Dentists Who Invest

Podcast Episode

Full Transcript

Dr James: 

What is up everybody? Welcome to the Dent’s Unfest podcast. This is a podcast episode where I share some of the coolest things that I learned throughout my voyage into finance and, of course, running the page and community. These lessons are allowed, or what allowed me to take my life to the next level. These lessons are the things that give my actions purpose and intent and also allowed me to think to myself hmm, just where am I putting my effort, just where am I putting my labor? Because we have to be mindful of that in order to get the best results. The whole point in life, at least in terms of our productivity, is to think to ourselves how can I maximize my output for every unit of input? How can I get the most out of every situation for every unit of input that I put in? So, if I’m putting in a lot of work, at least I’m getting a lot of returns for it. Think about it. If it was about pure, unadulterated, blind hard work, then the wealthiest people in this whole earth would be people who are hard, physical, manual laborers. Now, here’s the thing people do different jobs for different reasons. However, if our purpose on our goal, is to be remunerated to a higher standard, then what it means is we have to be slightly purposeful and intentional with where we’re putting our effort, because the proofs in the pudding we know that hard, physical, manual labor actually that tends to be something that is not remunerated so well. Now, I can’t speak for every single person on the planet who is like that I don’t want to tread on any toes but of course that’s something that most of us would agree, aligns with the reality that we can observe, which is cool. So how can we begin to think to ourselves Actually, I want to enhance the output I get for every unit of input in my life. What are the units of input? Time, effort. Those are the main two. If I’m putting time into something, I want to get lots of returns. If I’m putting input and putting effort into something, I want to get lots of returns. What can the returns be? The returns can be knowledge, the returns can be money. The returns can be lots of things. What I mean is that I get the most for every unit of effort that I put in, because here’s the thing we can get caught in this vortex or illusion where we think that we have to be constantly busy to be the most productive. However, if we get paid £1 million in a year, or £5 million or £10 million, £1 million is still £1 million, whether we work 365 days out of the year for it, sweat and toil 14 hours a day or we worked one hour in the whole year. So, whilst most people might say the second scenario is unrealistic and possibly that might be unattainable for most of us in our life, because there has to be an element of good luck that comes along, at least with that mindset. We can look for the areas that we can get more return per unit hour. So how do we begin to get the mindset of the individual who thinks to themselves actually, how can I increase my output per unit of input? So in essence, we have to look at the part in between, the system or process that we put our effort into in order to get that return. So when we enhance the part in between, when we enhance the system and processes, what that means is that when we come along and do put some effort in, we get so much in return. It’s actually flipping insane, but most of us never think about how we can enhance that system and process. The very first fundamental step to doing that is to understand how we can do that, how we can undertake that process. So what am I talking about? I’m talking about leverage. The definition of leverage is that we get the most out of the system for every single unit of input. We have to focus on improving the system first. Therefore, we must understand leverage. Archimedes has a saying give me a lever long enough and I shall move the world. What did he mean by that? He meant that instead of coming along and trying to move the world, just give it a great, big old push, which would obviously never work. He spent time building the lever which he was going to use to move the world. He made the lever so long. Think about newton moments. If you have a lever that strong enough and you make it long enough, eventually the most minimal force, a little, little tiny push of the finger, will be enough force to move the world. If the root, if the meter, if the lever is long enough because of moments, because it’s multiplied, of course, by the distance of the way it is, you know the distance from the pivot, the distance from the point that the lever pivots we go back to physics. So we have to spend time building the lever first of all, and then what that means is we can put in less effort and get more results. That is totally possible. There’s three fundamental ways, three fundamental ways we can enhance our leverage and when we understand those, we know where to direct this energy. What is method number one? Method number one is human leverage. When we employ other people, what that means is that we can ask them to undertake tasks on our behalf. So think about it if I’m going to go out to my garden and start digging a hole in the back garden, I can do it at the rate of one person, the rate of one person per hour. They get that whole. Whatever that is, some people take faster, some people take slower, but it’s still gonna be one person an hour. If I have ten people doing it for me and now dig that hole at the rate of ten people per hour, which means that the process is faster, so I’ve just employed human leverage. I’ve just undertaken human leverage, got other people to do jobs for me and I have to pay them, of course. So that’s the downside to human leverage Because we have to employ other people, we have to find these people and we have to pay them, and we might be in a position to do that. So human leverage is possible. That’s usually not the first place that we look a low. In lots of businesses that is the first place they look. They look to hire others. Of course. Let’s go into the second form of leverage. The second form of leverage is cash. So if we have a lot of money, we can invest it and it’ll grow very fast. However, when you know a little bit about investing, you know that it takes a long time for your money to actually give you returns maybe five years, ten years, something like that. That’s typically how invest in works, and we also have to have a huge sum of money in the first place For it to reliably be able to throw off any meaningful amount that we can live on. Because your code is set of. Rate of return from the stock market is like ten percent. So if your lifestyle means that you need thirty thousand pounds here, well, we at least need three hundred thousand pounds for that to be sustainable. But before you rush off to the stock market to invest in the stock market, please know that there are way more factors to it than that. That’s just a very simple surface level. Analogy is way more complicated than that, and actually we probably need a great deal more than that three hundred thousand to be able to do that reliably for a long time. So what’s the downside of cash leverage? We need a ton of cash in the first place. We actually need to earn the cash. Of course, however, we must know that it is possible. Now here’s the interest and form of leverage the third form of leverage, the third way to enhance that system, the third way to ensure that every unit of input that you’re putting into something is giving you the most output. What am I talking about? I’m talking about automation Using machines physical mechanical machines or software. Right now, there is a huge, huge, huge, huge, huge disparate scope or the number of things that fall into this category. So, for example, a car is a form of leverage. If I want to go from point A to point B, I can do it way faster in the car versus walking. That is one example. Of course, I need money to buy the car. The cool thing about automation is we don’t actually necessarily need money to do it. We do need to Employ some time. There will be an expense in that sense. However, we can start on a budget of nothing and build a way up. What’s another example of automation software? If I write a program that does this the same process over and over and over again, then what it means is I don’t have to repetitively do that process. We can employ that system to work for us. But of course, that is something that, when we have a degree of understanding of coding, means that it’s much easier for us to find and create ways that we can do that. So it’s not always applicable, particularly when we’re dentists and we don’t necessarily have this knowledge. What is the other form of automation? That is actually a form of leverage. Growing a following is a huge part of that. If you post a following to 10 followers versus 10,000 followers versus 10 million followers, actually that post took exactly the same level of effort, but we get much more return on our time in terms of exposure. Or if we have some form of business online, potentially that means that we can get whatever it is that we’re talking about in front of much more people. The cool thing about a following is it doesn’t actually take any money to grow a following, or at least not any significant amount anyway. It is a function of time, it is a function of our skill set as well, our skill set being how entertaining our content is, how engaging we are and how consistently we put it out to the world, how consistent our output is. However, the huge cool thing about that is, like I say, that it doesn’t necessarily need any time. The internet is 1,000% underrated, in my opinion, even still to this day, in 2023, as of recording. There’s so many amazing things that people can do out there. It’s all about opening the doors to find out what the possibilities are. So, in a nutshell, when we want to obtain more wealth, when we want to have more output per unit input, really we must fundamentally start to think about how we can increase our leverage. When we want to increase leverage, it’s one of those three ways. It’s got to be one. So if we say that our goal is to create wealth in life, we say that our goal is to become richer, we’ve got to use one of those three ways, and we might want to. We might want to employ one of those methods, but if we know that we want to get from point A to point B and there’s only three paths, we must pick one if we’re serious about getting there, chances are, the wealthy understand these methods of leverage much more than the average person does. That’s what’s allowed them to excel, or even if they haven’t necessarily heard that, they’ve unintentionally employed one of those methods to get to that point. However, when you intentionally go about undertaking that process, using the knowledge that I’ve just given you, what it means is you can get there faster because you could be purposeful about where you put your efforts. That is leverage in a nutshell. That is how you begin to think on a bigger scale and begin to be able to generate more wealth, more exposure, more whatever it is that you want more output for the task that you’re undertaking in your life, it’s via understanding leverage. Now, let’s build on that, because there’s an extra level of this. There’s lots of extra levels. Here’s another lens through which to look at how you can increase your leverage and also increase your output in life, and that is luck. How do we make more luck come to us? Well, again, we have to be able to understand luck in order to do that. Lots of people look at the wealthy and they think, whoa, those people got lucky. Luck was an element of that, and luck, possibly, is an element of that. In fact, it certainly is. Of course, there has to be a degree of good fortune that comes our way. But the rich know, the wealthy know, that actually a huge part of this is making their own luck as well, which is actually probably the majority of that phenomenon. I would say that in likelihood it’s about 90% the conditions that they’ve created in their life which permit luck to find them on a much more simple and easy way, in a much more simple and easy way than anybody else. Then you’ve got the 10% on top, which, of course, is circumstances and lots of other things, and we have to just be conscious that bad luck can befall anyone at any time, even those who have been extremely successful or those who have yet to reach that level. However, we can’t just callously say that someone’s success in life is purely linked to them creating the correct conditions. Of course there’s many more factors. You have to be really, really sympathetic to that. However, like I say, when we have the correct conditions, when we have the ability and time to manage our own life and design it, be the architect of it us solely as an individual we can be that architect. Then what it means is that we can create the conditions in our life which mean that luck is way more likely to come our way. So what are those ways? Well, we’ve got to understand luck first of all. There are four different types of luck. Type of luck number one blind luck. What is blind luck? Blind luck is the definition that most people commonly associate with luck, which is that it just finds us totally out of the blue and it has no relevance to the parameters and conditions of our life. It has nothing to do with how successful we’ve been or how not yet successful we’ve been, how unsuccessful we’ve been. It’s got nothing to do with success. Whatever your definition of success, I don’t mind, right? What I’m saying is that blind luck will find us completely irrelevant to any intentional circumstance that we have created in our life period. That is the definition of it. So what’s an example of blind luck? We’re sitting in our bedroom, 50 pounds floats in through the window and it lands in our hand. Whoa, that’s so cool, I got lucky. There was nothing that I did to earn that 50 pounds. However, it found me amazing. The next day, 50 pounds flies in through the window again. The next day after it happens again and again, and again. That’s all blind luck, and it’s also passive income, which, again, is not something that is strictly true, because for there to be passive income, there would also have to be consistent blind luck and no effort. So, true, passive income is actually not really a thing. Residual income is better. What is residual income? It’s, when we understand leverage, we’ve created a system that is so lucrative that minimum levels of effort to maintain the system throw off consistent income. That’s a better definition for passive income, residual income. And that’s actually how it really works, because there must have been some effort at some point for that to occur for us to create that system. Therefore, it’s never truly passive. Anyway, luck number one blind luck, the luck that we have no control over whatsoever. That may or may not find us, irrespective of if we’re successful or we’ve yet to achieve success. Luck number two luck from motion. What is luck from motion? By the sheer fact that we’re doing things and putting ourselves out there, luck is more likely to find our way. Find us, come our way. So how do we create the conditions for luck and motion to find us? If we go out to events and we start to network a whole ton, chances are we talk to enough people. There’ll be a connection of value. There There’ll be someone who will reach out to us and potentially there’ll be an opportunity. If we go through life learning a lot of things and employing that knowledge and just testing it out, chances are we’ll find a system or process which can remunerate as well, if that is our goal, or help others to a higher degree. Whatever our definition of success is, luck is the portal to achieve success. We’ve created our own luck simply because we’ve put a lot of effort into our life. We keep putting the ingredients for success into a big cauldron and then the effort that we’re putting into life is just how fast we’re stirring that cauldron. When we stir something faster or we turn up the heat and what it means is that those ingredients are more likely to collide and create something special or create something worthwhile. Again, that is luck through motion. So we have control over luck through motion. The more effort that we put into our life, the more likely luck through motion will find us. Third type of lock lock through positioning. What is lock through positioning? Let’s say you are the dentist that is, the only dentist in the whole of town who can do a full mouth rehab. Those patients will come to you, those lucrative patients will come to you because you have a unique skill set. So you’ve positioned yourself in a position of authority that has meant that lock is more likely to find your way. Now that doesn’t just apply to that one specific instance. Any position which someone can elevate themselves to through their knowledge, through their abilities, through whatever it is, whatever merit that got them into that position, means that more luck will find them because they’ve positioned themselves in an amazing place. Let’s say you’re the only deep sea diver in the whole of the Caribbean that can dive below a certain depth. If somebody finds a Spanish galleon below that depth, then what it means is that you’re the only person who can go down there and help them get the gold up to the surface. Naturally, there’s got to be some kickback in it for you. There’s got to be some remuneration, and that can be quite lucrative because you have a bartering power at that point, because you positioned yourself in a great place. How do we control lock? Through positioning, we give ourselves the skills and knowledge which elevate. One way we can do it is to elevate ourselves, is to give ourselves the skills and knowledge that mean that we are the only individual who can perform or undertake a certain task, and what that means is that luck is more likely to gravitate towards us. Fourth type of luck Whenever we have a huge amount of skill or ability and the conditions are right around us, whenever we have this huge amount of skill or ability in any particular profession or field of knowledge, we will spot opportunities that others can Interesting. Let’s say, for example, we’re really good at trading stocks. What that will mean is when an opportunity presents itself, a low value company which well, sorry, a company that is high value but the market assigns it a low value. Therefore, we know there’s a disparity. Therefore, we know that really, when everybody realizes that this stock is undervalued, the price is going to skyrocket. That will present itself as an opportunity that we can recognize because we have a high level of skill and ability to understand those situations. We have a high level of skill or ability to recognize those opportunities. Therefore, we are the individual who is deemed lucky. However, that luck actually came about because we were someone who had the ability to spot opportunities. We’d invest in ourselves, give ourselves a high level of skill and knowledge. Therefore, we could recognize that there was an opportunity there that others couldn’t. Others will call it lucky, and we’ll know that part of it was luck, because it was good fortune. However, there was a lot of preparation in there. Luck is when opportunity meets a hell of a lot of preparation, and that is luck number four. Four types of luck, three types of leverage these are the things that will allow you to gain more wealth in your life. I hope everybody found this podcast flipping unbelievable, because these are the best things that I learned that allowed more success to come my way. I share them with you in the hope and effort that they will ignite your life as well, take everything that you do to the next level and generate you more wealth.