Dr. James:
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Dr. James:
So their understanding of finance can be elevated and they can hit the next level of financial success in their life.
Dr. James:
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Dr. James:
Welcome.
Dr. Arnold:
Welcome to the Dentists who Invest podcast. So, guys, welcome to another episode. And today I’m excited because we are going to be talking about finances investing when it comes to us as dentists. And I’ve got the one person who you go to when you want to talk about investing as a dentist We’ve got Dr James Martin with us. Dr James Martin, thank you for being on this call with me today.
Dr. James:
Oh, you flatter me, my man, you flatter me. Thank you so much. It’s been a pleasure to be here and right back at you, my friend. I’ve been equally excited to come on today and talk about anything and everything investment, and not just your conventional investment stuff. Two twists chucked in there as well, and we’re also going to make it specific some stuff through twists chucked in there as well, and we’re also going to make it specific.
Dr. Arnold:
Specific to dentists yes, definitely, and um, you know, just for those, um, you know most people in dentistry know um what you do, who you are, but just for those few, those very few that have been in iraq, um, just give us a little background about you. Know where you qualified from, I know you’re from Northern Ireland, but just give us a little brief introduction to yourself.
Dr. James:
Cool, all right. Well, I hope people know who I am. Perhaps some people have heard of me that would be great, but anyway, for those who haven’t, my name is Dr James Martin. So I graduated from Leeds in 2016, leeds Dental School, and then, to cut a very long story short, throughout the course of the next four to five years, I began to read about investing. Then, once I got a little bit of a handle on how that worked a lot of a handle on how that worked what I did next was when I had a hiatus out of dentistry.
Dr. James:
I had this hiatus out of dentistry due to this knee injury that I had, and what I did next was I started this Facebook group centered around investing for dentists, and also not just purely straight up the financial capital markets and all of that stuff, but also the business side too, because that is a huge element that we sometimes overlook whenever it comes to, well, our perspective on investing, what we perceive investing to contain or what we perceive it to constitute. So, actually, it’s this more holistic vantage point on investing which is to say, yes, we invest in the capital market. Yes, we take our money and we grow it long term in our ices and our sips, whatever the heck it is that we choose, but also that we invest in yourself, because that is a huge wealth creation portal. That is a huge wealth creating creation vector. Investing in our skills and knowledge, too, which I also preach about a lot, and what we’re going to be talking about today perfect perfect.
Dr. Arnold:
That rounds up real nice. So I mean, you said a lot of things there, um, but I I want to um, take it to the to the very, very beginning. You mentioned that you had an injury. And one thing as dentists, you know we can make a great living from our career, but at the same time, you know anything can happen. And I know there’s things like, you know, income protection. But I mean for you, did you have anything in place that, if you weren’t going to be able to work for a while, you’d still be able to maintain your lifestyle and sustain yourself, your family? Um, what? What were things like for you at that time?
Dr. James:
so great question, right? So I had my investments and at that time around about that time, they mainly constituted cryptocurrency. It was mainly bitcoin. Okay, because I like to play a little fast and loose, you know what I mean. I like to. I like I’m I’m risk tolerant, you know I I can accept a little a degree of risk. No, that’s not for everybody. That was for me around about that and partly put it like this, not knowing what I know now, I probably wouldn’t have weighted my portfolio as towards crypto, as I had around about that time. But hey ho, you live and learn. You know you’ve got to go through these experiences in order to learn the lessons. You’ve got to be old. You’ve got to be young and foolish to be old and wise, which is a saying that I absolutely love. You ever heard that?
Dr. James:
no that’s cool, isn’t it? The more mistakes you make, the more wisdom you get, but anyway, so, um, yes, that happened. And then what it? What it revealed to me? Really, it didn’t actually cause any detriment to my earning potential until I had the surgery for it. So I actually injured the knee and that was not great.
Dr. James:
And for anybody who hasn’t heard, maybe I don’t know if I’ve ever said this before on any content or anything but I tore my ACL, which is flipping zero fun whatsoever, or anything, but I tore my ACL, which is flipping zero fun whatsoever. If anybody’s ever been through that, they will agree with me on that one. That will resonate with them because it’s flipping, painful and, uh, actually I continued to go to work even though I just injured my knee. I didn’t even know that it needed surgery until someone told me the day after I thought that it would just heal, basically, but I continued to go to work. I had this leg brace so I was able to get around, and then, really whenever, when it actually began to began to get in the way of me attending work was after I had the surgery, which meant that I needed to take some time off, and the surgeon said to me, james, you need to take four time off. And the surgeon said to me James, you need to take four weeks off in order for you to need to recover.
Dr. James:
So I was young at the time, I was foolhardy and I thought to myself he says four weeks. I reckon I can do it in two. Okay, I’ll just take it easy, it’ll be fine. Right, went back to work after two weeks. Worst decision ever it was. It’s becoming painful and I thought to myself but why the heck am I going to work? Why am I risking my long-term health? Why am I sacrificing my health for money in the short term when there’s long-term implications and plus as well as that? That was when I’d already done all this pre-reading and learning on how you can invest your wealth and also how you can create more in alternative ways outside of dentistry.
Dr. James:
And I just thought, james, now is the time. It’s like you put in all this prep for this moment. So what that meant was I had this epiphany and I thought, well, if now’s the time, now’s a good time as any to just take some time out from dentistry and then employ all those methods and enhance them even further and really really fall back on them. Yeah, um, and then, after that happened, I left my job. I said to my boss listen, it’s really not working. I’m really sorry. I need some really long time. I don’t know when I’m going to be back. I think it’s better off that I just leave. If I’m honest, find someone else. Uh, and that’s what happened. Um, and then I had this four week, sorry, sorry. The doctor said to me. I called the doctor up and I said listen, I’m really sorry, I should have listened. This is what’s happened. You said four weeks. I went back to work. After two weeks I went. I’ve been working for a week. The knee’s huge, it’s like purple, is a really bad shape. What should I do? Right? And he said okay, you’re gonna listen to me this time. You don’t need four weeks, you need four months, okay. And I was like, right, listen, I’m gonna listen to this dude. I questioned him before, I’m not gonna question him now. Right, took this four month hiatus out of dentistry.
Dr. James:
About a week after that, I think, I started dentistry invest, the facebook group and then, really interestingly, uh, I started posting content on there. I’d always wanted to post content. I always felt like that was my energy, that was always something that I wanted to do. And here’s the thing I wanted to do it just for fun. You know, I wasn’t really attached so much to whether or not anybody would engage with it or watch it. Thankfully, some people did and the group started to grow and it became a thing and somebody shared it on For Dentists by Dent dentists, which is one of the larger facebook groups. And then I remember that the, the members, started to increase quite a lot and I thought, okay, wow, we’re really on to something here.
Dr. James:
And then I went back to dentistry after about four months, and, and, and, and, and.
Dr. James:
Yeah, but then at that point my heart wasn’t really in it, because I had a taste of this whole other dimension, this whole other side of reality which I connected with more, which was, which was related to dentistry, but not exactly clinical dentistry, and then I realized that at that point I was having more fun, fulfillment, from doing these other things.
Dr. James:
So I said to myself, okay, well, in for a penny, in for a pound. I’m the sort of person if I do something I want to be 1000 committed to it, because then at that point I’m in a position where I can help the most people I can. I can do the most. I can do the most of that task. I can do the most of that, that activity, I can undertake the most of that thing and then therefore improve the most at it and become the best as soon as possible. So for me it’s like we pick one thing and we go, we go all in right. Which can work, can work, but it can also not work. But you know what? It’s been two years since I’ve left clinical dentistry and I haven’t looked back.
Dr. Arnold:
Let’s say that.
Dr. James:
So at the moment you’re not a practicing dentist no, I, I retired inverted commas two years ago, retired, retired early, although, to be fair, although I say I say that whimsically and somewhat ironically, because now, if anything, it’s like we’ve been seven days a week you know what I mean, but I love this stuff, you know, like you and I chatting right now, arnold, this is work. Inverted commas. You know this is fun right.
Dr. Arnold:
So for the person that’s going to tear the acl next month, next year, they’ve just qualified as a dentist. What are you saying to them to future proof themselves?
Dr. James:
you know what right you want to hear something freaky. Somebody reached out to me and his name was james and he was an fd and he tore his, tore, his acl if he wasn’t an fd.
Dr. James:
He was in around that, I think it was just afterwards and my heart went out to that guy and I was like whoa, that is so what a coincidence. Um, so what I would say is I would say that no matter what perceived negative thing has stricken any one of us, whether it be the acl or whether it be something else, if we have the mindset that we can see the opportunity, that we can see that there may be an opportunity there or there well, there will be an opportunity there. There always is an opportunity there then what it means is we can frame it in a positive way. Life happens for us, not to us, right, and what I mean by that is any event in our life can serve us if we choose it, if we choose it to and we choose to learn the lesson there. We just have to see it from that vantage point and we’ll always find something good, something that can be useful for us, something that can enhance us as a person going forwards Very powerful, awesome, awesome.
Dr. Arnold:
I want to change gears here. Financial freedom it sounds amazing, it sounds great, but what is?
Dr. James:
it. That’s a dream, right there, ok, right. So I really like this question and I’m going to. I’ve got a really long winded answer. I’m going to do my best to summarize this response, and the reason is it’s got something really powerful contained therein.
Dr. James:
So, if you think about it, right, financial freedom the definition is where you can choose to work or not work. Right, you have the option, right. So another way of describing financial freedom is we stop exchanging present unhappiness for future happiness, right? So what do I mean by that? Most of us go to a job and whether we hate it or whether we quite like it, we’d still rather be doing something else. So there’s a compromise there. Are you with me?
Dr. James:
Yeah, so the thing that we’d rather be doing in that moment, the thing that will make us really happy, is like 10 out of 10 in terms of fulfillment. Right, and that can be anything that can be lounging around, that can be tv, that can be on holiday, whatever, right, it might even be your job. You might actually love your job and that’s cool. Are you with me? Yeah, so that thing for you in terms of satisfaction is 10 out of 10, right, but we have to do this other thing to earn money, as in our job, so that we can sustain ourselves, so that there’s some money coming in, so that we don’t run into problems, so that we don’t lose the roof over our head, right? So we’re exchanging unhappiness because there’s a compromise there to some degree. Whether it’s seven out of 10, or whether our job is seven out of 10, eight out of 10, nine out of 10, or two out of 10, there’s always a compromise there. And the promise is we’re going to be happy at some point in the future when we retire, because that’s what we’re all told, that we will be Right.
Dr. James:
So that’s when life supposedly goes to 10 out of 10. Right, but it doesn’t always work like that, does it? Ok? Because, you know, if you ask people who have just retired, they’re happy for a bit. But my parents went back to work after a while, you know, you know, and so they couldn’t have been they, maybe, if they spent their whole life looking forward to this goalpost, right? And then when they got there, it wasn’t quite how they imagined, right? So we kind of live under this mirage, so we live in this illusion our whole life, and when we get to this point we’re going to be happy, but when people actually get there, are they always Actually most commonly not right. So that’s kind of a myth to a degree. So I’m going to build on that in two seconds, but can I just confirm that that made sense, arnold, so far yeah, trading this temporary and happiness for a future.
Dr. James:
Uh, happiness yeah, promise of being happy, right. Yeah, promise being the operative word, because promises should come true, right, but they don’t always, right. Yeah, you, the more someone is true to their word does a promise come true, right, but not always. Is that the case. Are you with me? Yeah, so here’s the thing, right, we’re exchanging present unhappiness for a future promise of being happy.
Dr. James:
Okay, so, by that definition, by that definition of retirement or financial freedom, okay, there’s actually three ways that we can be financially free, right, if you think about it. Right, the first one is we earn so much money, okay, that we don’t have to go to work anymore. We can do whatever the heck we like with our time. Right now, we can either work to build a business or, you know, earn money and invest it over the course of our life, okay, to get to that point where we have that pot, where it’s many millions, okay, usually it’s around like two, three million okay, is enough for one to live. The rest of their days depends on a few other factors, but let’s call it that, right, so that’s the magic number, ish for lots of people, yeah, so, really, we have to get that bank balance, okay. So, however, we get there, right. Most people choose the certain path, which is to work and have a career and invest what they have, what they the, the abundance that they have, the extra that they have, and grow that pot right now. Usually that takes like 20, 30 years.
Dr. James:
You can win the lottery. You can start a business. There’ll be an element of fortuitousness in there. Are you with with me? However you get it, you have to get it right. So that is the most obvious way we earn enough money to get to that point where we don’t have to work anymore. So, therefore, we don’t have to sacrifice unhappiness in the moment for happiness in the future.
Dr. James:
Are you with me? Yeah, that’s the first way Lots of graft or a huge amount of luck. Ok, second way, think about it. If you don’t need any money, right, then what that means is that you don’t have to work anymore, right? The man who wants for nothing. You have no power over the man who wants for nothing. If you want nothing, right, then cash has no power over you.
Dr. James:
Are you with me? That’s from a book, by the way 48 Laws of Power. I really love that book. Right, but think about it. Okay, we lack of creature comforts. We need to eat right, unless you want to be foragers or live up a mountain or something like that, we need to eat. It’s nice to have the heat and all right. So, realistically, even though you might be able to reduce your outgoings quite a lot, there’s still going to be some level of money that you need to have those creature comforts, unless we want the life of a hermit, you know, know the life of someone who, well, you know, like they live like, like like a nomad or you know whatever the you know very minimal, yeah, very minimal, yeah, so, realistically, we’re going to need some money at some level.
Dr. James:
So that is not practicable for most people. Is the second way, right? What about the third way? What about the third way? Right? The third way is where you love what you flipping, do whatever that is, yeah, right, yeah, because, if you think about it, you’re not sacrificing happiness in the short term. You’re happy. It just so happens that the thing that makes you happy also generates you money, right? Whatever, that is okay. And then actually, you don’t really need money at that point, right? Well, you don’t need to be so conscious about how much you’re earning, because you’re happy anyway. Right, you’re happy. Okay, you know what I mean? Yeah, and then what that means is you can earn money doing the thing that you love. Right, tuck a little bit of it away, have money in the short term, but the thing is, there’s no compromise on your happiness whatsoever, because you’re actually doing what you love right now.
Dr. James:
Easier said than done. How many people would describe their job as 10 out of 10 in terms of fulfillment? Very few, right? But here’s the thing even if we can get as close as possible to 10 out of 10, and what it means is we’re happier in the now, rather than living our life on this basis that we will be happy at some point in this future, this promise which may not come true, and that’s a really sad way to go through 30 to 40 years of our existence.
Dr. James:
And, by the way, it’s a total construct. It’s a total societal construct. Somebody just made that up one day. We all kind of went along with it, and that’s traditional finance planning. And that’s not to say that that isn’t right for some people. But I think that a lot of people get shoehorned into that version of financial freedom when it doesn’t actually work that well for them. And when you know these things, you’re able to elevate yourself beyond that and be more powerful and make conscious decisions which are better for you just clarify that version of financial that people get shooed into.
Dr. James:
Real quick, guys. I’ve put together a special report for dentists, entitled the Seven Costly and Potentially Disastrous 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 realize 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 wwwdenisoninvestcom forward slash podcast report or, alternatively, you can download it using the link in the description. This report details the seven most common issues. However, most importantly, it also shows you how to fix them Really. Looking forward to hearing your thoughts.
Dr. James:
So what I mean by that is what I mean by that is the whole retirement concept. So the retirement concept being what we have to exchange on happiness. That we have to, because that’s the premise we have to exchange unhappiness. That we have to, because that’s the premise we have to be on.
Dr. James:
People think that you have to be unhappy or we have to not be unhappy, but we have to compromise on our happiness to some degree. You know what I mean. And compromise happens as soon as something is not 10 out of 10 fun and fulfilling in the moment. Does that make sense, right? Yes, but we all think, we’re all told this narrative that we have to go to our job and that we have to sacrifice happiness, okay, for most of our lives to get to that point where we can be financially free, right? Actually, we know the three ways of retirement. That shifts your focus because it’s like a laser your brain will always try to prove itself right, right. So if you try to find the things that make you happier in the here and now and generate your money, then you’ve got the best of both worlds. But it comes from understanding the three ways to be retired does that make sense now?
Dr. Arnold:
yeah, no, that makes absolute sense. I wanted to ask then, because you work with, um a lot of dentists, um what percentage would you say dentistry is their happy place? Whether it’s 10 out of 10? You know because I I enjoy dentistry, but it’s not 10 out of 10, um, so have you ever met anybody who said it’s a 10 out of 10?
Dr. James:
I’ve. You know, this is a brilliant question and I actually feel like I’m in a fortunate position that I will have a decent answer for this. Or you know, because it’s an anecdotal question, you know, but through talking to lots of dentists all day long, you’re right, you get a good feel for it. Right, and I suppose, from my position, the fortunate thing about my position is I am someone who talks to lots of dentists all day long and then I usually ask them that question actually, so I get that data. So what I would say is this I would say that probably five percent love it like they love they would do it for free, like they flip and think it’s incredible, okay, and that’s cool. Yeah, that’s cool and genuinely I’m happy for someone like that.
Dr. James:
The people that, the people that my heart really goes out to, are the people who think it’s like two out of ten, but they feel like it’s the only way that they can make money and contribute towards their retirement. You know, and to a degree, uh, I feel like that is perpetuated by the finance industry as the only way to be financially free. You know, and it’s just horse hockey, it’s just nonsense. You know, you’re happy in the moment you are free. You know, and I get that sounds like this really woo-woo ideal thing that people throw around all the time like life gurus throw around, you know, and maybe that is a little bit of an ideal, but even if we can take someone from 3 out of 10 to 7 out of 10, 8 out of 10 in the moment, then that’s a huge improvement. Right, and it really when you ask people who are 65 and people who are 70, who are retired right, that is an awful lot of their life to sacrifice to hopefully make that point where they’re told that you will be happy because you’re free, right, and then when you get there, your perspective is totally different.
Dr. James:
Right, and here’s the thing, not to be super morbid, but there’s no guarantee any of us are going to live that long. Right, and we didn’t. The universe, there’s no universal law of the universe that says you have to wait 30 years, you have to work for 30 years to be retired. There’s no law of the universe that says that. Right, that’s totally a construct, that’s totally a narrative that we were fed that if you scratch the surface for two seconds, it isn’t even necessarily true. Yeah, so let me. Let me pause for two seconds. Let me pause for two seconds, right? Is this? Does this make sense? Or is this too abstract?
Dr. Arnold:
is this yeah, no, it definitely makes sense. I want to drill into a few more things. Um with you. So if you ask somebody, do you want financial freedom, I’m sure 100 are going to say yes. But then comes the reality what actually takes us away from financial freedom? What decisions are we making that are, you know, actually taking us away from this?
Dr. James:
I love how beautifully you’ve asked that question, right, because it’s like it’s kind of like this. It’s kind of like it’s a little bit like saying this you know that what is costing everybody $2 million a year, right, the fact that we don’t know how to make $2 million a year. Right, so it’s costing us $2 million minus our payslip every year, right? And I love how you’ve worded that question. It’s kind of like a little bit of a reframe, right, because our brain will look for the bar. We set it. We set it right. So if we make the bar two million minus this, then what we’ll do is we’ll do things to be able to get to that point, right, and of course, they have to be moral and ethical and all the rest right. But it’s a little bit of a reframe. It’s saying that that’s where we should be, rather than this is where we should be, if, of course, that’s what we want to do, because it’s not all about money. Money, only money is only important when you need more of it to have more freedom in your life. That’s the only reason that it’s important, right? And actually just blindly accruing money is also unhealthy in itself, because you’re just chasing a number on a bank screen, and what are you doing to yourself and the people around you to get to that point? Right, there should always be an objective. There always has to be an amount that we’re aiming for, right? So, to answer your question, okay, here’s the thing I feel. In fact, let me give you a description, okay, which will help, or a model through which to regard finance.
Dr. James:
Okay, so, think about it like this right, we’re thinking about the subject of wealth. Let’s imagine that there is an orb floating in front of us right now, and this orb is the orb of knowledge whenever it comes to finance. So, everything that humanity knows about money is contained in this orb. Everything they will know, everything they did know, everything they knew at one point and then they forgot, is all contained within here, right? So that is the orb of knowledge whenever it comes to wealth. Right, here’s the thing is the orb of knowledge whenever it comes to wealth. Right, here’s the thing about the orb of knowledge it actually has two halves building wealth and creating wealth. So, if you imagine that, or cut it into two hemispheres, build wealth and create wealth, okay, okay, so building the difference between building and creating yes, yes, yes, yes, yes, 100.
Dr. James:
So you’d like me to explain the difference. Is that what you said?
Dr. Arnold:
yeah, I’m just being too simple, but it sounds like the same thing building wealth and creating it oh, I always see what you mean.
Dr. James:
Ah, right, yeah, yeah, I totally hear you. So here’s the thing building wealth is how we invest. So we build our wealth like how we build a house. Right, okay, so we build it brick by brick by brick by brick by brick. Then at the end we have the house, the financial house, and in the house we have security, as in. We have the house, the financial house, and in the house we have security, as in. We have financial security, right, but we’ve got to build the house and put the roof on it first. Right, where do we actually get the bricks for the house? Right, that’s creating wealth. Right, we have to create the bricks right Now.
Dr. James:
Building wealth is akin to investing, because what we do is we make contributions to an investment account. Then it builds over time, like stacking the bricks on top of each other. Of course, that’s not exactly true, because it grows in a compounding fashion. Therefore, it grows exponentially rather than linearly, but we still have to build the house, right? That’s the point. So that’s how investing works.
Dr. James:
People think that we invest for passive income. It’s partly true. The main reason that we invest is so that we get a compounding pot that one day that we can live off, and the idea is that you don’t dip into it until you hit 65, right, most of the time. Most of the time, there’s a little bit more to it than that, of course. And, by the way, we’re using 65. We’ve just pulled out, it’s an arbitrary number that we’re using as a typical retirement, and it could be sooner, it could be after, I don’t, we don’t know.
Dr. James:
Okay, but we’re just using that today as a oh. What’s a good word is a stop gap, I suppose, or an explanatory term. Are you with me? So, anyway, create wealth. Creating wealth is where we get the bricks from. Okay, so we have to be able to go to work right to get the money. That’s usually how. So we have to be able to go to work right to get the money. That’s usually how it’s done, right, unless we create something else that generates money for us, right, but for most people, for 95% of people, we’ve got some time, We’ve taken our time, we’re putting it into a system, which is our job, and we’re obtaining money as the output, right? Let me pause because I’ve been talking for a while With me.
Dr. Arnold:
Yeah, yeah, no, yeah, you made it clear about building wealth, creating wealth and for us, creating wealth is the job that we have. That’s the way we know until we retire.
Dr. James:
Hell yeah, right. So for most people, what they think is they think that they can use investing as they think, that they use investing as something to create wealth. But really investing works slightly differently than that. You have to. You have to be able to leave your money in those investments accounts for a long time to get the best result, right? If you want to actually earn more money, which is what a lot of people are after, if you want to actually earn more money, which is what a lot of people are after, it’s probably not via the investing path per se, or at least investing in stocks and bonds and all of that. Now, you can invest your money, just not in the assets that your financial advisor will typically link you with, will typically recommend to you, at least. If you want to earn more money, right. Earning more money comes from your skills and abilities, generally speaking, right. So, if you think about it, in any system, there’s an input, there’s a process and there’s an output, right. So we want the input, which is our time, to be able to be multiplied by the system as much as possible to give us the greatest possible output in terms of money, right?
Dr. James:
People talk about passive income If you work one hour a week and you earn 100 grand a week, right, you’ve got very close to passive income. Right. Because you’re working one hour a week and obtaining 100 grand, right, we get to that point. We have to put some energy into enhancing the system, right. Enhancing the processes what are an example of the systems and processes, our skills and abilities, right?
Dr. James:
So a dentist who is extremely good at describing the value of what they do to the patient and therefore the patient is willing to invest in them to a higher standard is someone who has more, is someone who has enhanced that system. Because they’re good at selling right, they’re good at describing that value right. Another way, and that’s obviously important, we have to be able to describe the value of what we do, but we have to be able to serve those people as well, so we have to be able to give them a lot of value on the back end in return, give them a lot of value in terms of the treatment that we give them, right? So we can only ever ask someone to invest more in us when we know that we’re going to give them so much. Our quality of treatment is going to be so flipping high that whatever they invest in is going to look like a good deal. Right, and that’s leverage, are you with me? Well, that’s just one example. You know I mean so would you say it’s.
Dr. Arnold:
It’s probably fair to put your focus into being able to earn a lot more before you start pouring that into investment vehicles I would say it’s a great question and you know it’s a very controversial one.
Dr. James:
Sorry, will you finish this then, arnold? Yeah, yeah, yeah, sorry, mate, I thought there was more to that. So here’s the thing. Ultimately, there is going to be no right or wrong for anyone. Are you with me, if you ask me personally particularly anybody sub 30, we should be spending the majority of our investable capital enhancing our skills, because that’s going to be the thing which allows us to earn more money for the rest of our life, and that compounds as well. Then we take some of that and we put it into financial investments and we put it into capital markets. Are you with me? Now, to what proportions we do that? That’s going to be different for everybody, and some people might just be happy with what they earn, and they might be happy with their position in terms of how many hours a week they’re working, and they might be happy and this is where I have to be super sensitive. There’s no formula that suits everybody, right? If you want my personal opinion, I think that everybody who’s sub 30, certainly, and even a little over 30 as well you know, there’s no hard cut off point should be prioritizing very careful with my words, prioritizing, not totally focusing on, but certainly putting more energy into investing in 500, not the s&p 500, the s&me 500 nice, by the way, that wasn’t mine, I’m not going to claim credit from that one.
Dr. James:
I heard it on a podcast the other day. Uh, it was. It was alex hermosi’s podcast, for anybody who’s interested. Yeah, and he talks about some similar stuff to this as well, and and I have to say that I agree with it. I do, Because this is the thing I really don’t want people to get trapped into taking all of their wealth and putting it into the build wealth side of the sphere, because what that means is that you’re locked in Okay, you’re locked into this pathway that you might necessarily be happy with.
Dr. James:
I mean, we saw the I don’t know if you saw the budget today that you might necessarily be happy with. I mean, we saw the I don’t know if you saw the budget today. The chancellor announced that there’s no lifetime allowance now on pensions Okay, there’s no lifetime allowance. Previously, if you had over a million in there, you got really heavily taxed, okay, and now you can put 60,000 pounds in your pension every year. Now, pensions are great, don’t get me wrong and this totally depends on the individual, right.
Dr. James:
I feel that when we’re young, putting our money into this magic pot that will compound it okay, will compound it with time, but also means that we’re saying goodbye to it for 30 years actually means that we’re trapped on the build wealth side of things whenever we might necessarily like our jobs, you know, and that’s a huge sacrifice to make. And all these decisions being able to make better decisions comes from awareness and education and we’re led to believe that we have to prioritize that OK, when actually it might be the path for everyone. Right, it may not be the path that suits everybody, it may be the path that suits some, but I feel like most people are guided toward, lots of people are guided towards that they don’t actually necessarily align with it or don’t even realize that there’s other alternatives, which is what I’m here to preach about today.
Dr. Arnold:
I just want to ask you that, ok, so I know there’s no one size fits all, but if somebody came to you and said, james, what is the perfect investment strategy of? I’ve invested in myself, I’m now ready to to invest um in in different funds, stocks, whatever, what is the perfect one to to execute on?
Dr. James:
I love that. Okay, so we’re kind of taking the s and me 500 out of the game right now. We’re like james, just tell me about the s and p and all of that, right, uh, but uh, any, for anybody who doesn’t know, the S&P, in simple terms, is America’s stock market, so it’s an example of something that someone may invest in. No financial advice, by the way, on that one, just to be super clear. We have to be super careful about this stuff. So it’s very, very important that if somebody doesn’t have a total understanding of how the capital markets work, to definitely get some advice, particularly when we’re talking about these things. Because here’s the thing you can have the best investment, but actually most of it comes down to your execution as to whether or not you’ll actually generate any funds from that. So, pure and simple. Pure and simple. If you don’t need the money for 10 years or greater, your portfolio, when you remove all other factors, including emotions, including ability to withstand volatility, all those other factors which can mean that people often diverge from this philosophy that I’m about to describe, if you can just home it right down to what’s going to give you the best returns and has the most historical data to prove that, then, really, any portfolio in which we don’t need the money for over 10 years our time horizon from which we’re going to start making withdrawals is 10 years or more should, in likelihood, be constituted of 100% equities or 100% stocks. So what does that mean? There’s a little bit more to it than that. All I’m doing right now is, from a high level, describing an avenue that people can use to invest their wealth. How you actually execute that. There is way, way, way, way, way, way, way more to it. However, that little gemstone right there, that little pearl, took me flipping ages to figure out. Okay, took me so long right, and I used to do all sorts of weird and wacky things and buying individual companies and watching them going up and watching them go down.
Dr. James:
I’m not just talking about any equities. I’m talking about funds that can represent the global stock market, okay, but obviously we have to get into a whole host of other things like which funds and how do that, how do they work, and stuff like that. That’s actually the point where we cross into financial advice, so we’ve got to be really careful. The second I recommend a product, the second I talk about a fund, is actually advice at that point. Before that, you can say quite a lot, particularly on a podcast, as we’re doing right now. That’s the line that we can’t cross and just like the caveat that one more time, even though we now know where we should be looking, there is way more to actually executing that in order for it to be successful. So I certainly wouldn’t want anybody to just go ahead and jump into making those investments based off the back of what I’ve just said and somebody wants to now get that financial advice, who do they go to?
Dr. Arnold:
Do I go to an accountant? Do I go to a financial advisor, a wealth advisor? Who do I go to?
Dr. James:
That’s a good question. I would say it very much depends on what we’re trying to achieve. Yeah, a good accountant is worth his or her weight in gold. The thing about accountants is they’re very good at minimizing the tax bill in the here and now, but they don’t often think about what that money might be used for, because they don’t always get invested, investing that well. So what they’ll say is so here’s a good example, arnold. So they’ll say, okay, well, why don’t you put, why don’t you stick all this extra money you have in the sip, right?
Dr. James:
Then your personal tax bill is going to go from it’s going to half, pretty much, okay, past a certain point, right. And then you’ll be like, okay, well, I’ve got all this money in this sip, brilliant, what do I do with it? And they’ll be like I, I don’t know, that’s not my job. We’ve just put it in the sit for you. We’ve saved you the wealth, we saved you the tax bill. Are you with me? Yeah, but then we also have money in a sip that we need to optimize its output in terms of investing in the correct thing, and then also, as well as that, we need to understand that that money is now locked away until we hit retirement age, which will probably be 57 for most people who invest in their SIP now. And when I say retirement age on that instance, what I mean is the point that you can make withdrawals from your SIP.
Dr. Arnold:
Okay, so accountants might not give you the full picture for investing. Where else can you go to get solid advice?
Dr. James:
I would say it’s a bit like this Anybody who’s a dentist will resonate with this. You know, when you go to that, we all know, we know that there’s, there can be. If we, if we want a root canal, right, we go to a root canal specialist, right? You know, a generalist will never be able to do it to that standard, and that’s fine, that’s totally okay. Right?
Dr. James:
So we put it in dental terms is more understandable, right, if I ever want a root canal, I would pay a huge amount if I needed a root canal, because I know that a specialist will really, really, really know their stuff, get the cone beam out and all of those things, right, if they have to, yeah, um, so, to answer to, to bring that back to what you were saying just a minute ago, I would find a independent financial advisor and I’d also find one that is knowledgeable and reputable.
Dr. James:
Okay, that’s exactly what I would do now. That is, you know, of the, of the, of the, of the diaspora of advisors that are out there, you know, to find one that ticks those boxes, we have to do a research, definitely, because not everybody’s going to be flipping amazing. You know what I mean. It makes a huge difference for us, because obviously that will mean huge implications for our financial future, given the skill and knowledge of that individual that we can procure. So what I would say is, on the dentist who invest facebook group, that the advisors that are on there I’ve screened every single one of them so I know that they’re of a high standard.
Dr. Arnold:
Perfect, perfect. I know your time is valuable. You’ve got a lot of different engagements to be at. Just in closing, give us some thoughts about where your mind is, where you see things going with the finance world, investing, and what are you keeping your eyes on in these next few months I am keeping my eyes on.
Dr. James:
I mean put it like this I well famous last words because no one can ever predict the markets, but I am not super optimistic on equities, at least to the end of this year. I think that there’s a lot of across the board tax hikes in most of the major economies which are probably not going to be good for those. Here’s the thing Long term, they always recover, or they always have done. Short term, it’s very hard to make predictions, although that’s my hunch. So for me, you know, as someone who’s 31, I prioritize a lot of my investing in the S&ME 500. And of course, you know I have it spread out across different things. I don’t know what you might do.
Dr. James:
What you might say is you might say traditional financial logic is whenever things are reduced in price as they are right now, that now is a fire sale. Therefore, it represents the best opportunities. It all depends on your time horizon and what you’re trying to achieve. Right, you’re trying to create more wealth, invest in yourself. And if you’re trying to achieve right, you’re trying to create more wealth, invest in yourself. If you’re trying to invest your, you know, if you’re trying to build more wealth, then at that point. That’s when we prioritize financial markets. Buying a business, whatever it is, however, that looks for individuals Purchasing assets, is building wealth.
Dr. Arnold:
Perfect, perfect. And if people want to find you, contact you, what is the best way?
Dr. James:
Best way to contact myself is via my Facebook group, which is called Dentist who Invest, a community group for dentists who are interested in finance. You can find it on Facebook. Like I say, I’ve also got my website, wwwdentistwhoinvestcom, where you’ll be able to find my email on there, Should anything that I’ve said today interest you. It’s been flipping loads of fun. I really hope that everybody listening got a ton of value and they hopefully now see finance in a different way, because here’s the cool thing about all of this stuff this took me flipping ages to figure out. These are the gems of the gems and I really hope that I’ve accelerated everybody who’s listening’s path. Everybody who listening I’ve accelerated their path to understanding of the world of wealth.
Dr. Arnold:
Yes, no, definitely. Thank you for all of that, all that value that you’ve shared. Guys, make sure to check out Dr James Martin Density Invest. I’ll put the details in the description as well, and I’ll see you guys at the next video.
Dr. James:
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.
Dr. James:
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Dr. James:
So their understanding of finance can be elevated and they can hit the next level of financial success in their life.
Dr. James:
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.
Dr. James:
Welcome.
Dr. Arnold:
Welcome to the Dentists who Invest podcast. So, guys, welcome to another episode. And today I’m excited because we are going to be talking about finances investing when it comes to us as dentists. And I’ve got the one person who you go to when you want to talk about investing as a dentist We’ve got Dr James Martin with us. Dr James Martin, thank you for being on this call with me today.
Dr. James:
Oh, you flatter me, my man, you flatter me. Thank you so much. It’s been a pleasure to be here and right back at you, my friend. I’ve been equally excited to come on today and talk about anything and everything investment, and not just your conventional investment stuff. Two twists chucked in there as well, and we’re also going to make it specific some stuff through twists chucked in there as well, and we’re also going to make it specific.
Dr. Arnold:
Specific to dentists yes, definitely, and um, you know, just for those, um, you know most people in dentistry know um what you do, who you are, but just for those few, those very few that have been in iraq, um, just give us a little background about you. Know where you qualified from, I know you’re from Northern Ireland, but just give us a little brief introduction to yourself.
Dr. James:
Cool, all right. Well, I hope people know who I am. Perhaps some people have heard of me that would be great, but anyway, for those who haven’t, my name is Dr James Martin. So I graduated from Leeds in 2016, leeds Dental School, and then, to cut a very long story short, throughout the course of the next four to five years, I began to read about investing. Then, once I got a little bit of a handle on how that worked a lot of a handle on how that worked what I did next was when I had a hiatus out of dentistry.
Dr. James:
I had this hiatus out of dentistry due to this knee injury that I had, and what I did next was I started this Facebook group centered around investing for dentists, and also not just purely straight up the financial capital markets and all of that stuff, but also the business side too, because that is a huge element that we sometimes overlook whenever it comes to, well, our perspective on investing, what we perceive investing to contain or what we perceive it to constitute. So, actually, it’s this more holistic vantage point on investing which is to say, yes, we invest in the capital market. Yes, we take our money and we grow it long term in our ices and our sips, whatever the heck it is that we choose, but also that we invest in yourself, because that is a huge wealth creation portal. That is a huge wealth creating creation vector. Investing in our skills and knowledge, too, which I also preach about a lot, and what we’re going to be talking about today perfect perfect.
Dr. Arnold:
That rounds up real nice. So I mean, you said a lot of things there, um, but I I want to um, take it to the to the very, very beginning. You mentioned that you had an injury. And one thing as dentists, you know we can make a great living from our career, but at the same time, you know anything can happen. And I know there’s things like, you know, income protection. But I mean for you, did you have anything in place that, if you weren’t going to be able to work for a while, you’d still be able to maintain your lifestyle and sustain yourself, your family? Um, what? What were things like for you at that time?
Dr. James:
so great question, right? So I had my investments and at that time around about that time, they mainly constituted cryptocurrency. It was mainly bitcoin. Okay, because I like to play a little fast and loose, you know what I mean. I like to. I like I’m I’m risk tolerant, you know I I can accept a little a degree of risk. No, that’s not for everybody. That was for me around about that and partly put it like this, not knowing what I know now, I probably wouldn’t have weighted my portfolio as towards crypto, as I had around about that time. But hey ho, you live and learn. You know you’ve got to go through these experiences in order to learn the lessons. You’ve got to be old. You’ve got to be young and foolish to be old and wise, which is a saying that I absolutely love. You ever heard that?
Dr. James:
no that’s cool, isn’t it? The more mistakes you make, the more wisdom you get, but anyway, so, um, yes, that happened. And then what it? What it revealed to me? Really, it didn’t actually cause any detriment to my earning potential until I had the surgery for it. So I actually injured the knee and that was not great.
Dr. James:
And for anybody who hasn’t heard, maybe I don’t know if I’ve ever said this before on any content or anything but I tore my ACL, which is flipping zero fun whatsoever, or anything, but I tore my ACL, which is flipping zero fun whatsoever. If anybody’s ever been through that, they will agree with me on that one. That will resonate with them because it’s flipping, painful and, uh, actually I continued to go to work even though I just injured my knee. I didn’t even know that it needed surgery until someone told me the day after I thought that it would just heal, basically, but I continued to go to work. I had this leg brace so I was able to get around, and then, really whenever, when it actually began to began to get in the way of me attending work was after I had the surgery, which meant that I needed to take some time off, and the surgeon said to me, james, you need to take four time off. And the surgeon said to me James, you need to take four weeks off in order for you to need to recover.
Dr. James:
So I was young at the time, I was foolhardy and I thought to myself he says four weeks. I reckon I can do it in two. Okay, I’ll just take it easy, it’ll be fine. Right, went back to work after two weeks. Worst decision ever it was. It’s becoming painful and I thought to myself but why the heck am I going to work? Why am I risking my long-term health? Why am I sacrificing my health for money in the short term when there’s long-term implications and plus as well as that? That was when I’d already done all this pre-reading and learning on how you can invest your wealth and also how you can create more in alternative ways outside of dentistry.
Dr. James:
And I just thought, james, now is the time. It’s like you put in all this prep for this moment. So what that meant was I had this epiphany and I thought, well, if now’s the time, now’s a good time as any to just take some time out from dentistry and then employ all those methods and enhance them even further and really really fall back on them. Yeah, um, and then, after that happened, I left my job. I said to my boss listen, it’s really not working. I’m really sorry. I need some really long time. I don’t know when I’m going to be back. I think it’s better off that I just leave. If I’m honest, find someone else. Uh, and that’s what happened. Um, and then I had this four week, sorry, sorry. The doctor said to me. I called the doctor up and I said listen, I’m really sorry, I should have listened. This is what’s happened. You said four weeks. I went back to work. After two weeks I went. I’ve been working for a week. The knee’s huge, it’s like purple, is a really bad shape. What should I do? Right? And he said okay, you’re gonna listen to me this time. You don’t need four weeks, you need four months, okay. And I was like, right, listen, I’m gonna listen to this dude. I questioned him before, I’m not gonna question him now. Right, took this four month hiatus out of dentistry.
Dr. James:
About a week after that, I think, I started dentistry invest, the facebook group and then, really interestingly, uh, I started posting content on there. I’d always wanted to post content. I always felt like that was my energy, that was always something that I wanted to do. And here’s the thing I wanted to do it just for fun. You know, I wasn’t really attached so much to whether or not anybody would engage with it or watch it. Thankfully, some people did and the group started to grow and it became a thing and somebody shared it on For Dentists by Dent dentists, which is one of the larger facebook groups. And then I remember that the, the members, started to increase quite a lot and I thought, okay, wow, we’re really on to something here.
Dr. James:
And then I went back to dentistry after about four months, and, and, and, and, and.
Dr. James:
Yeah, but then at that point my heart wasn’t really in it, because I had a taste of this whole other dimension, this whole other side of reality which I connected with more, which was, which was related to dentistry, but not exactly clinical dentistry, and then I realized that at that point I was having more fun, fulfillment, from doing these other things.
Dr. James:
So I said to myself, okay, well, in for a penny, in for a pound. I’m the sort of person if I do something I want to be 1000 committed to it, because then at that point I’m in a position where I can help the most people I can. I can do the most. I can do the most of that task. I can do the most of that, that activity, I can undertake the most of that thing and then therefore improve the most at it and become the best as soon as possible. So for me it’s like we pick one thing and we go, we go all in right. Which can work, can work, but it can also not work. But you know what? It’s been two years since I’ve left clinical dentistry and I haven’t looked back.
Dr. Arnold:
Let’s say that.
Dr. James:
So at the moment you’re not a practicing dentist no, I, I retired inverted commas two years ago, retired, retired early, although, to be fair, although I say I say that whimsically and somewhat ironically, because now, if anything, it’s like we’ve been seven days a week you know what I mean, but I love this stuff, you know, like you and I chatting right now, arnold, this is work. Inverted commas. You know this is fun right.
Dr. Arnold:
So for the person that’s going to tear the acl next month, next year, they’ve just qualified as a dentist. What are you saying to them to future proof themselves?
Dr. James:
you know what right you want to hear something freaky. Somebody reached out to me and his name was james and he was an fd and he tore his, tore, his acl if he wasn’t an fd.
Dr. James:
He was in around that, I think it was just afterwards and my heart went out to that guy and I was like whoa, that is so what a coincidence. Um, so what I would say is I would say that no matter what perceived negative thing has stricken any one of us, whether it be the acl or whether it be something else, if we have the mindset that we can see the opportunity, that we can see that there may be an opportunity there or there well, there will be an opportunity there. There always is an opportunity there then what it means is we can frame it in a positive way. Life happens for us, not to us, right, and what I mean by that is any event in our life can serve us if we choose it, if we choose it to and we choose to learn the lesson there. We just have to see it from that vantage point and we’ll always find something good, something that can be useful for us, something that can enhance us as a person going forwards Very powerful, awesome, awesome.
Dr. Arnold:
I want to change gears here. Financial freedom it sounds amazing, it sounds great, but what is?
Dr. James:
it. That’s a dream, right there, ok, right. So I really like this question and I’m going to. I’ve got a really long winded answer. I’m going to do my best to summarize this response, and the reason is it’s got something really powerful contained therein.
Dr. James:
So, if you think about it, right, financial freedom the definition is where you can choose to work or not work. Right, you have the option, right. So another way of describing financial freedom is we stop exchanging present unhappiness for future happiness, right? So what do I mean by that? Most of us go to a job and whether we hate it or whether we quite like it, we’d still rather be doing something else. So there’s a compromise there. Are you with me?
Dr. James:
Yeah, so the thing that we’d rather be doing in that moment, the thing that will make us really happy, is like 10 out of 10 in terms of fulfillment. Right, and that can be anything that can be lounging around, that can be tv, that can be on holiday, whatever, right, it might even be your job. You might actually love your job and that’s cool. Are you with me? Yeah, so that thing for you in terms of satisfaction is 10 out of 10, right, but we have to do this other thing to earn money, as in our job, so that we can sustain ourselves, so that there’s some money coming in, so that we don’t run into problems, so that we don’t lose the roof over our head, right? So we’re exchanging unhappiness because there’s a compromise there to some degree. Whether it’s seven out of 10, or whether our job is seven out of 10, eight out of 10, nine out of 10, or two out of 10, there’s always a compromise there. And the promise is we’re going to be happy at some point in the future when we retire, because that’s what we’re all told, that we will be Right.
Dr. James:
So that’s when life supposedly goes to 10 out of 10. Right, but it doesn’t always work like that, does it? Ok? Because, you know, if you ask people who have just retired, they’re happy for a bit. But my parents went back to work after a while, you know, you know, and so they couldn’t have been they, maybe, if they spent their whole life looking forward to this goalpost, right? And then when they got there, it wasn’t quite how they imagined, right? So we kind of live under this mirage, so we live in this illusion our whole life, and when we get to this point we’re going to be happy, but when people actually get there, are they always Actually most commonly not right. So that’s kind of a myth to a degree. So I’m going to build on that in two seconds, but can I just confirm that that made sense, arnold, so far yeah, trading this temporary and happiness for a future.
Dr. James:
Uh, happiness yeah, promise of being happy, right. Yeah, promise being the operative word, because promises should come true, right, but they don’t always, right. Yeah, you, the more someone is true to their word does a promise come true, right, but not always. Is that the case. Are you with me? Yeah, so here’s the thing, right, we’re exchanging present unhappiness for a future promise of being happy.
Dr. James:
Okay, so, by that definition, by that definition of retirement or financial freedom, okay, there’s actually three ways that we can be financially free, right, if you think about it. Right, the first one is we earn so much money, okay, that we don’t have to go to work anymore. We can do whatever the heck we like with our time. Right now, we can either work to build a business or, you know, earn money and invest it over the course of our life, okay, to get to that point where we have that pot, where it’s many millions, okay, usually it’s around like two, three million okay, is enough for one to live. The rest of their days depends on a few other factors, but let’s call it that, right, so that’s the magic number, ish for lots of people, yeah, so, really, we have to get that bank balance, okay. So, however, we get there, right. Most people choose the certain path, which is to work and have a career and invest what they have, what they the, the abundance that they have, the extra that they have, and grow that pot right now. Usually that takes like 20, 30 years.
Dr. James:
You can win the lottery. You can start a business. There’ll be an element of fortuitousness in there. Are you with with me? However you get it, you have to get it right. So that is the most obvious way we earn enough money to get to that point where we don’t have to work anymore. So, therefore, we don’t have to sacrifice unhappiness in the moment for happiness in the future.
Dr. James:
Are you with me? Yeah, that’s the first way Lots of graft or a huge amount of luck. Ok, second way, think about it. If you don’t need any money, right, then what that means is that you don’t have to work anymore, right? The man who wants for nothing. You have no power over the man who wants for nothing. If you want nothing, right, then cash has no power over you.
Dr. James:
Are you with me? That’s from a book, by the way 48 Laws of Power. I really love that book. Right, but think about it. Okay, we lack of creature comforts. We need to eat right, unless you want to be foragers or live up a mountain or something like that, we need to eat. It’s nice to have the heat and all right. So, realistically, even though you might be able to reduce your outgoings quite a lot, there’s still going to be some level of money that you need to have those creature comforts, unless we want the life of a hermit, you know, know the life of someone who, well, you know, like they live like, like like a nomad or you know whatever the you know very minimal, yeah, very minimal, yeah, so, realistically, we’re going to need some money at some level.
Dr. James:
So that is not practicable for most people. Is the second way, right? What about the third way? What about the third way? Right? The third way is where you love what you flipping, do whatever that is, yeah, right, yeah, because, if you think about it, you’re not sacrificing happiness in the short term. You’re happy. It just so happens that the thing that makes you happy also generates you money, right? Whatever, that is okay. And then actually, you don’t really need money at that point, right? Well, you don’t need to be so conscious about how much you’re earning, because you’re happy anyway. Right, you’re happy. Okay, you know what I mean? Yeah, and then what that means is you can earn money doing the thing that you love. Right, tuck a little bit of it away, have money in the short term, but the thing is, there’s no compromise on your happiness whatsoever, because you’re actually doing what you love right now.
Dr. James:
Easier said than done. How many people would describe their job as 10 out of 10 in terms of fulfillment? Very few, right? But here’s the thing even if we can get as close as possible to 10 out of 10, and what it means is we’re happier in the now, rather than living our life on this basis that we will be happy at some point in this future, this promise which may not come true, and that’s a really sad way to go through 30 to 40 years of our existence.
Dr. James:
And, by the way, it’s a total construct. It’s a total societal construct. Somebody just made that up one day. We all kind of went along with it, and that’s traditional finance planning. And that’s not to say that that isn’t right for some people. But I think that a lot of people get shoehorned into that version of financial freedom when it doesn’t actually work that well for them. And when you know these things, you’re able to elevate yourself beyond that and be more powerful and make conscious decisions which are better for you just clarify that version of financial that people get shooed into.
Dr. James:
Real quick, guys. I’ve put together a special report for dentists, entitled the Seven Costly and Potentially Disastrous 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 realize 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 wwwdenisoninvestcom forward slash podcast report or, alternatively, you can download it using the link in the description. This report details the seven most common issues. However, most importantly, it also shows you how to fix them Really. Looking forward to hearing your thoughts.
Dr. James:
So what I mean by that is what I mean by that is the whole retirement concept. So the retirement concept being what we have to exchange on happiness. That we have to, because that’s the premise we have to exchange unhappiness. That we have to, because that’s the premise we have to be on.
Dr. James:
People think that you have to be unhappy or we have to not be unhappy, but we have to compromise on our happiness to some degree. You know what I mean. And compromise happens as soon as something is not 10 out of 10 fun and fulfilling in the moment. Does that make sense, right? Yes, but we all think, we’re all told this narrative that we have to go to our job and that we have to sacrifice happiness, okay, for most of our lives to get to that point where we can be financially free, right? Actually, we know the three ways of retirement. That shifts your focus because it’s like a laser your brain will always try to prove itself right, right. So if you try to find the things that make you happier in the here and now and generate your money, then you’ve got the best of both worlds. But it comes from understanding the three ways to be retired does that make sense now?
Dr. Arnold:
yeah, no, that makes absolute sense. I wanted to ask then, because you work with, um a lot of dentists, um what percentage would you say dentistry is their happy place? Whether it’s 10 out of 10? You know because I I enjoy dentistry, but it’s not 10 out of 10, um, so have you ever met anybody who said it’s a 10 out of 10?
Dr. James:
I’ve. You know, this is a brilliant question and I actually feel like I’m in a fortunate position that I will have a decent answer for this. Or you know, because it’s an anecdotal question, you know, but through talking to lots of dentists all day long, you’re right, you get a good feel for it. Right, and I suppose, from my position, the fortunate thing about my position is I am someone who talks to lots of dentists all day long and then I usually ask them that question actually, so I get that data. So what I would say is this I would say that probably five percent love it like they love they would do it for free, like they flip and think it’s incredible, okay, and that’s cool. Yeah, that’s cool and genuinely I’m happy for someone like that.
Dr. James:
The people that, the people that my heart really goes out to, are the people who think it’s like two out of ten, but they feel like it’s the only way that they can make money and contribute towards their retirement. You know, and to a degree, uh, I feel like that is perpetuated by the finance industry as the only way to be financially free. You know, and it’s just horse hockey, it’s just nonsense. You know, you’re happy in the moment you are free. You know, and I get that sounds like this really woo-woo ideal thing that people throw around all the time like life gurus throw around, you know, and maybe that is a little bit of an ideal, but even if we can take someone from 3 out of 10 to 7 out of 10, 8 out of 10 in the moment, then that’s a huge improvement. Right, and it really when you ask people who are 65 and people who are 70, who are retired right, that is an awful lot of their life to sacrifice to hopefully make that point where they’re told that you will be happy because you’re free, right, and then when you get there, your perspective is totally different.
Dr. James:
Right, and here’s the thing, not to be super morbid, but there’s no guarantee any of us are going to live that long. Right, and we didn’t. The universe, there’s no universal law of the universe that says you have to wait 30 years, you have to work for 30 years to be retired. There’s no law of the universe that says that. Right, that’s totally a construct, that’s totally a narrative that we were fed that if you scratch the surface for two seconds, it isn’t even necessarily true. Yeah, so let me. Let me pause for two seconds. Let me pause for two seconds, right? Is this? Does this make sense? Or is this too abstract?
Dr. Arnold:
is this yeah, no, it definitely makes sense. I want to drill into a few more things. Um with you. So if you ask somebody, do you want financial freedom, I’m sure 100 are going to say yes. But then comes the reality what actually takes us away from financial freedom? What decisions are we making that are, you know, actually taking us away from this?
Dr. James:
I love how beautifully you’ve asked that question, right, because it’s like it’s kind of like this. It’s kind of like it’s a little bit like saying this you know that what is costing everybody $2 million a year, right, the fact that we don’t know how to make $2 million a year. Right, so it’s costing us $2 million minus our payslip every year, right? And I love how you’ve worded that question. It’s kind of like a little bit of a reframe, right, because our brain will look for the bar. We set it. We set it right. So if we make the bar two million minus this, then what we’ll do is we’ll do things to be able to get to that point, right, and of course, they have to be moral and ethical and all the rest right. But it’s a little bit of a reframe. It’s saying that that’s where we should be, rather than this is where we should be, if, of course, that’s what we want to do, because it’s not all about money. Money, only money is only important when you need more of it to have more freedom in your life. That’s the only reason that it’s important, right? And actually just blindly accruing money is also unhealthy in itself, because you’re just chasing a number on a bank screen, and what are you doing to yourself and the people around you to get to that point? Right, there should always be an objective. There always has to be an amount that we’re aiming for, right? So, to answer your question, okay, here’s the thing I feel. In fact, let me give you a description, okay, which will help, or a model through which to regard finance.
Dr. James:
Okay, so, think about it like this right, we’re thinking about the subject of wealth. Let’s imagine that there is an orb floating in front of us right now, and this orb is the orb of knowledge whenever it comes to finance. So, everything that humanity knows about money is contained in this orb. Everything they will know, everything they did know, everything they knew at one point and then they forgot, is all contained within here, right? So that is the orb of knowledge whenever it comes to wealth. Right, here’s the thing is the orb of knowledge whenever it comes to wealth. Right, here’s the thing about the orb of knowledge it actually has two halves building wealth and creating wealth. So, if you imagine that, or cut it into two hemispheres, build wealth and create wealth, okay, okay, so building the difference between building and creating yes, yes, yes, yes, yes, 100.
Dr. James:
So you’d like me to explain the difference. Is that what you said?
Dr. Arnold:
yeah, I’m just being too simple, but it sounds like the same thing building wealth and creating it oh, I always see what you mean.
Dr. James:
Ah, right, yeah, yeah, I totally hear you. So here’s the thing building wealth is how we invest. So we build our wealth like how we build a house. Right, okay, so we build it brick by brick by brick by brick by brick. Then at the end we have the house, the financial house, and in the house we have security, as in. We have the house, the financial house, and in the house we have security, as in. We have financial security, right, but we’ve got to build the house and put the roof on it first. Right, where do we actually get the bricks for the house? Right, that’s creating wealth. Right, we have to create the bricks right Now.
Dr. James:
Building wealth is akin to investing, because what we do is we make contributions to an investment account. Then it builds over time, like stacking the bricks on top of each other. Of course, that’s not exactly true, because it grows in a compounding fashion. Therefore, it grows exponentially rather than linearly, but we still have to build the house, right? That’s the point. So that’s how investing works.
Dr. James:
People think that we invest for passive income. It’s partly true. The main reason that we invest is so that we get a compounding pot that one day that we can live off, and the idea is that you don’t dip into it until you hit 65, right, most of the time. Most of the time, there’s a little bit more to it than that, of course. And, by the way, we’re using 65. We’ve just pulled out, it’s an arbitrary number that we’re using as a typical retirement, and it could be sooner, it could be after, I don’t, we don’t know.
Dr. James:
Okay, but we’re just using that today as a oh. What’s a good word is a stop gap, I suppose, or an explanatory term. Are you with me? So, anyway, create wealth. Creating wealth is where we get the bricks from. Okay, so we have to be able to go to work right to get the money. That’s usually how. So we have to be able to go to work right to get the money. That’s usually how it’s done, right, unless we create something else that generates money for us, right, but for most people, for 95% of people, we’ve got some time, We’ve taken our time, we’re putting it into a system, which is our job, and we’re obtaining money as the output, right? Let me pause because I’ve been talking for a while With me.
Dr. Arnold:
Yeah, yeah, no, yeah, you made it clear about building wealth, creating wealth and for us, creating wealth is the job that we have. That’s the way we know until we retire.
Dr. James:
Hell yeah, right. So for most people, what they think is they think that they can use investing as they think, that they use investing as something to create wealth. But really investing works slightly differently than that. You have to. You have to be able to leave your money in those investments accounts for a long time to get the best result, right? If you want to actually earn more money, which is what a lot of people are after, if you want to actually earn more money, which is what a lot of people are after, it’s probably not via the investing path per se, or at least investing in stocks and bonds and all of that. Now, you can invest your money, just not in the assets that your financial advisor will typically link you with, will typically recommend to you, at least. If you want to earn more money, right. Earning more money comes from your skills and abilities, generally speaking, right. So, if you think about it, in any system, there’s an input, there’s a process and there’s an output, right. So we want the input, which is our time, to be able to be multiplied by the system as much as possible to give us the greatest possible output in terms of money, right?
Dr. James:
People talk about passive income If you work one hour a week and you earn 100 grand a week, right, you’ve got very close to passive income. Right. Because you’re working one hour a week and obtaining 100 grand, right, we get to that point. We have to put some energy into enhancing the system, right. Enhancing the processes what are an example of the systems and processes, our skills and abilities, right?
Dr. James:
So a dentist who is extremely good at describing the value of what they do to the patient and therefore the patient is willing to invest in them to a higher standard is someone who has more, is someone who has enhanced that system. Because they’re good at selling right, they’re good at describing that value right. Another way, and that’s obviously important, we have to be able to describe the value of what we do, but we have to be able to serve those people as well, so we have to be able to give them a lot of value on the back end in return, give them a lot of value in terms of the treatment that we give them, right? So we can only ever ask someone to invest more in us when we know that we’re going to give them so much. Our quality of treatment is going to be so flipping high that whatever they invest in is going to look like a good deal. Right, and that’s leverage, are you with me? Well, that’s just one example. You know I mean so would you say it’s.
Dr. Arnold:
It’s probably fair to put your focus into being able to earn a lot more before you start pouring that into investment vehicles I would say it’s a great question and you know it’s a very controversial one.
Dr. James:
Sorry, will you finish this then, arnold? Yeah, yeah, yeah, sorry, mate, I thought there was more to that. So here’s the thing. Ultimately, there is going to be no right or wrong for anyone. Are you with me, if you ask me personally particularly anybody sub 30, we should be spending the majority of our investable capital enhancing our skills, because that’s going to be the thing which allows us to earn more money for the rest of our life, and that compounds as well. Then we take some of that and we put it into financial investments and we put it into capital markets. Are you with me? Now, to what proportions we do that? That’s going to be different for everybody, and some people might just be happy with what they earn, and they might be happy with their position in terms of how many hours a week they’re working, and they might be happy and this is where I have to be super sensitive. There’s no formula that suits everybody, right? If you want my personal opinion, I think that everybody who’s sub 30, certainly, and even a little over 30 as well you know, there’s no hard cut off point should be prioritizing very careful with my words, prioritizing, not totally focusing on, but certainly putting more energy into investing in 500, not the s&p 500, the s&me 500 nice, by the way, that wasn’t mine, I’m not going to claim credit from that one.
Dr. James:
I heard it on a podcast the other day. Uh, it was. It was alex hermosi’s podcast, for anybody who’s interested. Yeah, and he talks about some similar stuff to this as well, and and I have to say that I agree with it. I do, Because this is the thing I really don’t want people to get trapped into taking all of their wealth and putting it into the build wealth side of the sphere, because what that means is that you’re locked in Okay, you’re locked into this pathway that you might necessarily be happy with.
Dr. James:
I mean, we saw the I don’t know if you saw the budget today that you might necessarily be happy with. I mean, we saw the I don’t know if you saw the budget today. The chancellor announced that there’s no lifetime allowance now on pensions Okay, there’s no lifetime allowance. Previously, if you had over a million in there, you got really heavily taxed, okay, and now you can put 60,000 pounds in your pension every year. Now, pensions are great, don’t get me wrong and this totally depends on the individual, right.
Dr. James:
I feel that when we’re young, putting our money into this magic pot that will compound it okay, will compound it with time, but also means that we’re saying goodbye to it for 30 years actually means that we’re trapped on the build wealth side of things whenever we might necessarily like our jobs, you know, and that’s a huge sacrifice to make. And all these decisions being able to make better decisions comes from awareness and education and we’re led to believe that we have to prioritize that OK, when actually it might be the path for everyone. Right, it may not be the path that suits everybody, it may be the path that suits some, but I feel like most people are guided toward, lots of people are guided towards that they don’t actually necessarily align with it or don’t even realize that there’s other alternatives, which is what I’m here to preach about today.
Dr. Arnold:
I just want to ask you that, ok, so I know there’s no one size fits all, but if somebody came to you and said, james, what is the perfect investment strategy of? I’ve invested in myself, I’m now ready to to invest um in in different funds, stocks, whatever, what is the perfect one to to execute on?
Dr. James:
I love that. Okay, so we’re kind of taking the s and me 500 out of the game right now. We’re like james, just tell me about the s and p and all of that, right, uh, but uh, any, for anybody who doesn’t know, the S&P, in simple terms, is America’s stock market, so it’s an example of something that someone may invest in. No financial advice, by the way, on that one, just to be super clear. We have to be super careful about this stuff. So it’s very, very important that if somebody doesn’t have a total understanding of how the capital markets work, to definitely get some advice, particularly when we’re talking about these things. Because here’s the thing you can have the best investment, but actually most of it comes down to your execution as to whether or not you’ll actually generate any funds from that. So, pure and simple. Pure and simple. If you don’t need the money for 10 years or greater, your portfolio, when you remove all other factors, including emotions, including ability to withstand volatility, all those other factors which can mean that people often diverge from this philosophy that I’m about to describe, if you can just home it right down to what’s going to give you the best returns and has the most historical data to prove that, then, really, any portfolio in which we don’t need the money for over 10 years our time horizon from which we’re going to start making withdrawals is 10 years or more should, in likelihood, be constituted of 100% equities or 100% stocks. So what does that mean? There’s a little bit more to it than that. All I’m doing right now is, from a high level, describing an avenue that people can use to invest their wealth. How you actually execute that. There is way, way, way, way, way, way, way more to it. However, that little gemstone right there, that little pearl, took me flipping ages to figure out. Okay, took me so long right, and I used to do all sorts of weird and wacky things and buying individual companies and watching them going up and watching them go down.
Dr. James:
I’m not just talking about any equities. I’m talking about funds that can represent the global stock market, okay, but obviously we have to get into a whole host of other things like which funds and how do that, how do they work, and stuff like that. That’s actually the point where we cross into financial advice, so we’ve got to be really careful. The second I recommend a product, the second I talk about a fund, is actually advice at that point. Before that, you can say quite a lot, particularly on a podcast, as we’re doing right now. That’s the line that we can’t cross and just like the caveat that one more time, even though we now know where we should be looking, there is way more to actually executing that in order for it to be successful. So I certainly wouldn’t want anybody to just go ahead and jump into making those investments based off the back of what I’ve just said and somebody wants to now get that financial advice, who do they go to?
Dr. Arnold:
Do I go to an accountant? Do I go to a financial advisor, a wealth advisor? Who do I go to?
Dr. James:
That’s a good question. I would say it very much depends on what we’re trying to achieve. Yeah, a good accountant is worth his or her weight in gold. The thing about accountants is they’re very good at minimizing the tax bill in the here and now, but they don’t often think about what that money might be used for, because they don’t always get invested, investing that well. So what they’ll say is so here’s a good example, arnold. So they’ll say, okay, well, why don’t you put, why don’t you stick all this extra money you have in the sip, right?
Dr. James:
Then your personal tax bill is going to go from it’s going to half, pretty much, okay, past a certain point, right. And then you’ll be like, okay, well, I’ve got all this money in this sip, brilliant, what do I do with it? And they’ll be like I, I don’t know, that’s not my job. We’ve just put it in the sit for you. We’ve saved you the wealth, we saved you the tax bill. Are you with me? Yeah, but then we also have money in a sip that we need to optimize its output in terms of investing in the correct thing, and then also, as well as that, we need to understand that that money is now locked away until we hit retirement age, which will probably be 57 for most people who invest in their SIP now. And when I say retirement age on that instance, what I mean is the point that you can make withdrawals from your SIP.
Dr. Arnold:
Okay, so accountants might not give you the full picture for investing. Where else can you go to get solid advice?
Dr. James:
I would say it’s a bit like this Anybody who’s a dentist will resonate with this. You know, when you go to that, we all know, we know that there’s, there can be. If we, if we want a root canal, right, we go to a root canal specialist, right? You know, a generalist will never be able to do it to that standard, and that’s fine, that’s totally okay. Right?
Dr. James:
So we put it in dental terms is more understandable, right, if I ever want a root canal, I would pay a huge amount if I needed a root canal, because I know that a specialist will really, really, really know their stuff, get the cone beam out and all of those things, right, if they have to, yeah, um, so, to answer to, to bring that back to what you were saying just a minute ago, I would find a independent financial advisor and I’d also find one that is knowledgeable and reputable.
Dr. James:
Okay, that’s exactly what I would do now. That is, you know, of the, of the, of the, of the diaspora of advisors that are out there, you know, to find one that ticks those boxes, we have to do a research, definitely, because not everybody’s going to be flipping amazing. You know what I mean. It makes a huge difference for us, because obviously that will mean huge implications for our financial future, given the skill and knowledge of that individual that we can procure. So what I would say is, on the dentist who invest facebook group, that the advisors that are on there I’ve screened every single one of them so I know that they’re of a high standard.
Dr. Arnold:
Perfect, perfect. I know your time is valuable. You’ve got a lot of different engagements to be at. Just in closing, give us some thoughts about where your mind is, where you see things going with the finance world, investing, and what are you keeping your eyes on in these next few months I am keeping my eyes on.
Dr. James:
I mean put it like this I well famous last words because no one can ever predict the markets, but I am not super optimistic on equities, at least to the end of this year. I think that there’s a lot of across the board tax hikes in most of the major economies which are probably not going to be good for those. Here’s the thing Long term, they always recover, or they always have done. Short term, it’s very hard to make predictions, although that’s my hunch. So for me, you know, as someone who’s 31, I prioritize a lot of my investing in the S&ME 500. And of course, you know I have it spread out across different things. I don’t know what you might do.
Dr. James:
What you might say is you might say traditional financial logic is whenever things are reduced in price as they are right now, that now is a fire sale. Therefore, it represents the best opportunities. It all depends on your time horizon and what you’re trying to achieve. Right, you’re trying to create more wealth, invest in yourself. And if you’re trying to achieve right, you’re trying to create more wealth, invest in yourself. If you’re trying to invest your, you know, if you’re trying to build more wealth, then at that point. That’s when we prioritize financial markets. Buying a business, whatever it is, however, that looks for individuals Purchasing assets, is building wealth.
Dr. Arnold:
Perfect, perfect. And if people want to find you, contact you, what is the best way?
Dr. James:
Best way to contact myself is via my Facebook group, which is called Dentist who Invest, a community group for dentists who are interested in finance. You can find it on Facebook. Like I say, I’ve also got my website, wwwdentistwhoinvestcom, where you’ll be able to find my email on there, Should anything that I’ve said today interest you. It’s been flipping loads of fun. I really hope that everybody listening got a ton of value and they hopefully now see finance in a different way, because here’s the cool thing about all of this stuff this took me flipping ages to figure out. These are the gems of the gems and I really hope that I’ve accelerated everybody who’s listening’s path. Everybody who listening I’ve accelerated their path to understanding of the world of wealth.
Dr. Arnold:
Yes, no, definitely. Thank you for all of that, all that value that you’ve shared. Guys, make sure to check out Dr James Martin Density Invest. I’ll put the details in the description as well, and I’ll see you guys at the next video.
Dr. James:
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