:
We’re gonna do this. We’re gonna…

Matt Mulcock:
Let’s do it.

Ryan Isaac:
Upset some folks.

0:14:35.2 MM: Let’s break some hearts and make some people angry. [chuckle]

Ryan Isaac:
I’ll let you save the big one that gets your blood boiling for a second. I’ll go first.

Matt Mulcock:
Yeah.

Ryan Isaac:
Man, I won’t steal your thunder on this one. This was just a conversation I had last week with somebody. Still really common. We’ve talked about it a million times before. This one won’t be as shocking or controversial probably, but it’s the, “Be your own bank” concept and how exciting and wonderful and advantageous it is to be your own bank and have tax-free retirement withdrawals for retirement. Now, that pitch of course, is part of the shiny part [chuckle] of permanent life insurance sales products.

Matt Mulcock:
Yeah.

Ryan Isaac:
And I was just having this conversation with someone last week. I wanna honor this person’s just genuine curiosity and they were just doing what they were told was best, and so have so many other people who learned about this for the first time years later. But we were talking about a permanent life insurance policy he had purchased years ago and he was kind of explaining the reasons why and what he was told.

Ryan Isaac:
And when we were talking about “be your own bank”, we were also on a discussion about investing in different kinds of asset classes using leverage and specifically margin loans out of a brokerage account. And when I was explaining that, ’cause I was saying, “Hey, there’s this thing called a margin loan, and basically means when you have enough money in a brokerage account, an after tax kind of account, you can borrow against it, not have to sell anything, not take… It’s a tax-free distribution. Keep your money invested and use the money to do other things with. And that triggered the conversation with life insurance. He goes, “Well, wait, that’s my life… You mean life insurance?” I was like, “No, no, that’s a thing you can just do. Everyone can just do it.” Then we got on the life insurance kick. So I think that’s one of the Woozles of personal finance for sure is the idea that you can be your own bank and have tax-free withdrawals only by using permanent life insurance as an investment vehicle.

Ryan Isaac:
And so the effort we’d have to put in to help old Brandolini out, Mandalorian, counteract that is just to teach people that while it is true you can do that inside of a permanent life insurance policy, you can also do that as just a regular human who doesn’t own permanent life insurance out of a brokerage account and everyone’s entitled to that benefit. You can save up some money, you can borrow against it, you can be your own bank, you can have a tax-free withdrawal and do something else with your own money while leaving it all invested. It’s called a margin loan, and people do it all the time.

Matt Mulcock:
Yep.

Ryan Isaac:
We’ve helped clients do it for all kinds of reasons and it can be a very beneficial tool. Right now it kind of sucks because rates are so high.

Matt Mulcock:
Yeah, rates aren’t great.

Ryan Isaac:
But over 15 years of doing this, I’ve seen a lot of people use margin loans to pay off other loans, to do investments, to get access to quick amounts of cash that they’re gonna pay back with some other project in the next 12 months. I’m doing that for a client right now. Margin loan gonna be paid back in 12 months. So anyway, that is definitely a Woozle of personal finance, believing that only in a permanent life insurance policy with high costs, high fees, low returns, huge barriers to entry, no liquidity, no transparency, no honest answers. [laughter] That that’s the only way that you can actually be your own bank. And if you really wanna be your own bank, you can do it without life insurance. So there you go, folks.

Matt Mulcock:
Yeah, that’s a great one. It’s simply put. If you have an asset… For the most part, if you have an asset, you can…

Ryan Isaac:
Geez, yeah, even more simply. [laughter]

Matt Mulcock:
Yeah, if you have an asset you can leverage it. You can borrow against it tax-free. Real estate, brokerage account, 401k, life insurance, you can take a loan. That’s all you’re doing is taking a loan against your asset.

Ryan Isaac:
You’re taking a loan against an asset that has equity in it.

Matt Mulcock:
Hey, by the way, your practice.

Ryan Isaac:
Your practice. You do it all the time.

Matt Mulcock:
You can take a loan against your practice.

Ryan Isaac:
You’re your own bank.

Matt Mulcock:
You are your own bank. It doesn’t have to be a permanent life insurance policy.

Ryan Isaac:
That’s true.

Matt Mulcock:
In fact, if you’re gonna do it, there’s probably better mechanisms to do it that you get a better rate of return, like your practice, like the stock market within a brokerage account, like real estate. It’s not a novel concept.

Ryan Isaac:
A lot of assets to back… No, it’s not. Now, some people are going to go, “Matt, but if you leverage a bank’s money against your asset, you’re not the bank.” Okay. But then you can just save your money in a brokerage account and actually be your own bank and you can do the funding too, if you so choose.

Matt Mulcock:
Sure.

Ryan Isaac:
I was gonna say when you were listing things that you could borrow against, and this would have been like ’05, ’06, when everyone was a total freaking idiot, including me, and just melting down with the dumbest…

Matt Mulcock:
Just a world full of idiots.

Ryan Isaac:
The dumbest financial schemes you’ve ever heard, ever, the craziest. Everyone’s got a radio show. Every idiot like us has a podcast. No, podcast didn’t exist yet, really. They did.

Matt Mulcock:
You’re talking about ’05, ’06, or you’re talking about 2021?

Ryan Isaac:
Dude, [laughter] yeah, ’05, ’06, there were dudes… Of course, it was the dudes. In my neighborhood, they were going and buying these exotic cars like Ferrari, imported cars, Ferraris, Lamborghinis, high-end Porsches…

Matt Mulcock:
Of course.

Ryan Isaac:
Race car stuff, and then they were gaining in equity so quickly, I guess kinda like how cars were over the last 18 months, of course, when I bought one at the peak.

Matt Mulcock:
Yeah, exactly.

Ryan Isaac:
I buy everything. But they were pulling money out of their cars’ equity like home equity loans, like tens and tens and tens or six-figure amounts of money. [laughter] It’s just like that’s the crazy… I remember dude’s driving around and being like, “Oh yeah, I bought this car, and then I just pulled out 100 grand out of it, and then I put the 100 grand in this house, and then I pulled money out of that.” It was ’05, ’06.

Matt Mulcock:
Yeah, of course.

Ryan Isaac:
Everyone was doing the wackiest stuff and everyone was getting away with it.

Matt Mulcock:
But again, are you talking about that or 2020, 2021? It’s the same thing, just different mechanism.

Ryan Isaac:
Same freaking thing, man.

Matt Mulcock:
Yeah.

Ryan Isaac:
We’re just suckers for Woozles. It’s what it is. Us humans.

Matt Mulcock:
We’re suckers for Woozles, man.

Ryan Isaac:
Alright, be your own bank. There’s a Woozle. You got a Woozle, I tease it at the beginning though. What’s your Woozle, dude?

Matt Mulcock:
Oh, you wanna go right for it?

Ryan Isaac:
What’s the Woozles that just…

Matt Mulcock:
Go for the jugular?

Ryan Isaac:
Or let’s keep going, save it for the end if you want to. Should we save… You do what you want. This is your show.

Matt Mulcock:
There’s two more Woozles I think we wanted to hit, but let’s just go for the jugular.

Ryan Isaac:
Okay. Hit it.

Matt Mulcock:
Do you want to?

Ryan Isaac:
Yeah, what’s the Woozles that just, when it gets brought up, Matt has to take 10 deep breaths and call his therapist before he responds? [laughter]

Matt Mulcock:
Yeah, the ultimate Woozle to me, and I call it, I do, I call it, I’m calling it right now, it’s the biggest lie in personal finance, is the idea of passive income. Now, I get in trouble for that because people hear that immediately and they’re like, “Oh, so you don’t think there’s assets that pay you income without having to put effort and all?” I’m like, “No. Passive income as like a, I own a rental property and it’s paying me. That does exist.”

Ryan Isaac:
Yeah, of course.

Matt Mulcock:
But how it’s pitched on YouTube, any YouTube channel you go to and the commercial pops up about…

Ryan Isaac:
TikTok, yeah.

Matt Mulcock:
Yeah, TikTok or all these programs you can buy on Twitter or Facebook, or again, Youtube. The way they sell it is that, literally nothing is required. It’s just like, sign up for my course.

Ryan Isaac:
It’s not earned. It’s just…

Matt Mulcock:
Yeah, that’s not earned.

Ryan Isaac:
And then you get passive income.

Matt Mulcock:
Passive income is like, sign up for my course and you will get 5,000… Learn how I made $5,000 a month by sitting on my couch. That’s where I get really frustrated with this. It’s like I was saying earlier, the Woozle affect, the citation, it’s either at its best, a misunderstood fact or at its worst, a straight up lie. A lot of times passive income strategies are, at their worst, are straight up lies. They’re just… It’s not true.

Ryan Isaac:
They’re not true because they’re pitched as there’s nothing that you have to earn to get that passive income. It’s like when I hear someone say, “Well, I just took a million bucks and I just put it into this real estate deal, and then it pays me like 200 grand a month.” I’m like, “Well, how did you get that million dollars?”

Matt Mulcock:
Yes, exactly. How did you get that million dollars?

Ryan Isaac:
Hold on. Let’s back up for a second. Did that just… How did you get that million bucks? Did you sign up for a course, and then you got the million to put in? It’s like, everything… I think every… Okay. To give it some credit, the ultimate goal of every single investment ever is to be passive, meaning at some point in the future, you are no longer trading time or money or whatever to get money back out of it. That is the ultimate goal. Every successful… Is that too general? Every successful investment ultimately will become passive if it’s done correctly over a long enough period of time? That’s probably true. A business, real estate, stocks and bonds, mutual funds. That’s all true. They all become passive when they’re over enough earned time that you’ve grinded for.

Matt Mulcock:
That’s the definition of an investment.

Ryan Isaac:
Yeah. That is the definition, exactly.

Matt Mulcock:
Right? But where I get really frustrated with this concept is that that’s the definition of an investment, period. Money working for you while you sleep.

Ryan Isaac:
Yeah.

Matt Mulcock:
Right? But for some reason, we want to try to categorize, let’s take real estate versus the stock market.

Ryan Isaac:
Yeah.

Matt Mulcock:
I just want us to be fair to the discussion of then the definition of what an investment is.

Ryan Isaac:
Yeah.

Matt Mulcock:
The stock market and real estate can both be, in fact, in some ways, depending on how you do it, are both passive. But hot take alert, here we go, the stock market is far more passive than real estate, generally speaking.

Ryan Isaac:
Hot take.

Matt Mulcock:
If you’re really gonna define it as the amount of effort it takes to generate that return, the stock market is far more passive in your life than when it comes to actual effort required. And by the way, also the barrier to entry of how much money you have to put into it to actually get a return, the barrier to entry and the passive aspect of the stock market is 10X real estate, probably.

Ryan Isaac:
Yeah, they’re very different. Now, what you don’t get to play the other side is you don’t get the tangible feeling of owning some property, seeing it and touching it and walking through it or whatever, but…

Matt Mulcock:
Of course. Yeah.

Ryan Isaac:
Or having something just different that feels different. But yeah, it’s like, let’s go ask all off… Well, I was gonna say our clients in retirement, but let’s go ask any person in retirement who built up a nest egg that’s kicking off money every single month and not draining and not going backwards. Ask them if that’s passive. It’s as passive as you possibly can get. Ask ’em how they got there though. [chuckle] It’s like…

Matt Mulcock:
Lot of time…

Ryan Isaac:
They had to work a long time.

Matt Mulcock:
Lot of energy, yeah.

Ryan Isaac:
Savings rate, sacrifice, and just time and time and time. They had to go through… How many bear markets did those people go through? How many crashes did they go through? How many correction, 10% corrections did they go through? Well, if they’ve been alive for the last 100 years, they went through one every single year. Correction, bear market every three to four years. So it’s like…

Ryan Isaac:
Yeah, there’s just this… The thing that’s frustrating, I think for, I won’t speak for you, but I think that for us as advisors, is that we feel really protective of someone’s hard-earned money in their situation, especially in our audience who are dentists who went to school for a decade first and then are in sometimes seven figures worth of debt just to be a dentist, and it’s kicking off cash flow and it’s doing really well. And we see a big picture ’cause we work with a lot of people and we get to see this over time and space and lots of people. We know that the career of dentistry works and it’s not that hard to just save some money and you will have millions of dollars somewhere one day and you’ll be okay. We know that that works. We do feel really protective of it. And so when a client gets pitched, or man, even a friend though, ’cause our friends talk about this stuff and I’m just like, “Just save yourself a little bit here. Don’t… ”

Ryan Isaac:
I feel really protective because I’m like, “You’re being pitched something as if it’s gonna give you an immediate value tomorrow with no exchange in return, that you don’t have to put anything into.” And I’m not talking about you saved up half a million dollars over the last decade of your life and then you’re gonna put it into that ’cause that wasn’t passive. [chuckle] It took you a decade to…

Matt Mulcock:
Not passive.

Ryan Isaac:
Save up, that’s not freaking passive. It’s not passive. But there’s just this notion that there’s no earned energy that has to be in exchange for it, and then you just get it. And that… And to your point earlier, some asset classes are passive and some are not.

Matt Mulcock:
Yeah.

Ryan Isaac:
And people will talk about the dentistry, their dental practices like this all the time. They’ll be like, “I don’t know, Ryan. I just don’t wanna be in dentistry forever. I just… ‘Cause I don’t wanna be working. I want something passive.” I’m like, “Well, the business of dentistry is pretty passive. You didn’t do hygiene and you made money in hygiene today.”

Matt Mulcock:
Exactly. Yes.

Ryan Isaac:
And people have associates and they have partners and it’s a business. It can be as passive as you want it to be, but it’s also a killer career if you happen to enjoy it, too.

Matt Mulcock:
Totally.

Ryan Isaac:
Yeah, it’s just that notion that there’s nothing that’s gonna go into the passive portion of the income and that some investments are passive and others are not. It’s just like, come on, that’s just marketing. And let’s protect ourselves. Save a friend. Save a friend…

0:27:27.8 MM: Save a friend and…

Ryan Isaac:
Call out a Woozle.

Matt Mulcock:
Call out a Woozle. And I think you just hit on it. That’s why we get frustrated. And it’s out of being protective of our clients, or even non-clients, just people we talk to…

Ryan Isaac:
Clients, man. Totally.

Matt Mulcock:
Who… And again, it’s not that we are anti any one asset class at all.

Ryan Isaac:
I don’t care. I don’t care anymore.

Matt Mulcock:
It’s not at all.

Ryan Isaac:
Literally don’t even care anymore.

Matt Mulcock:
No. I really don’t either.

Ryan Isaac:
I don’t care. I don’t care anymore.

Matt Mulcock:
And there’s so many different ways to do this and this being build wealth.

Ryan Isaac:
Yeah.

Matt Mulcock:
And we don’t claim… When I say that the stock market is more passive than real estate, first of all, it’s just true, but I’m not saying the stock market is the only way that you can build wealth.

Ryan Isaac:No way.

Matt Mulcock:
Real estate has made a ton of people very wealthy.

Ryan Isaac:
Yeah. Probably more people than the stock market ever will because of how old and expansive it is.

Matt Mulcock:
Totally.

Ryan Isaac:
No question, totally.

Matt Mulcock:
And I’ve said this so many times and it’s true. I come from a real estate background. I come from a real estate family. I’ve done a bunch of real estate in my life. I very much believe in it. Where I get frustrated is, to your point, is just this simplification usually by sales pitches to dentists to say, “There’s a better way. You can do this with little time, effort or money,” and it’s just not true. That definition of passive income, that it doesn’t require a bunch of time, energy, or capital, it does not exist.

Ryan Isaac:
It doesn’t exist.

Matt Mulcock:
It just doesn’t exist.

Ryan Isaac:
It’s not real in any asset class.

Matt Mulcock:
Yep.

Ryan Isaac:
In any asset class. ‘Cause if you go with your… And usually when you walk through this enough, it’s usually real estate people you’re referring to ’cause that’s like the passive asset class that’s marketed the most heavily as passive.

Matt Mulcock:
Yeah.

Ryan Isaac:
But it’s like, just walk through the steps of, “Okay, you got a down payment, it’s 20%, and you get a mortgage and you got a renter and you got a management company and you got money coming in, but you gotta pay the mortgage and you gotta pay the rent and you gotta hold money aside for expenses and taxes and insurance, and then repairs down the road.” Just walk through that. How long is that going to take you until either the notes paid off or you save up more money to pay off the note faster, or you get enough of those that are kicking off a little profit and you get enough of them to kick off something meaningful to replace your $18,000 a month spending that most dentists spend? It’s like, it’s just gonna take a long time, just like stocks and bonds and mutual funds will, just like your practice and your… It’s just time, man. And you gotta stick to something. What are you gonna stick to for 20 years and then do that thing?

Matt Mulcock:
Yeah, do that thing.

Ryan Isaac:
There you go. There’s your solution.

Matt Mulcock:
And one thing, final thing on this I would say is consider when you’re being pitched something, when you’re being pitched a passive income strategy, a course or whatever it is, on YouTube or wherever, just, you gotta think a little bit about the fact that in those cases, you are the passive income stream for that person selling you the strategy. You are their passive income stream. That’s what it is. That’s what drives me nuts is like…

Ryan Isaac:
Yeah, you’re the stream.

Matt Mulcock:
You are it. You are the passive income stream for that person, for that Grant Cardone or whatever.

Ryan Isaac:
Oh, yeah.

Matt Mulcock:
And it’s just… Anyway, it’s just more complicated than people want to give it credit for. If it seems too easy and too good to be true, it is. And here’s what I’ll say to your point of it about being frustrated and being protective. I’ve had these conversations a lot. I had one recently which kind of prompted me, us to think about this of a client of mine. I’m not gonna divulge his information. I’ll just call him Dr. B, you know who you are.

Ryan Isaac:
Got it.

Matt Mulcock:
Came into a bunch of money after putting a lot of time, energy into his business and the ability to cash out some funds. He immediately went on to go do a bunch of different passive income type strategies ’cause he had a lot of money, right? Well, he came back to me later on and was like… And just recently, we talked within the last couple of months. And he was just going off about how much harder it is and how it’s not what people think it is. And he was talking specifically real estate. And he used the term, he goes, “Matt, anyone who says real estate is passive is just, is so far out in left field.” And that’s what he thought as well. He’s like, “They’re lying to themselves if they think it’s passive. It’s not passive.”

Ryan Isaac:
Interesting. Yeah man, I think, people will hear what they wanna hear. But the conclusion is just simply, anything that’s gonna be meaningful is gonna take you a long time. What do you wanna say about tax strategy, Matt? [chuckle] The tax strategy Woozle.

Matt Mulcock:
We shouldn’t have gone for the jugular so early.

Ryan Isaac:
First, the passion will wane a little bit. It’s alright.

Matt Mulcock:
No, I think it’s the same thing. I think these are the three big ones that we’re talking about. Tax strategies are a big one.

Ryan Isaac:
Yeah.

Matt Mulcock:
And honestly, I’ll be… I’d say tax strategies in the grand scheme of things, actually might be even bigger than passive income, or we hear it maybe even more frequently, or at least equal, wouldn’t you say?

Ryan Isaac:
Yeah, yeah, for sure. Totally.

Matt Mulcock:
This idea that this… There’s this idea that, maybe this is a little generalized, but I think the general idea being that I can make a lot of money and not pay any taxes, or that there’s some strategy out there that will allow me to game the system in some way, and again, make the… Dentists make the highest income in the country on average.

Ryan Isaac:
Yeah.

Matt Mulcock:
And there’s this idea that you can be at that level of income and not pay taxes somehow with some product or fancy strategy or something.

Ryan Isaac:
And not only that, it’s… Yeah, you’re right, this does come up a lot. I feel like you have this conversation a lot and it’d kind of be… It’d be a bummer to be a CPA [chuckle] ’cause you’re constantly having to be like, “Look… ”

Matt Mulcock:
Oh my gosh. It’s such a bummer, man. I really feel for…

Ryan Isaac:
Shoutout to those guys.

Matt Mulcock:
I genuinely feel for CPAs.

Ryan Isaac:
I do, too. The reality is dentists, like my career, like your career, we are in a career where we have earned income. So it just so happens that the tax law for earned income is what it is. Every once in a while there’ll be new tax laws that come out. There’s like… Remember the QBI stuff that first came and the threshold is still there? But things like that will hit every once in a while. They’ll kind of be new. But we’re all in a… We are all in careers that are part of the tax code that’s earned income tax code. So you can give to charities, you can write off some mortgage interest up to a certain amount. You pay property taxes up to a certain amount. You can have retirement plans. You can write off stuff when you buy it in the business. Cars…

Matt Mulcock:
You can have kids.

Ryan Isaac:
You can have children. I mean, tread lightly, but…

Matt Mulcock:
Hopefully not just for tax.

Ryan Isaac:
Not just for taxes. Yeah. You can have home offices, you can do CE, you can write off other expenses through the business, but there’s not a person touring the country who happens to also be selling a book who has secrets that you don’t know about yet. And your highly educated CPA who’s been doing this for 20 years also doesn’t know about. Now, this isn’t to say that there aren’t CPAs who are more comfortable with some things and less comfortable ’cause there’s other kinds of deductions. I’ve watched this happen over the last few years with like R&D credit deductions. I know some CPAs that are like, “I don’t wanna mess with that.” And then I know some that do it all the time for their clients. What was the big one that just rolled through that everyone’s worried about audits?

Matt Mulcock:
ERC.

Ryan Isaac:
ERC. Everyone’s worried about the audits of the ERCs.

Matt Mulcock:
Yeah, that’s gonna come back to bite some people, I think.

Ryan Isaac:
Maybe. Yeah. I mean, I’ve known CPAs like you do too that are like, “No, we don’t… I’m not even touching ERCs,” and then some will do it. So there are different CPAs that’ll have a different personality that that’s probably fine to go find that fit for you. And work with your CPA to take advantage of everything within your part of the law that you can take advantage of. Unfortunately, there’s just no giant magic tricks. Like you said Matt, dentists are gonna be statistically the highest earning income profession in the country while somehow wiping out tax bills is just not… It’s not gonna happen, or you’re not gonna find something that also doesn’t come without some pretty grave consequences potentially.

Matt Mulcock:
Yeah, or some level of tradeoff, right?

Ryan Isaac:
Some tradeoff, yeah. There’s gonna be a tradeoff.

Matt Mulcock:
Everything’s a tradeoff. And so that’s why I think the problem comes in with this is like, I’ve had a lot of people who will come to us and say, “Hey, I wanna do the X, Y or Z strategy or buy this product because of the tax benefit.” And then when we really dive into it, it’s like, “Okay, well, what’s the tradeoff on the other side of it? What do you mean?”

Ryan Isaac:
How bad is this investment?

Matt Mulcock:
There’s always a tradeoff.

Ryan Isaac:
Yeah.

Matt Mulcock:
Like, how bad is the investment return, access to your money…

Ryan Isaac:
Liquidity, transparency fees…

Matt Mulcock:
Exactly.

Ryan Isaac:
Yeah.

Matt Mulcock:
There’s always a tradeoff. Now…

Ryan Isaac:
Risk of it going to zero, totally.

Matt Mulcock:
Yeah, exactly. Now, to your point, yeah, you take a big loss, that’s a big tax benefit to you. So you invest in something that’s horrible.

Ryan Isaac:
How about just don’t lose the money in paying taxes? [laughter]

Matt Mulcock:
How about you just don’t lose that money?

Ryan Isaac:
It’s kinda like buying stuff on sale that you don’t really need and you’re like, “But it was on sale,” you’re like, “Well, you could’ve just not bought it and had the money.”

Matt Mulcock:
Oh, I always joke with my wife about that ’cause I’ll be like, “How much was it?” And sometimes her response is 30% off or X% off and I’m like, “Oh, so we’re saving money.” [laughter] It’s like, but I’m always saying it obviously jokingly like a real jerk.

Ryan Isaac:
Yeah, it’s facetious. So you could lose money on a bad investment and get the tax break or you could just not lose money on investment.

Matt Mulcock:
Sure. But you just… You lost that money, right?

Ryan Isaac:
Yeah, yeah.

Matt Mulcock:
So it’s like that deduction is still a net negative to you from a cash flow perspective.

Ryan Isaac:
Totally.

Matt Mulcock:
Now I will say, to your point of, let’s say obviously in a dentist’s life, there are certain things the government will incentivize for you to get tax benefits. So investing is one. Like investing in real estate, there are tax benefits that come from investing in real estate, 100%. Investing in things like a 401K or retirement plans, the government has set up things to incentivize that.

Ryan Isaac:
Totally.

Matt Mulcock:
Right? And so you can get tax…

Ryan Isaac:
Expanding your business, buying equipment, yeah, growing economy.

Matt Mulcock:
As you say, investing in your business, the government incentivizes that from a tax perspective. I’ll be honest, even investing in a brokerage account, people will often say, “Oh well, there’s no tax benefits from that.” Absolutely there are, because the gains that you get are at one… If you hold them for longer than a year, are tax at capital gains rate. That’s an incentive the government is giving you to invest in companies and other people in the country. So there are definitely things you can do. But I think the Woozle here specifically is this idea that you can make all this money and somehow not pay taxes year to year. It’s just not… It’s not happening.

Ryan Isaac:
It’s not gonna happen.

Matt Mulcock:
It’s not possible.

Ryan Isaac:
Yeah. You’ll be disappointed. Yeah. And you’re right though, Matt. The list is long of things you can do and it is significant when you do them for decades over a long career.

Matt Mulcock:
Yeah, of course.

Ryan Isaac:
When you have the right sized retirement plan at the office, that’ll probably be your biggest ongoing, proactive deduction you could ever make. But when you buy stuff, you expend stuff the right way. When you’re working with the right CPA who understands your business, a dental-specific CPA. Those things do… I don’t care if it’s a $7,000 HSA. If you should have added an HSA and you actually funded it for that year, those things, I mean, do that for 20 years. These things will definitely add up to the tens and tens of thousands…

Matt Mulcock:
It’s a fantastic account.

Ryan Isaac:
Yeah, totally. So it doesn’t mean there’s… It’s not like throw up your hands and like, “Who cares? Guess we’re just screwed.” It’s like, no, there’s things you can do and there’s plenty of things people are not doing adequately or the right way for sure, but there is no magic, like go away. Every time you keep saying Woozle, I just laugh like, “Here’s the Woozle.” [laughter]

Matt Mulcock:
Here’s the Woozle.

Ryan Isaac:
I just keep laughing, man. Love it.

Matt Mulcock:
Yeah. And to emphasize that point, we’re not at all advocating to throw your hands up and just be like, “Oh, we’re screwed.” No, not all. There’s definitely things you should do and be proactively planning for taxes. And trying to think, I guess that’s another thing is think beyond this year. Don’t just think like… Love them to death right? We just gave a shoutout to CPAs. But I will say a lot of times, CPAs, generally speaking, CPAs are incentivized and this is no fault of their own, it’s because of the nature of their business. They are more like historians, like income historians. They’re more like, how do we… And they’re really focused on year to year to year, “How do we maximize your tax deductions for this year so you don’t hate me?”

Matt Mulcock:
Whereas it’s like, that’s one thing to consider, be more thoughtful with your tax plan moving forward as opposed to just, “How do I maximize deductions this year?” An example of this is, you make a big… Maybe you’re a startup, you make a big investment in the practice and your CPA comes to you and says, “Great, we can do a 179 deduction and basically show you made no income this year.” That may or may not be the right answer, but it’s like, “Well, what if we just extended this over its natural schedule, the deduction schedule, as my income’s going up? Can we talk about that tradeoff or that as a comparison?”

Ryan Isaac:
Yeah.

Matt Mulcock:
There’s just a lot more thought that needs to go into it. So to your point, we’re not just saying throw your hands up, there’s no point. There’s things you should be doing, but it’s not as easy as saying there’s some magic bullet out there.

Ryan Isaac:
No Woozle.

Matt Mulcock:
No Woozle.

Ryan Isaac:
Now, do throw your hands up in the air and please wave them like you don’t care.

Matt Mulcock:
Like you don’t care. Of course.

Ryan Isaac:
But that’s the only scenario you should be throwing your hands up.

Matt Mulcock:
And only on the weekends.

Ryan Isaac:
Only on the weekends.

Matt Mulcock:
Usually, yeah.

Ryan Isaac:
Only at the weekends.

Matt Mulcock:
So like for a dentist, on Fridays, for sure do that.

Ryan Isaac:
Throw your hands in the air, wave them.

Matt Mulcock:
Throw your hands in the air and wave them like you just don’t care. Of course.

Ryan Isaac:
We are so dad joking right now. [laughter] My daughter would be… Her eyes would be permanently rolled in the back of her head.

Matt Mulcock:
Your daughter? My wife would be screaming at me right now. She hates my dad jokes.

Ryan Isaac:
I love dad jokes.

Matt Mulcock:
Oh, they’re my favorite.

Ryan Isaac:
We went on. Are there any more Woozles? The only one I can think of though, and I think you already said this, is that there’s assets that are the best, or investments that are the best. What’s the best investment? We get that question a lot. And honestly, that’s just from… That’s how I guess we’re educated in the world now about… We’re not educated about personal finance and investing. We just don’t get a chance to learn that stuff. So I understand why people ask that question. That’s what marketing tells us to ask, right? That’s what products and marketers tell us to ask. So I understand that, but I think that’s another one where it’s like, this idea, this Woozle, if you will, about, what’s the best investment?

Ryan Isaac:
And you said it earlier, unless we’re talking about like a full-on scam, then it’s just a matter of tradeoffs. And the only thing you wanna see a client do, like I don’t have a preference, the only thing I want to see someone do, a friend, a client, anyone, is just understand it as much as they possibly can where they could basically go explain it to someone else who has no idea what you’re talking about. Quite often people will call and be like, “I wanna do this thing,” and you’re just like, “Well, what is it?” and they’re like, “Well, I don’t know.”

[laughter]

Matt Mulcock:
“I don’t know, but I’m gonna save a lot on taxes and it’s passive income.”

Ryan Isaac:
And it gets 16%. [laughter]

Matt Mulcock:
Yeah. And it’s like, I heard the number 16%.

Ryan Isaac:
“And what does the market do? It’s like nine, right, Ryan?” I’m like, “Well, what is it?” [laughter] Yeah.

Matt Mulcock:
I don’t know.

Ryan Isaac:
And I’m not exempt from this stuff either, no one is, but it’s like, you just wanna see someone not get hurt and get to a point where they’ve asked enough questions and have enough understanding. And if someone’s talking over your head over and over again, that should be a red flag. They’re trying to sell you on something. They’re trying to get you to feel so stupid that you just cave and then just do what they say.

Matt Mulcock:
Yeah.

Ryan Isaac:
So if you can’t get to the bottom from that, and you can just tell people, I do this all the time, like, “Look, I know I’m not as smart as you. I don’t know what you’re talking about. Can you just slow down and explain that one more time like I’m five?” I think that’s an actual whole sub-Reddit, Explain to me like I’m Five.

Matt Mulcock:
Yeah, yeah.

Ryan Isaac:
That’s a whole sub-Reddit.

Matt Mulcock:
There is. Yeah.

Ryan Isaac:
And people ask questions, like dumb questions on there. “Explain to me like, I’m five. I don’t get this.” And just do that. And if you have the ability to then turn around and explain it to someone else like their five, then you understand it and you could probably safely say that you did enough research and homework. But that’s just the point I want people to get to instead of just hear a few numbers get tossed out and then jump into it. But I get it, it’s human nature. That’s how we are. That’d be another Woozle. But you kind of already covered that with some of the other things. It’s just tradeoffs and understanding and asking questions and being patient and kind of tempering our emotions around financial decision-making for sure.

Matt Mulcock:
Yeah. I think along those same lines, another kind of sub-point of that sub-Reddit.

Ryan Isaac:
Sub-Woozle.

Matt Mulcock:
Sub-Woozle, a sub-Woozle of that Woozle.

Ryan Isaac:
It’s like a Woozle’s baby.

Matt Mulcock:
It’s like a Woozle baby.

Ryan Isaac:
Woozlesito.

[laughter]

Matt Mulcock:
A little Woozlesito. I would say along the lines of investing is this Woozle that the bigger your wealth gets, all of a sudden you’ve gotta do something different specifically around this idea of sophistication. It’s like, well now I’ve got a million dollars, and so I should be doing something more sophisticated than…

Ryan Isaac:
Yeah. Than what you did to get to the million-dollar point.

Matt Mulcock:
Than what you did to get to that point.

Ryan Isaac:
That’s really good.

Matt Mulcock:
And I do agree there are some concepts around like, getting wealthy is different than staying wealthy. I totally understand that there are some general things.

Ryan Isaac:
And different opportunities open up at different parts of your life. Yes, 100%.

Matt Mulcock:
Yes, for sure. But I think the keyword there is need. Like all of a sudden, it took you… You went down this one path to get to where you are, all of a sudden you’ve got a couple million dollars liquid, let’s say, and now all of a sudden you’re like, “Well, I need to do something different,” or “I’ve outgrown this strategy.” It’s like, “Have you?” I just want you to ask why you’re thinking that more wealth at that level means more sophistication. I think that’s a bit of a Woozle there where people think they’ve gotta do something drastically different ’cause all of a sudden they’ve got a couple million bucks. It’s like, actually, you don’t at all.

Ryan Isaac:
Yeah, and you could find people that we work with who do the same thing from $2 million to $10 million as they did from zero to $2 million, and they just keep doing the same thing.

Matt Mulcock:
Absolutely.

Ryan Isaac:
And it’s purely just preference. Some people just like to scratch an itch or explore different things or they have hobbies or passions. And that’s different too. But you’re totally right. It doesn’t have to change at all.

Matt Mulcock:
This one really grinds my gears a little bit too, this whole idea, these sales pitches of like, “What do the Rockefellers do? Rockefellers do this.”

Ryan Isaac:
You mean like 150 years ago?

Matt Mulcock:
Well, not only that but I’m like, wait, John D. Rockefeller, he is, by all accounts, if you adjust for inflation, the richest person to ever live, either him or Vanderbilt, one of the two.

Ryan Isaac:
Okay.

Matt Mulcock:
So my whole point is this… Again, the Woozle here is people sell you on this idea of like, “Don’t do what these normal dentists do. Do what John D. Rockefeller did.” I’m like…

Ryan Isaac:
Do what the richest person to ever walk the face of the earth did.

Matt Mulcock:
Wait a second, the dude was worth like, inflation adjusted, like $500 billion

Ryan Isaac:
Really? Okay.

Matt Mulcock:
Yeah, so why would I put… Wait, you want me to do what he did? It makes no sense.

Ryan Isaac:
Yeah.

Matt Mulcock:
But again, they tap it. These sales people tap into this idea of like… I mean it’s the Maslow Hierarchy of Needs right? They tap into the esteem level of like, you wanna feel esteem, you wanna feel like, “Yeah, I’m like John D. Rockefeller.” I’m sorry to tell you, no, you are not. You are definitely not John D. Rockefeller. Neither am I.

Ryan Isaac:
Dude, the same thing happens with Instagram fitness influencing.

Matt Mulcock:
Yes.

Ryan Isaac:
It’d be like, “Look at what this pro athlete does on a daily basis,” and you’re like, “Well, let me just tell you one difference between me and the pro athlete.”

[laughter]

Matt Mulcock:
How much time do you have? I’m gonna talk about the differences between me and him, yeah.

Ryan Isaac:
How about, I’ve never been to the gym before my whole life, what should I do today? Go on a walk and do that for a month and then see if you actually… Yeah, totally.

Matt Mulcock:
No, no, take this supplement because…

Ryan Isaac:
Take this and then wake up at 3:30 and do four sessions and then use this stuff and you’re like, “Wait, what?”

Matt Mulcock:
Yeah, exactly.

Ryan Isaac:
Totally, man. Thanks for bringing us through the Woozles and the Heffalumps and the… I love that song. The newer versions of Winnie the Pooh have this…

Matt Mulcock:
You’re gonna go listen to it now, huh?

Ryan Isaac:
I’m gonna go watch and listen to this cool trippy little…

Matt Mulcock:
Wait, when did… Really quick, when did Winnie t he Pooh the book come out?

Ryan Isaac:
Oh, geez. I don’t know. The original?

Matt Mulcock:
Yeah.

Ryan Isaac:
Will you do a Goog on that? Goog it.

Matt Mulcock:
I’m Googing it.

Ryan Isaac:
You’re just doing a Goog?

Matt Mulcock:
I’m just wondering.

Ryan Isaac:
Just did a quick Goog? When did Winnie the Pooh…

Matt Mulcock:
Oh, yeah, okay. Okay. This make more sense.

Ryan Isaac:
What, the ’70s?

Matt Mulcock:
No, 1926.

Ryan Isaac:
Oh, ’70s. Yeah. Okay.

Matt Mulcock:
That was the original…

Ryan Isaac:
Winnie the Pooh book.

Matt Mulcock:
That was the original Winnie the Pooh book.

Ryan Isaac:
Heffalumps and Woozles probably came out then, but the songs that were written were probably, yeah with Disney Corporation in ’70s.

Matt Mulcock:
Yeah. So, okay. Yeah, yeah, so like…

Ryan Isaac:
Set us straight.

Matt Mulcock:
Well, no. So, earlier when I said like the Woozle effect in the scientific community I thought came out sometime in the ’70s, you threw me off when you talked about the song being in the ’90s and I was like, “I’m an idiot. Why did I say the ’70s?” But now I’m like…

Ryan Isaac:
Oh yeah. That’s why.

Matt Mulcock:
But Winnie the Pooh original book with the Woozles and all that…

Ryan Isaac:
The stories of the Woozles, yeah.

Matt Mulcock:
The stories came out in the early 20th century.

Ryan Isaac:
Yeah, okay. Wow.

Matt Mulcock:
Okay. I just was double-checking.

Ryan Isaac:
Well thanks for clarifying that.

Matt Mulcock:
I just wanted to make sure I wasn’t making crap up, which I have been known to do, okay. Studies show, studies show.

Ryan Isaac:
That’s all you have to do is just say studies show.

Matt Mulcock:
That’s all you have to say.

Ryan Isaac:
Thanks everyone for being here as always, we appreciate it. We really actually do. So thanks for listening and tuning in. If you have any questions, it’s really easy to get your questions answered. You can just go to dentistadvisors.com, click the Book Free Consultation link, and then you’ll just get someone on the phone who is a nice person and is very willing to help point you in the right direction and not sell you something, 100% not sell you anything. So, that’s kind of refreshing.

Matt Mulcock:
We’re gonna point out your Woozles maybe. Maybe we’ll just talk about some Woozles.

Ryan Isaac:
Let’s talk some Woozles. We didn’t talk about Heffalumps. We gotta talk about some Heffalumps next time maybe. They’re bigger than Woozles.

Matt Mulcock:
We hit some pretty big Woozles, but we should have categorized there.

Ryan Isaac:
Maybe we should have categorized. Passive income was a Heffalump.

Matt Mulcock:
Heffalump, yeah.

Ryan Isaac:
Taxes was Woozle. Alright. Well, thanks everyone for joining us. Matty, thank you, brother, appreciate it.

Matt Mulcock:
Yeah, thanks, Ryan.

Ryan Isaac:
We’ll catch y’all next time on another episode of the Dentist Money Show. Take care now. Bye-bye.

Behavioral Finance