Jordan E. Goodman is “America’s Money Answers Man” and a nationally-recognized expert on personal finance. He is a regular guest on numerous radio and television call-in shows across the country, answering questions on personal financial topics. He appears frequently on The View, Fox News Network, Fox Business Network, CNN, CNBC and CBS evening news.
For 18 years, Jordan was on the editorial staff of Money magazine, where he served as Wall Street correspondent. While at Money, he reported and wrote on virtually every aspect of personal finance. In addition, he served as weekly financial analyst on NBC News at Sunrise for 9 years and the daily business news commentator on Mutual Broadcasting System’s America in the Morning show for 8 years.
He is the author / co-author of 13 best-selling books on personal finance including Master Your Debt Fast Profits in Hard Times, Everyone’s Money Book, Master Your Money Type, Barron’s Dictionary of Finance and Investment Terms and Barron’s Finance and Investment Handbook.
He has also written 6 special focus editions of Everyone’s Money Book on College, Credit, Financial Planning, Real Estate, Retirement Planning and Stocks, Bonds and Mutual Funds.
Jordan is also a speaker and seminar leader on personal finance topics for business executives, students, associations, investment clubs, employees and others.
VIDEO - DUwHF #961 - Jordan Goodman
AUDIO - DUwHF #961 - Jordan Goodman
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Howard: It is just a huge honour for me today to be podcast interviewing Jordan Goodman, America's Money Answer man. He has spent the past 40 years focused on one mission, to help Americans do better with their money. In a career spanning newspapers, magazines, books, radio, television, live events, tele -seminars and the internet at ‘moneyanswers.com’. He has helped millions of people to solve their financial problems and realize their financial dreams. An honors graduate of Amherst College, Jordan has just received his master's degree from the Columbia University School of Journalism in 1977 when he launched an award winning consumer oriented newspaper insert ‘Info’ which reached 4 million readers every week.
That early foray into consumer journalism soon lead to an 18 year stint at ‘Money', the foremost personal finance magazine in the United States where Jordan reported and wrote on every aspect of personal finance. During his tenure at ‘Money’, he also became a regular presence on radio and television programs around the country. When Jane Pauley and Bryant Gumble of ‘Today Show’ wanted to refute some of the more dubious strategies of financial guru Charles Givens in 1986, it was Jordan they asked to face down Givens. When Ted Koppel needed a financial expert to explain to ‘Nightline’ viewers the implications of the stock market crash of October 1987, which was four months after I graduated from dental school, May 11 ‘87, it was Jordan to whom he turned.
While at ‘Money’, Jordan also began to write the first of his fourteen highly acclaimed books on personal finance, the ‘Barrons Dictionary of Finance and Investment Terms’, which Jordan co-authored with John Downs, has been translated into Spanish, German, Russian, Japanese, and Chinese. And it's sold over 3 million copies worldwide. Now in its ninth edition, it is considered a classic in the field and staple of the syllabi of college personal finance and business courses, MBA classes and security training seminars. In the thirty three years since the dictionaries first release, John has also written ‘Barron's Finance Investment Handbook’, ‘Everyone's Money book’, The ‘Everyone's Money’ book series, credit stocks, bonds, mutual funds, ‘Reading between the lie’s, ‘How to avoid becoming a victim of the Wall Street scandal’, Master Your Money type, ‘Fast Profits and Hard times’, ’Master your debt’, ‘The Ultimate guide to student loans’. And it's been 20 years --your bio goes on for almost four pages. I want to end it there.
Howard: You like talking to dentists --
Jordan: I do.
Howard: Was that you in Salt Lake City, last week?
Jordan: Last week, correct. So I spoke about two years ago at the Seattle Study Club National Symposium, about seven hundred and something dentists. Now, a lot of people liked it and asked me to come to their local clubs. So I've done it all over the country, I love to speak to dentists. I think I understand them pretty well and what their financial questions and needs are. So I'm going to try to bring today a lot of specific resources and strategies they may not have heard about, based on what I've been hearing from the dentist, what they're interested in.
Howard: I know you're talking to several different groups. The young kids, they're throwing a pity party because they got $300,000 in student loans, some of them up to $400,000. Then they go buy a dental office for $750,000. So before they know it, they're thirty years old and they are a million dollars in debt and is that a good thing, a bad thing? What do you think about that, their position?
Jordan: I would not buy a dental office that young frankly, I think should wait until you have a little bit more established and work on the student loan debt. I did one of these events in Las Vegas, there was a couple each of them had $500,000 in dental school debt. One of them was an orthopaedist, an orthodontist. I mean it's just unbelievable the amount of debt people are in and so let me do some things to start right off with helping them with the student loans because it's massive, you are right Howard.
So first thing you can do is consolidate them, get a whole bunch of federal loans, have different interest rates, consolidate them into one at the lowest possible interest rate, and a website for that would be consolidatecollege.com. Then the second thing, a lot of people don't realize you can actually refinance your student loans or interest rates.
Howard: What was that website? Consolidate --
Howard: consolidatecollege.com, is that your website?
Jordan: No, it's not. These are places that I recommend, but no, this is not my own website. I mean I have these websites at my website moneyanswers.com
Howard: moneyanswers.com is your main website?
Jordan: Right, but I like to help other people and refer them to other places that I know are really specialists in these areas. So consolidation is the first thing and then people don't realize they can refinance their student loans, to typically in the two to three percent range. You combine federal loans which may be in the 4 to 6 % range with private loans, which can be 10% plus, into one, 2 to 3%.
A website to help you there is called credible, the website is credible.com, c-r-e-d-i-b-l-e, credible.com and then put back slash money answers. I know it's me, that way you get 200 bucks off your first payment. And credible itself doesn't refinance its loans, but it's like a clearing house and has five or six different places, credit unions, different places, and then they compete for your business. Can refinance your loan to 2 to 3 %, so it doesn't make the student loans disappear, but paying them off for 2% is better than 6 or 10%, they will hopefully pay it off a little bit quicker.
Howard: So why did they name it credible.com? Why not incredible.com?
Jordan: Well, because they're credible, the amount of debt that people have is incredible.
Howard: Well, you know, one way to look at it is, you know, debt is other people's money and these dental students that are crying, they could've got a job at McDonald's for ten to twelve bucks an hour, say worked from age sixteen to thirty and gone to dental school and [inaudible: 00:05:49], but only in about twenty countries, do you have access to other people's money. So they got all these student loans, they became a doctor and now they got to pay them back with doctors wages. Was that a good move or do you think, it was not a good move?
Jordan: Well it’s what their passion is, to make it into dental school is hard enough as it is, and then to make it through is really hard and then – but it’s something they really wanted to do, so you can't deny people their passion. But just the finances are much different today Howard than how it was in the past, because the amount of debt is so much more and because it was so much more expensive to buy into a dental practice in many cases with debt.
The existing baby boomer dentists now who might be in their fifties, sixties and seventies, they didn't have close to this amount of debt where they were going through dental school and they were able to buy into a practice early. And now they've got a lot of equity, in lot of the meetings I went to, they were saying “Now who am I going to sell this to?” Who can afford whatever, $700,000 or $1,000,000 for this dental practice? So they're concerned about selling and in many cases what they do is, they sell out to these dental service organizations, these DSO’s that buy them up and then they become employees.
And a lot of younger dentists, the same thing, they didn't want to take on that huge amount of debt for a practice for uncertain future. So they're in fact becoming employees working for the DSO’s as well. So the economics have really changed dramatically recently.
Howard: Well you know my best advice to these kids is that they can marry more money in a minute then they can earn in a lifetime. So I like that guy, why did he marry an orthodontist $500,000 in debt? He should have married an 80 year old lady who was a widow, sitting on $100,000,000 of bonds.
So your twitter is @GoodmanJord. I just re-tweeted your last tweet: “Jordan Goodman talks with financial advisor and investment specialist Josh Jalinski about the importance and value of holistic financial planning.” I just sent that to my twenty four thousand homies, thanks for following me on twitter. And by the way, you got a podcast.
Jordan: I do.
Howard: You should upload that on ‘Dentaltown’.
Jordan: I will, it's called the “Money Answer Show”. I’ve been doing it for about 11 years every month. Joshua Jalinski, what you just mentioned, was the show that I just did yesterday. He's a guy called the “Financial Quarterback” and he has a national radio show called “The Financial Quarterback radio show”. So I interviewed him on my show. It's on what's called, the Voice America Business Network, which is actually based in the Phoenix area where you are as well. But it's a national show and I've been doing it for 11 years and it's helped a lot of people, absolutely.
Howard: So he's in Phoenix?
Jordan: Voice America is based in Phoenix, the network that my show is on. Josh Jalinksi is based in the New York area, but I'm just saying the network where I run my show is in the Phoenix area.
Howard: And it's called Voice of America?
Jordan: Voice America, no ‘of’.
Howard: Oh okay because Voice of America was the government, military programme, okay Voice America. I wish you would upload your podcast on ‘Dentaltown’, everybody who tells me their views on iTunes, say they found it on the ‘Dentaltown’ app on their way to work or something. They opened up that app, I put the first podcast on ‘Dentaltown’ and now there's sixty people putting their show up there --
Howard: And they tell me they love it because they get their car in the morning, they've got an hour commute. Most podcasts only do like one show a week, so they need to follow lots of shows to get their hour commute each way.
Howard: So you know dentists, are their finances any different than other people. I mean what have you learned from lecturing to dentists so much?
Jordan: The cash flow is better, but my experience is they don't spend enough time or effort getting their financial life together. In many cases, it’s been my experience, the spouses take care of the money, which can be a good thing or bad thing. But the dentists are not that involved in the money because they are so involved in their practice and they're in the mouth all the time.
So they're not thinking about money the way they should be, so that's why I like to set up automatic systems, so without them having to think about it, the right things are automatically happening instead of the wrong things, which is what typically happens. I'll just give you an example ... income, a lot of dentists have a lot of money sitting in cash, earning zero. See these money market funds, savings accounts, both individually and within their practice as well.
Because they've got those cash flow going through, sitting there earning nothing, the banks love them, banks think they're doing a great job. But there’s lots of things they can do to make that money earn much more for them in a passive kind of way. I'll give you an example, something I'm doing which is called secured real estate funds because that's the way of earning an 8% yield over one year timeframe. You can get monthly cheques if you like, automatically deposit in your checking account or you can reinvest it, have that money compounding at 8% completely passively. You don't have to think about it whatsoever, it’s just happening, very safely as well.
A website for that is securedrealestatefunds.com, they've got a phone number too eight – eight- eight- four – four- four –two- one- zero- two, and what they're doing Howard is, they are lending money short term, to commercial real estate projects of all types. Could be medical offices, could be apartment buildings, assisted living, student housing, just all kinds of things because these places have a hard time getting financing with the Dodd-Frank Regulations these days. So it's a way of them getting money quicker, they pay it back within a year, it's secured by real estate.
The maximum they lend is 70% of the value of the real estate, widely diversified across the country, so there is a passive way and no commissions. You give them the minimum $5000, you've given $5000, $5000 invested and you can invest online there is an ‘invest now’ button, you don't even have to talk to anybody if you don't want to. So there a way of earning, 8% over one year completely passively, that would help a lot of dentists.
Howard: A lot of dentists, when they come out of school, they don't know, if they should be paying off debt, student loans, practice mortgage, or putting money in the bank for retirement. How do you coach debt versus savings?
Jordan: Do it both at the same time because one, it's very easy to do is you put all your cash flow towards the debt and then say, well, I'm going to start investing once my debts paid off. Well that means you're fifty five, so you have lost your entire life to invest. The way I like to put it is, as your debt goes down, your equity should be going up. It's a process, it's not an event, but one day the debts paid off and therefore your start saving and investing.
Because chances are, particularly we talked about refinancing your student loans, that the 2%, if you invest, you're going to get a much higher return than 2% and therefore you're going to come out ahead by having that money growing for you. So it's financial, it's also psychological because you want that sense of your money growing for you. What I call positive compounding, which feels good, you're money is producing more money. I just gave you a way to earn 8% compounding as opposed to the negative compounding, of I’ve got this interest piling up on me all the time.
So psychologically, it feels better to have your money growing for you. So don't do one or the other get your debt down, while your equity goes up.
Howard: You know, one of the, one of the hardest things for dentists, physicians and lawyers is that their egos are so big, so you know, they have $300,000 student loans, they buy a $700,000 office or $1,000,000 in debt and then when they go buy a house, they had to get the trophy house. And it's like, dude! I mean is there any part of your life where you live within your means?
So I just wanted to ask you, they are looking at a house, it's their first, they got their practice. What should their pity be? Their payments, interest, taxes, some people say it should be a third, some people say it should be a fourth. What do you think tax, insurance and maintenance should be?
Jordan: A maximum of 30% of their income, their take-home income should be for the whole, real estate combined interest, principal insurance, property taxes, all those things combined. Because otherwise what happens is the house owns you, you don't own the house, basically
Howard: And these dentists, they always get a thirty year mortgage on their house. What are your thoughts on thirty versus fifteen?
Jordan: Well, I've got a better way to do it actually. First of all, I can save you money, dentists, I can save you money on the mortgage. There's something called the ‘Heroes come First’ program, which helps heroes and dentists are considered heroes, Doctors, EMT, Police, Fireman any kind of people in the service profession. You go to the website heroescomefirst.com
Jordan: At that website they can save money on points and closing costs and fees and interest rates on mortgages and when they buy a home or sell a home, they get a rebate of part of the real estate agent's commission. Which could be significant as well, if they qualify as a hero and by the way everybody in their dental office staff can count as a hero as well.
So that's the first thing, get a better mortgage and then the second thing, I would say take out a 30 year mortgage, but pay it off in five to seven years.
There is a strategy you'll never hear about from banks, which is called mortgage optimization, which literally allows you to pay off a mortgage 25 years sooner than you ever thought possible on your existing level of income.
Let me explain how that works; there is a website related to that too, truthinequity.com. So here's how it works, say you have your first mortgage and then you'd get a Home Equity Line of Credit, what's called the ‘HELOC’ related to it, so that's the second. HELOC is liquid, you can put money in, you can take it out whenever you like with no fees, no limits whatsoever. So you take out the HELOC and you'd do a block of the HELOC right towards the first. Okay and you're starting to pay towards the first.
You keep your income in the HELOC moving and bouncing around literally every day and you pay off the HELOC in nine months or a year, and then you'd do it again and you can pay off your first. Let me give you a simple example of how it might work, Howard, okay? So say you had a house worth $300,000, just making up a number here and say your first mortgage you got at 4%, you got a good rate on your first. You would take out a HELOC for maybe $50,000 , you just opened up, so it's free and clear.
You would write a cheque on that fifty thousand HELOC towards the first, so instead of owing two hundred, you now owe one hundred and fifty right, you're with me? And then you would keep your income going into that HELOC so that fifty thousand is paid off in nine months, however long it takes, as your money keeps going in there, you're pushing the balance down every day.
Then you'd do it again, you write another $50,000 cheque on the HELOC. So instead of a hundred and fifty, you now owe one hundred, you do that twice more.
Your first is now paid off in say four years, then you pay off the HELOC and in five years or so you are completely mortgage-free. Is it not better to have no mortgage, instead of this huge albatross hanging over your head for 30 years?
See with a traditional mortgage, you make the same payment every month for thirty years and most of it is going towards interest for the first ten, fifteen years. Making very, very little progress on the principal because your money, your cash flow sitting in a checking account, zero, right? So here your money is sitting in the HELOC pushing your balance down every day.
So that's what's called mortgage optimization. The free website truthinequity.com you put in what's called a personal profile, you put it in your income, your expenses, your house value, your mortgage, all those things and it’s going to say “Okay, based on what you're doing today, it's going to take you 28 and a half years to pay off your mortgage”, however long it is. And based on the numbers you just gave us, it'll be 5.6 years, however it turns out to be and they show you step by step how to do it. So that's transformational for dentists, it’s to pay their mortgage off literally 25 years faster than they ever thought possible.
Howard: So another thing, ‘Dentaltown’, it's not a news feed like Twitter and Facebook and all that. It's a message board, I like message boards, I don't like the endless newsfeed you can't search anything. So one of the fifty categories is Finance and when you go to Finance, there's a big argument on ‘Do you pay a financial advisor to manage all this or do you go index funds like Vanguard?’
Jordan: In the long run, most index funds are going to do better than the financial advisors and you save a lot in fees. So if you got some really great financial advisor who's bidding the market consistently, fine put some in there. But I would think most dentists, are not going to spend a lot of time with index funds, four index funds is all you need. S&P 500, Mid-cap index, Small-cap index, International index, done. Just make it simple and you're the big caps, you are getting the medium, you're getting the small and getting the international flavour.
That portfolio is going to outperform the vast majority of actively managed funds at much lower costs. You could do an exchange traded fund like SPY would be the S&P 500, you could do a Vanguard or Fidelity Mutual fund, but something like that is simple dollar-cost averaging. Keep adding to it and I'm just trying to make it simple and I think you'll do really well with that, long-term Howard.
Howard: I know you probably don't want to be asked this question, but I have to ask it . Crypto currencies, Bitcoin they even have one called Dentacoin out of the Netherlands and there are some zealots on Dentaltown that think this is the next big thing. And other people think it's the Tulip bulb error of the 1600’s where Sir Isaac Newton lost all of his money. He wrote a book on, what was this book called? It was about calculus I think it was 1687 was 300 years before I graduated dental school and he took all that money, invested it in tulip bulbs and lost it.
Which is why, when you look for a picture, of what my professor said was the smartest man that ever lived, you only get a headshot of him. There's only a head, you know why? It comes from the saying, ‘That will cost you an arm and a leg’ because for photography, painters charged by the body part. So if you were multimillionaire, George Washington, it was full body with your dog and the horse in the background. But for the smartest man in the world, Sir Isaac Newton ‘Principles, the Mathematics’- 1687, he lost all his money in tulip bulbs. So is Dentacoin and Bitcoin, tulip bulbs or is it a real deal?
Jordan: There are some tulip bulb Crypto currencies, but Bitcoin is not one of them, okay? It's not going to zero, it's got a real purpose in life. Which is that people want to do transactions over the so-called block chain- that is secure, supposedly secure, although they do get hacked that is instant and that’s outside the traditional currency system, people want to do that.
So just because the price came down from nineteen thousand to eight thousand, whatever it is now, it doesn't mean that there is no use for Bitcoin. But any money that you as a dentist are going to put into Bitcoin or any other crypto currencies absolutely should be money you can afford to lose. People are doing crazy things now, they're taking out cash advances against their credit cards to do this, don't do that. They are taking out mortgages against their house, don't do that kind of thing.
It should be money you can afford to lose, but I think in the long run it is going to go up.
Now what's changed in the last month or so is that the regulators are really starting to get in there. In 2017 it was just a complete wild west, there was no regulation whatsoever. All kinds of crazy things including all kinds of frauds going on as well, so it's becoming more legitimized, which I think is a good thing. For example, in December they started trading futures and options on Bitcoin in Chicago and that gave certain legitimacy to the market and those futures are working just fine. On the other hand there's one called Coincheck in Japan that lost $570,000,000 because it didn't have adequate security, so people got ripped off from that. So it's still a little bit of the wild west.
Let me tell you a few ways to play it. If you want to play, again with money you can afford to lose, a pure stock on Bitcoin is called Bitcoin Investment trust. The symbol for that, GBTC a year ago was about two hundred it went up to about three thousand. It went down to about two thousand and then it's split twenty for one. So now each share is about $20 a share, something like that. So that's a pure play on Bitcoin, wildly volatile but at least have some of it.
You can do the exchanges, the two biggest ones are Coinbase and Gemini. You go in there, set up an account and then you can buy and sell different currencies the new one that's coming is called Robin Hood. Robin Hood has been out there and now, I think they've got about a million customers on trading currencies, so that's a direct way of doing it.
And then the indirect way, are the companies that benefit from the whole crypto currency craze. I'll just give you two examples, Nvidia ,N-V-I-D-I-A makes the chips that go into all the Bitcoin mining firms and that stock has gone from a year ago about $40 to about $240 it has gone up dramatically. They make the chips that go into all kinds of things of video games, crypto currency firms, driverless cars, cloud computing, everything that's growth industry in video, so that's a kind of indirect way. And another one's called overstock.com, they have a division called the ‘Medici division’ that is doing crypto currency exchanges as well.
So it's not an area you want, it's a risk area, but it's not something you want to ignore because it's not going away, it's just a very volatile area.
Howard: There is another question under finance on ‘Dentaltown’. It says, ‘How much money, what percent of your income should you be saving? Less than 5%, 5 % - 10 %, 10% - 20%, or over 20%.
Jordan: If you can do 10 - 15% with the amount of debt that a lot of dentists have, I think you'd be doing just fine. The average American saves 5% or less. Now, the way to do it is as automatic as possible. Now, if your income is okay, you could do a Roth IRA. You can do up to $5,500 for a regular Roth under age 50, $6,500 a year over age of 50, then the money grows tax free.
I would put that in first, that if you don't qualify without traditional IRA, certainly max out a 401K . If you could offer that to your employees, you can do a Roth 401k and have that through your employer, that's a wonderful thing. There are all kinds of pension plans that you can do as well. If you don't save for yourself Howard, nobody's going to do it for you, okay? So you want to set it up, I like to say saving and investing is a habit not an accident. It's not an event that just happens once. It's setting up something that's happening on a regular basis and if you could put between 10 - 15% of your income aside, you'll do just fine.
Howard: So you lectured at the prestigious National Seattle Study Club meeting and that prompted a lot of Seattle study clubs to have you come lecture to their group. What have you learned from working with Dennis? What other unique things do they have about them?
Jordan: I find, again, they just don't pay enough attention to it, but if they – they are very smart and to get through dental school and everything they do, they really have to understand things. They just don't spend enough time focusing on this particular area. A small amount of additional focus has huge pay offs. Just looking what we've talked about so far, we've given them a way to earn 8% passively your mortgages off in five years instead of thirty years. Just a small change makes a huge difference in their financial lives. I'll give you another example of something that they are not -- they are missing out on in many cases.
A lot of dentists, particularly older ones, maybe those 60 plus have life insurance policies they don't need any more. And what they do is they let them lapse, total waste. They could be selling those life insurance policies, literally for hundreds of thousands of dollars in what's called the ‘life settlement market’, that they don't even know exists. Again, life insurance agents are never going to tell you about this. The insurance companies are really happy to let those life insurance policies lapse.
But here is how it works, say you had a million dollar policy and say you're sixty five, something like that. You sell it, you could sell it for maybe three hundred thousand, something like that. The people who buy the policy for three hundred thousand when you die, become the beneficiaries of a million dollars, right? So they're willing to wait awhile to triple their money. Meanwhile you get three hundred thousand right now, you don't have to pay the premiums anymore and you can invest that for your own retirement. So it's a win- win for both sides. There is a website for that called fundinglife.com and they basically put the buyers and sellers of life insurance policies together. It's a dramatic funding --
Howard: What was that fundinglife.com?
Jordan: fundinglife.com is the website for that, correct. And they have more buyers than they have sellers right now. So if you have insurance policy and you can sell it, you'll do really, really well because a lot of buyers competing to buy those life insurance policies. And frankly the older you are and the sicker you are, the more money you're going to get because the people buying the policies, we'd rather that you not stick around very long, right? So if you've got a heart condition or something like that that just raised how much you're going get for your policy by a hundred thousand or so.
Howard: You know, a lot of the podcasters are still in dental school, about 25%. I always say, “Hey, shoot me an email, firstname.lastname@example.org, and tell me who's out there listening”. 25% are still in dental school, almost all are under 30, I only get like one email a week that say “Dude, I'm as old as you. I'm 55 with the two grandkids walking and two in the oven”. So they don't know what the difference between 401K and a Roth is, can you go back to dental kindergarten? Can you explain that?
Jordan: A 401k is where you put in money, pre tax from your pay check and it goes into this 401K. It grows tax deferred, but when you take it out in retirement, it's taxed at that point, so you get a current tax benefit. Your salary is lowered by that amount so you pay less tax, it grows tax-deferred, but you pay tax later.
A Roth IRA, you're putting in money that's already been taxed. You're putting an after tax dollars, but the money grows tax free forever. So no matter how much you earn on it, you get to keep all of it when you take the money out in retirement, no taxes whatsoever, so it's two different ways. That's why the Roth is better because I always say I like to tax, the seed, not the harvest. With a Roth, you're taxing the seed, the money going into it is being taxed, but whatever it produces is not being taxed. Whereas with a 401K, you are not taxing the seed, but you're taxing the harvest, many years in the future when you're taking it out.
Howard: Well don't you think that a country that has, $20 trillion of debt and historically the lowest tax rates ever, that someday they're going to have to raise taxes and pay down.
Jordan: They might, that’s the reason why you want to have the seed taxed now because when the harvest gets docked at higher tax rates, I agree with you, you're going to get less of it.
Howard: I don't like to talk about politics, religion, sex or violence, but from your point of view on Money deal did. Does the national debt of twenty trillion and the fact that this year we'll add another one trillion in debt, do you think that that's going to be a really bad deal someday? Or do you think it's sustainable?
Jordan: I think it's sustainable, it's not great, but the situation we're in right now, the tax cut that was put in at the end of 2017 is clearly stimulating the economy and that means more jobs and more income. That's the only way out of this is to kind of grow your way out of it to some extent. So it's not great and we're adding to the deficit the budget they just put through adds another three hundred billion, if we have an infrastructure project on top of that, is more billions. But I'd rather do that, try to grow our way out of it than kind of stay in the very low growth environment we're in before. Compared to other countries we have a lot of debt, but compared to Japan or China or Italy or Spain or lots of places, we have a lot less debt as a percentage of GDP and these other places. So there's just a lot of debt around the world, we are growing at least because of it, right now.
Howard: What do you think of these young dental students, they come out of school, they get a job as an associate, you know, they're making a $175,000 a year or they say they want to own their own practice someday, but they go buy a home first. What do you think of that?
Jordan: Well, it's about our priorities, I mean, the advantage of buying a home is you get to build equity over time, you get tax deductions, hopefully get a nice place to live. But I agree with you, don't buy too big a home, a bigger home and you really need because that's where all your resources are going. Buying a dental practice is a major long-term investment; I think you might wait a little bit. Don't buy it when you are thirty buy when you're forty or when you're more financially stable and able to do that. Because I think people are just taking on too much debt by buying a home and a dental practice at the same time, I agree with you.
Howard: So what do you think of these kids today coming out of dental school and buying their first house on an ARM an Adjustable Rate Mortgage? How does that sit with you?
Jordan: There is a risk to that because rates have gone up, I think will go up more. The thirty year fixed rate mortgage had been below 4% for a long time, now it's about four and three quarters, I think it's going to go over 5%. I mentioned before that heroescomefirst.com is a way of getting the interest rate down on those. But yes, I agree with you if you're doing an Adjustable Rate Mortgage today, you're taking a lot of risk. In general, the direction of interest rates, is clearly up because the economy is getting stronger because the Federal Reserve is raising rates because of concerns about inflation. So if I were to get a mortgage today, I would try to lock in a fixed rate mortgage and not worry about ARM.
Howard: I think I was very lucky in the fact that I graduated from high school in 1980, who was the Federal Reserve chairman?
Howard: Paul Volcker came in and he was going to break inflation and interest rates went to what, 21%?
Jordan: The prime rate was 20% in 1980, correct and he did break inflation by causing a huge recession, that's correct.
Howard: And you know, I had so many friends whose dads and moms had bought wheat farms and dairy farms and their loans were floating 200 basis points over Prime, and they went bankrupt.
Jordan: Yes 20% is not really sustainable I agree with you.
Howard: So you know, if you're my age, if you're fifty-five and you walked out of high school during that fiasco, I mean if someone says adjustable rate mortgage to me, I just cringe. I mean I think of my classmates on the ninth floor of Swanson Hall at Creighton University, crying because their parents were losing the family farm that had been in the business for three or four years because they went and used it as collateral to buy a bunch of John Deere stuff.
I just want to tell you that you never know what's around the corner. And then I graduated May 11, ‘87 and then you know what happened September or October, ‘87. I mean, you're on TV about October 1987. And I'll tell you also that these kids that are complaining that mortgage rates went up to 5%. You know, when I got out of school, after I bought my practice, I decided to buy a home and I thought I was getting such a killer deal because the guy who was selling it to me, he had it financed at 14% and I could lock it in at 12%.
Jordan: Wow. What a deal.
Howard: I thought I was the luckiest guy in the world because 1980, it was 21%.
Jordan: That’s right.
Howard: It was like buying a house on a credit card.
Jordan: You are right. I never know for sure, but I don't think rates are going back to these double digit levels. You would have to have a huge amount of inflation to do that and there are a lot of deflationary forces in the world still. But I agree with you, lock in a fixed rate, don't take the risk. It's not worth it to do an adjustable rate because if things go back up, you don't want to get crushed like that.
Howard: I wish you would go on Dentaltown under finance and answer some of these questions.
Jordan: I’d love to.
Howard: It would be good marketing for you because you answered the question, but in your signatures, your name, your website, and you have about twenty websites. A very common question under finances, they are trying to figure out what everyone else is doing, when should they be out of debt and then how much money... they always say, “What is reasonable for me to be debt free and how much money do I have to have to sell my office and be retired?” That's a complex question.
Jordan: As far as getting out of debt, on the mortgage side, the house side, again, I told you a way, mortgage optimization where you can pay it off in five to seven years depending on what your numbers look like, so that's reasonable.
As far as the dental office, I mean if you're buying it for three hundred thousand or six hundred thousand it depends where it's going to be. It should take ten to fifteen years to pay that off or something like that. Just don't be unrealistic, you are going pay it off in five years you got the cash flow of the business, but then once you've got it, you've got some equity that is producing cash flow and hopefully you'll be able to sell in the future. I just think it's a different calculus than it had been for previous generations.
Imagine the dentists going to school now, okay? Who are going to be taking on even more debt and coming out with even bigger debts. I think it’s going to be harder for them to buy dental practices in the future. I think people are going to be selling their dental practices to the DSO’s for quite awhile, which means you get less.
Howard: But how much would this dentist have to have? What's the calculation range, how much cash or money do I have to have saved before I can sit there and ride off into the sunset and not have to worry about money again?
Jordan: Well, I would say ten times your annual gross income would be an amount. So if you're making three hundred thousand that's like three million, something like that, in order to keep a similar kind of lifestyle, because if you do that then you can invest it. I showed you a way to earn 8%, so you're getting regular passive income from that. If you have it in the checking account or savings account, earning zero, it doesn't produce any income, but typically that's a good rule of thumb. Ten times your gross income during your working years to have in capital to produce income because you're going to live a long time, I mean people are saying, “Oh, you know, sixty-five” well that's nothing today. People are living easily into their eighties and nineties, so assume you're going to live a long time.
One of the biggest problems people face in retirement is outliving their money. They just haven't either invested enough or it's not growing enough to keep them around for a long time. So this is what I call the reverse boomerang or which is the parents moving back with the kids when the parents were out of money. The boomerangers was the kids coming out of college, moving in with the parents because they can't live on their own. So you've got the boomerangers or reverse boomerangers moving into your house.
Howard: You know I don't have to worry about it, I have four boys and they all assured me that I would die before I ran out of money before I die. They said “Dad we will kill you” because that's what it takes. Another question I was going to ask in 2008 and in 2009 America was GM, Chrysler, Ford, America was selling about nine million cars a year. Now it's up to like fifteen million cars a year but five million of those are leased and a lot of dentists say, look out leasing cars. Obviously if five out of seventeen million cars sold in 2017, we're least instead of bought, is leasing smarter than buying?
Jordan: I think so, in many cases I've leased my cars. I'm in the process of doing another one. The advantage of leasing is that your monthly payment is less. You can write it off if you use your car for legitimate business expenses and you are not putting assets into a depreciating asset. The way I like to put it is, buy things that appreciate, stocks, real estate, mutual funds, Bitcoin, whatever it may be.
Lease things that depreciate, you know a car is going to go down in value, you may not know how fast, but it's not something that's going to be appreciating over time. So my last five cars, I'm about to get another one. Every three years or whatever, I got a new updated card. This time I got a hybrid where I didn't have a hybrid before there was even more efficient. So in many cases, leasing can make sense.
Now if you are going to hold onto a car for ten years and run it into the ground for three hundred thousand miles, leasing doesn't make sense.
So in many cases you have two cars in a household, buy one drive it into the ground for three hundred thousand miles, lease the other one. You keep it for relatively short miles, typically like fifteen thousand miles a year is what is appropriate for lease.
So if that's your circumstance, I think leasing makes sense. Let me give you a resource to get you the best deal on either leasing or financing. There is a car buying service that I use, which is called carq.com, C-A-R letter Q dot com. They are an objective service that'll help you buy a car or lease it. Get the best financing deal, get the best price. I'll tell you right now, I'm in the middle of getting a Lexus and I'm in New York and they found the best deal in California. They're going to ship it across the country and I'm getting two thousand below a dealer's price.
Howard: What was the name of that website?
Jordan: C-A-R- Q dot com, carq.com. They are terrific they work for you the consumer, to get you the absolute best deal on the price, on the model, on the options. Whether you buy it, finance it or lease it, this is something you do every five years or whatever. You are not very good at it, the people in the car dealerships know all the tricks and you don't have a chance basically is what it comes down to.
Howard: I'm going to ask you a politically incorrect question.
Jordan: Go for it.
Howard: But on ‘Dentaltown’, if anybody gets the bears out crawling, it's when some dentist goes on the finance section and post something from Jim Rogers is saying, you know, the worst crash ever is coming. What are you, what are you thinking of Jim Rogers and his --
Jordan: I know Jim, he was right on commodities. He proposed a big commodity boom before it happened. So that was right. But he's been proposing a bear market for several years and he's missed out on the greatest boom market in human history basically. So, you know, at some point in the future we have to take a big downer, but the fundamentals right now are really supporting the stock market continuing to go up.
Earnings have been very strong. The tax bill is just starting to kick in increasing profitability for companies. People are getting more money in their pay checks, so the tax bill is really kicking in. We have a lot of stimulus between the Tax Bill, the Infrastructure Bill, if we get that, the Spending Bill. So yes, we're adding a lot of debt, but I don't see it coming for at least five years or something like that. So you would have missed out on an awful lot of profit opportunity had you followed Jim Rogers the last few years.
Howard: Yeah so, good guy, you like that guy?
Jordan: He's a fun guy; he's a big on motorcycling, he likes to motorcycle.
Howard: I know, but I noticed it from many aspects of my life, whether it be growing up, you know, my parents are big in the Catholic Church, finance, getting my MBA, it’s like, if you go to the Christian community, 20% think the end of the world is coming and 80% don't. You go down to Wall Street, 20% think the whole thing is going to crash and buy gold and 80% don't.
So think it's more of a human phenomenon, it's almost more of a personality trait. Some people see the glass, some people see growth. The reason I do is because if I flip back every hundred year history all the way back to the great pyramid, I mean, it just keeps getting better and better and better and better and better. How I graduated college, I graduated dental school 30 years ago and never seen a computer. Right now I have a computer in my phone that has more computing power than the Apollo mission that landed on the moon. I mean, I just think we're going in the right direction century by century now. A lot of times with humans and countries, it's usually two steps forward, one step back, but I just don't see the end of humanity.
Jordan: And certainly don’t act on it, you know? I mean, let's put it this way, if we all go down, there is going to be no place to hide anyway and having a piece of gold is not going to save you. What are you going to go to your local grocery store and shave off a little bit of gold for your milk? I mean, it's not going to help you very much.
Howard: It has no utility, I mean no utility.
Jordan: If you're leaving Venezuela today or Zimbabwe to get out before you get murdered? Then yes, have gold in your socks, it's what I call refugee mentality, okay? If you're the last one on the helicopter getting out of Vietnam, yes gold is a great way to kind of bring value with you. But for most people I just don't think, maybe 5% of your money in gold, but nothing too significant.
Howard: I would say it's funny how they are trying to have a saved up a year’s worth of food in their basement for those catastrophes, like the scenarios, the Zombie Apocalypse, all the people coming down the street they are going to be so many dead bodies in the streets you just drag one back to your charcoal. An arm and a leg and you certainly don't need a year’s worth of food. With all these millions of monkey dying, you just need to learn how to eat monkey. So do you have any thoughts on taxes?
Jordan: I do, I do. Now there's a new tax law it could be extremely positive for dentists if they're set up in the right way. You want to be with, so called pass-through entity, meaning Subchapter S, Limited Liability Corporation, limited partnership, those are the big three. And the first 20 % of your income is tax deductible now, so it's a really big tax break for people.
Also they have expanded the kind of pensions you can do there’s all kinds of ways of putting money aside. So yes, I mean take full advantage of the tax bill. The reason it was done was to stimulate small businesses and dentists are small businesses and if they do well they should hire more people and buy more equipment and help the economy in various ways. So this is the best of times as far as the tax bill, take full advantage of it. You never know how long these things are going to last, if the Democrats get in they'd want to wipe it all away. I don't think that's going to happen, but we know what's happening now, so take full advantage of it.
Howard: The news media is just infatuated with the S&P 500 especially the big stocks and they don't realize the backbone of every economy and every country in the world. 80% of people work for small business, 20 employees or less and I think that as you're driving to work, how many people in your family work for Facebook Apple, Netflix, Google?
Every body works for a business about the size of a damn dental office, 25 employees or less doing about a million dollars that's America. But only Apple and Facebook get all the headlines,
Jordan: The Tax Bill made major incentives for the small businesses that are the backbone of America to do better. And that's where all the growth is, I mean big companies continue to lay-off for the most part, but the small and medium-sized companies is where the growth is. So it was a very well targeted tax cut to help those businesses increase their cash flow and hopefully use it to reinvest back in the business and grow.
Howard: I want to ask a bizarre question, I know my homies, I've been a dentist for 30 years. I’ve been in ‘Dentaltown’ all day every day. I mean they get A's in Math, Physics, Chemistry, but when it comes to money, it seems like Math and Physics go out the window, it’s so emotional. Do you think humans are more emotional about money than Algebra and Geometry and Trig?
Howard: And why is that?
Jordan: Emotions of greed and fear come in. When the market's doing really well, your greed hormones are kind of going really racing, ‘I want to get out on the action’. You just saw what happened with crypto currencies, when it went from seven thousand to ten thousand, fifteen thousand. That's when people were borrowing against their credit cards to get in, greed, greed, greed.
Then it conscripts very quickly to fear and its like, ‘I'm worried about losing my money’ and it's your hormones go the complete opposite direction, I guess you might say. So you don't have that in calculus and geometry, it's much more rational. So fear and greed are the two extremes. I mean what Warren Buffet always says is, “When everybody else is greedy you should be fearful when everybody else is fearful you should be greedy.” It's nice to say that it's hard to do it psychologically.
I mean, it'd be hard to have been buying like crazy in 2008 when the market was falling apart. In the long run that would have been a great deal, but that's psychological. I would say psychologically it's easy to buy high when everything's going great and so low when things are terrible, but you just don't make a lot of money that way. So you have got to kind of counteract your natural emotional forces.
I actually did a book on this Howard called ‘Master your Money Type’ about people's financial personalities and how it gets in their way of doing the right financial decisions.
Howard: So if my homies listening had to buy one book from you, because you have so many, would it be Dictionary of Finance, Investment Terms, Barron's business dictionary on Amazon with fifty six, five star reviews would that be your go-to book?
Jordan: That is just defining the terms of a field which a lot of people have no clue. I've heard this many times from a dentist at these events. In dental school they don't tell us anything about how to run the business, how to set up a pension plan, anything about the finances. It's all about what's in the mouth, okay? Well that is nice but like having one course or something about how to help people in their businesses and run the business would be nice. So the dictionary will at least explain the basic terms of finance and investment, which can be a barrier for an awful lot of people. I would say that would be a good one.
‘Fast Profits in Hard Times’ I go through all kinds of different strategies to help people no matter what's going on in the economy. And then we talked about ‘Master your Debt’ since debt is such a big issue for dentists, that helps. We talked about mortgage optimization, getting your credit score and report in good ways. So that would be another good one that can help people.
Howard: Yeah that's ‘Master your Debt - Slash your monthly payments and become debt-free’ by Jordan E. Goodman, twenty three five star reviews. What does the ‘E’ stand for in Goodman? My middle initial is ‘E’ mine stands for Eugene? What's yours?
Jordan: Elliott. My father was Elliot, my father was a professor at Brown University and so it's Elliot. So my middle initial is Elliot.
Howard: Well I will remember that because my dental office on the corner of 48th street and Elliot.
Howard: Was my street named after your grandfather?
Jordan: Probably, that was my father,
Howard: Your father?
Jordan: He grew up in Indianapolis. I'll tell you a fun story, his father, my grandfather made the silk stockings in the 1920’s, he made an absolute fortune. It was called the silk stocking era. Well my grandfather made all the silk stockings, he imported silk from Japan. He had a factory with ten thousand workers and they made all the silk stockings. So that's where my ultimate family fortune came from, silk stockings
Howard: And it's amazing because silk back in the last thousand years, only the very rich could have it. And then the poor man’s silk was sheep’s wool. The wool was scratchy and everybody wished they could have silk, like the King and Queen, but they had to have this wool. That was one of the reasons America had such a financial boom because they got into cotton and cotton substituted wool as the poor man's silk, because cotton was smooth and didn't scratch your skin.
And people don't realize that the real basis of America's economy was that a brutal cotton industry because that's where the base economy was. The profits from that, is what started Wall Street investing in factories.
Howard: So the whole North was banking, insurance and financing off cotton money.
Jordan: My grandfather, in the thirties when Japan got kind of dicey and they couldn't import the silk anymore, he met a guy named Mr Dupont. Who came up with something called nylon and so he was the first one to do nylon stockings after they couldn’t do silk anymore. So he was always doing innovation so that is in my blood, innovation and entrepreneurship.
Howard: So your main website is moneyanswers.com?
Jordan: So at that website I've got all kinds of, what I call the resource centre where I give examples, I’m just giving a small example here.
Howard: Are all those websites that you mentioned, are they all found on here?
Howard: Good. OK.
Jordan: So I've got resources on debt and credit on mortgages, on investing, on insurance, on all different kinds of areas. I've got little videos I've done about these things, interviews with the people that do these things. My ‘Money Answers’ show, I'm going to put this show on my website on the podcast. I do take emails, so it’s a kind of a general centre of helping people in all aspects of personal finance, love doing it.
Howard: I love your website except for one thing, the only thing that confused me about your website.
Jordan: What was that?
Howard: I don't know why, I'm always curious where you live. There is no city or address on your website.
Jordan: Stare at the very bottom, I live in Westchester – New York.
Howard: No I don’t see it.
Jordan: Anyway, it's there.
Howard: So where are you at?
Jordan: I'm in Elmsford - New York, which is Westchester near Tarrytown where the Tappan Zee Bridge goes over the Hudson River.
Howard: So how far are you from Manhattan?
Jordan: About 45 minutes’ drive. No big deal because I'd go in there all the time to do TV and radio shows.
Howard: Yeah, God I love Manhattan. I read a deal the other day that if all seven and a half billion humans lived at the density of Manhattan, all of us could live on New Zealand there. You wouldn't want to live in Manhattan? Why would you not want to live in Manhattan?
Jordan: Well, today it's just for billionaires basically. I mean the prices are just beyond outrageous, the taxes. I like being in Westchester where it's nice and calm and everything, and then I go into the city as I need for Broadway shows or meetings or radio or TV shows. To me, I've got the best of both worlds that way.
Howard: Did you see the play Hamilton?
Jordan: Yes I really followed carefully because it's that, that hip-hop rap kind of thing but if you listen carefully, it's a fantastic story.
Howard: Tell these young kids why, I mean Hamilton was about America's first banking and finance, wasn't he?
Jordan: He was the first Treasury Secretary and he basically came up with the Federal Reserve ,well not the Federal Reserve, the United States Treasury basically. He came up with a whole system and you had the duel with Aaron Burr and I mean he was one of the major founding fathers. He was an orphan, he came from the Caribbean, he had a really interesting history, but very, very influential in our whole financial structure.
Howard: The play came Phoenix, it's playing right now for two weeks at Arizona State University Drama theatre, but they sold out. So, I went online to find people selling their tickets. Cheapest ticket I could find in the nosebleed was eleven hundred a ticket.
Jordan: It's worth, go for it.
Howard: And the three times I've lectured in New York since that plays been on. I went to buy a ticket and they're like, “Dude, it's sold out six months in advance”. So I still have not had the opportunity to see that play. I can't believe it's already been fifty five minutes. Any questions that I am not smart enough to be asking you, that I should've asked or --?
Jordan: Let me just do two more quick resources to help people because I really liked to help these dentists. This first one, if they've got a lot of debt as a business, we talked about the individual as a business. They should use the strategy of what's called ‘debt prioritization’ because not all creditors are equal. Some creditors have more power over your business than others.
If the Electric company turns off your lights tomorrow you're done, that's got a lot of priority over you. But if you had some lawyer do a contract three years ago, or whatever he has no leverage over you whatsoever. So you want to have a system that is called ‘Debt prioritization’ and you pay creditors based on how much leverage they've got over your business.
You can try and do that on your own. There is a website that can help people do that which is called helpwithpayables.com and what they do is they look at all your creditors and look at the leverage ratio of each.
You make one payment to them, they pay the creditors and you can get out of business debt much quicker and easier without you're trying to do it yourself.
Because what typically happens is the creditor that screams the loudest gets paid and they often are not the one that should get paid first. It should be the one with the most leverage over your business. So that may help some of the dentists who have a lot of business debt.
Then kind of related to that, is you want to stay on top of your business credit report. You have a Dun Bradstreet report and a lot of people have no idea whatsoever, they don't really pay much attention to it. When you apply for credit, just like on the individual side, you want to be as clean as possible and a website that can help you there is called tourdbusiness, T - O –U- R- D business.com. They'll help you establish or clean up your business credit report. So those are just a few more resources that can help you run your business more efficiently.
Howard: But just to be clear, every website resource you've listed, they could find that moneyanswers.com ?
Jordan: Correct, it's called the resource center and you'll see it all right there. I've got a little video and explanation of all that and more than we talked about but I tried to do the ones that are relevant to dentists.
Howard: Resource Center, Recommended resources, Debit and Credit Mortgages, Insurance, Investing, LifeLock, what is LifeLock?
Jordan: LifeLock is a way to protect yourself against the ID theft, which is a huge problem these days. Often, it's not something you're doing wrong, but people get your information, what happened last year with Equifax was just a complete tragedy. The ID thieves got in there and they got your basic information, your name, your social security number, your date of birth, your mother's maiden name, all these things. Then once they've got that, they can create false accounts with your names, open credit, do all kinds of nefarious things.
When you have LifeLock, they tell you “Did you just open this credit card account?” Or “Did you just take out a $10,000 cash advance from an ATM in Las Vegas?” Then you can say “ No, no, that wasn't me” and they can stop it right away. So that's what LifeLock is about.
Howard: I just want to say one thing, there is also a section for his speaking engagements. I will tell you the hardest gig to get in speaking, is an annual Seattle Study Club meeting. And then you got that gig, then how many Seattle study clubs did you lecture for?
Jordan: It’s been about fifteen so far.
Howard: You don't have to say anything else, I mean that's just impossible to get, they vet their speakers more than anyone. So there is also a link on there if you want to have you to be their speaker.
Jordan: I love to speak to dentist groups, I really do. I'm actually writing now for the Seattle Study Club Journal on a quarterly basis as well. So I'm really very, very helpful and it's just been great.
Howard: Is that a magazine or is that on their website?
Jordan: It’s a journal. It's a physical journal that they put out once a quarter and I'm now doing financial articles for them once a quarter as well. So I love helping dentists. To any of your listeners, they can contact me at moneyanswers.com and I'd love to speak to their groups.
Howard: All right, well, on that note, I want to thank you so much for coming on my show today and speaking to my homies for an hour about money. Dentists, I know you only want to learn about root canals, fillings and crowns, I get it, I'm a dentist. Hell, I’d rather pull four wisdom teeth and go golf in Palm Springs. I mean really, I totally get it and that's why as a leader, I'm trying to take you away from that candy bowl and point you at that weird stuff under the sink that you got to do.
You don't know your numbers, you don't know your finance, you don't know your business. And another thing, you are always trying to spend $150,000 on a Cad/Cam, $100,000 on a -- I mean you don't even realize the true cost of that. I mean if you were 30 years old and you bought a $150,000 Cad/Cam, what would that money be if they would have put that money in an index fund? $150,000 at age 30 at an index fund, what would that be when they were 65?
Jordan: A lot. Well if over 40 years, a hundred and fifty thousand would be about four hundred and fifty thousand, something like that.
Howard: So that Cad/Cam machine is that really worth not having a half million extra cash when you're 65? Some people do a root playing cure dodge where you got to buy a $100,000 laser to do it and, and these toys. And then the big financial disasters, you think your dental assistant’s so hot. So then you divorce your wife to marry your damn hygienist and now you lost half of everything you own.
Jordan: Don’t do that.
Howard: Yeah. Just be smart with your money and I'd rather you get an “A” in money and “B” on your dental work than sit there and get a “B” on your money and an “A” on your dental work. Because it just means you're going to just work harder and harder and harder. Now I'll end with this... The happiest dentists I know at my age, are the ones that do dentistry that don't have to, and the unhappiest ones are the ones that know they have to drive to work Monday through Friday for another decade because their house is not in order.
We were talking about money is so emotional. When you don't have to work, then you love it and if you don't want to treat screaming kids, just send them to a paediatric dentist. If you don't want to do molar endo they call the endodontist. Whatever you don't want to do you just refer out because it doesn't matter. Then you only start doing what you want to do. So when you don't have to work, you love to work, but when you have to work, you can burn out. What percent of dentist’s burnout do you think is related to finances?
Howard: Yeah I know, 80% and then they make these flipping decisions that they're going to go buy all these fancy toys and all this stuff like that. Get your house in order. Every human I personally know does not have an earnings problem, they all have a spending problem. Whether it’s their kids in college, I mean these student loan debts next time one of them is telling you, crying crocodile tears about his student loan debts, “Dude, I didn't have a car in Undergrad at Creighton University, I didn't have a car in the first three years of dental school.”
You drive to these dental schools, it looks like a new car lot for Honda. And on vacations, what do we do? We hitched a ride home back to Woodstock and stayed with mom and dad. What do they do? They get in jet airplanes and take cruises and go to fancy beaches and oceans and they...
Jordan: But they deserve it you see.
Howard: Oh yeah, they ate out Sushi every Friday night when we were eating Ramen noodles cooking it in a holly hot pot. I mean, it doesn't matter what – remember the Charles Keating scandal?
Jordan: Oh yeah.
Howard: And when he went under, everybody was trying to find his money, he had none.
Jordan: He spent it all
Howard: He had islands and yachts and airplanes and people were looking. My God, he made more money than anybody could win in the lottery every year for decades and when the market turned down, he had nothing.
Jordan: Right, right. So the point is that dentists are really smart, but they have to pay a little more attention to what we've talked about. I mean, just look at what we've talked about this last hour. So we pay off their mortgages faster, we got them earning 8%, we got them out of business debt that their credit score is in better shape, we got their student loans refinanced. I mean there are lots of good things, these are like one or two minute kind of things you could do. Just set it up and have things automatically work for you. What a better life as you say and then you can do what you want to do instead of what you have to do.
Howard: And we convince them to keep their spouse, because it's just not worth it. It’s just cheaper to keep her, that's all I can say. But hey on that note, Jordan, thank you so much for coming on the show. I hope you have a rocking hot day.
Jordan: Thanks so much Howard, I really appreciate it.