Casey and Jarrod are joined by Toby Hampp, a Four Quadrants Representative, to discuss how dentists are so capable with their hands when it comes to the chair but still let money slip through their fingers.
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 it again at the Millionaire Dentist podcast. Cohost, Jarrod Bridgeman, joins me in studio and special guests, Toby Hampp. You travel the country and help educate and work with practice owners as well. Thank you for joining us.
Toby Hampp:
Thanks for having us.
Jarrod Bridgeman:
Hey, how are you?
Toby Hampp:
Doing well.
Casey Hiers:
So, guys, I talk to a lot of practice owners, right? And it's proven most of our listeners, most practice owners, dentist specialist, they have good hands, right? So here's the question. Why does so many practice owners let so much money slip right through their hands?
Jarrod Bridgeman:
So, when you think about it, people know that dentists tend to make pretty decent money and you see them driving the nice cars, you see them having the nice homes and the lake houses and things like that. What they don't realize is they may be living past their means even while having a good income.
Casey Hiers:
That never happens.
Jarrod Bridgeman:
No. Okay.
Casey Hiers:
Well, and let's be honest, that's not exclusive to dentists. [crosstalk 00:01:17] Many people live beyond their means, but to your point in your city or in your community, yes, that plays.
Toby Hampp:
So, one of the fundamentals that we talk about, when we talk to dentists all over the country about this. A practice owner is often going to be in the position of being the primary producer for their practice, as well as being the CFO, the CIO, wearing all of these other hats. At that point, there's somewhat of a financial target and Casey will say things like "the hub of the wheel", and they are the hub of the wheel. We were recently meeting with dentists and a dentist brought up how he had thought he had overpaid for something, a service, what have you and said, "oh, I got the rich person tax". Why do we accept that? We shouldn't. Right? But, time and again, we're going to walk into those situations.
Jarrod Bridgeman:
Is that what do you mean by financial target?
Toby Hampp:
Yes. Correct.
Casey Hiers:
Well, we've seen this in real-time. There's a lot of dentists who, if you want to talk about having a target on their back, business ideas, right? We've talked about this in previous podcasts, practice owners under save and so they want to make up for it. And I don't want to call it a get rich, quick scheme, but they are a little bit vulnerable for, "Hey, I've got this great idea, $50,000". We hear that too much. And they do that. And then
Jarrod Bridgeman:
People come up and kind of shark tank. You don't have the investing experience to really vet out people.
Casey Hiers:
And the hard part is if you're overhead 65, 70, 75%, God forbid higher, or you don't know what your overhead is, there's money slipping through your hands, within your situation. That's not good. Then externally, a lot of practice owners are trying to make up, catch up for some time. Or, we talked about it to the day, it's the fishing story, right? Everybody talks about the great fish that they catch, they don't tell you how many hours they came up empty. Most practice owners have friends that are, have a wonderful real estate story or a wonderful crypto story, or fill in the blank story. They don't tell them of the $300,000 they've lost over 20 years in these harebrained schemes. But the one that worked, they tell you about. That's really what it comes down to, and talking about slipping through your hands. Poor, overhead, poor decision-making.
Jarrod Bridgeman:
Not any different than a Vegas stories
Toby Hampp:
That one time that you won at blackjack versus the how many hours you spent in the casino.
Jarrod Bridgeman:
I still lost it all, but I won the first day.
Casey Hiers:
I may have shared this previously, but my dad was on a flight. And this guy next to him was, "Man, I won a hundred thousand dollars". And he was so excited. "Oh, what'd you play? Tell me all about it". And he was just so positive. And then at the very end, he goes, "I'm almost even for the year". [crosstalk 00:03:56] More than one thing can be true.
Toby Hampp:
And that brings up the point. The practice owner is going to be, again, going to be very good with their hands. Focus on those areas, focus on that efficiency rather than investing in that indie film. Right? I think on a previous podcast you've been brought up, by all means, invest and sponsor that little league team. That's good. That's a feel-good use of your money, but maybe you don't want to sponsor the racing team that's going to cost you hundreds of thousands of dollars. We're in Indiana for a lot of racing going on. It's right down the street. May not be the best use of your funds if dentistry isn't your true passion.
Jarrod Bridgeman:
And honestly, all of this, maybe not all of this, but a lot of it is controllable by the dentist themselves.
Toby Hampp:
Completely.
Jarrod Bridgeman:
Yeah.
Casey Hiers:
Well, here's what it comes down to. You're good at dentistry. You're not trained in business. You're not trained in private equity or venture capital or measuring what a good idea versus a bad idea looks. I mean, many practice owners, when they go to look to buy another practice, they have a hard time discerning between the right one and the wrong one to buy. And so, again, there's so much on practice owners' plates, how are they to be able to vet these things? So they don't vet them well, they're on this island by themselves. They use their instinct, right? They don't get a lot of feedback.
Toby Hampp:
Right.
Jarrod Bridgeman:
Well, and when you don't have someone there to vet and help you on that process, that's part of the thing that you got to do is you got to find someone who's not a yes man, on your side and look at getting a team together that can help you. That does have your interests, your best interests. It could be something as simple as once you find one good person ask for their recommendations. I don't know if that makes any sense. [crosstalk 00:05:42]
Casey Hiers:
Yeah, I was going to springboard into, we just spoke to, triple-digit room full of folks. And one thing I encourage them with, if you have an external team that's helping you, unfortunately, you're probably the hub of the wheel, but you need to challenge them and tell them what you want.
Jarrod Bridgeman:
The, one of the things I feel like it took me a long time to realize, I do believe I can take care of this. I do believe I know how to handle these things. You went to school for such a long time to become a dentist, become an expert in your field. There's other people who go to school and take their tests and do all those things to do investments.
Toby Hampp:
So, and the practice of dentistry there, the dentist and the practice owner might refer out. Right? So having that understanding of where you're going to refer out to a specialist needs to apply in other parts of their business life, not just to the practice of dentistry. The other thing that comes to mind is when the practice owner is firing on all cylinders, the staff is doing well, everything's doing great. Some of those external ego strokes don't happen. So to your point, Jarrod, when someone comes up to you next in an elevator and says, "Oh, you're a dental practice owner. Hey, I've got this great X. I've got this get rich quick scheme", the shark tank thing. You're not going to be the person that they're going to want to sidle up against.
Jarrod Bridgeman:
And that makes sense. When you have someone be like, "yeah, I looked into this guy and he filed bankruptcy last year. He may not be the best bet", for example. Well, let me ask you this. Do you guys feel that good with the hands, good working on the mouth, letting money slip through their fingers, like Butterfingers here, where do you start? Where do you decide, hey, I need to...
Casey Hiers:
I'll tell you where a good place to start is within the practice is having a custom chart of accounts. We talk about that in our presentation a little bit. It's kind of a 101 level accounting, but every practice out there should have a custom, to your practice chart of accounts that means something. So how do you have them mean something? Don't dump it in one huge bucket, line item it out so that your chart of accounts is telling you something. Am I losing money on a procedure? Are there some marketing or advertising that we alluded to putting money in that I'm getting no return on?
Jarrod Bridgeman:
Don't throw everything underneath supplies
Casey Hiers:
You need, correct.
Jarrod Bridgeman:
Correct.
Casey Hiers:
Yeah. You need to know what's going out. What that's bringing in. So a real basic start is a good custom 50-60 line-item chart of accounts. That's a good starting place.
Jarrod Bridgeman:
I feel like it wouldn't be, you do this for one month and all of a sudden "Huzzah! I figured out my issues". This is a constant updating kind of situation.
Toby Hampp:
Mm-hmm (affirmative) Yeah. We just talked about that in a previous meeting. I mean your team should be building upon the data that they're getting and every month it means something more, means something more. Then at the end of the 12 months, what that means is there's an extra $80,000. Let's pay down some debt. Let's save some more, let's put some more in brokerage for retirement, there's options. And so when you correct it, you have options it all ties together to be financially free. Then what? Well you look up after a decade of doing the right things and refusing to let money slip out of your hands and you don't have to work the three extra years, you can retire now. That's what this is all about. Letting money slip through your hands. Our listeners are too busy, right? Let's be honest, they're too busy. They can maybe even have the know-how. We talk about how so many dentists don't have the training and don't know-how. Even if you do know how, do you want to spend 10:00 PM to midnight every night on some of this stuff after you've produced dentistry? I mean, that's kind of where this goes.
Casey Hiers:
I mean, I can talk about having a spouse and children involved too. Don't You want to spend time with them as well?
Toby Hampp:
Well, I like the, when you refer out some dentistry, you need to refer out some other things that you do. And what happens is your spouse gets you back. Right? As a listener, I think that's important.
Jarrod Bridgeman:
And if you start with the custom chartered accounts, you're putting good fundamentals in place, and you're creating a culture within your practice that has good fundamentals. So as you grow, whether organically or whether you're purchasing another practice or whether you're even contemplating bringing on other staff, you're going to have those fundamentals in place. So as those different growth things happen within your career, you already have a really good system that you're just able to move forward with.
Casey Hiers:
You want to make sure you get your house cleaned up first before you worry about the external. I mean obviously, you don't want to throw all of it in one basket and not worry about the other, but if you're actively throwing away money in your own practice.
Toby Hampp:
Control that first and then reduce the mistakes that you make.
Jarrod Bridgeman:
and then.
Toby Hampp:
Capitalize and then capitalize on that cash flow.
Jarrod Bridgeman:
So, guys, I had this really, really awesome idea. You're the practice owners and I come to you guys and I say, "Hey, I had this awesome new crypto. I just found out about, I need some starter cash to get it going. And I promise you within the next six months, not only to get your investment back plus another, let's say 200%". And three months ago, I feel like a lot more people have fallen for it than today. Cause everything's been down, but everything was at all-time highs for crypto. Not that long ago. Would you have the ability to say no, if you're out there by yourself and you hear, I can make $300,000?
Casey Hiers:
Well, it's funny as you have used described this, you use the word feel, and unfortunately, a lot of practice owners are going to just go on how it makes them feel and what that emotion looks like. And we talk about this all the time. Pull the emotion out, use data, use numbers, write a custom chart of accounts is going to help that. Things that are proven, they're going to help that. I mean, we preach here all the time, save a hundred thousand dollars a year and be close to the market returns. But if you're a couple points back and you take some risk out, is that better or worse than the guy that's saving or investing 20 or 25,000 to trying to beat the market, beats at one out of three years and tells all of his friends, how he beats the market, right? The answer is save a hundred thousand dollars for practice owners in our listeners. That's what you can do. That's what you can control. That's what you can clean up. The speculative stuff. You don't need to do it, right? And so going back to our central theme, when it's slipping through your hands. Internally, you have control of that, externally, don't fall. Don't be the target. Don't do a lot of this high-risk things. And again, some things are proven and there's opportunity. No doubt. Those are rare.
Jarrod Bridgeman:
And you want to do research, but I also know you guys don't have a lot of time.
Toby Hampp:
I think it goes back to one thing that Casey and I talk about often with doctors and practice owners, you need to practice with a certain level of care, a certain level of expertise. You should approach the financial part of your life and business with that same level of care and clinical interest as you do the practice of dentistry. So when you come to us and you say, "guys, I need a hundred thousand dollars, we've got this crypto startup. It's going to go through the roof". To my mind, that sounds like, "Hey guys, remove all of my teeth. I want you to give me X instead of teeth because I think it's cool". No dentist is going to sign up for that because they understand that you're going to undermine your health. When it comes to making that decision based on a financial or a business-related thing, we should look at it the same way with the same level of skepticism.
Casey Hiers:
Yeah. I liked that the level of skepticism. Prove it, back it up.
Jarrod Bridgeman:
Would it be a tough thing to deal with if it's maybe not so much the practice owner that's causing the financial issues, but it may be their spouse?
Casey Hiers:
Wow. That's opening up a can of worms. Yeah. Have we seen that? Sure, absolutely. Honey, I've got an idea. I'm just going to need a few hundred thousand dollars to bankroll it, right? I mean those are tough.
Jarrod Bridgeman:
Let's open up a pizza place.
Casey Hiers:
Those are tough decisions.
Jarrod Bridgeman:
No matter what it always comes down to. And we say this, I feel like every episode you need a team and not just a team, you need a dental-specific team to help you with those. Right.
Casey Hiers:
Well, Guys, it's a robust topic. It's an interesting topic. I wouldn't say we recreated the wheel by any means, but we see so many mistakes made that we're compelled sometimes to have these kinds of topics and these conversations, right? So to our listeners again, control what you can control. Know what's coming in, know what's coming out, don't pay 9% for your supplies, and think you're getting the best deal. Data, metrics, that's what it's about. Proven. Don't go on feel, I feel this, I think this, the fishing story, right? Yeah. We see that so much.
Jarrod Bridgeman:
Toby, thanks so much for bringing this topic up to us.
Toby Hampp:
Thanks for having me.
Casey Hiers:
Appreciate it. Thanks, guys.
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.
