Stop Chasing Returns—Start Building Stability

[00:00:00] The GrowOrtho Podcast is for informational and educational purposes only. The views expressed by hosts and guests are their own and do not constitute financial, legal, or professional advice. Before making any financial decisions, you should consult with a licensed financial advisor who understands your unique situation. Neither the podcast nor its

[00:00:22] creators are liable for any actions taken based on the content shared. Teresa, thanks so much for coming on the GrowOrtho Podcast. My pleasure. Thanks for having me, Luke. Absolutely. Tell us just a little bit about yourself and where you're based. So I am based in Austin, Texas. Although I have clients all over the country, I have a national

[00:00:51] firm. I built a remote team over 20 years ago. I've been working remote for over 20 years. And back then they said it couldn't be done. I figured it out. So I'm basically a wealth and tax mitigation strategist. And what I specialize in is helping high-income professionals, like many orthodontists, keep more of what they earn, protect what they've built, and set up smarter

[00:01:19] transitions for the future. It's not just about investments or strategies. It really is about living, building a living legacy through different strategies that can maximize cash flow, minimize tax, the tax drag, and protect assets from the unexpected that happens in life. The value that I bring to orthodontists, and I do work with a lot of dentists, I think we talked about that,

[00:01:48] an orthodontist, is really make sure they're structured well. They take a lot of risk with their money because they get advice from advisors. All kinds of people. All kinds of people. They chase all sorts of shiny objects. They think they should be in

[00:02:11] all sorts of different types of investments. And in this environment, they've lost so much money. Not just to be honest, just a lot of people in general have lost money. I'm curious because I've previously, first off, I'm not like a numbers person, hate math. Not that that's what you do, but obviously that can go into it. But years ago, I went down the rabbit

[00:02:41] hole of trusts and running things through, where is it? The 4% flat tax. The name's- Puerto Rico. Puerto Rico. Yeah. Thank you. And then there's also self-insuring. What's the vehicle to do that? Captive insurance. Captive. I went through all this and certain types of trust setups, family trust. And

[00:03:09] I have an attorney who's done something quite complicated, which is fine. But I guess where I'm going with this is obviously we serve a lot of dentists and orthodontists. A lot of the information out there is either very traditional, mainstream. So you hear things from Merrill Lynch or big banks or investment companies, or you hear things that you can't really wrap your mind around

[00:03:35] and understand it all. So how do you help people navigate understanding a financial structure and set up for building wealth? And like you said, protecting themselves and doing it safely. You start with a foundation, right? And most professionals, especially dentists, orthodontists, doctors, lawyers, CPAs, engineers, they focus on the education. They focus on being a

[00:04:05] technician, a really, really, really, really, really good technician. Not all of them, but most of them, right? And they don't learn the world of business. And so they're so busy being technicians over time, right? And they've worked so hard, they feel like they deserve to have nice things and have the nice house and the nice car and they start spending all sorts of money. Totally get that.

[00:04:33] But instead of investing in the right foundation first, right? They're building their house on quicksand. Yep. And then they've got to come back and fix, right? The foundation, because they didn't do it properly to start. And instead of spending money on the shiny stuff, the stuff that looks really

[00:04:57] good, that is a reflection that society says, the culture or cult says, hey, you know, you've worked your butt off. You need, you know, the huge house and you need the cars, you need all of that. I teach my clients depending on what stage I find them in, hey, let's build the foundation first. So it's rock bottom. So no matter what happens in life, you've got a really strong foundation to navigate from.

[00:05:25] And it's not shiny object stuff. It's not the fun stuff that people want to spend money in or invest in, unfortunately. And it can be somewhat, you know, expensive because some of this money is going out. But I've just seen it time and time again. And I've been in finance for over 40 years now, which is a long time. I have the finance degree. I have the law degree. And I've practiced law in

[00:05:51] downtown DC, licensed in three states and went back to working in finance. Wow. And I've got an amazing group of colleagues that I call technicians and specialists and really just smart people in their fields that, you know, it might not be my niche, you know, but I have enough experience and enough where I've seen so much that I just come back to no, no, no, no. Set your foundation.

[00:06:19] Um, my son who's 29, um, we did something a little, it was alternative back then. Now, not so alternative. He was going to go to business school. And instead of going to business school, I told him, I made him an offer. We'll take your college money and start a business and you'll learn business. Yeah. Great story for another time. Cause I could really go into that. Um, and my nephew who's 40,

[00:06:45] who's in real estate and has done very well in real estate here in Austin, I set up their foundation from day one. I helped them set up their foundation, I should say from day one. So whatever happens in life, at least they've got something strong, right. To fall back on. And it was easy for them because I had control over them and you know, when they were young, right. I set them up. Um, but I don't

[00:07:11] usually catch people that young. I catch people when they're in the middle and then they've got some investments in some structures and they're putting some money away and some kind of qualified plans and they've made commitments and it's a little more difficult at that point and not impossible. Let me tell you kind of our main avatar. And I think you know it well because you work with a lot of dentists, orthodontist doctors, but typically we'll find someone,

[00:07:40] um, you know, as a client and they're between the ages of 40 and 50, they may have some debt, but hopefully not a ton at this age from, um, residency from building out a private practice. So it's manageable, but they don't really have much long-term other than maybe an investment fund, 401k money may even be tight because they bought these very extravagant things, big house, the Porsche,

[00:08:10] the summer house, um, you know, boathouse, lake house, whatever. Um, so how would you help that person who does have some cashflow, but, um, you know, may kind of be strapped to just because they're a little bit over leveraged, how would you help that person set up a foundation? So it's a little tricky. Um, and this is the part that I found find fascinating, the psychology

[00:08:36] and finance or the behavioral finance, right? Um, and you know, one is having that conversation where they're bring awareness to what's happened. How did they get here? Right. Cause if they have awareness around how they got here and they have awareness around what they're trying to accomplish from an objectives perspective, where do they want to go, then they can adjust hopefully some of their

[00:09:04] behavior or find motivation to go through the pain of adjusting some of their behavior. So it's really, that's, that's the beginning of the conversation so that they are motivated to have something different. There's a lot of pain out there. Society doesn't feel sorry for them because, Oh, you've got the fancy car and the fancy house. And what problems do you have?

[00:09:27] They also have the huge payroll. They also have huge obligations on their back in terms of their labor. And most dentists and orthodontists, if they're not in, you know, a private equity type of situation and they're not an employee, haven't figured out leverage and scale because they're a really good technician. They haven't figured out how to set up their life as a business. And so self-awareness,

[00:09:58] I'm going to say, yeah, I'm going to say, I'm going to say, I'm going to say, I'm going to say, but you're either going to take that risk and own that risk or you're going to transfer that risk to someone else. There's the insurance aspect of it. There's the asset protection, creditor protection aspect of it. There's the estate planning aspect of it. Again, none of this sexy, none of this,

[00:10:26] nobody likes this. Right. And then it's, um, and this is not work that I do. I think this is the work that you do. It's analyzing the business. How can they optimize their business and scale their business? And then, um, when they've got revenue coming out, um, and they pay themselves typically, you know, W two and then distributions, how can we mitigate their income tax exposure?

[00:10:53] And we have access to over 50 strategies that can help them do that. And there is an immediate return on investment there without risk. And when I say without risk, when you invest, investment by definition is risky. When you have, um, strategies in place to reduce your tax liability

[00:11:15] legally, right? Totally by the book, you're getting an immediate 20, 30% return on investment. And so when you've got, um, excess money there from your tax savings that you can then go invest or position safely and securely, then my thinking around that is we're going to position safely.

[00:11:45] Summon to risk, right? But it's risk that, um, let's, let's just do it super simple. S and P index the last, I don't know, 80 years, 8% return over a long period of time on average. Hmm. But I give every dollar on a balance sheet, a job and not every dollar needs to be invested in

[00:12:13] risk or invested in the S and P. Right. And then if you're going to invest in wall street, and by the way, I'm not an investment advisor, just for that disclaimer. Um, if you're going to invest in wall street, then how much of your investment is in a qualified plan and how much is in a non-qualified plan. And there are benefits to certain qualified plans. And there are certain qualified plans that give the business owner more opportunity to reduce their taxes,

[00:12:41] which we can talk about. And then we position money for, um, the longterm, um, with strategies that help them from a retirement perspective, a considerable amount income tax-free, and then there are alternative investments and that whole world that can increase their return sometimes safer than others. So that's pretty much it in a nutshell, I think.

[00:13:09] Let's see if this, um, is kind of in line with what you're talking about and maybe talk about some of the vehicles. Cause I get it, what you're talking about from a strategic standpoint. Um, and maybe I'll, I'll use myself as an example, probably 10 years ago. I, and I'm curious what you think about this. There may be some things I've done wrong and you can kind of coach me on this,

[00:13:33] uh, 10 years ago or so I started setting up whole life insurance. And so I was told, um, which I, I think I agree with, and I like the strategy that you can kind of become your own bank to some degree. And there's a, I think a book about this, like the internal banking system or something like this.

[00:13:55] So the idea is you put money in a whole life, which Dave Ramsey, I think hates, and you have cash value. And as you continue to fund these policies, the cash value grows and it can grow with interest and you can borrow against it at the current rate anytime you want. And your money continues to work inside the

[00:14:21] policy. You're taking a loan from the insurance company. And so I've known several people who've done this. One of the doctors who, um, kind of coached me on this, uh, had funded like, his, uh, CT machine and, you know, different aspects of his building. And I'm curious, do you think that depending on, cause it matters drastically if you're younger or older, but can

[00:14:47] something like that fall in line with a, a strategy with other things too? Absolutely. And that is one of the strategies that I use. Um, and I've learned from, um, I think the book you're referring to is the infinite banking concept. Yeah. Yeah. Nelson Nash was one of my mentors before he passed away, dear friend of mine. Um, wow, that's awesome.

[00:15:10] He was a very esoteric thinker, a very smart guy who was a forester. Um, and I've got a series of, of books, uh, under the hundred year, um, brand. And basically, and this is a fundamental philosophy that I teach my clients. Um, you want to make decisions that impact your future self. And I use

[00:15:39] the hundred year brand, um, because we really want to think out, you know, a hundred years into the future, um, there's a concept called cathedral thinking. Are you familiar with that? No, I'm not. What is that? One of my favorite concepts ever, um, a thousand years ago, I'm going to, I'm going to, I'm going to, I'm going to take some creative license and explaining this, but let's say a thousand years

[00:16:03] ago, if you were in some small little town in the middle of nowhere, Europe, right. Um, the town got together and decided they wanted to build a cathedral, right. To make, um, this amazing, beautiful structure that generations and generations to come would enjoy. Well, what kind of planning would need to take place to build a structure a thousand years ago to make sure that, you know,

[00:16:33] a thousand years from then, um, people would enjoy it. That would mean that your intention and your thinking has to be very clear on what's going to, what materials are going to be endearing, what materials are going to survive, you know, weather patterns. Um, if there was a part of the structure that broke, would that material be local so that the local people could replace it? Um,

[00:16:59] what kind of architecture, what kind of design would be timeless so that the people during that time could enjoy it. Plus the people a thousand years from now would look at it and say, oh my gosh, this is amazing. Right. So cathedral thinking is also very much in line with my thinking around a hundred years. So plan your life out for a hundred years into the future.

[00:17:23] Well, when I met Nelson, he was a forester and he went to college studying forestry and you've got to be a hundred year thinker to be a forester because if you're planting trees, you're not expecting a return, right? In the next quarter, right? You're planting trees to harvest sometimes decades down the road. I love that. Yeah. And so whole life insurance or insurance in general, right? When

[00:17:53] you look at your whole life policy, it goes out until you're a hundred or 121 years of age, depending on when you got it. So in the short term, you know, Dave Ramsey says that sucks. You've got no return for a number of years. If you're looking at it from a short-term perspective, if you're looking at it from a long-term perspective, right? You're investing, there's not risk there. So I'm using that term

[00:18:20] loosely, but you're intentionally putting money into a strategy that can serve you and future generations for a long time to come. And I've sold a ton of this stuff. I've positioned a lot of this for many, many, many clients, thousands of clients that I've worked with over the years. There's something about a whole life insurance though, that doesn't necessarily keep up with inflation when

[00:18:45] you're looking at the times that we're in. This is a limitation that whole life insurance has. And I've got strategies that mitigate that limitation because I teach my clients to take the money that's in the policy, not all of it, and dual purpose it. So become your own source of financing. Finance your own equipment in your practice instead of paying a third party considerable amount, amount, an

[00:19:15] interest or leasing, right? Take that money and invest it safely. And yes, there are safe investments out there with colleagues that I work with. Always an element of risk, right? But so you can use a strategy that in my opinion is foundational. It sits at the bottom of the pyramid in terms of safety,

[00:19:38] but get a better return so that it more than keeps up with inflation. So it's a great tool. It can be even a better tool if used wisely. There are purists in the insurance world. Some people love whole life. Some people love IUL. Many times they hate the opposite. I use both and there are places to

[00:20:04] use both. And you've got to know when that you can use both. Yeah. Because as I understand it, if you're like 60 or 65 versus you're 30, well, that's a whole lot different for a whole life. And I may be misspeaking. I'm not sure. No, you're right on. You've been taught well. Okay, cool. And then another thing that I've been told that I need to look into is captive insurance.

[00:20:31] And I'm curious if people know what that is who are listening or watching. Can you maybe explain that too and your thoughts around that? So most people don't qualify for captive insurance. You've got to have certain... Number one, it's expensive to set up, right? Pretty expensive to set up. It's really more for higher net worth. And you're going to ask, okay, what's the net worth?

[00:20:56] I can't remember exactly the requirements, but you've got to be making at least $1 to $2 million a year for it to make sense. And there's got to be a purpose around setting up the captive insurance that's more than just setting up a vehicle to save money in premiums or to mitigate taxes. There's got to be a very strong business purpose for setting up the captive insurance.

[00:21:25] And there have been, in recent times, some strategies around captive insurance that make it more accessible to people that don't have the higher net worth or don't have the higher income. But I am of the opinion, simplicity matters. Yeah. Yeah. As a, let's say, an entrepreneur who happens to be an orthodontist or a dentist, Michael Gerber, the e-myth, right? Mm-hmm. Entrepreneur.

[00:21:55] Great book. Great book. Great book. We all start out as technicians, or many of us start out as technicians, right? So you start out as a dentist, you get the training, you open up the practice, now you're in business. But nobody taught you how to be a business person. And then you might find a coach who teaches you scaling and leverage, and let's build a business, right? And sometimes they get turned on to strategies that are just really complex.

[00:22:23] And they get turned on to strategies for their entities and structures that are really complex. Mm-hmm. And the technician turned entrepreneur, right, is already overwhelmed with their life. Yeah. And then you add complexity to their life that only engineers really enjoy, and then you've got a mess.

[00:22:50] And so from a practical perspective, there are, I think, a lot of strategies out there that can work and that do work on paper, but create a tremendous amount of complexity for the technician turned entrepreneur who's just trying to keep up with life. And now they find themselves in their 40s and 50s, and they've got kids, and they've got, you know, this huge life that they've got to support. And they're barely treading water. They're not enjoying life.

[00:23:19] In fact, they're pretty miserable. And they're not free. They're actually slaves to all these different strategies and structures that they've set up for themselves. And then we can talk about the next step, which is the successful exit, right, and succession planning. And that's a whole other conversation. It is interesting how overwhelming this stuff can be.

[00:23:41] And I think for a lot of the potentially better strategies, people don't know who to turn to. And they need someone like you to help them navigate this. And then more times than not, I see people just go the mainstream route, which, you know, again, it's something. But it just may not be the best foundation and the best strategy. And I love what you mentioned about thinking, you know, within 100 years or 1,000 years.

[00:24:11] And there's also a book. The name escapes me. What would the Rockefellers do? Yeah, the Rockefellers. Yeah. And how it compares them with other families at those times that had significant net worths, too, that just fizzled and faded away. And I guess a more modern day name you could tie this to, which is, I believe, the wealthiest family, the Waltons.

[00:24:38] And if you go read Sam Walton's biography, he talks about how he set up this family trust and was very intentional about bringing the family into the business of Walmart and what that also meant from a savings and wealth building kind of strategy from the beginning, which I thought was really smart. Yeah, that was setting the foundation up in the beginning, right? Instead of midstream. Right.

[00:25:07] You know, what's really interesting about the world we live in today, there is so much access to information, free information, so many podcasts. So, you know, there's AI, chat GPT. There's so much information out there. And it can be very, very confusing. I think people, for the most part, are really confused because there's more information that

[00:25:35] any one person can figure out, especially as a business owner. I mean, think about an orthodontist and their life, right? Just your average orthodontist. Let's say married, couple kids. He's got the business. He's got employees. He's got to do continuing education and continuing training and make sure he's up to date with, you know, his technical expertise.

[00:26:04] And then finance and the legal and making sure, you know, retirement is taken care of. Making sure the bills are paid today and then retirement into the future. And then, you know, what's exit going to be like? And the world today, which is pretty crazy, right? So many things changing so fast. It's a very challenging time, I think, in many ways for many, many people.

[00:26:34] Oh, yeah. And even when you look at social media and mental health and like, it's just, it's tough. And, you know, you brought up transition planning, retirement planning. I hope I'm always going to be working, even though I may sell businesses or do different things. I don't love the idea of retirement. I know a lot of orthodontists, dentists, doctors who are kind of at the end of their

[00:26:59] runway of practicing, but they can't stop working because they haven't built up the plan to have the cash flow or built up the business to sell the practice successfully. And so it's exactly what you're talking about is how do you think about this? How do you be five steps ahead or 10 steps ahead and think about this earlier on? And so not to say, you know, older demographics listening, there's nothing you can do.

[00:27:28] There probably is a lot of things you can do. But I think the point is getting ahead of this and thinking long term faster is really key. Well, every phase, right? You know, if you've got a young technician, orthodontist, dentist who's finished with school, right? That's one phase of life, right? And then they're starting their family if that's what they choose to do.

[00:27:55] And they're building up their career and their practice. That's another phase. And then the third phase is, you know, how do they have a successful retirement? I personally don't believe in retirement. Again, I've been working 40 years. I just... Everybody says that's when you die. So just keep working. Exactly. And it's... I don't... I use the word retirement because that's what the culture understands. Right. But it's living life on your terms. Right. Right?

[00:28:25] Whatever that looks like. I personally have built up my business in the last five years to be positioned for the next 20 plus years. But a lot of, you know, dentists and orthodontists don't necessarily want to be practicing. You know, there's some professions that lend itself for that. Right. I don't think dentistry and orthodontistry is that. They need to figure out a way to replace their cash flow. Mm-hmm.

[00:28:55] And the traditional ways, I don't think work solved that problem because the traditional way and what I mean by traditional is, you know, the investment advisor, right? They're very good at helping you accumulate money in a qualified plan. I think they're great for that if that's what you want to do. But when you're getting ready to retirement, there's a risk called sequence of return risk.

[00:29:25] I don't know if you're familiar with that. But let's say you've built up $3 million in a retirement plan. Typical investment, right? And you go to retire. You're 65. And the first year you retire, the market goes down. Well, you had allocated out of $3 million in a Monte Carlo scenario that your investment

[00:29:51] advisor created for you that that money was going to last until you're 95 if you take out a certain amount. Well, when the market goes down and you need to take out income, cash flow, you're taking money out in a market that's going down, that reduces your value quicker than if you were taking money out when the market was going up. Mm-hmm.

[00:30:18] And so having strategies in place outside of the market helps mitigate that risk. And the investment world solution to mitigate that risk is bonds, right? You have a diversified portfolio with bonds. Well, guess what happened to bonds in the last couple years? Value went down. Yeah.

[00:30:43] So I get why people will invest and only listen to that in terms of mainstream because there's so much misinformation in the other world, right? And there's so much information to figure out. And there are opportunities outside of that world that if you can keep it somewhat simple, can really benefit people.

[00:31:12] And I go by a mantra that I share with my clients, which is the quality of your life is in direct proportion to the quality of options that you have. Yeah, I like that. And what I help my clients do, right? What I help my clients is to give them more options. So no matter what happens in their financial world, right, they can navigate through, you know, what happens.

[00:31:42] And money does not make you happy. I think most people understand that for the most part. But money does give you options. And there are many, many, many problems that money can help solve. So it's just a really important part of our life. Yeah, I agree. For sure.

[00:32:07] We're going to have to do a part two because I'm up against the clock and there's a lot more things that we need to dive into. I hope you're down with doing a part two and going deeper into some of these strategies, because I think it's such an important thing that so many of us just don't think about. You know, business owners are so busy, stressed out, you know, worried about their teams, hiring,

[00:32:35] firing, leading people, you know, in this case, seeing a lot of patients per day. And so I want to give it justice, the topic of going deep into some of these things. So I hope you're down for that. And I have some ideas on how to make it incredible. But for those watching or listening right now, what is the easiest way to get a hold of you if they have questions?

[00:32:59] I'm rebuilding my website, but they can go to TeresaKuhn.com or LivingWealthyFinancial.com. Teresa, thank you so much. I appreciate it. It was my pleasure.