Owning a practice is exhilarating yet overwhelming. In this episode, Casey and Jarrod explore the emotional highs and lows of ownership, uncovering decisions that may not stand the test of time. Gain insights into the complexities and rewards of managing your own practice.
Announcer:
Hello, everyone. Welcome to the Millionaire Dentist Podcast, brought to you by Four Quadrants Advisory. On this podcast, we break down the world of dentistry finances and business practices to help you become the millionaire dentist you deserve to be. Please be advised, we do speak with an honest tongue and may not be safe for work.
Casey Hiers:
Hello, and welcome. This is Casey Hiers back at the Millionaire Dentist Podcast in studio with co-host Jarrod Bridgeman.
Jarrod Bridgeman:
Casey, what's going on? How are you?
Casey Hiers:
That's a lot of purple. It looks good.
Jarrod Bridgeman:
I'm a purple fella. My nickname around the office is Grimace.
Casey Hiers:
Oh, I thought you wanted to be called King.
Jarrod Bridgeman:
It was King.
Casey Hiers:
It's a royal color.
Jarrod Bridgeman:
And nobody took me up on it, to be honest.
Casey Hiers:
Yeah.
Jarrod Bridgeman:
Yeah, I was very sad.
Casey Hiers:
Swing and a miss.
Jarrod Bridgeman:
I was sad for myself.
Casey Hiers:
Hey, it looks good.
Jarrod Bridgeman:
Well, thank you. That makes me feel good. And we were going to talk about feelings today.
Casey Hiers:
Feelings.
Jarrod Bridgeman:
Yes. It feels like a Sesame Street episode all of a sudden.
Casey Hiers:
Yeah, a little bit.
Jarrod Bridgeman:
A little bit. Because we were kind of talking about there are certain things in business and in life and personal where initially you may get that high of feeling good, but in the long run and long term, it may not have been the best decision or best move you may have made. Maybe you had a really fantastic date, and then it turns out that person's toxic. And I'm not talking Britney Spears.
Casey Hiers:
We're not getting into your dating history.
Jarrod Bridgeman:
No, no. That would take way too long. There was three.
Casey Hiers:
No. Yeah, no, the emotion, the feelings. This comes up a lot with what we do.
Jarrod Bridgeman:
Right.
Casey Hiers:
Which is odd considering we're a financial firm, an accounting firm, an investing firm like feelings.
Jarrod Bridgeman:
Right. Yeah.
Casey Hiers:
But we hear that a lot from practice owners where-
Jarrod Bridgeman:
We talk so much about how many decisions, you need to remove that.
Casey Hiers:
Yeah. Well, and we're based in the racing capital of the world, Indianapolis 500. We were just talking a little bit ago about for a race car driver, and there's some of them that live around here, we know a couple of them. And you're going around the oval and you're flying and everything's going great. You feel good until there's a five-car pile up and you're in the air flipping over in midair and crash.
Jarrod Bridgeman:
Right. Yeah.
Casey Hiers:
And that can happen in a split second. And unfortunately, as a practice owner, that kind of cheesy analogy, it really can resonate.
Jarrod Bridgeman:
Right.
Casey Hiers:
And I've just had conversations this week with people that that was the case.
Jarrod Bridgeman:
What would be one of the first ones that would come to your mind of something where someone feels good about their situation or particular relationship, let's say, that you kind of pushed them more and found out maybe you're lying to yourself?
Casey Hiers:
Well, it happened recently talking to somebody and they said, "Hey, I just met..." It's typically if somebody meets with their accountant or their investment advisor or financial planner. But I just talked to somebody and they said, "Hey, I just met with my CPA, and I feel better. I feel good."
Jarrod Bridgeman:
Right.
Casey Hiers:
Now, that on itself is not a bad thing.
Jarrod Bridgeman:
Sure.
Casey Hiers:
But you can have mystification of, "Everything's great. I feel good; therefore, it is good." We dug into some data. The same person who felt good has a $200,000 shareholder loan on their balance sheet that they didn't know about.
Jarrod Bridgeman:
Right.
Casey Hiers:
Typically stems from poor accounting. But it really emphasized to me how feelings can sometimes trump reality and facts.
Jarrod Bridgeman:
Right.
Casey Hiers:
And we see that a fair amount.
Jarrod Bridgeman:
Now, Casey, real quick, for somebody who might be a newer listener, could you remind me what a shareholder loan is?
Casey Hiers:
Yeah, it's a loan to shareholder.
Jarrod Bridgeman:
Perfect. Thank you.
Casey Hiers:
Yeah, yeah, just use the same words in a definition. The most common time we see this is when, let's say a practice has grown. The CPA didn't account for that over the year into the year or the beginning of the next year when they go to file, "Ooh, do I want to tell my client they owe an extra $50,000? Well, they've got a nice practice. It had his equity in it. We can create a loan from shareholder on the balance sheet and just tuck away that $50,000 and deal with that another time." Right?
Jarrod Bridgeman:
That's a future problem.
Casey Hiers:
Yeah. Yeah.
Jarrod Bridgeman:
And I know we've had Kevin Wharton, our CPA, on here several times. And I believe we asked, I don't remember the number off the top of my head, but how many times he's come across potential prospects and people that go through our system, and how many of them had no clue that they had one of these on the books?
Casey Hiers:
Yeah.
Jarrod Bridgeman:
It was a pretty high number.
Casey Hiers:
Yeah. And your feelings change quickly.
Jarrod Bridgeman:
Yeah.
Casey Hiers:
"I feel good about things. I have a $200,000 shareholder loan. I don't feel so good about that."
Jarrod Bridgeman:
Right. It's almost like when you go visit another state and all of a sudden you get in the mail a toll cost. I just got one from three months ago in Kentucky, and I was like, "I owe $15? Come on."
Casey Hiers:
"I don't like the way this makes me feel."
Jarrod Bridgeman:
Yeah.
Casey Hiers:
Well, another time this happens, again, people will go meet with their investment advisor or financial planner and they go, "Yeah, they said, I'm doing great and I'm doing well." And it's like, "Oh, okay. Well, what's your target nest egg at retirement?"
Jarrod Bridgeman:
Right.
Casey Hiers:
What's your number? How long is it going to take to get there? How much-"
Jarrod Bridgeman:
What does doing good mean? You know what I mean? It's different for everybody.
Casey Hiers:
Well, they don't get those details.
Jarrod Bridgeman:
Yeah.
Casey Hiers:
But the line of thinking I was going down was they'll be told that. And then when I ask three or four questions, they don't know.
Jarrod Bridgeman:
Right.
Casey Hiers:
They don't know what do they need to maintain lifestyle? Because as a practice owner, you've worked too hard to go back in lifestyle in retirement.
Jarrod Bridgeman:
Yep.
Casey Hiers:
But they don't know these basic numbers.
Jarrod Bridgeman:
Well, because you and I have talked about a lot of people assume when they retire they'll probably spend less. And that's the opposite.
Casey Hiers:
Yeah.
Jarrod Bridgeman:
You have so much more free time.
Casey Hiers:
Yeah. Yeah. Yeah, when they meet with their financial planner or investment advisor and they're told these things, but they can't answer basic questions. And then, we'll talk to people and again, they're doing okay or well.
Jarrod Bridgeman:
Right.
Casey Hiers:
But what does that mean? They'll go buy a dream house, they'll go buy their dream car, but they don't have a retirement strategy. They don't know those things. This is a direct conversation from a parking lot next to a brand new Lamborghini with an oral surgeon that attended one of our events, and it was a beautiful car.
Jarrod Bridgeman:
And some of that I still think falls upon something to start their thinking, selling the practice potentially to a DSO, whatever, is going to be the windfall they needed.
Casey Hiers:
Well, some just, they have the cash flow today, so they're going to go do it. But again, so much is driven on feelings. And for us, somebody else had just said the relationship, the rapport, the emotional feeling they have towards this person is really good so they feel positive working with this firm.
Jarrod Bridgeman:
Yep.
Casey Hiers:
Another firm, and then we got into the nitty-gritty, they did not have any clear answers.
Jarrod Bridgeman:
Right.
Casey Hiers:
And I pushed back and I said, "Typically, yes, you want to work with people you like and there's trust and there's all those things. That's got to be there. But ultimately, let's achieve some results. The friendship, the fun, the emotion, that's icing on the cake."
Jarrod Bridgeman:
Yep.
Casey Hiers:
"But let's make sure results are really good." And she looked at me and was like, "I've never thought of that. And that's actually much more powerful than I like them and I feel good about them and I feel like I'm doing well. But there's no concrete evidence to it."
Jarrod Bridgeman:
Casey, let me ask you a personal question here. Would you rather have an extra $5 million when you retire or secretly owe $200,000?
Casey Hiers:
The former.
Jarrod Bridgeman:
And that's sometimes what this can come down to. We're not dogging other CPAs obviously out there or financial planners, but having someone that's more in tuned to your field and your end goals can make a world of difference.
Casey Hiers:
Well, I was just talking to one of our CPAs, and they were looking at previous year tax returns for somebody we're bringing on, and there was a mistake made. In certain industries, you can make a deduction up to a certain amount.
Jarrod Bridgeman:
Sure.
Casey Hiers:
In dentistry, that cannot be the case. And so, this deduction was taken and they're ultimately potentially going to owe $40,000, $50,000 that they're not aware of.
Jarrod Bridgeman:
Yeah.
Casey Hiers:
Well, in other industries, that would've been the right move. But not being dental specific, they just lumped them in. And there's this glaring mistake where dental CPAs are just, they're flabbergasted that they even see this on tax returns because it's so egregious to them.
Jarrod Bridgeman:
And how many people plan ahead for potentially owing $50,000?
Casey Hiers:
Well, this might resonate. There's a lot of dentists out there where maybe patients come from an older dentist or another dentist and they practice differently. And they go and look at their mouth and they're almost, they're shocked that either too much dentistry that was over-sold to them or a lazy amount of dentistry in the past where they need so much help. And they're shocked that a person in their field, another dentist, the standard of care was so egregious.
Jarrod Bridgeman:
Right.
Casey Hiers:
And with us, that happens a lot. Now, we're not putting down others. But when we get into this and look at practice owners, just from the tax management perspective, we see things that make our people blush and just go, "What the hell were they doing?" But the practice owner expects that person to master.
Jarrod Bridgeman:
It's like any other case, like in the medical field where if you're injured in a certain way, you go see a specialist and not your general family practitioner.
Casey Hiers:
I'll keep it short, but surgeons, right? I knew a lot of surgeons, spent time with them. And it was crazy to me that some of the best surgeons with the best hands that wanted to have the most efficient surgeries and not have the patient under for five hours but have them under for two and a half hours and all these things; their bedside manner, they were kind of rough because they were geniuses in the OR. Versus I knew some surgeons that they were funny and personable and they would make you feel great. And I'm in the OR, and I'm not a surgeon, but I knew that they were not doing correct procedures, and it was mind-boggling to me.
Jarrod Bridgeman:
What, did you drop a Junior Mint in there?
Casey Hiers:
Seinfeld reference.
Jarrod Bridgeman:
Yeah, I knew you'd like that one.
Casey Hiers:
Nice.
Jarrod Bridgeman:
Yes.
Casey Hiers:
But all this, the point of this is feelings and emotion, they're important, they're real. We all have them, right? But you've got to be careful not to let that drive decision-making too much.
Jarrod Bridgeman:
And it's hard, and I get that. I am one to sometimes wear my heart on my sleeve and I do have these emotions. You've been witness to that a couple times here and there. And then, a lot of people too, it's hindsight is always 2/020 going back and, "Maybe I shouldn't have gotten that car. Maybe I should have waited on the house." But then, you try to lie to yourself and continue on this facade of, "I'm going to continue plowing through and it'll eventually be worth it."
Casey Hiers:
Well, in dentistry, it's just, "I'm just going to produce more and it's all going to be better because I'm going to produce more."
Jarrod Bridgeman:
Yeah. And, "Maybe I'll take on a couple more insurances and get some more patients in here." We go out, we spread the good word. We talk to dentists and practice owners and specialists all over the country. We were just in Ohio this past week. We are going to be in the D.C. area. Do you remember which areas we're going to be in out there?
Casey Hiers:
Tyson's Corner and Chevy Chase.
Jarrod Bridgeman:
Yes. So I want to let you folks know that the Tyson's Corner, which is a bourbon tasting out there, that is going really, really fast.
Casey Hiers:
There's only like what, three seats left I think.
Jarrod Bridgeman:
Yep. Chevy Chase is going quick as well. Go to fourquadrantsadvisory.com/events and you can register there.
Casey Hiers:
We'll be in Southern California in September.
Jarrod Bridgeman:
Yep. We're going to be in LA, the LA area, Huntington Beach, and Calabasas.
Casey Hiers:
That's correct.
Jarrod Bridgeman:
And then, San Francisco,
Casey Hiers:
Boom.
Jarrod Bridgeman:
Yeah, we're going to be all kinds of places on top of everything else we do.
Casey Hiers:
We've got a study club in wine country I think that's coming up as well.
Jarrod Bridgeman:
Oh, and I'm going to that, right? Yeah. Yeah. I can present. So Casey, thank you so much for being on here. Folks, please like and subscribe, do all those things, and share this with other dentists out there that you know may need help or just want to hear me talk.
Casey Hiers:
It's a good listen. It's a great listen when you're on the treadmill or mowing the grass.
Jarrod Bridgeman:
Yes, it's very therapeutic.
Casey Hiers:
Thank you, sir.
Jarrod Bridgeman:
Thank you so much.
Announcer:
That's all the time we have today. Thank you to our guests for their insight and for sharing some really great information. And thank you to you, the listener, for tuning in. The Millionaire Dentist Podcast is brought to you by Four Quadrants Advisory. To see if they might be a good fit for you and your practice, go on over to fourquadrantsadvisory.com and see why year after year they retain over 95% of their clients. Thank you again for joining us, and we'll see you next time.
