Why We Choose Lifestyle Over Scale: Building a Business You'll Never Want to Leave

In this Wealth Strategy Session, Josh Cochran and Dr. Reed Faldet dive deep into the "lifestyle practice" philosophy. Josh shares his personal testimony of growing the largest dental group in the Inland Northwest—and the heavy toll that "customer-first" obsession took on his health, family, and sanity.

In this video, we discuss:
• The Trap of Growth: Why "bigger" often just means more operational drag and "Sunday Scaries."
• Earned Clarity: Why Josh would do everything differently if he started a dental practice today (including the "Conservative Value Dental" model).
• Selective Scaling: How to use the "No" filter to protect your time, energy, and capital.
• The Wealth Strategy: Moving from obligation-driven work to opportunity-driven investing.
• The End of Retirement: Why staying "in the game" is better for your health and impact than traditional retirement.

Whether you are a dentist, a business owner, or a real estate investor, this episode is a masterclass in aligning your professional growth with your personal values.

🎧 Tune in for a deeper understanding of real estate investing strategies and how they can unlock your financial future! 

🔔 Subscribe for more on how smart investing and wealth-building strategies can shape your financial journey.

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Transcript

SPEAKER_01 0:00

So when you read these business books, you're like, wow, this is like, this all makes sense. This is like super logical. You see all the businesses of Rowan using that kind of philosophy, and you're like, okay, this is how you build a business.

SPEAKER_00 0:12

I don't think people realize how many like seven figures. Well, I think seven figures. Seven figures there are out there. Just keep. People think customer focused, say yes.

SPEAKER_01 0:25

You know, we say yes, that is gonna be successful. If it's only to success for a little while, then you're gonna burn out, right? So really build a business that you never want to retire from, right? Learn to say no and say yes in alignment with that, and you will be more successful long term.

SPEAKER_00 0:43

This is where you can take more of a capital allocator investment mindset, and you spend more time just strategically positioning where you're putting capital instead of putting it all back into your business and growing and growing. Because as your business grows, operational drag grows. Welcome to the wealth strategy session. This is where we unpack one key wealth building strategy at a time and show you how to apply it.

SPEAKER_01 1:05

We have a great wealth strategy session today on building a life you don't want to retire from. With me today is the Sultan of Smart Money, Dr. Reef Aldette. Reed, how are you this Friday, sir?

SPEAKER_00 1:20

Very good, very good. Got family in town, so it'll be a busy weekend, but it's always a blast. The kids always have fun, and so it's good to see. Good to see the siblings and the nieces and the nephews and have a nice full house. Family first.

SPEAKER_01 1:33

A little chaos.

SPEAKER_00 1:36

Family first. What do you got? What do you got going on?

SPEAKER_01 1:39

Uh, we are going up uh up to our ski condo. It's the last uh weekend of ski team for the kids. Okay, so we're excited to do that. Our our kids have had a lovely year, um, making a lot of good friends, learning discipline, learning grit. I mean, the the weather when you're skiing ain't great, right? Always. And so uh the kids is learning to to you know get past hard things, right? We can do hard things. I mean, it's great, and they they build a little relationship circle outside of their their uh friends at school. I always think that's super healthy too. Um, so um it's a it's a really good sport for kids, and it's a great family sport. So we all go to ski together and stuff. So we're gonna do that. Um, okay, Reed. Uh today, building a life you don't want to retire from. Who are we trying to help and what problem are we trying to solve today?

SPEAKER_00 2:31

Yeah, I think this is this is a frequent discussed thing, is as a dentist, like as a business owner, um when you're in kind of the the trenches and things are tough, you often start thinking about your exit plan and uh how quickly you can exit, maybe, right? How how fast you can exit. So um this stemmed from a conversation in our on our private Facebook group um where Josh posted and he said, uh everyone talks about growth. And we we often talk about growing the business, growing the practice, right? But what is your long-term exit plan? And so it was really just to facilitate discussions and get people thinking of um maybe what their exit plan, the succession plan could look like. Uh, but that kind of sets the stage. So maybe it's the people we're trying to help are help people think about what their exit plan could be, or maybe think differently about what an exit plan means. So you know, I'll let you go off from there.

SPEAKER_01 3:29

Yeah, so I have main two, three, two main points today. I want to talk a little bit about my dental story in relation to this, and then I want to talk a little bit about uh what I would do differently if I ever went back into dental. So that's part one, and then I'll talk about my construction company, like what my current plan is and how I'm saying no and sticking to it. Saying no a lot, so avoiding shiny things. Okay, so so this is up my personal like testimony on dental. Okay, you know, I started as an associate, decided to start my own practice. I wanted to do things better, wanted to do a modern practice. And um, you know, you read all these business books and you read about uh putting the customer first, you're building your whole business around the customer, right? And those organizations do fantastic, right? Other parts is like, especially after COVID, it's also being team focused, right? How do I build my business around my team? And when you read these business books, you're like, wow, this is like this all makes sense. This is like super logical. You see all the businesses that have grown using that kind of philosophy, and you're like, okay, this is how you build a business. But on the outside, you also hear about like dental consultants talking about like the lifestyle practice, like build a practice that works for you. And when I heard that, I was like, okay, you can, but like, are you selfish? Like, if you're really trying to serve others, you should build a business around them, right? So that's what I did. Okay. So I had our first practice. I decided that, like, hey, you know, it's super annoying that dentists aren't open in the evenings, right? It's super annoying that if you have an emergency on the weekend, like your dentist isn't there for you, right? Maybe they answer their phone, you get a message, like you have a dental emergency. That's terrible. It's super annoying that like you have to go to these specialists, right? Half of the patients ever go to the specialist you refer them to, right? I'm like, these are all things that are wrong with dentistry. The ideal dentistry, right, is one practice housed from kids to elderly, right? Your whole family, right? All services under one roof, seven days a week, all hours, right? And that is like putting the customer first, okay? And we did that, you know. First year, like I said, it was the hardest thing I ever did, made no money, but within three years, we were the largest practice in the region, right? Because we were doing the things the customers wanted. Okay. So you're like, wow, that's amazing. Then we started adding other practices who are the largest dental group in the inland northwest. It's like, wow, this sounds really successful, right? And then I thought about other dentists the whole time, and I'm like, gosh, why are they only open four days a week? And you hear other dentists say, You're crazy, like I can't believe you're doing all this. Like, good for you. But like, you know, and you kind of hear all that and you're just like, no, we're we're customer focused. But here's the downside: when you're so customer focused, you know it wears on you, right? Because it doesn't fit your life, right? You only have one life uh with your kids, right? Only one, hopefully one marriage, right? Uh, your health, right? Health is wealth. So you let all these other things go because you're so customer focused, right? And it just starts to wear on you, it starts to grind on you, and then you start fantasizing about retirement. You start fantasizing about selling your practice someday, right? So when you start fantasizing though about those things, that's a that's a clue that you're not in alignment and what you're doing is not sustainable. Okay. So I ended up growing all these practices, and then I was just like, man, like I'm working so hard. My kids are you know in grade school now. I want to be there for them, I want to be a coach, I don't want to get constantly. We had 160 employees, I don't want all these calls anymore, right? I don't want to be dealing with all this stuff anymore. Like, I want to spend time with my family, right? I want to be healthy. I don't want to be like one of those dentists who they're constantly struggling with their back, their neck, they retire and they die, right? Like that is not the life I want, and I'm not gonna accept that life. Okay. So, you know, this is what I learned, but this wasn't like like I'm always thinking, I'm always questioning, right? And I didn't come to this conclusion when I started my practice. I had to I had to eat it, right? I had to work hard and eat it for for years before I had this clarity. This is earned clarity. Any comments read before I go to like what I would do now if I ever got back into dental.

SPEAKER_00 7:57

Yeah, I mean, I can I'll I'll try to quick just like parallel it a little bit. Like I so used your first practice was a startup, right? Yep. So I did pseudo startups and they were really old, you know, practices that needed a lot of updating and had a pretty small patient base. So I get the the grind of it all. Um, but I was I was kind of the opposite in the beginning where I was just like, no, I'm only gonna work these days, I'm not gonna be on call all weekend, and so it's just very different. And I think when you tell me it's it's rare that you were able to do real estate and dentistry at the same time, it was because I created the focus of a lifestyle practice first. Um and I know you'll get into kind of what you would build. So I think that's and I've been just super rigid. I mean, I don't do morning huddles like my team does morning huddles, right? I show up at 10 minutes past when the patient's there, numb and all that. So mine is just like, how does this practice fit in with my life? Because then I can then I can see myself doing it longer and doing the real estate with it. But yeah, so just it's funny the parallels a little bit, but I did not grow a massive hundred-person team, right? I just kept it, kept the team more small. We have 15, 16 team members, so definitely easier to manage and and uh to build small leadership within it. And so the problems are um fewer, you know, a lot fewer. So go ahead though. Yeah, just was gonna parallel that.

SPEAKER_01 9:19

No, that all makes sense because you know, whenever we talk, I always get a strong sense of a lack of chaos in your life, right? We all have things, families coming over, gotta work out, gotta do this, gotta do that. But you you've been able to not have chaos run your life, right? You're very reliable, you're very consistent, very disciplined, and you have to build your practice that way to be able to do that. Um, so everything you're telling me makes sense. Yeah, I wasn't I wasn't that smart, I had to learn it, I had to do it. Uh so now I very much understand the value of a lifestyle practice, right? If I ever did it again, I would do that. But let me give you some more tangible specifics. So, you know, one specific is um, you know, uh Washington is a very liberal state, right? And I don't align with one political party, right? But um there are certain things that I believe that is not in the media in Washington state. It's not normal. You don't hear it in the media, right? The generally media just says it one way in Washington state, and and so for me, like like my value system is like very conservative, like no waste, fraud, and abuse. Like that kind of stuff just drives in bananas, right? You gotta have run a balanced budget, right?

SPEAKER_00 10:31

Fiscally, very fiscally conservative.

SPEAKER_01 10:33

Fiscally conservative. Like you gotta run the government like a business, right? I'm all about education for kids, you know. I'm all about like infrastructure for our country, right? Utility, like building the I need the government to be like a basketball game where it's got like three refs, right? I don't need uh the government to be a basketball game where you got 10 refs and 10 players, right? Like that to me doesn't seem efficient, right? It doesn't matter what my beliefs is. My point here is what I one model I could do, there's no fee for service practices in my area, right? So one model I could do is if the media is appealing to only half the population, okay, like more liberal point of views, um, whatever. Okay, I don't even care, but just like they're applying to one point of the population, and I feel differently. Well, there's 50% of the market that nobody is talking to, right? And oftentimes those are business owners, right? Those are successful professionals, the more like fiscally conservative folks, right? So, one example is I would just go out and just call my practice like conservative value dental, right? Or whatever, whatever I brand it as. I'd go on podcasts, I go on the media, right? Like this very different point of view than what you hear in the media here, okay? And then people who are attracted to that, right, are willing to pay fee for service, right? A certain percentage of the population, right? If we've got you know 500,000 people locally, I don't need a ton, right? I just need a thousand of them that are gonna do that. One out of 500 is my target market, right? And if I'm the only one saying the opposite of what these other people are saying, and and half the people align with me, right? Like I'm gonna build a business that works for me. So now my marketing, right, and my margins are just better because unique marketing and higher profit margins because fee for service, right? And then I just build the practice how I want, whatever procedure I wanted to do, how I wanted to set it up, my hours, my days, right? And the key here is because I'm building this practice to fit my life, I am going to be successful in the long term because I'm not going to be thinking about retirement, right? Because I've built this for me, right? I love this. This is what I love to do, this is what I want to do. So um it's going to be over time. How do you win as a business, right? You're consistent every year. You show up, right? And if you love what you do, people, the team, the community, they're gonna respond to that, right? If you love what you do. So that's one model. Another one would be wisdom teeth. I love doing surgery and I love it when people are asleep, right? So I would just do a wisdom teeth clinic, six chairs, the CRNAs get everybody knocked out, the hygienist goes in and adds anesthetic for everybody, and I just come in, make a decision, pop, pop, pop, pop, pop out the teeth, right? That's it. Like least amount, like everyone's just like that's the kind of model I would do. Okay. Because again, it's something I enjoy, and I'm I'm I'm doing a niche like how I want it.

SPEAKER_00 13:47

Okay. You I think I think the key there is like you're running it through the filter, right? You know what to say yes or no to based on what you want. I don't want it bigger than this, right? Like, you're not making decisions for growth alone. Like, that isn't your your guiding compass anymore. It's what is how does this fit within my life?

SPEAKER_01 14:06

And I will be more successful. That's the part that I think is contrarian. People think customer focus, say yes. You know, we say yes, that is gonna be successful. It's it's only successful for a little while, then you're gonna burn out, right? So, really build a business that you never want to retire from, right? Learn to say no and say yes in alignment with that, and you will be more successful long term. You will be the you know, $500 million net worth grocery store owner who's still going into the grocery store at 80, right? Because he loves what he does, and the community responds to that. Yes, yeah, the temptations are always there. So, same with my construction company, right? Like, we're like just building for ourselves, okay? Stay small, keep it all, right? We're building for ourselves, we're doing great work, we're we're under budget, we're like super fast in our construction, right? We're not getting ahead of our skis, we're just really killing it in the stuff we do, okay. I go to this Greater Spokane Incorporated, this meeting that's all like the local business leaders, right? The big hospitals, the big banks, the civil uh community leaders, right? It's all like the leaders in town, and I see these other construction companies, right? And they've got like 40 people on their employee list, right? And they're building all over the region. And I look at that and it gives me like heart palpitations, right? Because that was that was what I did with our nettle group, right? And I'm like, wow, yeah, these guys are huge, right? Yeah, they're doing a ton of projects, right? But I'm like, I am not jealous of them. I actually, and and I it's gonna come out wrong. I should probably should be. I I they probably they've made this choice, and they're I don't know, maybe they love it, maybe they don't, but but I yeah, I don't fit you. It wouldn't be one, right? I feel sorry for them, right? But that doesn't mean they don't love it, but I'll be like, oh man, that sucks, right? Yeah, so so yeah, why why don't you kind of comment?

SPEAKER_00 16:14

Yeah, yeah. So I think um I think there is, like you said, that contrary point of view where or it's a contrary way of thinking, and that like because you're gonna build it around your life, that you're going to be sacrificing customer growth, profit, essentially, right? And I don't think you're right, I don't think that's necessarily true because with consistency over time, you'll grow it. And it just there's just a lot of models I'm thinking of when I've talked to other dentists, and you hear like the model of their practice and how it works for them, you're like, dang, that's smart. Like, and they're making, so I don't know what you're making, or or the top guys in your hundred um person organization were making, but I feel like it's probably not that different than that guy who runs that wisdom teeth practice, right, with six ops because his net is so much higher, you know, because it's overheads low, he can. I mean, team morale is high, like they just crank. So it's usually much higher, actually.

SPEAKER_01 17:14

Their income is usually much higher, right? Because they found a niche and and and they just go after it, right?

SPEAKER_00 17:21

Um, yeah, I don't think people realize how many like seven-figure, when I say seven figure, I'm saying seven figure net dentists there are out there, just GPs. I talk to them all the time. It's crazy.

SPEAKER_01 17:33

One to three million, right? It's maybe I don't know, three percent of guys, right? Or women, but then you hear their business, well, maybe one million net take on maybe it's more than three percent. Let's say it's like top 10%, right? It you hear their business models, and it's so unique, it's so defined, focused, right? And and they like and they're focused on it, they're passionate about it.

SPEAKER_00 17:56

Yeah, yeah. And I think this is so I I wrote this this post in our group a few. This just registered with me. That's why I wanted to pull it up. Um, I said a few things I tell my younger self, and that's kind of the conversation we're having right now, a little bit, is one thing is like know who you are early, right? Like, do you want to be an entrepreneur? Do you want to work for somebody else? Like, do you want to build your niche practice or do you want to build this massive organization? Whatever it is that you want to do, and sometimes you don't know until you just start moving forward, and then you have to pivot along the way. That's okay. Like, you just have to start somewhere, but I think if you know some things about yourself, like, man, I hate dealing with people, big teams, like then you know that model isn't for you for sure. So there's ways to kind of you know self-test and figure out what path may make the most sense for you.

SPEAKER_01 18:45

My sense here is my parents both work for the school district, okay? So not entrepreneurs. I did not grow up in an entrepreneurial household, business owner household. And so I think there were certain like fundamental core understanding, values, habits, right, that I just didn't get. And so I I always had to learn, do it to learn, right? I get these ideas and then I do it and then I learn. So uh, you know, if you're a read and you have that clarity early on, that's a much better place to be if you if you have that clarity. I don't know how you got that clarity, you know, learning to say no and really define those borders. Like, where do you think that came from?

SPEAKER_00 19:27

I think uh, I mean, in the early days, I was just obsessed with utility. And so it just was just like, I just could feel like this resistance. Like if something wasn't gonna serve me and like what I wanted, I'd feel like this resistance, and I'd be like, no, no, I'm not doing that. Like I say no so quickly that I could just I don't know how to explain it other than this is like my North Star, this is what I want. I begin, I always begin with the end in mind, knowing that I can always change my mind in the future, right? But I'm like, I knew I wanted to do dentistry, I knew I wanted to be my own practice owner, and I knew I wanted to get into real estate. And if you have like that vision of like build the dental machine, go into real estate, the real estate will help replace the dental machine if you want, and then I can exit dentistry, right? Then you you kind of have that path laid out, and so you kind of know how to filter decisions through that. But what happened was as I was building the practices, that machine, I realized that it wasn't that hard to manage that machine anymore, and that I could do this a lot longer than I thought. It was this initial sprints, and then I realized, well, actually, I don't need to exit from this, right? And this goes back to your main point of like build the life you don't want to retire from. And so that started to be my new filters like, how could I just start thinking long-term always? And if I'm doing something now that I could see myself doing 10, 15 years from now, then it then it feels right, and I'm gonna keep doing it. Um, versus like, I hate this thing. And then over time, my wife and I were just talking about this. Over time, every year should get better than the past year because your filter gets better. You say no to the right things, you say yes to the right things, and life just gets a little bit better every year. If your life isn't getting better every year, then you're not you're not analyzing things correctly, you're not filtering things correctly. Like you have to you have to find a new north, right? That's that's kind of how I think about it. 100%.

SPEAKER_01 21:18

Uh I think where we get caught up, like the customer focusing, business books, but also just like society, like religion, spirituality, you know, serve others, right? You you hear this, and it and it's a hundred percent true, right? You want to care for others and all those things, but not when it goes at what cost? Right? How how is it so so yeah? So I'm glad you had that clarity early on. I lost all my hair, the rest turned gray. But uh I I'm getting smarter now.

SPEAKER_00 21:52

It it's it's every year though, it's a new check in, and you do this yourself with your kind of your goal planning, right? It's a check in basically. Basically, like I even say uh this let's let's uh I'll just ask you maybe a marriage question too, because I feel like this goes with it is like if I feel like there's a problem or my wife is stressed about something or whatever, all I'm just like is why are we stressed about this? Let's quick find a solution, right? And get this problem off our plate. And that's why every year it gets better because a problem emerges and we never let it emerge again.

SPEAKER_01 22:24

Whatever that is, you become intolerant of chaos and stress, right? You just don't tolerate anymore. Um, yeah. I mean, obviously, you gotta give her the 15 minutes just to vent and then really see if she wants a solution first. You can't you can't go that quick, right? You gotta yeah, that sucks. Yeah, I hear you.

SPEAKER_00 22:46

Uh but she's she, yes, that's true. That's true. But I think she the what I'm super thankful for is like she knows, like she knows that I know that the right path is just like, here, go ahead and vent, honey, like and and tell me what you think, and and I'll hear you out. But she knows at the end of it, it's we're not we're not complaining just for the sake of complaining. I'll never complain to you for the sake of complaining. Let's problem solve together so life gets better. Yeah, and I think when you find that partner that like you both know each other, know your intentions, like and know where you're going, and you've proven it to each other time and time again, it just the it that's like where it gets easy, it feels easy.

SPEAKER_01 23:22

When both when both are committed to like the intolerance, right? We vent, we let it go, and then be like, okay, let's we want to live this life, and we can if we let these things run it for us, right? Or create this problem for us, yeah. 100% agree. Yeah, got any good marriage advice? Uh, probably, but we'll do that another show. I mean, I'm still married happily, so it must be something working. Uh it's probably just my wife, right? Mary right, and then uh it's less likely to screw it up. But uh, do you had a list? Did you want to keep going on that list?

SPEAKER_00 23:54

Yeah, so let's so this is what I said. Okay, so know who you are early. Um, enough is is very powerful. So, like even having a single healthy practice where you're produce you're netting you know 500 take-home a year, like that's phenomenal. You don't have to keep growing for the sake of growth. You have a great lifestyle with that. Scope creep, right?

SPEAKER_01 24:12

You say this is what I want to do, and then you keep like pushing and making it bigger, right? Well, if you really want it that, and if that's probably great, and right at what cost, but don't just keep growing for growth's sake. That's like my favorite question now. People are like, I want to do this, and I go, and my question is like, how does that growth serve you? Yes, right? Like, and if they know, it's great, but if they don't know, then I'm like, hey, like look at it, because I might you might put yourself in kind of a pinch.

SPEAKER_00 24:40

And I've I've offended a few people with that question, like the dentist that's you know, um, again, netting seven figures a year, right? Not netting over a million dollars, and they're like, we're gonna move our practice so that we can go to a 15 op and bring out some associates. And I'm just like, okay, so I mean that's that's fine, but but why? Like, why do you want to do this? Just just because of it's like exciting, it's a new project, you're feeling stagnant. Like, but it if it's to create a better income, like you're there, you've won already. I don't think you can keep going.

SPEAKER_01 25:12

Heck yeah, but I need to hear a strong why, or I worry about somebody. Yep.

SPEAKER_00 25:18

Yeah. Um, the other, and that's very that's the intentionality thing. Like again, society tells us like we have momentum, keep going, but you can just check in with yourself and be like, yeah, I could keep going, but do I need to? And does it serve me? But okay, and that goes to the next thing, which is like scale selectively. Bigger isn't always smarter, especially if it adds operational drag. So, like, that might mean you know, operational drag is just like so many things, right? It can just be like I'm my the Sunday scaries creep in because of all the problems that I'm gonna face on Monday, right? Like, that's operational drag. Operational drag is like I have eight meetings today, right? Like, because of all these problems with all these people, like it could be it, it just complexity, right, can create a lot of operational drag.

SPEAKER_01 26:06

So you have to say, I'm still tolerant of a waste of time now, yeah. Right? If I'm having a meeting and I'm not clear on why I'm having that meeting, right? Like my tolerance for that meeting is like two minutes, right? Uh, and I was having this discussion with my sister. So on one of my buildings, like my sister has a child with severe special needs, right? So she used to be a hygienist, didn't work for me. I had her, you know, I was like, hey, go work for somebody else. Let's keep this healthy, but uh she uh yeah, so she's been home with the kid, right? She needs to continue to be home with this kid probably forever, right? And so I was trying to think like how can I create a job that like supports my sister, right? And so uh on this next building, there's like a house next door, right? This beautiful house, and it's a beautiful property. And I was like, Well, why don't you live in this house and become the property manager for me, right? This will give her something to do that's like right next door, so she doesn't need to drive, she need to be away from her kid, right? She can both she can do it all. And um, so we were talking about kind of like the different duties here, and I'm very clear when I'm helping her like build this out, like we got to protect your lifestyle, right? Like, let's not hand out your phone number, right? People can chat you through the app, right? And and the other one was like cleaning, you know. She's like, hey, like there's not a lot of units, and like we're not gonna have a lot of turnover, so like I can probably clean the units, you know. And you know, sometimes that my heart, like my instincts tell me, hey, that's the right call, right? Or sometimes they tell me that hey, that's the wrong call. Okay, just her, if there's not a lot of units being cleaned, right? Turnover, right? It's a smaller property, it's nice, it's nicer than other ones in the area. We're it's a little higher income. I just don't think there's gonna be a lot of churn compared to like an average apartment building, right? And so in my brain here, I'm like, hey, if you ever need to hire a cleaner, like go do it, right? But you know, finding a cleaner, you know, contacting them to come when you want them to come, holding them accountable when they didn't actually clean as well as you want, right? Like, you know how it is, but it's just like a little bit, it's all this operational drag for this like little service, right? So the operational drag outweighs the little service, right? Now, if it's a 200-unit apartment building, right, then that small operational drag is worth all the work you're getting from them, right? And so this is just a recent example of like, yeah, we're if it's just quick, we're just gonna do it ourselves. It's more, it's more work to manage somebody, it's more work to hire somebody to set up DHR. Like, like don't put yourself in that situation for small things.

SPEAKER_00 28:51

Um, yes, only big things. So and so, so just the scale selectively thing. I said, after a strong foundation, right? Like your business is is doing well, right? After that, 500k income or whatever, more passive investing or diversification may be operational expansion. Because now you can funnel, right? This is where you take more of a capital allocator investment mindset, and you spend more time just strategically positioning where you're putting capital instead of putting it all back into your business and growing and growing. Because as your business grows, operational drag grows. But if you as your investment base grows, if you do it strategically, it's not going to add much drag to your life.

SPEAKER_01 29:32

Yeah, I think that's a really good point. So how I'm doing that right now, right, is if I'm thinking about working on a project with somebody, right? They say, hey, I'd love for you to come in on this development we're working on, right? Like, I need to be all in on it, right? I'm not dipping a toe in there, right? I'm not doing just a little piece. Like, if I'm in it, I'm in it, right? I'm probably on the development side, I'm probably on the capital raising side, on the debt side, on the management side, on the construction side. Like if somebody brings me in, I need to really be all in because then I'm my best version of myself for them, right? And like I said, we really stick to keep it simple. I'm sticking to like three, four projects a year, right? Is this one of my three? I slot them in, right? When I say yes, I'm not like slotting five over the top of each other. I'm slotting like this four-month window, I'm focused on this project. So if I want to do something that's outside my slots, right, as a dentist with your time, right? You're doing real estate, you're doing this. If you wanted to do another thing, you don't really have the bandwidth because there's gonna whatever you're saying yes to, you're saying no to something else, right? No, so you would need to find a Sherpa in whatever area you're interested in, right? Like I'm interested in this, um, and I want to diversify my portfolio into this, right? You need somebody you really trust to be the one doing it because you you're not gonna be able to do it well. Yeah, or you're gonna kill something else that's already successful for you. Uh no, so one of the ones that comes up a lot that I want to mention in investments is private lending. Okay. So, you know, a couple years ago, I did quite a bit of private lending with just like my excess cash, right? I was like, well, I can put in the bank for five percent, or I can get you know a much higher return over here. Um the hard part is private lending is really hard when all the interest rates are jacked up on everybody, right? So, like I mean, my returns on the private lending are very good because I just I say no to a lot, right? So somebody really wants me to lend to them, like like I'm getting good returns, okay? Because I know that it's not like an institutional product where I'm getting like seven percent, right? It's like if crap hits the fan, I might have to step in and take over the project, right? And bail out the project, and it's not where I live, so that's a lot of freaking work to fly across the country and do that, right? Yes, so so um, so anyway, so I had this in my brain that, like, hey, I may need to hop in on these projects, okay. And what actually ended up happening on I don't remember how many private land, let's say four or five, like at least two to three of them, like I was having calls with folks, like coaching them. Yeah, right. Like, okay, your interest rates has doubled, but your performa like was at. Like, what are we gonna do about it, right? Like to get back my capital and then get back my interest from my principal, right?

SPEAKER_00 32:36

Yep. Um, so um it's not where you know so you're saying that that added a little operational drag that you didn't you didn't intend.

SPEAKER_01 32:46

I had it in my side of my brain, right? Like, like, like, like, just like uh a hard money lender, right? They always say, like, you know, what happens if if it if it goes into default? Well, you take over the property at 70% of value, right? And you know, you want to earth their mid-construction, then you gotta find another contractor to like finish the construction, right? But you don't want to, but it's the business model at work. So I I guess I'm just saying, like, um you really need to have somebody who really has their stuff together, right? Uh, because stuff happens, and and uh somebody who's your Sherpa needs to be a if you want uh returns above 7%, your Sherpa and their team need to be problem solvers, right? High integrity, discipline, grit, problem solvers.

SPEAKER_00 33:38

For sure. Yeah, that's well said. Um I was on this, I was just gonna summarize and say basically time and energy and capital allocation need to align with who you are and what you actually want. Right? So time, energy, and capital. Because where you're allocating capital may pull your time and energy in this specific example.

SPEAKER_01 34:04

In the AI world, there's only two things we're actually doing as we go more AI and A and I. It's time, energy, and capital. That's all you're doing. You're a quarterback of those two things. Where are you allocating time energy? Where are you allocating capital? That's it. And we can dive into another one on that. But that that is what it's like to live in the AI world. Uh so yeah, yeah.

SPEAKER_00 34:28

Oh, the just the last thing I was gonna say is is basically anything I'm in, whether it's real estate deals or the dental practice, right? So I you're talking about your Sherpa, but or you could have like your right-hand strategic partner, right? Whoever that person is that you trust is like your ride or die person, because they'll be able to take a lot of that off your plate. So that's that's the value of a strategic partner. I have a director of operations within my dental practices, um, and the it's a even though she's an employee, right? It's basically like my my partner on the admin operation side. And she just got a very good raise. People like other dentists I talk to would be like, How the heck are you deciding to pay her that much? Because she makes my life easy, right? She solved so many problems, she filtered so many things for me that it's just it's worth it. It's completely worth it. And that's the same thing in real estate. I have strategic partners where I'm like, I don't want to go do this new partnership. That's the filter, the no filter, right? Like someone's pitching me a deal and I have to go through it. I'm just like, I I like these people I work with right now because I know who they are and the problems they're capable of solving. I don't know who this set of people is, and I don't know if they can solve the type of problems they need to solve. And I don't want to have to go drive there, fly there, whatever, and solve them for them.

SPEAKER_01 35:46

And stick to your asset class, right? That you know, like uh there's this build, you know, buildings are going down for their prices are coming down, right? Especially downtown in my area. Downtown they kind of let things go a little bit. So there's this building that's been on the market for a while, like $90 a square foot, fully occupied, mixed use, okay? Mostly fully occupied, maybe a couple empty spots. So it's like kind of attractive in $90 a square foot, right? And so me and my partner are like, man, we should take a look at this because it's beautiful, it's old, you know. And before we toured it, okay, I ran the financials and I said, what happens if we got them to cut the price by like 15%, right? Like we really won. And we did we had them do owner financing for a couple years because you inherit the loan, and then yeah, we only put like 50 grand or something in, or something, 100 grand between the two of us. I'm like, what if we really just did the best on the closing and everything? It's like low income, okay? It's it's a low income property. Our net take home cash flow at the end of the year was 10,000 each. In the best case scenario, right? You you get excited, the shiny thing. Look at this beautiful building, low price, almost fully off. Like we get owner, we get we get inherit this low low interest rate loan, and we get owner financing. Like you win on so many levels, right? Oh, dude, we just killed it. But I ran this before we even toured it. So when we toured it, we were just like, yep, there's no way I would manage this, be an asset manager of this property for 10 grand a year. It's a distraction for our core competency, which is doing these ground-up developments right that are they're awesome, they they they positive impact for the community. We're good at it, we're fast at it, right? Everyone makes good money. Like, like, why are we getting distracted, right? So basically, it just cured our FOMO.

SPEAKER_00 37:34

Yep. That's that's all it did. That that I that's the very important thing of like knowing what your time is worth and what your energy is worth, right? That is that is like the most important filter of knowing what to say yes to and known to, and what is a distraction from your core competency. I mean, this is like getting getting a little bit into the weeds, but just like like I if I'm I have like you know, 16 bank accounts, 17 bank accounts, all the properties, it gets complex. And every year you have to go in and download bank statements and maybe mortgage uh, you know, property tax escrow, all this kind of stuff. And I'm just like, this is wasting my time. And I said, I'll just send an email to my lender and see if they'll put it all into a nice little folder for me that I can forward onto my account. And they do, right? Yeah, never never do something that someone else can do for you that is already getting paid to do that thing. It's just stupid. So 100%.

SPEAKER_01 38:26

If you're paying someone, they better be doing this stuff for you. That's what I'm always like. Like, if I'm paying you, like do this. Like if you want to be long-term partner, like this is your area, like do it. Um okay, last question, so we can exit here. Um, let's talk about like what is your exit plan, and then I'll talk about what is my exit plan. So, what is your exit plan, Reed?

SPEAKER_00 38:48

Yeah, yeah. So I basically, I mean, I should pull that up, but because I wrote this in our our Facebook group as kind of a uh a summary, but I basically said I don't really have a traditional exit or retirement plan. You know, I think of it more of an ongoing transition to doing the work I want to do in the capacity that I want to do it. Um, so I don't like ever see myself fully stopping work, right? Even even dentistry, I think I can do in some capacity for a long time, as long as I don't feel that operational drag. Um, I think it's more about the work maybe evolving over time and like as my interests change, right, the work will change with it. Because I always want to be productive in some capacity. Um, I think the biggest shift is just going from like obligation driven to like opportunity driven because it's not fun to feel obligated to do something, but when you feel like you can opt into an opportunity, like that's exciting. I want to do more of that. Um, and so I just I just think more like I want to keep elevating to be on a higher level, more strategy, more investment, more capital allocation, and less nitty-gritty in the in the weeds. So I love it.

SPEAKER_01 39:51

Uh I I I I resonate with that. When people ask me what's my retirement plan or my exit plan, it's like, dude, I love what I do, right? And if I don't love something, I kill it, right? So like I don't plan on ever retiring. It's fun. Yeah, I create impact for my community. Relevancy. I see people retire, right? They're the head of the hospital or they're the head of this bank. They retire, they're no longer relevant. The only people they're relevant to are their wife, their kids, uh, you know, the caddy at the golf course.

SPEAKER_00 40:27

I never I never put much weight in relevancy, but I think that is like probably higher on my mind than I would think. Right.

SPEAKER_01 40:35

Yeah, it's not so much like ego, like who I am, right? It's like, am I in the game? Yes. And once you're out of the game, it's just like you know, I go on my walk, I go hit golf balls, like it's just not the life I want to live, right? I want to be in the game.

SPEAKER_00 40:54

If you're a competitor, you want to compete.

SPEAKER_01 40:57

Yeah, compete to just like you want to do something, impact, like like communicate with folks, right? Like, like, um and then a balanced life, right? Like if your life is balanced, right? You're a great time with your kids, great time with your wife, you're taking awesome vacations, right? You're you're super healthy, right? You're fit like you want to be. Like, if work isn't overshadowing those other areas, uh, causing pain on those other areas, keeping you from being the best version of yourself in those other areas, like, and it serves you and it feeds you, why would you end it?

SPEAKER_00 41:34

Yeah, exactly. Exactly. Don't yeah, basically build a life that you don't want to retire from. And this is going back to what I said before, it's like every year gets better to my life, and I would hope that that's going to continue on that trajectory. So 10 years from now, I like my life even better than I like it today. And that's exciting, and that keeps you kind of you know driven and and looking forward to the future instead of dreading it. And yeah.

SPEAKER_01 41:59

So uh, and uh yeah, so if you want to be involved in these discussions, cop in our dental real estate partners uh Facebook group, we'd love to have you. And then two, if you guys have uh if you're looking to build a lifestyle practice, like uh Reed and I both have friends who've done it very successfully. Uh Reed and I don't coach on this, but we have friends who coach on this who who who've done it, right? So real deal, not consultants, like they're just uh guys who've done it and they like giving back. And um we can connect you. Yeah, we can connect you. So good? Cool. All right, have a great week.

SPEAKER_00 42:38

Thanks for joining us today. If you want to connect with us directly and keep the conversation going, join our private Facebook group. We'd love to have you in the discussion. If you want to see or listen to any of our other shows, you can find them on our YouTube channel by searching Dental Real Estate Partners. Or if you prefer to listen in podcast format, look for us on your favorite podcast app or streaming platform.

SPEAKER_01 43:02

Content from Dental Real Estate Partners is for informational purposes only and should not be considered financial, legal, or investment advice. All investments carry risk. Past performance does not guarantee future results. Always consult a qualified professional. Dental Real Estate Partners is not responsible for outcomes from actions taken based on this content.