Silver Linings of an Upcoming Recession

The following transcription was from the Bulletproof Youtube channel. Here is the https://www.youtube.com/watch?v=Vdnhli70qOw

Trey Tippit
0:00:00
Welcome back to another episode Bulletproof Dental Practice podcast. Do you guys know that for a long time Craig couldn't say that? He was like welcome back to Bulletproof. Yeah, we heard it. We heard it. I loved it. He's like Craig. No, the whole name is Bulletproof Dental Practice. Bulletproof Dental Practice Podcast. Nice to have everybody on. Good to be amongst friends. Always. Absolutely.

Dwight Peccora
0:00:35
Well, let's tackle some stuff.

Peter Boulden
0:00:37
What do y'all say?

Craig Spodak
0:00:38
Let's do it.

Craig Spodak
0:00:39
Let's do it.

Peter Boulden
0:00:40
Let's light the candle, people.

Trey Tippit
0:00:41
If you missed the intro from the last episode, the Roasting Dwight episode of him being the Jason Calacanis of dentistry, then make sure you listen to that. It was pretty cool.

Dwight Peccora
0:00:54
I'm going to have to send it to Jason and be like, hey, you should check out our little

Trey Tippit
0:00:57
roaster. You know, he follows me on Twitter, so maybe I can get some action there. That would be awesome.

Peter Boulden
0:01:03
Kalkanis stuff?

Craig Spodak
0:01:04
Yeah.

Craig Spodak
0:01:05
Yeah.

Trey Tippit
0:01:06
Troublemaker. He's into crypto, so he's, anyway. Thanks for all that, Jaz.

Dwight Peccora
0:01:09
Well, I think one of the big topics I think we can throw down and I think it's good to have this many minds on a call like this to be able to discuss it. In many, many ways a lot of people have advised, including on this podcast between Pete and Craig at some point in time, to hold as recession was approaching, inflationary impacts were going on, a war across the other side of the world. There was enough going on where there was almost this discussion, one side both. Now you discussed a little bit of real estate, you discussed a little bit of dental practice, and said hold, everybody should maybe hold and not put so much pressure. In fact at the summit, I remember this coming out of Pete's mouth and a lot of advice, but there's something to be said for the fact that all four of us on this call are actually in the midst of expansion and deep diving in the midst of this. So I wanna open it up and just have a general discussion to help people think through this. Partially because maybe where our businesses are and where we're choosing to do this or just the nature of our personality as to why the drive is happening, what's going on. So let's throw it out there, we'll start off with, actually let's talk about what everybody is doing right now. I know Craig you're starting to expand in your own space that you built a while back, but now you've even added chairs to that.

Trey Tippit
0:02:29
So- Well, wait, let's, Dwight, let's talk about some macroeconomic things that may frame why you are saying this, right? Right. In my opinion. I think, I think that we are gonna have a pretty hard landing in 2023, at some point.

Trey Tippit
0:02:49
I agree.

Peter Boulden
0:02:50
That being said.

Trey Tippit
0:02:51
Describe a little more of what a hard landing to you means. Yeah, so I mean, look, I mean, we've already had, we had all these things coming up that Craig and I, we talked about them a lot, like the bond, the yield curve is inverting, right? The amount of inflation that was out of control, we talked about the Haywood Index, right? And so. Chapworth Index.

Peter Boulden
0:03:08
The Chapworth, sorry.

Trey Tippit
0:03:09
Chapwood. Okay, whatever. And so these are all like ingredients when you start stirring the pot. And eventually it's just going to come to fruition. And we can only print our way, we can only kick the can so far down the road with stimulus and adding this and, and, and, um, so things are obviously getting overheated, which they have to rectify, you know, and the Fed keeps trying. They have one lever to fix this, and that is just raising interest rates, raising business rates. So another 75 basis raised. And so they will continue to do it. They are committed to this process until they force a recession. That's actually the goal.

Dwight Peccora
0:03:49
They also were expecting another 50 basis points, but they announced it's more likely to be about 150. So when they originally were saying it was transitory and then of course it was then realizing no, we're going to try and make it a soft landing. And now they're backing all that out because they know it's gonna be a relatively hard landing.

Peter Boulden
0:04:06
It's gonna be worse because they're actually spending, printing money in inflation reduction bill. They've actually printed trillions of dollars to fix inflation, which is actually going, we all know it's gonna fail.

Craig Spodak
0:04:20
We all know it's gonna fail.

Peter Boulden
0:04:21
If you wanna figure out how government works, go down to the DMV and renew your license. That's what you're gonna get when the Inflation Reduction Act, I mean, it's going to get more of the same. But I think overall, though, I mean, actually, you know, Pete, I'm curious because I always, every time we talk about economics, I always want to really just listen to you guys. My opinions are not that good.

Trey Tippit
0:04:42
No, I mean, so look, that is – look, just can anyone see the future? Absolutely not. Could we get out of this somewhat unscathed? Probably, but I would be very surprised. That being said, here's what you do, right, in my opinion, and I don't love Warren Buffett, but he has some quotes, right? You want to be fearful when everybody is greedy, and we've had some greed in the economy, some froth in the economy the past two years, let's just call it. Okay, so you want to be fearful when everyone's greedy, and then greedy when everybody is fearful. And so I believe where we are coming into, you can't avoid the headlines. You know, us as business owners, us as dentists, people listening to this pod, you know, the internet surrounds us and all we are seeing now is doom and gloom, inflation and war and federal printing and you know, all these things, right? Interest rates rising. So if it bleeds, it reads, and it starts to affect, you know, it starts to brainwash you to effect. And so people start clamming up. And I was gonna actually mention that in the last pod, is that we talked about September. And in a vacuum that's not related to all this stuff, it's easy to say, hey, identify the trends. But some of it may very well be just people are getting scared and starting to spend less, even though you guys had up months. But it affects different regions of the country differently at different times. So where am I going with this? Craig, I know you wanted to hear kind of an outlook. Is that I think when you set a plan, right? And my plans were set in place long, my expansion plans were set in place long before, you know, they were set in place in the greedy phase, let's just call it, the past couple of years, not my greed, but in a greedy phase of the economy where everything was just blowing and going, buildings were selling for 4% cap rates, you know, everyone was getting stimulus money. So my plan has not changed because I believe in the thesis of the expansion. Okay, so I, you know, 5% money is what kind of we are currently looking at right now for business loans if you have really good relationships. I'm borrowing money at 5%. Is it as great as 3% like it was a year and a half ago? No. But if that is the metric for I'm going to be successful or not in this endeavor, that's the wrong question to ask. If that's where you're thinking, if your fear is predicated on a couple percent interest rate, then it's probably not a sound investment. No, absolutely. Yeah. Yeah. You're not running a profitable enough business to look I'm not gonna I am NOT gonna run hog wild trying to just like pick up things that people are dropping so to speak metaphorically But you know it get into the greedy phase of people being fearful. I'm going to move forward with with cautious Optimism yeah, and make sure that I am backing up the decisions. I'm making on data not emotion full stop Not emotion. Full stop. Exactly. Granted, I don't have a crystal ball like I just started this monologue with. I don't have a crystal ball. No one does. But I sure as shit don't want to be sitting here in 2024 saying, Oh, wow. I paused and I could have expanded and nothing bad happened. Right? So, that is a bigger fear to me than facing the rocks in front of me, is the woulda, coulda, shoulda, is far more regretful for me than the pain of saying, like, I did it, I was the man in the arena, so to speak, and I did it. And I got cut up, but I did it. And I would much rather live that way. And that's kind of how I've always lived, you know, as Dwight tells you by culture. There you go. That's right. It's such a, yeah, I mean, that's such a beautiful, I think about that all the time, Craig. I have that too in my closet.

Peter Boulden
0:08:26
I just got this on Amazon. It's one of my favorite things. So I had that on my desk before I ever did my first move, and it was always just like, you never want to slip into the gray area of neither knowing victory nor defeat. And I agree with that. If your plan is to step on the gas, don't let the economic cycles trick you. I think those that are gonna be scared through this cycle, you're gonna get hurt worse. When we had the dental intel guys on, we saw that the bottom 15% and the top 15% both decreased and grew at the same percentage. So the lowest 15% of practice, dental practices during COVID, like decreased by 80%. The top 15% increased by 80 percent. So it's like whatever, you know.

Trey Tippit
0:09:18
It's Pareto's principle, right?

Peter Boulden
0:09:19
Yeah, and it's wild to see that it's really your psychology again. If you are.

Dwight Peccora
0:09:24
But with that being said, I think the most important thing that you're saying is you're exactly right. But that also means that the majority is in the middle, getting on social media, listening to each other, and staying status quo. So if all you're doing is getting in there, getting on social media, listening to each other on some group or calling your buddies and seeing what they're doing, you're like okay I'm doing what they're doing, that's awesome, okay then we're all staying status quo, great. Well guess what, the highs and the lows need that middle center to stay status quo. Because the truth is, the acquisition, the development, the merger and acquisition, the consolidation of our industry which is actually being forced by that status quo is what's making it happen. So I agree.

Peter Boulden
0:10:05
Being in the right circles is the absolute greatest thing you can do for yourself. If you wanna be, if you wanna get fit and all your friends are not fit, you're not gonna get fit. I mean, for me, like, or if you want the economic circles, the type of, it's just so important to be discerning.

Trey Tippit
0:10:25
Show me five smokers, your five friend smokers, you will be the sixth. Yeah. Like it's just, it's just.

Peter Boulden
0:10:31
So Patrick Bet-David today just put this out two hours ago on Instagram, I loved it. It says, if everyone around you complains, odds are you're a complainer. If everyone around you feels helpless, odds are you are helpless. If everyone around you is pursuing big dreams, odds are you are pursuing big dreams. Choose your company wisely. My buddy John, I know Dwight, you've met him. I don't know if you've met him, Peter. He single-handedly changed the trajectory of my life. He's my friend. He just started telling me things. He would meet with me and Erica, talk about profitability. He's like, I know it's just 1%, but 1% when you're at your size you are, and 1% here, and this is what you need to do." I watched his leadership. I mean, the guy is a rock star. Fort Myers just got blasted with a hurricane and their dealerships are okay. They went over there and they started taking inventory of the people that lost their houses who didn't have generators. They bought like 50 generators. They literally set up trailers for people. The business is open. It's not your responsibility to take care of your employees' housing. My buddy Jeff went over for four days. He's been chainsawing, literally in the trenches with people, with tractors and equipment. He's really handy. Chainsawing. The guy's worth hundreds of millions of dollars. It doesn't matter. That's just who he is. He would be there for anybody, but these types of leadership examples that I got to witness, I'm like, damn, would I do that? Would I write a severance check like that?

Peter Boulden
0:12:04
Would I do this?

Peter Boulden
0:12:05
It's the power of the network. It's the power of the network. And if you're just – for those of you who are – just what I'm trying to say to kind of land this comment is as we go through a recession, your company matters more. When it's a polarizing time, either the sky is freaking falling or don't worry, there's still opportunities. When there's a recession, it's magnified by 10. So if you're in the wrong circle in this recession, you are going to have an expanded effect of the recession in a detrimental way.

Trey Tippit
0:12:34
I agree. That's very good. That's very good intel. I mean, I know we beat that drum a lot, right? Put yourself in a group that is not a crab pot, not a group that… I mean, in crab pot, Craigie Boys asked what I mean by that is, you know, if you ever see crabs in a pot, they try to get to the top and one of them almost escapes the other One kind of pulls him down. It's like whoa. Whoa. What are you problem? The problem that's so tricky about this distinction Peter is when you're in a crab pot group of friends You're a crap. You're a crab as well. Yeah, so you don't you need the self-awareness like oh shit I love hanging out with Johnny and his wife Diane, but you know what they're like this Do I really want to be like that? I mean I do this with every single friend I have I say to myself would I like to be more like this person? And if the answer is no, I'm done. I don't go to dinner again with you. My wife has taken me out. She thinks I'm impossible. She's like, Craig, you are so visibly disturbed by those people as kicking you into the table. I was like, I can't help it. I can't. I can't. I don't have ability to bullshit. Like if I'm not if I don't respect you as a person, I can't be your friend or business partner. Well, you're so protective.

Dwight Peccora
0:13:40
I guess the perspective on that is you're protective of what ends up entering your ears and how you spend your time.

Peter Boulden
0:13:46
Because you've been exposed. That's the September comment.

21
0:13:48
Yes, exactly.

Peter Boulden
0:13:48
So if I met a dentist who's like, well, you know, it's September, I'd be like, what is that? I'm like, you're done. I can't talk to you. If I can't change you or persuade you to think differently,

Trey Tippit
0:13:57
it'll be, I'll have to extricate you from my ecosystem.

Craig Spodak
0:14:00
That's exactly right.

Dwight Peccora
0:14:01
And honestly, that's what happened to me when I was flipping through Facebook and I saw that little comment and I knew because it was a guy from my class. I jumped on there and I was like, why are you not changing anything? You do the same thing every September, every year. If anything, pandemic taught you to pivot and change your business. You're not putting any effort towards changing your September whatsoever.

Peter Boulden
0:14:20
I got to grab. He's a crab. He doesn't know he's a crab.

Dwight Peccora
0:14:24
Like you got to be kidding me. I mean and the truth is that is the natural, that middle section, that lack of growth and lack of depth.

Trey Tippit
0:14:32
It is status quo, but I think that you have a very, it's very important to protect that inner circle because the other aspect that I think is important too is get bigger and more people, you're exactly right, most people are in the middle. Most people are gonna act like that. People are gonna, it's, the more people you put in a room And this is a you may know this there's a psychological phenomenon has a name But basically if someone has an accident right in front of me, I will run I will run to them and help them There's a point at which there's ten people around and you say well someone here is going to help them So you it stops initiating action at that point in time. So your inner circle along, you know, and Craig, wiping people out that are negative is highly positive in that regard because it keeps everything small in that regard. It's a supreme protection of that inner circle. That's a really good aspect to do. But as you find both, you know, I see this, the reason I bring this up is I look at, say, hygienists or administrators or assistants or docs, pick a subgroup of any any practice you have same thing happens crab potting and it goes you can flip it on its head too so well the antithesis of crab potting is what but because that's company is the no but the antithesis is what what's that thing like a rising tide floats all ships or whatever it's just there is

Peter Boulden
0:16:07
And you know, I think it's just you know

Trey Tippit
0:16:10
If you're stuck in this in this paradox, right where you're where you you have to change your environment full stop And I'm not saying that you have to get into an environment where people are saying Hey, let's expand. Let's grow. Let's do that You know that to get there because that may mean not what you want But you have to get in circles of positivity where it's not low as in me all the time Where people play the victim card because it's an easier narrative, then I just didn't prepare and I better do now Nowadays the victim card is is celebrated, so it's not just an easier narrative You're a hero when you're a victim, so it's there's a cultural current That's pushing us this way, and it's like no wonder. We're all sitting here on this you know Monday morning talking about this it's through selection we all have the same personalities of trying to grow trying to be abundant trying to figure out ways to do it we all fall down many times we skin our knees and we all just

Dwight Peccora
0:17:04
get back up and do it again. I have to say something that I think in particular for what everybody who's listening like this is so critical. We lose our gratitude for the profession and the effort we went into to get to here. And the truth is, is that if you literally look up in place-

Trey Tippit
0:17:23
Wait, what do you mean we lose it?

Dwight Peccora
0:17:24
Consumer spending. If being dentists, being in healthcare, people forget the fact that we get to run such incredibly profitable businesses that has a hard way to get into it with low competition. On top of that, we have the ability to create something that community needs. When you look up inflationary consumer spending and what is prioritized in our outlook, we're going to have a hard landing, we're going to have 18 months of consumer spending that's going to be more inflationary related than anything else. Inflationary meaning too much money with minimized number of goods, right? So you're dealing with this. Even if it's stagflation, lack of growth and having that. What is the number one category on spending that consumers spend on during inflationary times? It actually has to be necessities which tends to be healthcare. That is one of those items. So most people who are freaking out, yes, everybody else out there, all other industries, they're freaking out. How am I going to get an edge over everybody else? But on top of us, we've got this stance where we've got a healthy business and people are creating negativity around that. That should be the basis of your abundance mindset

Peter Boulden
0:18:30
within the healthcare. And some of those people that you're mentioning, Dwight, have massive platforms. There's one that Dwight and I always just like commiserate on. The guy's got a massive 35,000 audience on Facebook and it's just non-stop toxicity. You know how hygienists are, you know how assistants, like FML, you know. It's really costly. Like when you have a microphone you have a responsibility Yeah, I know it feels good to just drag everybody down as a crab But like that's a pretty fucking big crab pot 35,000 to you're dragging down like a third of the profession

Trey Tippit
0:19:03
I want to do two things as we kind of are on this topic a I want to make sure we're focused on I Don't want just to pontificate about a problem that everyone knows about right I want to kind of pontificate about a problem and then propose Solutions to get people thinking if they're in a fearful state of mind right now in the second thing. I want to do is Talk about the silver linings of this period Coming up if it is a hard landing if there is a recession. What did we learn from tooth? You know Craig you and I Trey we're in business, and I think Dwight you were coming out of school in the last recession Yeah, so there were lessons that learned. And in hindsight, in hindsight, like that PTSD taught me a lot of things. And so recessions don't have to be bad things, especially if you've been a good steward of your capital up to this point, there will be a lot of opportunities. So let me illustrate where I see, because it's easy to go doom and gloom and oh shit the sky is falling. Guess what's about to get much better?

Peter Boulden
0:20:06
Employment.

Trey Tippit
0:20:07
Of top talent. People are about to stop living with their parents or stop living with the baby boomers. It's an interesting thing I actually got from the All In podcast. The baby boomers right now control one, of the United States, control one seventh of the total world economy. Of which they got… Just the US. So it's 70 trillion dollars of the 700 trillion dollar market cap of the world. They control 70 trillion dollars. So they're in control. It's not the government, it's not Morgan Stanley, it's the baby boomers. Pretty much.

Dwight Peccora
0:20:49
So you want me to translate that?

Trey Tippit
0:20:51
So here's where I'm going. Yes. So when they're so abundantly rich, it's allowed for their successors to be a little lazy, living in their parents, you live home, right? And so that's where I get baffled so much. It's like, how are people not having to go back to work? The stimulus was so long ago. How is this, how is the job market still shitty? So there are more jobs out in the market than there are people applying to be that. And that is not healthy. That is a frustration point for entrepreneurs and business owners, as we've seen in our masterminds.

Peter Boulden
0:21:23
My largest point of frustration right now for me personally.

Trey Tippit
0:21:25
Yes. And Craig, we experienced that last year in saying like, we just can't get top talent. We can't get good talent. We just have to take warm bodies. And so, where I'm going, I like to point the positive, is that I think if you are a thoroughbred practice, you are about to get thoroughbred talent if you haven't already. We are starting to get a lot more influx of the people that we are accustomed to getting. The past two years I think has been hard for everybody, right? Because, and people were having to overpay in certain scenarios, right? People were getting poached out of certain areas because other dentist practitioners were desperate for a warm body. So, that is a silver lining in my opinion, is that in times like in war times, I think you get some of the best soldiers.

Dwight Peccora
0:22:12
And what you're saying by that is in an inflationary environment, low unemployment is a dangerous thing. It actually causes more inflation, but we're about to have a higher unemployment, more businesses shutting down, and therefore you're gonna have more individuals applying and back at it.

Trey Tippit
0:22:27
Yeah, I think we're about to get back to-

Dwight Peccora
0:22:29
Hey, I work for that lower rate.

Trey Tippit
0:22:31
Healthy unemployment levels. Yes.

Dwight Peccora
0:22:33
So that's what he's trying to say when it comes to the actual practice level. As an individual practice owner, you can be prepared for people to stop showing up. Like we do in Texas, showing up with California fees for a hygienist, things like that. A lot of that's going to fluctuate and go back. And really it's because it's a bunch of crap hots on social media in their own hygiene groups or no no

Trey Tippit
0:22:52
this is just gonna be this is gonna be just economic stability economic equilibrium right where the pendulum swung way too far because like I'm buying money and now it's gonna swing back because everyone's gonna pause which then things roll downhill and and so that would be I'm trying to just go over some of the blessings and and and look for the silver linings and be prepared for that. The other thing, and this goes back to my talking about 2008, had I had a bunch of capital in 2008, I could have made life-changing opportunities back then. Because when people run, I mean sorry, when people get scared they want to drop things, they want to leave things. There were bargains left and right. Unfortunately, I was in a time period of my life where I was just like, I'm just gonna get out of this unscathed. It wasn't capital, I didn't have equity, I didn't have good banking relationships at that point. I was a younger dentist. And so there will be opportunities. So instead of hunkering down and looking fearful, you don't miss the opportunity of a potential good recession if we do have a hard landing. Maybe you all of a sudden now get that piece of dirt that you've been looking at for the past five years, driving by it every day, if you're a dentist. Right? Maybe you all of a sudden, maybe one of your favorite buildings is all of a sudden now on the courthouse steps. Who knows? And I'm not saying that this is a good place to be, but it's out of your control, so why not take advantage of it if you can?

Peter Boulden
0:24:18
Yeah, I offered $1.3 million for the land that my building sits on. The guy told me to go fly a kite. He literally had never been here. It's on Atlantic Avenue. There's one thing I know that means it's waterfront. I'm like, no sir, it's not. It's Atlantic, like the Atlantic Ocean, but we're three miles from the water. So he was delusional. Same property, same man, 2011, 550, he took it.

Trey Tippit
0:24:51
Yeah, and you're right.

Peter Boulden
0:24:52
And so, translation is, things go on sale, right?

Dwight Peccora
0:24:53
Same thing as with COVID. Yeah, but the funny thing is when assets go on sale, no one wants them. When the TV goes on sale, or that- Everybody buys. Everybody buys it.

Peter Boulden
0:24:57
When assets go on sale, no one buys it. Which is a freedom advertisement. So, to summarize, we're seeing the Black Friday opportunity within our industry. Right. And it keeps going on, as people are not seeing it that way. I agree with you.

Dwight Peccora
0:25:03
I mean, there was a practice I was going to buy a DVD, and I was going to buy a DVD,

Peter Boulden
0:25:04
and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD,

Craig Spodak
0:25:08
and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD,

Dwight Peccora
0:25:09
and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD, and I was going to buy a DVD, industry. And it keeps going on as people are not seeing it that way. I agree with you. I mean, there was a practice I was going to buy just prior to COVID that was 850 grand to buy it. After COVID, I spent 325. There's a big, big difference.

Trey Tippit
0:25:25
But it was a time. One more silver lining, Dwight. Now may be also a time that you could either look for a merger with someone else, right? Because strength builds numbers, right? A merger or an acquisition with a practice. So now I think it's the time too in situations like this where dentists can potentially hold hands together and become stronger through an acquisition or through a merger. And so that's another kind of silver lining opportunity. Maybe this is a time where you strengthen yourself up, getting ready for the bull market and absolutely getting ready to clobber when the tides do turn and they will turn again, but we just don't know how long it's going to be.

Peter Boulden
0:26:02
This is a testament to also staying, you have to build a good foundation, going back to what you were talking about of part one, come up with solutions. You have to have a strong foundation, not just throughout the business, but say financially, you want to always be ready for things like that, because you can't predict the future. You don't know when that next cycle of the downturn happens, although now you're staring something in the face. And it's not just, say, in the industry. When assets go on sale, usually all assets go on sale. So your dental office goes on sale, your land goes on sale, stocks are all down. You have assets all around you. So building a good foundation all the way through.

Trey Tippit
0:26:42
But it's all relative, too, which is interesting. Let me pause you there for just for a second. And I'm gonna pull this back to real estate. When things were going crazy in real estate recently, my buddies were saying, God, I could sell my home for $4 million. I said, yeah, but your replacement costs have inflated the exact same amount. So it's all relative. Just because things like, and so I'm saying, it's like, yes, things go on sale, and your assets may have gone down in value, but it's relative to now what you can acquire more for, potentially. So it all stays in the flux. And it's usually, you know, okay, cars go first, real estate goes last, and things go last. But if you learn how these cycles work, you can wait and time your opportunity a little bit better. I think practices, obviously, are predicated on cash flow, right? So the value of a practice, you're saying, your practice value goes down, is predicated on cash flow. So you usually look at a rear view of 12 months. So it might be, let's just say hypothetically there was a hard landing Dwight in January 2023. The practice would be at full lull potentially in January of 2024, because you have to do it, you have to look back at the preceding 12 months. So that may be actually when the best value for dentistry comes in. Now real estate might be a quite different thing. You know, cars may be quite a different thing as soon as they fix this chip supply shortage. You know, things like that, the supply chain thing. So it happens at different points in time and so I just wanted to illustrate that because sometimes people say, well, that's, this is still high, meat's still high, cars are still high, right? And that's an inflationary thing in supply chain versus an asset thing. And there's a big distinction. What are you thinking about, Greg? I see your

Peter Boulden
0:28:34
eyes up and to the left. Yeah, I'm just thinking that, well, I'm thinking a lot about a couple of, you know, I think that we conflate as dentists, we conflate this idea that the only way through business is your dental business. I'm really happy that you said that all assets go on sale because if you're an associate and you listen to this podcast and you're like, man, if I was just an owner, blah, blah, blah, blah, blah, I just want to tell you flat out, I call it bullshit because you don't have to own your dental, I always say this and I want to say it again, you don't have to own your dental business to be a business owner. Like part of the thing that gives me a lot of comfort at this point in my life is that I have so many varied income streams and what gave me a lot of discomfort in my life was that I didn't. I was consolidated. So if we could run two groups of people as an economic experiment, the one that's associate working in an awesome, vibrant practice that has a disciplined ability to invest in real real estate or other passive income producing businesses, or B, same level of producer as a dentist but owns his own practice and never really grows it into a business, which is most. 70% of dentists are still solo practitioners, so they're not business owners. And you took those two people and ran the trajectory like the Monte Carlo 20-year scenario. I would put forward, and again, I'm looking for feedback with this, that's a guy who is diversified as an associate and decoupled his long-term business asset from his wages would be far better off. Yet, we're all drinking the Kool-Aid of like dental business ownership. I just think that when you say this and those people that are maybe just solo practitioners are not looking to expand their dental practices, this is the time that you want to buy those other assets. This is your one chance in the rest of our lifetimes, probably, where you get this possibility to really asymmetrically move your generational wealth forward.

Craig Spodak
0:30:37
This is it.

Peter Boulden
0:30:38
It's coming. We knew about this early. Peter and I were borrowing money in September, and I borrowed the most money I've ever borrowed in my entire life at 2.5%. And I knew it. We were saying it. And now I'm getting letters from other, previous masterminds from other, you know, I wanna do it now. It's still good at 6%, but it's not as good as 2.5. And there's gonna be, I think, a massive opportunity. And you gotta look at it that way. You can either hunker down and weather the storm, or go out and pick up all the other shit that everybody's dropped. And I think it's just, again, it's psychology. It's your psychology.

Peter Boulden
0:31:11
Do I have anything? Yeah.

Dwight Peccora
0:31:13
So with that being said, let's tackle some very specific things that people are doing in their practices right now, or should be doing in their practices when looking at potential recession, 18-month consumer spending, inflationary spending, and things to that degree. One of those categories, I mean, I can throw some things out there. Things to be thinking about is inflationary money, which Americans don't really understand inflation as much because we haven't experienced it as much as the rest

Trey Tippit
0:31:43
of the world, right?

Dwight Peccora
0:31:44
But one of those things is your money's worth less, less, less, right?

Peter Boulden
0:31:47
So there are a lot.

Trey Tippit
0:31:48
It's a melting ice cube is what you're saying.

Dwight Peccora
0:31:50
Yes, it's a melting ice cube.

Craig Spodak
0:31:51
And so that would be the thing for those.

Peter Boulden
0:31:52
Get me an ice for next week.

Dwight Peccora
0:31:53
If you're, first off, if you're not pursuing your AR, it's a melting ice cube that's out there and hasn't been pursued. And you need to be able to get after that money and pursue it. There's no doubt about that, bring that in. You should always have a tackle on your AR, but that seems to be one of those things where people get so worried about their business, they forget about the money that's out there and it's also melting. So that's the first perspective that I would give. The other thing I would say is, is remember that what we said earlier is inflationary consumer spending, people will spend money more on things that they necessitate and need and want to do it faster, right? And right here and now. That's gonna be one of those things that relates to bread and butter dentistry, right? So this goes back to Craig's discussion about the fact that if you build a well-established infrastructure, you rarely worry about a September things to that degree. Well, that's because he's got all types of comprehensive care, but he's got a balance in there where he knows that his hygiene program's strong, he knows that from a recall process, but also his bread and butter dentistry. It is a huge portion of his business. And so, unless if you're on the opposite extremes of those specialty cares, you have to realize that during inflationary times, people will spend money for healthcare, but it's usually emergencies, same day care, maintenance and management. Those things will still spend the money on, and those are things that we really need to be thinking about because they know that it's also melting ice cube in their bank account and they need to spend it as well.

Trey Tippit
0:33:17
Dwight, bull markets, about what we've been in, allow you to be sloppy. Yeah. They allow you, they think that you are God's gift to real estate investing, God's gift to dentistry, and meanwhile you could have thrown a dart at success. Stock markets, yeah. Right, so bull markets allow you to be sloppy and they give you a false sense of confidence. Yeah. And you and only you really know that because people pat you on the back like you're doing so well. I'm up 20 percent. Yeah. OK. So. Well, listen, we're going to find out who's real and who's not. Yeah, I agree. You know, there's guys out there that you're feeling bad about yourself because they've grown from zero to 10 practices and their startup and their leverage and blah, blah, blah. Listen, I mean, God bless everybody, but this is the shakeout. Everybody is a genius. You could have thrown darts at the S&P over the last five years. Even in real estate, look at how many people left our industry to become real estate agents. They were hygienists making $120,000 a year, $100,000 a year, and now they're real estate agents and no one's calling. Let me land the plane of where I was going with that is that if you're hearing that and saying yeah That's kind of kind of me like we just got better even though I didn't really do anything to make us better right as a practitioner or a practice owner I just think it got better. You know because there's more money in the economy. That's that's fair, but now would be the time in my opinion That you revisit and audit all the things that got you here Yes, meaning identify the things that worked. If you know that, you know, for instance, also COVID allowed made us sloppy in my opinion. PPP made people sloppy. PPP made people sloppy. But COVID really made, I was kind of looking at things the other day in our ecosystem about like, you know, there were just things that have never been brought back into fruition after COVID in my ecosystem. And I was like, why are we not doing this? And I was like, I don't know, just kind of not doing it. But like, you know, like for instance, we were only, we were mandated by the law, by the government, to only do the things that were absolutely needed, right? So we had to get rid of our internet cafe or internet cafe, you know, drinks and refreshments. We had to stop doing paraffin. We had to limit this and that and this. It became very archaic dentistry. And guess what? That's a lot easier, that's an excuse, and that's a lot easier of a level of service to provide someone, right? When it doesn't have all the fluff and the frills, customer service just kind of sucks all around you right now. You look at hotels, you look at a lot of restaurants, like it just isn't back to where it was in 2018.

Peter Boulden
0:35:55
Yeah, if your plexiglass is still up all over the place, you know, maybe if you're listening to New York, you might still be mandated to do that or California, but like that's negative customer service. Like if you're the last person to pull your plexiglass down, that's like, doesn't feel good.

Craig Spodak
0:36:08
Yes, great, to your point,

Trey Tippit
0:36:09
like review kind of some of that, right? If you've gotten a little complacent with COVID or just like, because revenues have been really good, like why change anything? We're doing great. Because you might be forced to. And just like we started this podcast or last, by the time you're showing symptoms of pain it is too late it is a systemic problem that now you are gonna have you know make potentially months to years to fix as a as opposed to it could have been this course correction so audit your systems ask for reviews make sure that cadence is going that is your website what you like all these things get ready for war before the war is here. I love that Lao Tzu quote, it's better to be a warrior in a garden rather than a gardener in a war. Better to be a warrior in a garden than a gardener in a war. So stay fit, stay ready, stay hard like David Goggins and whatever it is. I mean all that happens

Peter Boulden
0:37:07
is we're all in some degree failing to plan for what can happen.

Dwight Peccora
0:37:10
Dr. Pompa I think this is a great summary concept for everybody listening. Because even if you don't have dry powder to output and buy stuff and you're in that place and things to that degree, this goes back to our mastermind call that we had earlier this month where there was a discussion about the true pandemic in our industry right now is everybody get bigger, get bigger, get bigger, more offices, more numbers and this and that. And the truth is, is I brought up the quote from Truett, from Chick-fil-A in the 1990s when there was a big competition between Boston Market was coming after them and was saying we were gonna hit a billion in sales and they're going after him in Chick-fil-A and the board all sat together and they said, well, they're coming after us, they're the chicken competitor or something to that degree. And we said, we've got to compete and we keep doing that. And Truett sat at the end of the table and he started pounding on the table and he stopped. He says, all I hear is everybody talking about wanting to get bigger, but I hear nobody talking about how we're going to get better. And if we get better, our customers will demand that we get bigger. And that, in that time, in that time he slammed and carried and totally took over Boston Market. Anybody know Boston Market out there? We all know that there's free plays popping up everywhere because he decided. And for those of you out there who, yes, you may have an opportunity to dry powder to expand and do. Some of you don't. It doesn't matter. You're in a place where you can get better. Your customer service, your individual relationships, your focus, your phone calls at the end of the day when you're tired and you didn't get to see as many patients, guess what?

Craig Spodak
0:38:46
You should call.

Dwight Peccora
0:38:48
You should check up on those patients, regardless of their insurance plan, you should take care of them and do what's right, because guess what, that's making you better, and then one day, you will not be able to care, whether it's a September, whether it's anything, because you built something better that is requiring to get bigger because of what your people need you to be.

Craig Spodak
0:39:05
So that's the quote.

Trey Tippit
0:39:06
And if you've been doing, if you've been like, just this guy who's like, oh, I only do all on X's now, like, that's me, like, you might have a hard landing yourself if that's, if you think you're going to stay specialized. And I can tell you this as someone who had a boutique practice in 2007. And I spent the next five years pivoting out of that boutiqueness after I got the pain of 2009 because you have these high highs, you're going to have low lows. And so like Trey, Trey will probably be hurt if we have a recession, Trey Tippett will probably be hurt the least on this call because he is obsessed with the base hit, not the home run. And so, go back to the bread and butter and focus on the one hits. I know you like to place six implants at one time, but maybe placing just one on a patient is still pretty cool. Right? You know what I'm saying? Or doing the ground.

Peter Boulden
0:40:01
We get a lot of blinders, you know, so people, like some of the things that people are not doing is like, they're not doing third party financing. Because my patients don't need that, they don't want that. But you've got to offer it. Or you know, we're not doing save day dentistry because my patients don't mind coming back. Or we don't have a scanner because my patients don't mind getting impressions. Or we don't have an in-office mill because my patients don't mind temporaries. They don't mind until they mind. And I think all business really is, and I said this the last podcast is innovation and marketing so you innovate you provide more value Provide more value that either the people you serve or the people that work with you and you market it That's all it is so if you're literally staying the same you're gonna get your ass kicked

Dwight Peccora
0:40:40
So you've made a better session or not yeah, and you described the spending habits of the largest living generation Which is the Millennials so you've got the baby boomers who have all the money but the spending habits of how your methodologies are for your marketing, your financing, that is the basis of your business still and you have to do that. You've got to be prepared, that's online scheduling, that's same day dentistry, that's financing availability, monthly payments as opposed to other. That is the methodology and I totally agree with you, I think that's where we have to focus. And you've got to build it and have it ready. Don't freak out when it's here and it's too late and jump on it and say, oh, well now we need to implement this and this and this because guess what? All those third party vendors are now gonna charge you out the wazoo for that. You're behind this.

Peter Boulden
0:41:24
It's an interesting thing too. A lot of perspective I just want to share as having 10 different doctors working here, associates, and you get to have people in your life that maybe they're great people and I love each person that works here, but some psychology is very different from mine, so I've just noticed this trend That people get when they get really really busy. They want to slow it down They just want they want to apply the brakes and a buddy of mine who? Unfortunately passed away, but he ran the largest Porsche dealership in the United States. I was talking to him When my doctors wanted to slow things down. He's like what's going on like yeah, I got to stop taking these insurances it's too hectic it's too busy he's like never apply brakes to a business businesses can never have brakes applied if you don't want to work you want to work three days a week or two days we find the practice needs five days I'm gonna hire the third the third the person that's gonna work three and four or five days or we can't go out of network for that you what you can go out of network but I'll put another doctor in that network. So there's certain personalities that may want to slow your business down. It's fine for people to slow down, just don't slow the organization down. You can kill it very quickly.

Trey Tippit
0:42:36
Yeah, put yourself in it. You know, instead of that damn social media that you guys are talking about, that kind of the crab pot, start listening to like other podcasts or YouTubes. I mean, you know, like Patrick McDavid, like he isn't he is it's the number one business podcast right now by the way I don't know a good reason yeah You know the all-in potluck. I know I talk about these But like oh your brain with this optimism as opposed to like looking on message boards who gives a shit What other dentists think about the economy? Gives a shit what other dentists think about the economy and here we are talking about the economy Yeah, well, we're all I think that there's you know just just we're all growing You know I just don't want the people that are contracting to just spoil people with their ideas contaminate their thought by the way funny Patrick but David thing he was in the office and one of my team members didn't know who he was and was assisting me and said, oh, by the way, my friend is a huge fan of your podcast. And Patrick David said, thank you. And my assistant's like, no, you're yours.

Peter Boulden
0:43:49
Dr. Spodek. True fucking story.

Peter Boulden
0:43:51
And Patrick P.B.D. looks at me, goes, brother, that's powerful right there. And I said to Jenny who's my assistant like Jenny he actually had like like billions. She's like oh, yeah nice to meet you There's a getting the French can't stop talking about your podcast to me right in front of him Oh, and it would have felt planned if it wasn't her natural dismissive nature. It was so funny

Craig Spodak
0:44:16
That is funny

Trey Tippit
0:44:17
What's funny is I I was a fan boy saw him met him in the breakers Craig was actually there at the same time at the breakers. I was like Craig. It's my favorite guy, and he's like, yeah, yeah, yeah, yeah. And like, lo and behold, this guy becomes a patient of Craig's practice. Now Craig has a relationship with him.

Peter Boulden
0:44:31
When I was the fanboy, I actually texted a video of him like, Peter, where are you? But he's a nice guy.

Trey Tippit
0:44:36
He's a good guy.

Craig Spodak
0:44:37
He's awesome.

Peter Boulden
0:44:38
He's a sass. He's awesome. But again, just tying it back to what we were talking about, the guy grew up, and you know, Peter made me read his book before the podcast, The Five Next Moves, right? He grew up fleeing a violent wartime Iran, his car with his father driving crossed the bridge and he looks in the rearview mirror behind, it's a child and the bridge blew up. It could have been him. So this guy has an allergy to being poor. He's so scared of it. He's going to go to billions. You know, and even I was listening to Papa John, Paul, Papa John Shatner or whatever his name is. He's like, even when I had like 50 million, I would have nightmares I'm going broke.

Trey Tippit
0:45:16
A hundred, yeah. Actually, I said that just this week. He said, you know, even when I knew I had a hundred million dollars, it was the first time I was able to really get a good night's sleep.

Peter Boulden
0:45:24
Right, but like that is crazy.

Trey Tippit
0:45:26
Crazy.

Peter Boulden
0:45:27
Like, it's like you're afraid of snow, you move to Jamaica and you're still having nightmares of snow.

Craig Spodak
0:45:33
It's impossible.

Peter Boulden
0:45:34
He has so much money. And it's just, you know, there's a healthy balance to be paranoid and wanna innovate, but then also just pat yourself on the back a little bit too. Like if you spend 100 grand a year and you have X millions of dollars in the bank, even if you live to 180, you're not spending that shit.

Craig Spodak
0:45:52
Right?

Peter Boulden
0:45:53
So like feel successful. The worst thing is when you're super successful and you feel broke and poor.

Craig Spodak
0:45:57
That sucks. It's true, true.

Peter Boulden
0:46:00
All right, anything else?

Trey Tippit
0:46:02
Let's wrap it.

Craig Spodak
0:46:03
Beautiful.

Peter Boulden
0:46:04
This time baby I'll be playing through. This time baby I'll be playing through. This time baby I'll be playing through. This time baby I'll be playing through.

Transcribed with Cockatoo