Myth-Busting Financial Planning with Reese Harper

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Bulletproof Dental Practice Podcast Episode 77

Hosts: Dr. Peter Boulden & Dr. Craig Spodak

Guest: Reese Harper,

Key Takeaways:

  • There are big differences between fee-based and fee-only financial advisors.
    • People assume “fee-based” means you only charge fees, but advisors who say they are fee-based generally also take commissions.
  • Bad financial advice comes from product salespeople who get paid commissions. Good advice generally comes from people who get paid for their time, or percentage against an investment account.
  • Make sure your financial advisor is disclosing ALL FEES UP FRONT.
  • Everyone who is commission based have a strong conflict of interest. They are incentivized for pushing products that may not be in your best financial interest.
  • Your financial advisor should be a registered investment advisor, and an independent, fee-only fiduciary, and nothing else.
  • If your broker/dealer/advisor is spending a lot of money on you it is a red flag.
  • The more you learn about finance the more you’ll know the current financial market model is crazy.
  • For dentists who have “found money,” the first & best thing you should do is invest it in your business.
  • Dentistry is an amazing career, but there’s a huge barrier to entry.
  • Use your money to work toward at least a 20% operating margin beyond your production.
  • If your practice is good and doesn’t need investment, you can use your money to:
    • Build businesses
    • Buy liquid assets (minimum 6 months of living expenses) (cash, mutual funds, anything you can pull out that isn’t tied up)
    • Work on retirement plans
    • Buy real estate
  • To be a serious investor you have to take risk. In order to take risk you have to be liquid.
  • Pay attention to your debt-to-income ratio.
  • In a calendar year, do you have more than 20% of your gross income left over? If you’re not accumulating 20-25% liquidity every year you haven’t earned the luxury to reduce your debt on an accelerated basis.
  • Your income can only go to:
    • Savings
    • Spending
    • Debt
    • Taxes
  • The ratio of your income mix dictates what you can do.
  • It’s more important to get into the right working situation than it is to pay down your student loan debt.
  • Not everyone is cut out to be a practice owner. There are a lot of benefits to being an associate, and you don’t have to be an owner to max your earnings.
  • There is a correlation between income and ownership. Owners tend to make more, but that’s because 30% of owners manage their practices really well and are killing it. 70% of owners really struggle, to the point where it’s probably a wash whether they should be an owner or not.
  • If you’re smart, your first associate hire will cut your income. As an owner you have to go through periods where you make less than you would as an associate.
  • You have to have a net worth that is about 30x your annual spending in order for work to be optional.
  • Dentists don’t invest their liquid assets aggressively enough. They’re too conservative, and it costs millions of dollars over a 25-year career.
  • The 3-factor model says investments grow more than average because they are:
    • Smaller vs. bigger
    • High value companies vs. high-growth
    • High quality & profitably vs. low-profitability
  • Run if your CFP is telling you to get out of the market now because a correction is coming.
  • You know you’re too conservative if your investments didn’t beat the S&P return.
  • Your investments can earn 10-13% every year if you invest wisely.
  • Keep tuning in to Bulletproof Dental Practice podcasts for the next interview with Reese!


Fama–French three-factor model


It’s difficult to get a man to understand something when his salary depends upon his not understanding it. – Upton Sinclair

The things that drive owners are not always financial. – Reese Harper

No business tries to pay down debt as their first goal. – Reese Harper

Money is an emotional thing, it’s not logical. – Dr. Craig Spodak

As long as you’re loving what you do and you’re not oppressed by it, that is freedom. – Dr. Craig Spodak


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