Dentists Who Invest Podcast
Official Podcast of the Dentists Who Invest platform. Talking all things investing, money and finance with a dental spin. Have you ever wondered how you can grow your wealth and protect your hard earned money as a Dentist? We've got you covered. Featuring famous guests such as Andrew Craig, Edward Zuckerberg and Benyamin Ahmed we delve deep into EVERY aspect of finance to educate and empower ALL Dentists.
Dentists Who Invest Podcast
How A Dentist Can Retire Early with Anick Sharma DWI-EP282
You can download your FREE report on how you can avoid financial mistakes as a dentist using the link just here >>> dentistswhoinvest.com/podcastreport
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Unlock the secrets to a secure and fulfilling retirement by tuning into our enlightening episode on financial freedom and retirement planning. We promise you'll gain invaluable insights into cash flow planning, understanding liquid assets, and building a detailed balance sheet, all illustrated through a compelling case study of Adam and Aisha, a dental practice owner and her husband. With my co-host, Anick Sharma, a seasoned financial planner, we explore the emotional transformation that comes with realizing financial freedom, offering you actionable strategies to map out your path to a worry-free retirement.
Ever wondered how to navigate the intricate process of selling a dental practice while securing your financial future? Anick and I delve into the critical aspects of this journey, emphasizing the power of setting clear financial targets and leveraging cash flow models to make informed decisions. From mitigating business risks by transitioning value to personal assets to adjusting your financial plan in response to unexpected changes, we provide a comprehensive roadmap to ensure you maintain your desired lifestyle, even in unpredictable times.
Lastly, we challenge the traditional retirement timeline, advocating for early retirement planning to enjoy life's pleasures while you're still physically able. Discover how conservative investment assumptions and a holistic financial perspective can help you achieve financial freedom without depending solely on business or property assets. Anick shares his experiences with clients who reached financial independence through pensions and ISAs, shedding light on the FIRE movement and the unique opportunities for dentists to boost their income. Get ready for a thought-provoking discussion that will inspire you to rethink retirement and take charge of your financial destiny!
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Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional.
Bonjour, oh, hello, bonjour. How's everybody doing this fine Wednesday evening? I hope everybody has had a terrific day. In the world of dentistry, I recently heard dentistry described as full contact arts and crafts, so now I'm going to throw that around because it made me laugh quite a lot. There's an American guy who I heard say that. I think it works a little bit better in their accent. Anyway, I hope everybody had fun today in full contact arts and crafts.
Dr James:It's good to see some familiar faces on this webinar tonight. We've got my man, rory it's been flipping ages and, of course, Mr John Mahoney as well. Ah, Mohammed. How are you doing, my friend? Hope you're keeping well.
Dr James:Guys, we have got a fun webinar tonight, an extra fun webinar, because all the webinars are fun. This webinar is all about something called cash flow planning, which is really really really flipping cool because it is something that can allow you to understand and figure out whether or not you may be already retired, especially those people who have big asset portfolios. We really got to figure out how much we have, take account of how much we need and the part in between Well, that's our investments, that's growing our portfolio, and part in between, well, that's our investments. That's growing our portfolio, and part of that has to be planning, and that's why this stuff is super interesting, and I've got a gentleman who's co-hosting with me this evening. His name is Mr Anick Sharma and he knows this stuff inside out, so I'm really looking forward to it. I'm a student as well, as much as you guys are. Anyway, Anick, how are you this evening? Good thanks, James.
Dr James:how are you, I'm amazing thanks for asking buddy so, Anick, how are you this evening? Good thanks, James. How are you? I'm amazing thanks for asking buddy so. Anick, I know that this is one of your first appearances on the Dentists Who Invest platform. Well, actually, interestingly, we also had a podcast very recently, which just got released today, so shout out that podcast for everybody who's on this webinar tonight. A lot of people will be just at the point where they maybe just getting to know you you're seeing a little bit of your stuff or maybe some people who are yet to meet you, which is cool as well. If we were to have a little bit of a high level bio from yourself about your background, who you are, what we're going to talk about this evening, that'll be flipping fantastic yeah, no problem.
Anick:Um, I had a background in academia. Did the last minute 180 turn ends up in financial services? Um went through my career and I quickly realized sitting in front of clients is what I really love. Um now a CFP, a certified financial planner, and charter financial planner and for me the real great stuff is just sitting in front with clients and helping to draw the dots between point A and point B in the context of financial plan top stuff.
Dr James:Now I'm going to ask you straight from the hip curveball question, but topical. How can we retire early? Let's go, let's jump straight in.
Anick:Great. I think before we look at retiring early, we need to think what's the end point. Because if we start saying I need the best pension or the best investment first of all, what is the best investment? What is the best pension or the best investment First of all? What is the best investment? What is the best pension or ISA or whatever it might be? These are just tools in our armory to achieve that end point, and that end point has to be looked at in the context of the financial plan. What is it we really want to get out of life? And from there we can work backwards and figure out the sort of investments or savings rates or what sort of wrappers to use. I can show you right now, and I'll jump on cash flow demonstration in a moment to give context to this. So let's do that. Just share my screen, so I'm going to talk you through a client's um demo absolutely that sounds good and just for the benefit of the audience, this is how.
Dr James:This is the level of detail and information that one might need in order to figure out when can we retire. And, of course, oftentimes in your conversations, annick I know from conversations that you and I have had prior to this webinar tonight you were telling me that oftentimes a lot of people don't necessarily understand or realize that they've actually already hit their financial freedom point and it's not until they have this conversation that they realize and that must be an amazing conversation to sit on the other side of the table off.
Anick:Yeah, absolutely. In the podcast we actually mentioned the situation where I was with a client and when she realised she could retire and spend life travelling with her daughter, visually just crying in front of me. It's quite a powerful moment. But it's remarkable, like you say, the amount of people that come to me thinking I need to sort my pension out. But just taking a step back and, you know, breaking everything down, you can actually see you could probably live out the life you wanted to. Maybe a few tweaks here or there, but you need the context, so you need to understand the path you want to go on, or the end point, before we consider some of those life-changing moments 100%.
Anick:So let me introduce you to Adam and Aisha. Aisha is a dental practice owner, married to Adam. Adam works for a private company that goes into different schools and gives various education sessions. Aisha is 46 and Adam is 43 and they have a 10-year-old daughter called Lauren. So with any client interaction, we'd start building out the balance sheet, which is a record of what you earn and what you owe.
Anick:So I just worked my way down. It was about 56 grand in cash, about 47 grand in investments. Now cash and investments is what we say the liquid assets, ie what can we eat, drink or spend to fund our future lifestyle. Looking a bit further down, you'll see there are pension funds here which aren't liquid because they can't be accessed yet. I'll come on to the NHS pension. At the moment that is factored in, we've got the house property £625,000 and we have a mortgage of £486,000. The dental practice you'll see here is a placeholder at £1. I'm going to come on to that in a moment. We're going to really focus on some of the perceived risks of modelling true value. Here we have some cars and at the bottom we can see total net worth of about £440,000.
Anick:So with the ongoing planning work we have built out an income statement. So on the left what you're looking at is detailed breakdown on the current tax year and on the right you're looking at every single year between now and age 100. The different colors represent the different sections we can see. So Adam's salary is £20,000. And we can see here that is moving in line with inflation. The inflation assumption is the same, so it looks just like a straight line. Here Aisha's taking a £12,500 salary and if I go down we can see she's taking a £7,500 dividends to keep her at the £100,000 mark and to keep her at the 100,000 pound mark. We can see here the various bars represent the ongoing dividends until age 60. So, working with Adam and Aisha, they had their master plan to want to retire at age 60 and spend life doing whatever they wanted to. If I just zone in onto age 60, we can see on the graph on the right there's a big red spike.
Dr James:And that just signifies we're going to have some tax-free cash coming into the equation and then we also have some defined benefit NHS pension coming in too.
Anick:The green far right is just signifying state pension, so that's the income statement and that's the projected income frame for their lifestyle. So if we move on to expenditure again, it's a similar sort of thing Currently on the left, on the right is a projection over a lifetime. The blue is a household bill, so about £26,000 and that's moving with inflation across. Personal expenses I'm going to come on to in a moment. And we have some costs for Lauren, so some education fees and that might go up by 20% depending what happens tomorrow, but we'll see. And which is these blue bars here? And then we can see this sorry pink this is pink spike here age 65. So in their mind they want to pay for Lauren's wedding and they're assuming about £35,000. We have some mortgage costs in which runs till age 60. And if I just scroll down we've got some other car bits and professional expenses. Granted they would likely go through the company anyway. So the very bottom you can see total expenses about £190,000. We have some tax in here, so total lifestyle costs we're assuming are £170,000. We have some tax in here, so data lifestyle costs we're assuming are 170,000 pounds. So now I'm going to go have a look at the liquid cash flow and this maps out liquid assets compared to the expenditure we've built in here Blue's good, red's bad so, as we can see, there is a huge shortfall. So this starting point represents the cash and the ices, ie the liquid amounts, and then we're now muzzling all those expenditure items throughout their lifetime. We can see here, when we get to age 100, we're in about a £3 million deficit. So absolutely fantastic that we've built out their dream life, we've contextualised it. They want to know their end point, but currently we can't quite get there. So we need to look at pulling various different levers in order to get there. Before we have a look at that, we can see there's various placeholders at the bottom.
Anick:Aisha sells dental practice. We take the private pensions, the NHS pension, and Aisha stops work. Entirely Previous conversations with her, she quite likes the idea of when she sells a dental practice, doing some sort of consultancy work, but that's to be explored. So one thing Adam had noted is that Aisha's not really around. She's so busy running the practice and it's really hard for family time. So Adam did actually mention in one conversation can't we just sell it now?
Anick:Aisha was a bit put back by this because she wasn't sure anyone was there to buy it or how the market worked, contextualizing and this is fantastic, because what we can actually do is say right, how much do you need in order to live the rest of your life? Um, now, if I asked you that without financial plan or contextualizing it, you're basically putting your finger up in the air and it's guesswork. But because of this, we can say right, if we don't want the cash flow to drop below 100 000 pounds with a tax-free lump sum as at today, I how much needs to be received in your pocket right now to live out your best life when it loads? We can see so from her sale. She needs about £850,000. And this is great, because, when it comes to negotiation, various multiples will be thrown out, but having the context of knowing I actually need £850,000 is a very powerful tool. However, aisha's not ready to give up working yet. She absolutely loves it, so that's a non-starter.
Dr James:Can I just jump in there for two seconds? That's bloody fantastic, right? Because how many dentists out there, when it comes to selling their dental practice, actually know, actually are coming to that conversation with that figure in mind? It really does change things and you know how long you need to hold out for, like, let's say, the market's going up or down. You might know you need to wait a little bit, or if you're ready, or whatever. But yeah, interesting one. I'd be interested to know how many times, or on how many occasions, when people come to the exit of their business, they have that to hand, that figure.
Anick:In my experience not many, because it really works well in a joined-up approach, Because if you're trying to highball it for four, five, six million pounds, absolutely great.
Anick:I turn around and say, why, for what? If you've mapped out your ideal life yeah okay, more money is good in theory out your ideal life yeah okay, more money goes in theory. If it's just causing you a load more stress and you can live out your perfect life, then you're going to have so much less stress and you're going to be in the bahamas quicker than you know boom, and that's that's why this stuff is so fascinating and powerful and useful.
Dr James:But it all starts with planning and then, of course, I'm going to imagine you're going to get on with this, but there has to be. You know, no one can 100% predict the future, so there's going to be some variables in there as well to account for that, or you know certain tolerances in terms of intervals of accuracy, but I'm sure you're going to get onto that in a second.
Anick:Yeah, 100%. This is a cashflow model. It's based on the assumptions. As soon as Adam and I walk out of the meeting, this cash flow plan is basically going to be redundant. It's going to be out of date. The real value is the ongoing relationship and checking in every year to make sure the plan is on track. Because it is based on assumptions, I can't predict the future. I don't know what capital markets are going to do. It's our best guess, based on the available information we have, but that doesn't mean it's necessarily a bad guess. It's taking the most educated, informed view we can, based on what we have, and doing this is way better than putting your head in the sandbox and not really thinking about how you want to approach it.
Dr James:Awesome. Thanks for that. I'll let you pick up because you were in full flow there.
Anick:So I'll just remove this, because Aisha is dead set against giving up the business now. So it means we now need to take some sort of intervention and pull some tools. So I had a chat with Aisha and it turns out there's actually a scope to increase her pension contributions within her private pension. So this is a fantastic tool because within the business I know we have it as a pound here there's actually quite a lot of cash swishing around and from a business risk perspective we can see here that the cash flow has to be then dependent on the sale of the business. If all that risk is concentrated in there, it's our job to try and manage that risk.
Anick:If we can move value from the business to personal assets, we can look to mitigate some of that business risk. So if we go into Aisha's pension now and we've done a load of work behind the scenes to calculate how much she can actually put into her pension so I'm just going to amend this Employee contribution 40 grand a year, which is three and a bit grand a month Going until Aisha sells the dental practice. This is a bit of a double bubble as well, because we're moving value from within the business to Aisha's personal name. We're also getting corporation tax relief, so it's a really good tool to use. So if I go back, we're at minus 3 mil. We're now at minus 1.8 mil, so quite a sizable difference. We still need to find 2 million pounds from someone, so we've just seen Aisha's keeping her income at 100,000 pounds a year for tax efficiency purposes.
Dr James:But there's a load of cash switching around the business.
Anick:So what we can do as well, because, as a practice owner, she can choose her own remuneration. So in a similar exercise, we can say okay, we don't want the cash flow to drop below £100,000 a year of dividend income to solve this, so we just share this and keep it. All of a sudden, this cash flow profile is looking way different. So the liquid asset pool is increasing as we're having more income coming in. We can see that here. So this is just a record of all the inflows and outflows. Blue is inflows, red outflows, and because we have more blue than red, it's now saying okay, we've got more cash switching around which would probably be invested. The big spike here is tax-free cash from the private pensions. So going back into the chart here, that spike is there. And then we're beating the capital as we're spending a good life on holidays and whatnot. So this is great. And all of a sudden we now have a load of freedom. So if I just quickly nip into the income statements, bring it back down to present day and we can see there's additional dividends coming in here. So what I'm going to do now is stop this when Aisha settles the dental practice because it's not going to continue on. So absolutely great. Now I've got a cash flow that works, aisha's really happy, adam's happy and we can go live out the best life.
Anick:The following meeting, aisha comes in and has a chat with me. Anick, I absolutely hate working. I'm sick of it. I'm constantly surrounded and trying to solve problems and want out what can we do. Okay, no problem at all. Let's have a look at this again. So I know we have the practices in the pound here. It's actually quite a big practice and Aisha managed to sell it for 2.2 million. So if I amend this to 2.2. All of a sudden, the cash flow is completely different and it now means at age 100, she's dying with 3.7 million pounds, which Lauren might be a bit happy with. But from my perspective financial planning perspective it's not great, because I like to see checks to the undertaker bounce.
Dr James:If.
Anick:I see a big blue block like this, it means life hasn't been fulfilled. She hasn't really done what she wanted to do, she only got the most out of life. So having another chat, it's blatant. She can't afford to retire earlier and age 52 seems pretty good to her. So if I just leave that assured load in a second and all of a sudden we have all this additional value and stuff to do. So I mentioned before that I'd come back to personal expenses. The current assumption is £10,000 on holidays now and then when she retires or when the practice is sold, that's going to jump to £50,000. So if I just move 53, we're now spending £50,000 a year on holidays and that's going from age 52 until age 70. So she's getting out living the life she wants, creating memories, taking Laura and spending really good quality time with Adam. It's what life's for. Life's for living.
Anick:This is where life really changes her, because all of a sudden she was thinking about consultancy work and the answer possible is there. So she retires for a couple of years. Then she realizes with all her traveling she can actually do a lot of remote business consultancy work, which is perfect for her. On the side she picks up a little job here, which then, if we now look at the new, revised cash flow profile, we're just going to see an even bigger blue block. This then facilitates the art of impossible.
Anick:So after a few cruises around the world and a trip to Antarctica, she then comes in and says she wants to spend a bit more money on holidays. Do a bit more. Take Lauren, take the extended family, have real meaningful connections and experiences with the family. What's possible? Okay, so let's have a look at that. So she then decides £70,000 feels like the right number, let's have a look. So now we're spending £70,000 a year on holidays from age 52 until age 70. It steps down to £15,000 thereafter. So what's it going to do to the overall cash flow profile? It makes a bit of a difference, but it's not massive. What about £80,000? You can see the bars go higher as well.
Dr James:again, it makes a bit of a difference, but she's still leaving lauren a millionaire at age 100 I could go on and on tinkering this and I think, just to drive from what you're saying, I think one of the key things to realize is that there's every chance that there's people out there who are working more than they need to be versus the level of cash flow that they need, which is partly what you exemplified just then, because it's kind of like we just get stuck in the nine to five and just the monotony or the rat race and we're just doing a lot of programming more than anything else, without any overall strategy. So that was one thing that I took from what you were saying just then 100%, James, and you're right, we can be.
Anick:So it's so easy to be stuck in that nine to five or the rat race, whereas this is a very high level overview, and just taking a step back and thinking how can we get to where we want to get to, or where is it we even want to get to? You might be able to retire tomorrow, for all you know, and then life just changes completely. So I could be here all day tinkering with the holidays. What I can do if I just put this back to what it was at £50,000 for 10 years, what I can do if I just put this back to what is that fifty thousand pounds for ten years and if I then go back into cash flow, what I can do is calculate again if you don't want the cash flow to drop below £100,000, how much can be spent per year between selling a dental practice and the 10-year window.
Anick:So the good year is when we can actually do stuff, because later on in life it becomes quite difficult, which we can see here. Aisha and Adam can spend an additional £178,000, and that's on top of the £100,000 of expenditure. So it's quite remarkable how, just taking that step back, they can do whatever they want and live the life they want, in the context of just having that map going forward. It's life-changing here and we can see here the context of just having that map going forward. It's life-changing here and we can see here the difference of that's where they're at at the moment and this is the revised, with the additional expenditure. Obviously they're going to eat capsule at a higher rate than they had previously.
Dr James:So I'll just remove that.
Anick:So I'll just remove that. In terms of the cash flow itself, that's a very high level snapshot overview, but you can do so much more in terms of net income tax calculations and look at the required growth. So we haven't touched on it here because the cash flow works as it is, but quite often there might be a situation where the investments aren't working as it should do or it's not the right investment. So what can we do? Well, we can make those assets work a bit harder by particularly changing the equity content. For example, we could look at, say, Aisha in the personal pension had a 60% equity portfolio and the cash flow was crashing. What would then happen if we changed that to a 100% equity portfolio?
Anick:And by doing that, we can look at the required risk needed to achieve that financial plan, which is a very, very useful tool, A major thing as well. We can then do catastrophe planning. Obviously, Aisha brings in the income here and if she was to die, there's a massive risk to the family for both Adam and Lauren, and protections are a massively, massively overlooked area within financial planning and wider society as well, Particularly as a business owner who is so busy and might have not sorted out the policies and might have not sorted out the policies. We can actually turn around and say how much is needed now so that we can look at the capitalised value. So Adam and Lauren can still live out their best life with everything here. And it's quite cool how much detail you can go to and look at the protection needed or the life assurance needed to make sure that happens, so that family peace of mind is number one.
Dr James:Thank you for that, Anick. And just how do you build that tolerance in for that unpredictability factor that we were talking about before?
Anick:So it all comes down to assumptions, what we're assuming Generally. If you look at 100 years worth of data, the stock market returns 10% a year per annum and that's the average. However, to get the average you're going to have to go through plus 20%, minus 15%, plus 8%, minus 4%. If I was to assume a 10% a year return here, that wouldn't be conservative because I'd then be banking on getting the average throughout their lifetime.
Anick:It's a mixture of having enough fat within the investment assumption so that when it's not borne out it's not a case of right now what we're going to do. We can't live out this life. And also the expenditure. If I was to turn around to you and say, how much do you spend a year? I don't know how much do you spend a year, I don't know how much do you spend. It's an ongoing iteration with clients to get that viewpoint perspective of how much we spend. I I'm clued up on all this but I couldn't reel off client numbers off my head. Um, so having enough fat within the expenditure equation really helps, because one year you're going to spend that extra bit more or you might spend a little bit less, but having that ongoing touch points to make sure we're on track really helps to ensure that when assumptions don't get the way they're supposed to and I can guarantee you this in a life where there are no real guarantees, the assumptions here will not be borne out completely.
Dr James:It's important to have those touch points to make sure we are on track another thing I like about this as well it actually takes into account your business assets and how much you're drawing from them, rather than purely your growth assets, as in what's in your pension and what's in your isa, because I feel like a lot of the time there's too much focus purely on those and we're ignoring something that can give us a crazy amount of cash flow, which is absolutely absolutely, and when we're looking at this, it has to be with a holistic perspective.
Anick:I was just or anyone's just to focus on pension isa. It doesn't make up the entire picture, so why not include the entire picture? Um, other things that could be here. Aisha and Adam have parents, inheritances etc. Generally, we don't like to model inheritances in, because you're basically trying to say your financial success is depending on someone else dying, which doesn't really work too well.
Dr James:Um yeah, no, we don't want to be sitting around, you know, planning on something like that, we want to be able to stand on our own two feet, which is why it's valuable. So who's this, who's this stuff for? Is this for everybody? Is this for a young associate? Is this for a principal who's getting towards retirement? Or or is it for everybody?
Anick:so I think the context of the financial plan is important for everyone, because even if you're starting out on day one, it's really important to know where you want to get to. A full, in-depth cash flow may not be relevant for everyone, and by that I mean particularly younger ones who just need to save loads of money Around retirement and business owners, principals, et cetera. It's going to be. It's going to be really helpful, and you can be cute with the tax and look at the changes that can make with your outcome. Um, so it's. It's always worth having a look at, or, the very least, just take a step back and think about where you want to be in the next 30, 40 years. Um, I know it can be quite difficult when we don't know what we're going to do from day to day and week to week, but just having some sort of vision of where you want to get to you can really help just bring this stuff to life yeah, 100, and I'm just curious.
Dr James:You know the way you were talking. You were talking about portfolios earlier and 60, 40 portfolios and what have you. And for everybody who's listening, for anybody who's out there who's listening tonight, what I'm referring to is the inverted commas balance portfolio, which is 60% stocks, 40% bonds, a blend, and you know what. Luke talks about this a lot, luke Hurley, who's been on the podcast a few times. There's a lot of the time where, in his opinion, the portfolios that people have been allocated are actually suboptimal and potentially delaying their financial freedom debt. Just how common is that in your experience?
Anick:so, so common. I see it all the time. Um, you get some workplace schemes that will put someone in an unsuitable portfolio, based on whatever criteria they think and by the time. So, like I just said, having an in-depth look at cash flow is very useful, particularly around retirement or as you start to get a bit older. By the time you get to that stage and you realize 20 or 30 years ago I should have been invested in a different fund, you've lost out on 20 or 30 years of compounded growth, which, over a lifetime, is massive. And that's the difference between life changing decisions such as retiring early or spending time with the family, going on holiday or spending your time doing the things that matter. Money is just the enabler. Real wealth is all about time and moments with your loved ones. It can be so detrimental and it's always worth just looking at what's under the bonnet. How is it invested? Is it a suitable portfolio? Does it meet what I need it to in the future?
Dr James:Yeah, it's pretty darn common. In fact, it's almost like I'm going to say the vast majority of the time. It's the case from what I've seen out there as well, and it's so easy to fix with a little bit of investing knowledge and a little bit of planning as well. And you know what? Let's just delve in. Let's just touch. We've got a little bit of time here before we throw the mic out to the audience for the Q&A portion of this webinar. Let's talk about retirement a little bit, because retirement for a lot of people has this connotation where we have to be I don't know 70,. You know we have to be well on in terms of our years. But that's not always the case, far from it, right, Anick?
Anick:100%. There is that conception you get to somewhat near state pension age and then you have a few years of doing what you want and then you die, which that's not making the most out of life. We can see this big blue block here. The more we can shift that blue block to the left, the more we can do what we want, the more we can go on holiday or spend time. If we just delay things to the right, then we're not getting the most out of life.
Anick:When it's difficult to go up the stairs, you're not going to want to travel across the world or climb a mountain or wherever it might be. It's really important we can do the things that we enjoy and gives us passion and fulfillment in the early years. I get quite passionate about that as well, of using the money to facilitate whatever you want in life and we're all different. What I like to be different to what you want in your later life. But we only get one shot of it and it's really important to make sure we keep passionate about the things we like and actually continue doing it, because by the time we get into our 70s or 80s it's it's not the best time to be trying to pursue those hobbies and stuff.
Dr James:Yeah, yeah. Well, here's the thing I mean. What blows my mind is it's just so easy to just go with the flow and just bob along and get stuck in doing the same thing over and over again, just because you have this belief in your head that it's only really something that you can have a conversation about at a certain age by the way, are we?
Anick:uh, were you planning on showing us more cash flow planning? No, that's just in terms of what I was going to show. So, um, this is basically what we can do identify surplus cash for investing. It's a really powerful tool, but it's just a tool in the context of life, um, and we can use it to help inform decisions. It's really good just to have a look at and have this sort of context in your life awesome my man.
Dr James:Well, listen, thank you so much for sharing. If you're happy, what we can do is we can actually yeah, there we go, brilliant, we can jump out and uh yeah, just to round off what I was saying just a second there, it's like we have this subconscious connotation that we have to have certain conditions to be retired and actually sometimes it's just literally as simple as it's a belief in our head that we never question that someone was given to us at some stage. That's the frightening thing yeah, absolutely, and why?
Anick:why do we think we have to retire at 70? Why can't it be earlier? Um, I saw something the other day Someone got retired. Someone retired their mum, or something. One of the comments was she's too young to retire. That sort of mindset.
Dr James:You can't ever be too young to retire. This is the thing. We covered, this in the podcast, didn't we? Retirement doesn't necessarily mean you stop working.
Anick:It just means you're living your best life in the here and now. That's all. For some people that could be slightly different. So we've just seen that Aisha, and I've seen so many clients that they love the hustle and bustle when it comes to retirement or stepping down. That might be working a day a week less in a practice, or working two days a week in the practice, or having some sort of part-time work to pop in every couple weeks or so. It's going to be different for different people, but it doesn't necessarily mean a hard stop and you just sat playing, uh, watching, countdown all day yeah, 100.
Dr James:And it all starts with planning. There's a really nice analogy there where, if you can imagine your yourself as a ship voyaging on the ocean, okay, you've got the home port, you've got the destination port. Yeah, how can that ship ever, ever, ever have a hope of hitting its destination port unless it's actually figured out what that port is? And so many of us do that right, like how does that look? Where is it right? Otherwise, you're just a ship that's just bobbing about on the ocean and you're just being carried by the prevailing wind, not actually really going in the direction you necessarily want to. In that analogy, a ship would never, ever do that. You know it doesn't make sense. You know the whole point is that it's a voyage with an objective.
Dr James:Yet it's so easy to do that in life, even though life is exactly analogous, right, even though it's exactly the same. How easy is it to do that? And and here's the thing, it's not. It's not like I could be better at that as well. Everybody could be better at it. It's not a binary thing. Have we done it? Have we not done it? It's more like to what degree have we done it? However, the more we do it, the more upside it's is in it for us, given that we have more of a handle on where we'd like to go and where we currently are.
Dr James:And actually maybe we've already done enough. Enough times, because I think Luke was saying as well a lot of times he has these conversations with people and the dentist has realized that they've actually overworked, if that's a word, and what it over over saved is probably a better word, as in they have too much money relative to their goals or objectives, and that doesn't actually. But they don't realize until like five years afterwards because, again, they've just been going through the motions. So anyway, listen, food for thought. That's why it's so important to plan, listen, and I thank you. Oh, sorry, you were going to say something.
Anick:I was going to say it's quite interesting there as well, because time's our most valuable resource and if you're wasting an extra five years when you've over saved, then you've lost five years of your life. To what, um? And it's just so important that we take stock of this and check in all the time love that, my man.
Dr James:Thank you so much, and thank you so much for sharing your wisdom and knowledge, and I really get the impression we're just scratching the surface there. That was, that was your dominant right down right. There's like way more to it, but maybe we'll do another follow up webinar on that very soon. Listen, guys. Thanks so much on behalf of everybody who is attending this evening and who will be watching this on catch up. Thanks so much to, uh, mr annick. I'm sure everybody will agree. Guys, now is a prime opportunity for anybody out there in the audience to ask your questions anything you'd like in the whole wide world to Mr Anick this evening. And just for context, mr Anick is not presently working as an IFA, but you previously were. However, currently a financial planner. So you do bring that expertise and knowledge to the conversation. Of course, not financial advice. We've got to say that out loud and just state that but there's a whole big bank of knowledge there in annex head. So what we're going to do is we're going to throw the mic out to the audience right now. If anybody would like to ask any questions, feel free. Now is your opportunity, or we can just have a little browse around the room and see who's here. See if there was any big takeaways from what annick was saying. Let's get mr mahoney on, because I haven't spoke properly to mr Mahoney in too long. John, can you hear us? Oh, maybe not, might be absent from his keyboard because, john, to give for a little bit of context, I could probably relate exactly that story that you were telling just then, and that he's got a dental practice. He's a principal. Anybody else out there, who else? We got any questions? Or we can just go ahead and ask some people in the audience as well. That's also on the cards. Let's see who we got. There's a mr sam shaw on the screen who I've never met before. Sam, can you hear us? Everybody's going camera shy tonight. We're just gonna have to freestyle over here, annick, that's fine, we can do that too. We can. We can start singing. Maybe we can do. We can get that. No, nobody wants to see that. Actually, nobody wants to see that. Uh, what we can do is we can get there. No, nobody wants to see that. Actually, don't want to hear that. Nobody wants to see that. What we can do is we can go ahead and get some more examples on the screen. If there's no questions from the audience, that's also completely fine. Maybe we'll just do that. Shall we, Anick? Let's have some fun. Let's freestyle, cool, yeah, or actually I'll tell you what I've got.
Dr James:A question, okay, so, and you know what? There's like a genre, almost, of questions that I really like to ask, and that genre is questions that only someone with the given expertise of the speaker or the guest in the webinar would ever know, because they're just so specific, right, and they directly come from experience, and you never be able to find a resource that would ever be able to describe these. Because it's such a specific thing and also it's very contemporaneous as well. There's actually a name for that knowledge it's called specific knowledge. So, anyway, here's what. That was the pre-frame. Here's my question. Okay, you're talking, you what?
Anick:sorry, you put me under now, aren't you?
Dr James:ah no, I'm a nice guy. Deep down I'm a nice guy, but anyway, um, what? What was I going to say? So, basically, I have a question. So, when you're talking to these people who they're there for some financial planning with yourself right, what is the youngest that you've ever seen somebody hit their financial freedom date who doesn't have a business Okay, that's the curveball and doesn't have a property portfolio as well? So it's purely like pension and isa or purely like paper assets.
Anick:I'm very I'm interested to hear that I think it's probably about mid to late 40s, granted they okay, that stacks up.
Dr James:I thought you were going to say something crazy there, like 35 or something like that, but mid to late 40s I could see that yeah, sorry, mate no it's all right. I was just gonna say because I I'm gonna guess they're iso, ties them over to their pension and their outgoings are minimal yeah, exactly that.
Anick:Um, the fire movement was something that they loved at first. Um, I think fire is a good principle in steering that invested discipline. But if you're living on beans and rice every day and not going out or not seeing friends and family or doing what you like, is that really a life you want? I'm not sure their life, not me personally. But, yeah, absolutely One strategy. Again, it's not advice. You can build up a nicer and then use your pension in due course.
Dr James:Awesome, my man. Thank you so much. And you know what? We've just had a question that's just popped in and, by the way, just to add to what you were saying, yeah, the whole fire thing, the whole austerity thing, where we have to take it to such an extreme that our outgoings are absolutely nothing, I it to such an extreme that our outgoings are absolutely nothing.
Dr James:I, actually, I, you know what dentistry is such a profession. Right, that does not necessitate that whatsoever, because you know the coolest thing about dentistry there's things that you can do like that. You take them into the clinic and you increase your income. Because the thing about dentistry is you're actually quite how can we say you have scope to do that a lot more than a lot of professions out there, because to get to the next level of income you have to hit the next pay grade and blah, blah, blah, and it takes X, y, z amount of times. That's the thing about dentists, right, you know you can boost your income like that whenever you have the right knowledge, should that be something relevant and pertinent to you. You know, cause, earning an unlimited amount of money is not like the be all and end all, but if it's going to actually help you achieve some sort of goal in your life, then absolutely, we should be able to talk about it, business owners out there and associates as well, because you are a business too, as an associate. It's just worth keeping that in mind. So that's why the whole fire movement yeah, I'm not necessarily a fan full stop, I'm not necessarily a fan period, but I think it even. It has even less relevance to the profession of dentistry, given that dentistry does have that characteristic that is acknowledged about it and even though that is possible, not always dentists don't always realize that, which is really cool. Boost your cash flow, man. Live a life that you want in the here and now, today. Get balance and then also invest as well, which is what annick was talking about. Income first, then. For me, it's the investing side of things income for today, which is partly related to what annick was saying, and then building and investing, which involves cash flow planning. That's for the future, but the income has got to come first for me anyway.
Dr James:So we got, uh, some questions coming in. Uh, Mr Pieter classin. Mr Pieter, how are you, hi, annick, how do we get this cash flow done? Do you have an offer for the audience tonight. Yeah, should anybody wish to speak to Anick, we're actually going to drop an email afterwards and there'll be a form that you can fill in the email. First name your number and also your email. And if anybody does want to speak to Anick, that's completely cool. That form would be the best way, or? Anick is actually on the Facebook group as well. If anybody would like to reach out to Anick, mr Anick Sharma, feel free to search him in the group members. Thank you so much for that question, peter. I've got another question from Rachel, Anick. May I ask what the average value, Anick? May I ask what is the average value you see for financial so it's just been a little funny on my screen value see for financial freedom at retirement age, at, say, a 60 year old without a property portfolio, or good question?
Anick:That's a great question. Thanks, Rachel, that is a fantastic question and I don't think my answer is going to be the hard answer you want because, honestly, it depends. If someone wants to spend £20,000 a year, with all the lifestyle costs, that number is going to be a hell of a lot less than someone who wants to spend 20k a month. And, as you've just seen the context of cash flow plan, once we know what that expenditure profile is going to look like throughout a lifetime, we can then calculate such a number.
Anick:Typically, though, in my experience financial freedom, I've seen from three to five hundred thousand pounds, but again, that's massively caveated with what is an expenditure profile for one person, or someone's ideal life is very, very different to another person, so it's really difficult to say by £500,000, that's financial freedom, because you need context. We're all different, we all want different lives and we all want different things throughout the rest of our life. Try and have a think about what number you would like, what, what your expenditure might be now, what it might be in the future, and from there you can look to try and build on those calculations to get a feel of whether you have enough, fundamentally, because that is what the cash flow does. It answers the question do I have enough to retire?
Dr James:awesome. Please do let us know, rachel. If that helps or there was any more info that you needed there, feel free to do so. Okay, wonderful, rachel has said thank you, so Rachel's happy Rachel. Thank you for the question, you know, because the great thing about questions is, oftentimes other people are thinking this stuff, so if we can articulate it for them on their behalf, what it means is they also benefit. So you so much, guys. Okay, cool. Well, listen, you know what we'd like to keep these webinars to around about 45 minutes or so. So we're coming up to 46 minutes just now, so that's a good time to go ahead. Start thinking about rounding off, Anick. Thank you on behalf of everybody who is here with us tonight, present in the audience and also who is watching on catch up. Thank you so much for sharing your wisdom and knowledge. Just before we round off, anything that you'd like to say in conclusion, just to put a little bit of a tea or a cap on everything that we said tonight we only have one life.
Anick:Life is for living, and just the process of taking a step back and thinking about where you want to get to it can be life-changing. I know I've said it a few times, but I generally bang the drum for this lifestyle approach and lifestyle financial planning. Money is a tool to live the best life we want, so make sure we're getting out there and living our life.
Dr James:Boom, love it. Thank you so much, Anick, and, as I say, thanks so much once more for your time. Guys, it's been awesome to host everybody this evening. We run these webinars every two weeks on the Dentists Who Invest group. They occur at 6.30pm UK on Wednesdays. We cover everything and anything related to finance and increasing income for dentists, giving everybody a heads up on that.
Dr James:The next one is coming up in a few weeks time. That's going to be all about tax with relation to the impending change of government which is going to happen tomorrow, which we can't, of course, say at all where that's going to go, but certainly there's there's a big favorite there, but let's see what happens. Let's keep an open mind. So that's going to be an interesting one because there's no doubt going to have tax implications and also we're going to hone that towards dentists as well, not only what the tax implications are, but what do they specifically mean to dentists. So that's going to be a goodie for sure. I'm looking forward to see everybody there.
Dr James:In the meantime, hope everybody has an amazing Wednesday evening, has amazing week and I hope that everybody continues to excel and expedite towards those financial goals that we talked about tonight. It's my privilege and pleasure to bring this information to you guys, because I know how much it can help people firsthand. And really, by understanding this stuff and embracing this stuff, you accelerate your own financial goals and accelerate that financial freedom. Debt, not because money is a be all and end all, but I'll tell you what is life, freedom and happiness, and actually money is just the quickest tool to get there, in my opinion. So the more we can talk about it from that perspective is definitely a good thing. Thank you so much. Once more, guys. Hope everybody has a lovely evening and we'll see each other very soon. Bye-bye.
