Why I Don't Like Financial Advisors

T

he merchants of “once-size-fits-all” – why America’s financial advisors have failed to create financial security for a generation of professionals.

Let me begin by saying that I have nothing personal against financial advisors.

Many of them are well-meaning people, doing the best they can for their clients (with what they know). However, I find myself at odds with the mindset and principles espoused by most financial advisors…

Financial advisors try to come to the marketplace with a one size fits all approach. Everything is under one umbrella. “We'll handle all your needs from retirement planning, to asset protection, to estate planning, to insurance deeds, et cetera, et cetera, et cetera.” 

This is certainly true of some of the firms that offer retirement planning for dentists.

Can one person or one firm really do everything well?

In my experience, one person/entity cannot. Most individuals and companies have a core skill set in which they excel. Unfortunately, there is allure to trying to be everything for everyone. Many financial advisors are tempted to think “The more I offer, the more clients and business I can get.” Maybe that's true, but…

How well are you serving your clients?

In Freedom Founders, we focus strictly on real estate assets. That's what I know like the back of my hand and what the people inside Freedom Founders know. When we need help with other aspects that help people along their journey (practice management, expanding multiple practices, exiting practice, tax services, insurance, estate planning, asset protection, etc.), we have people in our network for those areas of expertise. We DO NOT try to do everything. We simply do what we do very, very well.

Conventional wisdom vs taking ownership of your Freedom

When I was young, I had already started buying real estate before I graduated dental school. When I became a dentist, I decided I needed to find a dental CPA.

There's more to retirement planning than financial advisors know - dr. david phelps dds
Dr. David Phelps Speaking – Retirement planning for dentists is crucial and necessary.

There was a dental CPA firm that came to the local dental school and gave talks. The first time I went to meet with one of the partners of this dental CPA firm, he dropped his glasses down lower, peering through his bifocals to read through my past tax returns. I already had half a dozen or so real estate properties which were listed on my return.

This dental CPA flips through the pages, then looks back up at me over his glasses and says, “You know, David, this is all fine and good, but you need to stick with what brought you to where you are.”

What he was really saying, in a backhanded way, was “You know, David, you're doing all this real estate, but you're a dentist. You need to stick with being a dentist.”

There was some truth to that. 

There is a time value (the value of my time spent on something) on what we do. I was young then. My time value as a dentist was not exceedingly high at that point – My production per hour was lower. I often tell people to focus on the economic engine of their ability to produce income first. Usually, that’s your practice or business. You make that as strong as possible, and then you can begin to use that income to buy back your time, through alternative investments. 

But the fallacy of the CPA’s perspective was in thinking sequentially vs simultaneously. His mindset was rooted in the traditional approach to life and career. Focus on school first. Then get a job. Work your way up the income ladder. Get a family. Then save for retirement, which will come at age 65 (if you’re lucky). 

Very linear, sequential thinking. An approach that depends on trading time for dollars for the majority of one’s life. 

At that time of my life, I didn't have any kids. I had the capacity and the time to get more involved in my financial future. I didn’t have to wait until a distant “someday”. I could start creating financial freedom simultaneously

I didn’t understand all of the principles at play then, but I instinctively knew that there was a better way. 

Today I'm happy to say, looking back, that I was right. He was wrong. If I had followed his advice and tamped down on my desire to become more of an advocate for my financial future, I wouldn't have been able to leave dentistry when I did about 18 years ago during my daughters health crisis. I wouldn’t have learned how to build my own financial future.

Getting wise counsel is everything. 

Most financial advisors only advocate for what they know. 

If real estate is not in their wheelhouse, they will discourage you from pursuing it simply because it is outside their comfort zone or area of expertise. 

Why I’m a fan of staying out of Wall Street

Financial advisors, typically, try to be all things to all people by using the same model, almost across the board. That model = the financial markets. Now, I am not demeaning the financial markets. If you want to keep some money there for various reasons, then do it.

But if you want to diversify and get into more stable and reliable investments, you’ll have to start looking elsewhere. My preference, real estate.

retirement planning for dentists & financial advisors - freedom founders
David Phelps DDS at a Freedom Founders Event – retirement planning for dentists is crucial to think about.

Real estate is very important and has served me extremely well going through a number of market cycles and corrections. I understand how it works. I understand the inefficiency of that marketplace, which gives it more stability than the efficiency of the financial markets. 

We’ve all seen in the last several months that the financial markets are all over the place – Up, down sideways, inside out. 

It’s an emotional rollercoaster.

Real estate is not immune to the cycles, but we in Freedom Founders know how to slice and dice them. This means, using the leverage of our community, we can curate the best deals for our own customized path to financial freedom.

This is a focal point of mine – It’s the lane I choose to stay in.

What happens when you need something out of your area of expertise?

I understand when I need help outside of my area of expertise. I have professionals that help me, but I am still the orchestrator, the decision maker. This is what we teach our members in Freedom Founders – How to become your own financial advocate.

Not that they should ever be taking on more than they can do themselves, but surrounding themselves with people that have expertise, experience, advice, and don't always have an agenda for your money. That’s very important because everybody has a “plan” for you… as long as they can get your money.

You want to be around people who can serve you authentically, while you still have the ability to make decisions based on what you know is right for you.

That's why I'm not a big fan of the general financial advisor trying to wear too many hats and do everything. This is especially important when we go through market corrections and market cycles. That's when most of their one size fits all “plans” fall apart.

No one cares about your investments as much as you do

Each of us has a responsibility to ourselves to become our own financial advocate and take ownership of our Freedom. 

 

Will you let others decide what you do with your own money OR will you seek the expertise necessary to make the best decisions for your future? The choice is yours.

To your freedom!

– David

P.S. Whenever you’re ready, here are some other ways I can help fast track you to your Freedom goal (you’re closer than you think) :

1. Schedule a Call with My Team:

If you’d like to replace your active practice income with passive investment income within 2-3 years, and you have at least $1M in available capital (can include residential/practice equity or practice sale), then schedule a call with my team. If it looks like there is a mutual fit, you’ll have the opportunity to attend one of our upcoming member events as a guest. www.freedomfounders.com/schedule

2. Become a Full-Cycle Investor:

There are many self-proclaimed genius investors today who think everything they touch turns to gold. But they’re about to learn the hard way what others have gained through “expensive” experience. I’m offering a free report on how to become a full-cycle investor, who knows how to preserve and grow capital in Up and Down markets. Will you be prepared when the inevitable recession hits? Get your free report here.

3. Get Your Free Retirement Scorecard:

Benchmark your retirement and wealth-building against hundreds of other practice professionals, and get personalized feedback on your biggest opportunities and leverage points. Click here to take the 3 minute assessment and get your scorecard.

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