July 3, 2025 • 34 mins
If you’d like to discuss your finances with a professional, you can connect with Anick here: https://www.viderefinancial.com/contact
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You can download your FREE report on how you can avoid financial mistakes as a dentist using the link just here >>> dentistswhoinvest.com/podcastreport
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What if you’re already financially free – and don’t even realise it? In this powerful episode, Certified Financial Planner Anick Sharma reveals how dentists and business owners often work far longer than necessary, missing out on meaningful time with family, travel, and personal fulfilment.
Anick introduces a fresh perspective on retirement. It’s not about reaching a certain age, but about reaching the point where you no longer trade present happiness for future security. Through real-world client stories, he shares how tailored financial planning helped people discover they could retire five years earlier than expected, often prompting life-changing decisions.
Central to this approach is a clear and practical cash flow strategy. Anick uses the memorable “bucket analogy” to explain how money enters, fills, and flows through your life – showing how a million-pound pension isn’t the goal, but what that money enables is.
We explore why so many dental professionals fall into the “just one more year” trap – continuing to build business value while overlooking personal financial freedom. Anick shows how shifting focus to systematically extracting wealth can allow you to live with more freedom now, rather than waiting for an eventual practice sale.
If you’re wondering whether you could afford to work less, travel more, or retire early, this conversation offers clarity, inspiration, and practical steps to get there.
Listen now and rethink what retirement could look like – on your terms.
Let me know if you'd like a shorter version for social media or an episode title suggestion.
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Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional. Investment figures quoted refer to simulated past performance and that past performance is not a reliable indicator of future results/performance.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Dr James (00:00):
Another episode of Dentists Who Invest Podcast.
Guys what we're going to talkabout today, Going to get into
the nitty gritty of how someonecan shave years off their
retirement.
Big clue it starts withfiguring out what your
retirement looks like in thefirst place and your objective.
But it's not just that.
Obviously, if it's that simple,well there wouldn't be some
content we could make out of it.
More will be revealed veryshortly, but just before we do
(00:20):
that, we have Mr Anick Sharmasat in front of a certified
financial advisor.
No certified financial planner.
If I nailed it, the second one.
Anick (00:29):
That's right.
Certified financial planner.
Dr James (00:31):
Boom zing.
Awesome Anick.
How are you today?
Anick (00:33):
Good thanks, James.
How are you?
Dr James (00:35):
I'm amazing looking forward to listening to
everything that you have to saytoday, Anick.
So you know what would belovely if we had like a little
bit of a high-level bio aboutyourself.
I feel like that would be areally nice intro for the
listeners.
Anick (00:46):
Sure, I had a background in academia, published white
paper looking at somehemodynamics of the brain.
Had a last-minute 180 turn,decided to go into financial
services, joined the firm inHarrogate was a bit of a hybrid
between a financial planner anda back-office paraplanner.
Went through my exams in quitea fast rate five years down the
(01:10):
line client facing, cfp,certified Financial Planner,
fellow, all those sort of things.
But for me the real fun, thejuicy bit, is sitting in front
of a client and helping them toplan their retirement and how
that might be trying to solvethe problem each person has.
Dr James (01:23):
Amazing, okay, well, let's jump straight in.
How can anybody shave years offtheir retirement?
How can that be done?
And you know what's interestingabout asking you this.
You sat on the other side ofthe chair.
You've had this conversation amillion, billion, trillion times
, whereas for lots of peopleit's once in a lifetime, so you
have context on this absolutely,and I understand.
Anick (01:46):
As individuals, we all think our time is different, but
it's not.
Time and time again, everyonejust wants to see the retirement
goal person rush straight to it.
I'm a financial planner and theclue is in my name.
I plan it out.
So, rather than just rush to,it helps to break it down and
think about where we want to getto point B from where we are
(02:09):
today.
Point A I like to get out a lotrunning and hiking and stuff.
I'd never go for a run or ahike without an endpoint or a
route to know where I'm going togo to, because if I just decide
I want to go out and get lost,that journey becomes really
messy and hard to follow.
The what is having a clearstrategy, so a financial plan
(02:30):
aided by a cash flow.
Typically, the how is a littlebit more difficult.
It comes with complexities andthe tax issues that come around
and some of the efficiencies wecan make, but at a high level,
it's about having a clear plan,clear strategy to get to that
point.
Dr James (02:48):
Awesome, and I've got another analogy on that front
which I really like.
Imagine the ship.
It sails out into the ocean butit hasn't actually brought it
to itself what it's goal or it'sdestination is.
How can that ship evercalibrate it's sails?
How does that ship know if it'smaking progress or not making
progress?
Right, it literally makes nosense.
So I really like that analogy.
Okay, cool.
So let's relate that to whatyou see during these
(03:10):
conversations that you've hadwith clients in the past.
How does that actually looklike in reality for these people
?
Anick (03:18):
or saying I need to start on my pension, or I've got all
this cash within my business,what do I do with it?
Great question, absolutelygreat.
And don't get me wrong, I'm amassive nerd at heart and I
would happily go down togranular detail and get into a
deep dive of investing andbusiness tax.
(03:38):
Absolutely love it.
What people don't do oftenenough is just take a step back,
give yourself that context.
What does good look like?
What does that ideal retirementlook like?
And such a deep dive can behard for some people because
they come to me having aconception that they want to
drill down to some numbers, butthey don't necessarily
(04:00):
understand what the numbers arefor.
For example, the client mightthink about I need income
protection.
They won't necessarily thinkabout what number they might
need when we capitalise itacross their lifetime.
They think about the human sideof it, ie spouse or kids may be
without that income and need toprovide for them when they're
(04:22):
gone by.
Taking that step back and havingthe context of our life and our
circumstances means we can havea detailed roadmap to get to
point B.
Now what that looks like inprinciple is making a financial
plan and cash flow together withyou.
It's very much about havingthat balance between today's
enjoyment and saving fortomorrow, which the cash flow
(04:45):
really does.
And one question might be whatactually is a cash flow?
In a nutshell, it's a veryfancy spreadsheet.
So a cash flow is only as goodas its inputs and you can model
out balance sheet incomeexpenditure across a lifetime.
Once we have confidence of theinputs, we can be somewhat
confident of the outputs.
There are a whole load ofunderlying assumptions to go in
(05:07):
there and I can probably doanother podcast on investment
assumptions alone, but withoutboring you?
Dr James (05:14):
No, I think that I almost said the opposite there.
I was going to say the opposite.
Anick (05:17):
I'm like hell, yeah, let's do that, but anyway, not
to Taylor get me back on and wecan have a very deep dive into
assumptions.
I'd love that I'd love that I'mgonna take you up on that anyway
, sorry, I didn't mean to bargein once we're happy with the
inputs we can really start tokick the tires on the output and
have confidence in it and thenwe can start to stress test it
(05:39):
so we can build in things suchas retirement within this cash
flow plan and within that we canreally start to pull the levers
.
I really enjoyed this.
I call it art of the possible.
So you might say I don't know,I'm having holidays at £10,000 a
year until retirement age 50years.
Then what happens if we crankholidays to 50 grand a year?
We can see the outputs.
(06:00):
The chart will go red or blueto say whether it's viable or
not, and you see from thoseoutputs whether it's possible.
Once you get that grasp, youcan be so flexible and model,
live with a client or build outscenarios then and there to see
what really makes a difference.
In my experience and my clientswill know this from my time with
(06:25):
them I really like a bucketanalogy to explain cash flow
planning.
So imagine you have a bucket,just one you might use to wash
your car.
It's quite warm at the momentso you might be doing that a bit
more often Now.
Within the bucket you haveincome streams such as you might
be taking some sort of drawingsfrom business, a small bit of
salary and dividends.
(06:45):
Over time this liquid bucketbuilds up.
By liquid I mean things you caneat, drink or spend, things
that are accessible.
Now, not all things you own arein the bucket.
Some things are illiquid, sosit outside of that.
By that I mean your house youcan't easily sell it to realize
(07:08):
money or your business.
Your business sits outside thebucket, but for most people
there'll be some sort ofbusiness event in however many
years, and we'll have thatinflow of capital into the
bucket.
So this bucket's a constantinflow from the top.
Now underneath it's a bit of arubbish bucket.
There are some holes in it torepresent some taps.
(07:30):
Now imagine your bucket's goingfrom left to right.
Those taps change as youprogress through life.
So as you're younger you mightbe going on a holiday and
spending a bit too much money onalcohol, whereas once you start
to get older and kids mightcome into the equation, the
holiday and expenditure profilelooks a bit different.
You might be getting somelonger haul trips Then, as we
(07:51):
start to step down and go acrossthe bucket until our 70s, long
haul travel is probably not onthe agenda, probably more of a
short haul travel, and thenwe're possibly thinking about
gifting some of that money wedon't always need until we get
to the very last tap, whichunfortunately, is a bit of a
morbid topic but death, somesort of later life planning,
because care fees aren't cheap.
(08:13):
So within that analogy, wereally have three main levers
have more coming into the bucket, less coming out or what's
inside the bucket in terms ofour assets, we sweat it, ie we
look at the risk levels to makeour money work harder for itself
.
So in a very little snapshot,that is how the cash flow works.
(08:35):
But investments and wrappersand pensions and ISAs and GIAs
and this investment and thatinvestment, they are all
literally just tools to executea financial plan.
Personally generally and thefinancial plan in view is, we're
quite agnostic over what toolsyou use.
You can't use a sledgehammer tocrack a walnut.
(08:56):
It's all about using the righttool for the job, and the job is
always to have a greatfinancial plan and execute it in
the most tax efficient waypossible.
Dr James (09:07):
From my conversations with other financiers in the
past, they have consistentlyobserved that dentists tend to
inverted commas have too muchmoney when they retire.
And what is too much money?
Can you ever have too muchmoney?
I hear some people playing intheir head when I say those
(09:28):
words.
What I mean by that in thisspecific instance is they've
over saved, as in they have morewealth than is necessary to
actually achieve their goalsyeah.
Anick (09:39):
so see that all the time in my experience, typically
working with business owners andsenior executives, they come to
me with relatively largeamounts of money on their
balance sheet and they alwayshave the mindset one more year,
one more year, a few more yearsdown the line and it means they
miss out on the family stuff andthe children's birthdays.
(10:02):
Life is for living and realwealth is about time, memories,
relationships and experiences.
We all die.
It's a fact of life, and itdoesn't really matter how much
money you have if you haven'tlived the life you want or have
carried out what reallyinterests you.
And I genuinely get sopassionate about financial
(10:24):
planning because it canfacilitate the life you want,
but not enough people know aboutit, which means I have one
example that springs to mind.
Client worked really, reallyhard all their life, massive
sacrifices, because they thoughtthey were doing the best thing
for them and their family had amassive 30 oddodd million pound
(10:44):
exit Within a few months.
They got diagnosed with cancerand died shortly after.
Horrendous story.
Life is so short and if we'renot making the most out of what
we really want to do or whatmeans the most to us, it will
just go by in a heartbeat andwithout having that plan to help
get us there, or without thecontext to realize.
(11:05):
You know what I actually amfinancially secure and now's the
time to go out and live life.
Dr James (11:11):
it's so easy to be caught in the hamster wheel of
life but this is the thing,though, because I can totally
foresee how, in the lifespan ofan entrepreneur, they get so
caught up in the doing like whathas actually brought them
success initially going from oneto ten, the, the activities
that got you from one to ten interms of success are not going
(11:32):
to necessarily be the thingsthat get you from 10 to 100.
In fact, often there's a shiftand you can stay stuck at level
10 and here's the thing youmight be happy.
There it comes back tohappiness.
But if the reason that you wentfrom one to ten was to achieve
some next level goal, somethingafter that, then really it might
just be worth re-evaluating.
Let me just make that reallyclear what that is.
(11:53):
So, like I said, theentrepreneurs they work really
hard, generally speaking, to getfrom one to ten.
Right, but 10 to 100 is moreabout strategy, delegation, all
these things having some sort ofplan.
So that is a big how can we sayhurdle or a big barrier that
people don't always overcome,and I feel like these sorts of
conversations can help pull thatto the surface and get people
(12:13):
thinking themselves hmm,actually, upon evaluation, am I
already financially free withoutrealizing it?
Anick (12:23):
and it can be really scary and hard, especially when
your mindset has been work, work, work, build out this massive
business that has beensuccessful and all of a sudden
someone's saying right, stop.
I see it time and time againthat these very successful
people with all this money, dayone of retirement, they're
turning around and say now what?
(12:44):
What do I do with all this time?
And In terms of retirement,when I approach it with my
clients, it's not about having ahard stop, work, work, work,
bang stop, because that's enoughto send anyone insane.
I think retirement has to be agraduated process and that looks
(13:05):
different for different people.
Financial planning is not onesize fits all approach.
Someone could be the same age,have the same income, business,
work the same amount.
Their financial planning iscompletely different because as
humans we're all very different.
But one person that could be astep down to four days a week,
realizing you know what.
I don't have to work that extraday or I can get away working a
(13:26):
day a week as a graduated stepdown out of the practice.
There's someone else it could,potentially I'm going to take up
that hobby in that day a week.
I'm no longer in the practice.
It's just having thatconversation to what money means
to someone and why, which.
It's difficult because, we'vemoney stigmatized.
(13:46):
Let's be honest.
We shouldn't talk about,apparently, how it makes us feel
, but we absolutely should do.
Let's talk about money moreoften how it makes us feel, but
we absolutely should do.
Let's talk about money moreoften, how it makes us feel and
what our experiences are.
That then helps these informedconversations about what do I do
with my view of money and howcan I apply that to my own
financial situation.
That helps get the bestoutcomes for individuals across
(14:07):
the board, without a doubt.
Dr James (14:10):
Do you know what?
You know what really breaks myheart, my heart, right?
It's like we go through lifeand we're conditioned to have
this carrot in front of us whichis retirement.
And it's so easy to be likeI'll be happy when I'm retired,
I'll be overjoyed, I'll be overthe moon.
But how many 60 65 year olds doyou see running around like,
yeah, oh, my god, this isabsolutely unbelievable, right?
(14:30):
Actually there's a tendencypsychologically by human beings
to futurize our success.
That is a complete, complete andutter psychological bias, right
, and that actually never leavesyou, but you almost have to
untrain yourself to think likethat.
Now, the problem with theconditional model, the
traditional concept ofretirement, is it plays into
that little delusion that wehave and it means that we
(14:52):
continue, continue and continueand continue thinking that until
we actually get there and thenwe realize things are just the
same as before, are you with me,right?
Whereas actually, if we canjust pull it into the present is
way more powerful.
And, by the way, I'm not thebest at that.
Full disclosure, absolute,complete and utter disclaimer in
there, but at least I'mconscious of it, at least I'm
(15:16):
aware of it.
Rather than that, rather thanfalling into the psychological
pitfall that I am going to beoverjoyed and happy whenever I
hit a certain age, at a certainamount of time, and hopefully,
hopefully, I can hit that stageway sooner, because I again I
think we need to shake up thewhole concept that you have to
wait until 60, 65 to be retired.
Anick (15:32):
I've got a little bit more to add to that, annick,
that you might really like,actually, but before I do any
thoughts on what I've just said,completely brie if you tie your
happiness to a certain age orcertain milestone you're just
going to get to and be reallydisappointed and not fulfilled
with life and the problem isit's too late at that stage.
Dr James (15:53):
You, you can't actually turn back.
Are you with me?
Because it's already happened,the time has already happened,
that's the issue.
But anyway, you were sayingAbsolutely.
Anick (16:01):
If I bring it to an investing perspective, time's
the most important thing forcompounding Exactly the same
principle here you want to havetime on your side as much as
possible.
Dr James (16:11):
Good things happen in time hell, yeah.
So I once heard retirementdefined as the point at which
you stop sacrificing.
Very so, this is thisdescription I'm about to give
you.
Every word is this isn't mine,by the way, I read this in a
book, but I memorized it becauseI was like this is cool and
every word is deliberately thereand it's deliberately explained
(16:33):
like this.
Okay, so I'll start again.
The point in life at which youstop sacrificing the present for
a future promise of being happy.
It's good, I like that.
Right, you're sacrificing thepresent to a greater or lesser
degree, but there's some levelof compromise there.
(16:54):
You're sacrificing the here andnow for the promise, because
that's all.
It is right, it's literallyjust a promise, and promises are
made with the best intentions,as we all know, but do they 100%
happen?
Not always.
The future promise of beinghappy okay, that's from a book
and it's over here on thebookshelf.
Uh, I can't quite see it, butanyway, it's over there
(17:17):
somewhere.
So, by that definition, if weuse that definition, there's
three ways to be retiredinverted commas.
You can make so much money inthe here and now, like you
literally just win the lotteryor you sell your mega business
and you have billions.
Yeah, that you never have tothink about ever again, right?
You don't even have to investit.
You've got that level of wealth.
Inflation is never going tocatch you, okay?
(17:39):
So you basically have so muchmoney in the here and now that
your time is completely your own.
Do whatever the hell you like.
Right now, that would be welland good.
That happens to like 0.0001percent of the population, right
?
So whilst that may happen andyou weigh in the way you, you
may win the euro millionsprobably not, right?
So we can't put our eggs inthat basket.
(18:00):
Second way is to become a hermit.
So you move up to the mountains, your outgoing is good enough
and you're completelyself-sufficient.
Again, that's not a lifestyleeverybody would choose.
We all partake in the systembecause we like our creature
comforts.
This is why we have our house,this is why we have heating and
electricity, which actuallyforces us to kind of partake in
the whole capitalism game.
(18:21):
Basically, if you think aboutit, because we want these goods
and services that are available.
So that's the second way.
Again, a lot of people like thegood stuff in life, and I
actually believe in that too.
We shouldn't be.
We shouldn't be completelyexuberant, but at the same time,
it's not about austerity.
So the second way, as I say, isto reduce your outgoings to
nothing.
(18:42):
The third way is just to figureout what your ideal life looks
like.
Have it in the here and now andthen.
What that means is thatactually you're not sacrificing
anything in the present for thefuture promise of being happy,
and that ideal life is somethingthat might be available.
Because how many like myparents in particular?
Right, they went back to workthree days a week when they were
(19:04):
retired, right?
So was that their whole ideallife all along, and they were
kind of putting off the point atwhich they give themselves
permission to be happy until theage of 60, 65.
And maybe if they just did thethree days a week thing from the
start that that was actuallywhat they wanted and the income
would have, they would havesaved enough eventually to be
able to be, on paper,financially free as well.
Anick (19:26):
It's a really interesting concept, george Kinder he talks
about.
George Kinder looks at thehuman side of money a lot and
the Kinder way of life planning.
It goes that one step furtherthan financial planning, but
planning your life around whatyou want.
One of the questions is ifmoney was no object and you're
going to die, and if you'regoing to die tomorrow, what
(19:48):
would you really miss out on?
And it never really comes downto having the latest iphone or
the biggest tv, because allthese things, to your point
about capitalism, yeah, it'sreally nice to have, but so that
really leads to a meaningfuland purposeful life which are
having a.
(20:08):
That sense of fulfillment isreally what we're all after now.
There's definitely a balance oftoday's enjoyment versus saving
for tomorrow.
We don't want to be living inthe mountains and spending
nothing because we're going tobe miserable.
And then we start to idealizeat age 65, when we have all this
money, we can retire, we'regoing to be happy.
It doesn't work like that.
You could die the first dayinto your retirement, then what
(20:30):
You've completely sacrificed forhowever many years, and you get
to one day and that's it.
What was it all for?
There definitely needs to besome sort of balance.
Um, if you go too extreme,you're not necessarily going to
be happy, and I've seenmulti-millionaires dealing with
them on a financial basis okay,I've got all this money what
(20:53):
anyone else would think howcould you ever be unhappy?
But unhappiness still exists,despite what your balance sheet
number might be, and I think weneed to start looking at what
really drives us to be happy andfocusing on that in our run-up
to retirement, because if wejust idealize retirement at the
end point, we're not going to bethat happy.
When we get there, it's allabout.
It's that cliche, isn't it?
(21:14):
It's about the process, not theend point.
You have to enjoy the process,otherwise when you get to the
end point, it's a bit like nowwhat?
Dr James (21:22):
idealized is a good word, thank you, really good
word.
I like that in this, in thiscontext.
100, because the reason whythat word works so well is
ideals rarely exist at all, butwe all subconsciously idealize
retirement.
Anick (21:40):
Yeah, we do, we really do , and it's so easy to do,
especially when we're thinkingabout how great it'll be when
we're sat on a beach for therest of our lives.
And yeah, of course, it's gonnabe fantastic doing whatever it
is you might want to do inretirement.
But if you live in the future orthinking ahead to the future,
(22:00):
you're going to completely missthe present, and so much good
stuff happens there.
I also appreciate everythingwe've spoken about as being
quite high-level context and,taking the human side, it is
very important as well to drilldown into granular detail and
look at the mathematicalargument for whatever decision
you might do and just bring itback full circle.
(22:21):
This is where cash flow canreally help do that and kick the
tires off the numbers and todrill down into it.
That's a very overlooked partand what blows my mind is there
are some I say financialadvisors, not financial planners
out there who don't do any sortof cash flow planning exercise.
It's really hard to give anysort of context to any decision
(22:45):
in life without a financial planof what you're working towards.
Why would you ever want toinvest any sort of money or grow
any sort of money without thecontext of what you're working
towards.
It's a bit of a finger in theair at times well, this is it.
Dr James (22:59):
Unless you crystallize that people you know we're just
pulling these numbers out ofthe air and we're like, hey, I'd
like a million a year, right,but uh, yeah, that'd be nice for
most people.
Anick (23:08):
But interesting, you say that I real life example.
How?
How did a client come andnumber one the first meeting.
I want a million-pound pension.
Great, wouldn't we all?
But why?
Why do you want a million-poundpension?
Upon digging deeper, theythought having a million pounds
would then be able to facilitate20 grand a year on holidays,
(23:31):
being able to take the kids andgrandkids away.
That's the good stuff.
That's the real juicy, heartystuff.
Million pound pension?
Yeah, okay, money's a tool tofacilitate the holiday and
lifestyle you want.
But taking that step back tothink, what do I really want?
No one really cares aboutwhether it's a pension or what
investment is.
It's what you can do with it.
That's the main thing.
(23:51):
Money enables the life we want.
Dr James (23:55):
Boom.
And you know what I'minterested to know.
You know, whenever you drilldown into his or hers, was it
him?
Anick (24:02):
Him, him.
Dr James (24:03):
Whenever you drill down into his goals, was that
million pound pension actuallynecessary, even though that's
what he was fixated upon?
No, it wasn't.
Anick (24:14):
Which meant he had in his head.
He said, as well, he wish hecame to us years earlier because
he kept putting off, which Iunderstand.
These are very busy peoplebusiness owners and executives.
Time is a very poor resource ofthem.
But if he came a few yearsearlier, he could have done this
exercise then and wouldn't haveto build up as big of an amount
and wouldn't have had to workfor as long as he did so.
(24:36):
And time, time is time is soscarce.
So why waste time being on thewheel when we can go out and do
the things we want, the thingsthat we really enjoy?
Dr James (24:50):
there's, there's, there's a time for the doing,
energy, but the doing isineffective without a strategy,
because it doesn't actually makesense what, where are we going
and what are we trying to do?
And the problem is that it's sowhat is the word that I'm
looking for?
Like self-fulfilling in thenear term, to just keep being
(25:10):
busy because you keep gettingthat instant feedback, which is
good for the dopamine in ourbrains, but it's not actually,
it's not actually long term, themost effective way to get to
where you want to go.
But anyway, I'm just curious aswell as that.
So, in your experience, what Ilove to do whenever we get
guests in the dempsey investpodcast is talk about real life
things that they've observed,that you really can't find this
(25:31):
information any other placeapart from the reservoir of
knowledge that's in somebody'sbrain and experiences, because
they've sat on the other side ofthe chair.
Yeah, you can read about it inbooks and YouTube and stuff like
that, but it's not quite thesame, you know.
So I'm just curious has thereever been can you give us like
an anecdotal case studyobviously anonymized and what
have you of an instance where anindividual came to you and they
(25:51):
actually realized they werealready retired I mean that
person that we talked about justthen.
They are of that ilk, for sure,but any more powerful ones
where they had that conversationand then instantly afterwards
they were like oh my god, I'mactually just going to pack it
all in straight away.
This is amazing.
Something along those lineslike there was.
Anick (26:11):
It had huge and meaningful immediate impact for
their life so a cash flow and acash flow tool is so powerful to
illustrate that um, oneparticular situation immediately
springs to mind.
This woman, really, reallylovely person, um senior
executive working really hardfor years.
(26:33):
Her daughter is everything andher plan had always been to just
travel the world with herdaughter, um, give her a
childhood she never had herself,um, and just to make sure they
had those memories for life.
And the same things alwayshappen came to me over saving
massively, which is great.
(26:54):
I'm not shooing saving away.
Saving is a fantastic habit andthe more we can save the better.
But without context of wherewe're going to go, it leads to a
situation where she was infront of me and we demonstrated
you could have retired aboutfive years earlier.
Just having someone break downin tears for five, just the
(27:17):
sadness that five years had gone, but the delight that I can
actually do this.
A week later she put in thenotice and started getting
photos through all the time fromthe various places around the
world she was going, which isfantastic.
I absolutely love that and andjust being there to help guide
someone through that journey isreally amazing and I genuinely
(27:39):
love it.
I love what I do.
I don't see it as a job, it'snot.
It's a career.
My fiance's uh family I bumpedinto them recently and, um, my
fiance's mom made a commentsaying you still one of those
funny people who loves what youdo, and genuinely I do, it's not
work.
When you sat in front of peopletrying to well, helping them
(28:02):
achieve lives they want, it's apretty special place to be.
Dr James (28:06):
Good stuff, mate.
Well, long may that continue.
I mean, when stuff as powerfulas that happens, it's pretty
real.
Let's just say that, okay, cool.
So we've covered a lot of cashflow planning today and we've
covered a lot of how that can bemeaningful and impactful in
people's lives.
(28:27):
If you were to give us just ahigh-level outline of how that
process looks, what is that?
So they come to you, you talk,figure out the goals and then,
presumably, it goes from there.
How does it look?
Anick (28:40):
Yeah, so kind of walk through the door day one.
Um, if we realize we're a goodfit, we start going down the
journey.
Um, interestingly, most peopleturn their head and say what?
The first meeting?
It's best not to talk aboutmoney and talk about the debt.
Is it all?
Because we all get to that, you, the person you're.
It's far more important to getyour background, your context,
(29:03):
see what your drivers are andsee what you want to work
towards.
Once we have those detailedconversations and those
meaningful interactions, we canthen start to build out a
financial plan, a cash flowmodel, and with that we're going
to have covered expenditurewhat, what ideal, what the
perfect life will be.
And we can build that into themodel, quantify it down and from
(29:25):
there we work backwards,building a load of income
assumptions.
So your income might besomething at the moment.
Over the next few years itcould increase or decrease,
depending on whether you want tostep down until we hit that
retirement point.
And then we can build in allsorts of other assumptions for
business exits or housedownsizes or increase the
(29:45):
holidays.
But it's that ongoing iterationof having meaningful
conversations with you, theclients, and just iterating on
that financial cashflow,tweaking assumptions, playing
with the expenditure and havingthat collective buy-in.
It works best when I plan withyou, not plan for you.
(30:07):
It's not my life, it's not myfinancial plan.
So having you buy into that andhaving that collective feedback
it's great for everyone allaround.
But things change the secondyou walk out the door.
That financial plan isredundant.
The financial plan is live asof that moment.
So it really works best withthat continuous interaction.
(30:31):
Typically at an annual reviewwe will look at the cash flow
again, have a deep dive into it,kick the tires to make sure
everything is as it is.
If it's not on track for theperfect life, then no problem,
we can look at making somechanges if needed or if some
sort of life circumstance ishappening in the interim.
Quite often we have ad hocmeetings just to run through the
(30:53):
cash flow, see if things are ontrack still or how things are
looking.
Dr James (30:58):
Sweet man, thanks so much.
Well, I mean, it all comes backto how can we stop sacrificing
our present happiness for thatfuture of promise of being happy
as well?
That is the premise, and youmight, people might even be
there without realizing it, andyou know it's another thing that
I want to throw out there to togive even more balance to what
we're saying here today.
It's possible but not flippingeasy, but it is possible to
(31:23):
create a business which runsitself in such a hands-off way
and gives you balance, that itgives you amazing cash flow and
it also is a lovely big assetthat's growing and appreciating
with time.
That is another viable means toretirement and obviously we
would definitely advocate thefinancial planning side of
things as a component of that.
(31:45):
But actually it's possible toreach it purely with the
business alone, which a lot ofpeople don't realize, which is
really cool.
It's not frigging easy and thatrequires a lot of sacrifice.
But those are really the twomethods that I know of Design a
business that allows you to livethe lifestyle you want here and
now.
Or if you already have abusiness and you quite like
(32:06):
doing a little bit of dentistry,maybe you don't want to take
yourself out of your business tothat level, or you've got a lot
of cash building up, uh well,it's useful to harness that as
well, which is more the cashflow planning side of things
absolutely, and there arevarious levers we can pull to
make things super efficient andextract that business risk from
the business because of thebusiness all over.
(32:26):
What a bloody beautiful way ofputting it right there, because
I see that all the time whereyou have these principles and
their life's mission is tofriggin, build up their practice
, and then they get this bigjuicy exit and cash flow dies
because their business is gone.
You get this big juicy exit andcash flow dies, right, because
the business is gone.
And even sometimes I've evenhad people message me before and
they're like James, the thingthat nobody tells you about the
exit from your business is thatyou don't have cash flow anymore
(32:48):
.
That I've had like three orfour people come and say that to
me and yeah, I mean yeah, Iguess this is the penny never
drops until it actually happens.
But you're right, the stuffthat you're talking about today
is the other side of the coin.
How can we deleverage from thebusiness?
How can we pay ourselves andmake sure that our money grows
(33:09):
in value?
That's the investing component.
Anick (33:11):
Yeah, yeah, and it's really difficult because unless
you've been through that journey, or been through it with
someone, how are you meant toknow, how are you going to feel
on things that you don't alreadyknow?
There's no manual off the bookhow to retire 101 or everything
to expect, and which is why itcan be really helpful to get
context with someone who knowswhat, who knows what they're on
(33:33):
about, what's been through andit's useful to harness those tax
levers, those tax wrappers,rather on the journey you get
more out of them.
Dr James (33:42):
Smash the ISA every year Not just the ISA obviously
Depends on someone's situation.
Get that 20K out of the ISAevery year, tax-free Way more
efficient and it's alsocompounding rather than trying
to invest it all at once, right.
Anick (33:56):
Absolutely and with compounding everyone's favorite
quote, but Einstein apparentlyonce said compounding is the
eighth one in the world.
The earlier you start thebetter.
You're absolutely right.
We want to be as tax-sufficientas possible.
Looking at ISAs or makingpension contributions, they are
a great way where it'sappropriate and suitable for an
individual, but removing valuefrom the business, the personal
(34:19):
assets and the earlier we dothat, the quicker we can start
compounding, which can then justblow up over.
Another episode of Dentists Who Invest Podcast.
Guys what we're going to talkabout today, Going to get into
the nitty gritty of how someonecan shave years off their
retirement.
Big clue it starts withfiguring out what your
retirement looks like in thefirst place and your objective.
But it's not just that.
Obviously, if it's that simple,well there wouldn't be some
content we could make out of it.
More will be revealed veryshortly, but just before we do
(00:20):
that, we have Mr Anick Sharmasat in front of a certified
financial advisor.
No certified financial planner.
If I nailed it, the second one.
Anick (00:29):
That's right.
Certified financial planner.
Dr James (00:31):
Boom zing.
Awesome Anick.
How are you today?
Anick (00:33):
Good thanks, James.
How are you?
Dr James (00:35):
I'm amazing looking forward to listening to
everything that you have to saytoday, Anick.
So you know what would belovely if we had like a little
bit of a high-level bio aboutyourself.
I feel like that would be areally nice intro for the
listeners.
Anick (00:46):
Sure, I had a background in academia, published white
paper looking at somehemodynamics of the brain.
Had a last-minute 180 turn,decided to go into financial
services, joined the firm inHarrogate was a bit of a hybrid
between a financial planner anda back-office paraplanner.
Went through my exams in quitea fast rate five years down the
(01:10):
line client facing, cfp,certified Financial Planner,
fellow, all those sort of things.
But for me the real fun, thejuicy bit, is sitting in front
of a client and helping them toplan their retirement and how
that might be trying to solvethe problem each person has.
Dr James (01:23):
Amazing, okay, well, let's jump straight in.
How can anybody shave years offtheir retirement?
How can that be done?
And you know what's interestingabout asking you this.
You sat on the other side ofthe chair.
You've had this conversation amillion, billion, trillion times
, whereas for lots of peopleit's once in a lifetime, so you
have context on this absolutely,and I understand.
Anick (01:46):
As individuals, we all think our time is different, but
it's not.
Time and time again, everyonejust wants to see the retirement
goal person rush straight to it.
I'm a financial planner and theclue is in my name.
I plan it out.
So, rather than just rush to,it helps to break it down and
think about where we want to getto point B from where we are
(02:09):
today.
Point A I like to get out a lotrunning and hiking and stuff.
I'd never go for a run or ahike without an endpoint or a
route to know where I'm going togo to, because if I just decide
I want to go out and get lost,that journey becomes really
messy and hard to follow.
The what is having a clearstrategy, so a financial plan
(02:30):
aided by a cash flow.
Typically, the how is a littlebit more difficult.
It comes with complexities andthe tax issues that come around
and some of the efficiencies wecan make, but at a high level,
it's about having a clear plan,clear strategy to get to that
point.
Dr James (02:48):
Awesome, and I've got another analogy on that front
which I really like.
Imagine the ship.
It sails out into the ocean butit hasn't actually brought it
to itself what it's goal or it'sdestination is.
How can that ship evercalibrate it's sails?
How does that ship know if it'smaking progress or not making
progress?
Right, it literally makes nosense.
So I really like that analogy.
Okay, cool.
So let's relate that to whatyou see during these
(03:10):
conversations that you've hadwith clients in the past.
How does that actually looklike in reality for these people
?
Anick (03:18):
or saying I need to start on my pension, or I've got all
this cash within my business,what do I do with it?
Great question, absolutelygreat.
And don't get me wrong, I'm amassive nerd at heart and I
would happily go down togranular detail and get into a
deep dive of investing andbusiness tax.
(03:38):
Absolutely love it.
What people don't do oftenenough is just take a step back,
give yourself that context.
What does good look like?
What does that ideal retirementlook like?
And such a deep dive can behard for some people because
they come to me having aconception that they want to
drill down to some numbers, butthey don't necessarily
(04:00):
understand what the numbers arefor.
For example, the client mightthink about I need income
protection.
They won't necessarily thinkabout what number they might
need when we capitalise itacross their lifetime.
They think about the human sideof it, ie spouse or kids may be
without that income and need toprovide for them when they're
(04:22):
gone by.
Taking that step back and havingthe context of our life and our
circumstances means we can havea detailed roadmap to get to
point B.
Now what that looks like inprinciple is making a financial
plan and cash flow together withyou.
It's very much about havingthat balance between today's
enjoyment and saving fortomorrow, which the cash flow
(04:45):
really does.
And one question might be whatactually is a cash flow?
In a nutshell, it's a veryfancy spreadsheet.
So a cash flow is only as goodas its inputs and you can model
out balance sheet incomeexpenditure across a lifetime.
Once we have confidence of theinputs, we can be somewhat
confident of the outputs.
There are a whole load ofunderlying assumptions to go in
(05:07):
there and I can probably doanother podcast on investment
assumptions alone, but withoutboring you?
Dr James (05:14):
No, I think that I almost said the opposite there.
I was going to say the opposite.
Anick (05:17):
I'm like hell, yeah, let's do that, but anyway, not
to Taylor get me back on and wecan have a very deep dive into
assumptions.
I'd love that I'd love that I'mgonna take you up on that anyway
, sorry, I didn't mean to bargein once we're happy with the
inputs we can really start tokick the tires on the output and
have confidence in it and thenwe can start to stress test it
(05:39):
so we can build in things suchas retirement within this cash
flow plan and within that we canreally start to pull the levers
.
I really enjoyed this.
I call it art of the possible.
So you might say I don't know,I'm having holidays at £10,000 a
year until retirement age 50years.
Then what happens if we crankholidays to 50 grand a year?
We can see the outputs.
(06:00):
The chart will go red or blueto say whether it's viable or
not, and you see from thoseoutputs whether it's possible.
Once you get that grasp, youcan be so flexible and model,
live with a client or build outscenarios then and there to see
what really makes a difference.
In my experience and my clientswill know this from my time with
(06:25):
them I really like a bucketanalogy to explain cash flow
planning.
So imagine you have a bucket,just one you might use to wash
your car.
It's quite warm at the momentso you might be doing that a bit
more often Now.
Within the bucket you haveincome streams such as you might
be taking some sort of drawingsfrom business, a small bit of
salary and dividends.
(06:45):
Over time this liquid bucketbuilds up.
By liquid I mean things you caneat, drink or spend, things
that are accessible.
Now, not all things you own arein the bucket.
Some things are illiquid, sosit outside of that.
By that I mean your house youcan't easily sell it to realize
(07:08):
money or your business.
Your business sits outside thebucket, but for most people
there'll be some sort ofbusiness event in however many
years, and we'll have thatinflow of capital into the
bucket.
So this bucket's a constantinflow from the top.
Now underneath it's a bit of arubbish bucket.
There are some holes in it torepresent some taps.
(07:30):
Now imagine your bucket's goingfrom left to right.
Those taps change as youprogress through life.
So as you're younger you mightbe going on a holiday and
spending a bit too much money onalcohol, whereas once you start
to get older and kids mightcome into the equation, the
holiday and expenditure profilelooks a bit different.
You might be getting somelonger haul trips Then, as we
(07:51):
start to step down and go acrossthe bucket until our 70s, long
haul travel is probably not onthe agenda, probably more of a
short haul travel, and thenwe're possibly thinking about
gifting some of that money wedon't always need until we get
to the very last tap, whichunfortunately, is a bit of a
morbid topic but death, somesort of later life planning,
because care fees aren't cheap.
(08:13):
So within that analogy, wereally have three main levers
have more coming into the bucket, less coming out or what's
inside the bucket in terms ofour assets, we sweat it, ie we
look at the risk levels to makeour money work harder for itself
.
So in a very little snapshot,that is how the cash flow works.
(08:35):
But investments and wrappersand pensions and ISAs and GIAs
and this investment and thatinvestment, they are all
literally just tools to executea financial plan.
Personally generally and thefinancial plan in view is, we're
quite agnostic over what toolsyou use.
You can't use a sledgehammer tocrack a walnut.
(08:56):
It's all about using the righttool for the job, and the job is
always to have a greatfinancial plan and execute it in
the most tax efficient waypossible.
Dr James (09:07):
From my conversations with other financiers in the
past, they have consistentlyobserved that dentists tend to
inverted commas have too muchmoney when they retire.
And what is too much money?
Can you ever have too muchmoney?
I hear some people playing intheir head when I say those
(09:28):
words.
What I mean by that in thisspecific instance is they've
over saved, as in they have morewealth than is necessary to
actually achieve their goalsyeah.
Anick (09:39):
so see that all the time in my experience, typically
working with business owners andsenior executives, they come to
me with relatively largeamounts of money on their
balance sheet and they alwayshave the mindset one more year,
one more year, a few more yearsdown the line and it means they
miss out on the family stuff andthe children's birthdays.
(10:02):
Life is for living and realwealth is about time, memories,
relationships and experiences.
We all die.
It's a fact of life, and itdoesn't really matter how much
money you have if you haven'tlived the life you want or have
carried out what reallyinterests you.
And I genuinely get sopassionate about financial
(10:24):
planning because it canfacilitate the life you want,
but not enough people know aboutit, which means I have one
example that springs to mind.
Client worked really, reallyhard all their life, massive
sacrifices, because they thoughtthey were doing the best thing
for them and their family had amassive 30 oddodd million pound
(10:44):
exit Within a few months.
They got diagnosed with cancerand died shortly after.
Horrendous story.
Life is so short and if we'renot making the most out of what
we really want to do or whatmeans the most to us, it will
just go by in a heartbeat andwithout having that plan to help
get us there, or without thecontext to realize.
(11:05):
You know what I actually amfinancially secure and now's the
time to go out and live life.
Dr James (11:11):
it's so easy to be caught in the hamster wheel of
life but this is the thing,though, because I can totally
foresee how, in the lifespan ofan entrepreneur, they get so
caught up in the doing like whathas actually brought them
success initially going from oneto ten, the, the activities
that got you from one to ten interms of success are not going
(11:32):
to necessarily be the thingsthat get you from 10 to 100.
In fact, often there's a shiftand you can stay stuck at level
10 and here's the thing youmight be happy.
There it comes back tohappiness.
But if the reason that you wentfrom one to ten was to achieve
some next level goal, somethingafter that, then really it might
just be worth re-evaluating.
Let me just make that reallyclear what that is.
(11:53):
So, like I said, theentrepreneurs they work really
hard, generally speaking, to getfrom one to ten.
Right, but 10 to 100 is moreabout strategy, delegation, all
these things having some sort ofplan.
So that is a big how can we sayhurdle or a big barrier that
people don't always overcome,and I feel like these sorts of
conversations can help pull thatto the surface and get people
(12:13):
thinking themselves hmm,actually, upon evaluation, am I
already financially free withoutrealizing it?
Anick (12:23):
and it can be really scary and hard, especially when
your mindset has been work, work, work, build out this massive
business that has beensuccessful and all of a sudden
someone's saying right, stop.
I see it time and time againthat these very successful
people with all this money, dayone of retirement, they're
turning around and say now what?
(12:44):
What do I do with all this time?
And In terms of retirement,when I approach it with my
clients, it's not about having ahard stop, work, work, work,
bang stop, because that's enoughto send anyone insane.
I think retirement has to be agraduated process and that looks
(13:05):
different for different people.
Financial planning is not onesize fits all approach.
Someone could be the same age,have the same income, business,
work the same amount.
Their financial planning iscompletely different because as
humans we're all very different.
But one person that could be astep down to four days a week,
realizing you know what.
I don't have to work that extraday or I can get away working a
(13:26):
day a week as a graduated stepdown out of the practice.
There's someone else it could,potentially I'm going to take up
that hobby in that day a week.
I'm no longer in the practice.
It's just having thatconversation to what money means
to someone and why, which.
It's difficult because, we'vemoney stigmatized.
(13:46):
Let's be honest.
We shouldn't talk about,apparently, how it makes us feel
, but we absolutely should do.
Let's talk about money moreoften how it makes us feel, but
we absolutely should do.
Let's talk about money moreoften, how it makes us feel and
what our experiences are.
That then helps these informedconversations about what do I do
with my view of money and howcan I apply that to my own
financial situation.
That helps get the bestoutcomes for individuals across
(14:07):
the board, without a doubt.
Dr James (14:10):
Do you know what?
You know what really breaks myheart, my heart, right?
It's like we go through lifeand we're conditioned to have
this carrot in front of us whichis retirement.
And it's so easy to be likeI'll be happy when I'm retired,
I'll be overjoyed, I'll be overthe moon.
But how many 60 65 year olds doyou see running around like,
yeah, oh, my god, this isabsolutely unbelievable, right?
(14:30):
Actually there's a tendencypsychologically by human beings
to futurize our success.
That is a complete, complete andutter psychological bias, right
, and that actually never leavesyou, but you almost have to
untrain yourself to think likethat.
Now, the problem with theconditional model, the
traditional concept ofretirement, is it plays into
that little delusion that wehave and it means that we
(14:52):
continue, continue and continueand continue thinking that until
we actually get there and thenwe realize things are just the
same as before, are you with me,right?
Whereas actually, if we canjust pull it into the present is
way more powerful.
And, by the way, I'm not thebest at that.
Full disclosure, absolute,complete and utter disclaimer in
there, but at least I'mconscious of it, at least I'm
(15:16):
aware of it.
Rather than that, rather thanfalling into the psychological
pitfall that I am going to beoverjoyed and happy whenever I
hit a certain age, at a certainamount of time, and hopefully,
hopefully, I can hit that stageway sooner, because I again I
think we need to shake up thewhole concept that you have to
wait until 60, 65 to be retired.
Anick (15:32):
I've got a little bit more to add to that, annick,
that you might really like,actually, but before I do any
thoughts on what I've just said,completely brie if you tie your
happiness to a certain age orcertain milestone you're just
going to get to and be reallydisappointed and not fulfilled
with life and the problem isit's too late at that stage.
Dr James (15:53):
You, you can't actually turn back.
Are you with me?
Because it's already happened,the time has already happened,
that's the issue.
But anyway, you were sayingAbsolutely.
Anick (16:01):
If I bring it to an investing perspective, time's
the most important thing forcompounding Exactly the same
principle here you want to havetime on your side as much as
possible.
Dr James (16:11):
Good things happen in time hell, yeah.
So I once heard retirementdefined as the point at which
you stop sacrificing.
Very so, this is thisdescription I'm about to give
you.
Every word is this isn't mine,by the way, I read this in a
book, but I memorized it becauseI was like this is cool and
every word is deliberately thereand it's deliberately explained
(16:33):
like this.
Okay, so I'll start again.
The point in life at which youstop sacrificing the present for
a future promise of being happy.
It's good, I like that.
Right, you're sacrificing thepresent to a greater or lesser
degree, but there's some levelof compromise there.
(16:54):
You're sacrificing the here andnow for the promise, because
that's all.
It is right, it's literallyjust a promise, and promises are
made with the best intentions,as we all know, but do they 100%
happen?
Not always.
The future promise of beinghappy okay, that's from a book
and it's over here on thebookshelf.
Uh, I can't quite see it, butanyway, it's over there
(17:17):
somewhere.
So, by that definition, if weuse that definition, there's
three ways to be retiredinverted commas.
You can make so much money inthe here and now, like you
literally just win the lotteryor you sell your mega business
and you have billions.
Yeah, that you never have tothink about ever again, right?
You don't even have to investit.
You've got that level of wealth.
Inflation is never going tocatch you, okay?
(17:39):
So you basically have so muchmoney in the here and now that
your time is completely your own.
Do whatever the hell you like.
Right now, that would be welland good.
That happens to like 0.0001percent of the population, right
?
So whilst that may happen andyou weigh in the way you, you
may win the euro millionsprobably not, right?
So we can't put our eggs inthat basket.
(18:00):
Second way is to become a hermit.
So you move up to the mountains, your outgoing is good enough
and you're completelyself-sufficient.
Again, that's not a lifestyleeverybody would choose.
We all partake in the systembecause we like our creature
comforts.
This is why we have our house,this is why we have heating and
electricity, which actuallyforces us to kind of partake in
the whole capitalism game.
(18:21):
Basically, if you think aboutit, because we want these goods
and services that are available.
So that's the second way.
Again, a lot of people like thegood stuff in life, and I
actually believe in that too.
We shouldn't be.
We shouldn't be completelyexuberant, but at the same time,
it's not about austerity.
So the second way, as I say, isto reduce your outgoings to
nothing.
(18:42):
The third way is just to figureout what your ideal life looks
like.
Have it in the here and now andthen.
What that means is thatactually you're not sacrificing
anything in the present for thefuture promise of being happy,
and that ideal life is somethingthat might be available.
Because how many like myparents in particular?
Right, they went back to workthree days a week when they were
(19:04):
retired, right?
So was that their whole ideallife all along, and they were
kind of putting off the point atwhich they give themselves
permission to be happy until theage of 60, 65.
And maybe if they just did thethree days a week thing from the
start that that was actuallywhat they wanted and the income
would have, they would havesaved enough eventually to be
able to be, on paper,financially free as well.
Anick (19:26):
It's a really interesting concept, george Kinder he talks
about.
George Kinder looks at thehuman side of money a lot and
the Kinder way of life planning.
It goes that one step furtherthan financial planning, but
planning your life around whatyou want.
One of the questions is ifmoney was no object and you're
going to die, and if you'regoing to die tomorrow, what
(19:48):
would you really miss out on?
And it never really comes downto having the latest iphone or
the biggest tv, because allthese things, to your point
about capitalism, yeah, it'sreally nice to have, but so that
really leads to a meaningfuland purposeful life which are
having a.
(20:08):
That sense of fulfillment isreally what we're all after now.
There's definitely a balance oftoday's enjoyment versus saving
for tomorrow.
We don't want to be living inthe mountains and spending
nothing because we're going tobe miserable.
And then we start to idealizeat age 65, when we have all this
money, we can retire, we'regoing to be happy.
It doesn't work like that.
You could die the first dayinto your retirement, then what
(20:30):
You've completely sacrificed forhowever many years, and you get
to one day and that's it.
What was it all for?
There definitely needs to besome sort of balance.
Um, if you go too extreme,you're not necessarily going to
be happy, and I've seenmulti-millionaires dealing with
them on a financial basis okay,I've got all this money what
(20:53):
anyone else would think howcould you ever be unhappy?
But unhappiness still exists,despite what your balance sheet
number might be, and I think weneed to start looking at what
really drives us to be happy andfocusing on that in our run-up
to retirement, because if wejust idealize retirement at the
end point, we're not going to bethat happy.
When we get there, it's allabout.
It's that cliche, isn't it?
(21:14):
It's about the process, not theend point.
You have to enjoy the process,otherwise when you get to the
end point, it's a bit like nowwhat?
Dr James (21:22):
idealized is a good word, thank you, really good
word.
I like that in this, in thiscontext.
100, because the reason whythat word works so well is
ideals rarely exist at all, butwe all subconsciously idealize
retirement.
Anick (21:40):
Yeah, we do, we really do , and it's so easy to do,
especially when we're thinkingabout how great it'll be when
we're sat on a beach for therest of our lives.
And yeah, of course, it's gonnabe fantastic doing whatever it
is you might want to do inretirement.
But if you live in the future orthinking ahead to the future,
(22:00):
you're going to completely missthe present, and so much good
stuff happens there.
I also appreciate everythingwe've spoken about as being
quite high-level context and,taking the human side, it is
very important as well to drilldown into granular detail and
look at the mathematicalargument for whatever decision
you might do and just bring itback full circle.
(22:21):
This is where cash flow canreally help do that and kick the
tires off the numbers and todrill down into it.
That's a very overlooked partand what blows my mind is there
are some I say financialadvisors, not financial planners
out there who don't do any sortof cash flow planning exercise.
It's really hard to give anysort of context to any decision
(22:45):
in life without a financial planof what you're working towards.
Why would you ever want toinvest any sort of money or grow
any sort of money without thecontext of what you're working
towards.
It's a bit of a finger in theair at times well, this is it.
Dr James (22:59):
Unless you crystallize that people you know we're just
pulling these numbers out ofthe air and we're like, hey, I'd
like a million a year, right,but uh, yeah, that'd be nice for
most people.
Anick (23:08):
But interesting, you say that I real life example.
How?
How did a client come andnumber one the first meeting.
I want a million-pound pension.
Great, wouldn't we all?
But why?
Why do you want a million-poundpension?
Upon digging deeper, theythought having a million pounds
would then be able to facilitate20 grand a year on holidays,
(23:31):
being able to take the kids andgrandkids away.
That's the good stuff.
That's the real juicy, heartystuff.
Million pound pension?
Yeah, okay, money's a tool tofacilitate the holiday and
lifestyle you want.
But taking that step back tothink, what do I really want?
No one really cares aboutwhether it's a pension or what
investment is.
It's what you can do with it.
That's the main thing.
(23:51):
Money enables the life we want.
Dr James (23:55):
Boom.
And you know what I'minterested to know.
You know, whenever you drilldown into his or hers, was it
him?
Anick (24:02):
Him, him.
Dr James (24:03):
Whenever you drill down into his goals, was that
million pound pension actuallynecessary, even though that's
what he was fixated upon?
No, it wasn't.
Anick (24:14):
Which meant he had in his head.
He said, as well, he wish hecame to us years earlier because
he kept putting off, which Iunderstand.
These are very busy peoplebusiness owners and executives.
Time is a very poor resource ofthem.
But if he came a few yearsearlier, he could have done this
exercise then and wouldn't haveto build up as big of an amount
and wouldn't have had to workfor as long as he did so.
(24:36):
And time, time is time is soscarce.
So why waste time being on thewheel when we can go out and do
the things we want, the thingsthat we really enjoy?
Dr James (24:50):
there's, there's, there's a time for the doing,
energy, but the doing isineffective without a strategy,
because it doesn't actually makesense what, where are we going
and what are we trying to do?
And the problem is that it's sowhat is the word that I'm
looking for?
Like self-fulfilling in thenear term, to just keep being
(25:10):
busy because you keep gettingthat instant feedback, which is
good for the dopamine in ourbrains, but it's not actually,
it's not actually long term, themost effective way to get to
where you want to go.
But anyway, I'm just curious aswell as that.
So, in your experience, what Ilove to do whenever we get
guests in the dempsey investpodcast is talk about real life
things that they've observed,that you really can't find this
(25:31):
information any other placeapart from the reservoir of
knowledge that's in somebody'sbrain and experiences, because
they've sat on the other side ofthe chair.
Yeah, you can read about it inbooks and YouTube and stuff like
that, but it's not quite thesame, you know.
So I'm just curious has thereever been can you give us like
an anecdotal case studyobviously anonymized and what
have you of an instance where anindividual came to you and they
(25:51):
actually realized they werealready retired I mean that
person that we talked about justthen.
They are of that ilk, for sure,but any more powerful ones
where they had that conversationand then instantly afterwards
they were like oh my god, I'mactually just going to pack it
all in straight away.
This is amazing.
Something along those lineslike there was.
Anick (26:11):
It had huge and meaningful immediate impact for
their life so a cash flow and acash flow tool is so powerful to
illustrate that um, oneparticular situation immediately
springs to mind.
This woman, really, reallylovely person, um senior
executive working really hardfor years.
(26:33):
Her daughter is everything andher plan had always been to just
travel the world with herdaughter, um, give her a
childhood she never had herself,um, and just to make sure they
had those memories for life.
And the same things alwayshappen came to me over saving
massively, which is great.
(26:54):
I'm not shooing saving away.
Saving is a fantastic habit andthe more we can save the better.
But without context of wherewe're going to go, it leads to a
situation where she was infront of me and we demonstrated
you could have retired aboutfive years earlier.
Just having someone break downin tears for five, just the
(27:17):
sadness that five years had gone, but the delight that I can
actually do this.
A week later she put in thenotice and started getting
photos through all the time fromthe various places around the
world she was going, which isfantastic.
I absolutely love that and andjust being there to help guide
someone through that journey isreally amazing and I genuinely
(27:39):
love it.
I love what I do.
I don't see it as a job, it'snot.
It's a career.
My fiance's uh family I bumpedinto them recently and, um, my
fiance's mom made a commentsaying you still one of those
funny people who loves what youdo, and genuinely I do, it's not
work.
When you sat in front of peopletrying to well, helping them
(28:02):
achieve lives they want, it's apretty special place to be.
Dr James (28:06):
Good stuff, mate.
Well, long may that continue.
I mean, when stuff as powerfulas that happens, it's pretty
real.
Let's just say that, okay, cool.
So we've covered a lot of cashflow planning today and we've
covered a lot of how that can bemeaningful and impactful in
people's lives.
(28:27):
If you were to give us just ahigh-level outline of how that
process looks, what is that?
So they come to you, you talk,figure out the goals and then,
presumably, it goes from there.
How does it look?
Anick (28:40):
Yeah, so kind of walk through the door day one.
Um, if we realize we're a goodfit, we start going down the
journey.
Um, interestingly, most peopleturn their head and say what?
The first meeting?
It's best not to talk aboutmoney and talk about the debt.
Is it all?
Because we all get to that, you, the person you're.
It's far more important to getyour background, your context,
(29:03):
see what your drivers are andsee what you want to work
towards.
Once we have those detailedconversations and those
meaningful interactions, we canthen start to build out a
financial plan, a cash flowmodel, and with that we're going
to have covered expenditurewhat, what ideal, what the
perfect life will be.
And we can build that into themodel, quantify it down and from
(29:25):
there we work backwards,building a load of income
assumptions.
So your income might besomething at the moment.
Over the next few years itcould increase or decrease,
depending on whether you want tostep down until we hit that
retirement point.
And then we can build in allsorts of other assumptions for
business exits or housedownsizes or increase the
(29:45):
holidays.
But it's that ongoing iterationof having meaningful
conversations with you, theclients, and just iterating on
that financial cashflow,tweaking assumptions, playing
with the expenditure and havingthat collective buy-in.
It works best when I plan withyou, not plan for you.
(30:07):
It's not my life, it's not myfinancial plan.
So having you buy into that andhaving that collective feedback
it's great for everyone allaround.
But things change the secondyou walk out the door.
That financial plan isredundant.
The financial plan is live asof that moment.
So it really works best withthat continuous interaction.
(30:31):
Typically at an annual reviewwe will look at the cash flow
again, have a deep dive into it,kick the tires to make sure
everything is as it is.
If it's not on track for theperfect life, then no problem,
we can look at making somechanges if needed or if some
sort of life circumstance ishappening in the interim.
Quite often we have ad hocmeetings just to run through the
(30:53):
cash flow, see if things are ontrack still or how things are
looking.
Dr James (30:58):
Sweet man, thanks so much.
Well, I mean, it all comes backto how can we stop sacrificing
our present happiness for thatfuture of promise of being happy
as well?
That is the premise, and youmight, people might even be
there without realizing it, andyou know it's another thing that
I want to throw out there to togive even more balance to what
we're saying here today.
It's possible but not flippingeasy, but it is possible to
(31:23):
create a business which runsitself in such a hands-off way
and gives you balance, that itgives you amazing cash flow and
it also is a lovely big assetthat's growing and appreciating
with time.
That is another viable means toretirement and obviously we
would definitely advocate thefinancial planning side of
things as a component of that.
(31:45):
But actually it's possible toreach it purely with the
business alone, which a lot ofpeople don't realize, which is
really cool.
It's not frigging easy and thatrequires a lot of sacrifice.
But those are really the twomethods that I know of Design a
business that allows you to livethe lifestyle you want here and
now.
Or if you already have abusiness and you quite like
(32:06):
doing a little bit of dentistry,maybe you don't want to take
yourself out of your business tothat level, or you've got a lot
of cash building up, uh well,it's useful to harness that as
well, which is more the cashflow planning side of things
absolutely, and there arevarious levers we can pull to
make things super efficient andextract that business risk from
the business because of thebusiness all over.
(32:26):
What a bloody beautiful way ofputting it right there, because
I see that all the time whereyou have these principles and
their life's mission is tofriggin, build up their practice
, and then they get this bigjuicy exit and cash flow dies
because their business is gone.
You get this big juicy exit andcash flow dies, right, because
the business is gone.
And even sometimes I've evenhad people message me before and
they're like James, the thingthat nobody tells you about the
exit from your business is thatyou don't have cash flow anymore
(32:48):
.
That I've had like three orfour people come and say that to
me and yeah, I mean yeah, Iguess this is the penny never
drops until it actually happens.
But you're right, the stuffthat you're talking about today
is the other side of the coin.
How can we deleverage from thebusiness?
How can we pay ourselves andmake sure that our money grows
(33:09):
in value?
That's the investing component.
Anick (33:11):
Yeah, yeah, and it's really difficult because unless
you've been through that journey, or been through it with
someone, how are you meant toknow, how are you going to feel
on things that you don't alreadyknow?
There's no manual off the bookhow to retire 101 or everything
to expect, and which is why itcan be really helpful to get
context with someone who knowswhat, who knows what they're on
(33:33):
about, what's been through andit's useful to harness those tax
levers, those tax wrappers,rather on the journey you get
more out of them.
Dr James (33:42):
Smash the ISA every year Not just the ISA obviously
Depends on someone's situation.
Get that 20K out of the ISAevery year, tax-free Way more
efficient and it's alsocompounding rather than trying
to invest it all at once, right.
Anick (33:56):
Absolutely and with compounding everyone's favorite
quote, but Einstein apparentlyonce said compounding is the
eighth one in the world.
The earlier you start thebetter.
You're absolutely right.
We want to be as tax-sufficientas possible.
Looking at ISAs or makingpension contributions, they are
a great way where it'sappropriate and suitable for an
individual, but removing valuefrom the business, the personal
(34:19):
assets and the earlier we dothat, the quicker we can start
compounding, which can then justblow up over.
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