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Dentists Who Invest

Podcast Episode

Dr James: 

Fans of the Dennis who Invest podcast. If you feel like there was one particular episode in the back catalog in the anthology of Dennis who Invest podcast episodes that really, really really was massively valuable to you, feel free to share that with a fellow dental colleague who’s in a similar position, so their understanding of finance can be elevated and they can hit the next level of financial success in their life. Also, as well as that, if you could take two seconds to rate and review this podcast, it would mean the world. To me, what that would mean is that it drives this podcast further in terms of reach so that more dentists across the world can be able to benefit from the knowledge contained therein. Welcome, welcome to the Dennis who Invest podcast. Welcome back. Good evening everyone. Another episode of Dennis who Invest podcast, episode number 20, would you believe? We’re absolutely hammering through these. So this is a significant episode and for such a significant number, I thought I’d have a really significant guest who’s going to speak on something really interesting tonight. That is a little bit controversial, I’m very conscious of that, but the more opinions we can get on a matter, the more chains in our armor, the more knowledge we’re equipped with and a better decision we can make. You’ve seen it on the group. I’m sure this podcast is on the topic of by to let’s. Are they still a good idea? We’ve got someone Emily qualified to speak on that matter. I’m really interested here what he has to say. This is a new one for me. The receive knowledge is we get as many hight as we can, but, as we all know, receive knowledge and what actually you know reality, they don’t always marry up. So I’m really interested to hear what he has to say. His name is Matt Rickard. You may have not seen him on the group, matt. How are you tonight?

Matt: 

I’m doing really well Jokes. Yes, great to be chatting through this, like you say, quite controversial subject. I’m really looking forward to getting to see something really good conversation on it.

Dr James: 

Interesting stuff For anybody who cannot see the video. Matt is perched in his office and he’s got the most wonderful leather chair. I’m very jealous. He’s putting my working environment to shame, most certainly, but for anybody who can’t see it, it’s red, it’s like a burgundy leather chair. It’s very impressive. I think I need to up the production quality of where I’m currently sat, given some of the guests that I’m meeting, but that is a work in progress. It is a work in progress, everybody. Matt, for anybody who doesn’t know you on the group, would you like to do a quick intro of yourself, who you are?

Matt: 

Yes, of course, why you’d?

Dr James: 

like to speak on ByteLets this evening.

Matt: 

Yeah, absolutely. I think quite a few dentists probably already know me. I’ve been working with dentists as a financial advisor for 15 years, so you know lots of people that I’ve seen pop up on the group are either clients or people that I’ve come across in the past. As I said, I’ve been working with dentists for 15 years. I’m a chartered financial planner by qualification, but for the people that I work with, I just get to think of me as a money coach. So anything to do with money, just pick up the phone, send me an email on let’s Chat, and I think that’s a really good sort of starting off point for what we’re going to talk about today, because I think it is all about a discussion. I think, having worked with dentists for 15 years, there are three things that I know about them. To be cast, I only true that nobody can argue with Number one. Dentists in general don’t like talking about money. It’s a bit of a taboo subject. It’s something that they don’t really like talking about. I want to say why I think your group is really good, because I do think we should have it not as a taboo subject. The second thing that they don’t do is that they do not trust people in suits, and so I’ve really kind of got my work to tell for me. I do most financial advisors and the third thing that I know is that they don’t trust people in suits to talk about money. So we’re going to really have to make the content excellent today. Yes, to get over that, but yeah, absolutely. I’ve been running my own practice of financial advice for 15 years and I’ve seen over that time thousands of people do things well and badly, and, along with my professional qualifications, I just want to help people be better with their money and make savvier decisions, rather than perhaps some of the decisions that they follow other people, because, you know, dentists trust dentists.

Dr James: 

Well, it’s the receivable. It’s the receivable, it’s like I say I mean, how many dads, how many people have dads on the group that encourage them to buy houses? I know, I know mine does. It’s quite a common thing, isn’t it? It’s just, it’s hand me down knowledge. Get some houses safest houses invest in them. Hold them long term. You’ll make money, which is true, well, but you might well which is fair, but is there a more efficient way to do?

Matt: 

it Absolutely. Yeah, I think that’s one of the things that we’re going to have a really good sort of delve and dive into today. I must say, you know, one of the brilliant things about the group is that everybody can offer opinions. But as a regulatory you know, a regulated person, I’m not allowed to offer an opinion because it’s considered vice. So, as a bit of a, as a sort of starting point today, that none of this can be considered advice. All we want to do today is get people to think differently. Dentist three and medical professionals in general have a habit of just following what everybody else does and because of that perhaps lack of trust in financial professionals they tend to follow other things rather than exploring, you know, their options. A typical analogy that I use is that dentists like to play the same card. They don’t really look at the rest of the deck. Suppose for me the aim today is to get you just to think differently. And is there other cards that you could play?

Dr James: 

Yeah, fair enough. So not advice is such, just information for your consideration.

Matt: 

Yeah, and discussion point let’s get people thinking differently. Let’s get people talking to financial professionals, building trust relationships with them, because ultimately and you said it brilliantly at the start of it the more links we have in our chains, the more successful we’re going to be.

Dr James: 

Speak with gravitas in this matter of matter. You must have done some buy to that, properly investing yourself.

Matt: 

I certainly have. Yeah, you know, I probably did the first buy to. That was, you know, I had a flat man just for many years that I lived in, and when I moved out of that into a family home I decided to keep it because I thought, you know, that would be a good thing to do and do that. You know, after four or five years of renting it out, I worked out that my best year of return, after things you know breaking and tenants leaving in the middle of the night and those sorts of things, was 2% gross. That means after tax I got a lot less, and so that was really something that played in my mind. And you know, during that time period as well, I also bought another apartment that I thought was at a good price. So I bought it and rented it out and so forth, and again I got a little bit more on that because it was something I specifically bought with the idea of making money, whereas the previous one was just something I was holding on to. But again I got tenants fighting in the middle of the night, I got things breaking. I got estate agents ringing me and saying the boiler’s broken and when I said, well, deal with it. They said, no, no, we just ringed you to tell you that needs doing. I thought, well, what am I paying you for? And I said clinic could just ring me. And so a big consideration of mine was hassle is that it’s a great asset to have if it’s working, but if it isn’t working it’s an almighty noose around your neck and you know that in some cases you’re only 30 days from having to pay the mortgage without an income, and that was something that really kind of weighed on my mind. And when I disposed of that property, I used that money and I got a 40% return guaranteed, with no risk and, really interestingly, no risk. I can get you tomorrow 40% return on any money that you want to invest with no risk. Okay, now, no risk.

Dr James: 

Sounds good doesn’t?

Matt: 

it Sounds good, doesn’t it?

Dr James: 

It does A little too good Right.

Matt: 

It sounds fantastic. Now I’m going to shatter it now because I’m going to make it boring. That’s a pension contribution. If you’re a higher rate taxpayer, any money you put into a pension gets you 40%, actually with no risk, because you could invest your pension into a money market fund that will never fluctuate. Probably shouldn’t do that. You should probably put it in something that will beat inflation. But again, when I’ve had this conversation with clients over time self-employed dentists, private dentists or the dentists using limited companies, not in the NHS pension scheme hey, would you like to get a 40% return on your money? Oh, yeah, great, let’s put it into a pension. Oh, I don’t have the value of a pension. That seems boring. Or I heard in the 80s they went a bit funny, people were frauded. Yeah, when there was no regulation. Now, really top quality investment that you can do in certain situations. Again, this is not advice. You should explore with a financial advisor whether it’s right for you to do that. But ultimately a buy-to-lets probably never going to get you 40% return guarantee. A pension contribution will. And to give it a bit of an idea, if you’re buying buy-to-lets for retirement, then that’s a form of retirement planning. A pension is also a form of retirement planning. So just a consideration. You know, we said we might be a little controversial at the beginning. We said we might put some people’s ideas and thoughts, and I think that’s probably a good one. That might encourage people to perhaps be a bit more open to pensions, which is a topic that most people don’t understand or perhaps haven’t had much education in.

Dr James: 

Cool, awesome. Well, in that case, let’s not mess it up anymore. Let’s cut to the chase. Why do you think Bible Acts are dead? Tell us.

Matt: 

Well, it’s a great finite statement that James and I wouldn’t say that they are dead, because I think that that is, you know, a very categorical statement, and there are examples where Bible Acts can still do really well. I think the key thing that I would want to try and put across to people tonight is that it’s not about them being dead. It’s about the fact that the rules around how they are treated, particularly if attacks, have changed, and they were announced. These proposals were announced four years ago, but were fully implemented in April 2020. And there was quite a lot going on back in April 2020. So, you know, I think they would have got a lot more media coverage had there not been COVID and all these things going on. And you know, we spoke about slightly about the culture of dentists following dentists and doctors following doctors. For me, because Bible Acts have been such a whole run slam dunk for the last 20 years and because, yeah, socially, medially, culturally, we’ve always had it ingrained on us that Bible Acts is king, nobody questions that, and certainly when you get people like me. You know I, over the last few years, I’ve spent, you know, countless hours doing hundreds of calculations for clients with Bible Acts and I haven’t seen any that they’re going to make money post the new rules, and so I think people need to be aware of those things so that if they are going to buy to buy to let, they don’t do it just because they think it’s a good investment. They do it because they know it’s a good investment. I’ve invested the time to calculate what returns they’re going to make after tax.

Dr James: 

I see, can you elaborate on those new rules? Then a little bit.

Matt: 

Yeah. So for people holding property in their personal name, what we have now is something called a loss of mortgage interest really. So in the past you’re the cost of your interest on your mortgage was something you could deduct as a cost against your tax. So in a typical scenario where you had a mortgage that was costing you 600 pounds and a rental income of 800 pounds in the past, you go right, okay, well, I can deduct 600. And my profit is going to be lower, but my tax isn’t going to be as much Now. Now what they’re going to say is okay, we’re not going to allow you to use the mortgage interest as a cost anymore, so you can get the 800 income. You can write off upkeep, you can write off estate agents costs, things like that. But the vast majority of rental income is going to be taxed. And for high earning professionals dentists, for example, where you’ve got you know most people as higher rate taxpayers at 40% and some additional rate at 45%, if you’ve still got a cost of 600, and your rental income after tax is only now 500, well, you’re going to lose every month.

Dr James: 

Really and it’s. Oh sorry, I thought you were finished, go on.

Matt: 

No, so it’s. So. That’s really the thing that’s changed in the law. If you’re holding it personally which of course most people do slightly different if you’re holding it in a limited company, you still can get away with some of the things that were there before. And just going back to what we said, is that you know, I’ve had conversations with clients in the last years two years who’ve come to me with the idea of I’m going to buy a bike to let and I said, oh, hang on, how much money are we going to make from it? And almost I’ve had to rein them in and say, no, let’s sit down and do the calculations and they go. No, no, it’s a property. My dad’s always said property will be great. Yeah, well, your dad might have thought that 10 years ago, but is he aware of the new rules? Let’s not have a blindfold to walk towards a cliff. Let’s take the blindfold off and see if there’s a better way to walk. And so that’s really the sort of aim today is to get rid of the old. Do you know that this is happening? And if you do and you’re thinking of bike to let, well, let’s work out if it’s worth it and could other things outperform it.

Dr James: 

Did I hear you correctly, eric? Did you say it was as stark as you’ve yet to see one since the new regulations have been brought in place? That’s profitable Given the given the circumstance that you said. Obviously it’s held, just held personally, and you’re a higher or additional rate taxpayer, if I’ve grasped that correctly.

Matt: 

Yeah, absolutely yeah. I mean people with limited companies or properties in them and so forth, different, different cattle of fish. What I would say is in the last two or three years when I’ve had discussions with clients for bike to let and they said what do you think I can tell you were wrong, that I thought, goodnight, wow. That was a very small cost house £40,000, £50,000 in East Lancashire, with money that was being given to them by their parents and deposit of £10,000, if yours the property and rented out to the council who were going to put tenants in it, add in for an item, not a bad investment there and return on it was pretty good, even after tax. I’ll take you to a scenario. A few years ago when this was going in, I had a dentist ring me and say I’m going to buy a £1m vitalette in London. I said okay, great, before we do the mortgage for you. Why are you doing that? They said because it’s a vitalette. I said yeah, but £1m you’re going to spend. You’re going to have £3.25 a million debt on a £1m house. How much rent are you going to make? The dentist didn’t want to have the discussion on how much rental income he was going to make. He was just so convinced that because it’s a vitalette it’ll be fine. He was going to do it anyway, despite the fact that it was his second property in stamp duty. It was about £50,000, he was going to make £50,000 on second duty before he makes any money, but to get his second charge stamp duty back he wouldn’t have it. Ultimately, I had to ring my client and say thanks for the referral, but they’re not prepared to listen. I can’t take them on as a client. I need to put the end of the problem and the referral. So if I need to do the mortgage, I don’t do an order taking. I’m a professional advisor. You shouldn’t be buying the property. I would love to know what happened. I might ask my client actually.

Dr James: 

Well, crunch the numbers. It’s worth it by the signs of it. Can I ask where was that hoist? Where was that hoist based, the one that was successful?

Matt: 

Eastline Gishia. I believe it was like Akrington or Blackburn or somewhere like that.

Dr James: 

Okay, so in the north, and traditionally that’s where pauses with better rental yields are, of course.

Matt: 

Well, it was just that his mortgage debt on probably I think it was about £30,000 mortgage was going to cost about £80, £100 a month and his rent linkum was guaranteed by my accounts. That’s about £500. So even with 40% tax he was doing all right on that amount of money. But to give you another example, I also look after a few different types of professions that everyone I work with is a dentist or a doctor. They’re married to other people and I have a firm of estate agents that I had a conversation with two years ago and they had a Bitalette portfolio of 150 investment properties and when I told them about the new rules even as a estate agent you would expect to be absolute experts in this area I showed them, we went through their portfolio and there were two that were going to remain profitable out of about 100. Yikes, and they went white, absolutely white, and I sat in them. I said we need to speak with your accountant to get some of these sold, because you’ve got some CGT capital gains tax reliefs we can use and you don’t want to be in a position where you know next year this was a year before it was implemented you’re going to be in the hole by about 10 grand a month for this portfolio.

Dr James: 

Okay.

Matt: 

And that was a firm of estate agents who you think would be well versed on property. So it’s about having somebody who knows what they’re talking about help you to understand things outside of, perhaps, your current knowledge sphere.

Dr James: 

So your main line of argument is it’s this new legislation that shifts the goal post somewhat in terms of our expected returns. Can you give us a bit more information on what this legislation describes or what any more specifics about it?

Matt: 

Yeah Well, effectively, what’s happened is that the government is no longer allowing people to use mortgage interest as a cost against the rental income, so people are going to have to pay more tax on the rental income while still footing the bill of a mortgage and cost. Fair enough, just as you said earlier, then really not, or anything else in addition, or no, and I suppose the other thing to think about is that if you are buying a second property, you’ve also got second charge stamp duty which has been around for a few years. So you pay the normal stamp duty and then, because you own a second property, you’ve got a further 3% to pay, which can be extremely significant. And, of course, if you’ve got upfront costs, then your property has to repay those upfront costs through profits before you get to a profit. And if you’ve got a high amount of second charge stamp duty in some cases tens of thousands then it’s going to be many years before you actually see a real rate of return. So yeah, making sure people are aware of those topics.

Dr James: 

We are, of course, living in an inverted commerce stamp duty holiday at the minute. I know that that’s been changed in a few months. Do you see that affecting things? Real quick guys. I’ve put together a special report for Dentist entitled the Seven Costs in Potentially Disasters and Mistakes that Dentists make whenever it comes to their finances. Most of the time, dentists are going through these issues and they don’t even necessarily realise that they’re happening until they have their eyes opened, and that is the purpose of this report. You can go ahead and receive your free report by heading on over to wwwDentistInvestcom or, alternatively, you can download it using the link in the description. This report details these seven most common issues. However, most importantly, it also shows you how to fix them Really. Looking forwards to hearing your thoughts.

Matt: 

I actually think it will make it worse because at the moment we’re paying less people, investors are paying less stamp duty because you get some of it waived for being a second property. Of course, if that holiday goes away in March, as the Chancellor has stated, I actually think it might get extended and hopeful that for home buyers, particularly first-time buyers and so forth, I think it would be a really good idea to keep it going. I think it’s the only thing and we said we might go on controversial tonight. Again, this isn’t advice, my opinion. I think it’s the only thing propping the housing market up. I think we may well see a decrease in prices because there has been this rush to buy in the last six months because people are going to save money. We’ve had lots of clients buying property and us doing mortgages. That I think will tail off once that ends, I believe.

Dr James: 

Harry Singh said something similar on one of the earlier podcasts, so I don’t think you’re alone in that opinion and it would stack up, I suppose, if there’s less demand. I guess I suppose we’ve heard before, and a lot of people might say, that financial advisors don’t really tend to recommend houses so much as an investment. Some might say that that’s because financial advisors have nothing to gain from it as such. I know there’s many different arrangements in the financial advisor world. That would be my understanding of it, and I don’t think I’m alone in saying that. What would you say in response to those people?

Matt: 

I think, certainly in some financial advice cases where people are only really interested in getting clients who want to invest money in the stock market, you’re probably not far wrong there, I think, if you’ve got a holistic financial advisor who helps their clients with every single area, that actually that’s not true. We take our practice, for example. We do absolutely everything for our clients. We arrange mortgages. We arrange buy-to-buy products that mortgages is necessary. We do get the procuration fees from the lenders. We charge a fee to the clients for doing the work. We recommend building and contents policies which give us quite a nice trail being renewed each year. We also recommend the protection that’s required to look after the property. Actually, we get paid quite well for buy-to-buy to let. The key thing that I want to do as a professional advisor is I want the absolute best outcomes for my clients. Ultimately, I suppose, like most dental professionals people have, they don’t always do the job for money. They will do extra for their patients because they want better results. That’s exactly what I do. I want to make sure that our clients get the very best results possible long term. I will sit them down and say, okay, if you want to do the buy-to-buy, that’s cool, but we’ve got to crunch the numbers. We’re not doing this just because in the past our dads have done it. We’re doing it because it’s a good idea and it makes financial sense. If we do the numbers and it works out really well, then great. We’d love to get paid to help you with the actual arrangement. But if it doesn’t make sense and something else could outperform it with less hassle and less upfront costs, well, surely we’d want to make a decision based upon all the knowledge rather than, just as we talked about before, playing the same card over and over.

Dr James: 

Yeah, fair enough. Just good that we clear up, I suppose, that potentiality for the conflict of interest there.

Matt: 

Yeah, absolutely, yeah, yeah.

Dr James: 

I just wanted to hear your slant on it was all. Yeah, we’ve talked about the situations where we no longer believe or I suppose that you were arguing earlier that you no longer believe a buy-to-let is appropriate. Is there any situation where we can talk about those individuals who are interested in purchasing buy-to-lets where it may still be appropriate, even if they are on the higher tax band or the additional tax band? I know that you said yes, I know, okay, there was that one-off, that one-horse outside Blackburn or whatever it was. But, more broadly speaking, are there any instances where you would consider it or tend to suggest it as a good idea to your clients?

Matt: 

Well, I’ll go back to what you said before. I don’t want to be categorical here and say that I do not think buy-to-let is a good idea. I think it’s part of a discussion and part of a good balance portfolio of investments for the long term. I just think you’ve got to do it at the right time and make sure that the numbers make money without just doing it sort of blindfolded. I hear you Okay, the way that I suppose that I would suggest, if you do want to try and make some money from buy-to-let, it’s starting with the numbers. It is starting with how much am I going to cost going to be, how much my rental income is going to be, and then make sure that don’t stop at that calculation Most people stop at if I’m getting 800 and I’m paying 400, that’s good. No, it isn’t. What you’ve got to do then is apply your tax bracket and think about okay, in 100% circumstances, when it’s fully talented, nothing breaks, even after tax, what am I going to get? Because then if something breaks and then we don’t get tenants, it’s even worse. It’s looking at that. Then I think the other thing that would be if you are absolutely desperate to do buy-to-let and you’re a staunch believer and I won’t be convinced any other way is make sure you do it through a limited company, because the rules for properties in a limited company are different to those being held by individuals. Again, we talked about maybe being a little controversial tonight. James, I think if we’ve thought of that solution, the government would probably also thought of that solution as well. It would not surprise me in the next couple of years if the government come to look at oh, mr and Mrs Dentist have got one buy-to-let in a limited company. Okay, well, that’s tax avoidance. Let’s put some legislation in place to make it take care of that For now. I think that’s a good solution and that may work forever. But if we’ve thought of that solution, I’m sure the government have as well.

Dr James: 

Something to think about, and the trouble with a house as an asset is it’s very illiquid. Trying to shift it just because of sudden change in rules, that would be a nightmare Worth considering.

Matt: 

Yeah, absolutely. A lot of people want to try and sell their limited company. A lot of people say I’m going to sell my properties into a limited company now because I can save on the rules. But after a conversation with their accountant they realize that they’ve got capital tax, they’ve got all sorts of other things and costs and it’s not as simple as doing that. So if you hold properties in your personal name, I would suggest speaking to a financial advisor myself anybody who’s got the knowledge to show you how it works just simply understand. Are you going to make money and then don’t follow, I suppose, the old adage of throwing good money after that. If it’s not going to work in the future, then cut your losses and move on to something else.

Dr James: 

Do you think that COVID might change anything that we said tonight? If we’ve heard through that lens, does it make any difference?

Matt: 

I can’t see a scenario where it does. I suppose the tatchels of the tatchels and COVID’s not going to change those. I suppose if I’m being really really sort of putting on my future vision goggles here is that we’ve got to repay the COVID bills somehow and inevitably. That will probably mean higher taxes and the government looking for revenue. And they’ve already started to target property owners, particularly because there’s a lack of properties in the south and lots of help by landlords. And that’s a big reason why they’ve put this in. Really they want properties in the hands of owners, not landlords. It’s better for the economy that way. So I don’t think COVID will change anything other than the government may have to come looking for extra taxes. But of course there are lots of ways for them to find that. I think the only other way that I would and I think we might come onto my experiences with Bytelec. But the only way that at the moment I would personally buy a Bytelec is to a limited company and the distressed sale. So if something’s worth a couple of hundred thousand, then I can get it for, you know, 150. Then you know, because it’s a horrible thing to think about. But somebody’s lost their job. They need to sell it or people are desperate to get in a Bytelec properties because you know they’ve realised they’re going to make a loss. Then if you’re then going to hold it and you’ve bought it at a big discount, you know, then maybe. But I believe property is an asset class. If you look at the property price index of the UK, it’s at an all-time high and the old average of buy low and sell high would mean that at the moment, if you’re looking for an asset that’s good value for money, it’s the stock markets around the world and you know they are lower. A property is higher. If that swings the other way because of COVID and we get some sort of national depression, slash, covid, brexit type, you know fair, then property comes down in value and you can, you know, like we did in 2008, have lots of properties being received by people you know being repossessed, which from an emotional standpoint is horrible. But in finances you’ve got to think about profit and you kind of have to put some of that to side, which is not nice. But my job isn’t to be emotional for clients, it’s to, you know, be technical and make sure that people are making the most money they can.

Dr James: 

If we think about how these buy-to-lets, these people who own these buy-to-lets, are actually generating rental income, it would stand the reason in my view. Again, I’m going to blame, and you’ll know more than me that there are probably a lot of buy-to-lets that are vacant at the minute, given how many students are at home, not going to university, et cetera, et cetera, and I know that that’s just one sector. But there are so many students, you know, and maybe that’s just the one example I can think off the top of my head People who would otherwise be renting but are now cohabiting with their parents or somebody else. Is this a factor?

Matt: 

I think absolutely. I think one of my bug bears with property in general, and certainly when I owned buy-to-lets which I do not anymore was the fact that you know, the stock market will keep making me money or that might go up and down over time, it’s never going to be void, it’s never going to have a broken boiler, and so I think you’re right. I think when we see, you know, university accommodation not being filled, then that’s going to have an immediate impact on people who have buy-to-let properties, who rely on that income or have a debt on it and have to pay it. I think also we look at holiday-lets. I think about a client of mine that I had conversation with just yesterday. They bought a holiday-let against my advice last year. I didn’t think it would make any money. This was before COVID and they’ve not been able to in Wales for six or seven months this year. They’ve not been allowed to rent it out, and so they’ve had a £1,000 bill every month for the mortgage, £1,000 plus probably without making any money. And of course that’s an unusual situation, but it does highlight the fact that you need somebody to be in your property for you to make money, and if there isn’t, then you won’t be, and I think commercial property as a sector as well in some stances can be, really, could really be affected. I was talking to one of my solicitors today who said that their firm won’t be going back into an office.

Dr James: 

So whoever owns that?

Matt: 

building won’t be getting a rental income from that company. I think we’ve learned through medium like this. I haven’t seen a client face to face for a year. I’ve learned that I can do my business differently and I think people will use property differently in the future.

Dr James: 

See, that’s why I wanted to ask that question. The student one was the one that I could think off off the top of my head. I’m sure there were others, people who are working from home, whereas before COVID they didn’t realize. I suppose that it was possible. Now, because it’s necessary, we might, going forwards, should fingers crossed, covid just you know, disappear in a few. Yeah, sooner rather than later. Then there will be all. There will be people who’ll say things along the lines off Well, actually we managed to run this business perfectly fine without a property, for all of however long, you know. Do we necessarily need to rent the premises again?

Matt: 

I think it’s. I mean again, I’ve talked to a friend of mine who’s job is IT sales and she was telling me that their industry is really struggling because, you know, a number of their clients have decided not to have their big open buildings anymore and just to pay. It’s cheaper to pay people to work in their home. Yeah, absolutely, Absolutely.

Dr James: 

There’ll always be overheads in dental practice. That’s one thing you can’t outsource.

Matt: 

Well, I think I think, as a dental practice, you’re fairly safe that the building is going to be occupied because, james, you can’t do my teeth from there.

Dr James: 

No, I know I always get rather jealous when I talk to my friends and they’re working from home, and yeah. Having said that, though, I don’t know if I could stay in the house all day, every day, but that’s one of the downsides of being a dentist. There’s many positives. I’m sure everybody’s listening would agree.

Matt: 

Oh, absolutely. It’s a fantastic career that can give people some real options and I think one of the best things about working with clients is that, you know I say to clients I want to know what’s really important to you, I want to know what long term you want to achieve. Be that a certain type of retirement, a certain lifestyle in retirement, like lifestyle before you know? Do you want your children’s at the paper children’s wedding? In a kind of morbid way I talk about with clients and say, look, if we’re sat here in 60 years, both in our death beds, what are we going to talk about? What are the things we’re going to be really interested in? Because it won’t be the cost of coffins, it won’t be that takeaway we had. It’ll be a pay for my kids to go to uni. And ultimately, I suppose the aim that I have with my clients is that I want people to achieve those very big goals and I want them to achieve it in the fastest, most tax efficient way. And if that’s a buy to let, great. But if it isn’t, I want them to consider what the alternatives are that might up from it.

Dr James: 

Presumably, when you’re having these conversations with individuals, you’ll recommend them an alternative. What is it? What have you had in?

Matt: 

mind the worst diversifying various things. Well, it’s a great question, james. It goes back to the individuality of the person. So, for example, today I’ve had an array of meetings that had one with a client who’s 65, has got a very large pension, is very happy, and we were talking about what he might do with some of his spare money and so forth, and it was all about his grandchildren that’s what he wanted to invest for Whereas I had a meeting this morning with a 26 year old dentist who wants to buy a house for her to live in, and the things that I would recommend for her and the other person would be very different in individual. It could be stocks and shares, it could be personal pensions, it could be venture capital trusts, enterprise investments, unit trusts it’s absolutely everything. And I suppose the idea with being a money coach is it’s not all about products, it’s about helping people to understand the best way to use their money. So again, a few weeks ago I had a conversation with one of my dentists who’s really unhappy in dentistry and she said I’m going to jack it all in. I don’t want to do it. That’s okay, but there must be one bit of dentistry that you really like. She’s like I like aesthetics. I don’t want to do anything but aesthetics. I said, okay, well, don’t jack it all in, just work. A way to do aesthetics. You might want to sit straight away. You might need to do aesthetics on a Friday and then work backwards, and when you’re busy you make it to a Thursday. When you can busy, you make it to a Wednesday. And that’s a conversation I’ve had with many clients over the years to try and get them to think differently. And a conversation, a very similar conversation, with somebody three or four years ago. She’s now running an incredible aesthetics business and we had a conversation, probably as we do every six months and every conversation we have with her. She thanks me. She says I wouldn’t have done this without you sort of coaching me to think differently, and so that’s nothing to do with products. A good financial advisor isn’t all products. It’s about listening to what your clients needs are and giving them the benefit of 15 years of talking to people and understanding that things don’t have to be as certain way they can be able to waste it.

Dr James: 

Can I just say one thing from listening to you, I think that there might be many people listening who may not agree with things that were said on the show tonight. And that’s fine, that’s totally fine. It was entitled to the opinion. The one thing that’s got me thinking the most is the point that we raised about COVID what that world would look like afterwards, and there is no conceivable scenario for me that there will be more demand for rental after this. Now I’d be really interested if someone could set me straight on that or change my way of thinking. That is quite a quite a big thing to say, but given what we’ve said this evening, I just can’t see how there’s going to be more people who want to rent more office space and more houses, giving that the world, given that the world is shifting to work towards a more decentralized fashion. I could be wrong. I could be wrong, but that is just my perspective on it. Might be that I’m completely overlooking something. I’ve just had this thought spur of a moment, just when we were talking earlier, matt, and, like I say, I just really, really am struggling to see at this point how there will be more demand for more houses and more rental spaces and businesses, etc, etc. I could be wrong. What do you think?

Matt: 

I don’t disagree with the jokes I wouldn’t agree. But I don’t disagree either. I think there will always be areas of the country where there are strong rental incomes and strong tenants that can yield you money for the long term if the house is right and the price is right and so forth. But I think you’re right. The vast majority of people who I know who have bikes, like properties are student flats and I think the shrinking of mentality where people are saying, okay, we might not go back to that building, we might not bother using that. There will always be industries where you need a building, but they’re not all there anymore. So I don’t think you’re wrong and I guess the point of today is that if people are watching this, thinking now this guy’s talking rubbish and he’s wrong, my challenge would be am I have a real look into the numbers with the new rules and decide for yourself? Don’t just dismiss me, because your dad has always told you the property thing right Because things have changed. So go and look into it. And that’s the entire point of this. I am not saying buy-tot is terrible. Nobody should do it. I’m saying that I want you to get out of the dental sheet bubble and the mentality that everybody does property because everybody does property. Step outside the herd, have a look around and really look into it for yourself. That’s what we want.

Dr James: 

Cool, absolutely. There might be something that I haven’t considered because this I’ve just conceived of this thought as we were speaking earlier, but at this point I’m struggling to see and I think that that is a really good point, effectively, so just wanted to throw my hat into the ring on that. Maybe, what, however things pan out in the future, I’ll be wrong, maybe things will be back to normal Fingers crossed they will do. I really don’t know at this stage, but it’s just. If nothing else, it’s an interesting perspective and an interesting thought. Yeah, definitely, 100%. So I know that you said earlier, matt, that you can help dentists with their financial affairs. How is it that you do that? Can you just offer us a little bit more information on that?

Matt: 

Yeah, absolutely. So. I have a programme of financial advice and I look for candidates that I can work with for the very long term and I’m only really interested in people that I can see myself having that yearly, annual relationship with and I’m getting to build a real relationship of trust over the next 30 odd years. We have a lot of people wanting to. Just you know, could you do a mortgage for us? When we talk about income protection or practice financing or their pensions, oh, I don’t want that, but that’s not what we want. We want people who want a relationship of trust with somebody who can add value in areas that they may not know about. And particularly, you know I’m holistic, so I will work with FETs in old money to get them set up properly with, you know, the savings for their first home, their income protections, and I will work all the way through to people who are selling their practices and want to, you know, dispose of the proceeds and practice in a tax efficient way and everything in between. And I suppose my message to anybody who doesn’t have a financial advisor is you should. You should find somebody that you can trust and build that relationship with, even if it’s not me, because ultimately, they know more than you do about certain subjects. I wouldn’t go to a financial advisor about my teeth, but people go to dentists about their financial advice, which I think is not quite the way it should be. So find somebody that you can have a really good, trusted relationship with and help them to understand your circumstances, what you want to achieve, and they can help you to understand concepts that you might not even be aware of. And if that sounds good to you and you’re looking for somebody and you don’t have somebody, then you know, get in touch with me at the practice. And, and you know, we don’t take everybody on. We look for the right type of people. We’re fortunate we don’t have enough time. I don’t have enough meeting slots in the week to take everybody that would like to see me, but I want good people that I can have a good long term relationship with and ultimately enjoy my time with, so go well, if you like what you heard tonight and you thought everything was of interest, I’m sure Matt will be happy to clarify.

Dr James: 

If you were to drop my messages on the groups will be in the chat to him. Absolutely, yeah, an interest in one and certainly a well, a topic that, like I say, it’s very common that we all receive. You know, dogma. I suppose that about by two less. I do think the point about there being less students and less people who want rentals is a really interesting one. It’ll be interesting to see how that pan out. Pans out at least, if nothing else, and you do own some by two less. Maybe it’s worth diversifying and, you know, spreading your wealth across other assets to hedge yourself, should the situation provide to let’s be unfavourable in future. That’s why I’m reasonable to you. I don’t, you know, you might have. I think so you might have your opinions, whatever those might be, and that’s completely fair enough. But if you’ve got diversification in your portfolio, it’s a hedge against everything else, and that’s why it’s interesting to hear these points of use.

Matt: 

Yeah, absolutely, and reiterate what we’ve said all along is this is not about telling you that the buy to let is not a good idea. This is about getting people to think differently. It’s getting people to perhaps trust the financial advice where they may not, and it’s about making you get out of the kind of the bubble that it’s it’s king, because it might not be, and don’t walk into it just because you think it is like to do the numbers, workouts and what to do it.

Dr James: 

So people can find you on Facebook. Is that right, Matt? Anywhere else that they might be able to search for you?

Matt: 

Yeah, absolutely. You can find me, matt Ricard, on Facebook. I’ve got a sort of a profile that you can add as a friend. Feel free to do that. I’ve also got a public page that you can follow and then Instagram. So, at the wealth life coach, if you like financial advice tips, good looking food and pro wrestling sports, I think you might get some more out of that. Anyway, and on there I’ll be plugging, promoting over the next month the talks that I’m doing on pensions, on more a technical session on this subject we’ve been talking today, and feel free to follow me and look out for those sessions and join in if you’d like to.

Dr James: 

Cool, awesome. Well, I’ve learned a lot tonight and definitely a new perspective on, as I say, by the lets, which is super interesting. Thank you so much for giving up your evening, matt. I’m going to let you get off now, my pleasure.

Matt: 

It’s been great to chat with you, James.

Dr James: 

Absolutely, my friend Hope to speak very soon. You too. If you enjoyed this podcast, please hit, follow or subscribe so you can stay up to date with information on new podcasts which are released weekly. Please also feel free to leave a positive review so others can learn about this podcast and benefit from it. I would also encourage any fans of the podcast to sign up to the free Facebook community from which the podcast originated. Please search dentists who invest on Facebook and hit join to become part of a community of thousands of other dentists interested in improving their finances, wellbeing and investing knowledge. Looking forward to seeing you on there.