Episode 62 – Creating Wealth in Your Dental Practice with Tim McNeely, CFP, CIMA

“Wealth is not just money. It’s the ability to take care of those you love, support the causes you care about, and making your dent in the universe.”  ~ Tim McNeely

Nearly every dental practice is sellable.  

The real question is are you going to garner top value when you go to sale. And can you even create financial freedom BEFORE you hang up the handpiece?

You probably got into dentistry because you want to make a difference. You want to make a mark and do some good in the world. But in order to do so, you need to have a certain level of financial success so you can take care of your needs and your family’s future. And, let’s be honest, you want to enjoy your life now, not wait until some unknown time in the future. 

The good news is, you can do this with an Investment Grade Practice. It’s all about making smart choices. But how do you know you’re making those smart choices? Join me and my fellow podcaster, Tim McNeely, CFP, CIMA host of the Dental Wealth Nation Podcast as we share tips that can help you create assets in your lifetime that will endure into the future, including:

• Mitigating risks in taxation & take care of your heirs
• Knowing where your money and data are
• Building your legacy so you can enjoy it today

EPISODE TRANSCRIPT

Regan 0:00
Hi, Dr. Regan Robertson, CCO of Productive Dentist Academy here and have a question for you. Are you finding it hard to get your team aligned to your vision, but you know, you deserve growth just like everybody else? That’s why we’ve created the PDA productivity workshop. For nearly 20 years, PDA workshops have helped dentists just like you align their teams, get control of scheduling, and create productive practices that they love walking into every day. Just imagine how you will feel when you know your schedule is productive, your systems are humming, and your team is aligned to your vision. It’s simple, but it’s not necessarily easy. We can help visit productivedentist.com/workshop, that’s productivedentist.com/workshop to secure your seats now.

Tim McNeely 0:46
I really define wealth as not just money, but it’s the ability to take even better care of the people you love, support the causes that you’re passionate about, and really continuing to make your dent in the universe.

Narrator 1:00
Welcome to Investment Grade Practices podcast where we believe private practice dentists deserve to get the lifestyle today while building an asset for tomorrow. Join your host Victoria Peterson to design the practice of your dreams and secure your financial independence. Let’s get started.

Victoria Peterson 1:23
Welcome, everyone to another edition of Investment Grade Practices. I am here with the one and only Tim McNeely. Tim is the CEO of Lifestone Wealth Management and what I love most about Tim, is that he understands the entrepreneurial journey of dentists, he understands the ups and the downs, and how to help you mitigate risk and taxation, how to take care of your heirs, how to really create assets that will serve you well in your lifetime and endure long after you’re gone and people are smiling at your photographs. So Tim, welcome to Investment Grade Practices.

Tim McNeely 2:06
I’m so excited to be here with you today.

Victoria Peterson 2:09
Now you’re coming to us from California and the wine country, yeah,

Tim McNeely 2:12
Beautiful central California, San Joaquin Valley and Bakersfield.

Victoria Peterson 2:18
Ah, so did you get hit by all the snow and things like that, that we saw on the bizarre weather of California this year?

Tim McNeely 2:24
Our current river is so full, we’re having record outflows from the dam and expecting a little bit of flooding along the river. So California is drought, and California is flood and the year we get the average doesn’t exist.

Victoria Peterson 2:39
You know, and it almost sounds like a dental practice.

Tim McNeely 2:42
Right.

Victoria Peterson 2:43
We have feast and we had famine and then we have everything in between but welcome from California. I’m joining you here from actually rainy but gorgeous Kailua Kona. So technology is a wonderful thing for our tried and true listeners, you know that I bring on guests who help you build investment, great assets, while all practices, nearly all practices are sellable. The question is, are you going to garner top value when you go to sale and could you even create financial freedom before you hang up the handpiece and I think Tim has a lot of nuggets for us. So Tim, let’s just start out with the basics and get a definition here. What does it mean to create wealth?

Tim McNeely 3:29
Yeah, so I really define wealth as not just money, but it’s the ability to take even better care of the people you love, support the causes that you’re passionate about, and really continuing to make your dent in the universe.

Victoria Peterson 3:41
I love that so much. In my book that will be published one day, your book is fabulous by the way, there’s a whole section on investing in your self-care as a peak performance tool. So how much of wealth do you think is embodied in health and relationships and things like that?

Tim McNeely 4:01
I would tell you that health is wealth, if you don’t have your health, if you’re not feeling good, if you’re overworked and stressed out by your practices, it doesn’t matter how much money you’ve got in the bank account, because you’re gonna be miserable and your relationships are going to be suffering, and for me, that’s what gets me up every day is the people I love and those causes I care about and I would argue who cares about the size of the bank account if you don’t have people to share it with.

Victoria Peterson 4:23
That’s right. That’s coming from a financial planner, guys. It’s this killer for somebody who deals with money all day long. So what does it mean then, you know, my partner, Dr. Baird wrote a book called “Legendary Leadership”, and he’s all about leaving a legacy and things like that. So as we’re building wealth, you know, there’s a financial aspect and there’s the health aspect. What does it mean then to leave a thriving legacy?

Tim McNeely 4:49
Yeah, so legacy is really the impact that you’re able to leave and a lot of people think, “Oh, legacy happens after you die.” I would argue legacy is happening right now, today and your legacy is the people you’re talking with. It’s the people you’re impacting. It’s the causes and things you’re pouring into. So you can actually live your legacy, you don’t have to die to have a legacy.

Victoria Peterson 5:10
Can you give me an example of that?

Tim McNeely 5:13
Yeah, I would tell you a lot of the doctors I work with are living legacies, right. So for example, my wife, I love what my wife has done. She’s had a longtime front office assistant who’s worked in her practice for years and she decided she wanted to go to hygiene school and my wife has a very interesting practice. She has no teeth, dentists, she does, you know, removals and that’s about it, and so when Esther decided to go on, and go to hygiene it was, you know what, I want to support you in this, I want to do whatever I need to do to make sure you can make your dream happen and that, to me is leaving a legacy. It’s not holding on saying, “I’m about to lose one of my favorite employees,” which he was, it wasn’t saying, “How do I keep her here? How do I manipulate the system?” It’s, “No, how do I launch this person, so they can go do what’s important to them so they can take care of the people that matter?” That’s an amazing example of legacy and how you can live it out right now, today.

Victoria Peterson 6:05
That’s a huge, huge example of legacy. We work with a lot of doctors too and they’ll say, I’ll say, “How do you, how do you invest in your team? You know, what resources do you provide? What CE do you provide?” and I gotta tell you more often than I would like to hear the question back is, “Why would I do that? They’re just going to leave anyway,” and one of our great clients, Cheryl Brunel, she said people ask her that question. She said, “No, why do you invest so much in your team? What if they leave?” and she said, “What if I don’t invest in my team, and they stay?” I hear you hear your mouth, you know, what if they stay, and doctors are freaking out right now, because of the talent wars and I don’t personally think that it’s difficult to attract top talent right now. I think doctors are having difficulty aligning their reputation as an employer, and what they’re willing to invest in their team like this living, thriving legacy that you’re talking about. Employers who are saying, “We create best-in-class culture, we create best-in-class education, we have a place for you to go thrive and learn,” they’re not having a problem attracting team members.

Tim McNeely 7:20
Yeah, and I would agree with you and the competition for talent has never been more fierce and the competition, really, it’s your McDonalds, it’s your Amazons, it’s all those other companies out there that have a training system. Yeah, right. If I were to quit tomorrow, and sell off the entire business and go work for McDonald’s, they’d have me up and running in about a week, I would be knowing how to flip hamburgers and press all the buttons, right, I wouldn’t be able to do that. Whereas if you weren’t in a dental practice, I would be lost and so that’s the competition is how do you train people? How do you get them up to speed quickly and how do you create that best-in-class culture?

Victoria Peterson 7:55
Wow, how do you have the answer to that?

Tim McNeely 7:58
You know what it’s work with people do, it’s systemize the practice and that’s one of the components of that Investment Grade Practice. It’s systems of processes, so you can bring people up to speed.

Victoria Peterson 8:09
Yeah, it’s tough when you don’t have systems and I think a lot of us found that out, particularly when the administrative team left, and they had the skill sets to work in the virtual economy and they’re not coming back, you know, a system hygenist, they have to be brick and mortar. Alright, so I love your definition of wealth and how to create it, but why does this matter? Like why not just show up to work and work and when you’re done, you’re done? Why does even focusing on leaving a legacy or creating wealth? Why does it matter?

Tim McNeely 8:40
Well, I would tell you, for some people, it doesn’t and right, then I’m the wrong advisor for them, but for those of you who actually do care about making an impact, and I would argue that’s a lot of your listeners, it’s a lot of you listening right now you got into dentistry because you actually care about helping people you actually help that you actually care about, you know, increasing quality of life and so I would argue that’s innate in just most of the health care providers, is we’re in this business because we actually want to make a difference and when you start thinking beyond yourself, it’s also that mission that can help get you up everyday because entrepreneurship, it is a grind and I know the days where I’m focused on me and my business and things that are going on, I can get really discouraged. I can get really distracted, and I can want to throw in the towel, but when I do my book launch party, like I just did at CDA presents, had about 100 people there and I had people show up telling me what a difference I made for them. Like I was crying with my client saying, “You know what, you’re the reason that I get up every day.” So I argue that it’s that bigger picture that helps keep you going.

Victoria Peterson 9:42
I like that it’s almost like a like a guiding light, like a North Star like absolutely is I’m working for something bigger than myself. I’m looking for the way I can impact my team, the way I can impact my patients, my community, it becomes bigger than you, that what I’m here renew says it pulls you through those tough times.

Tim McNeely 10:01
Absolutely and I would argue most people listening to this, right, if you’ve been in dentistry, any number of years, you can probably get rid of the practice, he could probably sell everything, you’ve probably already acquired just enough assets to be happy, hey, it actually the same money can’t buy happiness, but it doesn’t to a point, about $120,000 a year is all you need to be happy according to study. So most of our listeners listening to this, you can be happy and so so there’s probably something greater than just money that’s getting you up every day.

Victoria Peterson 10:34
So if I’m making 500 grand, and I’m complaining, then that’s just like some internal work to be done. They’re wasting focus

Tim McNeely 10:42
Focus on gratitude and gratefulness and then we can also focus on right, how can you keep earning that but actually be a better steward of it, right, give less of the government more to your team, that’s what I love doing is coming in and showing a doctor who’s you know, overpaying in taxes, they’ve never worked with the right advisors, or they’re working with their college buddy, who they’ve known for years and all of a sudden, I can show them ways that they can put 100 $150,000 away a year on a pre-tax basis and they can give some of that to their employees actually reward the team of people who’s helping them do what they do every single day. That to me is exciting.

Victoria Peterson 11:17
That’s amazing. You know, I’m just going to ask you a general question of what mistakes did dentists make, but can I get more specific? Yeah, at this point of taxation, what’s one of the biggest mistakes they make that could save them money on their taxes, give the government less? Yeah,

Tim McNeely 11:33
I would tell you that the biggest mistake is they’re saying, “Well, I’ve got a team of advisers, and they’re working just fine.” It’s maintaining the status quo. It’s like our President Ronald Reagan used to say, “Trust, but verify.” So many of you have wealth plans that you’ve put together over the years, or you’ve done incremental planning, but you’ve never actually stress-tested these things and you’ve never actually run it through and put it through its paces to make sure it’s going to deliver his promise, the super-rich do this on a regular basis and I would argue we have a lot to learn from the super-rich, and we should be stress testing and looking and reviewing our plans to make sure they’re going to deliver as promised.

Victoria Peterson 12:10
So make me smarter, what would I look at if I were looking at a plan?

Tim McNeely 12:14
Yeah, great question. So it’s really going to come down to you know, there’s so many areas you can look at. So start with what’s causing you the most pain, maybe you’re worried about, you know, hey, I did my estate planning, and I’ve got my practice, I’m getting ready to sell and I, I think I’ve done all the stuff I’m supposed to do to mitigate taxes, go get a second opinion, right? You work with a team and do the analysis. That’s one thing you can look at, or maybe you’re feeling like you’re getting killed with taxes, and you’ve talked to your CPA, I’ve had clients call me and say, you know, I’ve talked to my CPA, and they’ve told me, they’ve done all they can for me, and I need to go find someone else and so I usually get those calls when the CPAs are saying, ‘I don’t know what else to do. Tim, how can we help this client out?” So get those second opinions and stress tests? What’s on your mind? Right? What are those things keeping you awake at night, that’s what you should be diving into to really make sure those are buttoned up for you.

Victoria Peterson 13:04
I love that. I love that and you can’t get a second opinion just from anybody. You know, there are I don’t even know what would be your top 123? How do you know that you’re, you’re employing the services of a credible first or second opinion? Like for me, like if they’re charging you 100 grand to review it, they’re probably not who you need to be working for, if they’re giving it away for free, I don’t know there’s something in between, they’re just on, I see, I see craziness on both sides, right.

Tim McNeely 13:35
But these days, you gotta be so careful. I don’t know about you but I think my poodle just started a consulting company on Facebook, you should see the ads, they look amazing but they’re part of the Lamborghini, they must know what they’re doing.

Victoria Peterson 13:48
You and I have is it we work in an industry that has no barrier to entry,

Tim McNeely 13:53
Zero, right? Anyone can call themselves a consultant and a manager and so really, I encourage you to do a couple of things. Number one, look for a recognized leader, a thought leader in the industry and I define a thought leader, as someone who speaks and writes and publishes in the industry. That’s a great way because oftentimes, if you are a public figure, if you’re out there, you’ve got your reputation on the line, and they can be very credible sources. The second thing is referrals from your existing professionals, right, that’s another great way, right. Talk to your CPA, talk to your accountant and your attorneys and, and your consultants ask them who do you know that’s really the best of the best when it comes to this? And then lastly, you can also ask your peers who are they working with? Those are three great ways to vet individuals I would argue, looking at Facebook at whatever the latest ad is, is probably not the best way to go about it.

Victoria Peterson 14:44
I hadn’t even thought about finding a CPA or financial wealth planner on Facebook, but I guess that’s the thing.

Tim McNeely 14:51
The ads are there everywhere.

Victoria Peterson 14:55
That’s that’s just crazy. You know, all the things that we’re talking about for those who might be new to the Investment Grade Practice platform, there’s four major areas that we coach doctors to look at. The traditional one is your practice optimization, right? All the KPIs of the practice, marketing, are you being genuine and authentic and your marketing or you’re increasing your authority, the cultural North Star, you know, we do a lot of employer surveys to, we’re actually I don’t know how much you’re doing this, Tim, but we’re diving into employ your net promoter score enough just to get a five-star review from your patients. Are you getting a five-star review from your team? And what you’re walking us through is the fourth equation, which is building business value and really, it does come to Financials and I’m going to encourage everybody, step one, ask yourself these two questions. One, do I know where my stuff is? You know, where are my P&Ls? Do I have a folder for that? Is it online? Do I have access to that? Where are my bank account numbers? Is it all organized into one platform? Can I like the days of trying to I don’t know, for me trying to do a personal net worth statement on an Excel spreadsheet are long gone, I just have a portal and when I need it, I print it out, but I have talked to three doctors this week, and they’re freaking out about money. Not because they don’t have it, like they’re making 600,000 , 800,000 a million bucks a year, but they’re freaking out because they don’t know what their bookkeeper knows. So are you organized and are you armed with good data? So I love everything that you shared about finding great people to work with, but um, that’s your first challenge is pull yourself together, you know, get a get a Google Drive, get have Dropbox, get something that secure, put all your contracts and documents and financial life in a place. Get all your bank accounts and logins in a place, in a secure password system. You know, if Heartland and Aspen Dental can be cyber hacked, surely your laptop can be so if you get it secured and then number two, start to ask the question that you were saying, “What really is on my mind financially?” It’s it’s hard to look at when you’re in fear of it, but if you chunk it down and just say, “Yeah, I am concerned about taxes, or I am preparing my practice for sale. How do I preserve?” Well, you’re going to start asking different questions and better questions when you focus your mind on what problem am I solving.

Tim McNeely 17:39
Yeah, absolutely goes back to the problem and I would tell you even what you just mentioned about, you know, the maximizing the practice value. It’s not just maximizing practice value that matters, but I would argue it’s also maximizing your net worth outside of your business. That really matters too and that’s another common mistake I see is so often the business is the largest asset that you own and that can be a scary thing because if something happens to the business, something happens to you, that can value evaporate really quickly. So you want to be maximizing your net worth outside of your practice also.

Victoria Peterson 18:13
I love it. Tim, tell us a little bit more about Lifestone Wealth Management.

Tim McNeely 18:18
Yeah, so I run the Lifestone companies that I’m known for helping entrepreneurial dentists thrive in the midst of an uncertain world, but it wasn’t always that way I met and fell in love with my wife and when I first met her, I thought it was my job just to manage a little meager investment portfolio, but it turns out, there’s a lot more going on and a dentist life and just some mutual funds and, and I couldn’t help my wife because I didn’t have the skills to really deal with a dental practice and, and I found myself in a job I hated and I couldn’t take care of the person I loved the most, I was miserable, right? I didn’t have that purpose. I didn’t have that passion, but I knew I could fix it and so I went out, I hired some of the best of the best consultants in my industry to help me learn to help me grow the same way that you help dentists who know they’ve got more to offer, but they’re not quite sure what the roadmap is to follow, right. I hired a team of the best of the best to help me build that roadmap and through that process, my wife and I got back to being back on track, enjoying the practice again, and enjoying life and that’s what gets me up every single day is helping entrepreneurial dentists take advantage of all the opportunities that are out there, while also looking for costly errors that may be lurking in their plants.

Victoria Peterson 19:24
I love it, and specifically, what do you help them do?

Tim McNeely 19:29
So it really starts with that organization piece, like you were just mentioning, um, you know, once again, when I first started off, I would you know, send the email, give me all these documents, and I would ask for all this financial data. It didn’t take too long for me to learn. Most doctors have no idea where that is. So my first meeting is actually a help get you organized meeting I tell people don’t stress out if you don’t know where this stuff is, this is what we’re going to do for you is help you get it organized and then from there, we really do what I call “Gap Analysis” and it’s taking a look at where you are now, where you want to go, and then helping you identify the gaps that are there and through that process, I may tell you, “You know what, you’ve actually got everything in place. You don’t have to change anything,” and, and I don’t know about you, but I actually like going to my doctor once a year for my physical and getting the phone call back and he says, “Tim, nothing’s wrong, I’ll see you again in 12 months,” like, like, I have never been upset at that result ever. In fact, I’m probably going to be disappointed when he says, “Hey, we caught something that we got to look at,” and so that’s the first thing is you may already be on the path. So trust, but verify. Secondarily, it may just require some tweaks with your existing providers, you know, maybe it’s a change in strategy with your accountant or changing something up in your estate plan a little or, lastly, maybe the system has failed catastrophically and you really do have to hire some new team members and make some big adjustments, but either way, that’s that purpose of the gap analysis is really to help you accelerate your success, and do it faster with less effort than you ever thought possible.

Victoria Peterson 20:55
I love it. I’m gonna have to have you back. It’s just too good. I do want to let everyone know that your book launched on May 19, “Dental Wealth Nation” the book, where can they find this?

Tim McNeely 21:09
They can find it at dentalwealthnationbook.com. and I’d love to get a copy of that in your hands. It really is everything I’ve learned over the last 15 years and it’s in a book so you can go implement it yourself.

Victoria Peterson 21:20
I love it. You put that book in my hand and you autographed it for me when I saw you in Phoenix last month. So thank you, thank you, it is a treasure. How else can people get in contact with you and learn more about what you and your team do?

Tim McNeely 21:33
Yeah, absolutely. They can find me on Facebook, Twitter, LinkedIn, or you can give me a call at 818-534-4949

Victoria Peterson 21:43
Thank you so much. It was a pleasure we’ve had today speaking with Tim McNeely, certified financial planner and all-around great guy. Thank you for being here today, Tim.

Tim McNeely 21:54
It’s been a joy, Victoria.

Narrator 21:58
Thank you for tuning in to this episode of Investment Grade Practices podcast. If you find value in this episode, help us spread the word by passing it along to a dental friend. Subscribe and give us a Like on iTunes or Spotify. Learn more about building your Investment Grade Practice at productivedentist.com Today