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A Warren Buffett Investment Secret You Can Mimic – Episode 267


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If you could imitate a secret ingredient to Warren Buffett’s investment success, would you do it?

Warren Buffett is considered a superstar investor and he is probably the most well-known name in the investment world. Worth billions, it’s a distinction he surely deserves. On this episode of the Dentist Money™ Show, Ryan and Matt reveal a surprising secret to Buffett’s success—and it’s a secret you can start duplicating right now.

Numerous books have been written about the fundamentals Buffett follows on his way to creating a fortune. But this ingredient to that success is often overlooked.

Listen now to discover one secret to Warren Buffett’s success that you can start using today.

Show Notes: “The Psychology of Money” by Morgan Housel

 


 

Podcast Transcript

Ryan Isaac:
Hey everybody. Welcome back to another episode of The Dentist Money Show, sponsored by Dentist Advisors, a comprehensive, fee-only financial planning firm just for dentists all over the country. Check us out at dentistadvisors.com.

Ryan Isaac:
Today Matt and I talk about one of my favorite stories about Warren Buffett, the king of investing himself, and how this story can help you improve your financial future and make better decisions in your life. If you have any questions, go to dentistadvisors.com, schedule a free consultation to chat with us. And enjoy the show.

Announcer:
Consultant advisor, 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, living in a van down by the river, and I’m here with Matt The Hollywood Mountain Mulcock. Matt, what’s happening? Thanks for being on the show. How are you doing, buddy?

Matt Mulcock:
Yo, Ryan. I’m good. I am jealous of you. You are literally in a van down by the river right now, recording this.

Ryan Isaac:
I am.

Matt Mulcock:
And I’m sitting in my basement, my basement office, which is soon to be my daughter’s bedroom.

Ryan Isaac:
Oh, that’s much better use. So living in a van and living in a basement are two ways that people have used to insult other people for not doing well in life. And so here we find ourselves, basically, is what I’m saying.

Matt Mulcock:
This is our life. So what you’re saying is we are not doing very well in life.

Ryan Isaac:
I’ve been in a van for three days, using grocery store bathrooms, and wet wipes as a shower, and you live in a basement. The positive side, though, the optimistic side is it’s all looking up from here though.

Matt Mulcock:
Yes. I think there’s only one way to go from here.

Ryan Isaac:
There’s nowhere to go but up.

Matt Mulcock:
Yeah, it’s so true.

Ryan Isaac:
Today on the show we’re talking about something that is… Man, it’s such a big subject that it’s so easy to say, it’s easy to tell other people, especially as you get older and you have experiences in different parts of life, it’s cliche. And it’s just it’s so easy to say, and it’s so much harder to do. So starting out, we have a lot of empathy for this, because it’s hard.

Ryan Isaac:
But the theme today is getting started with things earlier in life instead of putting them off and waiting. And specifically, obviously, to improve your financial situation not only in the future, but now. How do we improve your liquidity? How do we grow your net worth? How do you have a better savings rate? How do you become a better investor? How do you develop tolerances to ups and downs of investing?

Ryan Isaac:
And the answer is, you got to just start. We’re here in the new year, shout out to January 2021, but we’re going to kick it off with a little bit of story and quote about the master Yoda of investing, Mr. Buffett himself. We’re going to talk a little bit about his life. We talked a little bit about this on a previous episode, a quote from a recent book. But Matt, kick it off here. Set the stage, give me some context. What are we talking about?

Matt Mulcock:
We ended the last podcast with this quote, and we’re going to start today’s podcast with the same quote.

Ryan Isaac:
We did that on purpose, right?

Matt Mulcock:
We did it on purpose. This is part two.

Ryan Isaac:
To be continued.

Matt Mulcock:
This is to be continued, part two.

Ryan Isaac:
You’re welcome.

Matt Mulcock:
So I’m just going to hit the quote again. I’m going to read the whole thing. It’s a long quote, but you know what, just hang in with us.

Ryan Isaac:
Well, you’re not even reading. You’re telling a story. You’re setting the stage. You’re painting a picture, if you will. You are the master artist.

Matt Mulcock:
I’m basically an artist.

Ryan Isaac:
You’re basically an artist right now. You’re a verbal artist. We are your canvas. Pick up your brush. Go.

Matt Mulcock:
Wow, that’s a lot of pressure.

Ryan Isaac:
Paint me. Isn’t that the line from Titanic?

Matt Mulcock:
Paint me.

Ryan Isaac:
Will you draw me, Matt?

Matt Mulcock:
Draw me, yeah. This got real weird.

Ryan Isaac:
Was that a cricket? Go ahead.

Matt Mulcock:
For context here, this is from the book Psychology of Money, Morgan Housel. We said it last time, we could not recommend this book enough. Go out and read it. It’s pretty quick read. If you read any financial books this year, this needs to be the one.

Ryan Isaac:
You said your wife read this. You said she doesn’t like to read a lot of financial books. If you’re a person who’s like “I don’t really love financial books,” this one you will love.

Matt Mulcock:
Very approachable.

Ryan Isaac:
Yeah. It’s just full of stories. Human behavior, very relatable. They’re just full of real life stories that are so fascinating, that shed a lot of light on the way we all behave with money. So, Psychology of Money.

Matt Mulcock:
Yeah. So this particular part of the book, he’s talking about Buffet. Obviously I’m pretty sure anyone, whether or not you’re into investing or not, Warren Buffett is a very well-known name. He’s like that athlete, the LeBron James of investing, basically. You don’t have to be into investing to know who Warren Buffett is. So he’s talking about Buffett in this part and talking about his secret basically. We think it’s one thing, but really it’s another.

Matt Mulcock:
And so this excerpt breaks this down, so here it is. “More than 2000 books are dedicated to how Warren Buffett built his wealth. Many of them are wonderful. But if you paid enough attention to the simplest fact, Buffett’s fortune isn’t due to just being a good investor, but being a good investor since he was literally a child. As I write this Warren Buffett’s net worth is 84.5 billion. Of that, 84.2 billion was accumulated after his 50th birthday. 81.5 billion came after he qualified for Social Security in his mid sixties.

Matt Mulcock:
Warren Buffett is a phenomenal investor, but you miss a key point if you attach all of his success to investing acumen. The real key to his success is that he’s been a phenomenal investor for three quarters of a century. Effectively, all of Warren Buffett’s financial can be tied to the financial base he built in his pubescent years, and the longevity he maintained in his geriatric years. His skill is investing, but his secret is time.

Ryan Isaac:
Boom, man.

Matt Mulcock:
That’s it.

Ryan Isaac:
That’s the line, “his skill is investing, but his secret is time.” The encouraging part from this, this is what I love, as a slightly below average human in most things in my life-

Matt Mulcock:
Don’t you dare.

Ryan Isaac:
You always see those blog posts, Matt, or you get emails or texts or DMS that are like, “Hey, I heard the secret that Warren does. Should we do this too?” And really, it’s the secret is a lot more accessible to every single person on the planet.

Matt Mulcock:
Every person, yup.

Ryan Isaac:
And it’s time. Which just means you’ve got to begin though, you’ve got to start. He didn’t start as Warren Buffet. He started as Little W, little 10-year-old WB.

Matt Mulcock:
He started investing seriously at 10 years old. So he’s an anomaly in that respect. How many 10 year olds are out there seriously approaching mentors like Benjamin Graham, who is his mentor. He wrote several books. If you really want to get it in depth, you can read Benjamin Graham’s books. There is a unique quality to Warren Buffett, that he was curious and intrigued enough in it at a young age that he got into it.

Matt Mulcock:
But I like what you just said. It’s so much more accessible. The secret is, it’s not a secret. It’s just discipline and being patient, and anyone and everyone can do that. And so it’s so much more approachable and accessible than we give it credit for. We want to hang Warren Buffett out there as this prodigy. What do we call him, The Oracle of-

Ryan Isaac:
The Oracle of Omaha.

Matt Mulcock:
… Omaha. He is, he’s an incredible investor. His average rate of return over his career is 22% annually. It’s incredible.

Ryan Isaac:
Almost it’s almost double the S&P over long periods of time.

Matt Mulcock:
So he’s an incredible investor, but Morgan-

Ryan Isaac:
But here’s what’s crazy. Think about that math for a second. You could be like, “Would you like half of LeBron James? Half of his ability?

Matt Mulcock:
Yes, I would.

Ryan Isaac:
If you said, “Hey, what if I could tell you I could get you half the returns that Warren Buffett gets?” I think most people would be like, “Oh yeah, dude, I’ll take half his returns. I’d take a quarter of his returns.” You’re like, all right, well let’s just hold a low-cost, diversified portfolio for 30 years-

Matt Mulcock:
Globally diverse.

Ryan Isaac:
…and you’ll get more than half of Warren Buffett’s lifetime return.

Matt Mulcock:
It’s so true.

Ryan Isaac:
Funny to think about that, man. I like that. I feel like there’s a t-shirt here. “The secret is there is no secret.” There’s no secret.

Ryan Isaac:
The point we want to drive home is that as a dentist, honestly I feel like a lot of the hardest stuff for a dentist to achieve success, is by the time they’re an actual practicing dentist, a lot of the hardest stuff is them. Not all of it. You still have to grow and run a good practice for a long time. That’s probably the hardest out of everything.

Ryan Isaac:
But all the schooling and the beginning and where am I going to live and what am I going to do and what practice do I want to be in, choosing the career, you’ve already cleared such a huge hurdle. And so the good message from today, the good news that Matt’s bringing from the hilltop-

Matt Mulcock:
From the hilltop.

Ryan Isaac:
From the hilltops is-

Matt Mulcock:
You’re closer to the hilltop than me.

Ryan Isaac:
I am close. No, you’re in the mountains. I’m 50 feet above sea level.

Matt Mulcock:
I’m at the base of the mountains, that’s true.

Ryan Isaac:
Yeah, you’re 5000 feet right now. But everything is just so accessible. And dentists, by the time they’re a dentist, have already achieved such incredibly difficult, expensive, hard things. And from here on out, you can just begin implementing things. Just do it now, even if they’re small, even if they’re not totally adequate, even if it’s not as much as it should be. Let’s start implementing those things now.

Ryan Isaac:
And instead of a resolution for 2021, make these four things the beginning of a lifestyle that there is no end point. You’re not doing this to satisfy a perfect goal. You’re doing this to begin changing into a different person financially. And I think it’ll pay off in a lot of other ways.

Ryan Isaac:
So let’s take a quick break, and we’ll come back and hit our list of four things that are easier to start now, as opposed to later. Enjoy this commercial, folks. Me and Matt spent a lot of time rehearsing, publishing, and practicing.

Matt Mulcock:
You’re going to love it.

Ryan Isaac:
And I hope it convinces you to take action. Enjoy the commercial. We’ll be right back.

Matt Mulcock:
On the Dentist Money Show we teach dentists how to make smart financial decisions.

Ryan Isaac:
You’re correct.

Matt Mulcock:
Is that all it takes, Ryan, to make smart financial decisions, listening to our show?

Ryan Isaac:
Matt, it’s a good first step, but to put your financial future on the fast track, the next smart decision is to go to dentistadvisors.com. What you do there is you click on the Book Free Consultation button, right in the middle of the home screen. And then you schedule a time to talk with one of our very friendly dental specific financial advisors today.

Ryan Isaac:
Okay, the four things that you should start now as a dentist that are going to be way easier to start then later in your career. I feel like my dad right now giving me advice when I was younger, like “Son, trust me. It’ll just be so much easier to do this now in life than later on.”

Matt Mulcock:
Just trust me, it’ll work out.

Ryan Isaac:
But I’m serious. I am a dad now, and I’m serious, guys. These are things that over our careers, working with hundreds of dentists and watching more than that make financial decisions and go through the motions, these things are just so much easier to implement early on.

Ryan Isaac:
And again, these are not resolution things. This is your new lifestyle kind of things, and they will change your future. And they’ll change your current status, your present too.

Ryan Isaac:
So number one is going to be an easy one, is savings. Please, please, please, please, please, I don’t care where you’re at, where you’re listening to this right now, if this is year one for you or year 25 for you, if you are currently not saving money, just call your advisor or call your bank or broker, whoever’s got an account for you, and just start something. Automate it from your, I was going to say business account, but that’s a CPA thing, so ask your CPA. A lot of people do this though. Automate it from an account that you don’t see at first, and just get rid of that amount. Try to just pick something that you can stick to, that you’re not going to have to shut off in two months, but that music stretch you a little bit.

Ryan Isaac:
And we’ll just say that a lifestyle savings rate, we’re not talking about goals here, this isn’t a resolution episode, but a lifestyle savings rate would be somewhere around 20% for most dentists. A little higher for some higher income earners, a little lower for other dentists, but a 20% savings rate would be a great lifestyle savings rate that we’re trying to eventually achieve. But if it’s 5% right now, then it’s 5%. It doesn’t matter.

Matt Mulcock:
We don’t care. Just set that habit now, early and often. I feel bad for maybe our older listeners right now.

Ryan Isaac:
Yeah, feeling like you’re running out of time.

Matt Mulcock:
Maybe forties or fifties, and they feel like “You’re talking about all this time that Warren Buffett had, and I don’t have it.” But just like you said, just set the habit now. It is never too late to start putting these things in place.

Ryan Isaac:
It’s not. Look, we measure someone’s financial independence in terms of multiples of their annual personal spending, something we call total term. It’s this calculation we invented. Go to dentistadvisors.com, check it out, you’ll see it on there. That’s how we determine if someone’s ready for financial independence or not. But that multiple, it doesn’t matter if it’s perfect. We can improve it, that’s the point. We’re talking about improvement. So if you’re 55 and you’re like, “I need to start doing something,” well, 10 years is going to go by whether you do something or not. And so I’d rather be trying to help yo. When you call us at age 65, having gone through 10 years of at least trying to save, than not anything, and then be like, “I don’t know what I’m going to do.”

Ryan Isaac:
And also, don’t take for granted how long people are living nowadays. We have a lot of time after we’re done working, and it’s possible that you might have extra cashflow to keep saving. Some of these habits are going to transfer over. They might not be exactly the same, but they’ll transfer over.

Ryan Isaac:
So, savings is number one. So again, if you’re listening to this, this would be a great time to pause the podcast, call your advisor. If you don’t have one, call us, go to dentistadvisors.com, click on the Book Free Consultation. Put in the notes “I need to talk to an advisor, I need a plan, I need to start saving” and just do that, and let’s begin that.

Ryan Isaac:
And I was just on the phone with a client this week. He’s telling me a story that I’ve heard, I couldn’t even count, it’s been so many times over my career so far. And this is a person who has had a pretty common path of a lot of dentists. Has a great practice, owns a building, has gone through periods of huge cashflow, has gone through periods of low cash flows, have problems with the business, has had periods of time where he spent too much money. Anyway, through all that period of time, hit a low where all the forces of the world combined against him, unfortunately. And we hit a low for awhile.

Matt Mulcock:
It’s a perfect storm.

Ryan Isaac:
Yeah, it was like perfect storm, as happens in life. But since then, actually it began in spring of 2020, the worst time ever to start saving money. The worst time ever. And there’s a lot of people that started saving money last year. But he started, and he started with a thousand bucks a month. And then it was 2000. And we’re up to 4000 a month right now, 12 months later. And we’re almost at a six-figure account between all of his little places that he’s saving, and some of the growth that’s been great over the last 12 months.

Ryan Isaac:
And he was telling me on the phone, he was like, “It’s crazy to think 12 months ago how I felt about my situation. I felt so depressed about it, like “I’m never going to make progress. How am I supposed to make any progress? This little thousand dollar chunk of money is not going to get me anywhere. I need $4 million to retire one day. What’s this going to do?” And he’s like, “Man, fast forward a year later, I can’t believe I’m almost got a hundred grand sitting here, and how good this feels. I feel so encouraged. I feel so positive.”

Ryan Isaac:
And guess how that call ended? That call ended with our plan to bump up savings even more, our goal over the next 12 months to have a net worth at a certain point. And it’s just amazing to me how little, consistent efforts day in and day out make such a big difference in the end.

Matt Mulcock:
Yeah, it’s just, like you said-

Ryan Isaac:
So, I’m sure you’ve got a ton of stories like that too.

Matt Mulcock:
Oh yeah, absolutely. I see that all the time, that momentum that it creates, that you were just hitting on. We see that literally all the time, after three months, six months, 12 months, and they start to see that progress. Like you said, it builds up momentum, and it’s like the object in motion generally stays in motion type thing. They start saving, and then it just builds on itself.

Matt Mulcock:
And the quote that is coming to my mind that we actually saw from a viewer in one of those webinars that we did a couple within the last couple- I can’t remember which one exactly.

Ryan Isaac:
Oh, I love this.

Matt Mulcock:
I don’t know the origin of this.

Ryan Isaac:
Yeah, [inaudible 00:17:02] somewhere, I’ve heard it before.

Matt Mulcock:
If the person wants to post who, where this came from, on Facebook, because I don’t know the origin of this quote. And maybe it was an original from this person. If it is, that’s awesome. But the quote was, “We tend to overestimate what we can do in a year, and underestimate what we can do in 10.”

Ryan Isaac:
So true.

Matt Mulcock:
Which I thought was so spot on.

Ryan Isaac:
It’s true, man.

Matt Mulcock:
You think of only in this year, or over the next 10 years, like you were just saying, that guy saying “If I need $4 million to retire, I’m never going to get there.”

Ryan Isaac:
Yeah, what is this thousand dollars going to get me? Who cares? I might as well just spend it. Whatever.

Matt Mulcock:
Exactly. But like you just said, if you start small and just go, you’re going to be shocked what you can do over a 5, 10 year period.

Ryan Isaac:
Yeah. It’s amazing. And momentum builds a lot.

Ryan Isaac:
I did this little calculation preparing for this episode today. And I don’t want to be too detailed. This would be a better like thing for a webinar, where I could show the math of it. But I just ran a simple illustration of how much money could someone accumulate starting at a thousand bucks a month savings, and then bumping it up a thousand bucks a month, every five years. So if you did this even sooner, or if you got higher- I assumed a 7% return too. But year five at a 7% return would be 80 grand. Year 10, 250. Year 15 it’s 580. Then it’s a million. Then it’s two million. Then it’s three million by year 30. And all we’re doing is every five years increasing our savings by a thousand bucks a month. So we start at one, then five years later it’s two grand a month, every month. Then five years later, it’s three grand a month. Those numbers are extremely doable for many, many dentists.

Matt Mulcock:
Absolutely. More than doable.

Ryan Isaac:
Yeah, more than doable. And that net worth growth doesn’t even include the practice that you can sell one day, or maybe the building you own, or maybe house equity that you can use one day, or Social Security money, or a simple IRA or a 401k that you also put money into. So the point is, just start. Just start. And if you don’t know where to start, that’s why advisors exist. Go to dentistadvisors.com, click on the Book Free Consultation, and just chat with us and just tell us you want to start a plan, and you want to start saving. You heard this episode, you don’t want to wait any longer. This is not a resolution. This is a lifestyle.

Ryan Isaac:
The most cheese ball thing I’ll probably not ever say, but it’s cheesy enough.

Matt Mulcock:
We’ll say it again.

Ryan Isaac:
We’ll say it again. Number two, Matt, start now. It is so much easier now that it’s going to be later, is investing. And there’s so many facets of investing. It could be investing in growing up a practice like a private business, could be investing in real estate. We’ll just focus on investing in public markets, stocks and bonds, mutual funds, ETFs. We always say a low-cost, globally diversified portfolio frequently rebounds with the high savings rate. That’s what we’re talking about.

Ryan Isaac:
But it is so much easier to put in 500 bucks into your investment account and watch that 500 bucks fluctuate up and down, than it is waiting until all of your debts are paid off somehow in your fifties, and then you’re like, “Oh, then I’ll have 20 grand a month to start investing.” I promise you, promise, you promise you, it’ll just be so much easier if you can-

Matt Mulcock:
It’ll hurt a lot more at that point.

Ryan Isaac:
Yeah, it’ll hurt so much more. You need to develop some emotional callous by investing early in your life. You need to know what it feels like to have a $50,000 IRA go down to 35 grand in March of 2020. You need to know what that feels like before that account is 500 or a million dollars.

Ryan Isaac:
Or actually, more common would be the dentist who never learns these lessons early. They just don’t know where to start. And I get it, I know what the reasoning is, you don’t know where to begin. It’s scary. You hear, there’s myths about investing and all these things. And so what happens is you just end up piling up 200 in cash in the business account. And that 200 becomes 500, and then it’s 750, and then it’s a million dollars sitting in a practice checking. And if you’re hearing this and that sounds crazy, I hear that all the time.

Matt Mulcock:
Yeah, we see it all the time.

Ryan Isaac:
It is not uncommon for someone to be sitting on huge six figures in their checking account. They’re like, “I just don’t know what to do with this.” And that might be, ladies and gentlemen, one of the most risky things you can do, which sounds counterintuitive, is sit on tons of cash. Because cash doesn’t grow. Inflation will eat it up. And the only way to combat inflation at whatever rate it is – right now, it’s low, at some point in the future, it’ll be high maybe – you have to invest money. And the only way to be able to develop that mental callous and what is it, man, it’s that grit, you just deal with the ups and downs.

Matt Mulcock:
The steel stomach.

Ryan Isaac:
Yeah, the stomach, man. You’ve got to just do that.

Ryan Isaac:
So, investing would be number two. Anything else you want to say about that, Matt? You’ve probably seen this a million times before, and seeing people learn lessons. And it’s cool though, you’ve probably seen where early on someone invests their first 50 grand, and they’re really stressed up first couple of years. They always want to know, “What’s my return now, and what did it do, and should we get out?” And then it’s funny because that 50 grand turns into half a million dollars, and they don’t even ask anymore. They’re like, “Yeah, it’s fine.”

Matt Mulcock:
That’s exactly right, and that’s what we see all the time.

Matt Mulcock:
And to the investing point, like you said, of do we see a lot of people piling up cash, I’d say now, over the last 12 or 18 months, probably more than ever. And we’ve talked about this a lot, but the reason being now more than ever, at least in our careers, that we’ve seen, is because this very pervasive message that’s just everywhere, of stocks are too expensive, or there’s going to be a pullback.

Ryan Isaac:
The myths.

Matt Mulcock:
These stories and myths that we’re hearing and telling ourselves, that now I’m going to wait. I’m going to wait. I’m going to wait. And then what happens is you keep piling up, piling up, piling up. And I used to call this a hot take, but I’m not even going to call it a hot take anymore. It’s just fact. Over the next 20 or 30 years, cash is riskier than investing in equities.

Ryan Isaac:
I love it. Calling your shot.

Matt Mulcock:
I’m calling it. Because if you really look at it, the best way to lock in a loss is sit in cash. You are locking in a loss every single year. Because what are we talking about when it comes to risk? The true risk that you face when it comes to retirement or when it comes to investing, is losing everything, or losing value, and by the end, not having really anything.

Matt Mulcock:
When it comes to investing, when people think about risk, really what they’re thinking about is the ups and downs of the market. That’s not really risk. That’s just a feature. That’s just part of it. So over a 30-year period, if you take cash, versus a globally diversified equity portfolio, over a 30-year period, the cash is riskier. Because you are guaranteed to lose value. Guaranteed.

Ryan Isaac:
And if for some reason, your basket of low-cost, globally diversified stocks around the company goes to zero, we have bigger problems, my friends.

Matt Mulcock:
Bigger issues.

Ryan Isaac:
It means every publicly-traded company-

Matt Mulcock:
2020 lasted for 30 years.

Ryan Isaac:
Basically every company in the world goes out of business, and no one’s hired, and there is no jobs. I’m glad you brought that up, man, because I think about that all the time and the stories I’ve heard, especially over the last few years, and some of the messages that people have heard from people, even in the dental industry. Look, there’s speakers in the dental industry. And to each his own, we’ve all got opinions. That’s what makes a market work is various differing opinions. But some of them have been dangerous, and some people have listened to those, and it makes me feel bad, and it worries me for people. And I don’t care if they’re my clients, or they don’t hire us. That doesn’t matter. They’re doing things that are going to hurt themselves in the long term.

Ryan Isaac:
So if you hear this, and that describes your situation, there’s ways around it. There’s ways to retrain your brain for investing, to get back in slowly. There’s ways to do this so you don’t find yourself in this bad position later. So I’ll get off the soap box here if you don’t mind.

Matt Mulcock:
Look, just one last point on that. Pessimism is sexy. This is why you don’t click on the news, and the anchor is sitting there saying, “You know what? Over the last 30 years, the world has just generally gotten better.”

Ryan Isaac:
We’ve mostly gotten better, yeah.

Matt Mulcock:
“Just incrementally increased.” No. What are they doing? They’re sitting there talking about fires and wars and violence, because that’s sexy. Same thing with someone that’s forecasting the market. You don’t want to sit there and listen to maybe us, when we’re sitting here saying “Just focus on-”

Ryan Isaac:
“It’s going to be fine.”

Matt Mulcock:
“It’s going to be fine. Invest like an optimist, just think about the long term.” No, you want to get on here and have us say “We’re going to tell you what to short,” and the doomsday scenarios. People want to listen to that.

Matt Mulcock:
And Morgan Housel talks about this very thing. Pessimism sounds more sophisticated. So if we’re sitting here talking about all these things, you truly are more interested. I don’t know if this is a psychological thing, rooted in evolution. I don’t know. But it’s not as sexy to say, “Hey, generally speaking, the world’s getting better. It always has. It always will. And over time you’re going to make money if you do it the right way.” But that’s the message we’re going to continue to hit, because that’s the truth.

Ryan Isaac:
And hey, if you like that message, you’ll join us on our little journey here. And if you don’t, that’s cool. Hopefully something helps you out. But if this is your message, join us. We driving a very friendly, huge bus. I’m on the passenger side. Matt’s driving with the big wheel and a [crosstalk 00:26:35].

Matt Mulcock:
You do not want me driving that bus.

Ryan Isaac:
Please stand behind the red line at all times. But join, jump on our bus, all right. Dentistadvisors.com. Get on the bus.

Matt Mulcock:
What if one of the podcast listener loves our podcasts and all the things we talk about, but they want to see our faces and go into subjects a little bit deeper?

Ryan Isaac:
Man, it’s amazing you just asked that. The best way to do it is to listen to our webinars. Actually watch the webinars. You and I, as you know, because you’re there, cover one subject a month where we both host and we talk about a whole range of things in a lot of detail.

Matt Mulcock:
Yeah, it’s really fun. And we’re going to go into all the topics where you go on The Dentist Money Show, but go in more depth. Super easy to sign up. Go to dentistadvisors.com, click on Webinars under the Education Library button on the home page.

Ryan Isaac:
All right, number three. This is an interesting one. And this always comes to mind every time I meet someone who’s a lot further along in their career, who is calling a financial advisor, asking questions for the very first time. And we’re talking they’re in their fifties or sixties. And this is the concept of outsourcing help.

Ryan Isaac:
We totally understand when you’re brand new in your career, there’s no money to go around. You’ve got to just do all the jobs. You’re answering phones, you’re trying to do your own marketing, you’re doing your own hygiene. We get that.

Ryan Isaac:
But incrementally, again, as time goes on, you need to start learning the skill and building a tolerance to the pain, the cost of outsourcing. You need to. Again, as a dentist, once you’ve gone through a decade of school and you’ve got the loans and you’ve got the practice loans and you’ve got the building, you’ve gone through the pain of being a manager, an employer, a coach, a teacher, a firer, a clinician, you’ve gone through all that pain-

Matt Mulcock:
Maybe a janitor.

Ryan Isaac:
You’re going to be a janitor at some periods of time. Your highest value, it’s not even close, is producing and running a practice. It’s not even close. So as you get the opportunity to have a CPA instead of doing it online, doing a bookkeeper instead of making someone in your office or one of your family members do it, who doesn’t have the skill or desire or time to do it the right way. Hire a financial advisor instead of trying your hand at your own triple-leveraged Tesla shorts.

Matt Mulcock:
Oh, man.

Ryan Isaac:
[crosstalk 00:29:03].

Matt Mulcock:
We crushed it on that trade. We crushed it on that trade. Our clients were so happy about that. Sarcasm alert.

Ryan Isaac:
Yeah, sarcasm alert, little scroller at the bottom. So, that was sarcasm, folks.

Ryan Isaac:
Look, there is a skill set that we all need to develop in outsourcing to people. And what it will do, outsourcing is really the only way for you to protect and preserve your highest output value as a dentist, that you trained and paid to become, which has hundreds, maybe thousands or plus an hour value, versus anything else you could do.

Ryan Isaac:
And then anything else outside of you being a dentist is your life. That should be your hobbies, your friends, your family, your relationships, whatever you’re into that makes life snazzy. Maybe you squat 600 pounds on a Friday, like Matt does, whatever. Anything out of being a dentist, that’s your life.

Ryan Isaac:
And then being a dentist, that’s all you need to focus on. So outsourcing is a skill you need to develop. It’s not a thing that only rich people do. It’s not a thing that only people who don’t understand investing hire an advisor, or only people who don’t like this stuff hire an advisor. Man, me and Matt and our advisors could show you clients that we have that are probably smarter than us at personal finance and investments in economies. People love this stuff, but they still outsource because they know their highest value and the only way to predict, protect and preserve their highest value is to outsource and then just be a dentist.

Ryan Isaac:
So please, learn the skills of outsourcing. And if you’re hearing this again, and you’re like, “I’ve never had an advisor. What’s it like? What’s the process like? How do we communicate? What do you guys do?” Call us. We’ll explain it. We’ll tell it to you in a friendly phone call and a very friendly chat.

Matt Mulcock:
Very friendly.

Ryan Isaac:
Or dentistadvisors.com, it’s always friendly. What do you want to say about that, Matt, about outsourcing?

Matt Mulcock:
I think it’s a great point. I like that you said it’s a skill. I think along with that, it’s a mindset shift. To me, it’s pretty straightforward. When you shift your mindset around, just asking the question, what is my time worth, just ask that. And you can figure that out based on chairside, what is my time worth? That’s probably pretty straightforward for you to figure out. And it’s a lot of money, let’s just say that.

Matt Mulcock:
But just in general, what is time with my family worth? Only you can figure that out. And then when you think of it like that, when you go to do something on your own, whatever that is, whatever that task is that you’re doing, something as simple as mowing your lawn or doing your books, or whatever it is, just think, “Okay, my time, I’ve figured out is worth X. Am I going to be paying less to have someone else do this than what my hourly rate is worth?” That to me is just a mindset shift.

Matt Mulcock:
And I know people in my personal life, family and friends that are really do it yourself-ers in every way. And I’m not. I outsource as much as I possibly can, because I’ve had that mindset shift of “Okay, what is my time worth?” and then applying it to everything that I’m doing., I’d rather be hanging out in my wife and daughter than-

Ryan Isaac:
In a basement.

Matt Mulcock:
… framing, in a basement, well of course.

Ryan Isaac:
Than framing your basement.

Matt Mulcock:
Than framing my basement, yeah.I also don’t have the skills to do that, but that’s neither here nor there.

Ryan Isaac:
Yeah. I think that’s an important point. And it would probably be helpful for people to know that there comes a point – I just had a conversation like that this week – where even the most skilled, highly interested, do it yourself – or let’s just talk about personal finance and investing right now. There comes a point where a lot of those people – and it’s much later than the average person, it’s mid career, it’s late forties, early fifties – where even that person reaches a point where they’re like, “Okay, despite my high levels of unusual interest in personal finance as a dentist, and despite the time I’m willing to happily spend researching and implementing tasks and doing things, I still find myself asking basic questions like “Am I doing this right? Am I on track? Am I making any progress? Am I screwing anything up? What am I missing? What questions am I not asking?”

Matt Mulcock:
Or I just want to bounce these ideas off someone. I get that all the time.

Ryan Isaac:
Yes, I just wish I had somebody.

Matt Mulcock:
Dude, I have people coming to me all the time, we’ll be talking about a specific topic, whatever it is, and they’ll come to me and say, “Here’s what I’m thinking.” And it’s spot on, it’s exactly the way we would approach it. And I tell them that, “Hey man, you thought of this perfectly. You’ve laid this out. We’re on the same page, yes.” And they’re like, “Man, thank you so much. This is exactly what I needed. I just needed affirmation that I’m doing this right and I’m thinking about it.” But the only way that works is you have someone that knows your situation intimately, knows your goals, knows your relationship with money, knows what you’re trying to accomplish, knows your timeframe, and knows how all of these different components interact in your financial life. They can give you a quick answer of, “Yeah, you’re doing it right.”

Ryan Isaac:
Doing it

Matt Mulcock:
And that alone, that relief is like, you can just feel it. They’re like, “Man, that’s exactly what I needed.”

Ryan Isaac:
Yeah, how do you put money on that psychological benefit of just being able to check in with an expert? Like you said, Matt, you came up with the right idea. But checking with an expert who sees that idea implemented hundreds of times, where you don’t. Even if it was the right call, just hearing that confirmation, it feels awesome. Be like, “I’m not a professional investor. I’m a dentist. I like this stuff, I spend a lot of time, but here’s my idea,” and to hear someone who spends their entire career watching people implement these decisions, and to hear them go, “Yeah, that’s the right call, it’s just super valuable, man. That’s a big one.

Ryan Isaac:
So, outsourcing is number three.

Ryan Isaac:
The last one here is a little bonus here. But it shouldn’t be a bonus, it should be its own episode. The career of dentistry and the longevity of the career of dentistry and the ability to earn money even very late into a career, even if you sell the practice, you’re not an owner, you’re just working back a day or two a week in the practice you sold, or another one, has such a high, high earning potential. Which is very unique among a lot of careers. That longevity and that income potential even late into your life is something that plays a gigantic part in financial planning and building your net worth and having security for the future.

Ryan Isaac:
But one of the biggest threats to that ability and that longevity is balance in your life and physical and emotional and mental health during your career. What’s the phrase you use, Matt? Something about-

Matt Mulcock:
Balance over burnout.

Ryan Isaac:
Balance over burnout, man. Okay, that’s the t-shirt of the episode. I will create it, I’ll post it. Balance over burnout. When you say that to somebody, in your mind, what are you saying to them? What do you want to see them do as opposed to not do?

Matt Mulcock:
For me, it’s be okay slowing down a little bit. Be okay realizing what we hit at the very beginning of this, the Warren Buffett quote. Time is your greatest asset when it comes to building wealth, so be okay taking time, be okay realizing that building wealth is a lifelong process for most people.

Matt Mulcock:
And like you just said it, one of the biggest obstacles that you’ll create is burnout. If you are pushing, pushing, pushing for this arbitrary goal, we see this all the time. We talked about this in our last podcast, getting to this arbitrary number and I want to build this huge business for X- and we’re not saying there’s anything wrong with that, but a lot of times people don’t think about the burnout aspect or the collateral damage that possibly would be there by pushing so hard. And then by the time they hit 45 or 50, they’re like, like you said, Ryan, “Man, I can’t do this anymore.”

Ryan Isaac:
Can’t do it anymore, yeah.

Matt Mulcock:
And then you’re losing your greatest asset of time, because you put it in anymore because you burned yourself out. So be okay slowing down. Be okay finding that balance.

Matt Mulcock:
We always this. I think our, or at least mine, I think we as a company, Dentist Advisors, our definition of financial planning is living your best life now while still planning for the future. Well, that to me is like, you could basically just define that as balance.

Ryan Isaac:
Yeah, balance.

Matt Mulcock:
Because you never know about tomorrow or when you’re 50 or 40 or whatever. So live your best life now. Find that balance. Don’t burn yourself out. That’s top three pieces of advice we can give people.

Ryan Isaac:
I love that, man. Again, this isn’t resolution setting, this isn’t 2021 goals. This is become a dentist who has balance, however you define that for yourself, and become a dentist who as good physical health that you can continue to perform dentistry. Not always at the same level, you’re not always going to be an owner and run a busy practice if that’s your current situation. You might end up transitioning to be an associate one day. But even that associate’s salary, you work a day or two a week and you’re still pulling down six figures into your fifties and sixties, and maybe even close to 70.

Matt Mulcock:
It’s such a unique-

Ryan Isaac:
It’s so unique. And it’s just huge for your net worth and your financial planning and your investments and your returns and your timeframe. It’s just amazing. So that’s another thing, okay. This is the new you.

Matt Mulcock:
[crosstalk 00:38:15].

Ryan Isaac:
The new year, new [yous 00:38:16] podcast. But these are not goals and resolutions, these are the new things you’re going to do: saving, investing, outsourcing, balance and health. These are things we’re starting now. There is no end goal. These are just things we’re becoming, and these are things that are going to be a part of our life.

Ryan Isaac:
So, Matt, thanks for bringing that back up to the, to the forefront of the discussion, the Warren Buffett. What’s the line? Say that last line again, his skill- [crosstalk 00:38:41].

Matt Mulcock:
His skill is investing, but his secret is time.

Ryan Isaac:
Secret is time. You guys, we can all use the same secret. If you have any questions or you want help trying to get all this stuff started – again, it’s not goals, not resolutions, this is going to be your future lifestyle, the future you – give us a shout out. Go to dentistadvisors.com, click on the Book Free Consultation button, schedule a chat with one of our friendly dental specific advisors. We’ll talk to you about how to start a savings plan, how to invest, how to outsource, and hopefully then that’ll give you some freedom and maybe some mental Headspace to achieve more balance and health in your life too. So, thanks for joining me from the basement.

Matt Mulcock:
Thanks, Ryan.

Ryan Isaac:
I’ll sign off. I’ll sign off from the trusty van.

Matt Mulcock:
From the van. Enjoy California.

Ryan Isaac:
I’m signing off from the van, and thanks for tuning in. Yeah, I will. Thanks for tuning in, everyone. Thanks for listening as always. And we’ll catch you next time. Thanks, everybody.

 

Behavioral Finance

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