SPEAKER_00 0:00

Welcome to the next episode of the Real Estate Real Life podcast. We're particularly excited about this recording. We just returned from the White Coat Investor Physician Wellness and Financial Literacy Conference that was held in Las Vegas, Nevada. This was our second year as a sponsor for Blacks on Real Estate. And we are here to summarize four of our top learnings that come from attending that conference and speaking to about 300 attendees who either stopped by our booth, attended a lunch that we hosted, attended a dinner that we hosted. And what we want to share with you today in this podcast is some of the themes that we heard taught off the presses coming off of that conference.

SPEAKER_01 0:43

We go to these conferences to speak and to teach, and we love doing that, but we are lifetime learners. We always try to approach things from a beginner's mindset, and there is wisdom in the crowd. And it's always interesting to see the same themes over and over again. I think the first thing that stood out to me was just that whoever is listening to this podcast right now, you're not alone. We spoke with so many people, had chances to do flash one-on-one coaching sessions with people at our booth or after our talks. And everyone is in a different stage in the journey. And we're all on the same kind of a mission, same trajectory. We're all trying to get the same thing. We're trying to be grateful for what we have, to be excited to want more. We all feel a little bit nervous that we maybe don't know enough or that others have more than we have, or we don't have as much as we ought to have. And that's all that's all okay. It's so affirming to speak to so many people coming from such a diverse set of backgrounds that are at different stages in their journey, and to feel the same emotions with those individuals and just know that ultimately we're we're all in things together.

SPEAKER_00 1:52

Dr. Jim Dolly, who is the founder of Whitecoat Investor, opened the conference during the reception dinner by speaking to this point directly that he knows from running Whitecoat Investor and the conference for many years that people feel alone. They feel as though they have no one to talk to about their finances. And I loved what he said. He said, in this room, there's everyone from someone who is negative multi-hundreds of thousands of dollars in debt, you know, likely from student loans, to someone who is a DECA millionaire plus. And yet we all share the same ideas, the same struggles, the same growth trajectory. And it's okay to want to think about money, to want to think about your finances, to want to improve that area of your life and to do so in a community. I encourage everyone to find that community. We hope that we provide that for you here through the Real Estate Real Life podcast and through the other activities that we do at Black Swan Real Estate, because sunshine is the best disinfectant. There's so much shame and doubt around money in all cultures and in Western culture. And I am a big believer that where we bring communication and transparency and honesty, that's where we can bring more abundance and clarity and growth. So our first lesson from the conference, and hopefully it's affirming for everyone listening, is you are not alone. It may take you a little bit of time to find that community where you can talk about finances and grow together and share big goals and share big wins. But when you find them, hang on to them dearly and appreciate that community that's created there to talk about finances with.

SPEAKER_01 3:33

Another thing that I know that we really noted and saw over and over again is that people are often looking for certainty. And then when they can't find that certainty, that gives them a reason to not take action today, to not make a decision today. And something Elaine and I have figured out is we've had the privilege to spend time with people who are further down the path than us. I guess we always thought at some point we'd get to the person that had it all figured out, like uh the people running the country or running large companies that they had it all figured out and they had a lot of certainty about the future. And what we've seen over and over again is that those people, they just are very comfortable with being uncomfortable. They're very comfortable with being uncertain, and they have the courage to make decisions today based on the information that they have, and then have the courage to change that decision. Those decisions are not final, you can always change your mind, and sometimes it takes a lot of courage to leap out into the unknown and to make a decision when you don't have absolute certainty about the future, and then it takes even more courage to change that decision when it turns out that you made the wrong call. The metaphor that I love is you get to a crossroads. You're driving down the road in your car, you get to a T in the road, and you need to go left or right, you don't know which is the right way, and you could spend your whole life sitting at that intersection just thinking, analyzing, wondering, trying to wait for someone to pass you by and see which way they go, maybe follow that person, and you could spend your whole life stuck in that situation, or you could just pick a direction. You probably in your heart of hearts have an intuition about what is the right direction to take. Take that direction and go fast. Go as fast as you safely can and get very comfortable doing U-turns until your whole life becomes this joyful drift race where you're going as fast as you can safely go and taking joyful U-turns often, joyful course corrections. There's no way you can ever have complete certainty about today, and don't let it ever be an excuse to not take action. Don't ever let it be something that holds you back. Don't get stuck in analysis paralysis.

SPEAKER_00 5:34

I'm over here stifling my laughing that your interpretation of certainty and uncertainty is drift racing.

SPEAKER_01 5:41

I used to race cars back in the day, so that's a metaphor that feels very apt to me.

SPEAKER_00 5:46

I'll give a different one, maybe for different listeners.

SPEAKER_01 5:48

If I have a masculine metaphor, maybe you're gonna have a feminine metaphor.

SPEAKER_00 5:50

I wouldn't say mine is feminine, but I think of it from the perspective of medicine or public health. Many of our listeners are physicians, and even if you're not, you've consumed healthcare in your lifetime. And you might think of it as a level of certainty of let's take something like Tylenol, very simple, over-the-counter medicine. The extreme majority of the human population has taken it during some time in their lifespan. It's generally well tolerated. It works pretty well. There's a level of certainty there. And yet, if someone asks you, if you're a physician and someone asks you, can I be 100% certain that Tylenol will not harm me? You cannot say yes to that. There can always be a person with an allergic reaction or a medication interaction or just some fluke reaction to that medication. And it's the same thing in finances. And so we have a level of comfort with uncertainty in medicine. We might be, say, a primary care doctor and a patient asks us, say a healthy middle-aged patient asks us, do you think I'll be alive in 15 years? And we can say, Yeah, I mean, I think so. You know, you're healthy if we look at population trends and based on your life expectancy and you have no cancer or no chronic conditions, but we can't say with 100% certainty that person could have a fatal accident a few minutes after leaving the office. And yet we're very comfortable with that balance or that dance between certainty and uncertainty in medicine or in our human lives because it's just so much more intuitive. And yet what I find is that same group of people, physicians, when they're in relationship with their finances, they often really struggle with uncertainty. They want to, they seek a 100% probability. And really, outside of, say, like a CD at an FDIC insured bank, there's really no such thing as 100% certainty in the world of finances. And so I would encourage people to maybe adopt some of that comfort in uncertainty that comes from medicine, clinical care, public health, and borrow that way of thinking and bring it over into your finances. There will always be risk. There will always be things that are somewhat unpredictable. There will always be the little tiny fine print, the one in a hundred thousand or one in a million or one in 10 million things that happen. And yet you still have to proceed, right? Just like you would encourage your patient, like, yep, still take your medicines, get your tests, do your things. There's always risks to these sorts of things. But in general, the benefits far outweigh the risks. And that's how I think of finances as well. So there's Nick's way of thinking about certainty and uncertainty. And then there's my way of thinking about certainty and uncertainty. And I just find it to be interesting in talking with investors, not just at the White Coat conference this past week, but the hundreds of investors that Nick and I have done calls with over the last 10 plus years. And this craving that exists for certainty. And what I find so tragic about it is that I will see that it causes people to not make a decision at all. And that's where the real, like actual suffering can come in because then people get stuck leaving their money in a checking account and it's eroding as inflation goes up and the their dollar is not growing. Some level of uncertainty is required to just show up to life, and some level of uncertainty is required to grow your finances and to grow your financial mindset. And the more you can take calculated risk and be comfortable with uncertainty and make wise and educated decisions, right? Just like you wouldn't necessarily encourage a patient to take an incredibly risky medication or if they're allergic to one medication in a medication family, you don't prescribe another medication in that family, right? Because you know that the risk probably outweighs the benefit at that point. You would prescribe a completely different class of medications to still treat that same condition. Take what you know about certainty and uncertainty in medicine and apply it to your finances.

SPEAKER_01 10:00

The next thing that I would say was a huge theme for us is understanding tax strategy, have having not just strategy, but just knowledge of taxes. So for most American households, near nearly all American households, taxes are your number one expense. They're your number one expense, and you pay property tax and sales tax and everything, though we're specifically talking about income tax. So at Whitecote Investor, a conference that is geared towards physicians. Physicians have one of the most extraordinary tax burdens of any profession in the United States. Those individuals that have a high income, it's often on a W-2 or a 1099, and they just pay an extraordinary percentage of that income in tax. And mastering tax, it is an unbelievably important life skill. It's something that you just need to dedicate yourself to mastering. It doesn't matter what profession you're in, if you own a business, if you're a W-2 employee, if you are a solopreneur, like you must have a very firm understanding of tax if you want to be financially successful. In the United States, our tax system is a complex system. It's not just a way for the government to collect revenue, it's how the government incentivizes certain things, how it subsidizes or encourages certain things, and how it discourages other things. And once you understand that and you understand how you can do the things the government wants you to do, or do them in the way the government wants you to do them, for some people that's an eye-opening thing, but we heard lots of different things at the conference. For example, there's one individual who said that they preferred to get a 1099 instead of a K1 because there's different investment opportunities. And the secure freedom fund that we offer, it pays out on a K1 so that we are able to share depreciation and significantly reduce the taxes associated with the investment compared to, say, a bond or a CD where you'd get paid on a 1099 and someone who is getting paid on a CD. There was there's one person we spoke with who has hundreds of thousands of dollars in CDs getting less than a 4% rate of return. And they liked that because they said they could file their taxes on time, and they thought if they received a K1, that would somehow delay, defer, penalize their taxes. Their after tax rate of return in those CDs is probably something like 2% or 2.5%. And Secure Freedom Fund, it's probably something like 8.5% or at least 8% fixed. It's like quadruple, at least triple the rate of return, but they were really hesitant to receive a K1. And that has nothing to do with Secure Freedom Fund or CDs, and it's just a gap in understanding taxes. So wherever you are in your understanding of the way the U.S. tax system works, there are so many phenomenal educational resources out there. There were lots of amazing resources at the Whitecoat Investor Conference. And you must understand the US tax code and ways to improve your tax burden to reduce your tax liability if you're going to be financially successful. That is simply how the U.S. economy works. And until you a lot of people say, oh, that's not my profession or taxes are hard or complex or I'm not an accountant. And those are all limiting beliefs. You have to understand the way taxes work if you're going to be financially successful.

SPEAKER_00 12:59

Absolutely. I don't think that someone needs to be a tax expert, right? That's why that's why you surround yourself with good CPAs. When someone's taxes become pretty complicated, they may even have a tax strategist or a tax attorney. But there's a couple of basic things in taxes that people should understand, particularly high income earners who are so taxed burdened. Taxes are likely your number one expense more than your housing, all of your discretionary spending combined, all of those things, taxes are likely your number one expense, 40 to 50% for most high-income households. And then the other thing I might share is that similar to our bullet point before this around certainty, what I find is that people might experience like either a sense of overwhelm around taxes, of okay, I don't have a perfect understanding of it. So I won't understand it at all, or I can't understand it at all, or they'll desire to bring taxes completely down to zero and say, well, if I can't bring taxes down to zero, then no sense optimizing. And I'll share with you that my understanding of the US tax code is that unless something is a bona fide nonprofit, there's no such thing as zero taxes. There's tax efficiency, there's tax optimization, there's tax deferral, all sorts of things that can happen to lower your overall effective tax rate. But there's really no such thing for us as US taxpayers to bring our taxes all the way down to zero. And yet that doesn't mean that the work to optimize your taxes is not important. If someone can bring their overall effective tax rate down from 50 to 40% or from 40 to 35% or whatever that delta is that you're able to create in your personal financial tax situation, all of that is helpful because that allows you to maybe eliminate some taxes, say going from an investment that's taxed on, say, a 1099 to an investment that benefits from depreciation and other tax advantages, or deferring some taxes so that you're able to have control of that capital in the meantime. And then eventually there may be a situation where then you need to pay those taxes into the IRS. But if you're able to defer taxes for five, 10, 20 years and you have control of that capital in the meantime, you can be doing something good with that capital, either spending it on your household or investing it and growing from it. Don't be scared of taxes, would be sort of my like call to action for people. Learn some basic things. You need not be a tax expert. That's where you bring in CPAs and tax strategists and tax attorneys, but having some basic understanding of taxes will be extraordinarily beneficial and will have a staggering ROI for you across your earning years. And know that there's no such thing as perfection in taxes. You really need to be thinking about tax efficiency, tax optimization, and tax deferral and bringing your overall effective tax rate down as much as possible. But going back to that second point, like when we chase certainty, that's when we get stuck in analysis, paralysis, and don't do anything. You don't have to be a 100% expert on taxes. You're not going to get your taxes down to 0%, but learn a little bit about taxes, lower your overall effective tax rate, bring in your team to support you with all of the finer details of your taxes as you grow and advance your investment portfolio. And that's really all you have to do. And I find that the people that do those things make moves, make investments, grow their portfolio. And as they do so, they grow their tax knowledge and then they become more and more comfortable. So then they're more and more comfortable with different types of investments. And then that cycle becomes a self-perpetuating positive reinforcement cycle.

SPEAKER_01 16:44

Then I'd say the last item that really stood out to us, or I don't know, one of our biggest takeaways or piece of encouragement we would share with anyone listening to the podcast today is that it's okay to want more. And it was so interesting and beautiful and awesome to talk to people who are at different stages of their financial freedom journey and different stages of their career. And in the United States, I think it it almost doesn't matter how much you have. Hunger is a beautiful thing when you sit down to a fine meal. They say bone appetite, which means good appetite. And it's impossible to enjoy something. It's impossible to be happy, it's impossibly satisfied if you're not first hungry. So it is a beautiful, blessed thing to be hungry. And if you're not hungry, there's very little that Elaine and I can do for you. You must be hungry, and then it's okay also to be satisfied. And life, a beautiful life, is in that yin and yang between hunger and appetite and satisfaction and happiness and just being content that your hunger has been satisfied. So I I absolutely love one of the one of the individuals that that we spoke with. This is like our very last conversation of the entire conference. And they had just turned 65 years old and were like imminently retiring within days. And we were talking to them like at the end of their conventional career and hearing their beautiful life stories and where they were on their retirement journey and how we could potentially help them with the Secure Freedom Fund and all of the beautiful plans that they had for their retirement. They certainly did not plan to be idle. They planned to continue to serve mentorship was a theme that came up over and over and over again for them. They were one of the most joyful people that we spoke with the entire conference. And I think for a lot of people, when they get to retirement age or they're contemplating retirement, it can be a daunting thing. And so to see see the joy and beauty in their journey and closing that chapter of the journey and then that they're still so hungry to serve. This is a person who's going to serve until they can't serve anymore. And it was just the most perfect success story I could have seen. It was beautiful to close out the conference with it.

SPEAKER_00 19:05

That concept of and that concept of cognitive flexibility, being able to hold two thoughts at the same time that maybe seem unrelated or seem in juxtaposition to each other, that is a concept that will help you, not just in your finances, but in all areas of life. Just recording this podcast with my amazing husband, I can say I have an amazing marriage that I am completely satisfied with and brings me a ton of joy. And I am committed to always making it better, right? You can feel that same way in your finances. You can feel like I am incredibly blessed. I have an income more than I ever imagined I would. I'm better off than 99% of the world's population. And I desire for more. And I want to steward my money well. And I want to grow my wealth. And there's no shame in either. There's no shame in either. And I think particularly in medicine, we have been so brainwashed that we shouldn't think about money. We shouldn't think about growing our finances. We shouldn't think about focusing on net worth or those sorts of things. We should just focus on taking care of the patient in front of us and making ourselves a martyr and sacrificing it all. And I'm so grateful for things like the White Coat Investor Conference and other thought leaders out there who are changing the culture of not just medicine, but many high-earning professions to say it's okay to want to serve and to take care of people and to be a healer. All of those things can coexist with an and that you also want to take care of yourself. You also want to grow yourself. And that includes financially. And so just think about how you can use the cognitive flexibility of the word and in all areas of your life. And since we're focusing on lessons learned at the White Coat Investor Conference, particularly your finances, one thought and a second thought, it's okay to be extremely grateful, realize your blessings, be so proud of what you've created and hunger for more. And I found that the people who were able to carry that conversations were so much easier, so much smoother. You could tell they had a sense of clarity, a sense of certainty, a sense of self-assuredness. And then the folks who were struggling with maybe shame or doubt of is it okay for me to want more? Is it okay for me to want to invest? Is it okay for me to want to grow my wealth? Shouldn't I just be happy that I already have a six figure income and a nice house and a decent car? Those people were, you could just feel the angst that they carried. And it was almost like they were carrying this like heavy backpack around. And if you're listening and you've experienced that, going back to our first point, you are not alone. You are not. Alone. So many people experience that. And yet, this is also my offering to you to consider could you let that go? Could you incorporate the concept of and into your life and say, not only is it okay, it is righteous for me to want both because that's what keeps me hungry. That's what keeps me creating in the world, growing, learning, doing, serving, living out more of this human existence. Those are our four lessons from our recap of sponsoring Black Swan Real Estate at the White Coat Investor Physician Wellness and Financial Literacy Conference in Las Vegas just this past week. So, in summary, you are not alone. Develop a relationship with both certainty and uncertainty. Increase your tax knowledge, but don't feel like you need to be a tax expert. And it is absolutely okay to want more. Those are four themes that came up for us over and over again as we spoke to a few hundred investors there at the conference.

SPEAKER_01 23:04

We dearly hope that this podcast has left you both satisfied and wanting more. I think this is a solid segue there.

SPEAKER_00 23:11

Good job there, Nick.

SPEAKER_01 23:12

And if so, then please do subscribe. Or if you think that this would help someone in your life that struggles with feeling like they might be the only person that doesn't have their financial situation figured out and they just need to know that they're not alone or anything might serve them, please share this with them. We would love to appreciate that. And we look forward to seeing you on the next episode of the Real Estate Real Life Podcast.

SPEAKER_00 23:35

As always, here at the Real Estate Real Life Podcast, we are not tax professionals or investment advisors. Everything here is for informational purposes only and educational purposes. All investment has risk. As you're contemplating any investment, please do speak with your professional advisors, such as a CPA or attorney.