THE MILLIONAIRE DENTIST PODCAST

EPISODE 140: Complimentary Financial Assessment Pt 2: Cashflow Strategies, Debt Management, & Investment Strategies

 

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EPISODE 140: Complimentary Financial Assessment Pt 2: Cashflow Strategies, Debt Management, & Investment Strategies

In Part 2 of 3, Casey and Jarrod dive into more detail about what areas our complimentary assessment covers. They talk about three of the 8 options available: Cashflow Strategies, Debt Management, and Investment Strategies.

www.fourquadrantsadvisory.com/assessment

 

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EPISODE 140 TRANSCRIPTION

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 a sharp dressed man, co-host, Jarrod Bridgeman.

Jarrod Bridgeman:
Hey, I didn't know you were talking about me, but I appreciate that.

Casey Hiers:
Is that like a plum, a burgundy?

Jarrod Bridgeman:
Burgundy, plum'ish, yeah.

Casey Hiers:
 You can get away with that. Some can't, you can. It's a gift.

Jarrod Bridgeman:
It is a gift. Early on in my life, it may not have been a gift, it was a curse, but now that I'm more self-assured.

Casey Hiers:
There you go. Well, hopefully our listeners hear that extra gusto from you today. What do you want to talk about?

Jarrod Bridgeman:
Last week we talked about our complimentary financial practice assessment. We only did part one. We covered three of the eight topics that you can choose from for this one-time complimentary assessment. So let's cover a couple more.

Casey Hiers:
A new employee goes, "Hey, what's this all about?" I said, "Well, basically it's eight things that practice owners are not trained in and not good at that we master that we're going to do." And they go, "Oh, that makes a lot of sense."

Jarrod Bridgeman:
Who was this new employee, so I can relate driving home to him?

Casey Hiers:
I don't name names. I don't name names here. Snitches get stitches, pal.

Jarrod Bridgeman:
That's right, that's right. Well, I thought this time around we can kind of go after three of them that kind of loosely play into each other. Let's go with, we've got debt management, we've got cash flow strategies and investment strategies. These are just three more of the eight.

Casey Hiers:
I like that hat trick. World Cups coming up, I'm trying to use some more soccer terminology.

Jarrod Bridgeman:
 Goal, that's another one.

Casey Hiers:
Yeah, three, hat trick. Debt, cash flow and investments. That might get some people's attention.

Jarrod Bridgeman:
I would say cash flow seems like a pretty hot topic.

Casey Hiers:
It's general, but yet it does encompass a lot. Just to kind of jump in, I guess, from our perspective, for practice owners specifically, what's that mean? Well, cash flow, we look at practice account balances. How are those practice account balances? Are they too high, are they too low? Are they at the right place for you? What's the strategy? Are they erratic? All of those things. But then additionally, cash flow also means that money at home and what's that linked to? Income.

Jarrod Bridgeman:
Well, let me ask you what the whole cash flow thing, what would be some of the negatives of having too high or too low? You can take either one of those separately if you want, but what are some things that can occur from being too high or too low?

Casey Hiers:
Well, I would say generally people don't have cash flow strategies. That's probably where we should start. I mean, they just don't have them. Some feel comfortable because they're sitting on $650,000 in their practice account balances, so they're like, check the box. Look at me, I've got the money. It keeps them feeling good, but guess what? The other two we're talking about today are investments and debt management. Those two get ignored when you're hoarding cash and sitting on that much and so because you have no cash flow strategies, that's really the first problem.

Jarrod Bridgeman:
So, if you had too high of a cash flow, too much money sitting in your account, would that be money that could be better placed in other buckets?

Casey Hiers:
Look at the big brains on this guy. No, that's exactly. The point is, if people feel alone and that they don't have anybody having their back, then all the idle and PPE money has helped out a little bit, and so they're hoarding cash, they're sitting on cash. They don't really have any guidance on what to do with it, but they're not reducing their debt position. They're not necessarily looking to the future on growing that money, and so that's a huge problem. That is a massive red flag for a practice owner if there's no strategy.
Now, if they have a bad cash flow, meaning their cash flow is I'm barely getting by, that's a more obvious problem. But the flip side of the coin is, I'm talking to more and more folks that have a fair amount sitting there and they're not sure what to do with it.

Jarrod Bridgeman:
So a really lower poor cash flow strategy or cash flow in general, would that be where possibly a dentist is skipping paychecks?

Casey Hiers:
Yeah, that's it. Skipping paychecks.

Jarrod Bridgeman:
Trying to get their staff paid.

Casey Hiers:
Erratic distributions, just kind of trying to scrape by, depending on the credit cards, a little too much. Spouse.

Jarrod Bridgeman:
It's hard to plan when you don't know if you're actually going to get the money next month or not.

Casey Hiers:
Yeah. Spouse asking, "Hey, what's going on? I've got some big plans." I

Jarrod Bridgeman:
I need some golden goose shoes.

Casey Hiers:
Well, if the spouse is a husband, "Hey, I want to build an outdoor shooting range on our property." Well, that's expensive. We've heard that. Or yeah, I want to redo a kitchen, depending on gender and interest. But when there's no cashflow strategies, those decisions become hard. They can become hard on a marriage or relationships. But yeah, the low end, you hit on it.

Jarrod Bridgeman:
I mean, every single one of these topics we talk about for this assessment or all very, very important. This one feels like it could, if you don't have this under control, it would be harder to do the other things.

Casey Hiers:
This encompasses a lot, that's correct. And that's the whole systems and processes. You have to have a foundation for a house, a foundation for a relationship, and in your practice you need the foundation of cashflow strategies, systems and processes to build upon to be successful in multi-millionaire dentistry. And so you're right. If your cash flow is just you're a cowboy or a cowgirl just going on a whim and hope and a prayer, that's tough.

Jarrod Bridgeman:
I mean, even if you think you're doing okay with your cash flow situation, there's not any harm in signing up for this assessment. And we'll either tell you like, "Hey, here's ways to improve, or B, oh, dang, you got it."

Casey Hiers:
Hey, spoiler alert listeners. Register for our assessment, tell a friend. The worst thing that's going to happen is you're told that you're doing everything right, you'll probably sleep better. Or you're going to get a free piece of advice that is not really that available in dentistry. And so that's the spoiler alert here.

Jarrod Bridgeman:
So I mean, this is those things. We do these things every day, all day.

Casey Hiers:
Master them. Well, and I'm hearing more and more kind of going back to sitting on a lot of cash. It's, Hey, I've got half a million dollars sitting here. And then we switch pages and switch gears and yeah, I've got 1.8 million in debt. Oh, okay. And sometimes maybe people just subconsciously don't connect those two, but these are all connected. And so without proper cashflow strategies and without the right systems and processes and understanding what right-sizing your income means and what your ideal bank balance should be, and the cash flow you're spending at home, it's incredible how many people don't know how much they spend.
Cashflow strategies is the real foundation of this, it encompasses a lot. A lot of people are selecting this one after that 15-minute discovery call, then we determine what data to look at, to obviously be able to shine a light on this. But ideally, if your cashflow is okay, meaning you're consistent with your income, your practice account balances, those things are set, then it becomes fun because you can start to branch out and say, let's grow it, i.e investing, and let's reduce debt.

Jarrod Bridgeman:
So talking about debt management, can you go into a little bit about what they may be able to look forward to if they select that option?

Casey Hiers:
Well, debt scares practice owners. It's the boogeyman in the closet, but there's some reality to it. Three, $400,000 in student loan debt, if you buy a practice, I don't know, anywhere between 600 and 1.5 million, yeah, some people overpay for those things. And so, boom, blink of an eye, you're in seven digits of debt anywhere between, I don't know, one and two and a half million dollars sometimes. And that can paralyze people. Again, it's emotional, it's frightening.

Jarrod Bridgeman:
Do we help break down which debts would be better optimized?

Casey Hiers:
Ding, ding, ding. Things as basic as, Hey, we're paying down our mortgage. Well, that's great, except you have a 2.99% interest rate on your mortgage, and your student loan debt is 7% plus. It sounds simple, but there's a lot of folk that we rank those, prioritize them, and have the strategy and advice on which ones to attack and why.

Jarrod Bridgeman:
So this is as simple as like a Dave Ramsey, stick some money in an envelope and snowball it over?

Casey Hiers:
It's funny, his name comes up on a lot of conversations with practice owners. I think you and I have brought him up. I saw him speak, bought his book. He signed the book. Great advice for the "commoner", the civilian, if you will. But if you are a practice owner with a business that is producing seven digits with payroll and people, it's just ...

Jarrod Bridgeman:
A different thing.

Casey Hiers:
It wasn't the audience. There's some good principles. We help our folks be debt free and have tons of money all the time, but the singular focus of reducing debt as a practice owner is a mistake, it's a mishap. Because guess what? You're going to have debt. There's some debt that's okay. Know what that is, know what the plan is, but ultimately, debt doesn't scare our firm, debt is typically not the issue.

Jarrod Bridgeman:
But if it's something you're afraid of and would like an extra eye on, hey.

Casey Hiers:
Select debt.

Jarrod Bridgeman:
Sure. That's right. Let's talk investment strategies. Let's say you love to play the stock market. What can we do about that?

Casey Hiers:
Well, I mean, there's all sorts of ways to "invest". You've got a lot of gambling apps, there's sports events all weekend.

Jarrod Bridgeman:
They're saying right now. That's right. They're also saying, I read an article the other day, that investing in LEGOs is better than gold right now.

Casey Hiers:
FTX. Oh no, that's right. That one's no good.

Jarrod Bridgeman:
Argh, I just put a bunch of money in it yesterday.

Casey Hiers:
You know, investing is a broad, broad topic, and I've said this before, rappers want to be basketball players, basketball players want to be rappers. Dentists want to be real estate or Wall Street'ers. It's incredible. Normally because they need to play catch-up because they've under-retired or under-saved.

Jarrod Bridgeman:
So, not very many dentist rappers?

Casey Hiers:
No. We know some great musicians who are dentists, but their genre is probably more a little classical or country.

Jarrod Bridgeman:
Sure, sure.

Casey Hiers:
Here's the deal with investing, it's different for everybody. Our firm is custom, and so for our clients, they have a custom view of what their retirement strategy should be. For a lot of folks, we look at their investments and they're too risky, they're too lazy, or they're completely overly aggressive, and there's got to be a balance to everything. Ideally, what are you trying to do? You want to grow your money. For us, we want our clients to reduce risk because they're saving $180,000 a year, and you also want low-cost investing. It makes me sad that some practice owners have financial planners that they think they like and they have good relationships with, yet when we look at their investment strategies, they are very high-commission, high-cost investments that aren't really doing much more.

Jarrod Bridgeman:
I mean, the more you pay me, the more friendly I'll be to you.

Casey Hiers:
I think there's some wisdom in that, right? That might be part of it. I love my guy, he's great. He takes me to the NFL game in the private box and, cool.

Jarrod Bridgeman:
Yeah, how'd he get it?

Casey Hiers:
Yeah, well, you have an incredible amount of risk and very high-cost investing, but again, to just simplify it, you need to be growing your money somehow. You need to reduce your risk, and you need to have, there's low-cost investing out there. And having an okay cash position is good as well. When things are risky and volatile, you can still grow. Your expectations should be adjusted, and it's okay to have some cash too. We see folks on the back end of their career, like 95% in the market with high-cost investments that are aggressive, we cringe. Because their best interests aren't being looked at. When you ask your financial planner, Hey, I want to pull some out in cash, they're probably going to talk you out of it. For our clients, we have a boatload of money invested, having some sitting in cash is just a good way to do things. Grow your money, don't try to beat the market. Consistency.

Jarrod Bridgeman:
Casey, those were three more of the eight topics. Don't forget the first podcast, the one from last week. If you did not listen to it, that was about tax management and accounting, business consulting and financial planning. If you're interested in signing up, and you should, check out fourquadrantsadvisory.com/assessment.

Casey Hiers:
And tell your practice-owning friends as well. It'll be their early Christmas gift. Hey, I've got a free complimentary assessment. Just click on this link. Merry Christmas.

Jarrod Bridgeman:
Also, on December 9th, we will be in Charlotte, North Carolina, so please visit fourquadrantsadvisory.com/events, and we have a list of a couple more places we'll be coming to in the new year.

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.