Two Powerful Tips to Help You Reach Your Financial Resolutions – Episode 265

It’s time to set some goals. Learn two proven ways to make successful financial resolutions.

On this episode of the Dentist Money™ Show, Ryan & Matt take on New Year’s resolutions providing two powerful tips that can help you reach your yearly financial goals.

As January 1st rolls past, millions of people have set resolutions which tend to fail very quickly. How can you make goals, especially financial goals, and feel like you’re really making progress towards meeting them by year’s end? Ryan and Matt have some behavior-altering ideas that you need to hear as you start the new year.

 

Show Notes:
https://jamesclear.com/atomic-habits

 

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Podcast Transcript

Ryan Isaac:
Hey, everybody. Thanks for joining us on another episode of The Dentist Money Show. Today, Matt and I talk about new year’s resolutions and goals. Not the same old story, though, we talk about two ways to start thinking about your resolutions and your goals, especially financial ones in a little bit different light than you have before. Changing your internal story about the way you think about yourself and money and finances and changing your financial external environment and how to do that, a few quick tips that you can implement in your life this year. Shout out to 2021. Good riddance 2020.

Ryan Isaac:
Thanks everyone for joining us. If you have any questions, you can post a question in our Facebook group, dentistadvisors.com/group. Go there, post a question, we’ll answer it in a Facebook Live or an actual podcast episode. Or go to the website, dentistadvisors.com, click the Book Free Consultation link, sign up a chat with one of our friendly advisors anytime you like. And we’d love to hear from you. Thanks again for tuning into the show. Thanks for the support. Enjoy the show.

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

Ryan Isaac:
Welcome to The Dentist Money Show where we help dentists make smart financial decisions. I am Ryan Isaac, and I’m here with the guy that everyone is knowing and loving. He is known as Hollywood Matt Mulcock, the Mountain.

Matt Mulcock:
They’re knowing and loving me?

Ryan Isaac:
In that order sometimes, but sometimes not in that order. Sometimes it’s just Hollywood Matt, the Mountain Matt Mulcock.

Matt Mulcock:
I feel like you are the only person in the world that calls me this, but I’ll take it. And I got to call you out really quick. You didn’t introduce yourself correctly.

Ryan Isaac:
Yeah.

Matt Mulcock:
We’re going to run this back. You are Sir Ryan Isaac.

Ryan Isaac:
Sir Ryan Isaac.

Matt Mulcock:
Host of The Dentist Money Show.

Ryan Isaac:
Shout out to Reese Harper for the years and years of being a trusty old cohost, Sir Ryan Isaac. Yes, that is me.

Matt Mulcock:
I feel like I’m the trusty old cohost now, is that right?

Ryan Isaac:
We’re equals now. Equal playing field. This episode is launching to your ear holes on the beginning of 2021. The first thing that we’re going to say is goodbye 2020.

Matt Mulcock:
Oh, good riddance.

Ryan Isaac:
Good riddance. I hope that the actual… We don’t know if the world’s around when this will actually come out. It’s around when we’re recording this, but it might not be around when we’re supposed to release it. What if New Year’s Eve there’s something, you know?

Matt Mulcock:
We often have an ominous tone the last few recording we’ve done. Hopefully the world’s still here.

Ryan Isaac:
I’m just like hopefully it’s still there. It would be very 2020 for it to somehow trap us in 2020 and not roll over to the next year. Everything gets stuck on 11:59, and we can move. And it just-

Matt Mulcock:
It’s like Y2K, but worse.

Ryan Isaac:
Yeah, the time just stuck. Anyway, most people in the entire world now are going to be doing something at the beginning of this year. It’s a tradition, right? It’s a tradition that all of us do.

Matt Mulcock:
It is. It’s a good one.

Ryan Isaac:
But before we say that tradition, okay, we’re going to just tease that a little bit, right?

Matt Mulcock:
Yeah, that’s what we do. We tease it.

Ryan Isaac:
We’re just going to hold on and tease this a little bit. The first thing we’re going to do-

Matt Mulcock:
Because you have to hang around to listen to what the tradition is.

Ryan Isaac:
Yeah, that’s exactly right. So the first thing we’re going to say is that Dentist Advisors, The Dentist Money Show is sponsored by Dentists Advisors. That’s what I meant to say, okay? That The Dentist Money Show is sponsored by Dentist Advisors. And Dentists Advisors is a comprehensive, fee only financial planning firm just for dentists all over the country. You should check us out at dentistadvisors.com.

Ryan Isaac:
Now, let’s get into that thing. What’s the thing everyone’s doing right now at the beginning of the year? It’s setting goals and resolutions. New year’s resolutions and goals.

Matt Mulcock:
Good old new year’s resolutions.

Ryan Isaac:
If you’re interested, we did a webinar on this. You can check it out, dentistadvisors.com/webinars. And we had a great group that night. We talked about resolutions and goals, which is the subject of today. But more importantly, why they fail. And we’re going to give you some key tips to keeping some resolutions that are very, very financially specific. They’re not just the general ones of like make it specific, write it down, make it measurable. Of course, those are good goals. Those apply to a lot of other things. But these are financially specific helpers that’ll help you make some of these goals.

Ryan Isaac:
But here, I found this statistic, though. I don’t think this is going to be shocking. So there’s this huge study, it’s one of the bigger studies on new year’s resolutions, found that 77%-

Matt Mulcock:
You’re going to wreck some people aren’t you? You’re going to make us feel so bad about ourselves.

Ryan Isaac:
Well, that’s all of us. We’re just all humans. This is what we do.

Matt Mulcock:
Yeah. It’s okay.

Ryan Isaac:
Yeah, it’s the human condition. 77% of people who committed to a new year’s resolution in this study stuck to it for a week.

Matt Mulcock:
77%?

Ryan Isaac:
For a week.

Matt Mulcock:
That is worse than I even expected.

Ryan Isaac:
I mean, this is an older study. It was, came out of the University of Scranton just before year 2000.

Matt Mulcock:
Scranton, like Michael Scott?

Ryan Isaac:
Shout out to Michael Scott, yes. But so for that first week, man, people are on fire. And then 19% of those studied actually fulfilled the goals within two years. So 19% of the people, they hit the goals within two years, but everyone else didn’t hit their goals. And there was another study I found here that only 4% of people who make new year’s resolutions in 2018, so this is a lot more recent, said they kept them. So the study of 2018… Because I thought, “Well, that’s a pretty old study,” that first one, but it’s very, very big, and it was like one of the big official landmark studies on new year’s resolutions and goals. But then this one, 2018, 4% of the people surveyed said that they kept their new year’s resolutions. But I think that’s really common, right?

Matt Mulcock:
I mean, to just think anecdotally in our own lives, people we know ourselves, I’ll be the first one to admit, I’ll get vulnerable with you.

Ryan Isaac:
Let’s do it.

Matt Mulcock:
I’ve definitely failed at more resolutions than I’ve ever completed. I don’t even know if I’ve ever completed a resolution.

Ryan Isaac:
So that sets the stage. I don’t think that’s a surprise or news to anybody. We all try to set goals and resolutions.

Matt Mulcock:
So wait, can we just recap that stage you just set?

Ryan Isaac:
Yes.

Matt Mulcock:
You’re basically saying we are all failures.

Ryan Isaac:
We’re all failures.

Matt Mulcock:
Is what you were trying to say?

Ryan Isaac:
We have really good intentions, but I think we shoot too high. We don’t make things realistic is probably part of it. Another part of it is just accomplishing anything meaningful in life is hard, and it takes longer than we always expect, and it’s worse. The journey is harder than we expect, you know?

Matt Mulcock:
Yep.

Ryan Isaac:
For anything meaningful in life. And the tips you always hear on setting goals, making it measurable, be accountable, all those things, those are real, man. And without measuring and without accountability, those things don’t happen.

Ryan Isaac:
Let’s start with a quote. So this is kind of the basis for what we’re going to talk about today. It’s from the author James Clear, and you have a passage from one of the books you’re going to read, right?

Matt Mulcock:
Yeah. So the quote we talked about, so it’s, “The more pride you have in a particular aspect of your identity, the more motivated you will be to maintain the habits associated with it.”

Ryan Isaac:
Okay. So the goal just can’t be this external outward thing that you’re like, “This would be cool if people saw me do this,” right?

Matt Mulcock:
It has to be [crosstalk 00:07:25].

Ryan Isaac:
You are powerfully, emotionally tied to your pride. Your identity is tied in the becoming of this goal. The goal’s a measuring stick of you becoming something.

Matt Mulcock:
Exactly. So he talks about this in the book. And I mean, I know I joke about this a lot, but this truly is one of the best books I think you’ll ever read, one of the most actionable… You put the book down every time you’re done reading it, and you’re like, “I’m going to go apply this to my life.” This is a great book to read at the beginning of the year I feel like.

Ryan Isaac:
I just going to say, maybe that’s a good goal.

Matt Mulcock:
It’s a perfect goal.

Ryan Isaac:
Make one of your goals to read this book.

Matt Mulcock:
Yes. So he talks about the three layers of behavior change and what you were just hitting on Ryan. So he talks about level one, the peripheral, like the surface level, is what we’re used to. And then what we’re talking about with these resolutions, it’s outcome-driven behavior change. So it’s your typical, “I’m going to go to the gym three days a week,” or, “I’m going to go run a marathon.” It’s an outcome-driven behavior change, right?

Ryan Isaac:
Okay, yeah.

Matt Mulcock:
On the surface. Layer two is he calls it process-oriented, so you’re actually designing a process around how you’re going to achieve that outcome. That’s where a lot of our habits, most habits are created. He talks about the third level, which most people don’t ever really focus on or get to, which is identity, shifting and changing your identity. And he said, “That’s where real lasting change comes.”

Ryan Isaac:
Oh, that’s really cool.

Matt Mulcock:
So the goal is not to read a book, the goal is to become a reader. The goal is not to run a marathon, the goal is to become a runner. And then, he says, “The goal is not to learn an instrument, it’s to become a musician.” So again, it’s what you’re telling yourself and actually shifting your identity to actually… And again, because coming back to that quote more deeply-

Ryan Isaac:
Yeah, read that again. That’s what I was going to say.

Matt Mulcock:
Yeah, so the ultimate… Let’s see, “The more pride you have in a particular aspect of your identity, the more motivated you will be to maintain the habits associated with them.”

Ryan Isaac:
Yeah. I can relate to that because at this point, I want to become a surfer, which is really… I say that in all awareness at how lame and old and crappy I am and will be at surfing forever, okay? I’m acknowledging that right now. I’m not saying I’m a shredder.

Matt Mulcock:
You’re a real downer today.

Ryan Isaac:
I don’t shred, okay?

Matt Mulcock:
You don’t shred the gnar? You don’t hit it?

Ryan Isaac:
I don’t rip, I don’t shred, okay? I just try to stand up and go and ride [crosstalk 00:09:50]-

Matt Mulcock:
Which is harder than it looks. If anyone has ever tried to surf, it is brutal.

Ryan Isaac:
It’s really hard. It’s hard at 40. But I relate to this a lot because that’s something that I’ve wanted to accomplish for a very long time. And that quote kind of hits home because I will get in my van, and I’ll go down and sleep on the highway. And I wake up in the night, and you can see your breath in the van. It’s not comfortable. It’s lonely. And I wake up to get in the water the next day, and right now in California, it’s 45 degrees in the morning, and it’s a little chilly. I don’t like the cold. But I guess my pride is tied to that identity of, “I want to be a surfer.” Not just, “I want- ”

Matt Mulcock:
No, no, you are a surfer.

Ryan Isaac:
I’m a surfer.

Matt Mulcock:
Yeah.

Ryan Isaac:
Yeah. But I love that quote, man. I hadn’t heard that until you just read that this morning, and I think that’s really powerful. So if somebody is out there going, “I’m really worried about my financial future. How am I ever going to have enough net worth to quit one day or stop working or slow down?” They have to somehow get their brain wrapped around this identity that, “I am financially independent. I’m a saver. I’m a person who earns money, and then I save a good portion of it,” you know?

Matt Mulcock:
Yeah.

Ryan Isaac:
Which is funny, maybe it’s funny to say that, but how many people out there are like, “I’m just a spender? Dude, I can’t save money. I can’t pull this off. I’m going to be broke forever.” That’s an internal story, unfortunately, probably carried from childhood and just things that are hard to unwind. But I really love that quote.

Matt Mulcock:
Yeah, things you’re not even really aware of of why you carry this baggage and why you’re telling yourself this thing that is objectively not true. You telling yourself, “I’ve just never been good with money,” We hear that all the time, that’s not true.

Ryan Isaac:
Yeah, oh, yeah.

Matt Mulcock:
It’s just something you’re telling yourself.

Ryan Isaac:
“I’m just not good with money.” Man, that is one of the most common internal stories [inaudible 00:11:51]. Well, okay, so let’s take a quick break. When we come back, we’re going to read another quote from James Clear that’s going to set the stage for a couple of these topics. And I’m going to read the quote, and then we’re going to go backwards from the way we did it on the webinar because we’re already on the subject of internal stories, and this is just perfect. So let’s take a quick break. Come back, read the quote, and let’s jump right back into this internal story topic when we come back.

Ryan Isaac:
Matt, it’s time.

Matt Mulcock:
Time for what, Ryan?

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

Ryan Isaac:
We’re on a James Clear kick today, all right?

Matt Mulcock:
We really are.

Ryan Isaac:
So read Atomic Habits.

Matt Mulcock:
Because, again, it’s new year’s resolutions.

Ryan Isaac:
Yeah. Buy the book.

Matt Mulcock:
It’s goals. Yep.

Ryan Isaac:
Buy the book, buy the audio book, just start it.

Matt Mulcock:
Habits. Yep.

Ryan Isaac:
It’s really impactful. A quote from him, I don’t think this is from the book, but this is James Clear. He posted this on Twitter a couple of weeks ago. This is where I found it. He says, “It is not necessary to change a person in order to change their behavior, just change their environment. Similarly, it is not necessary to change your environment in order to change your behavior if you can change your internal story.”

Ryan Isaac:
So I thought this was amazing because he gave two paths to changing behavior. And he’s saying you don’t have to change who you are to change your behavior, you can change it through other ways. He says through changing your environment and then changing your internal story. I think the environment’s easier to change because you can force change an environment, right?

Matt Mulcock:
Yeah, it’s a quicker fix, right?

Ryan Isaac:
It’s quicker. You can outsource the help. If you’re trying to be healthy, you can hire a coach and you can drive to a gym and you can force your environment to change. Where the previous environment might’ve been stay at home, eat bad food, not move, and then the new environment might be I force myself to go somewhere to move, to get pushed, to eat better food.

Matt Mulcock:
Yes.

Ryan Isaac:
So that’s an example a lot of-

Matt Mulcock:
So this is like what we talked about earlier. This is like the second layer of that behavior change.

Ryan Isaac:
The process.

Matt Mulcock:
It’s like the process. It’s like creating obstacles for your temptations and making it easier for you to carry out what you’re trying to accomplish, right?

Ryan Isaac:
Really cool.

Matt Mulcock:
So I’m thinking of a really simple one. It’s not related to money at all, but let’s say that you want to watch less TV, right?

Ryan Isaac:
Mm-hmm (affirmative). I’m trying to watch more.

Matt Mulcock:
Right? But remove the TV from your bedroom, right?

Ryan Isaac:
Yeah.

Matt Mulcock:
That’s a quick, easy-

Ryan Isaac:
Yeah, environment change.

Matt Mulcock:
Create an obstacle to that temptation. Because if the TV’s there, don’t rely on willpower, rely on designing your environment to make that outcome that you want easier.

Ryan Isaac:
Environment was one of them James Clear mentioned here. And then, but let’s start with the internal story. I think that’s the harder one to change. That’s more of, it takes more time. It probably takes more internal, I don’t know, self-control, willpower, commitment.

Matt Mulcock:
Commitment, for sure, yeah.

Ryan Isaac:
Yeah, because the internal story, no one sees, no one hears, no one judges. It’s not on display. So you can pretend that you’re doing things while still telling yourself a bad internal story. I think we as humans do that all the time in all facets of our lives.

Matt Mulcock:
Yeah.

Ryan Isaac:
So let’s kind of go back to what you were saying a few minutes ago about these internal stories and becoming something and tying something. What would you suggest for someone’s internal financial story? How do we start to change an internal financial story? And I guess having just asked that question, it might have to be after the results of changing some environment and seeing some results first. I don’t know. What do you think about your internal financial stories?

Matt Mulcock:
Yeah. I mean, I think you’re right. I think changing the internal story is the most difficult one. But I think it’s also, as James Clear points out, it’s the foundation of long lasting behavior change, right?

Ryan Isaac:
Yes, that’s so true.

Matt Mulcock:
And creating good habits. So you can’t have one without the other. I actually think you start with the internal story you want to have, if you will.

Ryan Isaac:
Okay. Even if you’re maybe faking it a little bit.

Matt Mulcock:
I’m not saying you can’t-

Ryan Isaac:
Like, “I’m a saver.”

Matt Mulcock:
Yeah, kind of.

Ryan Isaac:
“I’m a saver. I’m a dentist who saves money.”

Matt Mulcock:
“I’m a saver.” Yep, exactly. “I’m a saver. I’m good with money.” And then, start building your habits around someone who would be a good saver and someone that’s good with money. And he talks about it in the book, your habits are then a vote for that person you want to be.

Ryan Isaac:
Interesting.

Matt Mulcock:
Every time you create a habit around that, you’re voting for that person. You’re basically saying… And then, again, as he says in that quote I read, it’s more motivating because you’re now starting… It’s like this circle. It’s like, “Okay, this is the person I am or I want to become,” and then every single habit, big or small, I’m putting in place is reinforcing that.” And then it’s just, again, it’s like this flywheel, it starts to gain momentum, momentum, and then it just becomes easier and easier and easier.

Matt Mulcock:
I’ve seen this in my own life. I know you’ve mentioned this already, and I’m sure there’s other things in your life. I know we always relate things back to the gym. But it wasn’t always-

Ryan Isaac:
It’s like the one thing we have. We don’t really have anything else, work and the gym.

Matt Mulcock:
But I think about this for myself. My internal story is I’m someone that gets up early. I’m an early riser. That’s something I told myself years ago.

Ryan Isaac:
Interesting.

Matt Mulcock:
I’m up at 5:00 every day, and I’m at the gym. And it it’s not even hard for me, and I’m not saying that’s because I’m some great, like I have all this willpower. It’s just that’s my identity now.

Ryan Isaac:
It’s funny you say that because I tell myself, “I’m not a morning person at all. I hate the morning, but I do it because I have to.”

Matt Mulcock:
Yeah.

Ryan Isaac:
So I’m like, wow, now that you just said that, I’m like, “I wonder how many of my sluggish mornings have to do with the fact that my story for my entire life has been I’m a night person. I’m not a morning person?” But my life has to start early, so I just do it, but I hate it. If we were going to name a few, let’s try to name a few internal stories you would love for a dentist, your clients or anyone listening, to take on if they don’t already have this. I think we said one of them, which is maybe one of the most powerful things, which is, “I’m a dentist who saves money.” That would be a killer internal story to start really baking into your psyche. Be like, “I save money. I save money. I save money. I save money.”

Matt Mulcock:
Yep.

Ryan Isaac:
And then, we’re going to talk about how to help that.

Matt Mulcock:
Yeah, I’d say kind of on top of that is, “I’m an investor.”

Ryan Isaac:
Okay.

Matt Mulcock:
I like changing that internal story. “I’m a longterm investor,” that’s a story that I’d want you to be telling yourself and ingraining in your identity.

Ryan Isaac:
Yeah. I think another one would be… Because we talk about how powerful this is, another good internal story would be something around like, “I enjoy my career, and I can see myself doing this for a long time, or, “I’m going to do this for a long time in some capacity.” Burnout and longevity in dentistry is a really huge thing. And man, it’s one of the most powerful things that a dentist has control over from day one that’ll impact their finances in, man, such massive ways.

Ryan Isaac:
What I mean by that is the ability to continue an income far into your life, even if it’s not full time, even ownership, but just an income. Dentistry’s an insane profession where you can work very little hours and make a really good income even late into your life.

Matt Mulcock:
Make good money. Yeah.

Ryan Isaac:
When a lot of other industries struggle to retain older employees. And so, having that mentality from an early age on the career that, “I enjoy this, I have balance in my life. And I have- ”

Matt Mulcock:
I was just going to say that, balance.

Ryan Isaac:
“I enjoy this. I have balance. And I have longevity in my career.” I think if you can start telling yourself that story really early on, you’ll be forced to maybe go a little slower to view this career as not this sprint, like, “Man, 15 years, I’m going to kill myself. But I hope I’m done at 50 because I won’t be able to do it a day after that.” And that’s tough, man.

Matt Mulcock:
See, and we hear that, right, Ryan?

Ryan Isaac:
Yeah, a lot.

Matt Mulcock:
So that’s a perfect example. We hear that a lot of people saying, “I want X amount of dollars at X age.” Those are outcome-driven goals. I’m not saying that they’re bad.

Ryan Isaac:
Yeah, sure.

Matt Mulcock:
But oftentimes I’ll ask, I’ll respond when I hear that and just ask a simple, “Tell me more about that. Why do you need X dollars at X age?”

Ryan Isaac:
Sometimes it’s arbitrary, huh?

Matt Mulcock:
It’s totally arbitrary. Almost every time.

Ryan Isaac:
I need $3 million at 50, why?

Matt Mulcock:
Yeah. It’s like, “I need three or five or 10 million dollars at X, 50 years old.” And it’s like, “Okay, why?”

Ryan Isaac:
Why five? Why 50?

Matt Mulcock:
I’m not saying that with judgment.

Ryan Isaac:
Oh, yeah, why?

Matt Mulcock:
But just tell me why. Because again, we’re getting to this how does this fit into the identity of who you are and what you want to be and what you want out of life? Generally speaking, I have found the more focused on outcome-driven goals like that that are pretty arbitrary, the less satisfaction you get from accomplishing those goals.

Ryan Isaac:
Oh, yeah. Yeah. Because they weren’t tied in, and they weren’t tied to an identity.

Matt Mulcock:
To get there… How many times do you hear from people that they’re like, “I achieved X, Y, or Z,” and it’s like, “Great. Okay. What else?”

Ryan Isaac:
Let’s talk about these environment changes. And these are really, really helpful ones that’ll change the outcome and some of your behavior and some of the outcomes you start seeing. Number one is to track your net worth. This is something that we do for clients. This is one of our foundational pieces of data that gives the advisors the tools to show clients the progress they’re making. How much money are you saving? How are your investments growing? How much debt is getting paid down every year? And how does your behavior affect those items? And then what’s your net worth doing? You went through school, you’re in debt, you work so hard, you own this business, it’s really tough. Are you making progress? And the net worth is one of the most honest ways to show and answer to that question, am I making progress? You can compare your net worth to some other numbers to give you more context, but that net worth. So we said on the webinar, “Look, if you just took a spreadsheet… ” What? Once a quarter.

Matt Mulcock:
Yeah. I’d say once a quarter is ideal. Because it wouldn’t take you at that long.

Ryan Isaac:
Ten minute job.

Matt Mulcock:
And especially if you’re just doing it really simple, broad categories, don’t get too granular.

Ryan Isaac:
You know what’s funny about that, though, as you say that? I mean, how many jobs are simple, but still don’t get done.

Matt Mulcock:
Oh, yeah.

Ryan Isaac:
They’re simple. They’re incredibly helpful.

Matt Mulcock:
Simple, but not easy.

Ryan Isaac:
But they just don’t get done. It’s probably a 10 to 20 minute job once a quarter, fill out a spreadsheet. What are your assets? What are your debts? What’s your net worth? And then, how did it change compared with the previous quarter and the previous year? And what are the trends? What’s funny is most people won’t do that. Why?

Matt Mulcock:
Yeah, they don’t.

Ryan Isaac:
It’s not a time-consuming thing. It’s not too hard. It’s just probably not that fun. It’s a little boring. And it’s one of those things… See, a lot of the steps necessary when you change your environment and you’re trying to pursue behavioral changes and different outcomes, some of those steps are just tedious and they don’t give immediate rewards.

Matt Mulcock:
That’s it, not immediate feedback.

Ryan Isaac:
Not immediate rewards. You hear that a lot with goal-setting advice where set goals and give yourself immediate rewards where possible because that’s how we… We’re just these dumb creatures. We’re just like, “Give me a reward. Where’s the cheese?”

Matt Mulcock:
Yeah.

Ryan Isaac:
So yeah, I mean, but that’s something we do for clients on a quarterly basis is we take a balance sheet and we just compare how did it grow or not compared to the previous quarter and the previous year? And, man, you can see a lot of trends take shape when you do that long enough in terms of what’s your behavior with debt? What’s your behavior with savings? What’s your behavior with investments?

Matt Mulcock:
Oh, yeah. You give that a year, two years. And like you said, you start to see progress, start to get more motivated. It’s a really cool thing. I mean, how cool is it to see when a client goes from a negative net worth, which a lot of people that hire us are at a negative net worth. So if you’re out there, don’t feel bad about yourself.

Ryan Isaac:
It’s all good. You can still-

Matt Mulcock:
It’s so common. But how cool is it that someone starts working with us, they have a negative net worth, and by year one or halfway through year two, all of a sudden they’re like, “Man… ” They see it on the progress report.

Ryan Isaac:
[crosstalk 00:00:23:58].

Matt Mulcock:
And they’re like, “I went from negative, I flipped, now I’m positive. Now, I’m 100,000 [crosstalk 00:24:01].”

Ryan Isaac:
Yeah, I’m worth 100 grand. I’m worth half-a-million dollars. How did that… I wouldn’t have thought. And I was talking about this on the webinar, but this surprises me almost every time I look at this for clients, is the amount of debt that gets paid down just by making minimum payments year over year, quarter over quarter. I mean, dentists carry so much debt and the payments are so high. There’s just so many debts on your balance sheet that it often feels like, unless you’re purposely sacrificing, giving tons of money, extra payments to it, it feels like it’s not going anywhere.

Matt Mulcock:
It feels like you’re not making progress.

Ryan Isaac:
Not making any progress. Man, you look at a dentist’s balance sheet, the average dentist with a mortgage, a building, some practice loans, some equipment, some student loans, and you look like year-over-year minimum payment debt reduction, just minimum payments, you’re like, “Dude, you added 50 grand to your net worth. You added 100 grand a year net worth just by making minimum payments on your debts.”

Matt Mulcock:
And every time it’s like, “Oh my gosh.

Ryan Isaac:
It surprises me.

Matt Mulcock:
You shed some light on that… Yeah, it surprises us. And then they’re like-

Ryan Isaac:
“Wow.”

Matt Mulcock:
Again, you shed light on that progress and they get excited and they get more motivated, so just by tracking it.

Ryan Isaac:
Yes. Just by tracking it. Some of the outcomes I love from just that piece of it is people, they relax a little bit on debt reduction. They go, “Oh, it’s happening?”

Matt Mulcock:
It’s happening.

Ryan Isaac:
I’m okay. So, all right, I’m going to start saving some money in my investment accounts now, because now I just want to see my investments grow, you know?

Matt Mulcock:
Exactly.

Ryan Isaac:
Where now I’m going to invest back in my practice. Debt, okay, debt’s going to take care of itself. You’ve shown me that. I didn’t know. I mean, it’s amazing the power of just acknowledging something on paper. Even if you don’t change it immediately, just acknowledge, be honest about what the numbers are telling you. And it’s amazing what will start to take shape in your internal story.

Matt Mulcock:
It really is.

Ryan Isaac:
Because the internal story changes. The internal story goes from, “I’m going to be in debt forever. This sucks,” you know?

Matt Mulcock:
Yep. Or, “I’m scared of debt.”

Ryan Isaac:
I’m scared of debt. I hate it. It’s the worst thing ever,” to, “It was a tool to get me where I’m at, but now I can just do other things with my money.” It’s kind of fascinating. So tracking your net worth on a balance sheet quarterly, we do that for clients. It’s one of the many jobs we do for clients throughout the year, but is super important. Number two is the one no one really wants to track or admit, what is it, Matt?

Matt Mulcock:
We should have hit this at the end probably.

Ryan Isaac:
Yeah, we’ll leave it on a bummer note. What’s the one no one wants to track, Matt?

Matt Mulcock:
Yeah, your spending, spending.

Ryan Isaac:
Your spending.

Matt Mulcock:
Wah, wah, wah.

Ryan Isaac:
So what’s the quote you always say about spending and tracking, budgeting, tracking?

Matt Mulcock:
That budgeting is not necessary, but tracking is.

Ryan Isaac:
Yeah. Budgeting’s not necessary, but tracking… Where did that come from? Is that Reese Harper?

Matt Mulcock:
I think it was from [Hoss 00:00:26:34].

Ryan Isaac:
Yeah, big Hoss, what a quote.

Matt Mulcock:
And I think he says it better than I do, which is not a shock.

Ryan Isaac:
All the quotes. Budgeting’s not necessary, but tracking is. What that means is, again, it’s kind of like your net worth. Even if it’s negative, even if it’s not moving, it’s going to help you make progress on your internal story, and it’s going to eventually force you to start making some behavioral changes when you at least admit what’s happening. So if you look at that, you’re like, “I think I spend eight grand a month,” and then you admit that it’s 13 or 14 or 19 grand a month, it’s not eight.

Matt Mulcock:
Yeah, yeah. And this is something, yeah, we should’ve hit this earlier, I think we hit this on the webinar, but just on this topic with internal story, how many times do we hear, “I’m a big spender,” or more likely than that-

Ryan Isaac:
More common, “My spouse- ”

Matt Mulcock:
“My spouse is a big spender.”

Ryan Isaac:
My spouse.

Matt Mulcock:
“He or she spends all the money.”

Ryan Isaac:
“They spend it all.”

Matt Mulcock:
That’s an internal story that you’re telling yourself about your spouse or about yourself.

Ryan Isaac:
It’s something that might not be true.

Matt Mulcock:
And that’s one… you what?

Ryan Isaac:
That might not be true.

Matt Mulcock:
It might not be true. And I think it creates an identity within the couple almost.

Ryan Isaac:
Oh, yeah.

Matt Mulcock:
Where you’ve created this, “I’m the saver.” And, hey, I’m guilty of this as well. My wife and I talked about this, and we perpetuate this internal story, she’s the spender and I’m not. But I have to give a quick shout-out to my wife who doesn’t listen to the show.

Ryan Isaac:
[crosstalk 00:27:52].

Matt Mulcock:
She’s been incredible this year. Honestly, we’ve changed that internal story.

Ryan Isaac:
Cool.

Matt Mulcock:
She’s the one tracking our spending every single month, and we changed that at the beginning of this year. So that’s a big one, I think, of changing your internal story around, “I’m a big spender,” or, “My spouse is a big spender.” That’s-

Ryan Isaac:
Yeah, and alleviating that tension because that tension builds up on the story. And I found this in my own life and I see this with clients, when you don’t know what’s happening, you make stuff up. I mean, that’s how we are as humans, right?

Matt Mulcock:
Totally.

Ryan Isaac:
And we always make up worst case scenarios. And I’ve found this in my own life when I’ll be like, “I think my wife spends a lot.” It turns out that she just pays our bills and goes grocery shopping and buys shoes when the kids-

Matt Mulcock:
Yeah. Life’s just expensive with four girls.

Ryan Isaac:
Normal stuff, yeah.

Matt Mulcock:
Yeah.

Ryan Isaac:
There’s a lot of kids in my family.

Matt Mulcock:
Yeah.

Ryan Isaac:
But I’ve found that when there’s a lack of organization, then that story feels way more dramatic than it really is. Because when I have organization in terms of, well, I know I’m automatically saving enough every month. That’s kind of automatically leaving my bank account. It’s a healthy percentage. And I have a handle on what the rest is getting spent. All of a sudden that story changes from, “Oh, I think my spouse spends a lot,” to, “Ah, we just buy the necessities, but I know I save enough, so we’re not spending too much.” And it’s crazy, but, man, it’s really helpful. I think that’s a good one.

Ryan Isaac:
So track your spending, there’s a million free apps and websites you can do that. And what we mean by you don’t have to budget, but you have to track is it has to be an accurate number, and you have to admit it to yourself and be honest about it. And it’s not just what do I spend? Because a lot of people will get their spreadsheet out, and they’ll write down all their monthly costs and they’ll be like, “Oh, it’s 10 grand a month. Those are my monthly costs.” But what don’t do is they don’t track a whole year to go, “Oh, plus landscaping, plus vacation, plus the furnishing, plus the medical bills, plus, oh, we did that thing, and we bought this thing.” Those are spending too. So on average-

Matt Mulcock:
That is also spending, people.

Ryan Isaac:
Yeah.

Matt Mulcock:
Yeah.

Ryan Isaac:
On average, it’s not ten.

Matt Mulcock:
It’s probably more like 12 or 15.

Ryan Isaac:
It’s 12 or 15.

Matt Mulcock:
And that’s okay.

Ryan Isaac:
That’s okay.

Matt Mulcock:
Just be honest.

Ryan Isaac:
We’re admitting it. We’re being honest about it. So we don’t have the means to show you and draw this out here. So this is going to be a little plug, a little a teaser, if you will, a click-bait for the webinar, go to dentistadvisors.com/webinars. Find this webinar here.

Matt Mulcock:
Go watch it. You’ll love it. It’s fun.

Ryan Isaac:
Go watch it. You’ll love it. Because we wrote out the different income ranges and where you should be on savings rate in these ranges. So do you make 150 to 200? Do you make over 500 a year? Whatever. We wrote out these ranges and we took some Q&A in there. So go to the website and find that webinar and go to that part, if you just want to watch that part, and talk about the savings rates. But tracking your savings rate, it’s like the reverse budgeting though. So this is what I was saying earlier about my own situation, when I knew that I was automatically removing money directly from my account before I saw it-

Matt Mulcock:
You’re paying the savings bill.

Ryan Isaac:
I’m paying savings bill. I eased up a lot on worrying about spending because I knew that percentage was healthy and that’s what I had to do. And then whatever gets spent on top of that, that’s cool, we’re fine. So force-

Matt Mulcock:
So you told you told yourself you were a saver, and then you created a system or a process around how to make it as simple as possible-

Ryan Isaac:
Yeah.

Matt Mulcock:
… to just make it automatic, proactive, you don’t even think about it.

Ryan Isaac:
You don’t even think about it. You know what’s funny about that? You say that is, I, for a long time, didn’t tell myself I was a saver, though. Even in this job and helping people become savers and helping people change that identity about themselves. I didn’t think that about myself either because I thought, “I’m helping grow this small business, and I’ve got a big family, and I make enough to keep up.”

Matt Mulcock:
Got to get out to the club every once in a while obviously.

Ryan Isaac:
You got to hit the club. You got to be in the VIP every once in a while. You do pop bottles when you’re back in the VIP.

Matt Mulcock:
You got to pop the bottles. You got to pop the bottles.

Ryan Isaac:
If you don’t pop a bottle, what are you doing? But that was a story I had to change for myself. And the savings rate thing is it’s okay to start slow. So if you can go and you look at these ranges, and say your range is the ideal savings rate for your income is 20%, but what if you can only start at 10 or eight? Please just do it though. Just do it, automate it, start it, track it, acknowledge what it is. Be honest about the numbers. Be honest that it’s an 8% savings rate, and you need to be at 20 as soon as you can in your life, but it might take a couple of years. But when you do that, man, it’s just so powerful to begin because your story will start changing.

Ryan Isaac:
You’ll find ways to make that 20% become easier. Because once you start seeing like, “Oh, I can save a thousand dollars a month and I haven’t even thought about it since I started.” And then you’ll bump it to two and then you’ll bump it to three.

Ryan Isaac:
But here, I guess what I’ll say maybe to close all this out, though, is some of the reason that… We’re a little biased here when we’re talking about these success stories and these environment changes, okay? Because when we’re discussing these things, these are things that people pay us to do for them.

Matt Mulcock:
Yeah. We are, what? Resulting, is that what they call it?

Ryan Isaac:
Yes. Yeah, shout out to Cody.

Matt Mulcock:
Yeah. Shout out to [Cody Murray 00:00:33:02].

Ryan Isaac:
That’s like Cody’s theme this week, resulting.

Matt Mulcock:
Yep. Yeah.

Ryan Isaac:
But yeah, we’re projecting a little bit here because I’m the person in about 100 people’s lives who I’m showing them their net worth every quarter. I’m showing them what their spending has been. I’m showing them what their savings rate is. And multiple times a year, I’m getting on the phone with them and saying, “Do you think we could bump up the savings a little bit there?”

Matt Mulcock:
Yeah. Let’s go ahead and-

Ryan Isaac:
What do you think there, Bob? Could we save a few more dollars every month?

Matt Mulcock:
Come on, Bob, pick it up.

Ryan Isaac:
I know I’m annoying, but I’m the annoying little Jiminy Cricket… I’m the financial Jiminy Cricket in someone’s ear going, “I think we could save… Look at your business account. Things have been normal, and it’s still growing. It means we’re not saving enough. So let’s put it somewhere useful.” That might mean stay in your business and hire somebody, pay for some more marketing. It might mean pay off some debt faster. It might mean put it in your accounts, but let’s do something.

Matt Mulcock:
Just put the money to work.

Ryan Isaac:
Yeah, let’s put it to work because that internal story, “I’m an investor,” which you said earlier, I love it. “I’m an investor.”

Matt Mulcock:
Yeah.

Ryan Isaac:
Look, two ways to change your outcome and your behaviors, your environment, and your internal story. It’s kind of cyclical. They’re both really intertwined. You got to work on both, and having an accountability partner will make both of those things a lot easier. So if you would like to talk with us about having us be your very friendly neighborhood accountability partner for the rest of your entire life-

Matt Mulcock:
Your buddy. Your buddy. Your budget buddy.

Ryan Isaac:
Your budget buddy. Your savings buddy. Your net worth buddy. Give us a call or… You can give us a call, I was going to say, 833-DDS-PLAN, or more common because we’re-

Matt Mulcock:
Ryan’s cell phone number is-

Ryan Isaac:
My new-

Matt Mulcock:
Oh, nevermind, sorry.

Ryan Isaac:
Later. If you have it, you have it though. You can text me if you want to send me-

Matt Mulcock:
If you have it, you can count yourself the lucky one.

Ryan Isaac:
Go to dentistadvisors.com, click on the Book Free Consultation button and schedule a call with one of our very friendly dental-specific advisors. Or if you have a question and you just want to post us a question, we’ll answer it. We do these Facebook Lives all the time. Some of these shows are built on these questions. Go to the Dentist Advisors Discussion Group on Facebook, dentistadvisors.com/group will get you there. Post a question, we’ll answer it. But any parting words, Matt, for your new year’s… Okay, hold on. Let’s end this with a 2021 prediction. Give me a wild prediction for the year 2021.

Matt Mulcock:
Oh, gosh.

Ryan Isaac:
What’s something you want to predict? Anything top of mind?

Matt Mulcock:
Man. I mean, you’re saying anything in any arena in life?

Ryan Isaac:
Anything in the whole world, any subject, any 2021 predictions? Because this is coming out-

Matt Mulcock:
Shout out to [Jake Elm 00:00:35:32], this one’s for you.

Ryan Isaac:
Okay.

Matt Mulcock:
The Utah Jazz are winning the NBA finals.

Ryan Isaac:
Whoa.

Matt Mulcock:
That’s it.

Ryan Isaac:
You just called that shot.

Matt Mulcock:
Calling it.

Ryan Isaac:
Utah Jazz will be in the NBA finals.

Matt Mulcock:
Okay. That is mainly for Jake Elm. He’s going to get pumped on that, Hot Take Jake, he’s going to love that.

Ryan Isaac:
He’s going to love it. All right. My 2020-

Matt Mulcock:
I mean, that was on the spot, man. You [crosstalk 00:35:57]-

Ryan Isaac:
I don’t even have one. I’m just thinking like-

Matt Mulcock:
You have to.

Ryan Isaac:
All right, 2021 prediction. I’m going to say by the end of 2021, we have forgotten a lot of 2020.

Matt Mulcock:
Oh, I like that.

Ryan Isaac:
Things have improved to the point where we’re kind of like, “Yeah, that sucked, but we’re moving on.” That’s my prediction. That’s my hope for 2021.

Matt Mulcock:
Got it. I love that.

Ryan Isaac:
So we hope you guys are well. Thanks for tuning in. Thanks for listening as always. And we’ll catch you next time. Carry on, everybody.

 

Getting Organized, Tracking Progress