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Dentists Who Invest

Podcast Episode

Dr James: 

Fans of the Dennis who Invest podcast. If you feel like there was one particular episode in the back catalog in the anthology of Dennis who Invest podcast episodes that really, really, really was massively valuable to you, feel free to share that with a fellow dental colleague who’s in a similar position, so their understanding of finance can be elevated and they can hit the next level of financial success in their life. Also, as well as that, if you could take two seconds to rate and review this podcast, it would mean the world. To me, what that would mean is that it drives this podcast further in terms of reach so that more dentists across the world can be able to benefit from the knowledge contained therein. Welcome.

Chris: 

Welcome to the Dennis who Invest podcast.

Dr James: 

Welcome back everyone. What’s good. Another episode of Dennis who Invest with your host, James Martin. We’ve got a great guest with us today. He’s someone who is very well known in the dental world. I’m sure you’ve seen his name on various forums out there at some point. He is someone that I’ve met a few times, but I’m as intrigued as much as everybody else probably to get to know the real, the man behind the guest or the persona online. In case you don’t know who he is, and in case you have not come across Chris online before, his full name is Chris Barrow, and Chris does a variety of things in dentistry and he has a background in investing as well, because he did, of course, used to be in IFA. So there’s going to be some real golden nuggets on here, not just about investing, but also about Chris himself and what he does. Welcome to the show, Chris. How are you today?

Chris: 

It’s an absolute pleasure, james. I am very well indeed. Thank you for the intro. It’s nice to hear anybody say anything about me anymore, because I’ve been around certainly in dentistry for so long now that whenever I do a conference for a trade show, anything like that, whether it’s online or in the flesh, the only thing I ever get is the next speaker needs no introduction and that’s it, and then they shut me out. So there’s a huge assumption there, which is that after all these years, everybody does know me. In fact, that’s not the case, and so thanks for the intro. It’s much appreciated and it’s really good to be on the show with you.

Dr James: 

Chris, I hope I did you justice in that intro because that was completely ad hoc. I had to just off camera for anyone who’s listening. I had to confirm what Chris precisely does for dental practices because I wasn’t sure I know that he’s a business coach. But, chris, you are. You help dental practices by coming in you. You had a delightful analogy, but comparing yourself to Gordon Ramsay in Hell’s Kitchen just a minute ago, didn’t you? It’s an interesting one that was exactly right.

Chris: 

You know you can come up with all sorts of highfalutin explanations for it is that you do. But the whenever I say Gordon Ramsay’s kitchen nightmares in your dental practice, people get it. And I do normally add a kind of a postcript to that by saying I don’t swear at people quite as much as Gordon Ramsay does when he’s on television. In fact nowadays, to be honest, I don’t swear at people much at all, but I’m certainly very direct in the way that I give feedback to people, and one of the interesting about 20 years ago, some bright spark in dentistry gave me a bit of a nickname. That nickname was Mr Marmite. I’m not entirely sure whether it was intended as an insult or a compliment, but whichever way it came, I decided I was going to hang on to it. So Gordon Ramsay is a good analogy. Mr Marmite is a very good metaphor. At the end of the day, my job is about working with dental practice owners to generate more profit in less time, hopefully with happier people along the way. I’m about the business of dentistry.

Dr James: 

Do you know what I love that? You own the name Mr Marmite. You don’t shy away from it. It’s part of your identity and you, yeah, you’re happy to be known as Mr Marmite, but do you know what the thing of what it is? I’ve heard another delightful analogy along those lines as well, and that is I’d rather be somebody’s shot off tequila than everyone’s shot off whiskey, so, or every sorry, everyone’s cup of tea. There we go. That was it. I messed it up the first time, but I think that that might be appropriate. Is that right, chris? Yeah, that will do Awesome. So, chris, you’re very much in the industry of a coach. You go by coach Barrow, I believe, on your website. You help dental practice. This is your niche mentorship and help. An online. Online mentorship and things of that nature is taken on a whole new lease of life, at least in my world, given the advent of the off coronavirus, and it was something. It’s almost like this whole world or dimension in itself. There’s this subsection of people who help people via these, via methods, via mindset, motivation, all of those things, and I really didn’t have the first clue that this whole world existed until I came across a few people like that through my, my group and through spending enough time on social media, and it really is a whole new perspective or way of looking at the world and I almost feel, maybe a little bit more enlightened now because I’ve met some of these people. I’m just wondering what was your journey to becoming coach Barrow or becoming that person? Was there a light bulb moment? Was there an evolution? How did that happen?

Chris: 

Great question. Well, first of all, just to put things in perspective and I just want to pick up on something that you said in the introduction I am celebrating at the moment the rather dubious anniversary of having spent 51 years in full time employment, and what’s interesting about that is that I’ve spent 26 of those years working in dentistry. The last 26 of those years have been working in dentistry, but the time before that, the 25 or so years before that, I was working in financial services and I joined an insurance company in central Manchester as an office boy in September 1970,. Can you believe that? At the age of 16. I worked my way up through the ranks internally so that within a period of about seven or eight years, I defectively achieved the status of office manager. And at that point in time, of course, you, you, you’re waiting on dead man’s shoes if you wanted to get any further. And so I, rather with the benefit of hindsight, I took a huge leap of faith around about 1978 ish to move into the sales side of financial services. Now, that was a gradual move, because my first move was to become a technical rep for an insurance company. I enjoyed that and then, in 1986, I moved into sales direct to members of the public. So I became what nowadays would be described as an independent financial advisor in IFA and I traded as an IFA for about 10 years before I transitioned into business coaching. And of course, given the nature of this podcast, I’ve no doubt we’ll go back into that financial services period before we finish. But to answer your question, you know how that well, you were an IFA. Yes, I was. I was running my own IFA practice. I was one of the six founder members of the Institute for Financial Planning in 1986, seven and the IFP formed in those years was actually the first group of fee based financial planners. So back in 1987, and about 10 years before the rest of the market, myself and a few other guys and gals decided that we were going to move away from the commission environment and we were going to start charging our fees for our clients fees for the work that we did so that that would give us a lot more freedom of expression in terms of the advice that we gave to them. So I’m very proud of the fact that back in 87, I was one of those pioneers in the world of fee based financial planning. The other thing that’s relevant is that I decided right from the get go that I was going to deal with small business owners as my niche marketplace, largely because I didn’t like working in the evening and so I didn’t want to be sat in some of these living room with a cat sat in my briefcase. I wanted to do all my work during the day and then go home. So business owners and professionals were my first client base. So how the hell did I end up as a coach? Well, it’s very interesting that when, when I moved into fee based financial planning, all of a sudden the pressure to generate product sales in order to generate commissions was taken away and the clients paid me a flat rate monthly fee per client to be their financial planner, and what that did was it gave us breathing space. And so when I sat down with a client, I would happily spend three hours talking to the client, listening to the client, and I found that in an average three hour meeting, we probably spend about the first hour talking about financial services and we do whatever we needed to do in order to update their financial portfolio. But then they’d say, well, while you’re at it, let’s put the kettle on and let’s have a chat about how things are going in my business. So Gradually, slowly, organically, because I was fee-based, I had more time to get to know the client in a much deeper way. I became what I used to describe myself back in the late 80s, early 90s as a commercial psychiatrist, because the client would sit there telling me about all the problems that they had with the team and all the problems that they had with the marketing and all the problems that they had with the customers and all the problems that they had with the competitors and all the problems that they had themselves as owners of businesses. I would sit there and I would listen. What I didn’t know I was doing at the time, because I didn’t have the qualifications around it, was that I was doing a bit of therapy and a bit of coaching. But I had the time to do it because I was getting paid. As the 80s moved into the 90s I began to enjoy that psychiatry more and more and more and more. It got to the stage about 1993 where I thought you know what the financial services stuff, it’s a bit near it’s admin we go in, we do it, we do the paperwork. I have a para planner that I give all the paperwork to this chatting about the client’s life and the client’s business and the client’s hopes and aspirations. I’m really enjoying that. 1993, I accidentally stumbled across an organisation in the United States of America. It was called Coach University and it had been created by a fellow called Thomas Leonard who was a chartered accountant by training who had come out of Landmark in the 1980s. If you don’t know what Landmark is, go and Google it. It’s a personal development programme, very cultish. Thomas Leonard had come out of that and thought well, I’ve had enough of Landmark, but I like the personal development movement. He built his own training programme for what in those days were called life coaches. I signed up as one of the very first UK students. Between 1993 and 1996, I used to go on to Tuesday evening tutorials on the telephone.

Dr James: 

Yes, most of the things were done back then.

Chris: 

Oh, we didn’t have any bloody internet. There was no internet. So on a Tuesday night at 7 o’clock I’d pick my telephone up and I would dial an international number and that would log me into a group telephone call with a bunch of other people from primarily the USA and other countries. We’d sit on the phone for a couple of hours on a Tuesday night talking to Thomas or other tutors. They also sent me, when I signed up, an 11-pound in-weight box full of ring binders with printed material in them. On the telephone calls on a Tuesday night we worked through the ring binders. It took me about three years to become one of the very first certified coach university coaches in the United Kingdom. That was where the story began and frankly, at that point in time I was enjoying the coaching so much that I actually sold my financial planning practice to another IFA who was a Palomine and I burnt my bridges in 1996 and decided I was going to go full-time coaching on the 1st of January 1997. I decided also on that day I was going to deal exclusively with dentists. There’s another story about that which we probably don’t need to talk about today. But here I am, been there ever since.

Dr James: 

What a journey. What a journey. And you know, can I just say something about that, chris? Nowadays I feel like engaging in one of those circles is a lot more commonplace and accepted In the 90s. It still is what I think a lot of people would call a fringe thing to do, because it’s definitely not mainstream and it’s not available to everyone. In the 90s that must have just been totally unheard of. You must have had so many close friends and families who were perhaps concerned about you and what you were doing and maybe perhaps even think that you were in a cult. I don’t know.

Chris: 

Well, in all fairness, back in the day and I know it’s a bit of a cliche, but I used to say to people I’m training to be a coach and they’d say what is it you’re going to be driving? They had absolutely no idea what the hell I was talking about. And frankly you know, I turned up in dentistry around about 1996 and I started talking to dentists about doing some coaching and dentists didn’t know what coaching meant there you go. Neither did anybody else, for that matter. So, yeah, I suppose somebody once said that luck is the meeting place of opportunity and preparation, and I think that the opportunity was that the coaching community was just getting off the runway in the 90s, really beginning to happen, and there’s also demographic reasons around that, that the baby boomer generation were looking for answers to questions around their lifestyle, and the preparation was that original training that I did with Thomas Leonard. And also, in all fairness, I’m going to pay tribute to Dan Sullivan and the team at Strategic Coach in Toronto who, to this day, I first heard Dan Sullivan speaking July 1993. I’m still listening. I’m going to reference Stephen Covey seven habits of highly effective people. I’m going to reference, interestingly, in the context of what we’re talking about here, I’m going to reference Robert Kiyosaki and Rich Dad, poor Dad, which was a seminal book for a lot of people, and a lot of other very, very clever people who I just listened to during that 10 year period in order to begin to put together the framework of what it was that I intended to become.

Dr James: 

Yeah, absolutely, I mean. But, like I say, it must have been a big leap of faith because, at least nowadays for me, I feel like there’s a lot more of a semblance or acknowledgement amongst the general public that this is something that people do, whereas, yeah, back then, just as you were saying, it was just getting up and running, there must have been a huge leap of faith for you, basically. But yeah, it’s another interesting thing that I was just going to mention that struck me when you were talking. Sometimes in life, when we choose certainty, certainty being, we get up nine to five every day. We just do the same old thing and we’re building linearly towards something. It holds us back from the truly special things that can happen. When you choose uncertainty a little bit, yeah, and even when, let’s say, for example, you drop a day or two and work and you use that just to freestyle basically I want to say freestyle, I mean, just do things that you enjoy, create something, build on another skill that is when the magic can really happen. And even though it seems like something is holding you back, something is getting in the way of your linear, short term goals, it’s through that, it’s through that leap of faith or that. That’s something that you may feel. That isn’t necessarily contributing towards what you want to achieve or going somewhere. That’s when something really special can happen, and that’s what I benefited from. That’s what happened to me, because I left my job a few months ago about six, seven months ago and I had to recover from knee surgery and I had nothing better to do. And if that all those things wouldn’t have happened, if I wouldn’t have been in that football accident all those years ago, that football tackle and Left that left my job and did all these things, maybe there wouldn’t even be dentists who invest, I don’t know. And it just it made me see things in a new way. It made me see things in a new way. It really did, and maybe you’ve been along that path as well, I’m guessing you know you. You’ve seen that, you’ve seen, you’ve seen the light on that one too.

Chris: 

In fact, there’s a. For the people that have known me a long time, they will tell you that there’s a bit again, another bit of a joke, which is that, although, although Chris Barrows been around as a coach since 96, effectively, I’ve changed my brand a lot of times along the way, and I’ve also changed my business delivery model a lot of times along the way, and the joke is that he’s had more brand changes than Prince used to have. You know that every time you went on tour, there was a different costume and there was a different Backstage set and there was a different theme to the tour. Bit like Bowie as well. You know that, bow every time Bowie went on tour, it was a different version of Bowie, and and I I’m not in the same league, but I’ve, I’ve I’ve never been scared of Throwing the stage costume away and putting a completely new stage costume on and going out on tour as a new character, and so there’s been various iterations of Chris Barrow along the way. And, of course, the interesting thing about March 2020 is that, when lockdown came along, like a lot of other people, my business just drove off a cliff. On the 23rd of March 2020, when Boris announced lockdown, I was spending four days a week traveling. I worked at home on a Monday, I left on Tuesday. I came back on Friday night. I was living in hotels. I was traveling not just around the UK but all over the world, visiting practices, speaking at conferences and trade shows. All of a sudden, nothing, and so I was able, with my support team, to pivot in four days, and in four days after lockdown, we re-invented ourselves as a zoom-based business and we’ve never looked back and and in fact, I’m now have a quandary, and the quandary is that, at the time we’re recording this interview, lockdown restrictions are beginning to ease. There’s a lot of my contemporaries in the training, consultancy, coaching landscape who are trying to reinvent themselves pre-covid and Say right, I’ve got to go back to what I was doing in February 2020, because that was how I played the bills. And I seem to be the old man out at the moment because I’m saying screw that, I don’t want to go back to four days a week dragging a suitcase around, living in hotels, collecting flipping Hilton points. I Want to take this Virtual business that I’ve created and scale it now and say how can we take that forward? So don’t get me wrong, I’m not gonna sit in here for the rest of my life. I’m gonna go and talk at conferences and trade shows because that’s good for brand and marketing and so on and so forth, but schlepping around the world sitting in somebody’s dental surgery arguing about miserable Mary on reception, I’m not going back there again. So you’ve got to be prepared. You’ve got to be prepared to pivot and and you either pivot because of external circumstances these are the COVID-19 or you pivot because of internal circumstances. I’ve screwed me up with a sports injury and, whether it’s internal or external, there’s no point in crying over milk, milk. There was no point me sitting here crying into me coffee going, boris Johnson won’t let me go out. And there was no point in you sitting at home crying into your coffee saying me knees broken. You’ve got to pivot and it’s the ability to pivot, and to pivot quickly and to go off in a new direction and make the best of it that I think, determines the winners wise words, wise words.

Dr James: 

I think we learned a collective lesson as a society about how adaptable it’s necessary to be, especially when corona virus completely rocked our world, especially for us dentists as well. I mean it was. We must be up there with one of the industries that were affected the most. I just want to talk a little bit more about when you were saying that you help practice, so you go in. We’ll go back to the Hell’s Kitchen analogy. The food is terrible. They’re serving up frozen food. It’s been in the freezer for God knows how long. It’s moldy. The chefs are all at each other’s throats what you go in, you tell them how to fix it. How do you do that? What is it that you generally find when you go into these dental practices? Real quick, guys. I put together a special report for dentists entitled the seven costly and potentially disastrous mistakes the 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 wwwdentistunevestcom forward slash podcast report or Alternatively, you can download it using the link in the description. This report details these seven most common issues. However, most importantly, it also shows you how to fix them. I’m really looking forward to hearing your thoughts.

Chris: 

Well, the remarkable thing and I’m not, since I’m not so sure I should tell you this because I’m going to be giving away a huge trade secret Is that I get paid handsomely For stating the absolutely bleeding obvious, because my toolkit is full of common sense no magic. I am very blessed in the sense that I have mastered reading, writing and arithmetic, and I’m also very blessed that even at my age I understand technology. But when it comes to running a business properly, then all that I ever find myself doing, day in day out, is talking common sense to people who are either too knackered, too burned out, too overwhelmed, or the too frustrated or the too frightened to accept the reality of that common sense and do something about it. So it might be a miserable Mary on reception and the common sense approach is that you’ve either got to change the woman or change the woman. But the clients too scared to do anything about it. The client’s too tired to do anything about it. The client is frustrated because they don’t know what to do about it, because they’ve not taken professional HR help in the performance management of that individual. So what they do is they tolerate miserable Mary on reception and they tolerate the damage that she does to the patients, the damage that she does to the brand, the damage that she does to her colleagues in the workplace, and I’m using miserable Mary as a metaphor for 100 other things that could be wrong and 100 other people that could be wrong, although I’d say, in all fairness, I spend more of my time talking about the problems created by broken people than I do talk about the problems created by broken systems, because broken systems you go and fix them. If you financial monitoring systems aren’t working properly, you go and fix them, you get some decent systems in, and so on and so forth. The biggest problem is performance and behavioural management of the teams.

Dr James: 

But you know what’s curious what you’re saying there. I’ve been involved in those sorts of circles before and sometimes you’ll speak to your mentor or you’ll speak to someone who’s organised in the circle and the stuff that they’ll say to you is not this grand leap of faith. Sorry, it’s not this huge leap in imagination, sorry, it’s more. It’s more just stuff that you needed to hear, but it’s more just as if you’re having a straight talk with yourself. But it’s just the fact that it comes from someone else who’s knowledgeable and it makes this huge difference and it’s so hot, actionable it is, is just multiplied by about a million because it comes from someone who speaks from experience and also it’s reassuring and it also gives you permission to go and do that thing that you’re theorising about in your head. And I know that might sound. If you would have told me that about 12 months ago, before I’d come across people like that, I would have thought what a load of waffle, really what a load of waffle. But it really is so powerful and it sounds so obvious and it sounds like you’ve realised that or observed it or you live it. You are that person.

Chris: 

The Native Americans have a wonderful expression that wisdom enters through the wound, and so if you want good advice, it’s often a good idea to seek out the person that’s got the most scars, and in some respects, as each year goes by, I’ve acquired more and more scars as the years have gone by, and some of those are scars that have been inflicted upon me personally and professionally, and some of them are scars that I’ve seen inflicted personally and professionally on the people that I’ve had around me or the people that I’ve worked with as clients. So what you do is you build up a reservoir of experience, and I don’t want to pull the age card because I know how irritating that can be, but after 51 years at work and after 67 years on the planet, I think I’ve got a pretty good idea of what makes people tick, and so my Marvel superpower is simply based upon experience, which is that I’ve seen every conceivable aspect of performance and behavior and, over the years, have become fascinated with the psychology of what makes people tick, and I’ve done lots and lots of very amateur research on that. If I had my time again, I’d go back to university and take a psychology degree, I think, so that I had a greater degree of understanding of this, but I’ve got a lay person’s knowledge of it based on experience, and so, in actual fact, there’s not much happens in business that I’ve not seen before somewhere. There’s not much happens in business that hasn’t already happened to somebody that I know, and so I can often save people time and say listen, I’ve seen this before, this is where it’s going, so you might as well head it off at the pass and deal with it because this is where it’s gonna end up. Or, alternatively, you’ve got the insight to be able to say, okay, well, you’ve laid out these chess pieces around your own personal life or your own professional life, and it strikes me that these are the next moves that you need to make. But sometimes you do get paid for telling people what they already know, and that’s okay, because I have a business listen, james, I have a business coach who coaches me, and I work very, very closely with that business coach, and we meet either virtually or physically on a regular basis, and sometimes I sit squirming in my chair as my business coach asks me to do things that I know darn well I should be doing, and I pay a lot of money for the privilege of being told.

Dr James: 

It’s growth, though, isn’t it?

Chris: 

The word I’m gonna use is accountability, and the facts of the matter is that if you are temporarily unable to be accountable to yourself and if, for whatever reason, you might be unable to be accountable to a member of your family or a partner in business or a work colleague, if there’s a temporary period of time where you don’t feel accountable to all of those people, including yourself, then maybe you just need to hire somebody to be accountable to. And the interesting thing about that is that the higher the fee, the more accountable you feel and therefore the more likely you are to do something about it. So it’s bizarre that the clients who get the best results are the ones that pay most.

Dr James: 

Yeah, I’ve heard that said before in those sorts of circles that it’s an interest and it’s almost like a paradox in that the more coaches want to help people, the more they charge them, whereas you might think the opposite. If you want to help more people, you charge them less because the entry barrier is low, but you tend to notice that they get better results. You’re not the first person I’ve heard say that. Who is a coach or a mentor or in that line of work. Listening to you talk kind of reminds me of Gary V. Gary V, which, you’ll note, I’ve heard of business coach, industry, big industry figure, mixed, very wealthy guy. He was flat broke when he was 35, okay, he worked in a off license for his parents and the shop went broke. He was 35 and now the guy’s mid 40s now and I believe he’s a multimillionaire and he says if he could distill his qualities or his ability to generate money into two traits or features, he would say accountability and he would say self-awareness, because if you have those two things, you can never shut. You’ll always notice that even if something goes wrong, even if it’s 90%, the other person that 10%, you still have to hold yourself accountable. There’s something that you can learn, even if it’s someone being completely ridiculous in your view, and the easy reaction to that is is just to say something like well, that person’s just an idiot. Or this, this and this, and X, y and Z, and actually, really, there’s always, almost always, something that each one of us can improve on in those periods in life and something that we can get better at going forwards and hence be a better person, be more successful in business or various pursuits in life. That’s what I’ve noticed, anyway, and that really struck me when Gary V said that, chris, we have to talk about investing at some point. Yeah, because of the nature of this podcast and the nature what the guests are interested, what the listeners are interested in, of course. So I’m just curious what is your investment philosophy? I know that you once were an IFA. Presumably you did some investment by yourself around about then and presumably once more you continue that to this day. Is that true, and how does that look for you?

Chris: 

All right. Well, there’s a few things I’ll say about that, and I think that it’s interesting, isn’t it? You’re taking me back to what I used to do for a living 30 years ago. So I’m really having to dig deep and think well, okay, what was I saying to people all those years ago? And I think there’s a few simple things I’m gonna say. The first simple thing I’m going to say is that one of the parameters that I always had to establish when I was in communication with a client was a very simple parameter, which is that if we’re gonna have a conversation about investment, I need you to let me know what your time horizon is on that. So, are we talking about a short-term investment, a medium-term investment or a long-term investment? We’ve got to get those boundaries in place. Now, how do you define those? Very arbitrarily, to be fair, very arbitrarily, but I’m gonna give you a crisp arrow definition, which is that a short-term investment is one in which you want to make the highest gain that you possibly can in the shortest possible amount of time. So, in other words, it’s a sophisticated form of gambling.

Dr James: 

Yeah.

Chris: 

Because that’s all a short-term investment is. What you’re trying to do is you’re trying to beat the bank, and I’ll leave you to consider the statistical probability of beating the bank. But you know what Lots and lots and lots of people absolutely love going to the casino and they do it. It’s fun. And if they are sensible, they do it with fun money and if they are stupid, they do it with money that isn’t fun money. So there’s nothing wrong with short-term investment, just the same as when you have the office Christmas party and they have the gambling table after dinner and everybody gets some token pound notes and you can go into the gambling table and you can play roulette and you can play cards after the office Christmas do and just about everybody loses all the money and a few people come out and say I’ve got 10 times more than I started with. The fact that they’re usually pissed when they’re doing it has got nothing to do with it whatsoever. But short-term investment is a form of play. It’s not serious, it’s play. And if you do it, and if you do it with your playing money, then good luck to you. And when I was a financial advisor, I used to advise my clients that I had absolutely no skill, proficiency whatsoever in the world of short-term investment that if they wanted to do that they needed to go and talk to somebody else, because it wasn’t me. Medium-term investment is something where you’ve probably got something around about a 10 to 15 year time horizon on your return. And long-term investment is something where you’ve probably got more than 15 years time horizon on your return and every conceivable form of historical measurement demonstrates that if you’ve got a medium and long-term time horizon and if you’re able to pursue a buy-and-hold strategy, then over time the peaks and troughs can we start again. The inevitable peaks and troughs of any cyclical market will eventually even themselves out. So every market is cyclical, everything is cyclical. Every economy is cyclical. Human nature is cyclical. Nature is cyclical. Your investment portfolio is going to be the same. The longer the time horizon, the less the effect of those cycles will be on the overall value of the portfolio. But I’m going to share with you my number one favorite investment story. It actually comes from one of my number one heroes and that’s a fellow by the name of Sir James Goldsmith. Now, much could be said about Sir James Goldsmith, who sadly passed away a number of years ago. Can I advise your readers that his autobiography I should say his biography is an absolutely fascinating read, a very, very colorful character. But let’s just pause in 1987 for a moment, because in 1987, sir James Goldsmith at that time was the second richest man on earth. He’d made his money by buying and selling businesses and in fact made his final fortune by launching a bid to buy Exxon, the oil corporation, which proved to be successful, and the story of that bid itself is a fantastic part of his biography. But in the mid-80s Goldsmith was number two rich man in the world and he had a huge, huge equity portfolio. And he tells the story. And the story is that he was on a business trip to New York and he arrived early in Manhattan for a meeting, had a bit of time to spare, so he went into the ground floor of the skyscraper where his meeting was going to take place and he saw over on the side of the wall there was a shoe shine man and he thought I’ve got a few minutes spare, I’m going to have my shoes polished. So he walked over and he said how much to clean my shoes? And the guy said five dollars and he sat down and he opened up his paper and he was sat there reading it while the shoe shine guy was busy shining his shoes. And after a few minutes the shoe shine guy said do you mind if I ask you a question? And he said yeah, no problem. What is it? And he said are you Sir James Goldsmith? And he said yes, I am. And he said well, he said it’s an absolute pleasure and honour to meet you, sir, and to shine your shoes. And Goldsmith said do you mind if I ask you a question? And he said because. He said the question is what? And he said how do you know that I am Sir James Goldsmith? No disrespect, but you’re a shoe shine man. And he said Sir James, I’ve started building my own small personal equity portfolio because I read the paper and I see how the value of equities is increasing and so I’ve decided I want to take part in that. So I have an equity portfolio myself and I recognise you from the financial columns of the newspapers. And Goldsmith said very pleased to meet you, had his shoes shined and jumped into the elevator to go up to his meeting. He walked into the reception area of the office for his meeting and he said to the receptionist do you have a private room and would it be possible for me to make a telephone call to London? And the receptionist said certainly, sir James, and they made the room and the phone call available. He rang his stockbroker and he said get out of equities. And the stockbroker said Sir James, you’ve got a two and a half billion dollar portfolio. That’s going to take a little bit of time. And Goldsmith said I don’t care how much time it takes, just get out of equities and get into cash. And the stockbroker said Sir James, I have to ask why are you asking me to do that? And he said when the shoe shine man is buying equities, it’s time to get out of the market.

Dr James: 

I’ve heard that story in other guys’ that when your taxi drivers start talking about investments, it’s time to get out or ask you about a stock. It’s time to sell. Yeah, yeah, yeah.

Chris: 

So we liquidated and in October 1987, the stock markets of the world collapsed. 70% of the FTSE 100 value was wiped out over one 70% of the FTSE was wiped out in one day. So that’s my investment philosophy in an up shell and basically in so far as short to medium term investment is concerned, the moral of the story is very, very simple Drive in the opposite direction from the bandwagon, because if you can see a bandwagon, it’s too late.

Dr James: 

Yeah, yeah, I won’t disagree with that one. And passive investing is probably the only sure, far way to make money in the long run, and after that it’s pretty much a gamble at the casino. However, one would argue that if you’re skilled and knowledgeable enough, just like the poker players, you can play poker well, that there is an element of skill there. But I will entirely agree that it is always just an odds game and unless you’re the house, unless you’re making the rules, which, by playing on your own terms, which you can do to a degree, in short, to medium investing, then you’re not, then you’re just a puncture and you’re liable to lose a lot of money. And absolutely about the investing with money that you can afford to lose in short term, I would totally, wholeheartedly agree with that one, totally.

Chris: 

Yeah, so you can imagine that. You know I ended up don’t get me wrong I enjoyed a great deal of success as an independent financial advisor. I enjoyed going on to a fee basis in the late 80s because you know that took the what you would describe as the commission edge out of the conversation and it was a huge relief to be able to do that. But at the same time, you know, they were happy days and I had a lot of fun. I had some great clients. I don’t I don’t miss being a financial planner because I was ready to transition into a new area of my life, but I do look back at those days as being hugely enjoyable.

Dr James: 

Yeah, informative as well, because of course you wouldn’t be the person that you are now if you hadn’t had those things. But, yeah, maybe just a chapter that you’ve closed and you’re not willing to go back to.

Chris: 

I don’t think I’m going to be applying to become a financial planner at any stage in the future.

Dr James: 

I believe that to people like you, James. Well, I hope nobody thinks I’m a financial planner. That’s that would be. I just want to quash that myth while I’m on this podcast. I’m not here for financial advice absolutely not. But I will help where I can. I will help where I can, chris. This has been brilliant. Today I’ve learned loads. I hope everybody who’s listening has taken something away from this. Chris and I did this podcast. We did it just adlib. We did it with like any semblance of a script. We just wanted to see where we wind up, and you know what I really feel like that’s been useful to people who’s listening. I hope that. I hope that people would agree with me. I’ve definitely picked up a few things as well, and you know what it’s been fun. Chris, thank you so much for coming on the show.

Chris: 

It’s a pleasure. Good luck, James.

Dr James: 

My absolute pleasure to host you, my friend. We’ll speak very soon. I’ll see you later, cheers. If you enjoyed this podcast and want to be part of the Dentist who Invest community, feel free to find us on Facebook by searching Dentist who Invest Community Group for Dentist who Enjoy Trading. This is a group focused entirely and exclusively on dentists wishing to achieve financial freedom and improving their literacy and finance. Looking forward to see you on there.

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