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Dentists Who Invest

How I Achieved Financial Freedom with Dr. Julian Keen – YPTFF Month

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.

Julian: 

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.

Dr James: 

Also, as well as that, if you could take two, seconds to rate and review this podcast.

Julian: 

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.

Speaker 3: 

Welcome to the Dennis who Invest podcast.

Dr James: 

Welcome back everyone. Your path to financial freedom month continues with another episode of the podcast with another dentist who has some incredible knowledge to share on how he has. Am I too bold to say that it’s financial freedom, julian? How would you like me to term it from that point? Absolutely, is it financial freedom? Wonderful, brilliant, we’ll call it what it is.

Speaker 3: 

Financial freedom works.

Dr James: 

Excellent, we’ll call it what it is then. In that case, I just wanted to check if that was kosher before we went any further. So, as I was saying, we are with a dentist who has reached the zenith, the nirvana, the ultimate, I don’t know. We kind of put it on a pedestal, don’t we? Financial freedom. He is someone who works only because he enjoys working. Presumably you still work, julian.

Speaker 3: 

Yes.

Dr James: 

Yes.

Speaker 3: 

Still doing a few days, but that’s because you enjoy it rather than out of necessity. Absolutely. Yes, I mean the thing is now, it’s a hobby really now, rather than actually needing to go to work, and it’s different when it is a case of you don’t have to do it. You’re not restricted to do it, you can decide and if you find in the future you don’t enjoy it, you can stop doing it Absolutely incredible, absolutely incredible.

Dr James: 

So, as I say, you may have already guessed his name is Julian, because I’ve kind of, you know, given up the gambit on that one Julian Keane. It’s an absolute pleasure to have him here today, and Julian is a dentist, and Julian is someone who, as I say, through enacting steps that he has learned in books, that he has learned through his own sort of independent quest for knowledge, he has reached that position where he no longer works because he has to, and I think that this is going to be an absolutely incredible podcast for those people who are just starting out on this journey, who want some really tangible, actionable points to reach that, that nirvana, like I say that, that promised land where working is no longer a necessity but is something that you can do if you wish. And I’m really looking forward to this one Absolute pleasure. And, as I say, his name is Julian Keane. Very pleased to have you on the show, julian, how are you today?

Speaker 3: 

Very well, thank you. Great to be here. Thank you very much for the invite.

Dr James: 

Oh, my pleasure, my friend. I think it’s going to be a super interesting one, and it’s part of your path to financial freedom month as well, which is the month Well, I’ve actually made. The idea behind this month was pretty much the idea that you’ve embodied in that it’s empowering people to reach that position where they no longer have to work, and jazz made a really interesting point that hit home with me on one of the earlier podcasts, in that it just takes that one spurious claim against your name to completely take you out of the game as a dentist, no matter how dedicated you are, no matter how skilled you are, all of those things, and that is something that we need to hedge our bets against a little bit. And investing sensibly, diversifying our wealth and thinking of the long term is one way to do that, and that is something that you absolutely embody, julian. So I can’t wait to learn more about how you’ve done it. It’s going to be exciting.

Speaker 3: 

Absolutely Well. I mean basically I qualified in 2001 as a dentist from Manchester and I met my wife at dental school. We worked as an associate for nearly 10 years and then for the last 12 years we’ve been running our own dental practice, mainly an NHS practice. We started as a squat so we built it all and just recently we sold the practice. So I’ve had a good experience of working as an associate, working as a principal, the pressures involved, as you say, the pressures on associates and principals I’m quite familiar with all of those. I’ve followed the politics of dentistry for quite a few years. I’m vice chair of the local LBC, so I get involved in the politics a little bit of dentistry as well. But I have to say it isn’t really my passion and I’m hoping that this next few years I can actually start to enjoy dentistry more and more and develop some more skills really in dentistry rather than just being restricted to chasing UDAs, which is what I’ve been doing for the last 12 years.

Dr James: 

So Amazing and that presumably your investing has liberated you to a degree to pursue those interests as well. So another positive, I suppose.

Speaker 3: 

Absolutely Well. I think everybody’s got different definitions of what they mean and what financial freedom means to them, but for me it was always my, it was always my goal to be able to wake up in the morning and have the freedom to do the things that you want to do develop other areas of your life. I mean, I’ve got a young family, I’ve got two children and I want to be able to spend time with them rather than having to, you know, nine to five every day being in work and then bringing UDAs home to the kitchen table to discuss afterwards. You know, it’s quite nice to be able to just shelve that a little bit and get some balancing your life. For me it’s about having balance and I still enjoy the work because it gives me a routine. You know I like going into work. I’ve got some great patients and I think I’ve got a lot to offer. And not to mention, dentistry is still a great field to work in. You know we all do moan about all the stresses and strains of practice but ultimately it’s financially rewarding and I’m all up for tax efficiency. So at the end of the day I want to keep earning at least the smaller amounts to keep that rolling in, because it’s very tax efficient, you know, and I’ve paid enough tax. I’ve paid enough tax to know that. You know. I want to try and make sure at least I keep my earnings up to a reasonable level. I don’t want to deplete my capital as well, even though passive income will probably sustain me Absolutely.

Dr James: 

And that was actually something that I wanted to bring up further into this podcast was what is your definition, I suppose, of financial freedom and how it looks for you. So that will. We will absolutely talk about that at some point. I think, dodal, I live. The laptop lifestyle is, I don’t know. I think the laptop lifestyle is a bit flattering because that suggests that I was in some way an entrepreneur. I was making money from my pursuits, but it definitely had the laptop part. Maybe it didn’t have the entrepreneurial aspect so much. I think Andrew Craig said something about it, he says.

Speaker 3: 

When he wrote the first dish of the book, he said I think it was something like Mark Twain said you should continue to write for free until you can get paid for it. And I think the same thing applies with these podcasts and things you know. You’ve got to keep doing them for free until until you know the perpetrator for the work.

Dr James: 

Yeah, I mean I absolutely you know what, regardless of advertisements and things like that, it’s more than that. To me it’s the education is incredible and some of the things that I think. I’ve just read one too many books on how money works and when you get to that point you never quite really see it the same way again and there’s just some really interesting stuff in there that I just thought was worth sharing, and I suppose it came from there the laptop I saw go on.

Speaker 3: 

But I was just going to say I think I think one of the things about reading all these books is it’s actually you’re investing in yourself, you’re investing in your own education, and I don’t really really feel qualified as I said to you before, you know, I don’t really feel qualified to talk about finance and investing. I can tell you what’s worked for me. But most of the stuff that I will repeat is essentially the stuff that I’ve read from books like Andy Craig, the emails you know, the, the Effie Trustnet stuff, the articles from Hargreaves, lansdown, the Warren Buffett quotes. You know, let’s look at these things and essentially what you’re doing when you’re reading these books is you’re investing in yourself, and I think there’s a famous quote from Warren Buffett that said you know, if you invest in yourself, you’re going to increase your value by 50%. If you can just improve your communication skills alone, yeah, totally. I mean, and that was why he was saying that, when he was very young he involved in on the Dale Connivy course and he went on the course and, as a result, he improved his communication skills. And there’s another one line that he says. He says you know, at the end of the day, if you can’t communicate with people, it’s it’s like winking at girls in the dark nothing’s going to happen.

Dr James: 

Totally, and that was Julian. That is absolutely why I wanted to get you on the podcast, because you are a dentist who, as I say, you’ve enactioned these steps that you’ve read in books and you’ve got to that position where you no longer have to work, and this is so for anybody listening. This is so, so tangible, because Julian is a dentist, just like each and every one of us, and you can hopefully be able to podcast talking about investing about yourself. This podcast is hopefully going to be an investment in yourself and some of these things that we’re going to talk about with regards to how Julian specifically has done it will hopefully be incredibly actionable for anybody who was listening to who is listening. So what I was going to, where I was going with the laptop lifestyle thing, I’ve actually realized I don’t want to be the laptop lifestyle guy, because when you get up every day, every single day, and you don’t have a job and you don’t have a routine, it does get a little boring after a while. I’ve learned that lesson because I’ve been through it as such. So, 100% I would personally, even if I get to that point where I no longer have to work, it would be more the. It would be more the peace of mind that it would buy me rather than the fact that I no longer have to continue doing dentistry, because I actually really like my job, you know, and it sounds like you’re in a similar position. So anybody who’s listening, this is not about leaving dentistry. This is just about buying yourself some peace of mind and how you can make your money work for you Smashing Cool. Julian, you’ve done a little bit of this already, but I was hoping that you might just go into a little more detail about your journey, who you are and what has you know. You’ve obviously been a dentist for quite a few years. Just how you got into dentistry, maybe just a little bit more about yourself for anybody who’s listening, who doesn’t necessarily know you or hasn’t met you before.

Speaker 3: 

Yeah, I mean essentially I. I, when I was doing further maths at it’s a level, my maths teacher said to me. She said well, what do you want to do in the future? And I said to her I want to be a stockbroker. And she said oh, you’re not going to cope well as a stockbroker. You haven’t got the right psychology for that.

Julian: 

She said that, so I went. Yeah, she said that.

Speaker 3: 

And she was right. She was right. I mean, we talk a lot. Yeah, absolutely. I mean I’m not made for high risk investments and I do panic when my portfolio loses 20%. I start to. I start, and also I do get quite euphoric when I’m up 20%. I’m conscious of that and I think that’s part of the learning curve of investing. Actually, that when you’re on this roller coaster and you’re making 20,000 pounds a month and it’s gone off and then you lose 50,000 pounds and then it’s, you know that’s a lot of money and you start to get quite conscious of the sums and I think you know it really does make you realize the sort of person that you are.

Dr James: 

Just to jump in for two seconds. That’s an interesting point you realize about psychology, because when we’re investing we talk about fear and greed. Those are the two most eminent psychological characteristics or traits that are on display. It’s almost as if fear is something that we’re. It’s not OK. It’s not OK to display fear but as soon as we’re allowed to be euphoric when things go up in price, because it’s a positive thing, but actually both things can work against you. So it’s interesting to hear that you’ve got that awareness. I suppose that you’re able to juxtapose those two things and realize that maybe both of them are not necessarily good. But lots of people maybe don’t realize that as well, and that’s something that I’ve noticed in others, but also definitely myself, and I’m still working on that because there is still always some fear. There’s always going to be some fear in greed. The trick is just not to let it to influence your decisions. Anyway, I just wanted to jump in on that one. It was just an interesting question, absolutely.

Speaker 3: 

Brad, absolutely, but I think more and more. And one of the things that we keep touching on is the psychology bits. And absolutely you know you might think you’re strong, but when you’re in these situations and the market’s turned against you, you know it can have a huge impact and I think understanding that and appreciating that and almost being forewarned that these other things that are going to go on can allow you to be forearmed. You know, when you appreciate that you are going to have years when your portfolio is going to be down 50% gives you the strength to hold the market and stay the distance. I think Warren Buffett’s famous quote again was something along the lines of a lot of people are not emotionally and psychologically stable enough to invest in stocks. You know, if you’re going to do dumb things when the market turns against you, then you should not be owning stocks. And he uses the example. He says well, you know, if you buy a house for $100,000 or $200,000 and somebody offers you the next day $80,000 for it, you don’t necessarily buy just because that’s what people are offering you. You know you hold the distance and don’t panic, and I think it’s been strong in those situations. That’s a big lesson. I think the other lesson as well, and the one that’s coming through at the moment a lot of this fear of missing out. It’s FOMO type behavior, where people see stocks going up huge amounts and they’re thinking, oh God, I should have bought into that one and why didn’t I choose to buy that, why didn’t I listen to that bit of advice? But ultimately, you know it’s got to come down to have you got a solid basis for choosing these stock. If you’re going to choose individual stock, obviously we can talk more and more about the general investment strategies and what I’ve done. But you know I would personally try and avoid buying individual stock. I prefer to buy either managed, actively managed funds or passive funds.

Dr James: 

Fair enough. So you were in school. You’re investing hopes or your ambitions. They took a bit of a knock. This teacher kind of set maybe give me this negative feedback. And then where did it go from there? You went to dental school. You began to get into investing around about that time.

Speaker 3: 

Well, to be fair, I then I always had a keen interest in finance and I looked at other well-paid jobs and I looked at the sciences that I was studying at the time and spoke to a few people and ended up going to chat to a few dentists and they were just saying you know, it’s a good job. It’s a good, steady job, it’s well-paid, you can work wherever you want to, it gives you a lot of freedom. And I thought, well, yeah, this looks pretty good, did my work experience at my own dentist and took it from there. But I’d always had a keen interest in finance. I mean, my parents were always involved in investing. In those days it was mainly fixed rate income, bonds, interest rates 6%, 7%, 8%, 9%. You know it was guaranteed returns above inflation. So that worked. They had financial advisors and I think what’s exciting now is that we’ve got so much more access to fantastic tools that just weren’t available then, so you kind of had to go and use a financial advisor, whereas nowadays you’ve got all these powerful tools free at your fingertips and it’s such an exciting time to be involved in investing.

Dr James: 

Really interesting YouTube series that I watch and it’s about a guy who’s making a point that there’s never been an easier time to become a millionaire, and that’s for two reasons. That’s because a million points is worth less in real terms than it was all that time ago, but most prominently, it’s because of the power of the internet and investing and all these ones that you can move a hell of a lot of money around on an app on your phone. It’s just insane, absolutely. And that flexibility was not available, even iPhones the first smartphone that came out 2008. But how long have we actually had these apps that can do this? Maybe that took a few years to come through. It’s relatively recent Interesting one, isn’t it so, Julianne?

Speaker 3: 

go on. I mean, I’d embrace that as well. I mean, one of my investment philosophies really is to follow Moore’s Law, which is essentially appreciating the fact that technology is advancing so quickly. It’s all to do with the power of the number of the fastest computer in the world.

Dr James: 

It doubles every 18 months. That’s what Moore’s Law is, yeah.

Speaker 3: 

Yeah, it’s basically the service area that you can get the components into so that you can increase the computing power. But the same applies to, I mean, I know Andrew Craig now is heavily involved in the biotech industry and he’s frequently talking about the advancements that he’s seeing in that sector and I have to say I think it’s really exciting and I like to invest in things that I’m excited in. So again, technology-wise, I’m certainly, for the last 10 years, have been quite tech-heavy. I’d be a quite heavy follower of a NASDAQ-type tracker because that is my area where I really do see the future.

Dr James: 

Yeah, awesome, yeah, I mean, this is the thing. Sometimes I get people asking me what should I invest in? What should I buy? Give me a hot tip on the stock. But I would add to that by saying that you only really have the resolve to trade what you believe in. So if you think biotech is going to be hot, then even if you know that and if you believe in the long run that that’s going to do well, the day-to-day fluctuations or the noise, you won’t care about that and you’ll sleep really well at night. So it’s all about your beliefs in the market, and I would probably agree with you on that one Biotech is going to be hot. I’ve read a lot of Andrew Craig stuff and he is a big proponent of it too, and it sounds like we might be on the same page on that one.

Speaker 3: 

Yeah, I think the other side to it is, ultimately, if you follow an Andrew Craig-type philosophy of if you appreciate that you’re not the kind of person who copes well with these huge swings in the market, diversify your portfolio geographically and in asset class and you won’t get those big swings. Because what really excites me with my own portfolio is what I see sometimes is I see a day where the markets are really down, but I see other investments in another part of the portfolio going on, and this is great because you want to have different asset classes in different geographic areas that are negatively correlated with each other. So, in other words, when some go up, others go down and then it has a smoothing effect over time. So that’s really powerful.

Dr James: 

Another tip and trick for anyone who’s listening we talked about financial freedom earlier. Everybody has their own definitions. What is your definition of financial freedom, julian, and how does it look for you? How does it manifest?

Julian: 

Real quick guys. I put together a special report for dentists entitled the Seven Costs and Potentially Disasters, mistakes the dentists make whenever it comes to their finances.

Dr James: 

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 wwwdentistuneinvestcom 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.

Speaker 3: 

So I think it’s freedom, and I think it’s freedom to on your days off to do the things that you enjoy doing. I think it’s the ability to be able to work when you want to work. I think there’s a book because it called the five hour working week, or something like that which I read which Four hours, four hours, I think Four hours yeah. I’ve been over here. You know, I read that a few years ago and thought actually this is the kind of goal that I want, where I can work from anywhere in the world. So, you know, I would aspire the next few years probably, to, you know, be able to have the whole of winter off and spend that skiing and I can manage my investments from the ski slopes and I don’t have to, you know, be tied to drilling teeth day after day if I choose not to. You know, that’s the thing. It’s essentially for me, it’s escaping the rat race. That’s what it’s all about, I think. Yeah, I don’t want to be, you know, having to look down people’s votes at 60 years old, if I don’t have to. I’m 42 now and I think it’s as a result of applying some simple principles. I’ve been able to achieve this fortunate situation. I’m very grateful for it. You know, I’m very grateful for these resources that we’ve got access to now.

Dr James: 

How incredible is that for anybody listening 42 and working as an auction? Some amazing stuff. I think we’re gonna learn on this podcast. Julian, now that you’ve got to that position, we no longer have to work. I know you do some dentistry, but just to give people a little bit of an insight into your day-to-day or your week-on-week how does that look for you and what flexibility does that afford you? What are the merits of this?

Speaker 3: 

So I mean, I think it’s important that we’ll have balance in our lives and I think it’s very easy to get swamped with work and work can take over all other areas of your life, whereas I think actually, we need to have balance and we need to have the home life, we need to have time for our children, we need to have time for our hobbies, we need the time to do the things that really excite us, and I think it’s having this balance. And now what I wanna be able to do more than anything else is to have the time to spend with my children and actually to be able to educate them in finance. You know, my son, ted, is often closing his, putting his fingers in his ears and blah, blah, blah. When I start talking about Einstein’s 800 of the world and compound interest, you know. But I think again, our biggest, most important teaching job is to educate our children and I don’t wanna fail at that job. I’ve been successful at one job and I think it’s still important that my children see that I go to work. But I think it’s also important that we’ve got the time to spend with them. We talk about the importance of time in the markets, but also, you will not get this time back with your children.

Dr James: 

I used to work six days a week. I used to work six days a week and I actually did in mind the month. It was Monday to Saturday. I didn’t mind doing the Monday to Saturday, but what I did mind was the lack of time I had coming out the other end of that working week to prepare for the next week. Do you know what I mean? Does that make sense? So I had my. It was all the time that I spent. I would do my nine to five, I would come home and then really you’ve only got Saturday evening and Sunday to prepare for the next working week. So you really didn’t have much time in itself to spend as a, pursue your other interests or just to do whatever you want. Really, and that was the main issue for me, and it’s just true. It just it made me realize, I suppose, that time is definitely your most valuable asset and we accumulate this money. But the real goal for me is just to get back time and you’re quite right, it’s your most valuable non-renewable asset. I believe I heard it call the other day it was just a really nice way of phrasing it and buying back, buying back your time, is an incredible thing to be able to say that you’ve done.

Speaker 3: 

Absolutely. And I think the other thing that I would centralize myself personally the sort of 80-20 principle, the Pareto principle, of actually working more efficiently with the time that you’ve got. So it may be in your work, in your dental work, that you actually spend more time doing the things that you enjoy doing, but it might be a case of spending more of the time doing the profitable things and cutting out the other bits of your life. It’s all too easy to get caught up in the hamster wheel and actually not be able to take the helicopter view of what’s really going on. And I think the same with investments is true. I mean, if you want to spend a lot of time doing technical analysis and fundamental analysis companies, if that floats your boat and that’s what you want to do, that’s great. I’ve dabbled with that. I know professional investors that do that. I’ve got friends in the family who are involved in that and they’ve got teams of people that do it. I don’t particularly want to do that. I’ve dabbled in it a little bit but I’m quite happy to have a set and forget type portfolio that delivers high single digits, occasionally double digit returns annually.

Dr James: 

Amazing. Another thing that you’ve just mentioned there about learning. You can almost overdo it, I think, to a degree, when you try to learn every single thing about a stock in a share, and it becomes self-sabotage at a certain point. Yes, educate yourself to a degree, but after that it’s just about putting your money in, managing your risk and seeing how you go. Another thing that I’ve been a victim of myself and I’ve seen others do you can’t learn every single individual thing about an asset, and even your brain’s not big enough. Nobody’s brain is big enough. And even if you do, you can’t predict the future. It’s as good as saying that you have a crystal ball, so after a certain point you just kind of have to take the plunge, basically. But I’m not saying don’t learn about what you’re going to put your money into, but what I am saying is that past a certain point, learning about it becomes inefficient and you get no return out of it.

Speaker 3: 

I think the thing is there’s some fantastic books out there that give you a fantastic overview. You can spend all this time reading all these books and there’s some fantastic information, but I think essentially it’s about taking the action and taking the first steps, and I think that seems to be a lot of the question that comes through in these Facebook forums. I go in one or two of the American groups as well to see what’s coming on over there, and actually the thing that seems to come through again and again is where do we start? It’s what do we actually do? And I think the whole point is getting a basic understanding and then making those first few steps, and I think that’s where we’re looking nowadays that it’s never been easier to take these first few steps with only 50 quid a month. These things were not accessible a couple of hundred years ago, when the JPMorgan types and the Harvard School and Oxford and Cambridge, their funds, the access that they had to, the access of the investments that they had, we now have access to with relatively small amounts of money.

Dr James: 

Amazing, julian. I think you just hit the nail on the head there. That was perfect. That was better than I could have said it myself. What inspired you to begin going down this path of learning about money, et cetera? Was there a specific moment that you can remember that served as a call to action? Or was it more of an evolution, and you learned a little bit here, you learned a little bit there? How did that look for you and what was the main reason?

Speaker 3: 

So I think it started really. I mean I was very lucky. My parents were very supportive and educated me in the powers of compound interest, for example, and they would always educate me, you know, and where I should invest. And I think these are the lessons. Obviously, a lot of people you know don’t have these lessons, but I think it’s very powerful to start early on and then you see the effect and how that grows over time, I think later on in my life. So I always maintain that interest. But later on in my life I saw the family members who are very senior institutional investors and it really struck me. I thought this is an amazing field that I really want to know more about. And then, having read a few books and initially find it quite inaccessible, you know, reading books like the Intelligent, the Best, getting a little bit lost. It was almost a bit like Newton’s Principia, you know you kind of, some of these ideas are so complex. And then I remember about 10 years ago, picking up the first edition of Andrew Craig’s book and thinking this really resonates with me, this makes sense, it pops up a lot of times on the group, but there’s a reason why it does is because it’s such a good book.

Dr James: 

I think everybody should read that book. It’s so good.

Speaker 3: 

Yeah, yeah, and it’s still 99p till the end of the month. The latest edition oh and Amazon, was that. I think it’s on Kindle.

Dr James: 

Kindle. Kindle. Brilliant, Great book. Everyone should pick it up, by the way, if they haven’t already. First book I read on investment and one of the best 100%.

Speaker 3: 

I like the philosophy Playing English finance. Keep it simple. You know, so many of these books are written by. I mean, I remember a few years ago I picked up the George Soros book. You know, a famous hedge fund manager made billions and billions of pounds and I was just completely lost in these ideas and concepts. And I’ve read it about three times since and I just get completely lost.

Dr James: 

So you know what book is that.

Speaker 3: 

It’s the crash of 2000 and something I think it might have been the dot-com crash. It was very influential in driving federal reserve policy and speaking to Congress about oil reserves and things like that.

Dr James: 

You know, philanthropist, isn’t he? I’ve heard of him. He’s one of those people. He’s quite often targeted by people who are Republican. He’s almost like a hate figure or a representative of the Democrats in a way. There’s I’ve only heard of him in that sense and the fact that he’s a philanthropist, but I didn’t know that he was also an author of a book. So I might look into that one myself, maybe, if it’s a book.

Speaker 3: 

I wouldn’t.

Dr James: 

Oh no.

Speaker 3: 

It’s really hard work. It’s really hard work. So that’s why I was really impressed when I could read a book like plain English finance. It’s so easy to read and so easy to follow. But, yeah, I think there’s a lot of these billionaire philanthropists because essentially, they’ve been recruited by Warren Buffett to, you know, join his club, if you like, and try and make things better, really on a world stage, and I think that’s part of the Gates Foundation and so on. So fantastic work. He always jokes, though, again, that trying to convince some of these billionaires to part with some of the money isn’t that easy, and it’s how you actually live on your last billion pounds. You know, it’s a bit of a concern for some of you.

Dr James: 

It’s a hard life, isn’t it? There is that stat about Warren Buffett where so I can’t remember the exact figures, but off the top of my head, so let’s say he’s got 85 billion personal wealth and he made 81 of that over the age of 65, because of the power of compounding. So it’s just another piece of evidence really just how powerful that effect is. Einstein certainly thought so, eight thunder of the world in his words.

Speaker 3: 

Absolutely Well, I think I posted it in your group the other day. The Buffett $10,000 invested in an index fund when I bought my first stock in 1942 would be worth $51 million.

Dr James: 

How amazing is that? And that’s just buying an index fund, set and forget.

Speaker 3: 

Yeah, he said the only thing you had to believe in when you bought when I bought that fund would have been that America had won the war. You know you had all these other crises following that. So essentially again, this principle of ignoring all the economics, ignoring all the macroeconomic predictions and just essentially believing that America had won the war. And okay, he’s pro-America, you know, I get that. But you know you can’t argue with the facts there and the way that the compound interest stacks up.

Dr James: 

That’s it, because your belief doesn’t have to be complex, it can be something very simple. Andrew Craig’s book. He makes the point that as long as you believe inflation is real which it is, we all know it’s real and the world population is going to increase, then you’ve already got a fundamental thesis for an investment portfolio right there, in that you can buy commodities because gold is buying inflation. That’s what it is. That’s what we peg our current Well, we don’t anymore, but that’s what we want peg our currencies against, and the more people there are and the less gold there is, value of it is more than likely going to go up until we figure out a way to mine it from asteroids, but that’s not anytime soon. You know what I mean.

Speaker 3: 

Well, we’ll keep an eye on Elon Musk. If he ever looks like he’s going to have that breakthrough, then we’ll sell a gold.

Dr James: 

Yeah, well, this is it, this is it. I mean, it’s very possible that could change, but for the moment that’s not for a while, that is not for a while.

Speaker 3: 

I mean I’ve followed gold for quite a long time. I mean after I read the first edition of the Andrew Craig book I first started emailing Andrew Craig and exchange many emails and I remember one of the emails he sent me at the time was he was saying that gold on average returned 12.3% per annum since 2002. So it gives you an idea of the returns long term with gold. I mean you can pull up the gold billion volt graph of gold over time and trace it back. At the end of the day it’s got thousands of years of history. Well, it literally is, I mean gold is inflation.

Dr James: 

That is the principal commodity that we pay value to. That’s what gold is. It’s an interesting conversation. It’s been an interesting podcast. Someday, the merits of gold perhaps.

Speaker 3: 

Yeah, well, I mean, I’ve been a gold bug ever since, you know, and Warren Buffett is actually very anti-gold. He’s very bearish of gold. He doesn’t like the fact that he doesn’t do anything. Yeah, he likes to stop. Yeah, he likes to invest in his dividends and compounding, and yeah there’s nothing wrong with that, both you know.

Dr James: 

that’s the thing about investing you don’t have to be right or wrong so much as you just have to beat inflation and be, you know, successful. In that sense, that’s another. There’s just another way of looking at it. As long as you’re profitable, you don’t have to be the best. You just have to beat inflation and you’re already using your money to work more effectively for you. Another way of looking at it. Julian, when you were talking about, you’ve obviously been on this journey, which is great, and you’ve began learning about money quite a long time ago. For anybody who’s listening, who’s maybe at the start of that journey, what were the greatest lessons that you learned throughout that process?

Speaker 3: 

So I think I think the starting point really is you’ve got to understand the game. The game’s got rules and you’ve got to understand how the game is played. And certainly for me it really struck home the power of understanding not just the compound interest but also the tax efficiency and tax efficiency savings that you can make. And I think again in your group there’s been a lot of people who’ve made some fantastic points in terms of how it’s a great place to start with an ISA or a LISA or a SIP and utilizing these tax free wrappers to try and optimize your returns. So that’s first of all, you’ve got to understand the tax situation. And a great place to start and a place that Andrew Craig again strongly recommends is you just start with your ISA. You’re allowed to put 20,000 pounds a year in each into your ISA for yourself and your spouse, and it’s any growth tax free. That’s the beauty of it, and other people around the world really would be envious of that fantastic tax break opportunity.

Dr James: 

I think it’s incredible. I mean the fact that we’ve got this tax wrapper available to us. In the UK I don’t know of any. I know that America, I’ve got their 401ks. I’m not sure exactly how these work, but to me, 20,000 pounds on limit, invest that and tax free returns that’s an incredible deal.

Speaker 3: 

Yeah, I think the interesting thing as well with the 401k, I hear a lot of the people in the American group moaning because they’re now finding out fees that they’ve been charged over the years for this thing. And there’s six trillion pounds six trillion dollars, I believe. That’s a recent count up in the American 401k, so it’s a huge area of the market. But, yeah, I mean, great is lessons. I think you’ve got to understand the rules. You’ve got to understand tax efficiency. Your starting point for that keeping it simple is to start with your ICER. It’s a fantastic perk that we’ve got and you’ve got to take advantage of it. I think one of the other things that, again, people don’t necessarily appreciate and when I’ve spoken to financial advisors at the start of my journey, I think, to actually carry out your own expenditure so you work out where your money is going, because it’s quite surprising sometimes how the money can just disappear from your pot. I think the analogy I heard once was a bit like trying to fill a bathtub when you haven’t put the plug in, but you’ve also got multiple holes in that bath. You’ve got to try and plug those gaps as much as possible to try and make sure that you maximize the amount that you’ve got to invest. So many people say, oh, I don’t know where to start, and I think that’s the sound starting point is to try to at least save 10%. I think is the classic one.

Dr James: 

What have you got to pay?

Speaker 3: 

You’re literally saving some money.

Dr James: 

There’s no way you can lose on that, and then at least the door will open to you.

Speaker 3: 

Or, as you say, pay yourself first.

Dr James: 

Yeah, pay yourself first when you pay yourself sorry, sorry, sorry, Julian.

Speaker 3: 

Pay yourself. Pay yourself that 10% first. You know, that’s. That’s one of my favorite books, the Richie Spanning Babylon. Save you reading the book. You know, just pay yourself that 10% first and control your expenditure. You know, that’s, that’s the thing.

Dr James: 

Absolutely. I mean, I think maybe there’s this illusion that it has to be incredibly complex, but the key one of the key philosophies are the most important bits is that you have the cash to invest in the first place, and that can only come about by limiting your expenditure where necessary and saving some money. And what have you got to lose on that front? Because at the very least, even if you don’t choose to invest it, you’ll have that cushion. And maybe that’s a very simple message that gets overlooked quite a lot, and it’s one of the most important ones in investing. It’s more about the gains. You know gains with the Zed. You know what I mean. People get hyped over those. But to be able to get to that point, as I say, important to save in the first place and like I think that that’s one of the most fundamental key lessons, that if anybody who doesn’t do that already is really worthwhile, up on your game on that one.

Speaker 3: 

I think it’s all I was going to say as well. I mean some some other lessons with things like and again, I have your group to thank for this as a result of, you know, listening to what some of the people have said on there, looking at the fees that you get charged, you know really looking at how these fees stack up, and again, in this day and age, how easy it is to Google a fee calculator and work out exactly where your fees are going. I mean, I plug some figures in before we came on air to talk about this and I looked on. I actually had to check it on a couple of fee calculators because I couldn’t believe the effects it had. So take a figure like £20,000 a good figure to take because it’s what your allowance is, your annual allowance to put into your ISA wrapper. And if you put £20,000 into your ISA wrapper every year for 30 years so you know you start at 20. And you keep paying into that you will have, if you assume high single digit interest rate for about 8%, over the period of time you’ll find it will have grown to about £2.5 million. If. If, however, you pay fees of 2%, it takes off £850,000 in fees. Now the interesting thing is you’ve still got a decent part of money there. You know that’s still. That’s still a good amount of money for your 20,000 you put in and remember you can do the same, your spouse can do the same, so you can actually double up on that. And that’s just using your ISO like allowance loan, so you can see over 30 years how you can build up a really, really good part of money and that that could easily be the step to your financial freedom. You know you have to work out how much you need to live on, but you know that’s, that’s a really good chunk of money there that you can build up tax-free growth in simple as that simple as that percentage that you wouldn’t maybe look at, you wouldn’t buy an eyelid adds up big time when comp on. Absolutely so, so. So again, I mean I know a few of the guys on your group talked about Passive funds and I have tried to diversify more my own portfolio more and more with passive funds, minimising costs. The other one You’ve got to be really careful of and I don’t want to be rude to financial advisors, but obviously the fees really do tend to stack up when you use these financial advisors. So again, before you do use these guys, please at least consider looking at these fee indicators, because that’s taking 2%. Now it’s with a lot of funds. It can be quite tricky to to come in much. You know to cut them below 1% because essentially you’ve got your platform charge and then you’re going to have some charges even using, you know, low-cost tracker funds. So just be really mindful of these. And the interesting thing as well, with a lot of those fee fee calculators, as they do give you the option to Put in an initial fee as well. I always try to dodge any initial fees from financial advisors. You know it’s often the charge, your initial fee and then an ongoing fee. Now I’m very sympathetic of financial fires. I’ve got a few friends who are financial advisors and I’m quite sympathetic because I can appreciate the amount of paperwork they now have to do to comply with the FCA. You know, and this, this is one of the problems. They they get regulated in the same way. We have to write reams and reams of notes and and keep all their conversations, things. So all this thing takes time and cost money.

Dr James: 

So you know, that’s Just be mindful of yes, I think I think what you said complete, true and something to consider, 100% for those listening. I once had a very staunch stance on financial advisors in so far as I didn’t think they were necessary, but I’ve somewhat softened my opinions on them as time has went on and I think it just comes down to Someone’s psychological profile as an individual. What they feel comfortable with is no one shoe that fits. The important thing is to at least have a discussion about how you can make your money work for you, and you know what. Some people just won’t want to invest, and that’s fine too, but we’re just elevating consciousness and awareness. I suppose with this, some people who are listening to this will be at the very start of their investing journey. They’ll never have invested a penny before. What would you say to those people? Julien’s, I.

Speaker 3: 

Would say start, start early. You know that’s the thing it’s. It’s making that, that, that first step, you do, you know. Again, try to understand how the tax implications work for you. For myself personally, it was a case of utilizing my ICER, which I’ve always done. I’ve always utilized my ICER. It was a case of utilizing my lifetime ICER. You know, if you, if you start your lifetime ICER before you 40, you know, even if you just put a little bit in, then you can keep putting money in between 40 and 50 and at 60 You’re gonna have a nice pot of money, the real break and the bonuses at the end of the year. If you put 4,000 pounds in, you get extra thousand pounds topped up. It’s 25% on top. It’s a fantastic perk which you can then invest. These things are so easy to open now, using all the platforms. I use HL for my own hog who’s lands down and it’s. It’s fantastic. It’s a no-brainer for me. And the only issue with the Lyser is that you’ve got to leave it locked in Unless you pay the penalties for taking it out. You know, to your 60. So it’s essentially it’s another pension pot. So that’s the way I look at it to utilize your SIP. You know it’s been hugely tax-efficient for me as a high-rate taxpayer that I can drop money into my SIP and Get the tax relief on that. And that’s one of the big reasons why I’ve been able to retire, you know, effectively and come off of the out of the rat race is because having built up a Private pension, you know, having built up that SIP has allowed me to better understand how, how my money will work in the future and when I will have access to the different funds. And I think SIP is one area where it is probably sensible to get a little bit of financial advice ideally, you know, from a pension expert because the rules do change and you know currently you’ve got a £40,000 allowance, but you know these rules can change and especially when you start getting to tapered allowance, some of these terminology can be a little bit complicated. So it’s a good idea to get a little bit of help with that. And that certainly is somewhere area where I I do keep a financial advisor on the side. I actually play a bit of a game with my financial advisor. She’s a friend of mine and I put half of my own money in and I let her invest the other half with with her and and I’ve doubled you know, in the last few years I’ve doubled the returns that she has. But then that’s that’s because, yeah, you know, you know I Invested a small portion of it in Bitcoin and you know, a few years ago and obviously we can appreciate where Bitcoin is now. So you know, but that’s that’s, that’s part of the fun that you know you can have with it and I enjoy doing that and I enjoy winding up about that. No, so that’s that’s part of the fun.

Dr James: 

But again, it’d be interesting to know if there’s any FAs out there who use Bitcoin as an investment vehicle. That’ll be really interesting.

Speaker 3: 

Well, I think that. I think the point is very few do that for their clients because it’s essentially considered Too high risk. They may well have a little dabble themselves. I notice, and one of the reasons why I chose to invest in Bitcoin now and over the last couple of years is Because I’ve noticed more and more professional investors getting involved and you know, certainly when I hear people like you know, companies like Ruffus Allocating a proportion their portfolio to it, you know I start to you know, think well, perhaps this is this, whereas in 2017, I think there was a much higher risk of it going to zero. I think now you know there’s a lot of upside to it. Having said that, you know I Sort of spoiled your advice a little bit and taken some profits from that, because I just feel actually, you know this, there still could be a big correction on the way, but again, I don’t want to speculate on it too much. It’s a small proportion and I think you know I’ve done a similar thing with Tesla. You know when these valuations go 500% in, you know short periods of time I tend to think, you know these valuations are crackers and we need to be a common sense and I Understand the psychology. That hurt a little bit more now. So that’s that’s. But but other other things that I would say to people starting out I would say keep it simple. When you’re gonna, when you’re gonna start out, keep it super, super simple. I think so many people don’t make that first step because they don’t know where to start. So for me I I kept it simple by. I just opened an ICER with Harveys Lansdown and I I paid a little bit in at the time so I did feed it in, cost, average it in. I Made sure that I had a plan of how that was gonna work. And then I initially started by looking at it was at the time Harveys Lansdown had what they called a wealth 150, so it was 150 of their kind of recommended funds and that was a good introduction. And then I looked at the, the charts around the funds and they seem, they seem to have done well, ideally. I looked at a long term track record. So the longer the term the track record, the better. So I tended to choose actively managed funds who had track, who had fund managers who’d worked through previous crashes. So they’d worked through the dot-com crashes and the you know, the GFC crash. So, at the end of the day, I’ve got, you know, a far better idea of can these managers manage the downsides as well as the upsides, and I would always feel more comfortable Choosing a fund rather than buying individual stock. The question that I keep getting asked time and time again is should I buy this stock or should I buy this stock? And I don’t think that’s the place to start. I think the place to start is with a big fund, because essentially, what you’re doing then is you’re not putting all your eggs in one basket. You know nobody knows whether Apple’s gonna be up or down tomorrow. You might know over a long time frame, but if you group that together with all the other you know stocks and adopt own the world-type philosophy, then you know you win.

Dr James: 

Well, this is it. I mean, if you buy the fit see or you buy the S&P 500, you’re effectively buying the economy of the USA or the UK, and, unless the whole country can pitch it, it’s overnight. That’s a really solid pieces or fundamental Basis for an investment portfolio another way of looking at it and stocks are fine. Individual stocks are fine as well, but they’re always going to be more, more speculative than an index fund 100% every day of the week. You’ve obviously read quite a few books on investing, jillian. I know that we’ve talked about how to own the world, and you and I are both big fans of that, so that is 100% one that everybody should pick up 99p on the Kindle store, which is incredible. Any other resources that you can invest or you can a big pardon that you can recommend to others who are Interested in getting into investing.

Speaker 3: 

Yeah, I mean, I think, I think. So I’m not a big reader, to be honest. So I think the other thing that I try to do is I try to listen to podcasts and resources to try and so that I can do at the same time as a, for example, I’m exercising or going to the gym, that type of thing. So you know, later on I might go out on my mountain bike and while I’m doing that I’ll probably be listening to some macro economic outlook, you know, on a podcast. So I quite like that sort of idea I would recommend listening to. Thank you, I would recommend listening to some of the money week podcasts I think they’re fantastic, a little bit more detailed and Other other sources. I think how to in the world. But I would also recommend. He’s done a more recent book. It’s called live well on less, I think, or something like that live on less. And I think, even if you just follow the summary of that, I made a note of it actually, because His steps that he recommends in the book are basically what we talked about already. So if you’re going to bully point them, it’s find a reserve of money, try and trim your finances so that you can save a little bit of money. We’re lucky as dentists. We earn well. You know some of some of the people that I talked to. You know they really Struggled to get, say, 50 pounds a month, you know. But at least find some money to make that first step. Secondly, pay off any debt. So work out what your most expensive debts are and get rid of those first. Third thing, make sure you build yourself a rainy day pot. I know the financial advisors are big on this. Make sure you’ve got at least six to 12 months of reserve in case you lose your job these types of things. Set up tax-efficient accounts so we’ve talked about these things and finally, look at a sensible asset class allocation. Andrew’s big on the 100 minus your age for working out the risk profile for that. So that’s a great introduction. Again, if we’re going to gear it for people who want to think of another book to read as a starting point, that’s the type of thing. If you want to get into more complicated things, there’s plenty of. I mean, I’m sure you could recommend lots and lots of technical analysis and things like that and looking at the charts and making these predictions. I actually had an email the other day from a pal of mine who is a professional trader for JP Morgan and I can share that with you, maybe in another podcast, but I mean it was quite interesting his insight into it, because I think what you’ve got to be careful with a lot of these books is a lot of the guys who deal with them have got skin in the deal, if you like, and they’ve got their agenda and I think you’ve got to watch that a little bit now with how to earn the world, because the VTPF global fund that Andrew runs is essentially trying to build more and more interest in that and it will keep plugging that more and more. It’s quite an expensive fund he admits it himself and his latest email newsletter, but again, it’s free to subscribe to his email newsletters and they do provide some fantastic insight into the way his mind works and for a number of years. You can get the previous office website as well. Plain English finance. They’ll give anybody a rock solid understanding. One other source that I really liked the Hargreaves Lansdown website. Some of their articles are good. I like the one that they did recently about the difference between speculators and investors and I think actually I would really encourage I mean some of the guys on your group. You know I get this, they’re trading and I wouldn’t aim this at them. But if it’s the people who want to know where to start, start by investing, not speculating. I think you know, and there’s a fantastic article recently it was 28th of January 2021 in Hargreaves, lansdown that basically says, if you’re speculating, you are essentially gambling, and there’s nothing wrong with that, as long as you know that you’re gambling.

Dr James: 

I did it the wrong way around. I got into speculating before I got into investing and it didn’t really end so well for me and those first, those initial four years and months. So I would absolutely encourage everybody to not emulate me and to think about investing first of all and then use that as a springboard to learn about trading. And one thing that is really interesting is if you are getting into something and you have a more short term outlook on how it’s going to fare, or you don’t plan to hold it at Infinitum, I would 100% encourage you to have a plan for each and every trade, because you’re there’s no good having profit. It’s not profit until you sold it. It’s not profit until you sold it. You know what I mean. So if you have all this money, it’s went up exponentially, it’s still not yours. It can still go back down again. If you skim out profits at predetermined levels, you’ll always have something to show for it and let’s not forget, you’ve probably put some hard work into researching that and trading it. But if you reframe it like that mentally, it’s a really useful way of looking at it and it means you’ll be more profitable in the long run and those profits you can reinvest in other things that look cheap as well. It’s a very advantage to do that, and I would definitely encourage anybody who has a more short term philosophy to have a plan for every trade. I have a book that I write my trades in and I predetermine each and every one how much I’m going to put in, what my stop loss is when I’m going to sell, etc, etc. Very useful piece of advice is that I had one more question to ask, but I think we’ve already answered it. It was can you give anyone anyone who’s listening, who hasn’t really started investing, some actionable steps? And if they were to be tailored uniquely or specifically towards dentists, that would be even better, but we’ve kind of already covered that. Maybe we could just make it really punchy and impactful at the end and so on.

Speaker 3: 

I think the only other thing I was going to say is a further book to mention is the one that you’ve mentioned again recently, the Unshakable, and I think it keeps coming back to this psychology, and I think this is a learning journey for all of us, and I think none of us are professional investors. We’re learning and we’re going to have to course correct, a bit like an airplane that’s off course at times and we’ve got to live and learn from these things and we’ve got to be flexible and we’ve got to learn about the type of investment strategy that works. Course, you might find your fantastic technical analysis and you can predict what the herd is thinking, but essentially let’s keep it simple and I think essentially the starting points are as dentists, we are very fortunate. We’re in a well-paid occupation where we should be able to save money each month and to then use a tax efficient vehicle to maximise the returns that you’re going to get and to always make sure you’ve got a rainy day pass put to one side as well, and then to invest it in, basically to protect yourself by investing geographically, to make sure you’re diversified both in asset class and geography, and then also to make sure that you drip feed the money in, because none of us can time the market. If one of us is very well spoken on not trying to time the market himself, if he can’t time the market, we certainly can’t. So we should break it into chunks and drip feed it in. It doesn’t matter if you’ve got a lump sum to invest. Still break it up, because that will have the smoothing effect again.

Dr James: 

Amazing Dollar. Cost averaging, or point cost averaging is the technical term for that, and that’s what Julian has just basically described. And you’re absolutely right even professionals can’t do it. So what hope do we have 100%? And by buying in predetermined amounts over many weeks or many months, you also average down your investment price and therefore, if you believe that stocks, indexes etc are inherently biased to go up in value which they generally are then you can always buy them cheaper for what you will eventually sell them for. Because of that effect and because of the fact that you’ve averaged out your entry and, as well as that, it makes you disciplined.

Speaker 3: 

Well, I think one of the things that I heard recently Andrew Craig talking about was actually the fact that what most hedge funds aim to deliver is round about 0.8% per month. That’s actually what they aim to do. Rather than having these big ups and downs that, psychologically, are devastating for their investors. They aim to grind out 0.8% per month. So if you’re doing more than that, you’re beating the professional investors of these multi-billion pound hedge funds then you have to question the risk-reward structure that you’re working to, and is it going to pay off long-term? And again, I think hedge funds probably aren’t the way to go unless you’ve got big sums of money to invest. Because we’re all familiar with the bet that Warren Buffett had with Prodigy partners, and that’s a fantastic piece of history. The fact that one of the world’s most prolific active investors took on hand-picked hedge funds the top five by Prodigy and still managed to outperform them, taking fees into account, is quite an insight really.

Dr James: 

Interesting stuff, julian. This was an amazing podcast. Thank you so much. I hope everybody who has listened has learned a lot. Today I picked up a few things and it’s so, so, super tangible because Julian is a dentist, still works as a dentist, and he has applied these methods to reach that point where he works only because he likes his job. How amazing is that. That’s so useful to everybody who is listening, and that was part of the reason that inspired me to create this EuroPastive Financial Freedom Month as well.

Speaker 3: 

Julian, we’re going to wrap up now. Any parting words?

Dr James: 

Thank you so much for your time, by the way.

Speaker 3: 

Keep up the good work. It’s fantastic. It’s great this is making it accessible to people and I think we all need financial education and the more we can build on that the better. The one thing that struck me was there’s some statistical on the lines of 70 to 80% of millionaires who win the lottery with multi-multi-million pounds end up broke within five years, and essentially it’s because the mindset and they’re not financial literate. I think actually utilizing some of these skills can really pay dividends.

Dr James: 

Awesome. Thank you so much, julian. We’re going to let you get off now and enjoy the rest of your day. If anybody’s listened to this podcast and they haven’t heard of the group that we’re both referring to, it’s called Dentist who Invest Community Group for Dentist who Enjoy Trading. You can find it on Facebook Financial information for people who are not necessarily financially literate, and we’re seeking to elevate the collective consciousness of dentists so that they can make their money work better for them and enjoy their life more and have more freedom. So definitely a worthwhile group to join, if you’re not in it already. Julian, thank you so much for your time.

Speaker 3: 

You’re welcome, absolutely.

Dr James: 

Thank you for having my friend and we will connect very soon again on the group. I’m sure I’ll see you later.

Julian: 

Interested in improving their finances, wellbeing and investing knowledge. Looking forward to seeing you on there.

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