Dr James, 0s:

How can I do less dentistry? This is something that people ask a lot on the Dentists Who Invest Facebook group and generally it just seems to come up in conversation and, you know, not everybody feels that way, but I guess for a lot of people, they feel like it would be nice to have more balance in their life in the here and now, and that's fine. That's okay. It's not because they dislike their job. They just want a little bit more time. Maybe it's for their kids, maybe it's for their family, maybe it's just for themselves, maybe it's to do other things. That's all right. You got to enjoy the journey as well as the destination, the journey being life and financial freedom being the ultimate goal whenever it comes to your money and whenever it comes to your wealth, which is the whole entire theme of this podcast for me. I guess, if I look back over my shoulder, I was someone who used to work six days a week. I used to do that. A big part of the reason that I did that was for income. A big part of the reason that I did that was also to boost my skills in clinical dentistry. However, I guess I held the belief in my head that more work means more money. And now I look back over my shoulder and I'm just like man, that's just not true at all and I could have spent my whole life doing six days a week. Fair enough if I just like to work six days a week, but I didn't. I was doing it because the remuneration yes, there was maybe 20% in there. I was focused on boosting my skills in dentistry as well, but I guess I just don't want anybody out there to live their whole life under that pretense and think that that's necessary. I'm kind of glad I did, because I look back over my shoulder and I learned that lesson no-transcript, not as simple as that. Obviously there's going to be everybody's going to have individual circumstances and contexts which are going to make things easier and or easier in certain areas and harder than others, or however that looks for the individual, of course. I think really, whenever it comes to podcasts like this, what I can do is give everybody a framework. I can give that framework that I would have given to previous version of James in the hope that he can fill in the blanks and put in the little bits that he needs in order to achieve the result that he wants. And really, as I say, it depends on how much dentistry you're doing in the first place. I just want everybody to be happy in the present and the here and now and also make suitable provisions for the future. Let's talk about that subject right. This second, let's move on to that right away, and I guess the first concept that I'd like to highlight is there's really two versions of us. Whenever it comes to happiness in life, but also whenever it comes to our money as well, there's today us and there's future us. Past us has already happened. There's no point in spending a brain cell thinking about it. We've really got the present and we've got the future. They're the only two versions of us that are relevant whenever it comes to the things that we're about to speak about today. What do I mean by that? Today, you is where you are right here, right now. Future us is going to be us 20, 30 years down the line. Now, if we think about today us as in who we are in the here and now, and we think about what will make us happy, and we'll think about what will give us joy, a lot of people think that you have to sacrifice man. The previous version of me included. I used to think this a lot of people that you have to sacrifice who we are and happiness in the here and now in order to achieve some sort of goal in the future. And they are the rat racers, right? They're the people that really will sacrifice a lot for a future promise of obtaining happiness. Now, the issue with that is and as morbid as it is to say there's literally no guarantee whatsoever that we're going to make it to a certain age. So, really, whilst we do have to, in my opinion, make suitable provisions for the future, we also got to remember to enjoy things in the here and now. Now, if you enjoy things a little bit too much in the here and now, well, you're ahead in this, aren't you? You're making no provisions for the future, you're living very much in the moment, and we also, we all know that that's not exactly a good thesis either, because, let's say, we do go on through life. Well, how can I say this when we get to the stage where, for whatever reason, we're unable to work anymore? Well, we've got no plan b or we've got no assets to fall back on. So that's really the disadvantage of that mindset. So we already know we've got to be somewhere in between. But how do we do that? Well, a simple thesis is to me, happiness, or to me wealth, is being happy in the here and now, having the right work-life balance, plus also, as well as that, making suitable provisions for the future. Now, I haven't really said anything that most people don't know for the moment in this podcast, but now we're going to go one layer deeper and think and think to ourselves right, how do we actually make that happen? What is the framework? Again, I'm just going to caveat that that this, what I'm about to say one more time with this, is just a framework. The specifics are going to be unique to everybody, but I can guide as much as possible. I really do wish I had a magic wand and could give in more in-depth advice beyond that, but I can't but use these things as places to look 1000, because it'll speed up your journey massively, and that's the whole point of content, really, in general. All right, let's talk about the concept of the cash flow quadrant, which is originally Robert Kiyosaki's concept from his book. All about how somebody can grow financial freedom and also you know, you know attain wealth, which that period out is a great book which talks about those things that I mentioned just a second ago. And then also, as well as that, he has another book which is literally called the Cashflow Quadrant. Anyway, what is the Cashflow Quadrant? Well, basically, if everybody can just picture a quadrant in their head, as in four little sections sectioned off by a plus sign, effectively imagine the four corners, the four little spaces surrounding the plus sign, that's the quadrant. And really what he talks about is so simple, it's so beautiful, but it works so well is his cash flow quadrant, in which he inserts the the various concepts or relationships that people can have with work, into those little areas. So you can figure out what you can. You can apply it to your own life and figure out what to do whenever it comes to your wealth journey. So the way Robert describes everybody's relationship with money is that we're either employed, we're either workers or we're owners. We're literally one or the other. That's the only really two places that our cash flow can come from. Now, if we're a worker, obviously we're going to be exchanging time for money. If we're an owner, well we. That is what financial freedom looks like for most people, but obviously we need to be able to actually invest some money into the owner's side of the court until into the owner you know, to become an owner in the first place. So imagine a little quadrant in your head Top left, we've got employee, bottom left we've got self-employed, bottom right we've got asset owner, and top right we've got business owner. So if you think about it, the workers are on the left-hand side of the quadrant, as in the employees and self-employed, and the asset owners are on the right-hand side of the quadrant, as in businesses and other asset owners brought in more broadly in business, such as property, such as stocks, such as bonds, something along those lines. So if we want to be financially free, we need to take some of the wealth that we generate from the left hand side of the quadrant, as in the worker's side, and transfer it across to the owner's side. And really it's just all about generating wealth. And there's a few misconceptions that are broadly wrapped up in here. If we're an employee, we work for money, so time equals money. Even if we're earning really, really, really well, time still equals money to some degree. If we're self-employed, that relationship may be enhanced in that we may be able to generate more time, more money per unit of time, but remember, we're not actually an asset owner at that point because we still have to go to work to generate money. Most dentists out there are self-employed. We still have to go to work to generate money, so in a way, we own our own job. We don't actually have something that we can sell on. Now, what's the distinction between that and a business owner, which is on the right hand side of the sphere? What is a business is a collection of systems and processes that generate value for another party. Now, for it to be a true business, actually, it needs to run on its own and it needs to work without us. Easier said than done, of course, but whenever you can create something like that, well, that's an asset and what it means is it'll be generating money no matter what you do, and business businesses are one of the best assets you can have when they work because they can generate incredible cash flow. The bottom right aspect of the quadrant we talked about just a second ago are asset owners. What are asset owners? Asset owners are people who have in this, in this context, are people who have invested money in stocks, people who invested money in property, and then that is obviously able to generate them some cash flow and then they're able to live off that. Now, naturally, for somebody to be able to in most circumstances, for somebody to be able to transition from the left hand side of the quadrant over to the right hand side of the quadrant takes like 20 30 years. How do we know that? Well, usually most people work for about 20 30 years before they're able to retire. In fact, they're probably considered lucky if they're able to retire after 30 years, because 55 is an early retirement. I looked up some data the other day. Apparently the average age of retirement in the uk is 65, so really anything under that is good or is above average. Now, here is the biggest misconception I feel that is out there. When it it comes to investing, if you use the methods everybody else uses, you will get the same results. Really, it's not a fast process and you actually have to have some money in the first place. In order for you to grow, and in order for you to be able to invest and grow assets, we've got to be able to generate the cash in the first place, and that comes from the worker side of the sphere. One of the biggest things to remember is that unless you actually have a good deal of wealth already stashed already, already stored up already. Well, you can't just go out there and buy assets for free. You've got to get it in the first place now. Usually that comes through our clinical time as a dentist. So really, to me, one of the best ways you can accelerate uh, your investing career is to actually focus on your income in the first place as well, which sounds almost so blatantly obvious. It's, you know, it almost sounds like it's too obvious. It's so obvious sometimes a lot of people just don't pick up on it, if you ask me, because everybody's really obsessed about learning about what they can do in the stock market and how they can invest their cash and grow their wealth. Do in the stock market and how they can invest their cash and grow their wealth that they sometimes miss that. If you just had more capital to contribute in the first place, that would change things massively, because a 10% return on £100,000 is going to be way more than a 10% return on £10,000, and you can just play with that ad infinitum, as in, 10% more on a million pounds is obviously going to be way more than 10% more and 100,000 pounds, etc. Etc. And you get the idea and what I'm saying is that I think that sometimes we get lost so much in optimizing our investment portfolio or even our tax situation to get an extra two, three, 4% out, whereas really, in the first place, what would blow that entirely out of the water is just thinking about how we can generate more in the first place. Now, of course, we have to do that in a way that's ethical and of course we have to do that in a way that's aligned with our values and of course, not everybody's situation is going to be able to permit them to do that instantly. I really hope that I'm not offending anybody whenever I say that that's not the intention of this podcast. I don't want to make it out like it's easy, but what I am saying is that at least if we know where to look, that can accelerate our journey and that can speed things up for us. Basically because then all of a sudden it takes all of the focus off, spending way too much time trying to get that little extra one, two percent out of the investing side of things. Now it's different. If you already have money that change, if you already have a great deal of money to invest, that changes around things a lot, then you should totally focus on the right hand side of the quadrant. You just got to know how to do that, of course, and that's where knowledge on money and investing comes in. One thing that I should mention is that, when it comes to the left hand side of the sphere, obviously, or when it comes to the left hand side of the quadrant, obviously, the way that most of us generate our wealth is via our dentistry. So, really pragmatically, if you ask me, what can help somebody bring in a lot more money in order to invest, is really just thinking about the skills within dentistry, is really just thinking about upskilling, and that can be upskilling clinically. That can be upskilling in terms of communication, becoming better at articulating the value of the treatment that we provide for patients, becoming better at treatment planning, everything along those lines, because when someone becomes extremely proficient at that number one, I really think, from the point of view that you get more fulfillment out of your job in dentistry is a pertinent point and one that we got to highlight you'll be able to do better work for the patients. The patients will be happier, you'll provide them more value, you'll be able to get more job satisfaction and you'll just accidentally make a fair bit more cash flow as well. And it's not unfeasible that someone might add an extra 1000 or more to their income every single month through doing that, through becoming incredibly proficient at that, or even more. You know, you know this. It can be way more than that, of course, and show me the, show me the asset out there that's able to provide that for you over this time span of a few months or something along those lines, because they are pretty hard to find, they're not so easy. So, like I say, I think if we shift the focus back to the left hand side of the quadrant, we can sometimes get much faster results. It really depends on the person, really depends on the individual. But anyway, just my two cents. Let's move to the right hand side of the quadrant. We were talking about a second ago, owners. Now, this is where, if you already have a little bit of cash built up or building up, well, what it will mean is that you can begin to think about how you invest it. Now. The problem is, if we really if we don't think about our cash flow in the first instance, then for me what it can mean is that sometimes we're spending a lot more time in the clinic than we need to in order to generate a certain level of income, in order to invest it, whereas if we just focused on cash flow a little bit more in the first instance, on the left hand side of the quadrant well, what it would mean is we could generate the amount of hypothetically, you could generate the amount of money that you'd like that will fit into your life plans and fit into your goals, and do it in the amount of time that you like as well. Because, realistically, if someone could add an extra two, three, four grand to their income, or something along those lines every single month, well, they wouldn't necessarily, they mightn't have to go to the clinic as much, or at least they would have the option. And that's if you ask me. But I feel like it comes from the misconception that investing is some sort of quick fix thing or that you can make millions overnight and perhaps you can doing some sort of high risk strategies and techniques. But that's not. That's not the you know if you're using index funds. Those are not the methods that a lot of people are using. I mean, those are not the methods that how can I say this that, uh, most people are actively learning about and that most people are using or employing. So if we know that we're not using techniques that are incredibly risky, um, you know, if we're using the kind of how can we say copy paste techniques that everybody else is whenever it comes to our investing plans and whenever it comes to our investing strategy, well, we know that we can't expect anything else other than the returns that everybody else gets, and that's fine. We just have to know the terms. There's nothing wrong with that. I'm just saying that those are the terms, of course. Now, if somebody has already generated a great level of wealth already, then it can really make sense to focus on the right-hand side of the sphere and think about how to optimize things, particularly if someone's just had a dental practice exit. Well then, you've got a ton of cash that's just come into your bank account and you really need to think about how that's structured, because if you have that money, then you need to start thinking about how you can take profit from it, and this is where a really good cash flow planner can add loads of value to someone's life, because they can invest that capital, guide you as to how much you need every single year and begin to slowly siphon out the correct amount so that you have enough money you're able to sustain yourself and you're also able to grow the rest in a fashion which will mean that you potentially could never run out of money and you could live the rest of your life and sail off into the sunset and be financially free. Like I say, that works best when somebody already has a lot of cash. Now, one thing I need to make clear is that even if you are not in a place already where you have a huge level of cash in a bank account, it still is important to be able to invest some of your money whilst you are still working as a dentist or if you're very young or at the start of your career, because you obviously want to be able to have your money to compound and grow with time so that future you will be happy. But I guess the point of this podcast is to say that if someone really does want to do less dentistry, as we were saying a second ago, you might be better off just taking at least some of your energy and focusing how you can produce a little bit more cash flow in the here and now, which comes on the left hand side of the quadrant, the employed side of the quadrant that we talked about a second ago, and really the easiest way to do that is to think about our clinical dentistry. In tandem to that, we should be thinking about the investment side of things. That's more for the future you that we were talking about just a second ago, or what blows everything out of the water is if you already have had a windfall of cash in the here and now, in the present, then you really got to think about how you can invest that, and it might be worth getting the services of a good cash flow planner, because what that would mean is that you could potentially be retired off that sum of money. But of course, we need to be very clever about how we manage that.